New IP Act Passed in Australia: implementing Phase 1 recommendations of the Productivity Commission

On 16 August 2018, the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2018 (Bill) passed through both Houses of Parliament and will shortly come into force upon Royal Assent being granted.  

The passing of the Act follows a year-long inquiry by the Productivity Commission (Commission) into Australia's IP system with the aim of improving the balance between promoting access to ideas on the one hand and innovation on the other.

This Bill implements some of the Commission's recommendations, and a further round of amendments is proposed in a second draft bill currently being circulated for public comment: Intellectual Property Laws Amendment Bill (Productivity Commission Response Part 2 and Other Measures) Bill 2018.  

The notable changes which will be implemented when this Act receives assent include:

1. Making it is easier for importers of grey goods to rely on defences to allegations of trade mark infringement brought by the local owner of a trade mark. 

 The parallel importation provision in the Copyright Act 1968 (Cth) (Copyright Act) will be repealed in light of the clarifications made in the Trade Marks Act 1995 (Cth) (Trade Marks Act).

A new section 122A will be inserted in the Trade Marks Act so that use of a registered trade mark in relation to goods does not constitute infringement of the trade mark if:

(a) the goods are similar to the registered goods;

(b) the person makes reasonable inquiries in relation to the trade mark prior to using it in respect of such goods; and 

(c) after making such enquiries, a reasonable person would conclude that the trade mark has been applied to such goods with the consent of the registered owner or an authorised user of the trade mark.

The new provisions allow greater latitude for importers of trade marked goods. If importers can demonstrate that they made reasonable enquiries to ensure the trade mark has been applied to the imported goods with the trade mark owner's consent, then such importers will not infringe the trade mark. This will be the case even where the trade mark was not applied by the registered owner. 

The extent of "reasonable inquiries" will depend on the facts. For example, further inquiries will be needed if the trade marked goods are being supplied at suspiciously low prices than if they are imported from a licensed distributor at the usual price.

With respect to services, the parallel importation provision remains the same.

2. Reduction in the time frame from which certain non-use trade-mark applications can be made to 3 years: 

Section 93(2) of the Trade Marks Act will be amended to enable a non-use application to remove a trade mark (under section 92(4)(b)) to be brought within 3 years from the date that the particulars are entered onto the Register. The current time frame is 5 years after the filing date.

This amendment follows concerns about the number of unused trade marks on the register.

3. Notification of extension of standard patents relating to pharmaceutical substances is no longer required:

Standard patent holders who receive an extension of term are no longer required to provide the Department of Health with certain information under section 76A of the Patents Act 1900 (Cth) (Patents Act).  This is because such information is now readily available from other sources.

4. Additional damages available for unjustified threats of infringement:

In response to concerns that the current level of damages is insufficient to deter certain unjustified threats being made, the Act provides for additional damages (punitive damages) to be awarded in respect of threats of patent, design, plant breeders rights and trade mark  infringement proceedings that are held to be unjustified.

With respect to trade mark infringement, a trade mark owner can no longer terminate an unjustified threat by commencing infringement proceedings.   Further, the new section 130A in the Trade Marks Act clarifies that mere notification of the existence of a registered trade mark will not constitute a threat of infringement action (consistent with other legislation).  

Please contact one of our intellectual property team members if you would like further information.

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