7.1
Participants in the inquiry raised a number of issues in relation to the Intellectual Property provisions in Chapter 18 of the Trans-Pacific Partnership Agreement (TPP). The issues discussed were:
the Chapter’s affirmation of the intellectual property rules in the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which IP practitioners argued are outdated and in need of reform;
the complexity of a multilateral agreement that permits parties to retain their own IP rules;
the possible noncompliance of Australian IP laws with the ‘safe harbour’ provisions of the TPP; and
the treatment of medicines in general and biologics in particular.
IP in the TPP
7.2
According to the NIA, the intellectual property provisions of the TPP affirm and build on the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
7.3
TRIPS, which came into force in 1995, contains internationally applicable provisions that protect:
producers, recorders, performers and authors of sound recordings;
producers, recorders, performers and authors of visual recordings;
geographical identifiers, such as wine appellations;
the layout of integrated circuits.
TRIPS-related issues
7.4
Participants to the inquiry, while noting that Chapter 18 contained some new useful provisions, criticised the Chapter’s reliance on the TRIPS agreement.
7.5
In general the concerns relate to the fact that TRIPS takes a prescriptive approach to IP, and reflects the level of technological advance of its time. This makes TRIPS increasingly difficult to apply to modern, innovative uses of technology.
7.6
Associate Professor Kimbleree Weatherall argued that:
The TPP locks in IP laws that are old and have proven to be of little benefit to Australia, such as patent rules relating to medicines and anti-circumvention rules (which mean that Australians pay a higher price and receive products at a later time compared to, for example, the United States).
7.7
Associate Professor Weatherall further argues that:
This is not a good thing unless Australia’s current IP laws (1) are perfect; and (2) will continue to be perfect regardless of changes in technology, changes in business models, changes to Australia’s areas of comparative advantage, and changes to other countries’ IP settings. Obviously this cannot be true.
7.8
Technology and software developers also expressed this concern. Ben Sturmfels, a software developer, noted that:
It dedicates entire chapters to implementing dangerous restrictions on computing and the Internet … It spreads the worst elements of the United State’s Digital Millennium Copyright Act (DMCA). As a software developer, I would be treated as a criminal for making modifications to my own phone, computer or TV… It promotes software patents—an entirely broken mechanism that crushes innovation in my industry.
7.9
When these issues were raised with Australian Government witnesses, the response was sympathetic, but indicated that on this issue, reforms were difficult to obtain because of pressure being placed on United States negotiators by their copyright holders to protect their interests.
Overlapping rules
7.10
The NIA argues that an advantage of the IP provisions in the TPP is that they establish a common set of rules for IP across the parties:
The Chapter includes provisions to harmonise patent laws and promote business certainty for Australian patent applicants in the TPP region.
7.11
Participants in the inquiry did not consider this to be the case, based on the fact that a number of side letters to the Chapter create particular bi-lateral patent arrangements between different parties.
7.12
Associate Professor Weatherall discussed the impact of having a multilateral agreement with specific rules that apply to each party:
What you hear from people in practice, more often than not, when they are talking about how difficult it is to sell or expand into overseas markets, is that in the IP space it seems like it costs money to get intellectual property rights in every country. You have to go from office, to office to office to apply for rights. The rules in each office might be slightly different, so you have to redraft your patent every time you go from office to office.
7.13
The Committee notes that Chapter 18 contains a provision for improving the quality and efficiency of the parties’ patent registration systems. The Committee believes the Government should pursue this issue in the interest of supporting innovation in Australia.
Safe Harbours
7.14
Another aspect of the IP provisions in the TPP that attracted attention relates to the concept of ‘safe harbours’.
7.15
The safe harbours provision was introduced as part of the Australia–United States Free Trade Agreement (AUSFTA). The safe harbours provision provides legal protection to providers of on-line services in exchange for the service providers assisting rights holders with the identification of copyright infringers.
7.16
The text of AUSFTA and United States laws on safe harbours makes it clear that the provisions apply to all service providers. This encompasses schools and universities that provide internet facilities for their students.
7.17
The Copyright Advisory Group – COAG Education Council submission discusses the application of the ‘safe harbours’ provision in the Copyright Act 1968 to the TPP.
7.18
In Australia, a mistake was made in the amendment to the Copyright Act that included the safe harbours provision. The Copyright Act contains a safe harbour provision for ‘carriage service providers’ only. This means that commercial Internet Service Providers (ISPs) are provided safe harbour protection, but schools and universities are not.
7.19
The Copyright Advisory Group submission points out that the legal exposure of schools and universities is not a theoretical matter. In 2003, music companies commenced proceedings against schools and universities for the illegal reproduction of music on the grounds that they were excluded from the safe harbour provisions of the Copyright Act.
7.20
The safe harbour provisions in the TPP are the same as those in AUSFTA, and are intended to provide safe harbour protection to schools and universities.
7.21
The submission argues that the Copyright Act will need to be amended to make this clear if Australia is to comply with the TPP provisions.
7.22
However, Ms Elizabeth Ward, Chief Negotiator, Trans- Pacific Partnership Agreement, Department of Foreign Affairs and Trade, stressed that Australia’s:
…policy settings on intellectual property were negotiated to be within the standard of the TPP. We will not be changing any of our legislation as a result.
7.23
Associate Professor Weatherall also believes the Australian law will need to be amended:
… rewriting our anticircumvention laws—as the TPP allows—so that anticopy protections do not prevent schools and libraries from fulfilling their missions; and introducing and passing the Copyright Amendment (Disability and Other Access Measures) Bill so that we finally get the online safe harbours we were meant to get a decade ago and that are required by the TPP.
7.24
An exposure draft of the Bill to amend the Copyright Act to extend safe harbour provisions to schools and universities was released in 2015, but has not progressed at this stage. The Copyright Advisory Group argues that the introduction and passage of this Bill should be a priority to ensure Australia complies with the TPP prior to the TPP coming into effect.
7.25
When this issue was raised with the Australian Government, witnesses from the Department of Communications and the Arts noted that the United States had not raised the issue of Australia’s compliance with the AUSFTA safe harbours provisions.
7.26
The problem is an Australian one. The fact that the issues raised during the inquiry in relation to safe harbours provisions has reached the stage of being addressed in a draft Bill would indicate to the Committee that the problem is real.
7.27
The Committee recommends the Australian Government progress the safe harbours amendments to the Copyright Act.
7.28
The Committee recommends the Australian Government progress the safe harbours amendments in the proposed Copyright Amendment (Disability and Other Access Measures) Bill.
Medicines
7.29
The impact of free trade agreements on access by Australians to affordable generic medicines is a perennial concern for many Australians.
7.30
Australian negotiators were successful in protecting Australia’s current medical patent system during TPP negotiations. In other words, the TPP will not change Australian rules concerning when generic medicines can be made available.
7.31
However, the TPP contains provisions in relation to a new type of medicines called biologics, which are rapidly evolving classes of medicines that treat difficult to cure diseases and illnesses such as cancer.
7.32
Negotiations over the patent regime for biologics was, for free trade agreements, a very public affair.
7.33
The United States negotiators held the position that data exclusivity for biologics, which prevents generic substitutes from being developed, should reflect the United States standard of 12 years. Data exclusivity refers to protection of clinical trial data required to be submitted to a regulatory agency to prove safety and efficacy of a new drug, and prevention of generic drug manufacturers from relying on this data in their own applications.
7.34
At the final negotiations in October 2015, Australia was able to reach a compromise position of 8 years.
7.35
The Committee notes that any concerns about the benefits of this outcome should be considered in light of the United States’ response to it. One of the senior members of Congress, Senator Orin Hatch, described the outcome in these terms:
We cannot agree to something that would just destroy the biologics industry. In essence what the Australians are saying is 'let us steal your patents.’
7.36
Australian Government witnesses at the final public hearing stated:
… the outcome has been such that in fact the Department of Health has advised government that it is satisfied that there will be no impact on the [Pharmaceuticals Benefit Scheme], nor any change required to our domestic regulatory settings.
7.37
The Committee believes that, in relation to medicines, the Australian TPP negotiation team has made a deal substantially in Australia’s interests.