The Productivity Commission’s review of Australia’s Intellectual Property Arrangements has recommended less restrictive IP protections, as part of a number of changes aimed at balancing the rights of IP holders and users.

The commission recently released its draft report suggesting the intellectual property system in Australia is too heavily favouring rights holders, inhibiting creativity and innovation. Further submissions to the inquiry can be made by 3 June.

The report estimates that international agreements embedding IP measures are deepening a structural disadvantage for Australia, which effectively exports $1 of patented goods and services for every $4.50 it imports.

“Something like 90 per cent of recent patents issued in Australia are to overseas holders,” commissioner Jonathan Coppel told the Australian Financial Review last month. “That means when you’ve got a system that’s skewed too much towards the holder of the IP, the rents that can be accumulated essentially flow overseas.”

Among other recommendations were:

• The Government should abolish the innovation patent system. The innovation patent system was established in 2001 to stimulate innovation in SMEs.   It protects incremental or low level inventions that do not meet the inventive threshold required for standard patent protection and are not covered by design legislation.  According to the draft report, abolishing the innovation patent system would simplify the overall patent system, reduce administrative and transaction costs and remove the ability for patent holders to use innovation patents for strategic purposes.

• Propose that model agreements on IP be introduced.   According to the draft report, model agreements would have the benefit of being fully transparent to Australian industry and to the broader community.   A model agreement would involve a standardised approach to developing agreements that recognises an overall objective but avoids overly complex rules.

The Productivity Commission seeks input as to what features should be included in a model agreement covering intellectual property if one were adopted.

The draft report can be viewed at:

https://www.pc.gov.au/inquiries/current/intellectual-property/draft