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Friday, 7 September 1984
Page: 640


Senator HILL(10.21) —The Senate is debating the Patents Amendment Bill 1984. The Opposition will be supporting the Bill. It is an important Bill not only because of the detail of its contents but also because it highlights the task we in Australia face of developing an innovative and internationally competitive indigenous biotechnology industry. In a technical sense the Bill has a dual purpose. Firstly, it seeks to complement the existing patent law requirements relating to the patenting of new strains of micro- organisms. Since 1976 the Patent, Trade Marks and Design Office has regarded new strains of micro-organisms as capable of patent protection and applications for patents have required a written description of the new strain. Under this Bill the requirement of a written description is to be complemented by requiring an applicant in certain circumstances to deposit the new strain of micro-organism with a prescribed depository institution. The deposit requirements would be enforced if the particular strain of micro-organism subject to patent application was not reasonably available. If deposit of a new strain is required , that deposit would satisfy the requirement of a full description of a micro- organism.

Secondly, the Bill provides for Australia's accession to the 1977 Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purposes of Patent Procedure. Upon the signing of the Budapest Treaty Australia will join 12 other countries as participants. Local inventors who adhere to the deposit requirements for new micro-organism strains will automatically satisfy the deposit requirements of patent laws operated by the other 12 signatories, and will have access through the Treaty to micro-organism strains deposited by foreign patentees.

As the Minister for Social Security (Senator Grimes) noted in his second reading speech, the changes sought by the Bill reflect the dramatic technology changes occurring throughout the world. Nowhere is this more apparent than in the field of biotechnology, an area in which Australia has tremendous potential to capture a substantial international market niche. There is a certain mythology at the moment that the present Government has for the first time brought this to the attention of the Australian people. In fact, priority areas for the possible commercial application of biotechnological research have been previously identified. I remind the Senate in passing of the symposium and workshop on this subject arranged by the Department of Science and Technology and held in November 1982 under the auspices of the previous Government. I also remind the Senate of the 1981 symposium sponsored by the Department of Science and Technology, the Bank of New South Wales and the Institute of Management, New South Wales Division, which examined commercial opportunities available in Australia for genetic engineering.

I mention also that two significant studies on biotechnology were undertaken by the Australian Science and Technology Council-ASTEC-under the Fraser Government. The first was in November, 1982 and the second in December of that year. The second of those reports examined the specific opportunities in biotechnology, referring in particular to the lead Australia can take in adopting biotechnology to plant agriculture, animal husbandry, veterinary products, food processing, pharmaceuticals, chemicals and mining. We now hear about these matters often from the present Minister for Science and Technology, but under the previous Government studies were undertaken into such commercial opportunities in this country. The former Government recognised the importance of biotechnology as a commercially viable growth industry in Australia. In a sense, therefore, we are seeing the present Government carrying on from where the Fraser Government left off. Nevertheless, we in the Opposition are pleased to see the present Government taking up the challenge instituted by the previous Government.

The key issue that still remains as to whether Australia's potential in this field can be realised appears to be whether we are able to seek the means to transfer our undoubted biotechnology research capacity into realisable commercial opportunities. The Senate is aware that this issue-albeit on a broader scale of high technology in general-has been the subject of a number of debates in this place over the last year or so. The need for Australia to seize economic opportunities provided by rapid technological change has, for example, been recognised during debates on general economic issues and on specific pieces of legislation aimed at encouraging wider and faster development of Australia's high technology industries. In particular, I remind the Senate of the industries incentives Bills passed by the Senate in December last year which provided for the establishment of management investment companies; an expansion of the industrial research and development incentives scheme to provide for grants to be paid to sunrise industries, and for an expansion of the capital base of the Australian Industry Development Corporation. Each of those Bills was supported by the Opposition.

In those debates I reviewed the many factors that lie behind Australia's poor performance in high technology to date which require resolution. I and other senators who participated in those debates offered solutions. The one factor which is particularly relevant to this debate as a major obstacle to Australia becoming a high technology leader is the research development gap. Clearly, that gap has hindered the transformation of our high biotechnology research capability into commercially profitable enterprises. As Dr Tegart, the Secretary of the Department of Science and Technology, said at a 1982 Canberra workshop on commercial opportunities for biotechnology in Australia:

If it is to succeed in having a significant impact on our way of life, biotechnology must either achieve something new and presently unavailable by other routes, or replace some conventional processes by doing it more cheaply. The identification and selection of markets is of prime importance. If the product is not really wanted, there is no point in producing it, no matter how elegant the technique.

In fact, our inability to convert high quality research into commercially viable developed products possibly ranks alongside, or is even ahead of, lack of capital finance as the major factor for Australia's relatively poor efforts in meeting the high technology challenge. I remind the Senate of an article in the Australian Financial Review of last June written by journalist Anne Flahvin. She argued just this point in an article which examined the dichotomy of Australian biotechnology research and development:

Biotechnology is as advanced in Australia as in any other nation, but while overseas companies are capitalising on their research, Australians are doing it for free.

She went on to say that the problem confronting the development of a successful biotechnology industry was in her opinion:

. . . due partly to a lack of venture capital in Australia, but an even greater setback is the practice of researchers who announce their achievemnents to the world without patenting their inventions.

She continued:

Overseas companies smack a patent on a new technique developed in Australia, and the only reward local researchers receive is a pat on the back from their colleagues.

It is also interesting to note the comments of biotechnologists, such as Dr David MacLennan, who for some years have now been at the face of biotechnology development initiatives. Dr MacLennan, who spent many years trying, unsuccessfully, to get industry interested in his research work for purposes of commercial application, went as far as to suggest that research funding which resulted in other countries patenting Australian inventions was simply money wasted. In the same Australian Financial Review article to which I have just referred, Dr MacLennan summed up Australia's approach to research and development with observations such as:

All we are doing is researching for the Yanks . . . Academics in the US or Britain would not dream of giving a paper without first patenting their idea . . . If you make something that doesn't occur naturally, you patent it . . . Until that happens, Australian researchers are pouring money down the drain.

While such comments provide us with a sobering reminder of the obstacles we have set ourselves in bringing research efforts to commercial fruition, at the same time recognition should be given to the fact that, despite such obstacles, significant initiatives have been undertaken by research institutions themselves to address the gap between the idea and its commercial application. I am pleased to refer to one outstanding example of such an initiative in the Biotechnology Research Enterprises South Australia Pty Ltd, or BRESA as it is known. In 1982 this company was established on the initiative of members of the Adelaide University Biochemistry Department under the Chairmanship of Professor Bill Elliott. The idea of the company, which is incorporated and wholly owned by the University of Adelaide, arose from the Biochemistry Department's development of original methods for making 32P or phospherous nucleotides, a required component for recombinant DNA research. As this compound had a very short half-life and was generally imported for the purposes of experimentation, on-site production not only saved the University some $50,000 to $70,000 per year but provided an opportunity for the Department to service the domestic genetic engineering market. That is a fine precedent that is worth putting to the Senate on this occasion.

Although only one example, the history of BRESA indicates how good research in biotechnology can be utilised for commercial advantage. It also shows that researchers themselves are capable of perceiving practical applications for their efforts requiring only financial support and encouragement to take the step over what the Minister reasonably describes as 'the rickety bridge' between research and commercial application. South Australia in fact appears to be playing a major role in work aimed at bringing biotechnology ideas into marketable forms. We see, for example, that of the $1.5m allocated in 1983-84 under the national biotechnology program mentioned by the Minister in his second reading speech, four of the seven approved projects are being undertaken in South Australia. Speaking as a South Australian Senator, I am pleased to advise the Senate of that. Under this program the Commonwealth Scientific and Industrial Research Organisation Division of Plant Industry is collaborating with the Department of Biotechnology of the University of Adelaide and BRESA to develop the detection methods of virus-induced diseases in crop and pasture plants. Secondly, Professor Derrick Rowley of the Department of Microbiology and Immunology at the University of Adelaide is working in conjunction with F.H. Faulding Company Ltd to develop live oral vaccines for gastro-intestinal disease control. Thirdly, Dr Heddy Zola of the Flinders Medical Centre is working with a company called Disposable Products Pty Ltd to develop a series of diagnostic reagents, procedures and kits based on monoclonal antibodies which will have a number of human and veterinary applications. Fourthly, Dr Dudley Pinnock of the Waite Agricultural Research Institute-a very fine institution-is working on a project related to genetic engineering for animal health.

Initiatives such as the national biotechnology program are to be applauded. However, it should be recognised that by themselves such programs can touch only small components of biotechnology development. They are incapable of generating widespread developments in the market penetration of biotechnology products and greater co-operative efforts between research institutions and industry. The proper role of government lies in another direction. The most effective role for government in encouraging an improved research and development linkage was outlined to the proceedings of the workshop on biotechnology on appropriate areas for commercial exploitation in Australia held in 1982. The report of the proceedings stated:

Businessmen themselves must ultimately decide on the commercial potential of biotechnology techniques and on the appropriate time scales for their introduction. The Government's role will be to continue to assist in developing a positive climate for emerging biotechnology-based industries.

To amend the Patents Act to provide for more up to date arrangements for patenting of new strains of micro-organisms is one small worthwhile step for government to take in creating a more positive climate for the establishment of biotechnology-based industries. It does so because an expanded patent regime can offer to Australia's biotechnology industry a bridge from research to commercial exploitation. International monopoly protection for Australian biotechnology inventions provided for in this Bill can give the biotechnology industry the means to protect and encourage large investments for further research activity for the purpose of ultimate commercial application and profit. Additionally, biotechnology-based industry also has the advantage under this Bill of widening our access to other patented strains of micro-organisms which would otherwise have been denied. The importance of access rights of new strains of mirco- organisms was dealt with by Philip Thomas of the Australian Patents, Trade Marks and Design Office when he spoke at the 1981 Sydney symposium on commercial opportunities for genetic engineering in Australia. He made the point that there is more to the patenting of biotechnology inventions than the financial rewards which are supposed to flow from such protection. He stated:

The other side to the incentive effect of patents is the dissemination of information. In return for a monopoly the patentee must disclose his invention so that the public, including industry competitors, can perform the invention when the patent monopoly runs out. More importantly, particularly in a rapidly advancing field such as biotechnology, the information disclosed in a patent specification will theoretically enable competitors to build upon the invention, even before the monopoly period expires, by doing further research. This will hopefully in addition to benefiting the person doing the work, also further the common good because more and more useful inventions are produced.

Therefore Australia's accession to the Budapest Treaty will enable Australian biotechnologists and commercial concerns to benefit from access to international information and ideally build on the commercial opportunities their research endeavours have provided. For these reasons the Opposition supports this Bill and trusts that it will serve its wider purpose of contributing to the encouragement of the development of a viable and innovative Australian biotechnology industry.

In conclusion, I wish to touch on one final matter which has a broad relation to this Bill. While I can easily understand the enthusiasm of the Minister for Science and Technology (Mr Barry Jones) and members of the Government for this legislation, it is intriguing to note that the previous Government's efforts to introduce a system of plant variety rights was not equally supported by the Australian Labor Party. Essentially the concept of plant variety rights is no different from the concept we are debating here today. Both are concerned with patent rights for new inventions of living organisms. Both provide for mechanisms which ensure international monopoly property rights under international agreements. Both are justified as a means of encouraging greater research and development in their respective fields. It is therefore regrettable that the enthusiasm the Labor Party now exhibits for international patent protection as a means of encouraging biotechnology industry in Australia is not also carried over into the protection of plant variety rights. It seems a strange and disappointing inconsistency.

In the opinion of the Opposition this Bill correctly addresses itself to ways in which Australia can find a niche in international markets. Biotechnology is recognised as having great potential to give Australia important, highly specialised export markets. Therefore, as I indicated, this Bill has the support of the Opposition.