Research Paper No. 14 2003-04
Intellectual property rights and the Australia—US Free
Trade Agreement
David
Richardson
Economics, Commerce and Industrial Relations Section
31 May 2004
Contents
The duration and breadth of copyright
protection
Technical protection measures
Parallel importation
Work for hire
Health issues
IPRs and foreign investment
The purpose of this paper is to examine the
provisions on intellectual property rights (IPRs) in the Australia
United States Free Trade Agreement (AUSFTA). IPRs are a temporary
means of giving the creator of a work the exclusive right to
benefit from that work. A work here refers to expressions and
inventions. The justification for IPRs is that rewards to the
creator and protection from competition are necessary to encourage
innovation and creativity. Anti-competitive conduct is tolerated
for that reason. IPRs fit awkwardly in an agreement that has the
aim of advancing free trade. Free trade aims to eliminate or reduce
government interference in trade across international borders. By
contrast, stronger IPRs interfere in the market for the benefit of
rights holders. Generally the AUSFTA aims to strengthen the
protection given to holders of IPRs.
There has been an international trend towards
more protection for IPRs and the US has been a prime mover in this.
The US has been able to persuade other countries to include IPRs in
trade negotiations. One result was the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS) under the auspices
of the World Trade Organisation. In addition the coverage of IPRs
has extended into new areas such as software and genetic material.
Since TRIPS, the US has engaged in a series of free trade
agreements in which it has promoted stronger IPRs than provided
under TRIPS.
The economic arguments are generally concerned
with the anti-competitive nature of IPRs and how they have been
abused in the past. Where IPRs are given there has also been a long
history of foreign competition against the IPR holders from
countries in which IPRs may not be respected. The US itself was a
case in point and its failure to protect IPRs was a concern to
Europeans in the 19th century. More recently, the US in
particular has been concerned about unfair infringement of IPRs on
the part of less developed Asian economies.
Australias interests need to be taken into
account. While there has not been a comprehensive economic
evaluation of IPRs, the Productivity Commission has found that, as
a net importer of IPRs, Australia would lose more than it gains by
strengthening IPRs. The net economic impact is thus likely to be
negative. Unfortunately the economic analysis of the AUSFTA that
the Government commissioned did not attempt to quantify the impact
of IPRs. For example, the AUSFTA would extend the duration of
copyright by 20 years, but the analysis does not discuss what the
net benefits or costs might be. The Australian position is to
assert that there are benefits in harmonising legislation with such
a large economy as that of the US.
The US motive for stronger IPRs seems clearer,
especially in statements from the US Trade Representative and
business interests. The US has a disproportionately high share of
IPRs and products that contain IPRs in its exports. The US has
(naturally) been keen to promote the fortunes of its own IPR
holders; for example, it had extended the duration of copyright
protection in the US to continue protection for early Mickey Mouse
works whose protection was about to expire. The US has long been
concerned about Australias liberal approach to parallel
importation, which refers to the importation of protected works by
someone other than the rights owner or agent of the rights owner.
Yet there is overwhelming evidence to the effect that Australian
consumers are worse off to the benefit of overseas copyright
holders and licensees when parallel important is prevented.
The issues that arise in the context of the
AUSFTA reflect the general tension between the goals of promoting
competition in the economy at large and providing protection for
new works. However, those tensions take on new meaning in the
context of commercial relations between Australia and the US. There
are more detailed arguments about specific areas and industries
that are affected by the AUSFTA. Areas of concern include the
breadth and coverage of IPRs including in new areas such as gene
patents. Some of the concerns are not so much that the AUSFTA
pushes Australia further than it has gone in the past, but that the
agreement would prevent any retreat from the present protection for
IPRs and its attendant anti-competitive features.
Technical protection measures have been a
concern in Australia because copyright holders have been able to
use technological measures and Australias laws against
circumvention to discriminate against Australian consumers. For
example, the prices charged for some computer games in Australia
are much higher than the prices paid by consumers overseas. To a
large extent the AUSFTA facilitates these practices. Technological
measures that permit such things as regional coding of DVDs prevent
access to cheaper overseas alternatives and are a departure from
the Australian trend towards permitting more parallel importation
of copyright material. Recent Australian legislation and the AUSFTA
entrench the ability of copyright owners to use technological
measures against parallel importation. This is happening despite
concerns from the Australian Competition and Consumer Commission
(ACCC) and recommendations from the Digital Agenda Review in favour
of the circumvention of technical measures for legitimate
purposes.
In other respects there are trends in the
opposite direction. Courts in the US and Europe have forced
Microsoft to open up its technology to allow competitors to offer
Windows-compatible products. Big business, the Australian
Government and international standards promote interoperability so
that, at least in principle, everything can plug into everything
else. Having bought one brand should not preclude choice in the
future. Interoperability goals are being frustrated by strong IPRs
that allow manufacturers to prevent their products being used in
conjunction with cheaper alternatives.
IPRs have always been acknowledged as a
temporary protection from competition. There is seen to be a
trade-off between the anti-competitive aspects of IPRs on the one
hand and the desirability of encouraging innovation on the other.
There is no simple answer to balancing those competing objectives.
However, the issue is that Australia, and the rest of the world,
will be pushed too far in the direction of IPRs that promote
monopoly power. The AUSFTA treatment of IPRs seems to be
detrimental to Australias interests. However, IPRs are only one
aspect of the agreement, albeit an important one.
On 8 February 2004 Trade Minister, Mark Vaile
announced that Australia and the US had agreed to the Australia
United States Free Trade Agreement (AUSFTA).(1) The full
text was released on 4 March 2004.(2) An important part
of the agreement is chapter 17 on intellectual property rights
(IPRs), which covers copyright, trademarks, patents and industrial
design. (3)
From Australias perspective some of the main
developments in chapter 17 are:
-
commitments to reduce differences in law and
practice and participate in international harmonisation efforts
with respect to trademarks (article 17.2.11)
-
an increase in the duration of copyright
protection, for individuals to the life of the author, plus 70
years (currently 50 years), with similar increases for corporations
(17.4.4)
-
strengthened protection and remedies against
the circumvention of technological measures used by authors and
others to restrict access to their work (17.4.7), such as coding of
CDs to restrict how and where they might be used
-
protection of encrypted program-carrying
satellite signals, thereby extending the present regime to include
foreign and other transmissions not now covered by the
Broadcasting Services Act 1992 (17.7) and to criminalise
end-users of unauthorised decryptions, and
-
additional remedies for copyright
infringements.
Generally the agreement aims to strengthen the
protection given to holders of IPRs.
According to the OECD, IPRs give the innovator
an exclusive legal right to the economic exploitation of his [sic]
invention for a period of time the ability to exclude imitation is
the most important aspect of the property rights granted to the
innovator.(4) Policy towards IPRs seeks to balance two
competing objectives. On the one hand, IPRs are a restraint on
commerce and it is not immediately obvious why measures to
strengthen IPRs should be included in a free trade agreement (FTA)
unless the aim is to weaken them. IPRs can be, and have been, used
to preserve monopoly power on the part of big business and to
inhibit technological developments. On the other hand, IPRs are
designed to encourage innovation and the introduction of new
products and processes that tend to benefit the community as a
whole. Advocates of IPRs see temporary monopolies as the incentive
required to elicit innovation. Those arguments are discussed
further below.
This paper begins by briefly discussing recent
international experience in the protection of IPRs. Generally IPRs
have been strengthened by including new areas, extending periods of
protection and similar means. The paper then examines the economic
arguments surrounding the protection of IPRs. Traditionally there
has been strong scepticism about the desirability of granting IPRs.
IPRs are a pragmatic means of stimulating innovation and creativity
by enabling owners to earn an income that might not be earned if
their IPRs were not protected. However, domestic IPRs can be
undermined if other countries do not also protect them. On balance,
as argued below, a small country like Australia is likely to
benefit from lower protection for IPRs while larger economies, such
as the US, Japan and Europe, are likely to benefit from higher
protection for IPRs. This is, no doubt, one of the motives behind
the US push for encouraging IPRs. An examination of those motives
suggests that the present agreement is, at least in part, an
important precedent for subsequent free trade agreements (FTAs)
likely to be concluded by the US. The AUSFTA is the first bilateral
agreement the US has negotiated with a developed economy. There are
also important implications for the present World Trade
Organisation (WTO) Doha round of trade negotiations.(5)
The paper then considers some of the more specific issues in more
detail.
The OECD has pointed out that the trend in the
main OECD countries has been to provide stronger patent rights
through reinforcing the exclusive rights held by patent holders,
expanding the subject matter they cover and providing for easier
enforcement.(6) This trend has coincided with a
harmonisation of patent regimes especially between the US, Japan
and Europe. Thus, harmonisation has involved moving to the higher
level of protection for IPRs. The OECD offers the following summary
of the main developments:
Extended coverage of intellectual property
protection. Areas that used to fall outside the patent subject
matter are now partially or totally included, notably software,
business methods and some inventions close to basic science,
although differences remain across jurisdictions (which are
significant in the case of business methods).
Patents confer broader protection, especially in new
areas. Patent claims in new areas often cover far more than
what the inventor actually discovered or invented. Some of the
current patenting practices in new areas may extend protection to a
broad range of applications unknown at the time of patenting (e.g.
uses of genes).
Filing procedures are increasingly flexible
and less costly, notably at the international level. Several
mechanisms to defer filing and examination procedures at patent
offices, such as the system introduced by the Patent Cooperation
Treaty (PCT), have transformed the initial application into a sort
of option to patent that allows inventors to retain the right to
patent in foreign countries for longer periods of time.
The rights of patent holders are more frequently and
strongly enforced in court. Since the creation of [the US
centralised Court of Appeal of the Federal Circuit (CAFC)] in 1982,
the rate of invalidation of patents by courts has substantially
decreased in the United States. Efforts to create specialised
courts are ongoing in other jurisdictions: legislation is expected
to be passed next year in Japan in order to create a high court
specialised in IPRs, and the implementation of a centralised patent
litigation system is currently under discussion in Europe.
Moreover, damage awards in patent litigation trials have
substantially increased in recent years.
Restrictions on the exemption for research
use. Recent developments indicate that the conditions to apply
research exemptions may become increasingly restrictive in the
future. In 2002, the CAFC held that research exemptions would be
granted in the United States when research is solely for amusement,
to satisfy idle curiosity, or for strict philosophical
inquiry.(7)
These developments have raised a good deal of
concern about less rigorous patenting requirements. Tests are
easier to pass and the subject matter has widened considerably. The
extension of patents to software-related inventions has generated
very heated debate. Software applications in the US are subject to
lower requirements than in Japan and Europe. Business methods have
been awarded patents in the US but not in Japan and Europe. In the
latter they are not deemed sufficiently technical in
nature.(8)
The OECD is concerned that the interaction of
patents and copyright may be an obstacle to the diffusion of
technology in the software area since patents protect the invention
whereas copyright forbids the publicity of the way in which the
invention is implemented by forbidding reverse engineering,
[especially since] software patents do not have to reveal their
source code.(9)
Not only is there concern about the tendency
for stronger patent protection, but the OECD also laments the
paucity of economic evaluation of the patent system and points out
that most of the changes to patent regimes implemented over the
past two decades were not based on hard evidence or economic
analysis.(10) The theme of stronger patent protection is
taken up below.
So far this section has concentrated on
patents; however, there has also been a parallel tendency to
toughen up protections for other IPRs. The European Union (EU)
position on the duration of copyright protection is a good case
study showing that harmonisation initiatives tend to strengthen
IPRs. The Berne Convention on copyright, which goes back to 1886,
provides for a term of protection for the life of the author and 50
years after the authors death. Before harmonisation many EU members
used the Berne Convention minimum, but some offered more
protection. Germany was the highest and used life plus 70 years.
The EU members wanted to harmonise their laws. The debate on
harmonisation settled on the strongest regime, 70 years, rather
than on the Berne model. This was implemented in 1995. In 1998 the
US also moved to life plus 70.(11)
The trend towards greater protection of IPRs
generally has been reinforced by the WTOs Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS),
which was negotiated as part of the Uruguay Round
(198694).(12) This agreement put the full range of IPRs
into the WTO rules for the first time, and those are the rules
under which the multilateral trading system operates. While the
rules are administered by the WTO, they reflect the negotiations
among members and any agreements they reach. The WTO claims that,
as intellectual property became more important in world trade, the
differences in the extent and enforcement of IPR protection became
a source of tension in international economic relations. Hence the
aim of introducing more order and predictability through
internationally agreed rules for IPRs and for the systematic
settlement of disputes. The US played a significant role in this
development. One observer has reminded us that, in 1982 the United
States was alone in calling for developing GATT disciplines against
trade in counterfeit products, an idea that was viewed as an
irritation by most countries.(13) Developing countries
wanted the opposite, to tilt the balance in favour of the free
dissemination of technologies that could be useful in the
development agenda. The US was able to enlist the support of the EU
and Japan and won the day. By 1986 the US obtained commitments to
include IPRs in the new Uruguay Round of negotiations. The result
of that was TRIPS, as mentioned above.
The incorporation of IPRs into the WTO agenda
has not been without its critics. One critic, who is also one of
the worlds most influential advocates of free trade, is Professor
Jagdish Bhagwati, a Professor of Economics at Columbia University.
Bhagwati has also served as Economic Policy Advisor to the
Director-General, GATT (199193), Special Adviser to the UN on
Globalization and External Adviser to the WTO (200203). In his
view, intellectual property protection is:
a transfer from most of the poor countries to
the rich ones and hence as an item that does not belong to the WTO,
whose organising principle should be the inclusion of mutually
gainful transactions, as indeed noncoercive trade is
(14)
The case of developing economies is
complicated, however, because without an established body of
antitrust law, there is nothing to keep in check the monopoly
powers that are difficult enough to control in developed economies.
As a result, according to another observer, countries expose
themselves to potential anticompetitive tactics by patent-wielding
monopolists.(15)
As noted, IPRs have long been recognised as a
pragmatic way of encouraging innovation and creativity. However,
they have also long been recognised as a means of impeding
competition and encouraging anti-competitive practices. That
tension between the general goal of a competitive economic system
and the pragmatic notion of protecting a work is a consistent theme
in the discussion of IPRs. For example, it is alleged that big
corporations used patents as a means of getting around the
Sherman Antitrust Act (1890), which prohibited
corporations from acting together in an anti-competitive
manner.(16) Through devices such as patent pools,
companies were able to collude, divide up the market and exclude
new competitors. Patent pools are arrangements between a group of
companies for the sharing of IPRs through cross-licensing and other
means. IPRs have been criticised by two of last centurys most
prominent free-market economists, Fredrick Hayek and Milton
Friedman, and one from the previous century, Alfred Marshall. In
1948 Hayek said:
The problem of the prevention of monopoly is
raised much more acutely in certain other fields to which the
concept of property has been extended only in recent times. I am
thinking here of the extensions of the concept of property to such
rights and privileges as patents for inventions, copyright,
trade-marks, and the like. It seems to me beyond doubt that in
these fields a slavish application of the concept of property as it
has been developed for material things has done a great deal to
foster the growth of monopoly and that here drastic reforms may be
required if competition is to be made to work.
(17)
In a similar vein, Milton Friedman wrote in
1962:
There are costs involved [in the patent system].
For one thing, there are many inventions that are not patentable
Insofar as the same kind of ability is required for the one kind of
invention as the other, the existence of patents tends to divert
activity to patentable inventions. For another, trivial patents, or
patents that would be of dubious legality if contested in court,
are often used as a device for maintaining private collusive
arrangements that would otherwise be more difficult or impossible
to maintain.(18)
This raises an extremely important issue to do
with the role of pure or basic research. It is arguable that many
universities these days are captured by incentive structures and
seek to promote scientific and other pursuits that make money ahead
of contributions to basic scientific and other knowledge. The
difficulties that Universities have in obtaining funds from more
traditional sources may reinforce this decision. Activities are
directed therefore into areas that earn immediate rewards. These
may overwhelm incentives to pursue the pure research that might be
behind advances that have no immediate application, but have
potentially massive benefits in the future. An early example is the
work on quantum mechanics in the early twentieth century that
became the basis of the transistor and computer chip many years
later. The incentive structures encourage secrecy on the part of
researchers and work against the collaborative approach to
science.(19) The changes in incentives that alter the
type of research and development (R&D) undertaken in society
raise very important issues. The OECDs major macroeconomic study on
the sources of economic growth points to very strong contributions
from R&D. However, there are still no answers to basic
questions about the type of R&D that should be performed in
universities, whether IPRs are required and whether they encourage
the right directions for R&D.(20)
To take the arguments on bias in the direction
of R&D further is beyond the scope of this paper, but the role
of IPRs has to be taken into account in the context of the totality
of the pressures and opportunities facing the scientific community
as a whole. The other main point Friedman makes is that patents can
be used as a legal tactic to intimidate competitors and so preserve
monopoly positions on the part of an incumbent producer. This point
is taken up further below.
Alfred Marshall, in his Principles of
Economics, first published in 1890, discussed the issue of
technological development driving out small manufacturers. He was
also able to put the issue of patents in an international
context:
If one patent is taken out, it is often
necessary to block it, by patenting other methods of arriving at
the same result; the patentee does not expect to use them himself,
but he wants to prevent others from using them. All this involves
worry and loss of time and money: and the large manufacturer
prefers to keep his improvement to himself and get what benefit he
can by using it. While if the small manufacturer takes out a
patent, he is likely to be harassed by infringements: and even
though he may win with costs the actions in which he tries to
defend himself, he is sure to be ruined by them if they are
numerous. It is generally in the public interest that an
improvement should be published, even though it is at the same time
patented. But if it is patented in England and not in other
countries, as is often the case, English manufacturers may not use
it, even though they were just on the point of finding it out for
themselves before it was patented; while foreign manufacturers
learn all about it and can use it freely.(21)
Marshalls comments apply equally today. In
fact, each of the above authors expressed very serious concern that
IPRs were open to abuse. The international aspect offered by
Marshall is also interesting. In Marshalls time England seems to
have been the country most developed in the protection of IPRs.
Certainly patents were in part motivated by the aim of encouraging
inventors to make their discoveries available to other researchers.
The monopoly rights they earned were an incentive for researchers
to reveal their innovations. However, English patent and other IPRs
did not always apply in other jurisdictions, giving rise to the
free-rider problem from overseas. For example, the US itself failed
to respect patents until the end of the 19th century.
Its behaviour was one of the motivations for the 1883 Paris
Convention on patents, trade marks and designs as well as the 1886
Berne Convention on copyright.(22)
The argument in the paper to this point has
concentrated on patents. However, there is an analogous set of
arguments associated with copyright protection. Some of those
arguments were put in a petition to the US Supreme Court against
the application of the Copyright Term Extension Act of 1998. The
argument was put on behalf of 17 leading economist who included
five Nobel Laureates. There was particular concern about the
additional incentive to creators due to the additional term of
copyright. In an example they used the generous assumption that
there would be a constant annual flow of revenue for the next 80
years prior to the change and 100 years after the extension. It
goes without saying that the prospect of a dollar in 100 years time
must be so uncertain as to warrant a very heavy discount factor.
However, to be generous to the incentive argument, the authors used
a modest discount factor of 7 per cent. On that basis, for every $1
per annum, the present value of the stream of income would increase
from $14.22 to $14.27. For the individual creator the extra
incentive is trivial.(23) Against that, for the
monopolist with a work still in demand and with copyright about to
expire, the extension of copyright does not provide any incentive
to create, it merely prevents others from distributing the work and
so permits the copyright owner to enjoy maximum monopoly profit.
The fact that the extension is made retrospectively to benefit the
owners of works that already exist suggests that the real concern
on the part of policy-makers is not necessarily the incentive to
create.
Over the last few decades a concern has been
that IPRs have not been respected in todays newly industrialising
countries, such as China, Vietnam and other developing countries.
This was part of the motivation for initiating and finally agreeing
to the TRIPS, which came into effect in January 1995.
It is possible that many people might accept
temporary market dominance, and perhaps the Friedman-bias in
research in exchange for the promise of more innovation and
discovery. However, there are numerous instances in history where
patents have been used to stifle innovation along the lines that
Marshall identified. A leading author in this area, Professor
Michael Perelman, has documented the stifling effects that patents
have had on industries, including the radio, aircraft and
semiconductor industries. The Wright Brothers are credited with the
birth of powered air flight; however, they immediately patented
their ideas and were responsible for inhibiting competitors until,
during World War I, the US Navy forced a licensing arrangement on
them that allowed others to enter the industry. After that,
aircraft development accelerated.(24) The US military
has intervened in other industries in order to prevent patents
stifling development in areas in which it has an interest. Those
examples could be multiplied, but for present purposes it is only
necessary to note the effects that patents may have in critical
areas. Of course, Australia is akin to the foreign manufacturers
that Marshall mentioned in the quotation above. Australia can join
the US and enforce strong patent rights that may stifle innovation
or it can resist stronger-than-necessary IPRs. Australia may well
achieve some competitive advantage through weaker IPRs, just as the
foreign countries did against Marshalls England. Indeed, the
efforts of the US Administration presumably are predicated on the
belief that the US competitive advantage is enhanced if IPRs are
enforced as strongly in the rest of the world as they are in the
US.
At this point it is useful to examine some of
the Productivity Commissions empirical work on IPRs.(25)
Essentially, the commission found that, as a net importer of IPRs,
Australia would lose more than it gained by granting stronger
IPRs.(26) Specifically, the share of copyright content
in Australias imports in 199697 was 0.38 per cent of GDP while the
share of copyright in Australias exports was 0.16 per cent of GDP.
Similarly, the patent content of imports was 0.19 per cent of GDP
compared with 0.07 per cent of GDP for exports.(27) This
gives general support to the view that, in the case of a small
country like Australia, there are likely to be negative economic
effects as a result of any attempt to strengthen IPRs, whether that
involves:
-
lengthening the period of the protection
-
broadening the scope of IPRs, or
-
easing requirements for obtaining IPRs.
The Productivity Commission suggests that
strong IPRs are turning the terms of trade against Australia. An
observation on the commissions work may be in order. As they are
presented, the estimates of the intellectual content of the goods
and services examined seem modest. However, most of Australias
merchandise imports, worth 18 per cent of GDP, are manufactured
goods that presumably would be protected by some form of IPR. (US
merchandise exports to Australia are 3 per cent of Australian GDP.)
On the other hand, Australias exports of machinery, transport
equipment and other manufactures are a more modest 3.6 per cent of
GDP. The rest of Australias goods exports are 11.8 per cent of GDP,
most of which are commodities or simply transformed commodities
such as animal skins, sugar and coal and metal ores.(28)
These figures suggests that goods likely to have some sort of IPR
content dominate Australias goods imports, but are a modest share
of Australias goods exports. The ratio is of the order of five to
one.
For present purposes it is also useful to look
at the actual value of royalties and licence fees as recorded in
Australias balance of payments.(29) In 200203 Australia
paid royalties and licence fees of $1.82 billion to the rest of the
world. In return it received royalties and licence fees of $618
million. Those figures represented 0.24 and 0.08 per cent of GDP
respectively.(30) This reinforces the Productivity
Commissions findings.
Against all of the arguments put here and
elsewhere, the Australian Government has put the following
view:
The inclusion of the Intellectual Property
Chapter recognises the importance of a strong intellectual property
regime to economic growth through trade and investment. Australians
will benefit through closer harmonisation of our already strong
intellectual property regime with that of the largest intellectual
property market in the world.
Closer alignment in intellectual property laws
and practices will provide Australian exporters with a more
familiar and certain legal environment for the export of
value-added goods to the US. Likewise, the ability of Australian
innovators to attract investment from the US will be enhanced
through greater familiarity and confidence of those investors with
our legal system.(31)
The essence of the above seems to be that:
-
a stronger IPR regime will encourage growth
through trade and investment,
-
closer alignment of IPRs will increase exports
to the US, and
-
closer alignment of IPRs will increase US
investment in Australia.
Despite these propositions, there does not
appear to be any examples that show Australia has missed out, or
evidence that it might miss out, on investment or trade
opportunities through inadequate levels of protection for IPRs.
While the above are some of the main themes of
the economic debate on IPRs, it is beyond the scope of this paper
to provide the full economic analysis that, as noted above, the
OECD found missing. In any case, the arguments in this section are
in the abstract and do not directly answer the immediate questions,
such as: are there net benefits to Australia from the extension of
the copyright duration by 20 years? The work of the Productivity
Commission allows a fairly good guess, but it is still just
that.
The Australian Government commissioned some
economic modelling on the AUSFTA. The Centre for International
Economics prepared two reports, the first of which was released
before the agreement and so did not explicitly examine IPRs. The
only aspect of IPRs discussed in the first report was parallel
importation but, since it was not possible to anticipate the
content of the agreement, the report did not model possible changes
in parallel importation.(32) In the second report, which
was written after the details were known, there is some discussion
of IPRs but no quantification. For example, in discussing the
extension of the term of copyright protection, mention is made of
the lack of any additional significant incentive and the costs to
consumers. But the report then notes it is difficult to quantify
the extent of this effect.(33) The second report also
fails to quantify the other IPR issues it identifies.
It is important to recognise that many of the
measures included in the AUSFTA are not necessarily seen as
addressing a problem in the AustraliaUS bilateral relationship.
Rather, there appear to have been pressures on the US negotiators
to establish strong IPR regimes as precedents for further
free-trade agreements that the US may want to negotiate. A very
important one coming up is the Free Trade Area of the Americas,
which is intended to include the 34 countries in the continent. The
Industry Functional Advisory Committee on Intellectual Property
Rights for Trade Policy Matters (IFAC-3) has been working closely
with the US negotiators. This body includes representatives of the
Recording Industry Association of America, the Intellectual
Property Owners Association, Levi Strauss and Company, Pfizer,
Inc., Eli Lilly and Company, Merck & Company Inc., and Time
Warner. The committees role was to give the President and Congress
an advisory opinion as to whether and to what extent the agreement
[AUSFTA] promotes the economic interests of the United States. The
IFAC-3 commented on the AUSFTA, saying:
IFAC-3 strongly supports the chapter on
intellectual property and believes that, on the whole, it
establishes key precedential provisions to be included in the other
FTAs now being negotiated, including the FTAA. IFAC-3 wishes to
underscore the importance that it attaches to a close working
relationship between IFAC-3 and industry, on the one hand, and U.S.
negotiators, on the other, in ensuring that the model FTA
intellectual property text, which has been carefully developed
through the course of negotiation of six FTAs, continues to form
the basis for these other agreements.(34)
Moreover, the IFAC-3 observes that while FTAs
are a labour-intensive means of negotiating:
FTA negotiations provide the most effective
approach currently available to the United States for improving
global intellectual property protection. The negotiation of an
individual FTA provides the opportunity to deal with specific
intellectual property concerns that U.S. industry may have in the
particular negotiating partner.(35)
In an important opinion piece, US Trade
Representative Robert Zoellick reinforced this theme and made it
clear that US frustration with multilateral negotiations has caused
it to pursue FTAs and so win concessions on items that have been
hard to win in multilateral fora.(36)
The US has long expressed concern about parallel imports of
copyright goods in Australia. Parallel importation involves an
importer who is unrelated to the copyright holder importing
copyright goods that have been legally purchased in another
country. Provided they are purchased legally, the copyright owner
would have received any consideration that was legally due.
Parallel importation is now allowed in the case of sound
recordings, books (if not released within a month of overseas
release), and software (see below). However, the US wants Australia
to ban parallel importation so that only the copyright holder can
import or authorise the importation of copyright material. US
concerns about Australias IPR regime had been spelt out in the
annual US Trade Representative Reports.(37) However,
earlier work by the Prices Surveillance Authority established that
the restrictions that then applied to parallel importation had the
effect of artificially increasing prices in Australia relative to
the rest of the world.(38) There is something of a
paradox in all this. The push towards free trade, starting with the
Bretton Woods agreement in 1944, involved lowering or eliminating
government barriers to trade across national borders. However,
permitting restrictions on parallel importation means permitting
private interests to impose barriers to trade across national
bordersa privatised protectionism.
When the US Government argues for restrictions
on parallel importation, it can be interpreted as putting the right
of copyright owners to practise price discriminationcharging
whatever the market will bear in different jurisdictions. This is
often referred to as price gouging which is defined as pricing
above the market when no alternative retailer is
available.(39) Competition from parallel importers can
undermine the ability of copyright owners to price gouge. Price
gouging is more likely to occur in markets where there is less
competition, where incomes are reasonably high and where there
might be less countervailing power on the part of retailers. In
different conditions and in different countries the effects of
restrictions on parallel importation may well be different. For
example, they may mean that lower-income countries benefit because
copyrighters can sell there at lower prices, safe in the knowledge
that cheaper copies will not find their way back into higher priced
markets.(40) Nevertheless, it appears that price
discrimination through restrictions on parallel imports normally
acts to the detriment of Australian consumers (see below).
While there had been debate in Australia and
other countries on the American push for stronger IPRs, there is
also debate within the US over stronger domestic IPRs. The petition
mentioned earlier, by the five Nobel Laureates and other
economists, against the extension of copyright protection was a
case in point. Web sites have sprung up dealing with IPRs in
copyright and information and communications technology and there
are many sources referred to in the endnotes to this paper.
It is not possible here to go into all the
detail and all of the issues arising out of the AUSFTA chapter on
IPRs. However, the following issues are some of the most important.
That said, many of the issues identified below should be taken as
provisional pending any legislation that is introduced to give
effect to chapter 17 of the AUSFTA, especially given that much of
the language of the AUSFTA currently is rather vague. Generally the
issues arising reflect the tension referred to earlier between the
goals of competition and the protection of works. The earlier TRIPS
agreement recognises the tension between protecting IPRs and
fostering competition. The WTO says:
Article 40 of the TRIPS Agreement recognizes
that some licensing practices or conditions pertaining to
intellectual property rights which restrain competition may have
adverse effects on trade and may impede the transfer and
dissemination of technology (paragraph 1). Member countries may
adopt, consistently with the other provisions of the Agreement,
appropriate measures to prevent or control practices in the
licensing of intellectual property rights which are abusive and
anti-competitive (paragraph 2).(41)
The AUSFTA does permit some use of patents
without authorisation when the rights holder is engaging in
anti-competitive practices.
One other general observation needs to be
made. In some areas Australias existing IPRs may be as strong as
those in the AUSFTA. However, the AUSFTA would limit any attempts
in the future to ease the existing IPRs, for example, those on
parallel importing of pharmaceuticals.
As pointed out above, the AUSFTA extends the
duration of protection for copyright material, with article 17.4.4
requiring protection for 70 years after the death of the creator
rather than the 50 years protection in Australia at present. The US
extended copyright protection from 50 years to 70 years in 1998
with the passage of the Sonny Bono Copyright Extension Act 1998.
Apparently the main motivation for the extension was that Disneys
rights to Mickey Mouse were due to expire in 2003.(42)
By now Mickey Mouse would have been in the public domain, there
would be genuine competition in the supply of the copyright item
and the use of the item in other works.
In December 2003 Trade Minister Mark Vaile
called article 17.4.4 the Mickey Mouse clause and was resisting its
inclusion in the agreement. He is reported as saying: there is a
whole constituency out there with a strong view against copyright
term extension and we are arguing that case.(43) That
constituency will be disappointed with the result. Incidentally,
the earlier Intellectual Property and Competition Review Committees
September 2000 Review of Intellectual Property Legislation
under the Competition Principles Agreement had recommended
against extending the duration of copyright protection and the
Government had accepted that recommendation. The review also
recommended that there be no extension of the copyright
term in the future without a prior and thorough and independent
review of the resulting costs and benefits.(44) Evidence
to the review included findings of the Australian Governments
Office of Regulatory Review that the increased protection of 70
years:
-
would represent an unjustifiable redirection of
funds (rents) from Australian consumers without commensurate
benefit
-
would result in net royalty flows to overseas
authors and publishers, and
-
would not necessarily provide incentive to
produce works not already being produced.(45)
Some owners of copyright have a large library
of old but valuable product: the Disney Corporation is obviously
one of them. They have an interest in extending their rights as
long as possible, but would be hard pressed to argue that they need
that sort of incentive to produce new work. The review also pointed
out that the present value of any possible benefit to the creator
of a work at the time of the creation is trivial. Indeed, that
point could be taken further: the idea that there is an actual
benefit to an individual from anything that might happen 70 years
after death is difficult to conceptualise. Certainly there can be
no retrospective incentive.
The breadth of an IPR raises similar issues to
its duration in that both are means of strengthening the owners
rights. The example of the Wright Brothers referred to above
illustrates the possible damage that can follow the granting of
very broad rights under IPRs. The extension of IPRs to new areas
has raised concerns, also mentioned above. A particularly important
issue is the trend towards IPRs in biotechnology, which have raised
a number of concerns in the international community. One in
particular is the US acceptance of patents on naturally occurring
genes and gene sequences. The OECD has referred to beliefs that, in
a number of cases the criteria of novelty and inventive step are
not being met, and that broad patents are issued that could give
the patent holders an overly-strong negotiating position vis--vis
possible licensees.(46)
The Australian Law Reform Commission (ALRC)
recently released a major discussion paper on gene patenting. Some
of the concerns raised include ethical considerations, whether
discoveries are being patented as opposed to inventions, the
breadth of the patents and the ease of obtaining patents. Several
concerns were expressed about the manner in which gene patents are
exploited in the marketplace by a patent holder or its licensee.
These included:
These issues go beyond the scope of this
paper. That said, the AUSFTA cuts across any initiatives that might
come out of the ALRC process and limits the ability to respond to
the concerns being examined by the ALRC. Harmonisation issues are
problematic in some aspects of biotechnology, especially in areas
like IPRs covering stem cell research. Harmonisation is likely to
be especially difficult in areas in which different people are
going to take different positions for moral, ethical and religious
reasons.
A particularly important theme comes out of
the US experience with technical protection measures or effective
technological measures. Article 17.4.7 of the AUSFTA, which
attempts to protect effective technological measures (ETM), is
based on the US Digital Millennium Copyright Act 1998 (DMCA). An
effective technological measure is defined so that it:
means any technology, device or component that,
in the normal course of its operation, controls access to a
protected work, performance, phonogram, or other subject matter, or
protects any copyright.
Article 17.4.7 appears to go beyond the
Copyright Amendment (Digital Agenda) Act 2000, which is
Australias version of the DMCA. According to legal firm Blake
Dawson Waldron, the AUSFTA would limit the scope of exceptions in
which circumvention devices may be used and would extend the scope
of criminal offences relating to the manufacture and sale of
circumvention devices.(48) Article 17.4.7 also
pre-empted the review of the Australian Act, which was undertaken
by the law firm Phillips Fox and released in April 2004. The
Attorney-Generals web site now announces that:
The Government is now moving towards signing its
Free Trade Agreement with the US and implementing its obligations.
In some areas, the copyright provisions of the Free Trade Agreement
supersede the recommendations made in the Phillips Fox
report.(49)
The major problem with ETMs is that they give
rights well beyond the rights normally associated with copyright.
There are allegations that, for example, the DMCA has been abused
by big business in the US. Rather than being used to counter piracy
as it was intended, the allegations are that the DMCA is being used
to preserve monopoly power on the part of copyright holders. In
Australia there has been much concern about the practice of
regional coding, by which a manufacturer divides the world into
regions so that CDs and players can work together only if purchased
in the same region. CDs purchased in one region will not work in
another region. Australian consumers were briefly able to overcome
those restrictions on Sony Playstations by purchasing a mod chip
that overcame the region coding. Sony took action, but the Federal
Court accepted that the effect of regional coding was to restrict
the playing of games, not to restrict copying of games and was
therefore not worthy of protection under law.(50) That
decision was overturned by the Full Court on appeal. ACCC chairman
Graeme Samuel expressed disappointment, saying: this decision now
means Australian consumers will be unable to enjoy games
legitimately bought overseas, as well as legitimate back-up
copies.(51) He also expressed concern that the decision
may have the unintended consequence of eroding the gains on
parallel imports (see section headed Parallel importation at p.
18). Using rights management information, such things as computer
programs could also be sold as an Australian version playable on
Australian delivered computers and made inoperable if used with
software purchased overseas.
Sony has also been active in the US, using
DMCA litigation or the threat of it to stop software developers
allowing Sony games to be played on ordinary PCs, and likewise for
other games to be played on Sony Playstations.(52)
Restrictions on encryption have the immediate effect of denying a
lot of the fair use exemptions that normally apply under copyright
legislation, such as making back-ups and recording for later
viewing, as well as activities undertaken for purposes such as
criticism, comment, news reporting, teaching, scholarship or
research.(53) In the past, former ACCC chair Professor
Allan Fels has expressed concern about the emerging practice of
inserting copy protection measures into CDs, which has the effect
of making illegal copying more difficult but also prevents the use
of back-up copies and makes CDs unplayable on some
equipment.(54)
Whatever the legal issues involved, it is
clear that at least some of the industry practices are designed
more to maximise profits than prevent piracy. A quick, unscientific
survey of two on-line sites showed that on 30 March 2004 the Sony
PlayStation game Harry Potter and the Chamber of Secrets could be
purchased on-line for $US19.99 from the US or $A99.95 in Australia.
Another, 007 Nightfire, cost $US49.99 or $A99.95
respectively.(55) Looking at the list of prices,
$US49.99 seems to be the top price in the US, while most prices are
around $A99.95 in Australia. Using the exchange rate on that day
the Australian dollar equivalents are shown together with the
Australian prices in the following table.
|
Price in Australia
$A
|
Price in US
$A equivalent
|
Harry Potter and the Chamber of
Secrets
|
99.95
|
26.83
|
007 Nightfire
|
99.95
|
67.10
|
The Harry Potter game may well be discounted
in the US and 007 may represent the normal difference of a new
release. However, this quick comparison suggests that normal prices
are around 50 per cent higher in Australia and Australians might
miss out on substantial discounts.
The economic argument would be overwhelming if
such things as region coding were to make CDs and players from
different Australian states or different Australian retailers
unable to operate with each other. However, when national borders
are involved the economic arguments seem to be missed.
There have been other overseas examples where
the MDCA approach has had the effect of stifling innovation and/or
competition. For example, an adaptation that allowed users of Apple
Macintosh computers to work with external DVD recorders meant that
users did not need to buy a new Apple Macintosh in order to use a
DVD recorder. Apple claimed that this was a violation of the MDCA
and stopped the sale of the upgrade.(56) That had the
effect of forcing Apple Macintosh users to buy the latest model
computer if they wanted the DVD capabilities. The evidence suggests
copyright owners are using these technological restrictions for
much more than protecting themselves against piracy. Against that,
there has been some progress against the Information and
Communications Technology (ICT) industrys use of IPRs to enhance
its market power.
In the legal dispute with Microsoft in the US,
Microsoft was required to grant free access to some of its Windows
operating system code to enable other companies to develop add-ons
that work well on Windows. There is debate about how well the
settlement is working. For example, the US Department of Justice
has complained that the settlement had fallen short on a key
provision designed to ensure that rivals can make their server
software work properly with the Windows operating system. In
response, Microsoft has reportedly offered a number of changes it
plans to implement to facilitate competitors access to the
necessary computer code.(57)
Another landmark occurred on 25 March 2004
when the European Commission made an antitrust ruling against
Microsoft ordering it to share information with competitors in the
server and other applications business so that the competitors
could offer competitive products that work as easily on Windows as
Microsofts own applications.(58) The point here is that
Microsoft is being forced to open up its technology to allow
competitors to operate on it, yet others are being allowed to use
anti-piracy provisions to prevent competitors making interoperable
products. More recently, commercial pressures have forced Microsoft
and Sun into an agreement that provides each other with sufficient
access to their technologies so that Suns products will integrate
more seamlessly with the Windows environment. Suns chief executive
officer Scott McNealy, is reported as saying that the deal will
stimulate new products, delivering great choices for customers who
want to combine server products from multiple vendors and achieve
seamless computing in a heterogeneous computing
environment.(59)
In other respects the computer industry has
been at the forefront of pushing for common standards and
interoperability, the ability of products from different vendors to
be able to operate together. The Australian Government has a strong
position on interoperability. For its own purposes it has published
the Interoperability Technical Framework for the Australian
Government, and believes that achieving interoperability will
improve efficiency, reduce costs to business and government and
will enhance government agencies capacity to respond to public
policy developments.(60) In the main the policy involves
adopting the relevant international standards, which themselves
reflect the pressure to make ICT software and hardware that can
plug into each other without causing major problems for business.
It appears that business and other large users have been able to
make gains with common standards and interoperability. However,
interoperability seems to elude items designed for retail
consumers.
The Phillips Fox report mentioned earlier did
in fact recommend amending the Copyright Act 1968
to permit ETM circumvention devices so as to allow fair dealing and
access to legitimately acquired non-pirate copies of a work.
However, 17.4.7(e) of the AUSFTA severely limits the ability of the
Government to allow wide exemptions for non-infringing uses.
A particularly important issue that also goes
back to the time of Alfred Marshall is the question of controls
over imports. The IFAC-3 was pleased to see that the AUSFTA
included provisions to enhance the ability of patent owners to
prohibit international exhaustion of patent rights.(61)
This refers to article 17.9.4, which reads:
Each Party shall provide that the exclusive
right of the patent owner to prevent importation of a patented
product, or a product that results from a patented process, without
the consent of the patent owner shall not be limited by the sale or
distribution of that product outside its territory at least where
the patentee has placed restrictions on import by contract or other
means.
Patent rights are normally said to be
exhausted when the good or service that includes the patent is
sold. Subsequent use of the good or service by the holder would not
normally generate any additional benefit for the patent holder and
so the rights are said to be exhausted. However, article 17.9.4
would mean that patent rights are not exhausted if the purchaser
then tries to export the good or service to Australia. Australian
patents do provide exclusive rights to import at the moment, but
there may be a concern if those rights are entrenched by the
agreement. It is important to note in this respect that the trend
in Australia over the last decade and a half has been towards
relaxing restrictions on parallel importation. That trend began
with the Prices Surveillance Authority report into book prices in
1989.(62)
There is another important aspect of the
exercise of IPRs that goes to the heart of the subject matter of
AUSFTA. While import restrictions can prevent Australian consumers
having access to competitively priced goods and services, IPRs can
also be used to restrict exports from Australia to other countries,
thereby defeating any industry development ambitions that Australia
may have. A 1984 OECD report examined export restrictions implicit
in the use of IPR licensing and the territorial arrangements that
they involve. It was particularly concerned about the terms and
conditions in the licensing of IPRs that unreasonably allocate
markets, control re-exports or foreclose competition; i.e.
practices which can restrict trade flows.(63) The OECD
observed that in some countries, particularly the US, competition
laws are often applied to abuses in which companies impose terms
and conditions that go beyond IPRs and unduly restrict competition.
Some practices produced results such as the allocation and division
of worldwide markets, output limitations and entry foreclosure. It
is apparently considered illegal in the US for a rights holder to
use territorial restraints in agreements between competitors as a
device to allocate world markets among them. Similarly the European
Commission opposed licensing conditions that ban exports and so
restricted the free movement of goods and services in the European
Union.(64)
The issue of export franchise limitations has
been taken up a number of times over the years in Australia.
Generally the Australian Federal Government has been very concerned
to overcome any restrictions that multinationals may have on the
ability of the Australian subsidiary to export into other markets.
To give just a few examples, in 1983 the then Treasurer, Paul
Keating, announced changes to the foreign investment policy to
explicitly include the benefits and costs to Australia of any
export franchise limitations.(65) Export restrictions on
the Australian branch or subsidiary would be a negative factor to
take into account when considering a foreign investment
application. In 1984, during Australia/European Economic Community
discussions, the then Minister for Trade, Lionel Bowen, said
Australia expressed concern to the EC about the operation of
non-tariff barriers such as export franchise
restrictions(66) Senator Robert Hill speaking in the
Senate quoted figures showing that there were 900 companies in
Australia which are subject to export franchise restrictions
covering some 5400 exportable profit areas.(67) He went
on to cite a view that perhaps a policy of incentives should be
provided to encourage multinationals to liberalise franchise
restrictions.
The stronger IPRs are the more likely they are
to be used both in intended and in unintended ways that may well
limit international competition. Australia allows patent holders to
prohibit parallel imports and we know that this and other issues
will be used as precedents by the US in other FTAs. It will be a
Pyrrhic victory indeed if Australia ever manages to eliminate
export franchise limitations only to find that they are matched by
import restrictions by IPR holders in Australias export markets. Of
course, by agreeing to the article Australia increases the chances
it will be used again. Given the upcoming schedule of free trade
agreements about to be negotiated,0 that could soon mean that
Australian industry might be frustrated by IPR holders in the whole
of the American continent as well as the South African Customs
Union.
Another aspect of the AUSFTA that has had
little attention relates to performers rights. The aim of IPRs is
supposed to be to protect and encourage the creator of works and
innovations. The US Labor Advisory Committee, a body that the US
Congress has asked to give its views on trade negotiations and
outcomes, has drawn attention to article 17.4.6.a, which includes
the controversial work for hire provision that would permit
transfer by the performer, upon signing his/her contract, all of
the rights including moral rights and remuneration rights to the
employer.(68) The US legislation also provides that
copyright ownership vests initially in the author or authors of the
work. Generally the author is the one who actually creates the work
that is subject to copyright protection. But the Act provides an
important exception for works made for hire. If the work is for
hire, the employer owns the copyright, unless there is a written
agreement to the contrary.(69)
The US Labor Advisory Committee has expressed
concern:
that the Australia FTA undermines the
protections for public health contained in TRIPs and the Doha
declaration. This not only violates congressional negotiating
objectives, it sets a terrible precedent for pending free trade
agreements with developing countries in Southern Africa and
elsewhere. In countries facing devastating public health crises,
governments must have adequate flexibility under international
trade rules to provide their people with access to essential
medicines.(70)
The issue here is that the original TRIPs
agreement adopted at the Doha, Qatar, conference included some
important provisions for public health that would allow countries
to grant compulsory licences in a national emergency so that
patented medicines could be made available. The flexibility that
governments may need to address public health issues may be eroded
by some of the provisions in article 17.10: Measures related to
certain regulated products. The article entrenches strong new
protection for pharmaceutical test data so that generic producers
would have to wait five years for access to the data. That could
delay access to affordable medicines and make their production more
costly. In addition, patent holders could use the limits on how
governments provide marketing approval and safety permits to block
production of essential generic medicines during a health
crisis.
Other parts of the AUSFTA may also have
implications for the chapter on IPRs. For example, chapter 11 on
foreign investment, contains a reference to expropriation and says:
Neither Party may expropriate or nationalise a covered investment
either directly or indirectly through measures equivalent to
expropriation or nationalisation.(71) The agreement does
not define equivalent to. However, it is possible that some future
government action may be interpreted as something that erodes IPRs
and so is equivalent to expropriation. In other FTAs the US has
managed to obtain agreement to adopt controversial investorstate
dispute settlement measures. While there are no investorstate
dispute settlement mechanisms in the AUSFTA as it stands, there is
provision for developing such procedures in the event of a change
in circumstances.(72) In the event of a dispute with the
Australian Government, those provisions would provide measures for
American IPR holders operating in Australia that are not available
to other IPR holders.
The economic analysis of the AUSFTA
commissioned by the Government claims Australia will experience
large benefits from the agreement.(73) The purpose of
this paper is to examine the issues arising out of the intellectual
property chapter of the AUSFTA. It is widely taken for granted that
a strong IPR regime will generate important benefits in the form of
innovation and creativity. These in turn are expected to generate
higher productivity and economic growth. Against that, economists
have long had a sceptical view of IPRs since they imply a period of
monopoly control over an innovation. In some cutting edge
industries, as the earlier reference to the Wright Brothers
reveals, there is a history of abuse of IPRs, especially the use of
patents to prevent or slow down competition. That threat increases
as lower orders of innovation are rewarded with IPRs. However, the
international experience is that IPRs are getting stronger and
Australia is part of that trend. The likely effect on a country
like Australia is to turn the terms of trade against it and in
favour of those countries that disproportionately hold IPRs.
This paper has examined some issues arising
out of the inclusion of IPRs in the AUSFTA. For example, new
measures recently introduced into the IPRs debates, such as the
technological protection of rights management information have had
the effect of introducing parallel importation restrictions through
the back door. Developments in Australia and elsewhere have made it
clear that technological protection measures seem to have more to
do with discriminatory pricing than genuine anti-piracy measures.
The AUSFTA further reinforces anti-competitive practice in those
respects. Other specific measures included in chapter 17 are also
problematic insofar as they enshrine and enhance anti-competitive
behaviour on the part of IPR holders in Australia.
In a sense all this is well-known. IPRs have
always been acknowledged as at least a temporary protection from
competition. There is seen to be a trade-off between the
anti-competitive aspects of IPRs on the one hand and the
desirability of encouraging innovation on the other. There is no
simple answer to balancing those competing objectives. However, the
issue is that Australia, and the rest of the world, will be pushed
too far in the direction of IPRs that promote monopoly power.
-
M. Vaile, Minister for Trade, Free Trade Agreement with the
United States, media release MVT08/2004, 8 February
2004, at
http://www.trademinister.gov.au/releases/2004/mvt008_04.html
-
Department of Foreign Affairs and Trade, Australia United
States Free Trade Agreement, at http://www.dfat.gov.au/trade/negotiations/us_fta/text/index.html
-
Intellectual property rights, Australia United States Free
Trade Agreement, chapter 17, at http://www.dfat.gov.au/trade/negotiations/us_fta/text/17_IP.pdf
-
OECD, Competition Policy and Intellectual Property
Rights, OECD, Paris, 1989, p. 10, at http://www.oecd.org/dataoecd/8/44/2376247.pdf
-
See World Trade Organisation, Negotiations, Implementation
and Development: the Doha Agenda, at
http://www.wto.org/english/tratop_e/dda_e/dda_e.htm
-
OECD, Patents and Innovation: Trends and Policy
Challenges, OECD, Paris, 2004, at http://www.oecd.org/dataoecd/48/12/24508541.pdf
-
ibid., p. 18.
-
ibid., p. 24.
-
ibid., p. 25.
-
ibid., p. 26.
-
Some of the international developments are discussed in
Final Report of the Intellectual Property and Competition
Review Committee, September 2000, at
http://www.ipcr.gov.au/finalreport1dec/introcopy.htm#_Toc498833545
-
WTO, Understanding the WTOIntellectual property: protection
and enforcement, at http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm7_e.htm
-
K. E. Maskus, Strengthening intellectual property rights in
Asia: implications for Australia, Centre for International Economic
Studies Seminar Paper, 97-16, November 1997, available at http://www.adelaide.edu.au/cies/sp9716.pdf
-
J. Bhagwati, Free Trade Today, Princeton, Princeton
University Press, 2002, pp. 756.
-
R. H. Marschall, Patents, antitrust, and the WTO/GATT:
Using TRIPS as a vehicle for antitrust harmonisation, Law &
Policy in International Business, vol. 28, Summer 1997,
p. 1167.
-
M. Perelman, The weakness in strong intellectual property
rights, Challenge, NovemberDecember 2003, p. 44.
-
Cited in Perelman, ibid., p. 44.
-
Cited in Perelman, ibid., p. 45. The reference is to Friedmans
book, Capitalism and Freedom.
-
These and other arguments are developed in M. Perelman,
Steel this Idea: Intellectual Property Rights and the
Corporate Confiscation of Creativity, New York, Palgrave,
2002.
-
OECD, The Sources of Economic Growth in the OECD
Countries, OECD, Paris, 2003, available at http://www1.oecd.org/publications/e-book/1103011E.PDF
-
Alfred Marshall, Principles of Economics, Macmillan and
Co., Ltd, London, 1920, Book IV Chapter XI, [Online] available at
http://www.econlib.org/library/Marshall/marP0.html;
accessed 12 March 2004. p. 7, fn 133.
-
J. Revesz, Trade-Related Aspects of Intellectual Property
Rights, Productivity Commission Staff Research Paper, May
1999, at http://www.pc.gov.au/research/staffres/trips/trips.pdf
-
G. A. Akerlof et al., Brief in Support of Petitioners,
in Eldred v. Ashcroft, Attorney General, Supreme
Court of the United States, 20 May 2002, at
http://cyber.law.harvard.edu/openlaw/eldredvashcroft/supct/amici/economists.pdf
-
See Perelman, The weakness in strong intellectual property
rights, op. cit.
-
Especially Revesz, op. cit.
-
Australia is a net importer of IPRs as measured by the value of
goods and services with IPR content among Australias imports and
exports.
-
Revesz, op. cit., p. 76. The figures in the text are the
midpoints of the upper and lower estimates he reported.
-
Australian Bureau of Statistics (ABS), International Trade
in Goods and Services, Australia, February
2004, Cat. no. 5368.0, 30 March 2004, at
http://libabs1.parl.net/abs/subscriber.nsf/Lookup/3B96AE31A486233ECA256E66007698E3/$File/53680_feb%202004.pdf
-
ABS, Balance of Payments and International Investment
Position, Australia, Concepts, Sources and
Methods, para 7.24, at
http://libabs1.parl.net/abs/abs%40.nsf/5e3ac7411e37881aca2568b0007afd16/7d3f0f7fa63b5138ca25697e0018fba4?OpenDocument
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ABS, Balance of Payments and International Investment
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seems possible.
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Australia United States Free Trade Agreement, chapter
17, op. cit.
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Centre for International Economics, Economic impacts of an
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Centre for International Economics, Economic Analysis of
AUSFTA: Impact of the bilateral free trade agreement with the
United States, April 2004, p. 39, available at
http://www.dfat.gov.au/trade/negotiations/us_fta/economic_analysis_report/austfta_report_040428.pdf
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Industry Functional Advisory Committee on Intellectual Property
Rights for Trade Policy Matters (IFAC-3), The U.S.-Australia
Free Trade Agreement (FTA): The Intellectual Property Provisions,
Report of the Industry Functional Advisory Committee on
Intellectual Property Rights for Trade Policy Matters
(IFAC-3), 12 March 2004, available at http://www.ustr.gov/new/fta/Australia/advisor/ifac03.pdf
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ibid., pp. 45.
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R. B. Zoellick, Our credo: free trade and competition,
The Wall Street Journal, 7 October 2003, at http://www.ustr.gov/speech-test/zoellick/2003-07-10_WSJ.htm
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US Trade Representative, National Trade Estimate Report on
Foreign Trade Barriers, 2003, at http://www.ustr.gov/reports/nte/2003/australia.pdf
-
A fuller account of the evolution of the thinking on parallel
importation is provided in D. Richardson, Copyright and
Monopoly Profits: Books, Records and Software, Current Issues
Brief, no. 15, Department of the Parliamentary Library,
199697, at http://www.aph.gov.au/library/pubs/CIB/1996-97/97cib15.htm
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This definition comes from on-line dictionary LookWAYup
at http://lookwayup.com/free/
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This point is made by Revesz, op. cit.
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The World Trade Organisation, TRIPS: a more
detailed overview of the trips agreement, at
http://www.wto.org/english/tratop_e/trips_e/intel2_e.htm#anticompetitive
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Perelman, Steel this Idea, op. cit.
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Mickey Mouse holds key to the future, Australian Financial
Review, 8 December 2003.
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See Government Response to Intellectual Property and
Competition Review Recommendations: Information Package, 21
August 2001, p. 2, at
http://www.law.gov.au/www/securitylawHome.nsf/Web+Pages/A6C3825011D8A8B1CA256C330000CF9A?OpenDocument
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Final Report of the Intellectual Property and Competition
Review Committee, September 2000,
http://www.ipcr.gov.au/finalreport1dec/introcopy.htm#_Toc498833545
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OECD, Patents and Innovation, op.cit., p. 23.
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ALRC Discussion Paper, Gene Patenting and Human Health,
Discussion Paper No 68, March 2004, http://www.austlii.edu.au/au/other/alrc/publications/dp/68/
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Blake Dawson Waldron, AustraliaUS Free Trade Agreement,
March 2004,
http://www.bdw.com.au/frameit.asp?page=/publications/fta/fta03-2004.pdf
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Attorney-Generals Department, Review of Copyright Digital Agenda
reforms, at
http://www.ag.gov.au/www/securitylawHome.nsf/allDocs/RWP18B3985DD6A0767FCA256D9D00815B56?OpenDocument
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See Australian Competition and Consumer Commission (ACCC), Game
over for Sony Playstation, 29 July 2002, http://www.accc.gov.au/content/index.phtml/itemId/88133
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Australian Competition and Consumer Commission (ACCC), Consumers
lose in Playstation decision, 31 July 2003, http://www.accc.gov.au/content/index.phtml/itemId/345939
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For these and other examples, see Electronic Frontier
Foundation, Unintended consequences: Five years under the DMCA,
http://www.eff.org/IP/DMCA/20031003_unintended_cons.php,
accessed 30 March 2004.
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ibid., p. 9.
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ACCC, Game over for Sony Playstation, op. cit.
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The on-line sites were http://www.allgame.com/ and http://au.playstation.com/index.jhtml,
accessed 30 March 2004.
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See Electronic Frontier Foundation, Unintended consequences, op.
cit.
-
P. Kaplan, Judge satisfied with how Microsoft antitrust pact is
working, Computerworld, 23 January 2004,
http://www.computerworld.com/governmenttopics/government/legalissues/story/0,10801,89346,00.html
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P. Meller, Microsoft sanctions: The overview; Europeans rule
against Microsoft; appeal is promised, New York Times,
25 March 2004.
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R. Weisman, Microsoft and Sun broker $2 billion truce,
E-Commerce News, 2 April 2004.
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Australian Government, Interoperability Technical Framework
for the Australian Government, Canberra, June 2003,
p. iv.
http://www.agimo.gov.au/__data/assets/file/12298/interoperability_framework.pdf,
accessed 16 April 2004.
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IFAC-3 report, op. cit., p. 11.
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Prices Surveillance Authority, Inquiry into Book Prices,
Report no. 25, 1989.
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OECD, Competition and trade policies: Their
Interaction, OECD, Paris, 1984, at http://www.oecd.org/dataoecd/7/51/2375610.pdf
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ibid., p. 52.
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P. Keating (Treasurer), Review of foreign investment
policy, Press release no. 152, 20 December 1983.
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L. Bowen, Minister for Trade, European Economic Community,
Answer to Question on Notice, House of Representatives,
Debates, 4 September 1984, p. 542.
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Senator Robert Hill, Export finance and Insurance Corporation
Amendment Bill 1983: Second Reading, Senate, Debates, 16
December 1983, p. 3946.
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The USAustralia Free Trade Agreement: Report of the Labor
Advisory Committee for Trade Negotiations and Trade Policy
(LAC), 12 March 2004, at http://www.ustr.gov/new/fta/Australia/advisor/lac.pdf
.
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IPWatchdog, Understanding the work for hire doctrine, at
http://www.ipwatchdog.com/work_for_hire.html, accessed 16 April
2004.
-
Report of the Labor Advisory Committee, op. cit.
-
Investment, Australia United States Free Trade
Agreement, chapter 11, at
http://www.dfat.gov.au/trade/negotiations/us_fta/text/11_Investment.pdf
-
For further details, see D. Richardson,
Foreign investment and the Australia United States Free Trade
Agreement, Current Issues Brief, no. 7, Department of the
Parliamentary Library, 200304, at http://www.aph.gov.au/library/pubs/CIB/2003-04/04cib07.htm
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Centre for International Economics, 2004, op. cit.
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