User:Pde/Policyprocess

The process by which the IP Chapter was negotiated departed from the principles of transparency and accountability
The FTA bypasses established processes of public discussion and consultation on IP law, and has rendered some of the outcomes of existing public reviews of intellectual property redundant

At the same time as the FTA negotiations were occurring, two major reviews of IP policy were occurring in Australia: the Digital Agenda Review, and the ALRC Gene Patenting Review. The FTA pre-empts the results of two key ongoing reviews of IP law and policy. By doing so, the government has not taken the opportunity to allow for public discussion of these important issues.

In both of these reviews, the entity undertaking the report was specifically requested by the Australian government to undertake widespread public consultation and consult with key stakeholders. A large number of interested parties did expend considerable time and effort to make submissions and/or engage in consultations with these two reviews. The results of these inquiries have been pre-empted by the provisions of the IP Chapter of the FTA.

The implications of an FTA with the United States, and the implications of adopting more US-style IP law, could and should have been included in the Terms of Reference for these inquiries, and thus more openly discussed. This did not occur, and it seems that some of the issues considered in each review have been rendered redundant by the terms of the IP Chapter of the FTA.

The Digital Agenda Review

The Digital Agenda review was announced in April 2003 and received submissions and held consultations in September 2003. In this review, the consultant was asked to undertake:

“an examination of whether the approach taken in the amendments ensures a reasonable balance between the competing interests of enabling copyright owners to protect their copyright material in digital form whilst allowing reasonable access to such material by copyright users”

While the Consultant provided their Report to the Australian Government in January, that report has not yet been released for public comment.

It is also worth noting that the laws reviewed in this process – mainly the Copyright Amendment (Digital Agenda) Act 2000 – were themselves enacted only after very extensive consultation and public discussion, a process which commenced in July 1997 and only concluded with the passing of the Act in October 2001. The legislative provisions which resulted from this extensive, and detailed consultation process represented, according to the Australian government, an attempt to strike an appropriate balance between the interests of copyright owners and copyright “users” and members of the public.

As discussed further below, the FTA, if implemented, will require significant re-writing of the “approach taken in the amendments.” The result is to bypass the outcomes of two extensive public review processes.

The ALRC Gene Patenting Review

Second, the ALRC has been conducting an in-depth review of Australian patent law in the context of its review of Gene Patenting and Human Health. The Discussion Paper, released in March 2004, is a very comprehensive, high quality document which raises many important issues regarding the appropriate balance of public and private interests in patent law, particularly in relation to biotechnology but also more generally.

Similarly, aspects of the ALRC review will be rendered redundant if the FTA is ratified and implemented. For example, the ALRC has asked whether the Commonwealth amend the Patents Act to require a patent holder to transfer ‘know-how’ relating to the patented product or process to the Crown when the Crown uses or acquires a patent under the Act. This would be precluded by the FTA.

The negotiation of the FTA overrides past IP policy reviews

The effect of the FTA is not confined to the bypassing of current IP policy reviews. The outcomes of the FTA also override the reasoned conclusions of the Ergas Committee which reported in September 2000. In that report, the Ergas Committee made the finding that:

“The Committee is not convinced there is merit in proposals to extend the term of copyright protection, and recommends that the current term not be extended.

We also recommend that no extension of the copyright term be introduced in future without a prior thorough and independent review of the resulting costs and benefits.”

In 2001 the Australian government accepted this proposal, stating that it had “no plans to extend the general term for works.” Under the FTA, the copyright term will be extended to life of the author plus 70 years; this has occurred without the Ergas Committee’s “thorough and independent review” of the resulting costs and benefits.

The effect of bypassing the ALRC and Digital Agenda Review

It is a basic principle of sound policy-making that it should begin with sound economic support for policy changes. Evidence in favour of changes should be provided prior to changes being made to law – not afterwards.

The government, at the time it started negotiating with the United States Government, had initiated two significant reviews which were aimed, in part, at undertaking an analysis of the costs and benefits of existing IP law, and considering whether that law needed to be changed. Instead of waiting for the outcomes of those reviews, or even including the issues of the FTA in the Terms of Reference for those reviews, the government chose to bypass those processes entirely. Nor was any analysis of the costs and benefits of copyright term extension undertaken, as recommended by the Ergas Committee.

The result was that the Australian negotiators did not have a clear idea of the value of maintaining the current balance of Australian IP law. In short, the negotiators did not have any clear evidence as to the value of what they were trading away, in relation to IP law.

I would not argue that no concessions should have been made at all on IP law. I am aware that in the negotiation of a comprehensive trade agreement, trade-offs will be made. However, it is critical that, if the interests of Australia are to be served by the outcome of such negotiations, negotiators must have as clear a picture as is possible of the costs to Australia of making concessions. In bypassing the existing processes, and not conducting the public review of copyright term extension, the government ensured that it would not have this critical information.

I would therefore argue that the Australian Government ought not to have pre-empted, and rendered effectively redundant, the major reviews of IP policy in copyright law and patent law which were occurring at the time of these negotiations. By doing so, the Australian Government has departed from its commitment to an “open and transparent treaty-making process”.

At the very least, the implications of the FTA should have formed an integral part of both the ALRC and the Digital Agenda Review, so that issues of the costs and benefits of moving to the kinds of provisions found in Chapter 17 of the FTA could be openly discussed by the full range of interested parties. Instead, these public consultations have been bypassed by the FTA negotiations. This is particularly significant given the prescriptive nature of the Agreement.

Furthermore, in assessing the economic, environmental, social and cultural effects of the proposed treaty, and the financial costs associated with implementing and complying with the terms of the treaty, a copy of the Consultant’s Report on the Digital Agenda Review should be made available for public discussion.

The highly prescriptive nature of the IP Chapter will unduly constrain Australian discretion to shape appropriate IP laws for Australian circumstances
Intellectual property law is an important instrument of government economic and social policy, which should be shaped by the Australian Parliament for Australian circumstances

IP law embodies a balancing of various competing interests: the need for private parties to receive rewards for innovation must be balanced against the public need for access to new works and new technologies. The crafting of Australian IP law necessarily involves an assessment of how these balances operate in an Australian context. This process is important to ensuring a sound economic policy for Australia. The Australian government has long recognised that “Australia’s economic future will be shaped, in part, by how well it can manage its intellectual property assets.”

It has been widely recognised that the balance of interests embodied in IP law can and should vary between countries with different economic interests. Simply following the policies of American, or European IPRs is not necessary, nor is it desirable. Furthermore, as economist Keith Maskus has pointed out, for countries to maximise their gains from stronger IP rights, their IP systems must interact coherently with other national policies.

Further, from a democratic point of view,

“Australian laws, whether relating to human rights or other areas, should first and foremost be made by Australians, for Australians … [W]hen Australian laws are to be changed, Australians and the Australian political process should be at the beginning of the process, not at the end.”

The highly prescriptive nature of the Australia-US FTA will unduly limit the Australian Parliament’s freedom to shape intellectual property law in the future

The issues raised above regarding the process for negotiating the FTA would not be so important if the agreement were in the usual form of IP (and other) treaties; that is, if the Agreement was drafted at a high level of generality and required only that Australia provide “effective” protection. Were the obligations in the IP Chapter more general, then the implementation could be undertaken in a way that appropriately balanced the interests of users and owners in an Australian environment, and the findings of the two Reviews mentioned above could be taken into account. A good example of such an agreement may be found in the Australia-Singapore Free Trade Agreement, which includes 3 pages of IP-related obligations, stated at a broad level. The provisions of this agreement commit the parties to cooperation in relation to IP enforcement and education, and to observance of international IP treaties.

By way of contrast, the IP Chapter in the Australia-US FTA is highly detailed and prescriptive, extending to some 29 close-typed pages.

Provisions which provide for exhaustive lists: •	17.4.7(e) – exceptions re anticircumvention provisions (subject to 17.4.7(e)(viii)) •	17.4.8(b) – exceptions to rights management information •	[?more]

There is not sufficient flexibility built in to the FTA provisions to preserve the right of the Australian Parliament to shape Australian IP law

Since the announcement of the FTA, the Department of Foreign Affairs and Trade, and the IP negotiators have stated that “flexibility” in the FTA provisions ensures that Australia retains discretion in its implementation of the agreement to fit Australian law to Australian circumstances.

This would appear to be refuted by the IFAC-3 report, which really makes clear the negotiation of the agreement is not an end, but only a beginning of US interference in Australian IP law-making. The IFAC-3 committee notes in their report that:

"IFAC-3 expects that Australia will equitably implement all of the intellectual property-related provisions of this agreement, but will not hesitate to recommend US action under the provisions of the dispute settlement chapter should Australia's implementation of the agreement fall short of its commitments made in this agreement."

This passage would appear to refute the view that the US will allow Australia to take full advantage of the so-called "flexibility" in the agreement. The US IP industries are not known for their generous interpretation of IP treaty language. And while the IFAC-3 report is an industry report, rather than a US government report, it represents a high-level policy committee.

Past experience also suggests that the US may not take as "flexible" a view of the provisions as Stephen Fox has suggested. One substantive issue covered by the agreement is Australia's implementation of Article 11 of the WIPO Copyright Treaty: a provision that is worded thus:

"Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law."

Clearly, this language has a great deal of "flexibility". It is clear that it is for Contracting countries to decide what constitutes "adequate legal protection and effective legal remedies". In Australia, this was implemented by the creation of a ban on the selling and distribution of devices that allow circumvention of technological protection measures. Australia decided that it was not necessary to make it illegal to use such devices, considering, as it was clearly entitled to do under the broad terms of the WCT, that the real harm lay in the selling and distribution of such devices.

However, according to the IFAC-3 Report, the Australian implementation characterises this implementation of Art.11 in Australia "strayed in a particularly key area from what industry and the US government considered to be full and correct implementation of the obligations of those treaties."

Later, in the report (page 9), they refer to the "damaging loophole that Australia had enacted". Now, obviously, industry is entitled to see this as a loophole, and as an implementation that is less preferable than the one used in the United States. But what they say is that it was not a "full and correct implementation of the obligations".

This suggests that the US interpretation may well not be as flexible as the Australian government has presently suggested. And if this is so, then the expressed willingness to resort to the dispute resolution provisions of the treaty could be concerning.

The Australia-US FTA seeks to introduce IP-protective US laws but does not “harmonise” aspects of US law protective of the interests of members of the public
The IP Chapter of the AUSFTA harmonises aspects of IP law which are protective of IP owners’ interests, but does not include some important aspects that limit IP owners’ rights. The result of introducing these provisions in Australia without making appropriate adjustments to strengthen users’ interests may be to skew IP law in Australia to be even more protective of IP owners than American law.

In some important respects, Australian law provides more protection to IP owners than US IP law. In copyright law, the Australian standard of originality is, following the decision of the Full Federal Court in Desktop Marketing Systems v Telstra Corporation, lower than in the United States. In Australia it appears that copyright protection will be granted on the basis of the expenditure of effort alone, whereas in the United States some degree of creativity will be required. This means that collections of factual information which would not be protected by copyright law in the United States are protected by copyright in Australia.

Furthermore, the fair use defence to copyright infringement in the United States is more broadly stated than the ‘equivalent’ fair dealing defences to copyright infringement in Australia. In Australia, to gain the benefit of the defence, the alleged infringer is required to show that the purpose of their use falls within one of those enumerated in the Australian legislation: criticism and review, research and study,  news reporting,  or judicial proceedings. In the United States, a non-exhaustive list of purposes is provided. This has allowed US courts to find “fair use” for uses such as parody, where it is by no means clear that an Australian court would find a fair dealing.

It is not appropriate to take on extensive obligations to enact further laws protective of IP interests without a full analysis of how these provisions will operate in the context of Australian law, which is – and under the FTA provisions, will remain – different from US law in certain key respects.