Senator IAN CAMPBELL (11:47 AM) —I table a revised explanatory memorandum and move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard .

Leave granted.

The speech read as follows—

The legislative changes made by the Intellectual Property Laws Amendment Bill are threefold. The first will implement the Government's decision to allow an extension of the patent term to a total of 25 years for patents relating to pharmaceutical substances. The second will provide for the introduction of a new regime for regulation of the patent attorney profession and de regulate professional practice in trade marks and designs. The third will make minor changes to the patent regime of a technical nature, making it easier for applicants to transact business before the office.

Extension of Term Scheme for Pharmaceutical Patents

This Government is committed to the development of a viable pharmaceutical industry in Australia. In April this year, we announced three new initiatives to ensure an internationally competitive operating environment for the industry into the 21st century—the introduction of the Pharmaceutical Industry Investment Program; the extension of patent terms for pharmaceuticals by up to five years; and the provision of a regime of data exclusivity.

These measures were announced in the context of the Government's response the Industry Commission's Report No. 51, The Pharmaceutical Industry .

This bill implements the second of these measures.

The development of a new drug is a long process. A new chemical entity, from which a pharmaceutical is derived, is patented early in the process. However, considerable research and testing is still required before the product can enter the market.

This long development time, combined with the considerable regulatory process to register and market a new product, means that companies usually have considerably fewer years under patent in which to gain a return on their investment.

This becomes significant to the industry as companies rely heavily on patents to generate the substantial cash flows necessary to finance the development of new drugs.

A country's patent system is also an important factor in investment decisions. A strong patent system contributes significantly to a positive investment climate and sends a signal that Australia values an innovative pharmaceutical industry.

The objective of this part of the bill is to provide an `effective patent life' more in line with that available to inventions in other fields of technology. It will also create a patent regime for pharmaceuticals which is in line with our competitors.

An extension of up to five years will be available for a standard patent relating to a pharmaceutical substance that is the subject of first inclusion on the Australian Register of Therapeutic Goods.

The scheme will apply to all existing 20 year patents, as well as those patents granted after the commencement of the scheme. An extension is not however, automatic. Companies will need to apply within six months of the inclusion of the product on the ARTG or within six months of the date the patent is granted, which ever is the later.

Transitional arrangements will be put in place to accommodate existing patents.

The new arrangements make provision for `spring-boarding' activities. This allows manufacturers of generic drugs to undertake certain activities prior to the expiry of the patent solely for the purposes of meeting pre-marketing regulatory approval requirements. Companies will be permitted to spring-board any time after the extension has been granted.

Regulation of Professions

Professional practice in patents, trade marks and designs, has long been regulated by Governments throughout the world to ensure that professionals in the field have the high level of technical and professional competence necessary to foster high quality rights that support strong innovation and trading regimes.

In Australia, patent attorneys hold an exclusive right to draft patent specifications on behalf of others for gain. Patent attorneys and the legal professions have exclusive rights of practice in respect of the prosecution of patent applications and all aspects of the prosecution of trade marks and designs applications where owners choose not to prosecute the application themselves. To ensure Australia's continued competitiveness in innovation and research, the Government examined the current regime to ensure that the profession would be better placed to continue support of these vital activities in the future.

The Government has been concerned to ensure that the profession continues to offer a high quality service while being subject to competitive pressures It wishes to ensure there are no undue barriers to competition in professional practice that might adversely effect the public interest.

The Government recognises that allowing unqualified persons to perform the highly specialised activity of drafting patent specifications would involve unacceptably high risks to both consumers and the public. However, in the less specialised areas greater competition would afford benefits to the public with little risk.

It is these areas of lesser specialisation that the Government considers should be opened to greater competition. The existing restrictions require a level of technical qualification that is higher than that required for effective practice.

The bill will make a number of changes to the existing regime contained in the Patents Act 1990, the Trade Marks Act 1995 and the Designs Act 1906 to provide greater access though a wider choice of providers of professional services. In trade marks and designs it will remove restrictions on who can practice. Restrictions on practice in patents will be retained given the technical and demanding nature of patent regimes and the potential cost to the applicant of a poorly constructed or prosecuted application.

Suitably qualified persons will be entitled to registration as a trade marks attorney and will have the same rights of privilege as patent attorneys and lawyers in trade marks and designs matters. Trade marks attorneys will be given the same exemptions from obligations over copyrighted material for the purposes of the provision of professional advice as are currently available to patent attorneys and lawyers under the Copyright Act 1968.

Qualifications for registration as a trade marks attorney will be less rigorous than those required for registration as a patent attorney as there will be no requirement for a technical qualification.

The bill proposes that the existing partnership arrangements for patent attorneys should be relaxed to improve the public's access to the professions by encouraging a broadening of the competitive base within the patent attorney profession. The proposed system will allow mixed partnerships with other professions where at least one member of the partnership is a registered patent attorney. However, patent attorney partners will still be required to prepare patent specifications.

The Government is taking the lead and providing for these new partnership arrangements to foster linkages in the provision of professional services.

The rules of practice are amended to make it clear that an employee is not infringing the restrictions on practice in patents by undertaking patent work for the employer.

The Government intends that the education and examination functions should be moved from the narrow base of the existing Patent Attorneys Professional Standards Board to the universities to make them more accessible to people seeking entry to the profession.

Other minor amendments

The bill also introduces other minor amendments to the Patents Act 1990, some of which are of a technical nature. Amendments will allow employees of the Patent Office to provide a higher level of advice to applicants while not compromising their official duties and revise procedures for the payment of certain fees.

Madam President, I believe that the amendments proposed in the bill will enable to Government to meet its objectives of balancing a strong intellectual property system with competent professional advice against the benefits of greater competition.

There will be no additional cost to Government from any of the proposals as the patents, trade marks and designs systems operate on a cost recovery basis.

I commend this bill to the Senate.

Debate (on motion by Senator Chris Evans) adjourned.