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In patent laws around the world, exclusive licensees often have standing
to initiate infringement actions if the relevant patentee(s) is also added to the suit.
Australian patent legislation specifies that exclusive licensees have this power and,
correspondingly, the definition of ‘‘exclusive licensee’’ clearly permits licensees to
initiate infringement actions if they exclusively control the full complement of
rights conferred by a patent. However, an important question remains: Does the
definition of exclusive licensee include licensees that exclusively control only a
portion of the rights conferred by a patent (e.g. to import and sell an invention but
not make it)? The Full Court of the Federal Court of Australia has, through legislative
interpretation, recently answered this question in the negative. Arguably,
this interpretation is correct as a matter of statutory construction, but is it correct as
a matter of patent policy? This article examines this final question via two
approaches: (i) by extending the orthodox economic rationale for patents to the issue
at hand, in particular by examining the role of exclusive licensing in market
economies; and (ii) by evaluating the role of standing for exclusive licensees in the
context of world patent harmonisation and the corresponding approaches in the UK
and US.