RESTRICTEDWORLD TRADE
ORGANIZATIONIP/Q3/AUS/1
22 October 1997
(97-4625)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
REVIEW OF LEGISLATION IN THE FIELDS OF PATENTS, LAYOUT-DESIGNS
(TOPOGRAPHIES) OF INTEGRATED CIRCUITS, PROTECTION OF
UNDISCLOSED INFORMATION AND CONTROL OF
ANTI-COMPETITIVE PRACTICES IN
CONTRACTUAL LICENCES
Australia1
The present document reproduces the introductory statement made by the delegation of
Australia,  the questions put to it and the responses given in the review of legislation on patents,
layout-designs (topographies) of integrated circuits, protection of undisclosed information and control
of anti-competitive practices in contractual licences at the Council's meeting of 26-30 May 1997.2
_______________
I. INTRODUCTORY STATEMENT
Australia is pleased to be participating in this review in the areas of patents, layout designs of
integrated circuits, protection of confidential information and control of anti-competitive practices in
contractual licences.  We see these reviews as an important part of the TRIPS process in helping to
build understanding and transparency of Member countries' intellectual property protection regimes.
The areas we will be covering during this week's review are very important parts of the
TRIPS Agreement.  Australia has notified its major laws and regulations in the areas covered under
this week's review.  In particular, we draw your attention to the Patents Act 1990 and the Circuit
Layouts Act 1989.  Undisclosed information is dealt with primarily through case law and we would
draw your attention to the replies we have provided to questions from Japan and the United States on
this subject for more detailed information.
Related to this review, Australia would also like to mention the decision taken by the
Government last December to introduce a new regime of data exclusivity whereby a new
pharmaceutical, agricultural or veterinary chemical product containing a new chemical entity will be
protected for a five year period.  Legislation is currently being prepared to implement the new regime
which will be fully consistent with our obligations under the TRIPS Agreement.
                                                     
1As regards laws and regulations relevant to the areas under review as notified by Australia under
Article 63.2 of the Agreement, reference is made to documents IP/N/1/AUS/1/Rev.1, IP/N/1/AUS/P/1-3,IP/N/1/AUS/I/1-2 and I/1/Add.1, IP/N/1/AUS/L/1-2 and IP/N/1/AUS/O/1.
2The minutes of the meeting have been circulated in document IP/C/M/13.IP/Q3/AUS/1
Page 2
Specific comments on patents
Australia would also like to give a brief overview of the protection afforded to patents under
Australian law.
Australia's legislation relating to the protection of patents comprises the Patents Act 1990.
This is a Federal law and applies to Australia as a whole.  This Act already complied to a large extent
with the requirements of the TRIPS Agreement.  However, to accord completely with those
requirements, the Act was amended in July 1995 by the Patents (World Trade Organization
Amendments) Act 1994.
The significant changes made to the legislation include:
- increasing the term of a standard patent from 16 years to 20 years;
- for infringement actions in relation to patented processes, shifting the onus to the
defendant to prove that there has been no infringement;
- extending the existing conditions to which a court must have regard when deciding if
a compulsory licence to work the invention should be granted;  and
- imposing additional conditions with which the Crown (in right of the Commonwealth
or a State) must comply if it uses a patented invention.
II. REPLY TO THE GENERAL QUESTION ON PRIORITY RIGHTS3
Does your country recognize a right of priority on the basis of an earlier patent
application filed in any other WTO Member by a national of a WTO Member?
At present Australia affords priority rights on the basis of an earlier patent application only to
those countries that are included in the Schedules of the Regulations to the Patents Act 1990.   The
Schedules include countries that are members of the Paris Convention or with which Australia has
concluded bilateral agreements concerning the priority of applications.  Australia is taking action toextend the right of priority to all WTO Members.
III. REPLIES TO QUESTIONS POSED BY THE EUROPEAN COMMUNITIES AND
THEIR MEMBER STATES
1. Does Australia grant temporary protection to  patentable inventions in respect of goods
exhibited at official exhibitions held in Austra lia in accordance with Article 11 of the Paris
Convention (1967)?  (Article 2.1 of the TRIPS Agreement) .
Yes.  See Section 24(1)(a) of the Patents Act 1990 together with regulations 2.2(2)(a) and (b),
2.2(3) and 2.3(1)(a).
                                                     
3At the meeting of the TRIPS Council of 27 February 1997, Members agreed to respond to this
question in the context of the present review (document IP/C/M/12, paragraph 18).IP/Q3/AUS/1
Page 3
2. In what circumstances and under what conditions would the Commonwealth of
Australia order the acquisition of a patent pursuant to Section 171 of the Patents Act?
(Article 8 of the TRIPS Agreement) .
We are unable to give a precise answer to this question as there are no instances of the
provisions of Section 171 (nor Section 129 of the 1952 Act) having been used.  However if an
invention is acquired, Section 51(xxxi) of the Australian Constitution requires that the terms of thatacquisition be just.
[Follow-up question from the EC]
Under what circumstances is Section 171 Patents Act 1990 intended to be used?  Please
explain what safeguards, if any, are available under Australian law to prevent such acquisition
unreasonably prejudicing the interest of the owner of the patent?
The circumstances in which Section 171 would be used would include states of national
emergency, and for defence purposes.  As indicated in our answer to the original question,Section 51(xxxi) of the Australian Constitution requires any such acquisition to be on just terms.  In
addition, Section 171(4) of the Patents Act requir es the Commonwealth to pay compensation to any
compensable person.
3. Does the exclusion of an invention which is secretly used from the definition of
"patentable invention" in the Patents Act limit in any way the circumstances in which "patentsshall be available" within the meaning of Article 27.1 of the TRIPS Agreement?
The exclusion from "patentable invention" of inventions that have been secretly used does no
more than prevent a person, who has secretly used an invention for commercial purposes, from
subsequently obtaining a patent - irrespective of the subject matter.  [See also Section 9(c)].  It does
not prevent a patent from being granted for that invention for any of the reasons set out in Article 27.1of the TRIPS Agreement.
4. Pursuant to Section 51(1)(a) of the Patents Act, is it within the discretion of the
Commissioner to refuse the grant of a patent wh ere the prevention of its exploitation is not
required for the interests listed in Article 27.2 of the TRIPS Agreement?
Section 51(1)(a) of the Patents Act is interpreted to be limited to inventions where the only
use described for it would be punishable as a crime.  Thus guns are patentable since they can be used
for both lawful and unlawful purposes.  Consequently exclusions beyond the scope of Article 27.2 of
the TRIPS Agreement cannot arise.
[Follow-up question from the EC]
Is Section 51(l)(a) Patents Act 1990 to be interpreted as providing that the grant of a
patent will be refused, not merely because the exploitation of the patent is prohibited by law?
The application of Section 51(l)(a) will result in the refusal of a patent if its only use is
contrary to criminal law.  The provision is analogous to the EC ground of "ordre public" in
Article 53(a) of the EPC.IP/Q3/AUS/1
Page 4
5. Would the grant of a compulsory licence purs uant to Section 133 of the Patents Act, as
amended, be subject to the requirements of Article 31(c) and (f) of the TRIPS Agreement?  If so,
please explain.
The first part of Article 31(c) is recognized in Section 133(6), where the licence can be
revoked if circumstances that justified the licence  have ceased to exist and are unlikely to recur.
Article 31(f) is embodied in the prerequisite of Section 133(2)(a) that the reasonable requirements ofthe public have not been satisfied; "the public" is a reference to persons in Australia, and is exclusive
of persons outside the jurisdiction of the Act.
It is our understanding that the semi-conductor technology referred to in the second part of
Article 31(c) refers to circuit layouts which are protected in Australia under their own legislation, the
Circuit Layouts Act 1989.
6. Is the Government of Australia obliged to ma ke efforts to obtain authorization from the
right holder on reasonable commercial terms and conditions prior to the exploitation ofinventions by the Crown pursuant to Section 163 of the Patents Act 1990, as amended?
(Article 31(k) and (b) of the TRIPS Agreement).
There is no statutory requirement that the government must make any effort to obtain
authorization from the right holder prior to exploi tation.  The Government is required to advise the
relevant persons after exploitation has commenced - Section 164.
[Follow-up question from the EC]
On what basis does the Government of Australia consider Section 164 Patents Act 1990
to be compatible with Article 31(k) and (b) of the TRIPS Agreement?
Crown use is considered to be non-commercial public use.  Therefore, as provided under
Article 31(b) notification does not have to take place before the exploitation of the invention, butmerely "promptly".  The exclusions from Article 31 provided by paragraph (k) do not arise under
Australian provisions.
7. Does Section 163 of the Patents Act allow for exploitation of semiconductor technology
by the Crown?
Section 163 is not limited in any way by the subject matter of the invention.
8. Would the exploitation of a patent by the Crown pursuant to Section 163 of the Patents
Act be non-exclusive in all areas and, if so, on  what basis?  (Article 31(d)  of the TRIPS
Agreement) .
Exploitation by the Crown under Section 163 is non-exclusive in all areas.
[Follow-up question from the EC]
Could the Australia Government clarify the legal basis on which the exploitation by the
Crown under Section 163 would be non-exclusive in all areas?
Section 163 provides that exploitation by the Crown is not an infringement if the exploitation
is for the services of the Crown.  While the act is not an infringement, it does not follow that the
Crown has exclusive use;  the patentee is still free to exploit the invention.IP/Q3/AUS/1
Page 5
Section 163 is to be contrasted with Section 171 where the Crown assumes all rights in the
invention.  Section 163 merely provides for a specific exclusion from infringement, not the
assumption of the general rights of the patentee.
9. Is the exploitation of a patent by the Crown pursuant to Section 163 of the Patents Act
assignable?  Please explain.  (Art icle 31(e) of the TRIPS Agreement) .
Section 163 provides that the use can be by a person authorized in writing by the
Government -but the use must still be for the services of the Government.  The Act does not allow for
the right to exploit the invention to be as signed to a person for their own benefit.
10. Is use of a patent for the services of the Crown pursuant to Section 163 of the Patents
Act predominantly for the supply of the Austra lian market, having regard in particular to
Section 168 of the Act?  (Article 31(f) of the TRIPS Agreement).
Section 163(3) imposes a condition that the exploitation is necessary for the proper provision
of services in Australia.  In effect, this means that the use of the invention must be predominantly forthe Australian market.
[Follow-up question from the EC]
Is the concept in Section 168(a) Patents Act 1990, whereby the supply of products by the
Commonwealth to foreign countries for the purposes of the Chapter 17 is to be taken to be the
use of products by the Commonwealth for the Commonwealth, to be interpreted as useauthorized predominantly for the supply of  the domestic market in accordance with
Article 31(f) of the TRIPS Agreement?
Yes.
11. Does Australia provide for the judicial review of the legal validity of any decision
relating to the authorization of use by the Crown pursuant to Section 163 of the Patents Act oris this limited to applying for a declaration to the court that the exploitation is no longer
necessary as set out in Section 165A of the Act?  Please explain.  (Article 31(i) of the TRIPS
Agreement) .
Any administrative decisions under Chapter 17 of the Act would be reviewable by the Federal
court of Australia under the Administrative Decisions (Judicial Review) Act.  Any decisions of acourt of first instance are appellable.
[Follow-up question from the EC]
Could the Government of Australia describe what kind of procedures would apply for
such a judicial review, including the type of measures which can be obtained?
Judicial review entails the person aggrieved applying to the courts for a review of the
decision.  The court considers whether correct procedures have been followed, and whether all
relevant matters have been properly considered in accordance with law.  If the court finds there have
been defects, the matter is remitted to the decision  maker for reconsideration according to law.  The
court does not substitute its own decision for that of the original decision maker.IP/Q3/AUS/1
Page 6
12. Does Australia provide for the conditions as set out in Article 31(l) of the TRIPS
Agreement in the case of use by the Crown pursuant to Section 163 of the Patents Act of a
patent which cannot be exploited without infringing another patent?  Please explain.
The requirements under Article 31(l) of the TRIPS Agreement are implemented in
Section 133, dealing with compulsory licences for pe rsons other than the Crown.  If exploitation of an
invention under Section 163 necessarily involves ex ploitation of another invention, clearly that other
invention will be covered by Section 163 as well and Article 31(l) is not applicable.
[Follow-up question from the EC]
Could the Government of Australia please explain why it takes the view that
Article 31(l) of the TRIPS Agreement does not apply?
Our answer to the original question 12 was not intended to imply that Article 31(l) of the
TRIPS Agreement does not apply in the Australian context.  Rather we meant that given the
provisions covering Crown use, there is no need for a further specific provision to cover Article 31(l).Overall, the provisions of Sections 133 and 163 of the Australian Patents Act implement the
requirements of Article 31(l).
13. Does Australia apply its law on layout-desi gns (topographies) of integrated circuits to
nationals of all the WTO Members?  (Articles 1.3 and 3.5 of the TRIPS Agreement).
Yes.  Rights are granted in the Circuit Layouts Act 1989 to the owner of EL Rights in an
eligible layout (see Section 17).  Eligible layout is  defined in Section 5 of the Act to mean an original
circuit layout in which either the maker was an eligible person or the circuit was first commercially
exploited in Australia or an eligible foreign country.  Eligible foreign country and eligible person are
also defined in Section 5.  The effect of these provisions is to provide for the rights under the Act to
be available to citizens, nationals or residents of (or corporations incorporated by or in) countriesdeclared to be eligible foreign countries in regulations made under the Act.
The Circuit Layouts Regulations (r.3) contains a schedule of eligible foreign countries.  This
list was amended to include WTO Members in December 1995 and will be amended from time to
time to take account of new accessions to the WTO.  Section 42 of the Circuit Layouts Act restricts
the declaration of eligible foreign countries to, inter alia , those that are party to a convention relating
to the protection of circuit layouts, to which Australia is also a party.
[Follow-up question from the EC]
Will the Government of Australia apply its law on layout-designs of integrated circuits
to nationals of all the WTO Members, includ ing where these Members are not party to a
convention relating to the protection of circuit  layouts to which Australia is also a party?
It is the view of the government of Australia that the WTO Agreement is a convention
relating to the protection of circuit-layouts.  The Circuit Layouts Regulations extending the Circuit
Layouts Act to apply to citizens and resident s of WTO Members were amended accordingly.IP/Q3/AUS/1
Page 7
14. Does Australia require that the exploitation of a circuit layout by the Crown pursuant to
Section 25 of the Circuit Layouts Act be non-exclus ive in all cases?  (Art icle 31(d) of the TRIPS
Agreement).
Section 25(4) of the Circuit Layouts Act does not deny the right of the owner to licence to
other parties besides the Commonwealth.
15. Is the exploitation of a circuit layout by the Crown pursuant to Section 25 of the Circuit
Layouts Act assignable?  (Article  31(e) of the TRIPS Agreement).
Section 25 provides that an act done by the Commonwealth, or a person authorized by the
Commonwealth is not an infringement of the EL rights, in certain circumstances, if the act is for the
security or defence of the Commonwealth.  Only the Commonwealth may do the relevant act or grant
authority for another to do the act.  That being so, the right or immunity granted to the commonwealth
is not assignable although, as already noted, Section 25 permits the commonwealth to authorize
another to undertake action that would otherwise be an infringement of the EL rights.
[Follow-up question from the EC]
Is it the case that the authorization granted to persons under Section 25 of the Circuit
Layout Act does not take the form of assignments?
The provision in Section 25 is concerned with authorization in relation to use for national
defence or security.  As the authorization is given by the Australian Government, not the EL rightowner, it is not an assignment.
16. Can use by the Crown of a circuit layout pursuant to Section 25 of the Circuit Layouts
Act 1989 be terminated if and when the circumstances which led to it cease to exist or are
unlikely to return, and does a competent authorit y have the ability to review on request the
confirmed use of the circuit layout?  Please explain.  (Article 31(g) of the TRIPS Agreement).
An EL owner aggrieved by a decision of the Commonwealth to use a circuit layout could seek
judicial review of the decision, either pursuant to the Administrative Decisions (Judicial Review) Act
1977 or Section 39B of the Judiciary Act 1903.  Such proceedings would consider the question
whether the power had been exercised lawfully.
While not expressly stated, the requirement that the defence or security purpose would need
to continue to subsist would be implied by a court.  This would also apply in relation to agreed or
imposed terms under Section 25(4).
[Follow-up question from the EC]
Could the Government of Australia confirm th at a judicial review is available where the
use of a circuit layout by the Crown pursuant to Section 25 of the Circuit Layout Act hadinitially been exercised lawfully but the circums tances which led to such use cease to exist?
Judicial review concerning the lawful exercise of statutory powers is possible for persons
having a relevant interest in the outcome of such a review under both common law doctrines and the
Administrative Decisions (Judicial Review) Act 1977.  Such review would require an initial step of
seeking a further decision as to the current use.IP/Q3/AUS/1
Page 8
17. Does Australia require that adequate remuneration be paid to the owner of exclusive
rights in relation to circuit layouts, in all case s of use by the Crown pursuant to Section 25(4) of
the Circuit Layouts Act?  Please explain.   (Article 31(h) of the TRIPS Agreement) .
Section 25(3) of the Circuit Layouts Act states that the owner must be notified as soon as
possible of the use, unless this would compromise the defence or security of Australia.  Section 25(4)
states that the Commonwealth and the owner must agree on terms that are mutually acceptable to theowner and the Commonwealth.  In default of such ag reement, the terms are to be set by the Federal
Court of Australia.
There is a clear implication that adequate re muneration must be paid or other compensation
offered to the owner under Section 25(4).  This woul d be so even if the owner has not been advised of
the use due to the operation of Section 25(3).
[Follow-up question from the EC]
Does the Crown, in practice, remunerate or  otherwise compensate adequately the owner
of exclusive rights in relation to circuit layouts in all cases of use by the Crown under
Section 25(4) of the Circuit Layouts Act?
The Attorney-General's Department is not aware of any instances of the exercise of the
powers under Section 25 of the Circuit Layouts Act.
18. Does Australia provide for a general right of review of the decision of the
Commonwealth of Australia to undertake an act in relation to an eligible layout pursuant to
Section 25(4) of the Circuit Layouts Act?  Please explain.  (Articles 31(i) and 31(j) of the TRIPS
Agreement) .
Please see the answer to question 16 above.
19. Does Australia, and if so on what legal basis, protect (i) the type of information that is
the subject matter of Article 39.3 of the TRIPS Agreement and (ii) in accordance with the
requirements of Article 39.3 of the TRIPS Agreement?  If not, does Australia intend to
introduce legislation so as to grant the necessary  protection and, if so, when would this be in
place and what would be the content of such legislation?
Australia announced in December 1996 its intention to introduce a new regime of data
exclusivity.  Under this regime confidential data submitted to the Therapeutic Goods Administration
(TGA) or the National Registration Authority for Agricultural and Veterinary Chemicals (NRA) to
register a new pharmaceutical, agricultural and veterinary chemical product containing a new
chemical entity will be protected for a period of five years from the date of registration of the original
product.  Legislation is currently being prepared to implement the new regime which will be fullyconsistent with Article 39.3 of the TRIPS Agreement.  The new legislation will be notified to the
Council for TRIPS when finalized.
[Follow-up question from the EC]
What is the time-frame for the finalization of such implementing legislation?
The time-frame for implementation of the new re gime is subject to the usual Parliamentary
scheduling requirement for the consideration of new legislation and/or amendments.  We expect this
to take place by the end of this year or early in 1998.IP/Q3/AUS/1
Page 9
IV. REPLIES TO QUESTIONS POSED BY JAPAN
1. In your country, are the following subject matters protectable by patent:  (1) plants and
animals, and (2) plant and animal varieties?
Yes, subject to the same requirements as any other subject matter.
2. In your country, is the act of offering for sale included in the exclusive rights of patent?
The act of offering for sale is an explicit right granted by the patent - set out in the definition
of "exploit" in the dictionary to the Act.
3. In your country, what kinds of acts are rec ognized as exceptions to the exclusive rights
conferred by a patent right?
In Australia, patent rights are defined in an inclusive sense.  There are no general or specific
exclusions.  However, patent rights may be affected by the grant of a compulsory licence if the
invention is not used (Section 133), and the Crown has certain rights to use an invention without a
licence - but with just compensation (Section 163).
4. In your country, in which case is use wi thout the authorization of the right holder
permitted, including use by the government or by third parties authorized by the government?
Refer to the answer to question 3.
5. In your country, how is the obligation under Articles 34.1 and 34.2 of the TRIPS
Agreement regarding the shift of the burden of proof in civil proceedings for patentinfringement related to a process patent implemented?
Article 34 of the TRIPS Agreement is implemented by Section 121A of the Act.
6. Please explain how undisclosed information is protected in your country, as required by
Article 39.2 of the TRIPS Agreement.
The protection of undisclosed information in Australia is governed by the law concerning
breach of confidence and trade secrets.  This is not provided for in legislation although some
legislation provides for persons to have relationships of trust under certain circumstances and
obligations of non-disclosure can arise because of that relationship (e.g. trustee, solicitor, accountant,
company liquidator, stockbroker, employee).
The doctrine of breach of confidence and trade secrets has been part of our law for many
years.  It derives from the law of England primarily as it developed in the courts of equity.  The
English cases are still relied on in Australia as providing relevant guidance and direction for the
application of the law in Australia.  Case law from other common law jurisdictions can also be
persuasive.
An early case in England was that of Morison v Moat  decided in 1851.  This case involved the
secret of how to prepare a medicinal compound.  It had been invented by James Morison and
communicated to his partner, Mr. Moat.  The communication had been made under contract which
forbade Moat to disclose the secret to anyone.  After the termination of the partnership, Moat's son,
representing the formula to be his own invention, used it.  Morison brought an action in court for an
injunction to restrain the use, which was granted.  The Court said there was an equity against the son
arising from the breach of faith and breach of contract by the father.IP/Q3/AUS/1
Page 10
Over the years, the case law has shown some inconsistency of doctrine but since the early
1960s the prior reliance on some notion of an implied contractual term as the basis for the existence of
the non-disclosure obligation has been replaced by a broader principle of equity concerned with
ensuring that persons do not suffer from an exercise of bad faith on the part of another.
The case law has now largely settled a set of criteria on which a judgement is made about
protection of confidential information.  This law is not restricted to a trade context.
For a person to succeed in an action to protect his confidential information, he or she must
satisfy the court that:
(i) the information itself had the necessary quality of confidence or secrecy about it (see
Saltman Engineering and Others v Campbell Engineering Co Ltd [1948] 65 RPC 203
and Coco v AN Clarke (Engineering) Ltd  [1969] RPC 41, at 47;
(ii) the information was imparted in circum stances importing an obligation of confidence
(see Coco v AN Clarke (Engineering)  at p.47);  (there has been debate about the
necessity of the following 3rd factor but it is generally present in the cases that have
come before the courts); and
(iii) there has been, or may be, an unauthorised use of the information to the detriment or
prejudice of the owner.
Because the court is acting in equity, its discretion to assist a plaintiff will be assisted by
establishing that a detriment or harm to the plaintiff has resulted or will result from the disclosure or
use by the defendant.
The subject matter of an action to restrain a breach of confidence or disclosure of a trade
secret "may potentially be any fact, idea, invention, device, process or article that possess a necessary
quality of confidence or secrecy" (McComas, Davison, Gonski, The Protection of Trade Secrets,
Butterworths 1981 at p.7).
Some examples of what has been held to constitute the subject matter of an action to protect
confidential information or a trade secret include:
(i) information obtained by a consulting geologist and his associates from a geological
drilling programme;
(ii) information given to the other party about an invisible carpet grip during negotiations
for the defendant to market the grip ( Seager v Copydex Ltd  [1967] 1 All ER);
(iii) information concerning the design, construction and operation of machines for
making rubber gloves ( Ansell Rubber Co v Allied Rubber Co  [1967] VR 37) (this is
an Australian case from the State of Victoria);
(iv) denial or pre-trial discovery and interrogatories aimed at discovering the defendant's
trade secrets and methods in relation to the manufacture of "closures" (American
Flange  and Manufacturing Co. Inc v Rheem (Australia) Pty Ltd (No. 2)  [1965]
NSWLR 193);
(v) customer lists and information concerning the proposed contents of a mail order
catalogue ( Robb v Green  [1995] 2 QB 1; Littlewoods Organisation Ltd v Harris
[1977] 1 WLR 1472); andIP/Q3/AUS/1
Page 11
(vi) information with some intrinsic economic value such as manuscripts, plots of plays,
lectures and stock exchange quotations ( Duke of Queensbury v Shebbeare  [1758]
2 Eden 329;  Macklin v Richardson [1770] Amb 694; Caird v Sime  [1887] 12 App
Cass 326; Exchange Telegraph Co Ltd v Gregory  [1896] 1 QB 147).
To have the necessary element of secrecy the information need not be unpublished.  All of
separated features of a process may, for example, have been published, or be capable of beingascertained by actual inspection by any member of the public, but if the whole result has not been
achieved, and could not be achieved except by someone going through the same kind of process as the
owner, the information will not fail to qualify for protection by reason of the publication of the
separate features.  It may derive from a maker in another country without losing its character, if it is
used or entitled to be used, by the owner alone in  the country in which the owner operates.  There is
no suggestion of the need for invention.  (Gowans J. in Ansell Rubber Co Pty Ltd v Allied Rubber
Industries Co Pty Ltd [1967] VR 37 at p.49).
The Ansell Rubber  case (above) is one of a number of cases in Australia that has accepted the
definition of a trade secret which is found in Section 757 of the US Restatement of Torts.  It sets out a
6 part test for confidential information to be protected.  It is information:
(i) which is used in one's business;
(ii) which gives one an opportunity to obtain an advantage over competitors who do not
know or use it;
(iii) which is secret, i.e. not the common knowledge of the trade;
(iv) which is maintained in secrecy by the owner;
(v) which is of value to the competitor; and
(vi) which was acquired at some expense or effort by its owner(see also Re Organon (Australia) Pty Ltd v Departme nt of Community Services and Health
[1987] 13 ALD 558;   Mense and Ampere Electrical manufacturing Co v Milenkovic [1973]
VR 784; but note that information does not need to be of a technical character: Searle
Australia Ltd v Public Interest Advocacy Centre and Department of Community Services and
Health  [1992] 108 ALR 168).
Third parties can be restrained where the information was obtained improperly and
injunctions have also been granted to prevent copies being made of that information, and if copies
have already been made to restrain them from be ing further copied and to restrain persons whose
possession that confidential information has come from themselves in turn divulging or propagating it
(see Swifden-Eady J. in Ashburton v Pape  [1913] 2 Ch 469).
The level of secrecy, and the measures necessary  for the holder of the information to take in
the protection of the secret, are matters to be dete rmined on the facts.  However, the cases in the
various common law jurisdictions show that the possessor of a trade secret does not have to take
heroic measures to keep it secret;  he or she merely has to take all proper and reasonable steps to keep
it to him or herself ( USM Corp v Marston Fastener Corp 204 USPQ 233 (Mass Sup Crt, 1979)).
From the foregoing it can be seen that Australian law protects undisclosed information as
required by Article 39.2 of the TRIPS Agreement.IP/Q3/AUS/1
Page 12
V. REPLIES TO QUESTIONS POSED BY THE UNITED STATES
1. Please explain whether any inventions, other than those specified in Article 18(2), are
not eligible to be patented under Australian law, notwithstanding the fact that the invention
satisfies the criteria of being novel, involving an inventive step, and being useful.  In so doing,
please explain the meaning of the phrase "is a manner of manufacture within the meaning of
Section 6 of the Statute of Monopolies" and whether under this definition any of the followinginventions are deemed ineligible to be patented in Australia:
(a) process inventions which, in whole or in part, consist of steps that are performed
by a computer and are directed by a computer program;
(b) product inventions consisting of elements of a computer-implemented invention,
including in particular:
(i) machine-readable computer program code stored on a tangible medium
such as a floppy disk, computer ha rd drive or computer memory;  and
(ii) a general purpose computer whose novelty over the prior art arises
primarily due to its combination with a specific computer program;
(c) methods of treatment or diagnosis of humans or animals;  or
(d) non-naturally occurring microorganisms,  plants or animals produced through
some act of human intervention.
The phrase "is a manner of manufacture within the meaning of Section 6 of the Statute of
Monopolies" is a non-prescriptive definition of what is patentable.  In essence, case law draws the
distinction as being the difference between the useful arts and the fine arts.  With specific reference to
the 5 examples raised in the question, the subject matter of (a), (b)(ii), (c) and (d) are definitely
patentable.  The subject matter of (b)(i) is in the category of questionable, but is in fact covered by ourcontributory infringement provisions.
2. Articles 133 to 140 of the Australian Patents Act of 1990, as amended by Part 4 of the
Patents (World Trade Organization Amendments) Act 1994, permit the issuance of compulsory
licences under patents within Australia under cert ain circumstances, notably in cases where a
trade or industry in Australia is being unfairly prejudiced, Australian demand for the patentedinvention is not being met, or the patented invention is not being commercially worked within
Australia.  The provisions are not differentiated in terms of their application with respect to the
technological field of the invention.  Please explain how these provisions comply with Article
31(c) of the TRIPS Agreement, which specifies that compulsory licences under patents
concerning inventions in the field of semi-co nductor technology can be granted only for the
purpose of public non-commercial use or to remedy a practice determined after judicial or
administrative process to be anti-competitive.
The semi-conductor technology referred to in the second part of Article 31(c) is referable to
circuit layouts.  It is our understanding that there is no requirement that the provisions of Sections 133
to 140 of the Patents Act 1990  be differentiated in terms of their application with respect to the
technological field of the invention.IP/Q3/AUS/1
Page 13
[Follow-up question from the US]
In its answer to question 2 from the United States, Australia has indicated that it is their
understanding that there is no requirement that the provisions of Sections 133 to 140 of the
Patents Act be differentiated in terms of their appl ications with respect to the technological field
of invention.  The basis for the United States  question was that Article 31(c) specifies that
compulsory licences in respect of inventions in the field of semiconductor technology shall beavailable only "for public non-commercial use or to remedy a practice determined after judicial
or administrative process to be anti-competitive".  Please clarify the basis upon which the
answer to this question was provided by the Government of Australia.
The basis on which our answer to (original) question 2 from the US was provided is our
understanding that the reference in Article 31(c) of the TRIPS Agreement to "in the case of semi-
conductor technology" involved a reference only to Section 6.  This was based on negotiations at the
time those words were included in the Agreement.
3. Chapter 17 of the Patents Act of 1990, as amended by Part 4 of the Patents (World
Trade Organization Amendments) Act 1994, permits the government of Australia, or its
designees, to use an invention described in an application or in an issued patent.  Notice is to be
provided as soon as practical after the use comm ences, and remuneration is to be provided.
With respect to the so-called Crown use, please explain:
(a) whether any of the conditions specified in Article 31 of the TRIPS Agreement
are incorporated or applied in the context of authorizing Crown use of a
patented invention;
(b) how the provisions of Article 167, which authorize the Crown or its designee
under the authority of Crown use to not only use the invention but to sellproducts covered by the patent to the public at large, function in practice, and
how this authority can be reconciled with the provisions of Article 31;  and
(c) how frequently and under what circumstances Crown use is authorized in
Australia.
(a) Re Article 31(a):  each authorization of Crown use is necessarily considered on its
individual merits because under Section 163(3) Crown use can only occur if it is
necessary for the proper provision of those services in Australia.
Re Article 31(b):  Crown use is unders tood to be "public, non-commercial use";
Section 164 requires the right holder to be informed promptly.
Re Article 31(c):  see our answer to question 2 above.Re Article 31(d):  exploitation by the Crown under Section 163 is non-exclusive in all
areas.
Re Article 31(e):  Section 163 provides that the use can be by a person authorized in
writing by the Government - but the use must still be for the services of the
Government.  The Act does not allow for the right to exploit the invention to be
assigned to a person for their own benefit.
Re Article 31(f):  Section 163(3) imposes the requirement that the exploitation is
necessary for the proper provision of services within Australia.IP/Q3/AUS/1
Page 14
Re Article 31(g):  as for (f) above.
Re Article 31(h):  Section 51(xxxi) of the Australian Constitution requires that the
terms of any acquisition of property be just.
Re Article 31(i):  any administrative decisions under Chapter 17 of the Act would be
reviewable by the Federal Court of Australia under the  Administrative Decisions
(Judicial Review) Act.   Any decisions of a court of first instance are appellable.
Re Article 31(j):  is provided for by Section 165.
Re Article 31(k):  the exclusions from Article 31 provided by this paragraph are not
relevant under Australian provision.
Re Article 31(l):  if exploitation of an invention under Section 163 necessarily
involves exploitation of another invention, clearly the exploitation of that other
invention will be covered by Section 163 as well.
(b) As indicated in the answer to the next question, the circumstances of and detailed
arrangements for Crown use are the responsibility of the Crown instrumentality and
the patentee.  As Crown use provisions are rarely exercised there is no factual basis
available to the Australian Patent Office to allow any generalization on the practical
functionality of Section 167.  We are unaware of any concerns with the operation of
these provisions having been expressed.
(c) If the Crown use provisions were invo ked the case would be between the relevant
instrumentality of the Crown and the pate ntee and would not involve any of the
administrative bodies responsible.  As such it is difficult to determine the frequency
of use, though we expect this has been minimal.
[Follow-up question from the US]
In its answer to question 3(a) from the United States pertaining to Article 31(l), the
Australian Government has indicated that Article 31(l) is addressed through operation of the
general suite of restrictions imposed on the gran t of any compulsory licence by Australian law.
Please indicate whether, under such provision s, the requirements are fulfilled that the
dependent patent must be for an invention that is an important technical advance ofconsiderable economic significance in relation to  the invention claimed in the first patent and
that the owner of the first patent will be enti tled to a cross-licence on reasonable terms to use
the invention claimed in the second patent.
The answer given in relation to Article 31(l) was in respect of Crown use.  However, in
respect of compulsory licences, this issue is covered by Section 133(3B).  In this provision, the secondpatent must be for an invention that is an important technical advance of considerable economic
significance in relation to the invention claimed in the first invention and the owner of the first patent
can, if they wish, apply for a cross-licence on reasonable terms.IP/Q3/AUS/1
Page 15
4. Please indicate how many compulsory licen ces on a yearly basis have been granted in
Australia since 1 January 1993.
To our knowledge, there have never been any compulsory licences issued under Chapter 17,
nor under the corresponding provisions of the previous Act (although there were a small number of
applications under the old Act).
5. Please explain how undisclosed information is protected in Australia, and the legal basis
for such protection.
Please see answer on this subject provided to Japan.
6. Please indicate the nature of measures, if any, that are taken by judicial authorities in
Australia to protect the confidentiality of undisclosed information (e.g. trade or business
secrets) furnished by a party to the court dur ing legal proceedings, when the information has
been provided either to enforce trade secret rights in such in formation, or pursuant to other
proceedings.
(i) It is noted that this question although relating to confidential information relates to
the obligation in Article 42 in the context of legal proceedings.
(ii) There are a number of ways to access the material subject of a trade secret which
might be subject to disclosure as a result of a court procedure.  For example, the
information may be obtained as the result of the execution of an order for search andseizure of evidence (e.g. Anton Piller Order).
(iii) The Australian Courts have applied strict guidelines about the execution of Anton
Piller orders including requiring undertakings from the applicant at the time of
granting the order.  Even in such a case, if the material containing the confidential
information is not properly handled, the defendant may cross claim for damages andother relief, for disclosure arising out of access granted pursuant to the execution of
the order.  This is a serious risk.  Plaintiffs are regularly advised by their legal
advisers to take steps to ensure that confid ential, or allegedly confidential material, is
held by the plaintiff's solicitors rather that the plaintiff and, in the execution of an
Anton Piller order that the respond must be given the opportunity during the search toindicate those documents which they consider contain confidential information so as
to ensure its safe custody.
(iv) Confidential information may be disclosed in a statement of claim or other
proceeding particularly through discovery proceedings both in pre-trial and during the
course of a trial.
(v) In all proceedings in Australia there is an implied undertaking not to use the materials
and documents seized for any purpose other than the current proceedings.  With
Anton Piller orders the undertaking is usually given expressly and this may also be
requested in relation to discovery proceedings.  Statements of claim may also be
framed so as to seek an order for some protection of the information.  For example,
the statement of claim may list the confidential information in a schedule for
production to the respondent "subject to whatever order the Court deems fit for theprotection of the confidentiality thereof" (see Appendix C, The Law of Trade Secrets,
R. Dean, The Law Book Co. 1989).IP/Q3/AUS/1
Page 16
(vi) In regard to disclosure once court proceedings have been commenced, it is the law in
Australia that discovery in an action, whether of documents or of facts, has never
been at large but has always been confined to documents or facts relevant to the
issues between the parties.
(vii) So far as discovery is concerned there is no category of privilege based on
confidentiality (as finally admitted by Lord Denning in Riddick v Thames Board Mills
Ltd [1977] QB 881 at 895-896; see also Australian Broadcasting Commission v
Parish  [1980] 43 FLR 129).  Nevertheless, the rule from the decided cases is that the
confidentiality of the information can be a factor in determining whether to limit
disclosure (see e.g. Lord Evershed MR in Printers and Finishers Ltd v Holloway
[1961] RPC 71 at 79).
(viii) The same rule is applied in relation to inspection.  Inspection may be limited to
experts and a party's legal advisers or to a particular servant or agent of the party.  SeeWarner-Lambert Co v Glaxo Laboratories Ltd [1975] RPC 354 and the cases cited
therein.
(ix) The Supreme courts and the Federal Cour t also have power to hold proceedings in
camera.  In the Law of Trade Secrets , The Law Book Co, 1990, the author, Robert
Dean, notes (at p.498):
"Under the umbrella of securing justice there are classes of cases where it will
become necessary to allow secret litigation ( David Syme and Co Ltd v GMH  [1984]
2 NSWLR 294 at 300).  The largest class of cases is that where the subject matter of
the cases would be destroyed by publicity.  The largest component of this class
comprises cases involving trade secrets ( Scott v Scott  [1913] AC 417, Halsbury's
Laws of England (4th Ed Vol 10, para 705)."
(x) There are, therefore, a variety of ways in which confidential information can be
protected during proceedings.  The extent to which a court will do so will obviously
depend on the particular circumstances of the case.  The reported decisions in
Australia do not show that there has been any clearly identified problem withdisclosure during trial, or in the relevant pleadings.
(xi) Though parties are naturally reluctant to take any risks with commercially valuable
and carefully guarded information, the broad discretions of the more senior courts
allow the courts to impose, as  they see the requirement, restrictions on the release of
information to one or other party.  In particular cases experts might be appointed toexamine discovered documents to ascertain their relevance;  access may be restricted
to a party legal advisers or to one or more of them;  a particular employee may be
identified as the only one permitted access and copying may be restricted.  In an
extreme case, proceedings may be held in camera.  (See Dean, R., The Law of Trade
Secrets, Appendix E, The Law Book Co, 1989).
(xii) Such restrictions are not imposed lightly or without question.  It is the ordinary rule of
all the courts that their proceedings are to be conducted publicly and in open view(see, e.g. Russell v Russel  [1976] 134 CLR 495 per Gibbs J. at 520).  But the courts
recognize, as Dean J. (later Chief Justice of the High Court) said in ABC v Parish,  that
"the results of unduly discounting of legitimate claims to confidentiality are likely to
result in deterrence of the subject from having recourse to courts of justice".  It is this
balancing that is determined in each case that comes before the courts.IP/Q3/AUS/1
Page 17
7. Please explain the measures, if any, that h ave been implemented in Australia to protect
against unfair competition those parties that ha ve provided confidential test or other data
concerning a pharmaceutical or agricultural chemical product to Australian regulatory
authorities pursuant to a request for marketing approval.  Please explain how such measures, if
any, are consistent with Article 39.3 of the TRIPS Agreement.
Australia announced in December 1996 its intention to introduce a new regime of data
exclusivity.  Under this regime confidential data submitted to the Therapeutic Goods Administration
(TGA) or the National Registration Authority for Agricultural and Veterinary chemicals (NRA) to
register a new pharmaceutical, agricultural and veterinary chemical product containing a new
chemical entity will be protected for a period of five years from the date of registration of the
originator product.  Legislation is currently being prepared to implement the new regime which will
be fully consistent with Article 39.3 of the TRIPS Agreement.  The new legislation will be notified to
the Council for TRIPS when finalized.
8. Article 25 of the Circuit Layouts Act of 1989 permits the Government of Australia to
grant an involuntary licence under a certificate of protection to a government agency or a third
party authorized by the Government of Australia.  Article 37.2 of the TRIPS Agreement
requires WTO Members that permit the involuntary licensing of a mask work right to adhere to
the conditions concerning involuntary licences for patents found in Article 31(a) to (k).  Pleaseexplain how the Australian act complies with the requirements of these Articles of the TRIPS
Agreement.
(i) In general, please see Australia's answers to questions from the European
Commission concerning Section 25 of the Circuit Layouts Act 1989.
(ii) In summary, Section 25 of the Circuit Layout Act 1989  complies with the various
paragraphs of Article 31 of the TRIPS Agreement. By reason of its application for a
specific, or limited, purpose, the compulsory licence applies only when all reasonable
steps taken to obtain the licence of the owner of the EL Rights has been unsuccessful,
the use is subject to reasonable compensation, and the compulsion relates only to the
use of the layout itself.  Importantly, the Circuit Layout Act places no restriction on
the EL rights being otherwise utilized by the owner.
Article 31 - Other Use Without Au thorization of the Right Holder
Article 31(a)
(iii) This paragraph provides that "authorization of such use shall be considered on its
individual merits".  The paragraph appears to contemplate a situation where a membercountry has a broad statutory licence scheme that allows for any use of a layout by
government or a third party authorized by Government, especially since the
references to "other use" and "such use" in the paragraph are not limited in any way.
(iv) The licence scheme in Section 25 of the Circuit Layouts Act is limited to use by the
Commonwealth for acts for the defence or security of Australia which is, by itself, a
significant limitation.  The individual merits of the licensing issue are further satisfiedby the requirement for "reasonable efforts" to be made to obtain the authorization ofthe owner of the EL Rights.  It is this requirement of reasonable efforts in the
provision in Section 25(1) which ensures that each case is dealt with on its individualmerits since what is reasonable can only be determined having regard to the facts of
each case.IP/Q3/AUS/1
Page 18
Article 31(b)
(v) This paragraph provides that a government can use a layout design without obtaining
the authorization of the owner (prior to th at use), where efforts have been made to
obtain authorization but such efforts have not been successful within a reasonable
period of time.  Where there is a national emergency, other circumstances of extreme
urgency or where the use is public non-commercial the requirement to makereasonable efforts to obtain authorization is waived.  The final sentence of the Article
refers to public non-commercial use of patents (see paragraph 31(c)) and requires the
Commonwealth to inform  the right holder promptly of such use.
(vi) The Circuit Layouts Act complies with this paragraph by placing limits on the type
and conditions of use of layout designs by the Commonwealth.  Section 25(1)
provides that an act performed by the Commonwealth in relation to an eligible layout
is not an infringement of the rights of the owner if (a) it is an act for the defence orsecurity of Australia and (b) reasonable steps have been taken to obtain the licence of
the owner on reasonable terms.  The Commonw ealth is therefore limited by the Act to
using layout designs without authorization for defence or security reasons and the
reasonableness of the efforts to obtain consent will include a time factor.
Paragraph 31(b) permits a waiver of its requirements in cases of publicnon-commercial use or extreme urgency both of which conditions are potentially
applicable to an action taken for defence or security.  In this way, Section 25(2) of the
Circuit Layouts Act, permitting authorization after the use has commenced also falls
within the terms of the TRIPS provision.
Article 31(c)(vii) Paragraph 31(c) of the TRIPS Agreement states that "the scope and duration of such
use shall be limited to the purpose for which it was authorized".  The article also
states that in the case of semi-conductor technology the use "shall only be for public
non-commercial use".  To the extent that this article would apply or Article 31(b), the
determining condition of the use "for the defence or security of Australia" applies.
(viii) In Section 25(4) of the Circuit Layouts Act it is stated that the terms for the doing of
an act (by the Commonwealth) are those terms agreed between the parties (either
before or after the act is done) or as determined by the Federal Court.  As noted in
Australia's answers to questions from the EC  on this section, the uses of a circuit
layout by the Commonwealth under the section are limited to uses that are authorizedby the statute.  That is, for the defence and security of Australia.  It is difficult to
imagine clearer cases of public non-commercial  use.  Section 25(5) contemplates the
eventual sale of articles containing circuit layouts that may have been used
compulsorily.  This provision is not, howe ver, an implied consent to utilize the EL
Rights for a commercial purpose.  Rather, it provides an express statutory authority
for good title to pass on the disposal of the item in which circuit the subject of the EL
rights resides.  It does not affect the initial requirement that the use of the EL Rightsmust be for a defence for security purpose.
(ix) In this way, the Act complies with paragraph 31(c).  Note also that the Australian
Government is not granted any additional rights to those in Section 25(4) to use a
circuit layout for a purpose other than defence and security and so the intent of
paragraph 31(c) is also observed in this way.IP/Q3/AUS/1
Page 19
Article 31(d) to 31(h)
(x) These paragraphs impose additional constraints on the use of a circuit layout, namely
that any use shall be: non-exclusive, non-assignable, predominantly for the supply of
the domestic market, be liable to be terminated and that the owner shall be paid
adequate remuneration.
(xi) The Act does not specifically mention an y of the terms of paragraphs 31(d)-(h) but
the comments made above in relation to Article 31(c) are equally applicable here,
especially that the Commonwealth is not given any exclusive or assignable right that
would contravene these Articles.  Note again that exercise of the right is related to
defence and security, not the conduct of trading or commercial activity, and is subject
to reasonable terms being agreed by the parties or determined by the judicial authority
specified, namely, the Federal Court of Australia
Article 31(i) and (j)(xii) These paragraphs provide that the legal validity of decisions relating to authorization
and remuneration shall be subject to judicial review.  Section 25(4) of the Act
provides a right of application to the Federal Court by either the Commonwealth or
the owner where there is an absence of agreement on the terms of use.  A right of
review is probably also available under the Section 5 of the Administrative Decision(Judicial Review) Act 1977 where it is alleged the circumstances giving rise to the
exercise of the right have not been, or were not, satisfied.
Article 31(k)
(xiii) This paragraph makes an exception in the case of use by Government where that "use
is permitted to remedy a practice determined after judicial or administrative process tobe anti-competitive".  There is no provision in the Act dealing with use by the
government for this purpose.
VI. REPLIES TO QUESTIONS POSED BY INDIA
1. Are microbiological processes included in the scope of Section 18(2) of the Patents
Act 1990?
Microbiological processes are not excluded by Section 18(2).
2. With reference to Section 6, what is the definition and scope of the term
microorganisms?
The term microorganism, as used in the Australian Patents Act, has yet to be the subject of
judicial interpretation.  However, for the purpose of relying upon deposits for describing an invention,the term is given an expansive interpretation - consistent with being able to rely upon any deposit that
may be made under the terms of the Budapest Treaty.