Regime change needed for IP laws

James Riley
Editorial Director

Australia’s Intellectual Property regime has lost sight of its users and in need of significant rebalancing, with the current system now tipped too far in favour of vocal rights-holders and influential IP exporting nations.

That’s not the rantings of a Game of Thrones diehard sweating on a new episode, but rather the core findings of a draft report just published by Productivity Commission last week.

It raises big questions for Australian policy-makers who are pulling every lever at their disposal through the #IdeasBoom to make the nation a bigger producer of IP for world markets.

Karen Chester:’We feel the system has gone further out of balance’

Here’s the thing. We are massively a net importer of intellectual property in this country. And through bilateral trade agreements – most notably the Australia-US Free Trade Agreement – we are to a very great extent locked into a system that is not suited to the 21st century.

“No matter how you measure it, Australia overwhelmingly imports more IP than it exports — and this gap is widening. Most of the profits from excessive IP rights flow offshore, while Australian consumers and taxpayers are left to pick up the tab,” said Commissioner Karen Chester.

“We’ve done a lot of analysis, we’ve consulted with stakeholders, we’ve done a lot research,” Ms Chester said. “And based on all that evidence we’re of the view that Australia’s intellectual property rights have expanded and elevated over time and have sort of got out of balance.”

“They have seem to have swung too far in favour of rights holders – losing sight of the users.”

Many of Australia’s IP arrangements are locked-in by trade agreements, frustrating much needed change. Despite these constraints, the Commission has identified a workable bundle of reforms.

“We have identified what I call some policy ‘wriggle room’, where we can still continue to meet those trade agreement obligations, but we can go somewhere towards a better balance in IP arrangements from the perspective of Australians’ wellbeing,” Ms Chester said.

“Where we feel the system has gone further out of balance, we do see it as a reflection of very vocal rights holders and some influential IP exporting nations, influencing policy as its been framed within some of the trade agreements,” she said.

“There probably are some benefits for Australia in terms of being a bit more strategic about how we incorporate IP provisions in future trade agreements.”

“But our preference would be that Australia pursues IP arrangements and mutual recognition through multilateral means. That’s probably a better way of having a balance of different nations in the melting pot of those negotiations,” Ms Chester said.

Meanwhile, fellow commissioner Jonathan Coppel said that Australia’spatent system was poorly targeted, and that simply having more patents was not always better.

“Some patented inventions border on trivial and protection can last too long,” Mr Coppel said. “For pharmaceuticals alone, excessive protection costs the Australian Government, taxpayers and consumers over a quarter of a billion dollars each year.”

“Only genuine innovations should be granted patent protection and patent fees need to be higher to discourage rights holders from hanging on to patents longer than they need to.”

The Commonwealth agency that administers the current regime, IP Australia, has welcomed the draft report and said it was a good opportunity for organisations with an interest in intellectual property to have their say.

“IP Australia will respond to the draft report and this will be made publicly available on the Productivity Commission’s website,” the agency’s acting director general Deb Anton told

The Productivity Commission also had a stab the current copyright regime – and found it difficult and inflexible, and counter to the needs of users. While protection for copyright was important for protecting creative endeavours, better ‘fair-use’ provisions were needed.

Copyright is pervasive, affecting everyone from hip hop artists sampling music, school children watching a documentary in class, libraries and museums preserving Australia’s history, to innovative researchers accessing databases for data mining, the Commission said.

Copyright protection lasts too long – a book written today by an author who lives for another 50 years will be protected until 2136. To correct these imbalances, Australia needs a new, principles-based, fair use exception, to protect user rights without undermining the incentive to create.

The Productivity Commission will take submissions on the draft report until 3 June 2016 and will hold public hearings through June. The final report is due at the beginning of August.

Do you know more? Contact James Riley via Email.

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