Australia and Korea Conclude Free Trade Agreement

On 17 February 2014 the legally verified text of the Australia-Korea Free Trade Agreement (KAFTA) was released to the public.

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.

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Tags: Australia, Copyright, International treaties, Korea

The Politics of Patents

I find it interesting that while intellectual property can certainly be a divisive topic, unlike many other areas of public policy it does not tend to divide people along party-political lines.

We have seen a number of recent high-profile examples of this characteristic.  The Raising the Bar patent reforms in Australia had broad bipartisan support, being criticised in parliament only by arch-conservative senator Bill Heffernan, and independent senator Nick Xenophon.  Over in the US, both the America Invents Act and the recent Goodlatte Innovation Act (which has yet to pass through the Senate) were supported and opposed in the House of Representatives by a selection of Democrats and Republicans. 

There is no question, also, that campaigns for IP law reform can make for very strange bedfellows.  A particularly striking example of this is the 2012 push in the Australian parliament to ban the patenting of genes, which brought together the aforementioned Senator Heffernan with Western Australian Labor MP Melissa Parke.

It is possible that the reason for this is that IP laws have impacts across a very broad range of policy areas, including industry, innovation, manufacturing, education, science, research, healthcare and international relations, to name but a few.  Perhaps people do not form views on IP per se, but rather upon the role it plays in the areas about which they are most passionate.

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Tags: Politics, Public policy

Pharmaceutical Patents Review Buried by Successive Governments

It appears that a review of pharmaceutical patents in Australia – which had a particular focus on extensions of patent term – is dead. 

On 11 February 2014, the Minister for Industry, Ian Macfarlane, responded to a ‘Question in Writing’ from Western Australian MP Melissa Parke.  Ms Parke had asked (back in December) when we might expect the final report of the Pharmaceutical Patents Review to be released.  The Minister’s response: ‘The Government has no plans to release the final report at this stage.’

I have followed the saga of the Pharmaceutical Patents Review on this blog since its inception:

1. it was announced on 15 October 2012, by what was then a Labor government under Julia Gillard;
2. on 21 November 2012 the review panel released a ‘background and suggested issues paper’, providing a somewhat miserly two month period (over the Christmas and New Year break) for public submissions;
3. as I reported in February 2013, the terms of the review, the composition of the panel, and the compressed time frame drew criticism from some quarters;
4. a draft report issued on 2 April 2013 included a number of proposed recommendations, including two options for reducing the duration of extensions of patent term granted to pharmaceutical patents as compensation for delays in obtaining regulatory marketing approval; and
5. in June 2013 I wrote about continuing efforts by the generic pharmaceutical industry in Australia to press the case for reduced patent terms in the final report.

Over this period, there were two changes in leadership in Australia.  In June 2013, Prime Minister Julia Gillard was deposed by Kevin Rudd, while in September there was a Federal election which resulted in a switch to the current Liberal-National Party (LNP) government under Tony Abbott. 

In my first article of 2014, I speculated about whether there would be some progress on this review, or whether it would simply be set aside by the new government.  It seems we now have an answer to that question.

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Tags: Australia, Extension of patent term, Pharmaceuticals, Public policy

Australian Government Signals Stupid Crackdown on Piracy

Australian Attorney-General George Brandis has flagged government plans to crack down on internet piracy, including the possible introduction of laws requiring internet service providers (ISPs) to block websites known to host infringing content and/or a ‘graduated response scheme’ (which I believe is code for the kind of ‘three-strikes’ warning system that has proven essentially useless elsewhere).

Such proposals are, in my view, utterly wrong-headed, and serve only to demonstrate the extent to which the Australian government is beholden to (mostly foreign) content owners, at the expense of (Australian) consumers.

Not having anything much to do with patents, this might seem an unusual topic for this blog.  But there is a significant innovation angle to this story, because the intended purpose of such alleged ‘enhancements’ to copyright enforcement options is to protect out-dated business models employed by content owners and distributors in the face of rampant technological change.  And what consumers really need is not a raft of new ways to be punished for making use of new technologies, but rather the development of new business models that harness the capabilities of those technologies to provide us with greater convenience and choice.

The fact is that the really big content owners and producers, i.e. primarily US studios, and their local distribution arms, do not want their existing business structures to be disrupted by disruptive technologies.  They would much rather persuade governments to introduce new laws to counter the inevitable consequences of their refusal to change.

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Tags: Copyright, Piracy, Public policy

Inventorship and Ownership – the Importance of Getting it Right

Anybody who works as a patent attorney for any length of time discovers that there is no shortage of people who are perfectly happy to bend the truth a little in order to achieve their objectives.  In the case of patents, such liberties with the facts tend to relate to matters of inventorship and ownership of patent rights.

A case recently decided by the Federal Court of Australia, Neobev Pty Ltd v Bacchus Distillery Pty Ltd (Administrators Appointed) (No 3) [2014] FCA 4, perfectly illustrates this point.  Here, a patent for an invention made by one person (Mr Scott) was filed and granted naming an additional inventor (Mr Hajdinjak) because he ‘wanted his name on the patent’.  Furthermore, the patent is registered in the name of one owner (Bacchus) even though, in truth, the rights are co-owned by Mr Scott’s company, in order to better satisfy the requirements for Bacchus to receive a government grant to assist in commercialisation of the invention.

The true circumstances have come to light because Bacchus got into financial difficulties and was placed in administration.  The administrators propose to sell the business, and the associated intellectual property along with it.  Neobev, which now owns all of the rights previously held by Mr Scott and his company, is disputing the administrators’ entitlement to do this – or, at least, to do it without obligating any purchaser to pay royalties to Neobev under an existing agreement with Bacchus.

The situation is something of a mess, which has cost the parties time and money to resolve in the Federal Court.  The reason for the mess is that the people involved cut corners and did as they pleased when times were good, without regard to what would happen if the circumstances were to change in the future.  The one fortunate aspect of the case is that Australia is not one of those jurisdictions in which incorrect recording of inventorship or ownership is, in itself, fatal to the validity or enforceablity of a patent.

In this case, the court has now ordered (Neobev Pty Ltd v Bacchus Distillery Pty Ltd (Administrators Appointed) (No 4) [2014] FCA 21) that the Register of Patents be rectified to show Mr Scott as sole inventor.  The court has also found that, despite Bacchus being recorded as the sole owner of the patent in question, in reality it is holding the patent in trust on behalf of itself and Neobev as joint beneficial owners.  For now, the Register will not be amended to show this joint ownership, because there is no actual error requiring correction in the trustee being recorded as legal owner, and to record joint ownership would effectively terminate the trust and distribute its property 50/50 between Bacchus and Neobev.  The court was unwilling to do this when it had not heard evidence on the nature of the trust, or considered the relevant state laws in relation to the trust and the powers of the trustee.

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Tags: Entitlement, Inventorship, Ownership