IP in business transactions: Australia overview

A guide to intellectual property law in Australia. The IP in business transactions Q&A gives an overview of maintaining an IP portfolio, exploiting an IP portfolio through assignment and licensing, taking security over IPRs, IP and M&A transactions, and the impact of IP on key areas such as competition law, employees and tax.

To compare answers across multiple jurisdictions, visit the IP in business transactions Country Q&A tool.

This Q&A is part of the PLC multi-jurisdictional guide to IP law. For a full list of jurisdictional Q&As visit www.practicallaw.com/ip-mjg.

Wayne Condon, Geraldine Farrell and Sheree Hollender, Griffith Hack Lawyers
Contents

Overview of main IPRs

1. What are the main IPRs in your jurisdiction? How are they protected?

Patents

Australia has a two-tier patent system for the protection of inventions and innovations, which comprises:

  • Standard patents. These are available for a 20-year term, or up to 25 years for patents for pharmaceutical substances per se (that is, not method or process patents) to account for delays in obtaining regulatory approval.

  • Innovation patents. These are available for second-tier inventions that are unable to satisfy the inventive step threshold, but which are still innovative developments over the prior art. Innovation patents are given a non-extendable eight-year term.

Trade marks

A sign capable of distinguishing the goods or services of the applicant from other traders is registrable as a trade mark. A sign includes any letter, word, device, brand, aspect of packaging, shape, colour, sound or scent or any combination of these. Once registered, a trade mark subsists indefinitely, subject to the payment of renewal fees (and its continued use as a trade mark).

Registration is not mandatory but is advisable. It is generally easier and cheaper to enforce a registered trade mark rather than an unregistered trade mark.

Unregistered trade marks may be protected by:

  • An action for misleading and deceptive conduct (section 18, Australian Consumer Law 2010) (ACL) (previously section 52, Trade Practices Act 1974).

  • An action at common law for passing off.

Copyright

Copyright cannot be registered in Australia. Copyright automatically subsists in any original composition that falls within the definition of either (Copyright Act 1968):

  • A work. For example, a literary, dramatic, musical or artistic work.

  • Subject matter other than works. For example, recordings, films and radio and television broadcasts.

The individual creator also has automatic moral rights in relation to copyright works or films they have created. Moral rights comprise the right to:

  • Be attributed or credited for the work.

  • Not have work falsely attributed to another person.

  • Not have work treated in a derogatory way.

There is limited scope for industrial copyright in Australia. Where copyright subsists in an artistic work (other than a building or a work of artistic craftsmanship) and the corresponding design is applied industrially, and articles are made and sold according to the corresponding design, it is not an infringement of the copyright to reproduce the work.

Design rights

To be registrable, a design must be both (Designs Act 2003):

  • New (that is, not identical to a design that forms part of the prior art).

  • Distinctive (that is, not substantially similar in overall impression to a design forming part of the prior art base).

Registration lasts for five years from the filing date of the design application, or ten years if the registration is renewed. The maximum term of a registered design is ten years from the date of filing the design application.

Australia does not have an unregistered design right regime. In limited circumstances, protection may be available under:

  • Copyright, although not generally where the design has been industrially applied.

  • Trade mark law, where the trade mark is for a three dimensional shape.

Confidential information

Confidential information can be protected in two ways:

  • A contractual obligation to keep the information confidential.

  • In circumstances giving rise to an equitable obligation of confidence.

The owner of confidential information is permitted to prevent its misuse provided the information satisfies the following criteria:

  • The information to be kept confidential can be specifically identified.

  • The information is confidential in nature (for example, business or trade secrets, a formula).

  • The information is imparted in circumstances giving rise to a duty to maintain confidence.

  • There is an actual or threatened misuse or disclosure of the confidential information.

If there is a breach of confidence, an action for breach of confidence can be made as long as the information remains confidential in nature (or would have remained confidential, but for the breach of confidence).

Circuit layouts

Circuit layouts are protected under the Circuit Layouts Act 1989. A circuit layout is defined as a representation, fixed in any material form, of the three-dimensional location of active and passive elements and interconnections making up an integrated circuit (Circuit Layouts Act 1989). The owner of an eligible circuit layout has, during the protection period of the layout, the exclusive right to:

  • Copy the layout, directly or indirectly, in a material form.

  • Make an integrated circuit according to the layout or a copy of the layout.

  • Exploit the layout commercially in Australia.

The protection period is, in effect, ten years from the first commercial exploitation of the layout.

Plant breeder's rights

These are protected under the Plant Breeder's Rights Act 1994. The registration of a plant breeder's right in a plant variety gives the owner the exclusive right in relation to the propagating material of a variety to (Plant Breeder's Rights Act 1994):

  • Produce or reproduce the material.

  • Condition the material for the purposes of propagation.

  • Offer the material for sale.

  • Sell the material.

  • Import or export the material.

  • Stock the material for any of the above purposes.

Plant breeders' rights in plant varieties last for 25 years for trees and vines and 20 years for any other variety.

For further information about the main IPRs, see Main IPRs: Australia.

 

Maintaining IPRs

2. What facilities are available to conduct IP searches and obtain IP information on registered IP rights?

IP Australia (www.ipaustralia.gov.au) is the body responsible for maintaining the databases forming the registers of patents, trade marks, designs and plant breeders' rights. The Register for each of these IPRs is fully searchable online through its website.

 
3. What steps must a business take to maintain the registration and status of its main IPRs?

Patents

Maintenance fees are payable annually after four years from the filing date of a standard patent. These fees then increase from ten years and increase further from 15 years after the filing date.

Annual review fees are payable for innovation patents after two years from the filing date.

Trade marks

Renewal fees are payable every ten years from the date of filing. Further, if a trade mark is not used by the registered owner (or on the owner's behalf) for a continuous period of three years, an application can be made to remove the mark from the trade marks register.

It is also important to ensure that a trade mark continues to be regarded as a trade mark. For example, if the mark becomes known as a generic name for the goods or services in relation to which it is registered, it ceases to be recognised as a trade mark and may be cancelled.

Design rights

The initial period of registration is five years from the date of filing. Registration can be renewed for a further period of five years on the payment of fees.

Other

For plant breeders' rights, an annual fee must be paid to maintain the grant.

Details of fees and other maintenance requirements are provided on IP Australia's website (www.ipaustralia.gov.au).

 
4. What steps can a business take to avoid committing an infringement of another party's IPRs and to monitor whether a competitor is infringing its IPRs?

Registered rights

For registered rights such as patents, trade marks, registered designs or plant breeders' rights, a party should conduct a careful search of the relevant IP register to determine whether any registered rights may prevent or limit certain activities.

The search should be conducted by a reputable and experienced search entity (usually a firm of patent and/or trade mark attorneys) who should be carefully and specifically briefed in relation to the proposed activities and the appropriate search parameters. If material registrations are identified by the search, the party proposing the activity will be left with the following options:

  • Not conduct the activity at all.

  • Invent or design around to avoid infringing the registered right - (in the case of a patent or design).

  • Seek a licence from the owner of the registered right.

Unregistered rights

For unregistered rights, the search may be more difficult to conduct, but is no less important. Market research and enquiries can be made, for example to determine whether a particular unregistered mark is being used by a business entity. For confidential information, in most circumstances it will be clear that the information is to be kept confidential, and that any unauthorised exploitation of the information is a breach of confidence.

IPR owners should remain vigilant in monitoring actual and potential market activities (such as importation from a foreign jurisdiction). In Australia, mechanisms such as pre-action discovery can provide further means to identify potential IPR infringement and the identity of infringers.

 

Exploiting IPRs

5. What are the main steps in an IP audit in your jurisdiction to determine the content of an IP portfolio?

The main method of conducting an IP audit is to formulate an appropriately detailed checklist for each available IP and ancillary right, and in each case deal with the:

  • Identification of the IPR.

  • Ownership of the IPR.

  • Use of the IPR (both permitted and unauthorised uses).

  • Third party challenges to the IPR.

  • Security interests given in relation to the IPR including searching the Australian Personal Property Securities (PPS) Register (see Question 12).

  • Government obligations in relation to the IPR.

  • Licences for the IPR (both in-licensing from a licensor and out-licensing to licensees).

 

Assignment

6. How can main IPRs be assigned?

Patents

Patents can be assigned in whole or in part based on territory. Other types of partial assignment should be permissible, but this is not completely decided as a matter of law. Other types of partial assignment could include assigning some of the patent claims or exclusive rights of the patentee or rights to exploit the patent, in relation to certain types or fields of use.

Trade marks

A registered trade mark can be assigned with or without the goodwill of a business.

The assignment can be partial (that is, for only some of the goods or services covered by the registration). However, trade marks cannot be partially assigned in relation to a particular geographic area. Partial assignments of trade marks can be dangerous to the trade mark owner, as the trade mark may be jeopardised if deception or confusion arise from the transfer.

For an unregistered trade mark, an assignment must be with the goodwill of the business to which it is attached.

Copyright

The assignment can be in whole or in part.

Design rights

Registered designs can be assigned. The assignment can be partial for a particular territory.

Confidential information

Assignments of confidential information are unusual, and transfers are usually dealt with by a licence.

Plant breeders' rights

Plant breeders' rights can be assigned.

 
7. What formalities are required to assign each of the main IPRs?

Patents

Patents can be assigned provided the assignment is:

  • In writing.

  • Signed by or on behalf of both the assignor and the assignee.

The assignment should also be registered in the patent register maintained by IP Australia.

Trade marks

The assignment must be in writing either as a formal assignment document or by the assigner completing and signing the appropriate IP Australia form to confirm the assignment. The assignment should be registered in the trade mark register maintained by IP Australia.

Copyright

An assignment of copyright must be:

  • In writing.

  • Signed by or on behalf of the assignor.

Design rights

The assignment must be signed by or on behalf of both the assignor and the assignee. The assignment should also be registered in the design register maintained by IP Australia.

Plant breeders' rights

The assignee must inform the registrar of plant breeder's rights at IP Australia that it has acquired the right, giving details of the way it acquired the right, within 30 days after acquiring it. The assignment should also be registered in the register of plant breeders' rights.

 
8. What main terms should be included in an assignment of IPRs?

Any assignment should clearly identify the nature of the right being assigned. If the rights are registered rights, correct registration numbers should be included in the assignment for easy identification of the IPR. The assignment document should also expressly assign any rights of action the assignor has as at the date of assignment. An assignee may also insist on warranties in relation to the assigned IPRs. Some assignment documents may also contain an express confidentiality clause requiring that the assignor retain confidentiality of any information relating to the IPRs that are out of the public domain.

For an assignment of future rights, there should be a "further assurances" clause in the assignment that an assignment of future rights will be perfected by the parties as necessary. This is to avoid any problems created by the general law rule that property that does not exist cannot be assigned.

 

Licensing

9. How can each of the main IPRs be licensed?

Patents

The licence can be exclusive or non-exclusive. There is no limit on the type of licence that can be entered into. For example, the licence can be limited territorially or by any exclusive rights granted to the patent owner.

Trade marks

The licence can be exclusive or non-exclusive. It is possible to limit the licence by territory or by classes of goods or services.

In addition, "authorised users" (who are usually licensees) have statutory rights (under theTrade Marks Act) to:

  • Sub-license the use of the mark.

  • Commence infringement proceedings against alleged infringers.

A person is an "authorised user" if he uses the trade mark in relation to goods and/or services under the control of the trade mark owner. A trade mark is under the control of the owner if the owner for example:

  • Exercises quality control over the goods or services provided by the licensee.

  • Exercises financial control over the licensee's relevant trading activities.

To avoid doubt about whether there is sufficient control, it is advisable for the trade mark owner to enter into a formal written licence containing provisions which contractually give the trade mark owner power to exercise control.

If the trade mark owner wishes to limit the statutory rights of the authorised user, this should be provided for in the written licence.

Copyright

The licence can be exclusive or non-exclusive, and granted for:

  • Any or all of the exclusive rights of the copyright owner.

  • A limited duration, or any length of time (up to the expiry of the copyright term).

  • A limited geographic area, or with no geographical limit.

Design rights

The licence can be exclusive or non-exclusive. It can be limited by territory or by any exclusive rights of the design owner. An exclusive licensee of a registered design does not have any right to sue for infringement.

Other

For plant breeder's rights, the licence can be exclusive or non-exclusive. The licence can be territorially limited. An exclusive licensee of plant breeder's rights does not have any right to sue for infringement.

 
10. What are the formalities to license each of the main IPRs?

The registration of a licence involving registered IPRs (patents, trade marks, designs and plant breeders' rights) in the relevant register (see Question 7) is not usually required. However, in most circumstances, it is advisable to do so.

IP licences do not generally have to be in writing, although in most circumstances it is advisable (see Question 9). An exclusive licence of copyright must be in writing.

 
11. What main terms should be included in an IP licence?

The IP licence should include terms which are specific to its negotiation and the requirements of the parties. Some common terms appropriate to most IP licences include:

  • A definition of important terms.

  • The licence grant, particularly in relation to use, territory, exclusivity, sub-licensing and the licence term.

  • IP provisions, particularly in relation to registrations and renewals, disclosure and ownership of improvements, warranties and restrictions on use.

  • Exploitation by licensee provisions, particularly promotion and advertising, and minimum performance obligations.

  • Financial terms, particularly in relation to calculation, reporting, mode of payment and tax.

  • Infringement provisions, particularly in relation to claims by third parties, claims against third parties and who will sue.

  • Confidentiality.

  • Termination provisions (in particular relating to timing, with or without cause and post-termination obligations).

 

Taking security

12. Is security commonly taken over IPRs?

Lenders commonly take security over IPRs.

Security interests are more likely to be recorded over IPRs on the Australian Personal Property Securities (PPS) Register than on individual IPR registers, although they can be registered on both. The PPS Register can be accessed online (https://transact.ppsr.gov.au/ppsr/Home).

For a security interest in any IPR to be enforceable against a third party, the PPS legislation requires a written security agreement that describes the particular IP covered by the security agreement.

 
13. What are the main security interests taken over IPRs?

It is strongly advisable for a holder of a security interest in any IPR to register that interest in the PPS register (see Question 12). Registration is important because:

  • Perfection of a security interest can only be achieved by registration. Perfection is relevant in the context of enforceability and priority of the security interest.

  • A perfected, registered security interest generally has priority over an unperfected, unregistered security interest.

  • The PPS Register will serve as a record of security interests granted over personal property and can be searched by anyone, including prospective secured parties.

In addition to registering their interests on the PPS Register, holders of security interests in IPRs can register their interests on the relevant IP registers.

Patents

Registration of a security interest over a patent in the patent register is not compulsory. However, some benefits of registration include:

  • Any dealings with the patent by the patentee are subject to the interests of the security holder.

  • The Register is prima facie evidence of any particulars registered in it.

  • The security interest is admissible as evidence of title.

  • The patent specification cannot be amended without the consent of the security holder.

Trade marks

A security interest in a trade mark can be recorded in the Trade Marks Register on a voluntary basis. The application to have a security interest recorded must be made by both the:

  • Security holder.

  • Registered owner of the trade mark.

Copyright

A security interest in copyright can be held as a legal or equitable mortgage and should be registered in the PPS Register.

Design rights

Equitable interests can be granted over a registered design. The Designs Act 2003 provides for the recording of the assignment of interests. The registrar may, in practice, record an equitable interest on the designs register.

 

M&A

14. What IP-related due diligence is commonly carried out in both a share sale and an asset sale?

Share sale

In most share sales, due diligence may appear to be less important because the IP asset is not changing hands, although this can be misleading. For example, the target company may have:

  • Shared its IP with related companies.

  • Been using IP of a related company without a formal licence.

Therefore, the buyer should usually carry out a full due diligence enquiry (including IP). The main items of enquiry are usually:

  • Identifying the target company's IPRs (both registered and unregistered).

  • Ascertaining the nature and extent of any limitations on the target company using its IPRs in the marketplace.

  • Reviewing available details of any IP-related disputes or issues that have arisen or may arise.

Asset sale

In an asset sale:

  • There should be a careful review to assess which IPRs are included in the target's assets.

  • It is crucial to ensure that all contractual relationships survive the transaction. Many IP agreements have provisions terminating or otherwise limiting the ability to exploit the IP on a change of control.

  • The identification and listing of specific IP assets and liabilities is critical. Comprehensive due diligence questionnaires and appendices usually accompany the asset purchase agreement, identifying all IP assets and liabilities to be transferred.

  • The satisfactory completion of due diligence is usually a condition precedent to completion of the asset purchase.

 
15. What IP-related warranties and/or indemnities are commonly given by the seller to the buyer in both a share sale and an asset sale?

The seller usually attempts to restrict its warranties to the rights it can easily identify, but this may not be sufficient for the buyer.

In share sales and asset sales, the most common IP warranties and indemnities relate to:

  • Title. Here, the seller usually warrants that:

    • it is registered as the owner of certain specified IP (usually set out in a schedule); and

    • there are no licences of that IP or security interests granted in relation to it (if that is the case).

  • Validity and enforceability. A warranty by the seller that IPRs are valid and enforceable is unusual. However, the seller may warrant that, to its knowledge, the IPRs as described in a schedule to the sale agreement are valid and enforceable.

  • Non-infringement. The seller is unlikely to give a warranty that the conduct of the seller's business does not infringe any IPRs of any third party. However, it may be prepared to state that, to the best of its knowledge and belief, without conducting any searches of public registers, the conduct of the seller's business does not infringe the IPRs of any third party.

In relation to specific IP such as computer software, a more specific warranty may be sought and obtained. For example, that:

  • The software was written by employees of the seller in the course of their employment and is an original work.

  • No portion of the software uses, copies or comprises the work of any third party.

 
16. How are the main IPRs transferred in both a share sale and an asset sale?

Share sale

In a share sale, there is little need for any formal transfer of IPRs, as it is the shares in the relevant company that are acquired by the buyer. However, there may be issues with change of control provisions, which may need to be resolved by formal consents or assignments (see Question 6).

Asset sale

In an asset sale, the IPRs are transferred by a sale agreement and/or formal assignments subject to appropriate warranties (see Question 6).

 

Joint ventures

17. Is it common for companies to set up joint ventures in your jurisdiction to develop projects that heavily involve IPRs?

Joint ventures are relatively common in Australia. In these circumstances, companies may develop IP jointly and be governed by means of a joint venture agreement.

In most joint ventures involving significant IP, the critical issue is the ownership of background and foreground IP. Background IP consists of the IPRs created by the respective joint venturers before the joint venture came into effect, but which are used by the joint venture. Foreground IP consists of IPRs created during the joint venture project.

A number of questions arise which should be provided for in the joint venture agreement:

  • How will the background IP licensed by one joint venturer be distinguished from the background IP of the other joint venturer(s)?

  • Are there to be any restrictions on the venturer's exploitation of background IP outside the joint venture? For example, should there be restrictions on assignment or licensing without the consent of other participants in the joint venture, or only restrictions in the same fields as the joint venture project?

  • Will the participants be required to value their background IP so that contributions to the joint venture can be assessed, and if so, how?

  • How will IPRs created during the joint venture project be owned?

  • Who will apply for and maintain the joint venture's registered IPRs?

  • Who will enforce the joint venture's IPRs and how will costs and damages be shared if they are awarded for proven infringement?

  • What rights will each venturer have to exploit the joint venture IP after the joint venture ends?

  • Will the licensing of the joint venture IPRs be exclusive or non-exclusive?

 

Competition law

18. What are the main provisions of your national competition law that can affect the exploitation of the main IPRs?

The legislation dealing with competition law in Australia is the Competition and Consumer Act 2010 (CCA). The CCA includes provisions which prohibit:

  • Contracts, arrangements or understandings which include an exclusionary provision.

  • Contracts, arrangements or understandings which have the purpose or effect of substantially lessening competition in the market.

  • Price-fixing arrangements.

  • Exclusive dealing arrangements.

  • Resale price maintenance arrangements.

  • The taking advantage of market power for an anti-competitive purpose.

 
19. What are the most common national competition law issues that arise in the exploitation of the main IPRs?

Most licences of IPRs in Australia will benefit from an exemption from the anti-competitive conduct provisions of the CCA (see Question 20). However, it is advisable to avoid even technical breaches. Problematic provisions in a licence could include, for example:

  • An agreement between two or more competitors which gives rise to a boycott of some other person or class of persons. For example, a provision of a drug patent licence, in which the patentee agrees with the licensee that they will confer in future about which hospital tenders they will competitively bid for relating to that licensed drug.

  • A provision which has or is likely to have the effect of substantially lessening competition in a market by including:

    • market sharing arrangements;

    • territorial restraints;

    • non-compete provisions;

    • no-challenge IP clauses; and

    • selective tendering arrangements.

  • Provisions which fix, control or maintain the price of goods or services between competitors.

  • Tying arrangements and third line forcing agreements. For example, a patentee licenses generic company Y to market licensed drug X, on condition that the licensee must use the pharmaceutical wholesaler Z for distribution.

  • Stipulating that the licensee must not sell the licensed product supplied to it for resale by the licensor below a price specified by the licensor.

 
20. What exclusions or exemptions are available for national competition law issues involving the exploitation of the main IPRs?

There is an exemption from the anti-competitive provisions in the CCA (see Question 18) for certain provisions in licences and assignments of trade marks, patents, registered designs, copyright or protected rights in a circuit layout (section 51(3), CCA).

However, provisions relating to an abuse of market power and resale price maintenance are not exempted. In addition, the exemption only applies to the relevant IPR to the extent that the condition that would otherwise have breached the anti-competitive provisions of the CCA "relates to" one of the following:

  • The relevant patented invention.

  • Goods to which the registered design is to be applied.

  • The subject matter of the copyright.

  • The protected circuit layout.

The term "relates to" is somewhat vague, and has not yet been considered by the Australian courts. For patents, it is likely that the relevant condition should relate to the invention in the sense of only going so far as to protect the inventor's legitimate rights in the IP.

For trade marks, the exemption only relates to contracts, arrangements and understandings between the registered owner of the trade mark and authorised users to the extent that they relate to the kind, qualities or standard of goods (or services) bearing the mark.

 

Advertising

21. To what extent do advertising laws impact on the use of third party trade marks?

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive, or is likely to mislead or deceive (section 18, ACL, located in Schedule 2, CCA). This is a wide-ranging provision which has been applied in many contexts to individuals and corporations. This includes, for example, an unauthorised use of trade marks and trade names in a manner which is misleading or deceptive. Section 18 of the ACL is therefore similar to the common law action for passing off, but is potentially much wider.

It is a defence to trade mark infringement to use a third party's registered trade mark for the purposes of comparative advertising.

 

Employees and consultants

22. Who owns each of the main IPRs created by an employee in the course of his employment? Is compensation payable in relation to employee IPRs? What main steps can an employer take to ensure it owns each of the main IPRs?

Patents

The employer is usually entitled to ownership of an invention produced by an employee where both the:

  • Employee is working for the employer under a contract of service. Whether the employer can uphold a claim to ownership of an invention depends on the terms of employment and any express provisions or written assignment.

  • Invention was produced in the course of an employee's normal duties. This factor is the most important:

    • if the employee is employed to invent, or inventions are likely to arise in the normal course of the employee's duties, any invention which flows from the employee’s work will be owned by the employer;

    • if an invention is totally unrelated to the employee's job and the employer's business, the employee will own the invention and the right to apply for patent protection.

See below, Compensation and ownership.

Trade marks

Ownership of a trade mark by an employee will not often arise. The owner of a trade mark is the entity (usually a company or organisation) which adopts it and then uses or intends to use it to distinguish their goods or services from those of other traders.

See below, Compensation and ownership.

Copyright

Generally, where a copyright work has been produced under:

  • A contract of service: the employer owns any copyright created by the employee.

  • A contract for services (that is, by an independent contractor or consultant (see Question 23): the independent contractor or consultant owns the copyright in the work.

Determining whether a copyright work has been produced under a contract of service or under a contract for services can be problematic. Further, determining when something is made according to the terms of the contract of service involves analysing the employee's terms of engagement (that is, what they are actually employed to do).

See below, Compensation and ownership.

Registered designs

The commonly accepted view is that the same position for employee ownership of copyright applies to registered designs, although the wording of ownership provisions in the Copyright Act differs to the Designs Act (see above, Copyright).

Compensation and ownership

For all the IPRs listed above, there is no legal requirement to pay compensation to an employee who creates an IPR. However, an employee's employment contract may provide for such payment.

If an employee is likely to be engaged in an innovative activity, the employer should include the following terms in his written employment contract:

  • A detailed job description that should be updated if at any stage the role changes.

  • A provision dealing with the ownership of any inventions created by the employee in the course of employment.

  • A provision dealing with whether the employer or employee has the right to apply for the registration of any relevant IPR that is registrable.

  • A further assurances provision requiring an employee to sign documents, as necessary, to acquire the relevant IPR.

Employers should also consider having an IP management policy, accessible to all staff, reminding them of expectations and objectives in relation to IP protection and ownership. Regular training sessions will also remind staff of the importance of IP protection and ownership to the organisation.

 
23. Who owns each of the main IPRs created by an external consultant? What main steps can a business take to ensure it owns each of the main IPRs?

Main IPRs created by an external consultant are generally owned by the consultant unless otherwise provided for in a contract. A business retaining the services of an external consultant should have a written agreement which provides that all IP generated by the consultant during the retainer is deemed to be owned by the business.

The written agreement should also contain:

  • An assignment of future IP to the employer business.

  • A further assurances clause, to ensure that an assignment of future IP will be perfected as necessary.

 

Tax

24. What are the main taxes payable by a licensor on the licensing of the main IPRs?

The principal taxes payable by a licensor on the licensing of IPRs are:

  • Income tax.

  • Goods and services tax (depending on the structure of revenue payments payable by the licensee).

  • Stamp duty (if applicable).

 
25. What are the main taxes payable by a seller on the disposal of the main IPRs?

Where an IPR is disposed of, the seller is likely to be subject to capital gains tax.

 

Cross-border issues

26. What international IP treaties is your jurisdiction party to?

Patents

Australia is party to the:

  • WIPO Paris Convention for the Protection of Industrial Property 1883 (Paris Convention).

  • Patent Co-operation Treaty 1970 (PCT).

  • WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS).

Trade marks

Australia is party to the:

  • Paris Convention.

  • WIPO Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks 1989 (Madrid Protocol).

  • TRIPS.

Copyright

Australia is party to the:

  • WIPO Berne Convention for the Protection of Literary and Artistic Works 1971 (Berne Convention).

  • UN Universal Copyright Convention 1952.

Plant breeders' rights

Australia is party to the International Convention for the Protection of New Varieties of Plants 1961 (UPOV Convention).

A detailed list of treaties can be found at www.dfat.gov.au/treaties/

 
27. Are foreign IPRs recognised in your jurisdiction?

Foreign IPRs generally cannot be enforced in Australia. However, foreign IPRs are recognised as forming the basis for convention priority applications and, for patents, PCT applications.

Australia is also a signatory to the Madrid Protocol which, in effect, provides recognition of foreign trade marks.

 

Reform

28. Are there any proposals for reform?

There are numerous reviews underway which may lead to reform (see www.ipaustralia.gov.au/about-us/public-consultations/) and the Advisory Council on Intellectual Property (ACIP) (www.acip.gov.au). These include:

The Intellectual Property Laws Amendment Bill 2013 was introduced into Parliament on 30 May 2013. This Bill focusses on some areas not addressed in the Raising the Bar Act 2012 and also seeks to clarify some of the Raising the Bar provisions. The important provisions relevant to patents include:

  • A unified patent application and patent attorney register for Australia and New Zealand, removing duplication between patent offices and making it easier to obtain patents in Australia and New Zealand.

  • Amendments to clarify when the Crown use provisions of the Patents Act can be used.

  • Amendments implementing the TRIPS protocol which will allow the Federal Court to issue compulsory licences to Australian medicine producers to manufacture and export to developing countries pharmaceuticals which are the subject of one or more Australian patents.

 

Online resources

IP Australia

W www ipaustralia.gov.au

Description. IP Australia is an Australian Government agency. It deals with all applications for registration of patents, trade marks, registered designs and plant breeder's rights. Its website contains official and up-to-date information about IP in Australia, including IP legislation.

Attorney-General's Department

W www.ag.gov.au/RightsAndProtections/IntellectualProperty/Pages/default.aspx

Description. The Attorney-General’s Department deals with copyright and whole-of government issues on IP management. Its website contains official, up-to-date information about copyright in Australia.

Australian Securities and Investments Commission (ASIC)

W www.asic.gov.au

Description. ASIC administers the Corporations Act 2001 and the Business Names Registration Act 2011 (amongst others). Its official, up-to-date website contains links to relevant legislation, forms, and registers.

Advisory Council on Intellectual Property (ACIP) Productivity Commission

W www.acip.gov.au

Australian Competition & Consumer Commission (ACCC)

W www.accc.gov.au

Description. The ACCC administers the CCA. Its official, up-to-date website contains links to, and information about this Act.

Personal Property Securities (PPS) Register

W www.ppsr.gov.au

Description. Details of security interests in personal property can be registered and searched on the online PPS Register. The website is official and contains up-to-date information.

State / Territory regulation

Description. The regulation of IP in business transactions is also dealt with on a State and Territory basis, for example in relation to consumer rights. For a summary of and links to consumer affairs for each Australian State and Territory, please see www.business.gov.au/BusinessTopics/Fairtrading/Pages/Fairtradinglawsinyourstateorterritory.aspx



Contributor details

Wayne Condon

Griffith Hack Lawyers

T +61 3 9243 8344
F +61 3 9243 8370
E wayne.condon@griffithhack.com.au
W www.griffithhack.com.au

Qualified. New Zealand, 1979; Victoria, Australia, 1986; High Court of Australia, 1986; New South Wales, Australia, 1992; Queensland, Australia, 1993; Western Australia, Australia, 2000

Areas of practice. IP litigation, with a particular emphasis on life sciences patent litigation.

Recent transactions

  • Representing Sandoz Pharmaceuticals in relation to various patent issues arising out of pharmaceutical product launches in Australia.
  • Representing a large pharmaceutical company in respect of a complaint to the regulatory authority relating to alleged anti-competitive conduct in the pharmaceutical market place.
  • Representing Actavis Pharmaceuticals in Australian Federal Court litigation relating to rosuvastatin.
  • Advising a multinational biotech company in relation to a patent enforcement strategy for a blockbuster biologic in Australia.

Geraldine Farrell

Griffith Hack Lawyers

T +61 3 9243 8496
F +61 3 9243 8370
E geraldine.farrell@griffithhack.com.au
W www.griffithhack.com.au

Qualified. Victoria, Australia, 1996

Areas of practice. Commercialisation of technology; IP & IT licensing; technology transfer; IP due diligence.

Recent transactions

  • Advising multinational manufacturing clients on Australian legal requirements for the restructuring of IP assets and obligations under licensing agreements.
  • Advising on a web portal project for a global consulting company.
  • Advising public hospitals on various IP-related issues, including the involvement of one hospital in a multi-million dollar joint venture for the development of a bionic eye.
  • Contract negotiations for biotechnology and medical device companies, including licensing arrangements and technology transfer arrangements.

Sheree Hollender

Griffith Hack Lawyers

T +61 2 99255920
F +61 2 99255911
E sheree.hollender@griffithhack.com.au
W
www.griffithhack.com.au

Qualified. Victoria, Australia, 2007

Areas of practice. IP commercialisation; IP licensing; IP litigation; confidential information.

Recent transactions

  • Advising commercialisation division of a major university in relation to a range of research, licensing and assignment agreements.

  • Active involvement in the Apple v Samsung litigation.

  • Advising a distributor on brand protection and its anti-counterfeiting strategy.


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