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Patenting Genes and Gene Sequences and Competition: Patenting at the Expense of Competition

Published online by Cambridge University Press:  24 January 2025

Charles Lawson
Charles Lawson*
Affiliation:
Genomic Interactions Group, Research School of Biological Sciences, Australian National University
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Extract

The competition principles set out in the Trade Practices Act 1974 (Cth) are based on an economic model of perfectly competitive markets responding to the market and producing only the goods and services required in the market. However, effective competition together with good market information may create a disincentive to markets innovating (market failure) because new developments may be rapidly copied without the recovery of the innovation's development costs (a free ride). According to this model, a patent under the Patents Act 1990 (Cth) compensates for the disincentive to innovate and justifies a limited period of exclusive rights during which the innovator may exclude others in order to recover the development costs (confounding the free riders) and contribute to beneficial innovation by investing in new developments (with the added benefit of disclosure of the innovation). Patents are therefore generally assumed to produce overall economic benefit while at the same time having minimal social costs. The social costs are higher prices, restricted outputs, subsidised foreign inventors and the administrative costs of the patenting scheme.

Type
Research Article
Information
Federal Law Review , Volume 30 , Issue 1 , March 2002 , pp. 97 - 133
Copyright
Copyright © 2002 The Australian National University

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Footnotes

The assistance of Dr Catherine Pickering, Dr Barbara Hocking, Lisa Baird and the anonymous referees is appreciated and acknowledged.

References

1 Trade Practices Commission, Application of the Trade Practices Act to Intellectual Property (1991) 8.

2 Ibid.

3 Such as, 'the uncertainty of pay off from R&D and innovation activity' and 'the limited ability of the inventor/innovator to appropriate profits arising from the use of the new knowledge generated': see Industrial Property Advisory Committee, Patents, Innovation and Competition in Australia (1984) 12; Bureau of Industry Economics, The Economics of Patents, Occasional Paper No 18 (1994) 13.

4 Trade Practices Commission, above n 1, 8; for a review of the policy objectives of patenting see Thomas, McCarthy, 'Intellectual Property and Trade Practices Policy: Coexistence or Conflict? The American Experience' (1985) 13 Australian Business Law Review 198, 200-203.Google Scholar

5 See for example, Second Reading to the Intellectual Property Laws Amendment Act 1998 (Cth): Commonwealth, Parliamentary Debates, House of Representatives, 26 November 1997, 11274 (Warren Truss, Minister for Customs and Consumer Affairs); but for some criticism of this view see Industrial Property Advisory Committee, above n 3, 12 and 79; Trade Practices Commission, above n 1, 8.

6 Industrial Property Advisory Committee, above n 3, 13.

7 Patents Act 1990 (Cth) s 67 provides a minimum term of 20 years from the lodgement of a claim and s 77 provides the term may be extended for certain pharmaceuticals up to 25 years from lodgement.

8 Patents Act 1990 (Cth) s 13(1); Industrial Property Advisory Committee, above n 3, 12.

9 Ibid s 13(2).

10 Ibid Sch 1.

11 Ibid.

12 National Competition Council, Review of Sections 51(2) and 51(3) of the Trade Practices Act 1974 (1999) 167 and the references to the submissions to the inquiry; Intellectual Property and Competition Review Committee, Review of Intellectual Property Legislation under the Competition Principles Agreement (2000) 207; Industrial Property Advisory Committee, above n 3, 25.

13 Trade Practices Act 1974 (Cth) s 45A(1); noting some joint ventures (s 45A(2)) and joint advertising (s 45(4)) agreements may not be deemed illegal per se.

14 Trade Practices Act 1974 (Cth) s 45D and s 45DA.

15 Ibid s 45(1)(a), (2)(a)(i) and (2)(b)(i).

16 Ibid s 47(1), (6) and (7).

17 Ibid s 45C.

18 Ibid s 48.

19 Ibid s 45.

20 Ibid s 47(1), (2), (3), (4), (8)(a), (8)(b), (9)(a) and (9)(b).

21 Ibid s 50(1).

22 Ibid s 46(1)(a).

23 Ibid s 46(1)(b).

24 Ibid s 46(1)(c).

25 Ibid Part IVA.

26 Ibid s 52.

27 Re Queensland Cooperative Milling Association Ltd and Defiance Holdings Ltd (1976) 25 FLR 169, 189.

28 Queensland Wire Industries Pty Ltd v Broken Hill Pty Ltd (1989) 167 CLR 177, 191. However, this perspective may reflect, following the dramatic effects of the 'Chicago School' of economic thought, a competitive process rather than a rivalry between individuals: McCarthy, above n 4, 208.

29 The Patents Amendment Act 2001 (Cth) introduced a 'balance of probabilities' test for novelty and inventive step: see Commonwealth, Parliamentary Debates, House of Representatives, 24 May 2001, 26974 (Warren Entsch, Parliamentary Secretary to the Minister for Industry, Science and Resources).

30 Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232, 244.

31 International Business Machines Corporation v Commissioner of Patents (1991) 22 IPR 417.

32 Trade Practices Act 1974 (Cth) s 88.

33 Re 7 Eleven Stores Ltd (1994) ATPR 41-357, 42,677.

34 Australian Competition and Consumer Commission, Guide to Authorisations and Notifications (1995) 19.

35 Lord, Parker in Attorney General v Adelaide Steamship Co (1913) AC 781Google Scholar expressed a patent as the bargain between the community and the inventor with the consideration moving to the public for the derogation of the right to freedom of trade being the promotion of public benefit innovation and disclosure of the invention. This is consistent with the objects of the Trade Practices Act 1974 (Cth) s 2: 'to enhance the welfare of Australians through the promotion of competition and fair trading'.

36 For a review of the public policy considerations for gene and gene sequence patents see Miranda, Forsyth, 'Biotechnology, Patents and Public Policy: A Proposal for Reform in Australia' (2000) 11 Australian Intellectual Property Journal 202Google Scholar.

37 Halsbury's Statutes of England (2nd ed, 1950) vol 17, 619 (word spellings updated).

38 Charles, Lawson, 'Patenting Genetic Diversity–Old Rules may be Restricting the Exploitation of a New Technology' (1999) 6 Journal of Law and Medicine 373, 381-84Google Scholar.

39 Charles, Lawson Catherine, Pickering, 'Patenting Genetic Materials–Failing to Reflect the Value of Variation in DNA, RNA and Amino Acids' (2000) 11 Australian Intellectual Property Journal 69, 78-79Google Scholar.

40 The recent statement by the United States Patent and Trade Mark Office responding to comments about the proposed 'utility' requirements (United States Patent and Trade Mark Office, 'Revised utility examination guidelines–examination request' (1999) 64 Federal Register 71440; corrected at (2000) 65 Federal Register 3425) illustrates the very limited scope for future innovators to use patented gene and gene sequences:

'Several comments stated that the DNA patent claim scope should be limited to uses that are disclosed in the patent application and that allowing patent claims to encompass DNA itself would enable the inventor to assert claims to 'speculative' uses of the DNA that were not foreseen at the time the patent application was filed. Response: The comment is not adopted. A patent on a composition gives exclusive rights to the composition for a limited time, even if the inventor discloses only a single use for the composition. Thus, a patent granted for an isolated and purified DNA composition confers the right to exclude others from any method of using the DNA composition, for up to 20 years from the filing date. This result flows from the language of the statute itself. When the utility requirement and other requirements are satisfied by the application, a patent granted provides a patentee with the right to exclude others from … 'using' the patented composition of matter ... Where a new use is discovered for a patented DNA composition, that new use may qualify for its own process patent, notwithstanding that the DNA composition itself is patented.

United States Patent and Trade Mark Office, 'Utility examination guidelines' (2001) 66 Federal Register 1092, 1095; for an example of the consequences of broad claiming in the Australian context see Charles Lawson and Catherine Pickering, 'The Conflict for Patented Genetic Materials under the Convention on Biological Diversity and the Agreement on Trade Related Aspects of Intellectual Property Rights' (2001) 12 Australian Intellectual Property Journal 104.

41 Genetics Institute Inc v Kirin-Amgen Inc (No 3) (1998) 41 IPR 325; the recent decisions in Amgen Inc v Hoechst Marion Roussel Inc and Transkaryotic Therapies Inc, 126 F Supp 2d 69 (2001) and Amgen Parties v Roche Parties [2001] England and Wales High Court (Patents Court) 433 (11 April 2001) showed the courts accepted that alternative ways of producing erythropoietin through genetic manipulation could not substitute or imitate Amgen's patented cloned gene product.

42 Hoffmann-La Roche AG v Bresagen Limited and NE Biolabs[1997] Australian Patents Office 57 (12 November 1997).

43 Synaptic Pharmaceutical Corporation v Astra Aktiebolag [1988] Australian Patents Office 49 (9 September 1998).

44 Reviewed in Lawson and Pickering, above n 39, 78-79; another examples is the exclusion of superior diagnostic tests: see Murex Diagnostics Australia Pty Ltd v Chiron Corporation and Ortho Diagnostic Systems Inc, Federal Court, NG 380/1996 (Statement of Claim); Mark, Lawson, 'Patent Fights over Hepatitis C Test Kit Reverberates around the World' (1994) 370 Nature 493Google Scholar.

45 Patents Act 1990 (Cth) Sch 1.

46 Ibid s 18(1)(a).

47 CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260, 295.

48 NRDC v Commissioner of Patents (1959) 102 CLR 252, 269 ('NRDC case').

49 Noting that the Patents Act 1977 (UK) no longer makes any reference to 'manner of manufacture' or the Statute of Monopolies.

50 NRDC v Commissioner of Patents, above n 48, 269; CCOM Pty Ltd v Jiejing Pty Ltd, above n 47, 287-295; Industrial Property Advisory Committee, above n 3, 40.

51 IP Australia, Australian Patent Office Manual of Practice and Procedure, Vol 2–National (1996) 8.2.13-8.2.15; see also Andrew, Christie, 'Some Observations on the Requirement of Inherent Patentability in the Context of Business Method Patents' (2000) 41 IP Forum 16, 17Google Scholar.

52 IP Australia, ibid 8.2.11-8.2.12 and 8.2.16-8.2.17; see also Christie, ibid.

53 IP Australia, ibid 8.2.14 and 8.2.9; see also Christie, ibid.

54 IP Australia, ibid 8.2.2-8.2.8; see also Christie, ibid.

55 Jack, Starke, 'The Patenting of Animal Forms with New Traits' (1987) 61 Australian Law Journal 324, 325-326Google Scholar.

56 Ranks Hovis McDougall Ltd's Application (1976) 46 Office Journal of Patents (AOJP) 3915.

57 NRDC v Commissioner of Patents, above n 48.

58 Diamond v Chakrabarty, 447 US 303 (1980).

59 Bristol-Myers Squibb v FH Faulding & Co Ltd (2000) 97 FCR 524.

60 Christie, above n 51, argues the NRDC v Commissioner of Patents, above n 48, test is so broad that any practical restriction has been 'annihilated'; this now includes business systems: see Welcome Real-Time SA v Catuity Inc [2001] FCA 445.

61 IP Australia, Australian Patents for: Microorganisms, Cell Lines, Hybridomas, Related Biological Materials and their Use, Genetically Manipulated Organisms (1998) 1-2.

62 Patents Act 1990 (Cth) s 18(2).

63 IP Australia, above n 61, 1.

64 (1995) 183 CLR 655 ('Mirabella').

65 Ibid 664 (Brennan, Deane and Toohey JJ); Mary, Padbury, 'Inventiveness Apart from Novelty and Inventive Step–The High Court's decision on manner of manufacture in Philips and Mirabella' (1998) 9 Australian Intellectual Property Journal 161Google Scholar.

66 (1998) 194 CLR 171 (Brennan CJ, Gaudron, McHugh and Gummow JJ); note that this was an appeal about the construction of Patents Act 1952 (Cth) s 100 and in particular the meaning of invention with respect to manner of manufacture. Significantly, the term 'invention' is similarly defined in the Patents Act 1990 (Cth).

67 Ibid 185-93.

68 Ibid 193-201.

69 Ibid 200.

70 Above n 59.

71 Ibid 532-3.

72 Ibid 541; noting that in N V Philips Gloeilampenfabrieken and Philips Lighting Pty Ltd v Mirabella International Pty Ltd, above n 64, obviousness (or lack of inventive step) was not at issue as the appeal was confined to the opening words of s 18(1).

73 Bristol-Myers Squibb Company v FH Faulding Pty Ltd, above n 59, 541; see also, CCOM Pty Ltd v Jiejing Pty Ltd, above n 47, 285 which was cited as further authority for this proposition.

74 Bristol-Myers Squibb Company v FH Faulding Pty Ltd, ibid 541-2.

75 Ibid 542; in the House of Lords, albeit applying different laws, Lord Hoffman in the Biogen Inc v Medeva plc [1997] RPC 1, 45 warned:

One can of course imagine cases in which the alleged subject matter is so obviously not an invention that it is tempting to take an axe to the problem by dismissing the claim without inquiring too closely into which of the conditions has not been satisfied … Judges would therefore be well advised to put on one side their intuitive sense of what constitutes an invention until they have considered the questions of novelty, inventiveness and so forth.

76 N V Philips Gloeilampenfabrieken and Philips Lighting Pty Ltd v Mirabella International Pty Ltd, above n 64, 670 (Dawson and McHugh JJ).

77 Ibid 670-671.

78 Ibid 662.

79 Above n 66, 198.

80 (2000) 99 FCR 151.

81 Above n 30, 246.

82 Above n 80, 196.

83 Ibid 196.

84 Above n 59, 536.

85 For a review of the relatedness of genetic materials in the context of patenting see Lawson and Pickering, above n 39, 69-70.

86 For example Bristol-Myers Squibb v FH Faulding & Co Ltd, above n 59, 566-7; noting comments from the High Court suggest public policy arguments are relevant to an assessment of what constitutes appropriate subject matter for a patent grant: see Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd, above n 66, 190 (Brennan CJ, Gaudron, McHugh and Gummow JJ).

87 For example Bristol-Myers Squibb v FH Faulding & Co Ltd, ibid.

88 Ibid 569.

89 Ibid 530.

90 Ibid (Black CJ, Lehane and Finkelstein JJ), Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) 50 FCR 1 (Lockhart and Wilcox JJ); the converse approach has been adopted in Anaesthetic Supplies Pty Ltd v Rescare Ltd (Sheppard J) and in Bristol-Myers Squibb v FH Faulding & Co Ltd (1998) 41 IPR 467 (Heerey J).

91 Ibid 530.

92 Commonwealth, Parliamentary Debates, Senate, 22 August 1990, 1910 (Senator John Coulter), 17 September 1990, 2478 (Senator John Coulter) and 20 September 1990, 2653 (Senator John Coulter); the Patents Amendment Bill 1996 (Cth), which also proposed excluding gene and gene sequences has never progressed past the second reading stage in the Senate despite being prorogued to the 39th Parliament; similar amendments were again rejected in the Patents Amendment Bill 2001 (Cth): Commonwealth, Parliamentary Debates, Senate, 27 September 2001, 27427 (Senator Natasha Stott Despoja).

93 Jill McKeough and Andrew Stewart, Intellectual Property in Australia (2nd ed, 1997) 297 observe that during re-examination the prior art base does not include the doing of an act (s 98(2)) and so the re-examination is confined only to documentary publications without any apparent reason; note Patents Act 1990 (Cth) s 45(3) provides the Commissioner may direct an applicant to disclose the results of searches carried out for corresponding applications made outside Australia.

94 Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228, 235.

95 For a recent statement of the test and its application, see ICI Chemicals and Polymers Ltd v The Lubrizol Corporation Inc [1999] FCA 345, [93] (Emmett J).

96 Minnesota Manufacturing and Mining Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253, 298.

97 Lawson and Pickering, above n 39, 72-76.

98 This is considered 'trite law': Meyers Taylor Pty Ltd v Vicarr Industries Ltd, above n 94, 249 (Aikin J); recently considered in Aktiebolaget Hassle v Alphapharm Pty Ltd [2000] FCA 1303, [31].

99 The Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262, 280.

100 Commissioner of Patents v Microcell Ltd, above n 30, 244.

101 International Business Machines Corporation v Commissioner of Patents, above n 31.

102 (1996) 33 IPR 557.

103 Ibid 573.

104 Genetics Institute Inc v Kirin-Amgen Inc (No3) (1999) 92 FCR 106.

105 Industrial Property Advisory Committee, above n 3, 46; Department of Industry, Science and Resources, National Innovation Summit–Working Group on Managing Intellectual Property– Framework Paper (1999) 63; Intellectual Property and Competition Review Committee, above n 12, 156.

106 Patents Act 1990 (Cth) s 7(2) and (3).

107 Industrial Property Advisory Committee, above n 3, 46; National Innovation Summit, above n 105, 64; Intellectual Property and Competition Review Committee, above n 12, 156.

108 Department of Industry, Science and Resources, Backing Australia's Ability–An Innovation Action Plan for the Future: Facts Sheet 2–Intellectual Property (2001) 1.

109 Commonwealth, Parliamentary Debates, House of Representatives, 24 May 2001, 26974 (Warren Entsch, Parliamentary Secretary to the Minister for Industry, Science and Resources).

110 Ibid.

111 [1996] APO 3 (18 January 1996).

112 For a further analysis and examples see Lawson and Pickering, above n 39, 72-76.

113 Transfield Pty Ltd v Arlo International Ltd (1980) 144 CLR 83, 99 (Mason J) which reviews the English authorities; note in particular Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 2 All ER 657, 669 (Lord Oaksey).

114 Industrial Property Advisory Committee, above n 3, 27.

115 Above n 113.

116 Ibid 92 (Barwick CJ); 95-97 (Stephen J); 102 (Mason J); 107-08 (Wilson J).

117 Ibid 105 (Murphy J).

118 Industrial Property Advisory Committee, above n 3, 27-32.

119 Intellectual Property and Competition Review Committee, above n 12, 162.

120 Industrial Property Advisory Committee, above n 3, 28.

121 Intellectual Property and Competition Review Committee, above n 12, 162.

122 The 'prescribed court' in this instance is the Federal Court as the regulations do not provide for a court and Patents Act 1990 (Cth) s 154(1) provides: 'The Federal Court has jurisdiction with respect to matters arising under this Act'.

123 Patents Regulations 1991 (Cth) r 12.1(1).

124 (1969) 119 CLR 572.

125 Which was to be determined at the time of the hearing, ibid 575.

126 Ibid 578-79.

127 Ibid 579-82.

128 Ibid 583.

129 Ibid 583.

130 Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134, 139 (Bowen CJ); 167 (Deane J).

131 The only reported cases are Fastening Supplies Pty Ltd v Olin Mathieson Chemical Corporation, above n 124 and Wissen Pty Ltd v Lown (1987) 9 IPR 124.

132 Industrial Property Advisory Committee, above n 3, 28; Intellectual Property and Competition Review Committee, above n 12, 162.

133 Industrial Property Advisory Committee, ibid 27-32.

134 Ibid 32-33.

135 Intellectual Property and Competition Review Committee, above n 12, 163.

136 Ibid 163.

137 Ibid.

138 Ibid.

139 Part of 'The Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations' signed by ministers at Marrakech on 15 April 1994 and came into force on 1 January 1995. This agreement formed part of the trade negotiations started in Punta del Este, Uruguay in September 1986 that created the World Trade Organisation.

140 Bristol-Myers Squibb v FH Faulding & Co Ltd, above n 59, 568.

141 WT/DS/114 (17 March 2000).

142 Review in Charles, Lawson, 'Canada v European Union–Competition and Patents at the WTO' (2000) 28 ACCC Journal 1Google Scholar.

143 Queensland Wire Industries Pty Ltd v Broken Hill Pty Ltd, above n 28, 188 (Mason CJ and Wilson J); 200 (Dawson J); Trade Practices Commission v Ansett Transport Industries (Operations) Pty Ltd (1978) 32 FLR 305 (Federal Court); Re Queensland Cooperative Milling Association Ltd and Defiance Holdings Ltd (1976) 25 FLR 169 (Australian Competition Tribunal).

144 Trade Practices Act 1974 (Cth) s 50 and s 50A; Trade Practices Commission, above n 1, 1; this is a significant issue as mergers between corporations with broad patent rights to materials (including gene sequences) and applications have the potential to restrict competition for research and products: see for example the patent issues associated with the merger between Ciba-Geigy Limited and Sandoz Limited to form Novartis AG: In re Ciba-Geigy Limited, 'Analysis to Aid Public Comment' (1997) 62 Federal Register 409.

145 National Competition Council, above n 12, 151 and 156-67.

146 Although, conduct under Part IV and other Parts of the Trade Practices Act 1974 (Cth) may be exempted by regulation according to Trade Practices Act 1974 (Cth) s 172.

147 Trade Practices Act 1974 (Cth) s 46 and s 46A.

148 Ibid s 48.

149 Frances, Hanks Phillip, Williams, 'Implications of the Decision of the High Court in Queensland Wire' (1990) 17 Melbourne University Law Review 437, 454Google Scholar.

150 McCarthy, above n 4, 199.

151 National Competition Council, above n 12, 182-3.

152 Warman International v Envirotech Australia Pty Ltd (1986) 11 FCR 478, 502.

153 Examples include Ah Toy Pty Ltd v Thiess Toyota Pty Ltd (1980) 30 ALR 271 and Broderbund Software Inc v Computermate Products (Aust) Pty Ltd (1992) 22 IPR 215 where the market was broadly defined so that the Trade Practices Act 1974 (Cth) had no application.

154 (1990) 97 ALR 497.

155 Ibid 500.

156 Ibid 511.

157 Ibid.

158 For examples see Etablissements Consten SA and Grundig-Verkaufs-Gmbh v EC Commission [1966] CMLR 418 (applying Treaty of Rome Art 85); Parke, Davis & Co v Probel [1968] CMLR 47 (applying Treaty of Rome Art 86).

159 Radio Telefis Eireann and Independent Television Publications Ltd v EC Commission [1995] 4 CMLR 718, [35]-[36] ('Radio Telefis').

160 Ibid [38].

161 [1989] 4 CMLR 122.

162 Ibid [8].

163 Above n 159.

164 Reviewed in Abraham van, Melle, 'Refusal to License Intellectual Property Rights: the Impact of RTE v EC Commission (Magill) on Australian and New Zealand Competition Law' (1997) 25 Australian Business Law Review 4Google Scholar which argues this case has application in Australia and New Zealand.

165 United States Department of Justice and Federal Trade Commission, Anti-Trusts Guidelines for the Licensing of Intellectual Property (1995) s 2.1.

166 For example Eastman Kodak Co v Image Technical Services Inc 504 US 451 (1992) where the Supreme Court found Kodak's refusal to supply replacement parts except to buyers of their products who used their services could have been an unlawful anti-competitive practice and remitted the matter for trial. At trial Kodak raised the issue of patent and copyright protection for its parts. This was rejected on evidence that it was a pretext: see Image Technical Services Inc v Eastman Kodak Co 125 F3d 1195 (1997) 1201.

167 Independent Service Organizations Antitrust Litigation 203 F3d 1322 (2000) 1327-28.

168 Townshend v Rockwell International Corporation 2000 US Dist LEXIS 5070 [23].

169 In re Ciba-Geigy Limited 123 Federal Trade Commission 842 (1997).

170 In re Glaxo PLC 119 Federal Trade Commission 815 (1995).

171 Above n 113.

172 Ibid 103.

173 Ibid 103.

174 Ibid 92 (Barwick CJ); 108 (Wilson J).

175 Ibid 97; Stephen J also said the deeming provisions of Trade Practices Act 1974 (Cth) s 45A did not affect his conclusions.

176 Ibid 105.

177 Trade Practices Commission, above n 1, 13; Intellectual Property and Competition Review Committee, above n 12, 207.

178 Trade Practices Commission, ibid.

179 For example, when Trade Practices Act 1974 (Cth) s 45 and s 47 apply, s 46 will generally also apply: National Competition Council, above n 12, 216-219, although the National Competition Council 'accepts that there is a significant amount of conduct that may breach s 45 and s 47 without breaching s 46' (217).

180 National Competition Council, ibid 157-60, 217; see for examples the United States Department of Justice and Federal Trade Commission, above n 165, s 2.2; Organisation for Economic Co-operation and Development, Competition Policy and Intellectual Property Rights (1989) 15.

181 Trade Practices Commission, above n 1, 21-30.

182 National Competition Council, above n 12, 151 and 164-5.

183 Ibid 152; Intellectual Property and Competition Review Committee, above n 12, 215.

184 Industrial Property Advisory Committee, above n 3, 25.

185 National Competition Council, above n 12, Chapter C8.

186 Intellectual Property and Competition Review Committee, above n 12, 215.

187 National Competition Council, above n 12, 151.

188 Intellectual Property and Competition Review Committee, above n 12, 213.

189 Organisation for Economic Co-operation and Development, above n 180, 6 and 11; although incentives to innovate are believed to be significantly reduced in monopolised industries (6).

190 National Competition Council, above n 12, 150.

191 Trade Practices Act 1974 (Cth) s 45 and s 4D.

192 Ibid s 45A.

193 Ibid (Cth) s 45D and s 45DA .

194 Ibid (Cth), s 47, except s 47(6) and (7).

195 Trade Practices Commission, above n 1, 21-31.

196 Intellectual Property and Competition Review Committee, above n 12, 215.

197 Allan, Fels, 'The Trade Practices Act–Past, Present and Future' (20001) 9 Trade Practices Law Journal 5, 14-17Google Scholar.

198 National Competition Council, above n 12, 245.

199 Intellectual Property and Competition Review Committee, above n 12, 215.

200 United States Department of Justice and Federal Trade Commission, above n 165.

201 The Trade Practices Amendment Bill (No 1) 2000 (Cth) proposes an amendment which will allow the onus of proof to be reversed in an action brought by the Australian Competition and Consumer Commission where a corporation has a substantial degree of market power and has taken advantage of that power. In these circumstances the corporation will be required to establish that it has not taken advantage of its power for one of the proscribed purposes set out in Trade Practices Act 1974 (Cth) s 46(1).

202 O'Keeffe Nominees Pty Ltd v BP Australia Ltd (1990) ATPR 41-057, 51,741 (Spender J); Competition Policy Reform Act 1995 (Cth) s 2.

203 Hanks and Williams, above n 149, 452.

204 For example Ah Toy Pty Ltd v Thiess Toyota Pty Ltd, above n 153, rejected a market for the Toyota brand in favour of the motor vehicle market and Broderbund Software Inc v Computermate Products (Aust) Pty Ltd, above n 153, rejected a market for a particular computer game in favour of a national market for such games; Hanks and Williams, above n 149, 452, suggest even a pharmaceutical patent with no close substitutes might be considered in a broader range of activities of the patent owning company, such as research and marketing.

205 Above n 152.

206 Ibid 502; noting that this decision does not appear to have taken into account the construction of Trade Practices Act 1974 (Cth) s 51(1) which clearly contemplates intellectual property rights being subject to the Patents Act 1990 (Cth).

207 (1989) 167 CLR 177; noting that Dawson J (202) expressly considered Warman International v Envirotech Australia Pty Ltd, above n 152, might have been wrongly decided; reviewed in Hanks and Williams, above n 149.

208 Queensland Wire Industries Pty Ltd v Broken Hill Pty Ltd, above n 28; Mason CJ and Wilson J (with whom Dawson J (202) and Toohey J (216) essentially agreed): 'If BHP lacked that market power–in other words, if it were operating in a competitive market–it is highly unlikely that it could stand by, without any effort to compete and allow the [QWI] to secure its supply of Y-bar from a competitor' (192); Deane J adopted a different approach: 'In refusing to supply in order to achieve that purpose [of preventing QWI from becoming a manufacturer and wholesaler of star pickets] BHP has clearly taken advantage of that substantial power in the market' (197): for a consolidated view of the test, see Lockhart J in Dowling v Dalgety Australia Ltd (1992) ATPR 41-165, 40,277.

209 (2001) 178 ALR 253 (High Court); (1999) 90 FCR 128 (Full Federal Court); (1998) 42 IPR 627 (Federal Court).

210 Recent reviews include Stephen, Corones, 'Section 46 of the Trade Practices Act: Rules of Battle Revisited' (2001) 29 Australian Business Law Review 252Google Scholar; Michael, O'Bryan, 'Section 46: Legal and Economic Principles and Reasoning in Melway and Boral' (2001) 8 Competition & Consumer Law Journal 203Google Scholar; Robertson, Wright Michelle, Painter, 'Recent Developments in the Application of s 46: Melway and Boral considered' (2001) 21 Australian Bar Review 105Google Scholar; Warren, Pengilley, 'Misuse of Market Power: the High Court finds in favour of Melway and endorses the Realities of Exclusive Distribution' (2001) 17 Trade Practices Law Bulletin 1Google Scholar.

211 Heerey J summarises the judge at first instance's findings: above n 209 (FFC), 130-33.

212 Ibid 139-44.

213 Ibid 134.

214 Ibid 136.

215 Ibid 135.

216 Above n 209 (HCA), 265; but note Kirby J (dissenting) rejects this analysis (ibid 282-4).

217 Ibid 268.

218 Ibid.

219 Above n 209 (FFC), 135.

220 Ibid 134.

221 Ibid 134.

222 Ibid 135; Hanks and Williams, above n 149, which suggested 'taking advantage' had to be considered in the context of efficiency and that conduct engaged in irrespective of market power was a matter of efficiency and not mere use of any market power (ibid 445).

223 Ibid 135-6.

224 Ibid 136

225 Ibid 135; Trade Practices Commission, Misuse of Market Power (1990) [17].

226 Trade Practices Commission, ibid.

227 Above n 209 (FFC), 136.

228 Above n 209 (HCA), 268-69.

229 Ibid 269.

230 Ibid.

231 United States Department of Justice and Federal Trade Commission, above n 165, Part IV(A).

232 For example, see In re Summit Technology Inc and VISX Inc, No 9286, Federal Trade Commission, 21 August 1998.

233 Above n 209 (HCA), 278.

234 Ibid 273-4.

235 Ibid 266-7.

236 Ibid 268.

237 Ibid 273-4.

238 Ibid 285.

239 Trade Practices Commission, above n 1, 8.

240 Ibid.

241 United States Department of Justice and Federal Trade Commission, above n 165, s 2.3.

242 Above n 209 (HCA), 274.

243 McCarthy, above n 4, 199.

244 Intellectual Property and Competition Review Committee, above n 12, 138; see also IndustrialProperty Advisory Committee, above n 3, 24; National Competition Council, above n 12, 158.

245 Organisation for Economic Co-operation and Development, above n 180, 15.

246 Lawson, above n 38, 381-4.

247 Lawson and Pickering, above n 39, 78-9.

248 See the recent statement by the United States Patent and Trade Mark Office set out at n 40.

249 Above n 41; see also Transkaryotic Therapies Inc, Annual Report 2000 (2001) 2:

I understand that many people have concluded TKT has lost its opportunity in the US. However, I believe that this view is far from reality. About half of all patent cases are reversed on appeal, and Amgen sells an erythropoietin product today only because they overturned a patent case on appeal. We are emblodened by the decision of the District Court because it correctly found that Amgen had neither described nor enabled TKT's technology and had not distinguished their recombinant erythropoietin from that of the prior art.

Contrast Amgen's view: 'The successful defence of our intellectual property was important, not only for Amgen but for our entire industry': Amgen Inc, Annual Report 2000 (2001) 5; a successful appeal against Amgen now seems an unlikely result following the High Court of Justice decision in England in Amgen Parties v Roche Parties, above n 41.

250 Amgen Annual Report, ibid, 23.

251 The same limitation would most probably apply in Australia as Amgen has patented extensive applications of the erythropoietin gene: see for examples, Kirin-Amgen Inc v Board of Regents of the University of Washington and Genetics Institute Inc [1995] 64 APO (19 October 1995).

252 US Patent 6,245,566, Human embryonic germ cell line and methods of use, granted 12 June 2001; US Patent 6,200,806, Primate embryonic stem cells, granted 13 March 2001; Australian Patent 729377, Methods and materials for the growth of primate-derived primordial stem cells in feeder-free culture, granted 17 May 2001; US Patent 5,843,780, Primate embryonic stem cells, granted 12 January 1998; US Patent 5,061,620, Human haematopoietic stem cells, granted 29 October 1991.

253 US Patent 5,159,135, Genetic engineering of cotton plants and lines, granted 7 December 1994.

254 IP Australia, Industrial Property: IP Activity in Australia and the Asia Pacific Region (1998) 11 and Appendix B.

255 Ibid 17 and Appendix B; significantly the same level of foreign grants was reported in 1984:

Industrial Property Advisory Committee, above n 3, 11; attempting to quantify this, in 1998, 'of the 2000 or so patent applications filed in the biotechnology category, only around 2 per cent originate in Australia', which in real terms was an increase from 26 in 1988 to 46 in 1998: Dianne Nicol and Jane Nielsen, 'The Australian Medical Biotechnology Industry and Access to Intellectual Property: Issues for Patent Law Development' (2001) 23 Sydney Law Review 347, 361.

256 Industry Commission, The Pharmaceutical Industry, Report 51, volume 1 (1996) 7; Australian Pharmaceutical Manufacturers Association, APMA Facts Book 1999-2000 (1999) 2.

257 Industry Commission, ibid Chapter 6 (volume 1).

258 Industrial Property Advisory Committee, above n 3, 17.

259 For a recent listing of gene patent accumulations see Nell Boyce and Andy Coghlan, 'Your Genes in their Hands' (2000) New Scientist (20 May 2000) 15.

260 For an example, the merger between Ciba-Geigy Limited and Sandoz Limited to form Novartis AG: see In re Ciba-Geigy Limited, above n 144;

Ciba and Sandoz are the two leading commercial developers of gene therapy products, which are expected to begin offering significant improvements in the treatment of cancer and other diseases and medical conditions by the year 2000. Working to ensure that the merger does not slow research and development or raise prices for gene therapy products closest to marketability, or slow innovation toward future products, the FTC proposed today to require, among other things, the licensing of specified gene therapy technology and patent rights to Rhône-Poulenc Rorer Inc. The goal, the FTC said, is to put Rhône-Poulenc in a position to compete against the combined firm, thereby resolving the agency's antitrust concerns Federal Trade Commission, FTC Accord in Ciba-Giegy/Sandoz Merger to Prevent Slowdown in Gene Therapy Development and Preserve Competition in Corn Herbicides and Flea Control Markets, Press Release (17 December 1996).

261 For an example, the merger between Glaxo Limited and Wellcome Limited to form Glaxo Wellcome Limited: In re Glaxo PLC, above n 170.

262 See Suzanne Scotchmer and Jerry Green, 'Novelty and Disclosure in Patent Law' (1990) 21 RAND Journal of Economics 131; Intellectual Property and Competition Review Committee, above n 12, 138-39.

263 Intellectual Property and Competition Review Committee, above n 12, 16-18 lists the recommendations.

264 National Competition Council, above n 12, 1-14 summarises the recommendations.

265 Ibid v; Industrial Property Advisory Committee, above n 3, 217.

266 For an elegant summary of the 'traditional' and 'Chicago' views and the consequences for interpreting the benefits of intellectual property rights see McCarthy, above n 4, 209.

267 See for example Intellectual Property and Competition Review Committee, above n 12, 150.

268 Intellectual Property and Competition Review Committee, Report on Parallel Importing under the Copyright Act 1968 (2000) 3-13; although the view was not unanimous, see the dissenting opinion (38).

269 Intellectual Property and Competition Review, Committee, above n 12, 150.

270 Reviewed in Lawson, above n 38, 377-81; it is also significant that the United States does not draw this distinction: 'Whoever discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title': 35 USC 101; see the decision in Funk Brothers Seed Co v Kalo Inoculant Co, 333 US 127 (1948) which was criticised by the High Court in the NRDC case, above n 48, saying the terms 'work of nature' and 'laws of nature' were 'vague and malleable terms infected with too much ambiguity and equivocation' (263-4). The decision in Funk Brothers was an attempt by the court to limit a very broad claim for a very minor contribution to innovation.

271 Reviewed in Lawson and Pickering, above n 39, 72-76.

272 Which is well documented: see for example, Nicholas Gruen, Gerard Prior and Ian Bruse, Extending Patent Life: Is it in Australia's Economic Interests?, Industry Commission Staff Information Paper (1996) 16-40.

273 Although the Intellectual Property and Competition Review Committee, above n 12, 143 quoted FM Sherer, New Perspectives on Economic Growth and Technological Innovation (1999) 58 who made a passing comment on this issue without a referenced source.

274 Richard, Levin, 'A New Look at the Patent System' (1986) 76 American Economic Review 199Google Scholar.

275 See Charles, Lawson, 'Some Economic Questions for Biotechnology Patenting in Australia' (2000) 41 Intellectual Property Forum 10, 14Google Scholar for an analysis of the innovation deficit in the pharmaceutical industry.

276 Pharmaceutical Research and Manufacturers of America cites 50 existing biotechnology medicines and a further 350 in development: Pharmaceutical Research and Manufacturers of America, Pharmaceutical Industry Profile 1999 (1999) 6.

277 Australian Economic Analysis Pty Ltd, Pharmaceuticals and Australia's Knowledge Economy– A Report on Australia's Pharmaceutical Industry (1998) 1-6; although interestingly, intellectual property was not identified as a key issue for industry in a recent review of an industry/government dialogue in the United Kingdom: Pharmaceutical Industry Competitiveness Taskforce, Pharmaceutical Industry Competitiveness Taskforce–The Report (2001) 67.

278 For example see Boyce and Coghlan, above n 259, 15, which illustrates the concentration of key gene patents among a few corporations.

279 Prime Minister's Science Engineering and Innovation Council, Profiting from the Biotechnology Revolution (1998) 1.

280 Industrial Property Advisory Committee, above n 3, 80.