WIPO Journal - World Intellectual Property Organization

232 The WIPO Journal
In other words, when dealing with an action adopted by IPR holders to exclude others from using their
IPR works, the Australian law does not seem to have sufficiently taken into account the importance of
protecting IP owners’ incentives for making further innovation. The current “taking advantage” test in
s.46 essentially mandates a “factual inquiry”—a classic hypothetical “future with/future without”
test—whether the IP holder would have been likely to grant a licence if it did not have substantial market
power. 92 This would arguably place IPR holders, particularly IT giants, in a difficult situation. As one
commentator observed:
“Without the assistance of legal rules and presumptions it might seem that a right owner’s choice to
exclude other from its property will routinely be found to be a taking advantages of its market power.” 93
In summary, the current TPA does not seem to have appreciated the importance of achieving a trade-off
between IP protection and competition enforcement. The absence of an effective balancing regime (the
EU regime for protecting innovation incentive of potential competitors—IP licensees/users—and the US
regime for protecting the innovation incentive of IP holders) creates many legal uncertainties for the
business operations of major IP companies, particularly the operations of ICT companies in Australia.
Recommendations
In order to create a sound legal environment for ICT companies operating in Australia, and to foster
competition in the Australian ICT market, it is necessary to conduct a revolutionary reform of the IP-related
provisions in the TPA and the Australian competition law regime in general. The author believes that the
recommendations from the IP and Competition Review Committee (IPCRC) in 2001 have provided a
sound foundation for future reforms. Nevertheless, when conducting competition law reform, it is also
important for Australian regulators to draw on experiences from the recent development of competition
laws in the EU and the United States, particularly the recent EU case law relating to IP abuse prevention
in the ICT sector.
Repeal/revision of section 51(3)
As the IPCRC recommended, s.51(3) should be repealed, and the SLC test should apply to the whole of
Pt IV of the TPA, except certain per se prohibitions. In other words, as in the EU, the IP licensing and
assignment arrangements would be subject to full anti-competitive prohibition under Pt IV of the TPA. 94
This unified approach will help to resolve the confusion and uncertainty caused by vague language
expressions in s.51(3).
New balancing mechanism for enforcing competition law in the ICT sectors
In order to achieve a trade-off of enhancing innovation and preventing IP abuse, Australia can draw on
experiences from both the EU and the United States, and develop an effective balancing regime with its
own features. On one hand, Australian regulators may critically import the EU regime for determining
and preventing IP abuse in order to protect innovation incentive of “potential competitors” of dominant
ICT companies. In addition to the traditional SLC test, the ACCC and Australian courts should introduce
the EU-style “new product” test and “objective justification” test to help to determine the legitimate use
of IPRs and the abuse of IPRs. When determining IPR abuses in the ICT sector, the Australian courts
92
Hanks, “Intellectual Property Rights and Competition in Australia” in The Interface Between Intellectual Property Rights and Competition Policy,
2007, p.332.
93
Hanks, “Intellectual Property Rights and Competition in Australia” in The Interface Between Intellectual Property Rights and Competition Policy,
2007, p.332.
94
IPCRC, Review of IP Legislation Under the Competition Principles Agreement, 2001, p.215.
(2011) 2 W.I.P.O.J., Issue 2 © 2011 Thomson Reuters (Professional) UK Limited