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Monday, 19 March 2012
Page: 3416

Mr ZAPPIA (Makin) (17:23): The one thing on which we can certainly agree with the member for Indi is that this is indeed very important legislation. It is important not only because it amends and perhaps updates the intellectual property laws of this country but also because those very laws have a direct effect on our nation's ability to remain competitive in the years ahead. Today, more than ever before, when we compete in a global market with products that are available from around the world, and with copyright ownership of those products resting in the designers of them, our ability to protect our intellectual property and to innovate, develop and design products is going to be fundamental to our ability to remain a competitive nation. In fact, earlier today when we were debating a different matter in this chamber, the question of research and development into our agricultural sector was raised, and quite properly that is also an area where intellectual property can, in the future, make so much difference to what we produce in this country and how competitive we are as opposed to what is being done around the world. The parliamentary secretary outlined the importance of this bill and the details of it, and in my contribution I will try not to go to the same level of detail as he did. Effectively, the bill amends the Patents Act 1990, the Trade Marks Act 1995, the Copyright Act 1968, the Designs Act 2003 and the Plant Breeder's Rights Act 1994. It does that because this legislation will impact on each of those acts. The IP system in general and the patent system in particular protect and encourage innovation in our country. For the system to work effectively, the patent system itself needs to be up to date and in line with what is happening in and around the world. You must have a balance between what the law protects in terms of one person's innovation and design and what another person is doing elsewhere. It would seem that the current laws are very much out of date and therefore these changes are needed.

One of the things that the parliamentary secretary mentioned was that there have been a number of reviews in the last decade which have recognised concerns that the thresholds set for the granting of a patent in Australia are too low and that in turn suppresses competition and discourages follow-on innovation. That is absolutely correct and needs to be addressed, and that is what this legislation partly does. In fact, I understand that this bill is the result of extensive public consultation that commenced in March 2009. The consultation was associated with a number of reviews of the current laws by a number of different organisations. Effectively, the bill seeks to further improve a range of areas in relation to our intellectual property system, such as raising the quality of granted patents, allowing free access to patent inventions for regulatory approvals and research, reducing delays in the resolution of patent and trademark applications, assisting the operations of the intellectual property profession, improving mechanisms for trademark and copyright enforcement, and simplifying the IP system.

This legislation also complements and is supported by a number of other initiatives of this government. In May 2009 the government released the Powering ideas report, which outlined the government's innovation agenda for the following decade. Powering ideas clearly communicated the government's commitment to consider options for reforming Australia's present patent system and, by doing so, develop an environment conducive to innovation, investment and trade. The IP reforms contained in this bill are just part of the government's innovation agenda.

I want to speak particularly about one of those ideas, and that is Enterprise Connect. Enterprise Connect is an important element of the government's innovation agenda. Enterprise Connect provides a range of services to small and medium enterprises, including tailored advisory services and business reviews designed to improve management and business skills as well as organisational processes, assistance to help business access researchers and PhD students through the Researchers in Business program, and assistance to business to protect their IP through the business advisory services and the tailored advisory services. Currently, in my electorate of Makin there are around 46 small and medium enterprises that are being assisted through the Enterprise Connect program. I understand that around the country some 7½ thousand businesses have been assisted since the program was implemented. It is indeed unfortunate that, as I understand it, the opposition is proposing to cut $100 million from Enterprise Connect. This is a program that is working very well and is being accessed by 7½ thousand enterprises around this country, and the opposition proposes to cut $100 million of funding from it.

The government has also reformed the research and development tax concessions through the research and development tax incentive. The government is also promoting research and development by doubling support to small and medium enterprises and has increased the support to other firms as well. Changes have also been made to allow foreign companies to invest in Australia by producing their intellectual property here even in instances where the IP is owned by the parent company overseas. This builds Australia's research and development capability and skills and also increases the likelihood of further innovation. Encouraging business to invest in research and development fosters innovation. The government is supporting research and development partnerships between universities and industry and business in a range of ways. For example, the cooperative research centre program brings together consortiums of researchers and industry. The Australian Research Council linkages program provides grants to higher education institutions engaged in industrial research. An industrial PhD program also brings researchers into business.

The government is further increasing the focus on universities by building partnerships with industry through the negotiation of agreements between each university and the Commonwealth government. These are known as mission based compacts and will further deepen links between universities and industries that will foster innovation. I understand that the University of Adelaide, the University of South Australia and Flinders University, all in my home state of South Australia, have been negotiating with the Commonwealth for mission based compacts.

As I mentioned earlier, the bill comes on the back of several reviews undertaken by a number of organisations, including the Advisory Council on Intellectual Property and its review in respect of patentable subject matter, which was carried out in December 2010; its enforcement of trademarks review, carried out in April 2004; and its patents and experimental use review, carried out in 2005. Several of the recommendations in these reviews have been reflected in the amendments proposed in this bill. Whilst the government wants to ensure that innovators can protect their ideas, it does recognise that patents involve commercial monopolies over inventions and should not be given away too easily. ACIP, in its review on patentable subject matter, concluded:

… the threshold of inventiveness in Australia is too low … the existence of patents hampers innovation in some technological fields …

Low patent standards provide uncertainty for innovators, who cannot be confident that their patent will withstand challenges in Australia or overseas. The reality at the moment is that patent standards are lower in Australia than elsewhere and that this can block follow-on innovation by crowding out the innovation landscape. The bill addresses this by raising key patent requirements to raise the quality of granted patents.

It is also the case that researchers can be threatened with lawsuits by patent owners, and that in turn holds up important research projects and distorts research priorities. This problem is also addressed in the bill, which seeks to provide certainty to researchers by exempting research from patent infringements. The bill will also serve to tighten up processes that have on occasions been abused. For example, some patent applicants profit by delay and uncertainty, as the system allows them to draw out their applications for too long. Again, the bill tightens up the processes for assessing applications to give certainty sooner. I want to refer to that for a moment, because I know the parliamentary secretary did in his own comments about it. Allowing the Federal Magistrates Court to deal with matters and giving the commissioner additional powers to carry out reviews a lot faster, I think, will help everyone involved in this process, and they are certainly very welcome changes to the current legislation.

The other important matter that the parliamentary secretary talked about was the criminal penalties relating to the abuse of trademarks and patents by those who seek to profit from them. I have read submissions from industry groups that were concerned about the level of goods coming into this country that have trademarks on them and that have been smuggled or imported into the country using those trademarks and about how our Customs operations perhaps need to be given greater powers. Again, I think that the ability for Customs to provide information to the owners of those trademarks is an important first step, but the increasing of the criminal penalties is going to be very important in that respect as well.

I want to raise three other matters that I believe need to be taken into consideration when we talk about trademarks and intellectual property laws. It is my view that IP laws should never be used to withhold innovation from the public. There have been claims in the past that business sectors with a vested interest in a particular innovation or new design buy that new design and then shelve it for the deliberate purpose of preventing it from reaching the market. In doing so, what they are doing is preventing the use of that innovation for the rest of society. I believe that is wrong and that at some point we need to find a way of addressing that. It could be a case whereby a new patent or a trademark, once it is registered, would lapse if it is not put into commercial reality. That might be one way of resolving this matter. But there ought to be a process to enable innovations to actually reach the marketplace and to stop those who have a vested interest from blocking innovation from reaching the marketplace simply by taking out the patent rights for 10, 15 or 20 years. This is a matter that concerns me. I think most members of the House would be aware of claims that have been made over the years in respect of that—perhaps the most famous being to do with the Sarich orbital engine, where the patent rights were supposedly bought off and shelved to prevent the engine from reaching the market. The sad thing about that is that the world missed out on a terrific invention at the time.

The other matter that concerns me is something that I am sure happens on very frequent occasions. Two separate research institutions may independently carry out research into a particular matter and, even without the knowledge that the other is carrying out that research, may each come up with a design of a new product. The first one to patent it then gets the rights to it. Part of the reason we have patents laws and trademark laws is to protect the investment made by those organisations in their research and development. Regrettably, the second party, who has also carried out the research and who might come to the same finding ultimately, misses out entirely because they were not the first to register the patent—yet they have also spent real research dollars, real time and real effort on that design, often without any use or abuse of the research of the first company. It seems an injustice that they should be denied any opportunity to use that innovation. It would also apply where someone comes up with an innovation that they would have ultimately found but, because it has now been patented, they simply cannot go ahead and either market it or patent it.

The last point I will quickly raise, because it has been raised with me in the past, is about the situation where the federal government assists a university with some kind of funding, and the university works in conjunction with the private sector. If a department of the university, including perhaps some of its key scientists, works on a design and an innovation arises, the question as to who owns that innovation is an interesting one. It is a complex question but an interesting one, and it has been the cause of grief for people in the past. I raise it in the House as a matter that I believe ought to be addressed at some stage, particularly given that the government has an interest in that innovation through its indirect funding of the universities.

With those comments, I commend this bill to the House.