IP owners, get set for competition (law): Companies racing to review contracts

  • A bill recently passed by Parliament may affect the lawfulness of your existing intellectual property (IP) contracts by extending competition law prohibitions to those contracts
  • If your IP contracts breach those competition provisions, you may be exposed to substantial fines.
  • Review your existing IP licenses and assignments and ensure they (and any future IP contracts) comply with the competition law.

Closeup of filing folders with various labels

On 18 February 2019, the Treasury Laws Amendment (2018 Measures No 5) Bill 2018 was passed which, amongst other things, repeals s 51(3) of the Competition and Consumer Act 2010 (CCA).

This is the provision that exempts IP owners from some aspects of competition law when they impose restrictive conditions on licences or assignments of their intellectual property (IP) rights (such as patents, registered designs, registered trade marks, copyright or eligible circuit layouts). The Bill does not become law until it has received assent, however, once it come into play, IP owners will need to make sure their licences and assignments do not breach competition law, including some that were made before the law took effect.

This is particularly relevant for those industries which rely heavily on IP rights, such as health, biotechnology and pharmaceuticals, information technology, Fintech and telecommunications.

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