Another impractical report on IP


You have to doubt anyone should get too worked up about the recommendations of the Productivity Commission inquiry into intellectual property.

Depending on where you sit, its recommendations in relation to pharmaceutical patents are an attack on innovation or a common sense approach to reducing Australia's pharmaceutical expenditure.

Yet the fact remains that Australia's legal framework for pharmaceutical patents is not set exclusively by domestic law. The country maintains a number of international trade agreements, including TRIPS, the US-Australia Free Trade Agreement and the recently negotiated Trans Pacific Partnership Agreement, to name a few.

Theses agreements clearly set out Australia's obligations in relation to many of the areas touched on by the Productivity Commission, including patent term extensions and data protection. The upshot is that any winding back from current law would trigger a 'hellfire' global response - not just from the US, but Japan and the EU.

It's not out of the question that Australia might decide to walk away from its obligations under these international trade agreements, but it's very unlikely. Such a move would be unprecedented and almost certainly attract trade reprisals from other countries.

As a country whose economic performance relies almost entirely on exports, antagonising our major trading partners is generally considered a bad idea.

It might be worth speculating that our own Department of Foreign Affairs and Trade is amongst the most annoyed by the inquiry's recommendations given its embassies will be on the receiving end of the response. The negative response will not be confined to its recommendations on pharmaceutical patents given what it also says about copyright and its implications for the entertainment sectors.

It may well be that this latest report goes the same way as the Pharmaceutical Patents Review. Who remembers that report? Set-up by the former government and finally delivered in 2013, it contained many of the same themes and recommendations as those in the new report from the Productivity Commission.

The Pharmaceutical Patents Review triggered a visceral response from the global research-based biopharmaceutical sector. Even former Labor Premier of Queensland Peter Beattie called for it to be scrapped. As it turns out, government did not even formally respond to its recommendations and it disappeared without trace.

You have to question the thinking of the people behind these reports. Why produce a set of recommendations that are virtually impossible to implement? The real shame of it is that arguably sensible discussions get lost amongst a sea of impracticality.

The thing about amending law in relation to pharmaceutical patents is that, just as domestic political sentiment will never allow an extension in the legislated data protection period, political reality across the developed world makes any winding back equally challenging.

The one practical outcome of this report is that it further entrenches the 'vibe' against pharmaceutical patents in Australia and adds further weight to resistance against the ongoing push by the US for Australia to formally extend data protection for biologics, from the current five years to eight.