Another IP test for Australia

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Another test is coming for Australia's global position on intellectual property protection with the pending negotiation of a trade agreement with the European Union.

Late last week the European Parliament agreed its priorities for negotiation of free trade agreements with Australia and New Zealand.

In considering the proposed wide-ranging mandate, the European Parliament backed inclusion of "strong and enforceable measures covering the recognition and protection of intellectual property rights."

The mandate is expected to be endorsed by the European Council, comprised of the EU's heads of state and key EU officials, with negotiations able to get underway by the end of the year.

Approval by the European Parliament is considered a key step in the process towards negotiation of a trade agreement. The process was initiated in late 2015.

Negotiation of a trade agreement with the EU could coincide with negotiation for a similar agreement with the UK. Australia and the UK established a Joint Trade Working Group in September 2016, following that country's decision to leave the EU in June 2016, with intellectual property also likely to feature.

The EU and the UK could push Australia to extend its current legislated five-year data exclusivity period for medicines. 

The data exclusivity period is one of several mechanisms, along with patent-term extensions, designed to compensate innovator companies for the cost and time taken to develop the data required to secure regulatory approval for new medicines. 

During the data exclusivity period, other companies are prevented from using pre-clinical and clinical data developed by innovators to secure regulatory approval for generic brands of the same medicine.

The EU, including the UK, maintains what is effectively a ten-year data exclusivity period. The period is comprised of a formal eight-year data exclusivity period followed by a two-year market protection period. In the market protection period, companies can use the innovator's data to secure regulatory approval but cannot market the product.

Data exclusivity is considered an important mechanism because it provides an additional layer of intellectual property protection. Yet there are very few examples of where a patent period has expired before the data exclusivity period and this would be unlikely to change if Australia adopted a longer legislated period. One reason the EU and UK would pursue stronger data exclusivity period in their negotiation with Australia is, like the US, trade agreements are vehicles to incrementally expand intellectual property protections. 

Put simply, if a developed economy like Australia do not agree to standards equivalent to the EU or US, there is almost no chance of securing higher standards in agreements with developing countries.

US frustrations with Australia emerged during negotiation of the Trans Pacific Partnership Agreement. The US remains angered by Australia's decision to rally opposition to its proposal for countries to adopt an eight-year data exclusivity period for biologic medicines.

The finalised agreement, which the US has subsequently withdrawn from, allows countries to stick with a legislated five-year data exclusivity period for biologics but requires them to deliver a 'market protection' period "comparable" to 8 years.

It was an ambiguous outcome. While Australian officials argued it required no change to the current legislated framework, based on a five-year period for all medicines, the US did argue it expected countries to adopt the eight-year period.

The fate of the TPPA's intellectual property chapter remains unclear. The remaining eleven countries agreed to scrap the wording in relation to medicines, including data exclusivity, but there is some suggestion they may retain it as a way to attract a future US administration back into the agreement.

The US, which may itself seek to renegotiate its bilateral trade agreement with Australia, is certain to watch the approach it adopts to trade agreements with the EU and UK.