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If your business is involved in the licensing or assignment of IP rights (such as patents, registered designs or copyrights), you should urgently seek legal advice to ensure that all such arrangements comply with competition law.
This is because a current exception to competition law relating to IP rights will soon be repealed making all IP arrangements subject to competition laws including cartel and exclusive dealing provisions.
This is particularly important for existing IP arrangements because you may currently be taking advantage of the IP exception to competition law. Indeed, your business may have even received legal advice to this effect.
The new law (repealing the IP exception to competition law) is likely to come into effect in mid-2019.
It may be that your IP arrangements do not constitute cartel conduct and are unlikely to substantially lessen competition in any market. In such cases, you can continue with your IP arrangements without risk of contravening competition laws.
If the IP arrangement constitutes cartel conduct, you can seek immunity for the arrangement if you can demonstrate to the ACCC that the public benefits arising from the IP arrangement are likely to outweigh the public detriments (including anti-competitive detriment).
If there are competition concerns (non-cartel) in relation to an IP arrangement, you can seek immunity for the arrangement if you can demonstrate to the ACCC that the arrangement is unlikely to substantially lessening competition in a market or that the public benefits arising from the IP arrangement are likely to outweigh the public detriments (including anti-competitive detriment).
The ACCC also has the power to make “class exemptions” for specific types of conduct from one or more provisions of competition law.
The ACCC is able to do so if it is satisfied that, in all circumstances, a particular type of conduct is unlikely to substantially lessen competition or is likely to result in a net public benefit. A class exemption provides a “safe harbour” for the specific type of conduct, allowing businesses to engage in that conduct without risk of breaching the relevant provisions of competition law. The chances of the ACCC issuing a class exemption for IP arrangements are likely to increase if affected businesses make recommendations to the ACCC of particular types of arrangements which warrant protection from the application of competition law by way of class exemption. The European Commission has issued a “Block Exemption” for categories of technology transfer agreements, including IP licensing agreements and IP assignments, subject to market share thresholds and a “black list” of hard-core restrictions. Whether or not the ACCC follows suit remains to be seen.
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