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Thursday, 12 August 2004
Page: 26405

Senator NETTLE (8:47 PM) —The Australian Greens have a similar amendment to the Democrats relating to schedule 7 and seek to remove this component from the free trade agreement. Copyright—and intellectual property law more broadly—is always balanced between the rights of owners and producers and the users and consumers of an idea or intellectual creation. Currently, changes to technology, particularly the development of digital technology, are posing challenges to intellectual property regulation.

In Australia, various reviews and consultations have been under way for some time on how to adapt our intellectual property laws to the new environment. These include the Copyright Law Review Committee, the Intellectual Property and Competition Review Committee and the digital agenda review by the law firm Phillips Fox, which reported in January this year. The last time such significant changes were made to copyright law, they took place after three years of consultation with stakeholders, leading to the digital agenda act in 2000. There has been no such level of consultation before the changes set out in schedule 9, despite the bill and the US-Australia free trade agreement reversing some of the policy underpinning the act. We need to evolve laws carefully so as not to upset the delicate balance between producers' and consumers' rights. In their submission to the Senate Select Committee on the Free Trade Agreement between Australia and the United States of America, the Council of Australian University Librarians identified concerns such as the balance between copyright owners and copyright users being tipped in favour of owners in the United States and this trade agreement heading in a similar direction.

The process of change is being disrupted and, in some cases, reversed by the changes that have come about as a result of the free trade agreement. The change process in the trade agreement pre-empts the resolution of Australian discussion about how to get the balance right. In fact, the changes to copyright law in this bill undermine this important balance. By adopting the worst aspects of American law, we are undermining the creative potential of many industries and the creative enjoyment and participation of our citizens. The copyright changes outlined in schedule 9 of the bill make copyright more restrictive and penalties and infringements more severe. These are often infringements such as the ordinary, everyday practice of copying and using materials, which we have become familiar with. The trade agreement emphasises criminal liability rather than civil liability even though a breach of copyright is really a private loss and therefore more amenable to civil redress.

In some areas, the bill implementing the trade agreement actually goes further than required by the trade agreement. For example, this legislation criminalises conduct that results in infringement rather than conduct that is a significant copyright infringement as required by the trade agreement. A tourist returning from Bangkok with a large amount of pirated DVDs could be prosecuted for breaching copyright even though he or she did not intend a breach of copyright; the tourist's conduct resulted in a copyright infringement but the conduct itself was not a copyright infringement. Currently, copyright exemptions exist for sound recordings made solely for the purpose of the private domestic use of the maker and for indirect sound recording for certain purposes. Under the trade agreement, copyright exemptions for sound recordings will only exist for the purpose of research or study, criticism or review and news reportage.

Under the trade agreement, Internet service providers have increased responsibility for the content of web sites and other Internet services that they host. This creates an enormous responsibility for Internet service providers who can become, as has been seen in the United States, bombarded with copyright demands. In order to take a safe path they err on the side of caution and cut people off from their services, thereby having an impact on free speech.

Some of the changes that we have seen in the United States through the US Digital Millennium Copyright Act are also proposed in this trade agreement—for example, the changes that relate to technology protection measures. Article 17.4(7) of the agreement requires Australia to provide civil and criminal liabilities for the circumvention of TPMs and trafficking in such TPMs, even when such TPMs are not used to infringe copyright. There are serious concerns that, once legislation is introduced, as is required in the next two years, many corporations will use such protections to extend their monopoly control well beyond that of the copyright. The serial monopolies can be used to control accessories associated with a particular product, as was pointed out by Linux Australia's submission to the Senate select committee. In their submission, they cited Brendan Scott, an Australian intellectual property lawyer, who said:

We are already in a position where it is possible to embed microprocessors onto most manufactured items. Manufacturers in the US have already embedded such processors into garage doors and printers allowing them to control after markets for these products. For example, a printer interrogates the consumable cartridges to determine their origin and if they are from a competitor refuse to operate or, worse, will operate to a lower standard without alerting the consumer. The anti-circumvention provisions will prevent competitors from making functional accessories. You don't need to be too bright to realize that this will become an increasingly common practice for manufactured items—if you can do it for garage doors, why not tractors?

Over time we will see the emergence of the kinds of serial monopolies (and the attendant price gouging) for product areas that we have seen in the software world. In an attempt to protect the US music industry from market competition what will emerge is a reduction in competition across broad swathes of the economy—whether it's the farmer who wants a combine harvester to work with their tractor, or the IT manager who wants their PDA to interface with their GPS devices—

that is, the intellectual technology manager who wants their personal digital assistant to interface with their global positioning system devices—

Economics tells us we will get increased prices and lower quality in these circumstances.

A range of other examples have also been provided by the Electronic Frontier Foundation, a citizens rights organisation that works in the area of digital technology in the United States. They describe the problem as follows:

Every year numerous illegitimate patent applications make their way through the United States patent examination process without adequate review. The problem is particularly acute in the software and Internet fields where the history of prior inventions ... is widely distributed and poorly documented. As a result, we have seen patents asserted on such simple technologies as:

• One-click online shopping

• Online shopping carts

• The hyperlink

• Video streaming

• Internationalizing domain names

• Pop-up windows

• Targeted banner ads

• Paying with a credit card online

• Framed browsing; and

• Affiliate linking.

... ... ...

The harm these patents cause the public is profound.

Unlike most technologies, software and the Internet have attracted a vast number of small business, non-profit, and individual users—each of whom has adopted and built upon these resources as part of their daily interaction with computers and the online world. From open source programming to online journaling to political campaigning, the average citizen is using new technology online and on her desktop as often as any traditional company.

With this increased visibility, however, comes increased vulnerability. Previously, patentholders had only targeted competing companies. These companies have established legal departments and outside counsel and are thus able to defend against illegitimate patent threats. Now some patent holders have begun to set their sights on the new class of technology users-small organizations and individuals who cannot afford to retain lawyers. Faced with million-dollar legal demands, they have no choice but to capitulate and pay license fees—fees that often fund more threat letters and lawsuits. ...

Illegitimate patents can also threaten free expression. More and more people are using software and Internet technology to express themselves online. Website and blogging tools are increasingly popular. Video and audio streaming technology is ubiquitous. Email and Instant Messaging have reached users of all ages. Yet because patents can be anywhere and everywhere in these technologies, the average user has no way of knowing whether his or her tools are subject to legal threats. Patent owners who claim control over these means of community discourse can threaten anyone who uses them, even for personal non-commercial purposes. We lose much if we allow overreaching patent claims to reduce the tremendous benefits that software and technology bring to freedom of expression.

There are other examples in the United States of companies that are claiming patents over video streaming, sending out a whole variety of legal letters to colleges that are using the video streaming technology to provide distance learning, thereby threatening opportunities for those colleges to provide the education services that they do.

A statement was issued last week in Melbourne by the Open Source Software Industry Association and Linux Australia, warning that the US-Australia free trade agreement posed a grave threat to Australia's entire software development industry due to the large legal framework on intellectual property rights that are required for adoption within this pact. The spokesperson, Brendan Scott, spoke significantly about the resources that software houses had to resource to be able to obtain patents and the experience of the United States patent laws. He talked about non-trivial pieces of software that contained as many as thousands of codes of processes and algorisms, each of which could infringe one or many US software patents. The number of insights from industry about their concerns in this area continue endlessly.

Professor Peter Drahos from the Australian National University described it this way in his submission to the inquiry:

Australia's concessions in the IPR—

intellectual property rights—

chapter come at a time when there is an emerging view within the US that IPR protection has gone too far. ...

Australia has signed onto a set of US standards in the FTA at a time when there is considerable doubt in the US about the suitability of those standards for a truly dynamic and effective knowledge economy.

The other component of this copyright section of the US-Australia free trade agreement is exemplified and known as the `Disney clause', originally put in place by the United States to protect Disney's monopoly of the Mickey Mouse image. It has now been exported here, care of the Howard government, with the support of the Labor opposition. The Disney clause, which is in part 6 of schedule 9 of this bill, extends copyright from 50 to 70 years. This will have a huge impact on the rights of universities, libraries and educational and research institutions to have cost-effective access to materials for academic, research and public purposes. They will now pay royalties for an additional 20 years, long after the death of the author, so that big business can continue to profit.

The changes are retrospective, so work still under copyright will have their copyright extended by 20 years. This includes photographs. The impact on photographs is illustrated by an example provided in the Parliamentary Library current issues brief on the issue, which states:

... the extension of the duration of copyright in photographs involves a much greater retrospective extension than is involved for other works under AUSFTA, largely because it is coming from a lower base level. This is well illustrated by the case of Max Dupain, one of Australia's most famous photographers. Assuming passage of this Bill and Assent by the end of 2004, any photos published by Dupain in 1955 and later will maintain their copyright until 2062, 70 years from Dupain's death in 1992. Without passage of the Bill, photographs published in 1955 would become available next year. The photographs published before 1955 are already in the public domain and this will not change. For these photographs, this Bill will provide effectively prolong their copyright by 57 years. Under the general extension to copyright, no work or other matter would have its copyright prolonged by more than 20 years.

Philippa Dee of the Australian National University conducted research on the economic impact of the agreement for the Senate select committee. She estimated the potential increased net cost to Australia in royalty payments at $88 million. The Greens are not prepared to impose this burden upon the community. We believe that the most appropriate safeguard that can be put in place is in the form of the proposal that we are debating at the moment to remove this schedule from the bill. This is a way to protect Australian culture, Australian industry and Australian consumers.

Part of the trade agreement, as others have mentioned, was pointed out by Ross Gittins in his article on Wednesday of this week—that is, the significance of this area of the debate and the impact we have seen in the United States, whose primary objective of their trade policy is to make the world a more congenial place for US exporters of intellectual property. As such, we will be proceeding with this proposal to remove schedule 9 from the bill.