Negotiations on the Agreement were concluded in early December 2013, and the legally verified text was initialled by Chief Negotiators on 10 February 2014. It is anticipated that the agreement will be formally signed in the coming months.
The full Agreement consists of 23 chapters with various annexes and schedules, plus four side letters. Chapter 11 covers intellectual property aspects of the Agreement, which is the only part of the document I have read in any detail. It is important to bear in mind, however, that no part of the Agreement exists in isolation. Picking just one chapter and weighing up the potential gains and losses to either party is therefore not an entirely meaningful exercise. Other parts of the Agreement reportedly deliver some major trade benefits to Australia, for example the immediate lifting of 300% tariffs on chipping potatoes, a phase-out over three years of a 500% tariff on bluefin tuna (though this may not be such good news for the tuna), and a phase-out over 15 years of beef tarriffs currently set at 40% to 72%.
The IP aspects of the KAFTA are, for the most part, not particularly unexpected and, with the notable exception of certain copyright provisions, unlikely to require legislative changes in Australia. Unfortunately, it appears that the Agreement will oblige Australia to introduce the kind of ‘graduated response scheme’ to curtail repeated instances of online copyright infringement that I described just last week as ‘stupid’.
Additionally, the copyright provisions may limit Australia’s ability to introduce ‘technology neutral’ legislation that does not distinguish, for example, between products and cloud-based services for recording and/or time-shifting broadcast programs. These provisions might also prevent the introduction of a ‘broadcast-to-internet conversion’ service, such as that controversially provided by Aereo in a number of US markets.
PatentsArticle 13.8(1) of the KAFTA requires both countries to make patents available ‘for any invention, whether a product or process, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.’ This is almost exactly the same language as appears in Article 27(1) of the TRIPS Agreement, and therefore places no new obligations on Australia or Korea.
Additionally, however, Article 13.8(1) obliges the parties to make patents available ‘for any new uses or methods of using a known product’. Notably, by way of example, methods of medical treatment using known compounds were confirmed patentable in Australia just last year by the High Court.
Permissible exceptions to patentability in Article 13.8(2) are also based upon the language in Articles 27(2) and (3) of the TRIPS Agreement. However, where TRIPS states that members ‘may exclude’ inventions from patentability in certain circumstances, the KAFTA uses the language ‘may only exclude’. The exclusions are principally based on potentially overriding public policy concerns, such as maintaining social order, healthcare and environmental issues.
You might wonder whether this kind of prescriptive provision would prevent Australia from excluding patents for computer-implemented inventions, such as those in the Research Affiliates and RPL Central cases. However, I think that Australia would argue that, whatever the outcome in those appeals, it is compliant with the KAFTA (and TRIPS). The question in both matters is whether or not the claimed invention is a ‘manner of manufacture’, i.e. whether it even qualifies as ‘an invention’. If the answer is no (the argument would go) then it is not covered by Article 13.8(1) of the KAFTA.
The Agreement also allows for limited exceptions to patent rights (which would encompass Australia’s Crown use and compulsory licensing provisions), revocation of patents in certain circumstances (all of which are already provided for in the Patents Act 1990), a 12-month grace period (which both Australia and Korea already provide), and disclosure requirements which are consistent with those introduced by Australia’s Raising the Bar patent reforms.
Interestingly, Article 13.8(9) states that ‘the Parties shall endeavour to establish a framework for cooperation between their respective patent offices as a basis for progress towards the mutual exploitation of search and examination work.’
Trade MarksThe trade marks section of the KAFTA (Article 13.2) obliges both parties to provide for registration of trade marks, an examination system that includes providing reports and opportunities to respond in writing, a right of appeal, an opportunity for third parties to oppose the registration of trade marks, and a system for enforcing registered rights against infringers. Australia already has such systems in place.
There is a further requirement to provide special protection for ‘famous marks’. In the case of similar agreements, Australia has generally argued that it complies by virtue of some combination of s 60 of the Trade Marks Act 1995, provisions within the Australian Consumer Law, and the common law action for ‘passing off’.
Neither party is permitted to require trade mark licences to be registered in order to be valid and effective, i.e. the status quo in Australia.
Domain NamesUnder Article 13.4, both parties are obliged to provide a dispute resolution procedure based upon the principles established in the Uniform Domain-Name Dispute Resolution Policy (UDRP) in respect of their country-code top-level domains (i.e. .au and .kr). Assuming a reasonable interpretation of ‘based upon’, Australia already has such a system.
CopyrightThere are quite extensive provisions in the KAFTA in relation to copyright and related rights, most of which (based on my limited knowledge of copyright law) are generally consistent with Australia’s existing copyright laws. There are just two specific obligations that I wish to highlight here.
First, Article 13.9(28) requires that ‘each Party shall provide measures to curtail repeated copyright and related right infringement on the Internet.’ Australia currently has no specific provisions for dealing with repeated instances of online copyright infringement. This will therefore presumably require the enactment of new legislation to introduce some form of ‘graduated response scheme’, such as was foreshadowed by Attorney-General George Brandis just a few days prior to the public release of the KATFA text.
Additionally, Article 13.5(14) provides that:
… neither Party shall permit the retransmission of television signals (whether terrestrial, cable or satellite) on the Internet without the authorisation of the right holder or right holders of the content of the signal and, if any, of the signal.
A footnote clarifies that ‘retransmission within a Party’s territory over a closed, defined, subscriber network that is not accessible from outside the Party’s territory shall not constitute retransmission on the Internet.’
This calls to mind the Optus ‘TV Now’ case, which was decided in Australia in 2012, and established that the current copyright laws do not permit the provision of a service whereby free-to-air broadcasts are recorded by subscriber request onto cloud-based servers, for subsequent streaming to the subscriber’s device (e.g. smartphone or computer). Since this effectively means that a person cannot perform, via a cloud-based service, exactly the same acts that would be permissible (under existing time-shifting provisions) using a home personal video recorder (PVR), the decision immediately generated concerns about a lack of technology neutrality in Australian copyright law.
The Australian Law Reform Commission (ALRC) has since issued a report recommending the introduction of more technology-neutral laws, however it seems that the extent to which this might now be achieved could be limited by Australia’s new obligations under the KAFTA.
ConclusionGenerally speaking, the IP provisions of the KAFTA are not hugely controversial. In some respects they go a little further than TRIPS, but not as far as at least some proposals for the Trans Pacific Partnership Agreement (TPPA). Leaked copies of the IP chapter of the draft TPPA have attracted considerable criticism. Australia is a party to the negotiations, and will eventually be bound by the final text of the TPPA. Korea is not currently a party, but has expressed interest, and will therefore probably one day be bound by the Agreement.
Australia’s negotiators no doubt feel that they have achieved a pretty good outcome overall. Taking the IP provisions in isolation, it is largely business as usual, though it is disappointing to see agreements on copyright continuing to move along a path that is broadly ‘anti-consumer’, in the name of being ‘anti-piracy’.
What do you think? Has Australia got a good deal with the KAFTA? Feel free to add your thoughts in the comments below.
Image Copyright (c) 123RF Stock Photos