Fresh calls to invoke Crown use of patents

Denham Sadler
Senior Reporter

The Opposition has called on the government to invoke the Crown use of patents to ensure the supply of essential services during the coronavirus pandemic as it looks to ramp up local manufacturing of medical equipment.

Under the Patents Act, the federal government can use intellectual property without the permission of the copyright owner and does not have to obtain permission or provide compensation during a national emergency.

This would allow it to potentially use repurposed manufacturing businesses to mass-produce surgical masks or goods that are currently in short supply due to unprecedented demand.

Crown use of patents clause may be invoked to ensure supply
Crown use of patents clause may be invoked to ensure supply

Shadow industry minister Brendan O’Connor wrote to Industry Minister Karen Andrews on 19 March asking whether the government had considered utilising this power and addressed Parliament on the matter on Monday.

“The government will need to detail how Crown use of patents may be invoked, particularly for use for repurposed manufacturing businesses, to address shortages of essential goods impacted by disrupted supply chains,” Mr O’Connor said.

“This really is a very important matter. Chapter 17 of the Patents Act allows exploitation of patents for government services in a crisis. These provisions were recently strengthened in a bill that received bipartisan support. These provisions include compensation for patent holders and an ability to override compensation if necessitated by an emergency.

“With a high degree of uncertainty about the supply of certain goods and a potentially drawn-out disruption to supply chains, Labor publicly wants to raise this issue as a matter that should be properly considered.”

The federal government and its agencies are allowed to develop a patented item without permission from the owner or providing compensation “if the exploitation of the invention is necessary for the proper provision of those services within Australia”.

The Industry department recently issued a request for information on the domestic production capabilities of medical personal protective equipment, including surgical gowns, gloves, goggles, hand sanitisers and clinical waste bags.

“The sole purpose is to obtain information in connection with gaining an understanding of Australian manufacturing of medical personal protection equipment, it is not a procurement and does not form part of any Commonwealth procurement process,” it said,

Some of these items may be manufactured on a large scale in Australia after the Commonwealth invoked the crown use of patent, allowing local firms to develop them without patent approval.

The provision has virtually never been used before. It’s understood there are only two reported cases of contested Crown use in Australia.

The provision can be used by the government to ensure supply of essential goods during the crisis, Baxter IP senior associate Mike Biagio said.

“It could be used to manufacture drugs, ventolin, face masks, whatever could be patented or whatever is patented in Australia and which would be blocked or slowed down if it was only available from one source and they weren’t providing it fast enough,” Mr Biagio told InnovationAus.

“It would certainly fall in the clause of 163, necessary for proper provisions of those services.”

Recent legislative changes simplified the process of Crown use of patents, clarifying that the government can begin exploiting a patent after the relevant minister has signed off on it.

The government must then give the patentee a copy of the approval and statement of the reasons for overriding the patent as soon as practicable.

The government is actively looking at repurposing Australian manufacturing capabilities to produce essential items during the COVID-19 pandemic moving forward, including facial masks and hand sanitiser.

Do you know more? Contact James Riley via Email.

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