WIPO Journal - World Intellectual Property Organization

228 The WIPO Journal
Although the NCC set out different interpretations, it has not provided a clear recommendation on which
interpretation should be followed. 68 The NCC found that the intermediate interpretation seems to accord
with Mason J.’s approach in Transfield. 69 It further pointed out that the Mason approach also has its own
limitations. 70 Apart from the “collateral advantage” test, it has not been an easy task to make a distinction
between the matters relating to the legitimate use of IPR and matters of possible interest of competition.
Indeed, neither the court nor the existing statutory law, so far, has provided a clear instruction on how
such a distinction can be made. As Justice Lindgren commented in one of his papers, “the distinction will
often be difficult to apply”, and it is hard to propose a “better elucidation of the statutory test” in absence
of “a clear statutory guideline”. 71 This arguably creates many uncertainties for many ICT companies
operating in Australia, whose business operations rely greatly on the legitimate use of IPR (such as
Microsoft) or technological licences from other technology holders (such as small and medium software
application companies). (More details on how other jurisdictions, such as the United States, deal with
these issues will be introduced in later sections.)
Exemption for condition or contract?
It is noteworthy that the IP exemptions in s.51(3) only apply to conditions in licences and assignments,
rather than the licences or assignments themselves.
First, the immunity for IP-related condition in licences or assignments would not spontaneously extend
to the licences or assignments themselves. For example, as mentioned above, the IP immunity in s.51(3)
does not apply to the supply of an IP licence on the condition that the licensee will not grant a sub-licence
at below a specified price. 72 Such behaviour has breached the prohibition for maintaining resale price in
s.48. Moreover, an acquisition of IP is not spontaneously exempted by s.51(3). It remains subject to the
SLC test in s.50 which prohibits mergers or acquisitions that have the effect or the likely effect of SLC
in a market.
Secondly, the immunity for IP-related condition cannot be extended to refusals of IP licences or
assignments. As mentioned above, refusals to license or assign IP will be faced with the “full force” of
the misuse of market power prohibition under s.46. This means that a refusal to license will not be exempted
even if the refusal was made because the potential licensee would not agree with a condition that would
be exempted as “relating to” the IP. 73
Thirdly, the immunity does not apply to the IP-related condition in any agreements other than IP licences
or assignments. For example, the immunity does not extend to the conditions in a contract of the supply
of technology products embodying IP since the contract itself does not entail an IP licence. 74 Nor does it
apply to an agreement between two competitors that both agree to cross-license their patents and to restrict
68 The NCC pointed out that Mason J.’s judgment seems to accord with the intermediate interpretation that a condition “relates to” IP where it
attempts to secure an advantage within the “purpose and scope of the exclusive rights granted by the specific IP regime” and does not attempt to gain
a “collateral” advantage. But it also found that Mason J.’s approach may cause uncertainty in determining whether a condition relates to the subject-matter
of IP.
69 That a condition “relates to” IP where it attempts to secure an advantage within the “purpose and scope of the exclusive rights granted by the
specific IP regime” and does not attempt to gain a “collateral” advantage. See NCC, Review of Section 51(2) and 51(3), 1999, p.185, at http://www
.globalcompetitionforum.org/regions/Oceania/Australia/LESe-001.pdf [Accessed March 30, 2011].
70 By referring to the view of the former TPC, the NCC pointed out the test of Mason J. appears in two forms: (1) a positive question of whether a
condition is within the purpose and scope of the IP owner’s exclusive rights; or (2) a negative question of whether the IP owner is seeking an advantage
collateral to his exclusive rights. It further pointed out that a different conclusion (on whether the alleged condition relates to the subject-matter of IP
licence) may be reached depending on which question will be asked. NCC, Review of Section 51(2) and 51(3), 1999, pp.185–186, at http://www
.globalcompetitionforum.org/regions/Oceania/Australia/LESe-001.pdf [Accessed March 30, 2011].
71 Lindgren, “The Interface between Intellectual Property and Antitrust” (2005) 16(2) Australian Intellectual Property Journal 76, 78.
72 TPA s.96A; Hanks, “Intellectual Property Rights and Competition in Australia” in The Interface Between Intellectual Property Rights and
Competition Policy, 2007, p.323.
73 Hanks, “Intellectual Property Rights and Competition in Australia” in The Interface Between Intellectual Property Rights and Competition Policy,
2007, p.321.
74 Hanks, “Intellectual Property Rights and Competition in Australia” in The Interface Between Intellectual Property Rights and Competition Policy,
2007, p.321.
(2011) 2 W.I.P.O.J., Issue 2 © 2011 Thomson Reuters (Professional) UK Limited