Treasurer Joe Hockey has formally asked the Productivity Commission to undertake an inquiry into Australia's intellectual property arrangements.
An inquiry was recommended in the Ian Harper-led Competition Policy Review, which also recommended that current pharmacy ownership and location rules should be scrapped.
Mr Hockey and Small Business Minister Bruce Billson said the inquiry will examine whether Australia has the right balance between promoting competition and protecting intellectual property, while considering our international trade obligations.
According to the terms of reference, the inquiry will consider potential reform of existing intellectual property arrangements, within the context of Australia's trade obligations.
A series of multilateral and bilateral trade agreements restrict any move by Australia to reduce the current level of protections, particularly in relation to pharmaceuticals.
The 2013 Pharmaceutical Patents Review made a number of recommendations, including winding back and even abolishing the current five year patent term extension, which were virtually unimplementable because of Australia's existing trade obligations
The new inquiry's terms of reference very clearly set out that any reform must balance the need to promote investment and innovation "while not unduly restricting access to technologies and creative works.”
Yet its greatest emphasis is on the practical need to consider intellectual property changes in the wider context of what is possible under existing trade agreements.
The inquiry comes the week after Trade Minister Andrew Robb described the issue of data exclusivity on pharmaceuticals as the toughest he had encountered during negotiation of the 12-country Trans Pacific Partnership Agreement.
During an address to the National Press Club in Canberra, Mr Robb said he had invested more time than any of his counterparts in the other negotiating countries building his understanding of data exclusivity, and that advocates for the extension had failed to convince him of the benefit of any change to Australia.