Welcome to our Newsletter, bringing you the latest in Intellectual Property, Technology and Media Law news.
Innovation and incentives: patent box
As announced in the 2021/22 Budget, the Australian Government will introduce a patent box for eligible corporate income associated with new patents in the medical and biotechnology sectors. The aim is to encourage companies to base their medical and biotechnology research and development (R&D) operations, and commercialise innovation, in Australia and to retain associated patent profits in Australia. It is intended for the patent box regime to apply to companies for income years commencing on or after 1 July 2022.
The Government issued a Discussion Paper with the objective of informing the Government’s consideration of the detailed design of the patent box. The closing date for submissions on patent box was 16 August 2021. As such, the consultation period has now ended. We will provide further updates as they are available. In the meantime, please contact Kristie Schubert, Partner or Jacqueline McGrath, Special Counsel from our tax team should you have any questions regarding patent box or accessing R&D tax incentives.
Tax considerations associated with intangibles
An emerging area of focus for revenue authorities globally, including the Australian Taxation Office, is in relation to the development, enhancement, maintenance, protection and exploitation of intangible assets (known as DEMPE activities). With this in mind, the ATO issued its draft Practical Compliance Guideline 2021/D4 on Intangibles Arrangements on 19 May 2021 for consultation purposes. The draft Practical Compliance Guideline sets out the ATO’s intended compliance approach to international arrangements connected with the development, enhancement, maintenance, protection and exploitation of intangible assets.
The consultation process for the draft Practical Compliance Guideline closed on 16 July 2021 and the ATO are yet to advise of a completion date for the release of the final Practical Compliance Guideline. However, the ATO has indicated that the final Guideline will set out the ATO’s compliance approach to international arrangements connected with the development, enhancement, maintenance, protection and exploitation of intangible assets, specifically, the potential application of the transfer pricing, general anti-avoidance rule and the diverted profits tax provisions. The capital gains tax and capital allowances provisions will also be discussed in the final Guideline where these may be considered alongside, or relevant to, the ATO’s transfer pricing, general anti-avoidance or diverted profits tax risk assessment. Accordingly, taxpayers would be well advised to consider the draft Guideline and the impact it may have on current or proposed activities ahead of its finalisation.
We will provide a further update when the final Guideline is released. In the meantime, if you have any questions or concerns about how the proposed approach may impact your activities either now or in the future, please contact Kristie Schubert, Partner or Jacqueline McGrath, Special Counsel from our tax team who are happy to speak with you about the ATO’s proposed compliance approach.
Federal Court of Australia approves Artificial Intelligence to be Inventor for Patents Act purposes
A decision was handed down on 30 July 2021 by Justice Beach of the Federal Court in Thaler v Commissioner of Patents [2021] FCA 879 that artificial intelligence may be an inventor under section 15(1)(a) of the Patents Act 1990 (Cth) and section 3.2C(2)(aa) of the Patents Regulations 1991 (Cth).
This case involved artificial intelligence known as the device for the autonomous bootstrapping of unified sentience (DABUS). The claimed invention was said to be the output of DABUS’ processes, being products and methods ‘..concerning containers, devices and methods for attracting enhanced attention using convex and concave fractal elements.’
The Deputy Commissioner had previously decided that DABUS could not be an inventor for the purposes of the Act and Regulations. Dr Thaler’s patent application was refused by the Deputy Commissioner because it failed to “provide the name of the inventor of the invention to which the application relates”. This case involved an application by Dr Thaler for judicial review of the Deputy Commissioner’s decision.
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Saving grace in changes to the Designs Act
Upcoming changes to the Designs Act 2003 (Cth) will provide greater opportunities for designers to protect their novel designs.
Design registrations establish rights in the visual appearance of products, such as unique shapes, colours, patterns, ornamentations and configurations. Designs can relate to all manner of products, from clothing and furniture to mechanical components and chocolate bars.
The Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 recently passed Parliament and received royal assent on 10 September 2021. The bill addresses some of the recommendations made by the former Advisory Council on Intellectual Property back in 2015. IP Australia has announced the amendments are due to come into effect on 10 March 2022.
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Tech to go: the Commonwealth’s fast-IP plan for research commercialisation
The Commonwealth Government intends to create a standardised suite of templates and guidance for arrangements between parties participating in certain Commonwealth-funded research projects.
Submissions on the consultation paper are due by 10am on Monday 18 October 2021.
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In case you missed it, the following articles were recently published on our website:
You.au – 24 March 2022 announced as launch date for second level .au domain names
The governing body of .au domain names, the .au Domain Administration (auDA), recently announced that .au direct names will launch in Australia on 24 March 2022. This development follows similar moves for .uk and .nz domain names.
The public will be able to register second level .au domain names, like hwle.au rather than hwle.com.au, from 24 March 2022.
Holders of existing third level .au domain names, like com.au and net.au, will have priority to register corresponding second level .au domain names.
Rules are in place for dealing with competing priority claims, which can arise if different parties hold existing corresponding com.au and net.au domain names, for example.
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Landmark decision for publications on social media: High Court rules that media companies are publishers of the comments made on their Facebook posts
On 8 September 2021, the High Court ruled in Fairfax Media Publications Pty Ltd; Nationwide News Pty Limited; Australian News Channel Pty Ltd v Voller that media companies are ‘publishers’ of comments made on their public Facebook pages for the purposes of defamation law.
By creating a social media page, companies may be held to have facilitated, encourage and assisted the posting of comments by the third-party users and are therefore the publishers of those comments for the purposes of defamation. It does not matter that that companies have no control over the way the social media platform operates its services. Businesses that post content to a social media platform for commercial benefit are more likely to be seen as ‘publishers’ of third-party comments.
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