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Feature article: New IP policy for government agencies
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Feature article: New IP policy for government agencies

In brief: Partner Dr Trevor Davies (view CV) and Technical Assistant Dr John Landells provide an overview of recently released Federal Government policy requiring all government agencies to establish and implement plans for the management of intellectual property (IP).

The Australian Government has recently released new policy requiring all federal government agencies to establish and implement plans for the management of IP. Although structures have previously been implemented by the Australian Government to manage IP for specific purposes, for example, in relation to government funded research, this is the Government's first foray into providing a broad policy framework for the management of IP across all government agencies, which covers day-to-day operations.

The new policy, simply named the Intellectual Property Principles for Australian Government Agencies, has put forward a statement of IP principles. Government agencies will be individually responsible for implementing these IP principles by 1 June 2008. The IP principles provide a broad framework requiring each Government agency to create and implement an IP management plan suitable to its individual needs and objectives. Essentially, the IP principles will force each Government agency to evaluate, and in some cases re-evaluate, how they approach and deal with IP strategically and pragmatically from day-to-day. The IP principles from the new policy will be more fully defined later in the year with the release of a guidebook named the IP Better Practice Manual.

The new IP policy is expected to provide businesses with more opportunities to commercialise IP developed under government contracts. The new policy should also encourage and facilitate commercial relationships between businesses and government agencies by providing clarity over the ownership of IP. This accords with the Federal and state governments' general support and commitment for a pro-innovation environment, from which the bio-technology sector has seen considerable investment in recent years.

All government agencies are involved, at least to some degree, in the creation of IP, whether it be at the lower end of the IP scale such as that of privately-held knowledge for optimizing work procedures, or at the higher end of the IP scale such as creation of a patentable innovation. In addition, many government agencies are increasingly required to operate in a commercial capacity and must therefore be aware of, and respect, IP owned by third parties. Although some agencies directly involved with innovation already have well developed IP plans in place, such as that of the CSIRO, this is certainly not true of many of the smaller government agencies. The Federal Government has acknowledged the variation in activities and objectives that exist across the range of government agencies by creating a flexible policy enabling each agency to develop and implement its own plan suited to its own needs and objectives.

Government agencies have been given individual responsibility for managing IP in an effective and ethical manner. As a general principle outlined in the new policy, government agencies must adopt IP management plans that provide a balanced approach taking into consideration its own objectives and broader Federal Government objectives including the wider benefit to the Australian community as a whole. Management plans must also be periodically evaluated to assess effectiveness.

Further specific principles outlined in the new policy require government agencies to address particular aspects in their IP plans covering areas including procurement of IP, record-keeping, industry development, and identifying and recording IP. Government agencies will also need to implement plans and provide direction to staff for dealing with such aspects as:

acquisition, use, sharing, commercialisation, disposal and public access to IP;
identifying and recording ownership of IP; and
monitoring and protecting IP.

Each government agency will be able to determine its own specific policy on the ownership and commercialisation of IP. For some agencies, it will not be appropriate to seek ownership or registration of any IP rights, which would entail accepting the associated expense and commercialisation risk. For some government agencies whose objectives are not suited to its seeking ownership of IP, it will still be important for them to identify the existence of any IP rights and assess the appropriateness of alternative approaches such as simply documenting or publishing IP to prevent other parties obtaining any similar IP rights that may prohibit activity. Other options may also include the sale or licensing of IP rights.

A critical aspect for obtaining any registered IP rights, such as for patents and designs, requires a formal application be lodged prior to any public disclosure or commercialisation of the IP. The IP principles acknowledges this aspect by requiring systems and processes to be implemented to identify and value any IP created within a government agency before any public disclosure or commercialisation occurs.
A further objective of the IP policy is to make government agencies more aware of the potential for infringement and to act ethically in relation to third parties' IP rights, which is an important approach for reducing commercial risk such as dispute or litigation risk.

Each government agency will also be required to address issues of IP ownership when contracting services to business entities. This will provide clarity over the identification and ownership of any IP involved in a contractual relationship, which would typically include the IP owned by each party prior to the contractual relationship, the IP created during the course of the contracted service, and the ownership of IP to any future improvements.

Government agencies are required to maintain an approach to IP that is consistent with their core activity and objectives. However, a balanced approach is required by considering broader aspects including the sharing of IP, cost of access to IP by other government agencies, principles of competitive neutrality and impact on industry, commercial cost/benefit assessment and public access to IP. Government agencies are also required to encourage public use and provide easy access to copyrighted material generated for broader and formative purposes.

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Conclusion

The new IP policy represents a milestone in the continuing commercialisation of government agencies by requiring all agencies to at least consider and address how they will manage IP assets. For further information, please refer to the following references:

Attorney-General Philip Ruddock's official media release of 11 May 2007 at www.ag.gov.au; and
Official media release of the new policy of Intellectual Property Principles for Australian Government Agencies at www.ag.gov.au/cca

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Company news

In brief: Regular news from the biotech industry.

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General Electric and Abbott deal for diagnostics units falls through
Skin patch for Alzheimer's treatment receives approval
Roche makes offer to acquire Ventana, unanimously rejected
Sunshine Heart submits application for USA C-Pulse
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Ariad and Merck & Co announce cancer treatment collaboration

22 July – Ariad Pharmaceuticals and Merck & Co have announced a global collaboration to develop and commercialise AP23573, Ariad's novel mTOR inhibitor for use in cancer treatment. The agreement provides for an initial payment of US$75 million to Ariad and up to US$452 million more in milestone payments subject to the successful development of AP23573 in a number of cancer indications. Further, it includes up to US$200 million, subject to sales threshold achievements, at least US$200 million in interest-bearing repayable development cost advances from Merck and royalties paid by Merck outside the US. It is expected that AP23573 will enter Phase III clinical development for the treatment of metastatic sarcomas this quarter. Each party will share overall responsibility for global commercialisation and development of AP23573. In the US, Ariad will distribute and sell AP23573 for all cancer indications whilst outside the US, Merck will distribute, sell and promote the drug.