Productivity Commission to scrutinise Australia's intellectual property regime

The Productivity Commission will conduct an inquiry into the impact of Australia's intellectual property regime. The inquiry follows a recommendation included in the Harper Review of competition policy that the commission examine the country's IP arrangements.

The government today directed the commission to examine the impact of the IP regime on research and innovation, access to and cost of goods and services, and competition, trade and investment.

The commission should "recommend changes to the current system that would improve the overall wellbeing of Australian society, which take account of Australia’s international trade obligations," state the terms of reference issued today by Treasurer Joe Hockey.

"The Australian Government wishes to ensure that the intellectual property system provides appropriate incentives for innovation, investment and the production of creative works while ensuring it does not unreasonably impede further innovation, competition, investment and access to goods and services," state the terms of reference.

The Competition Policy Review (also known as the Harper Review after its chair, Professor Ian Harper) earlier this year recommended that the Productivity Commission conduct a 12-month overarching review of intellectual property.

"Australia’s intellectual property regime is a priority for review," the report stated.

The final Harper Review report was released in April.

Such a review should address IP-related competition policy issues "arising from new developments in technology and markets" and the principles that guide the inclusion of IP provisions in trade agreements Australia signs up to, the report stated.

"Disruptive technologies have put intellectual property ... rights in the spotlight. Although IP rights can create incentives for innovation and disseminating ideas, they also have the potential to restrict market entry by preventing access to technologies," the Harper Review said.

The Harper Review also echoed a 2010 Productivity Commission research report (PDF) that argued Australia should assess the value of IP provisions in bilateral and regional trade agreements.

"[A]ny IP provisions that are proposed for a particular agreement should only be included after an economic assessment of the impacts, including on consumers, in Australia and partner countries," the Productivity Commission report said.

A number of existing and prospective trade agreements, such as the Trans-Pacific Partnership Agreement (TPP), have generated concern among advocates for reform of Australia's intellectual property regime because of the potential to lock the country into more restrictive IP rules.

The terms of reference for the new Productivity Commission inquiry state that in its work the body should have regard to "Australia’s international arrangements, including obligations accepted under bilateral, multilateral and regional trade agreements to which Australia is a party".

Copyright reform

Attorney-General George Brandis has previously indicated that "root and branch reform" of at least one of the pillars of Australian IP law, the Copyright Act 1968, is of interest to the government.

"The Copyright Act in its current form is an act of 1968 when John Gorton was the prime minister and there are many who are of the view, and I am one of them, that the time is upon us for a comprehensive review of the Copyright Act," the attorney-general told a Senate Estimates hearing earlier this year.

"The day is upon us I think ... when we do need a comprehensive root and branch reform of the Copyright Act..."

The Attorney-General's Department is conducting an economic analysis of recommendations in the Australian Law Reform Commission's Copyright and the Digital Economy report.

That report, which was tabled in parliament in 2014, said that introducing a fair use provision in Australian copyright law would assist innovation and promote the public interest. (Brandis indicated at the Senate Estimates hearing that he was not convinced on the introduction of fair use into Australian law.)

There is as yet no formal government response to the ALRC report nor to the IT pricing inquiry's report, which included a number of recommendations relating to copyright reform.

Online infringement

Today's formal announcement of the Productivity Commission inquiry comes in the context of controversy over the potential impact on intellectual property arrangements in Australia of the TPP, bilateral trade agreements such as the Korea-Australia Free Trade Agreement (KAFTA) and other bilateral and multilateral agreements (particularly those that potentially include investor-state dispute settlement (ISDS) clauses).

It is also in the context of a concerted crackdown on copyright infringement waged by the Australian government, including its push for a (yet-to-be-finalised) industry code that will govern how Internet service providers will deal with allegations of online piracy by their customers and legislation that will potentially force ISPs to block access to websites associated with piracy

The new Productivity Commission inquiry is due to report within 12 months.

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