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Legislative Implementation of Flexibilities - Australia

Title:Section 144 of the Patents Act No. 83 of 1990 as amended by Act No. 106 of 2006
Field of IP:Patents
Type of flexibility:Ex-officio IP office control of anti-competitive clauses in licensing agreements
Summary table:PDF

Provisions of Law

144. Void conditions

(1) A condition in a contract relating to the sale or lease of, or a licence to exploit, a patented invention is void if the effect of the condition would be:

(a) to prohibit or restrict the buyer, lessee or licensee from using a product or process (whether patented or not) supplied or owned by a person other than the seller, lessor or licensor, or a nominee of the seller, lessor or licensor; or

(b) to require the buyer, lessee or licensee to acquire a product not protected by the patent from the seller, lessor or licensor, or a nominee of the seller, lessor or licensor.

(1A) A condition in a contract relating to the sale or lease of, or a licence to exploit, an invention the subject of an innovation patent is void if the effect of the condition would be to:

(a) prohibit the buyer, lessee or licensee from applying for examination of the patent; or

(b) impose restrictions on the circumstances in which the buyer, lessee or licensee may apply for examination of the patent.

(2) Subsection (1) does not apply if:

(a) the seller, lessor or licensor proves that, at the time the contract was made, the buyer, lessee or licensee had the option of buying the product, or obtaining a lease or licence, on reasonable terms without the condition; and

(b) the contract entitles the buyer, lessee or licensee to be relieved of the liability to comply with the condition on giving the other party 3 months' notice in writing and paying, in compensation for the relief:

(i) in the case of a sale - such sum as is fixed by an arbitrator appointed by the Minister; or

(ii) in the case of a lease or licence - such rent or royalty as is so fixed for the rest of the term of the contract.

(3) A person is not stopped from applying for or obtaining relief in any proceedings under this Act merely because of an admission made by the person about the reasonableness of terms offered to the person as mentioned in paragraph (2)(a).

(4) It is a defence to proceedings for infringement of a patent that the patented invention is, or was when the proceedings were started, the subject of a contract containing a provision, inserted by the patentee, that is void under this section.

(5) If the patentee offers the other parties to a contract mentioned in subsection (4) a new contract that does not contain the void condition but that otherwise gives the parties the same rights as the existing contract, then, whether or not the other parties accept the new contract in place of the existing contract, subsection (4) ceases to apply, but the patentee is not entitled to damages or an account of profit for an infringement of the patent committed before the offer of the new contract.

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