Options to Address the Exercising of Broad Patent Rights
Changing Compulsory Licensing Provisions / Crown Use Provision
47. Section 46 of the Patents Act provides for the granting of a compulsory licence. The grounds for the granting of a compulsory licence are that a market for the invention is not being supplied or is not being supplied on reasonable terms in New Zealand. The purpose of a compulsory licence is to provide a remedy where patent owners are considered to be unreasonably restricting access to their inventions. There is, however, no guidance given in the Act as to what "reasonable grounds" are. To date, no compulsory licences have been granted in New Zealand under section 46.
48. The use of patented inventions for services of the Crown is allowed for in the Patents Act (section 55). The provision states that any Government Department (or a person authorized by a Government Department) may make, use, exercise and/or vend a patented invention for the services of the Crown, and such use would not infringe the patent. Under section 58C of the Act, the patent owner is entitled to remuneration for the use of the invention. The situations in which s55 can be invoked include (but are not limited to) those where use of the patented invention is necessary to avoid prejudice to the security or defence of New Zealand, or to assist in the exercise of powers and the implementation of civil defence measures during a state of national or national civil defence emergency (s58 of the Act). However, this provision has not previously been used in New Zealand.
Comment
49. A number of countries are looking at whether compulsory licences could be used to address their concerns about the actions of the holders of genetic material patents. The TRIPS Agreement provides strict criteria around when a a compulsory licence may be issued. While the TRIPS criteria for issuing of compulsory licences have recently been relaxed in the context of helping developing countries access generic drugs to deal with major health crises12 , this development will not directly affect the grant of compulsory licences for genetic material patents.
50. The use of compulsory licences is being looked at by the ALRC. In their recent discussion document, the ALRC proposed clarifying the purposes for which the Crown could exploit an invention if the invention is for the purpose of health care services:
The Commonwealth should amend the Patents Act to clarify that, for the purposes of the Crown use provisions, an invention is exploited `for the services of the Commonwealth or the State' if the exploitation of the invention is for the provision of healthcare services or products to members of the public (Proposal 26 - 2).
51. Guidelines could also be developed to describe how and when both the Compulsory Licensing and the Crown Use provisions can be applied. The ALRC proposed that:
The Australian Health Ministers' Advisory Council should develop a policy regarding the circumstances in which it is appropriate for the Commonwealth or a State to exploit a patented invention under the Crown use provisions of the Patents Act 1990 (Cth) (Patents Act) for the purposes of promoting human health. Similarly, the Commonwealth Department of Health and Ageing should develop a policy regarding the circumstances in which it is appropriate for the Commonwealth to acquire a patent for the purposes of promoting human health (proposal 26.1);
52. We recommend looking into this proposal further, in particular, monitoring the response to the ALRC discussion paper in this area.
Back to Top