Gavel

Changes to the Australian Competition and Consumer Act 2010 have real implications for IP owners.

This article looks at the implications arising from recent changes to the Australian Competition and Consumer Act 2010, and the considerations IP owners should make in order to maintain their compliance with the Act.

Background

The Australian Competition and Consumer Act 2010 (the CCA) is one of the key pieces of legalisation governing business operations in Australia. One important aspect of the CCA is the prohibition of anti-competitive business behaviour, such as cartel behaviour, exclusive dealing or other acts which may lessen competition in the marketplace. 

A longstanding and important exception to these prohibitions was established in section 51(3) of the CCA, which allowed intellectual property owners to dictate how intellectual property is used and how goods and services are supplied through licensing and assignment agreements; for instance, intellectual property owners could require territorial restrictions, and price and quality requirements, even though such restrictions could be anti-competitive.   

Affected parties

Section 51(3) has recently been repealed, so restrictive market conditions and terms in licensing and assignment agreements now need to comply with the CCA.  Intellectual property owners have a six-month grace period to ensure licensing and assignment agreements comply with the CCA.   

The repeal of section 51(3) is expected to affect industries which rely heavily on intellectual property rights such as the biotech, pharmaceuticals, information technology and telecommunications industries. 

Next steps

All intellectual property owners should review their licensing and assignment agreements to ensure they comply with the CCA.  The grace period to ensure compliance with the CCA ends on 19 August 2019, so intellectual property owners should act now to ensure compliance. 

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