A central Victorian Aboriginal leader said recent restrictions on the use of the Aboriginal flag are "incredibly disappointing."
Dja Dja Wurrung chief executive Rodney Carter said the flag wasn't designed as a logo and is bigger than just one individual.
"The flag communicates solidarity, rights and identity," Mr Carter said.
WAM Clothing hold a licence to produce items using the flag's design and have been seeking to enforce its exclusive right to use the Aboriginal flag.
"There is an inherit responsibility to let go of the commercial aspects," Mr Carter said.
Bendigo MP Lisa Chesters said the Labor Party will introduce a private members bill to compel the government to negotiate with all rights holders, so the flag design can be used freely.
"This is a national flag and the government has to make sure it is freely available to all Australians," Ms Chesters said.
"It is outrageous that a private company is holding this symbol of incredible strength for its private profit.
"This flag is a symbol of our First Nations people and therefore, it must be treated with the respect."
Mr Carter said he loves the Aboriginal flag and said a design of the Australian flag, to incorporate elements of the Aboriginal flag would be a "defining moment."
"I love the flag for what it means for people," he said.
"I don't necessarily afford the same feeling toward where the flag might have come from in its beginning, but I appreciate the purpose of it.
The flag was designed by Lurtija artist Harold Thomas in 1971 and was made an official flag of Australia in 1995.
Mr Thomas was granted copyright of the flag in 1997.
Copyright of the Australian flag is held by the Commonwealth and the copyright of the Torres Strait Island flag is held by the Torres Strait Regional Council.