Sinodinos: Cabinet has considered IP changes


Cabinet has already considered the controversial recommendations of the Productivity Commission's inquiry into intellectual property.

Industry and innovation minister Arthur Sinodinos confirmed Cabinet had considered the recommendations but decided more work was required.

During Senate Estimates last week, and in response to questioning from shadow minister Kim Carr, Senator Sinodinos said a government response to the controversial recommendations was likely before the end of this year.

The final report of the review made many controversial recommendations, including radical changes to pharmaceutical patent law that would amount to the practical abolition of the five-year patent term extension.

The review recommended the extension only apply in circumstances where the technical regulatory approval process 'unreasonably' delays market access. The extension was actually introduced to compensate pharmaceutical innovators for long development timelines. The timelines may not be part of the technical approval process. Yet the requirements of that process, including multi-stage clinical trials, reflect the demands of regulators.

Under questioning from Senator Carr, director general of IP Australia, Patricia Kelly, acknowledged the extension was designed to compensate companies because the demands of the development process expend a significant proportion of a drug's patent life.

"The extension term was intended to compensate innovators to ensure they had sufficient patent life to obtain a return on their investment and therefore maintain the incentives for pharmaceutical companies to pursue development," said Ms Kelly. 

Senator Carr then asked whether she agreed with the Productivity Commission that the benefits of the extension are "illusory". Ms Kelly agreed the benefits were not "illusory" to a pharmaceutical company. She would not comment on the recommendation.

Senator Sinodinos said a government response to the review was likely "sometime this year".

"There has already been a preliminary examination by ministers of the PC review. There has been a Cabinet submission on this. My colleague, Senator Fifield, has been undertaking some consultations on copyright matters that overlap with the PC review and it's fair to say Cabinet wants to have a second look at all this in the near future. I'm giving it until the end of the year to give us sufficient time. It's a complex matter."


A decision by any Australian government to effectively scrap the five-year patent-term extension would generate a fierce global response from the research-based sector. It would come at a time the sector is already doubting Australia's commitment to intellectual property, in the context of its historic record as one of its strongest supporters. The country's performance on negotiation of the Trans Pacific Partnership Agreement, during which it rallied opposition to the US on data exclusivity for biologics, shocked many.

Yet there is probably little point asking what the research-based pharmaceutical industry thinks of the Productivity Commission's inquiry into intellectual property. 

In the end, the Australian government might be better off asking those who would be most seriously impacted by any move to adopt the recommendations - the country's export industries, not least in agriculture.

Any decision by Australia to wind back intellectual property protections for pharmaceuticals would almost certainly be met with reprisals, certainly by the US but maybe other countries as well, including the UK, Europe and Japan.

The US would almost certainly interpret such a decision as a breach of Australia's commitments under the terms of the countries' bilateral trade agreement. It would also be a factor in negotiations for free trade agreements with the UK and Europe.

Intellectual property laws are not readily changed because the impact transcends national borders - people may not like it but that is the reality. You just wish organisations like the Productivity Commission realised this before they set about wasting all of our time.