Businesses that assign or license intellectual property (IP) rights will soon have to consider extra competition laws under the Competition and Consumer Act 2010 (Act).
Currently, commercial transactions involving IP rights are exempt from certain restrictive trade practices provisions under Part IV of the Act. These provisions prohibit certain behaviours that reduce competition, such as exclusive dealing and cartel conduct. Under section 51(3), certain licensing of IP rights, including patents, registered designs, copyright and some circuit layout rights, are exempt. The exemption doesn't apply to the misuse of market power or resale price maintenance provisions.
The Treasury Laws Amendment (2018 Measures No. 5) Bill 2018 is set to repeal section 51(3) of the Act, and the equivalent provisions under State Competition Codes. Under the Bill, transactions involving IP rights will have to comply with competition laws, as if they were any other transaction of property or assets. The Bill is currently before Parliament and is expected to pass within the next fortnight.
Once the Bill receives Royal Assent, businesses will have six months to ensure that all pre-existing and new IP arrangements, understandings, licences, and contracts satisfy Part IV of the Act. There may be scope for businesses with pre-existing arrangements to apply to the ACCC for authorisation. Going forward, under the ACCC's power to make class exemptions, it is possible that certain IP exemptions could arise in future. However, to avoid breaching the Act, businesses should review their IP arrangements now.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.
