Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 12 August 2004
Page: 26399

Senator LUNDY (8:20 PM) —Schedule 9 relates to the Patents Act 1990. I want to put several questions to the minister. First of all, the schedule describes several amendments and I want some clarification from the minister. Evidence to the Senate inquiry into the change to the Patents Act in Australia varied widely. It seems that there have been some quite broad commitments from the Department of Foreign Affairs and Trade with respect to the flexibility retained by the Australian government in the implementation of the changes to the Patents Act and general issues. I would like the minister to outline very specifically, and build on the description contained in the explanatory memorandum, the actual effect of schedule 9 on patents, particularly software patents.

I mention software patents in particular because, in all of the evidence collected through the Senate inquiry, this was an area of genuine concern. Indeed, it has been the attention of columnist Ross Gittins, who has spent quite a bit of time putting together some column inches on the issue of concern about software patents. The general fear in the software community relates to the harmonisation of the intellectual property regime—harmonisation in the sense that in the US there are a number of different types of patents that are allowable, including business process patents. The concern in the software community is that this type of patent will become more prevalent in Australia.

The types of patents that have caused most concern are the very generalised business process patents, patents that include the look and feel of web sites and so forth, and patents that pick up what you would describe as generic sequences of coding in software applications that could create new vulnerabilities for software coders in Australia. The sorts of new vulnerabilities that were articulated through the Senate inquiry include things that open source software coders believe will make them more vulnerable to increasing litigation. I will refer to some comments by Mr Henry Ergas, the former Chair of the Intellectual Property and Competition Committee, contained in the Senate inquiry report. He states:

The FTA foreshadows further “harmonisation” in patent law, which most likely means future increases in patent protection.

He goes on to say:

Ironically, while Australia is being obliged to adopt IP laws that can disproportionately favour producer interests, US policy-makers have taken a more critical stance on their IP laws. Late last year, the US Federal Trade Commission (the US counterpart to the ACCC) released a report on the proper balance between competition and patent laws.

The FTC report, which follows a three-year investigation, highlighted the anti-competitive effects of two emerging problems in the US, namely the granting—

and this is the key point—

of excessively broad patents, that is, those that cover an excessively wide range of follow-on activities, and the granting of too many trivial patents.

He makes the following summation:

... these misapplications of patent law can have an adverse effect on innovation ...

and so forth. In the evidence of the inquiry, the Department of Foreign Affairs and Trade came back with a denial that the sentiment about harmonisation in the free trade agreement would lead to this outcome. The committee heard quite conflicting evidence, and what I am really seeking from the minister is very specific clarification on patent law and how it is likely to affect, and how the government anticipates it will affect, the applications of software patents and the software patent regime generally. It is worth quoting DFAT's response to this. The committee report states:

The free trade agreement does not change in any way the scope of what we currently consider to be patentable or what would be patented in Australia. We currently allow patents for software, and there will be no change to that. We are not being required to take a United States approach in relation to that type of patent, so I do not think that that concern is well founded. It will be business as usual for IP Australia in terms of granting patents.

That particular reference comes from DFAT official Toni Harmer.

Labor are particularly concerned about this. Hence, in our response and statement relating to the free trade agreement, we have expressed the view that this is an area where we need to keep a close watching brief. If there is evidence that the patent law, particularly relating to software patents and its impact on open source, is being used and abused in an anticompetitive way, then we clearly have a problem. That is why establishing a Senate select committee on intellectual property, which will comprehensively investigate and make recommendations for an appropriate IP regime for Australia in light of the significant changes required to IP law by the AUSFTA, is such a critical element of Labor's policy response to this agreement. Minister, I put those questions to you. There are many other witnesses I can refer to—Mr Russell and Mr Scott; I have mentioned Mr Ergas—who have made quite strong points about their fear for increased litigation based on the harmonisation goal that is so firmly expressed in the agreement. I am very interested in your response to that problem.