The Australian Government seeks to ensure that an appropriate balance exists between incentives for innovation and investment and the interests of both individuals and businesses, including small businesses, in accessing ideas and products.
Productivity Commission, IP Arrangements Issues Paper, 2015
In 2017, the department commissioned ACIL Allen Consulting Pty Ltd to research and review intellectual property (IP) arrangements associated with regulation of agricultural and veterinary (agvet) chemical products in selected countries, and to compare those IP arrangements with the Australian system.
The aim of this project was to provide the department with a better understanding of the regulatory arrangements in place in certain comparable nations to encourage both registration of new agvet chemical products and access to generic products.
In summary, the ACIL Allen review found that Australia's data protection (and IP settings more broadly) are generally appropriate, competitive and do not pose barriers to agvet chemical product registration.
However, the report also found there is scope to improve the efficiency of the current agvet chemical registration process, and for the APVMA to make greater use of international data and assessments as part of improving that process. The department and the APVMA are currently addressing these issues through the development of various legislative and operational changes.
With respect to the access problem of ‘minor use’, the report suggests that Australia’s national grants program (which is based on the Canadian minor use program) should carry on in conjunction with the APVMA continuing to fast-track its product registrations and use permits. The report also suggested that another Canadian policy of limiting manufacturer liability be considered as a possible option for Australia and this idea is also being explored.
Finally, the report suggests that Australian legislation surrounding agvet chemicals and intellectual property protection could benefit from being simplified and modernised.
Intellectual property (IP) and agvet chemicals
Sometimes agricultural producers cannot purchase agvet chemicals when they need them because a new chemical has not been registered in Australia by the owner for a particular use or volume. Not registering particular chemicals or product uses is a commercial decision based on the cost of their registration and the likely returns in a small market. When this occurs, producers in other markets will gain a trading advantage if they gain access to those newer chemicals before their Australian counterparts.
The agvet chemical sector relies heavily on data protection rights since many advances in chemistry require a large upfront R&D investment and are easy to copy. Any ability of agvet chemical companies to leverage IP rights to forestall market entry by generics (effectively extending the term of their exclusivity) has a significant negative impact on Australian farmers and other users in terms of choice and price as well as on taxpayers (e.g. through a compensating need to deliver grants programs or subsidies etc.).
In November 2016, the department began to examine how to encourage access to generic products while simultaneously facilitating the emergence of new chemistries, and whether this could be done through reforms to intellectual property (IP), data protection, and confidential commercial information settings. The department commissioned the ACIL Allen review of international IP arrangements and comparison with the Australian regulatory environment as an initial step in a longer-term research project.
IP in brief
Intellectual property (IP) rights take a variety of forms including patents, copyright and trademarks and others such as rights over plant varieties, and a single product can embody multiple IP rights. IP arrangements also form part of the broader innovation system and the role they play depends on the right that is afforded. Patents and copyright help promote product innovation and trademarks provide consumer information and protect brand reputation.
Australia is also overwhelmingly a net importer of IP, which means that the costs to consumers and follow-on innovators from higher prices and restricted availability are not offset by increases in Australian producer profits.
Sound IP arrangements offer opportunities to creators to secure sufficient returns to justify their investment. In this way ideas are like property rights but they also deliver economic and social value as others seek to use them and extend knowledge. For such reasons, IP rights are not granted in perpetuity, and strict limitations are placed on their application.
Some information on this page has been taken from the 2016 Productivity Commission inquiry report, No. 78, Intellectual Property Arrangements.
In undertaking the review, ACIL Allen was asked to deliver a report that:
- Proposed policy options to improve Australian agricultural producers’ access, through registration by the APVMA, to innovative agvet chemicals while also supporting access to generic agvet chemicals. This is to include a robust and evidence-based analysis of policy options.
- Included supporting background and analysis, primarily based on desk-top research using national and international sources, as well as stakeholder consultations.
- In the context of the registration process for both new and generic agvet chemical products in Australia, the UK, EU, the USA, Canada and New Zealand, documented and compared the supporting primary and subordinate IP legislation, including the provision and trade obligations around:
- Considered the use and management of confidential commercial information by agvet regulatory bodies, and anything else important for understanding the IP environment.
- Overviewed the national registration arrangements for both new and generic agvet chemical products for the selected countries, including the costs and timeframes involved for applicants, protocols/protections on the use and management of confidential commercial information, references to overseas registration processes, recent reforms and the direction of future reforms.
- For selected countries, explained the characteristics and unique features of the agvet chemical markets in which these regulators operate, including any market incentives/strategic behaviours fostered by IP settings, and how these have affected the registration rates of both new and generic agvet chemical products over recent years.
- For comparison purposes, reviewed and provided a summary of the available literature on the registration arrangements and supporting IP schemes in those same set of countries for human therapeutic (pharmaceutical) products.
- Developed policy options extending to consideration of changes to improve incentives to register agvet chemicals for minor uses.
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