Press publishers’ (new) rights Down Under

On 31 July, the ACCC published an exposure draft of the Bill aimed at forcing Google and Facebook to pay news businesses for the use of their news in services like Google Search, Google News and Facebook News Feed and Tab.

Some background

News media businesses claim that Google and Facebook make anywhere from $600 million to $1 billion a year from “using” the news the news media businesses publish.[1]

When Spain introduced a law to redress this “value gap”, Google responded by not including Spanish news in its services. Germany introduced a similar law, but publishers had to opt into the scheme, not out. Apparently, none did.

Last year, the EU introduced a press publisher’s right as part of its Digital Single Market (DSM) Directive.[2] When France implemented this (adopting the Spanish model), Google once again withdrew. The French Competition authority, however, has intervened.

Meanwhile, in Australia, the ACCC published the Final Report for its Digital Platforms Inquiry in July 2019.

Amongst other things, it concluded that Google and Facebook had become unavoidable trading parties for news media businesses wishing to reach audiences online. This created a significant imbalance in bargaining power.

In December 2019, the Treasurer directed the ACCC to facilitate negotations between the news businesses and Google and Facebook to develop a voluntary bargaining code to address this imbalance.

Those negotiations apparently not leading to the desired outcome, on April 2020, the Treasurer directed the ACCC to develop a mandatory bargaining code:

The Government has decided that the original timeframe set out in its response requires acceleration. The Australian media sector was already under significant pressure; that has now been exacerbated by a sharp decline in advertising revenue driven by coronavirus. At the same time, while discussions between the parties have been taking place, progress on a voluntary code has been limited according to recent advice provided by the ACCC following a request by the Government for an update. The ACCC considers it is unlikely that any voluntary agreement would be reached with respect to the key issue of payment for content.

The exposure draft bill and accompanying explanatory memorandum are the results of that process. I shall try only to describe what is being proposed.

What the bill will do[3]

The Bill will introduce a new Part IVB into the Competition and Consumer Act 2010.

Qualifying news business corporations may apply to the Australian Communications and Media Authority (ACMA) to register under the code: ss 52D and 52E.

Upon registration, designated digital platform corporations:

  1. must comply with minimum standards of conduct with respect to the registered news business’ “covered news content”;
  2. must participate in an arbitration to determine the remuneration payable to the registered news business for the use of its “covered news content”; and
  3. must not discriminate against the registered news business.

Designated digital platform corporations

The Bill will give the Treasurer power to designate by legislative instrument digital platform corporations and digital platform services that will be subject to the mandatory bargaining code: s 52C.

According to the explanatory memorandum, the designated digital platform corporations will be initially Google and Facebook, although other businesses may also be designated: [1.30]

The explanatory memorandum at [1.34] also “expects” that the services which will be designated are:

  • Facebook News Feed (including Facebook Groups and Facebook Pages);
  • Facebook News Tab (if and when released in Australia);
  • Instagram;
  • Google Discover;
  • Google News; and
  • Google Search.

News business corporations and news sources

A news business corporation may apply for registration of its news business(es) under the scheme if:

  1. the news corporation’s annual revenue exceeds $150,000 or exceeded $150,000 in three of the last five financial years: s 52G;[4]
  2. the news source(s) its seeks to register create and publish online content that is predominantly “core news content”: s 52H;
  3. the news source(s) operate predominantly in Australia for the dominant purpose of serving Australian audiences: s 52J; and
  4. the news source(s) adhere to professional quality standards: s 52K.

Once registered, the rights of the news business corporation extend to “covered news content”, not just its “core news content”.

Core news content and covered news content

The definition in s 52A of “core news content” is content that:

(a) is created by a journalist; and

(b) that records, investigates or explains issues that:

(i) are of public significance for Australians; or

(ii) are relevant in engaging Australians in public debate and in informing democratic decision-making; or

(iii) relate to community and local events.

The explanatory memorandum explains at [1.51] – [1.53] that “core” news content can relate directly to matters of public policy and decision making at any level of government such as political, court and crime reporting. The activities of private sector entities may also be included if of sufficient public importance.

Core news content is a subset of “covered news content” which, in addition to “core news content”, also includes:

content that is created by a journalist and is relevant in recording, investigating or explaining issues of interest to Australians.

According to the explanatory memorandum at [1.66] – [1.67] covered news content is intended to extend to:

sports and entertainment related news such as interviews with coaches and players, reporting about the entertainment industry and coverage of reality television.

(This is not intended to be an exhaustive description of what is included.) However, it does not include sports broadcasts or the results or scores of sports, “entertainment content such as drama or reality TV programming” or:

specialty or industry reporting, product reviews, talk-back radio discussions, content produced by academics and documentaries.

Professional quality standards

The Bill proposes two requirements for quality standards: s 52K. The news source:

  1. must be subject to the rules of the Australian Press Council, the Independent Media Council, the Code of Practice of the Commercial Television Industry or the Commercial Radio industry or the Subscription Broadcast industry, or rules substantially equivalent to these; and
  2. the news source must have editorial independence from the subjects covered.

The explanatory memorandum explains at [1.58] that the second requirement of editorial independence means the news source must not be controlled by a political advocacy group such as a political party, trade union or lobby group. It also means that the news source cannot be controlled by someone with a commercial interest in the coverage and gives the example of sports coverage owned or controlled by the sport’s governing body.

The minimum standards

Once a news business is registered, the digital platform corporation must comply with the minimum standards: s 52L.

These include, for each digital platform service:

  • listing and explaining what data is collected about users of the news business (s 52M);
  • explaining how the data about such users made available to the news business differs from the data the digital platform corporation collects about users of its service; and
  • explaining how the news business can access that additional data;
  • giving the news business notice of any changes to algorithms used by the digital platform service likely to have a significant effect on the ranking of the news content on the platform or specifically directed at the ranking of paywalled content: s 52N, 52O;
  • giving notice of other changes to policies or practices likely to have a significant effect on the display and presentation of the news business’ covered news content or advertising directly associated with that content: ss 52P and 52Q;
  • if requested, provide the news business with flexible content moderation tools so that the news business can remove or filter comments on the digital platform service about the news content: s 52S; and
  • develop a proposal, in consultation with all registered news businesses, to recognise original covered news content when ranking and displaying news content: s 52T; and
  • must discriminate between registered news businesses or registered news businesses and news business which are not registered: s 52W.

The arbitration scheme

In addition to the rights afforded it throught the minimum standards, a registered news business may also initiate a bargaining and arbitration process with the digital platform for the use of news content.

The registered news business (or its representative) inititates the bargaining process by giving notice “it wishes to bargain over one or more specified issues relating to its covered news content”: s 52Y.

While the publicly funded ABC and SBS may initiate bargaining, they cannot bargain about remuneration: s 52Y(6).

The parties must negotiate in good faith (s 52ZB) and can demand the provision of information and data relevant to the issues the subject of bargaining, a kind of discovery process: s 52ZC. This includes discovery about the benefits the digital platform derives from use of the news content.

Either party may refer the dispute to compulsory arbitration if:

  1. there has been at least one day of mediation; and
  2. the parties have not reached agreement within three months of bargaining starting: s 52FZ

Provided there has been at least a one day mediation, the parties can also agree to refer the dispute to compulsory arbitration after 10 days.

The arbitration itself is particularly interesting. It is “final offer” arbitration.

Although the news businesses can initiate bargaining over “issues”, the arbitral panel must make a determination about the remuneration payable by the digital platform corporation to the news business(es).

Ten days after the arbitration is established, both parties must submit their final offers about the amount of the remuneration. Once submitted, the parties cannot amend or withdraw their respective “final offers”. They may, however, submit a response to the other party’s final offer. The arbitral panel must accept one or other of the final offers: s 52ZO.

The only exception to this requirement is where the arbitral panel considers both final offers are “not in the public interest because they are highly likely to result in serious detriment to the provision of covered news content in Australia or Australian consumers.” In that case, the arbitral panel must adjust one or other of the final offers as required by the public interest.

The final offers must also be provided to the ACCC, which is authorised to provide its comments about the final offers to the arbitral panel before the panel hands down its decision: s 52ZS.

The “final offer” process has the considerable advantage that it avoids the expense and delay usually associated with rate setting proceedings for access to essential facilities or under the licensing schemes overseen by the Copyright Tribunal.

In deciding which final offer to accept, the arbitral panel must have regard to (s 52ZP):

  • the direct benefit (whether monetary or otherwise) of the registered news business’ covered news content to the digital platform service;
  • the indirect benefit (whether monetary or otherwise) of the registered news business’ covered news content to the digital platform service;
  • the cost to the registered news business of producing covered news content;
  • whether a particular remuneration amount would place an undue burden on the commercial interests of the digital platform service.

It is striking that the matters which must be taken into account do not include the benefits (direct or indirect) that the news business derives from being carried in the digital platform service.

Once the arbitral determination has been handed down, the parties must enter into a written agreement to ensure the digital platform corporation will pay the news business the remuneration determined in the arbitration: s 52ZT.

Sanctions

The ACCC may issue an infringement notice to a person who contravenes that person’s obligations under this scheme. The penalty for a corporation found to be in contravention is up to 600 penalty units: s 51ACF – i.e., up to $132,000.

In addition, s 76 of the Competition and Consumer Act 2010 will apply so that civil penalties may be imposed up to the greater of:

  • $10 million;
  • 3 times the total value of the benefits reasonably attributable to the non-compliance; or
  • 10% of the contravenor’s annual turnover in the previous 12 months.

EU’s DSM Directive

The EU’s press publisher’s right under the DSM Directive is an obvious inspiration for this new right for news businesses. There are a number of significant differences, in addition to the far greater detail elaborated into the Bill.

For example, unlike the DSM Directive, the Code to be imposed by the Bill is not tied to use of copyright or other (at this stage) recognised property right. Instead, the Bill creates a right to payment for some “intangible value”.

The DSM Directive expressly excludes from the obligation for payment:

  • hyperlinking; or
  • “the use of individual words or very short extracts of a press publication” – which seems a lot like the snippets returned in a Google Search for example.

At least since the Victoria Park Racing case, the High Court has declared that Australian law does not protect all intangible value, only those sources of value falling within recognised legal rights. Later, in the Blank Tapes case, the High Court struck down a “royalty” imposed on the sale of blank cassette tapes on the grounds it was not a payment for use of copyright and so was invalid as a tax or, possibly, an acquisition of property on other than just terms. It will be interesting to see whether the resort to an access regime – one in which the facility provider pays, not the user – changes the calculus.

Under the DSM Directive, the obligation to pay does not apply to articles or materials published before 6 June 2019.[5] Further, it applies to articles and materials only for two years following publication.[6]

Another difference is that art. 15.5 of the DSM Directive imposes an obligation to ensure that the authors of the press publication receive “an appropriate share” of the remuneration the press publisher receives from the digital platforms.

Google’s reaction has been swift. It has cancelled, or suspended, a licensing deal it had reached with a number of independent publishers. It has come out strongly against the scheme.[7] Now, when one initiates a search on Google or seeks to watch something on YouTube, one is met with the following banner:

Comments should be submitted to the ACCC by 28 August 2020

Exposure Draft Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020


  1. For example, Mason and Kehoe, [‘Tech giants should pay media $600m: Costello’][600m]. Google disputes this and claims that the news media business gain much more value from its services than it receives.  ?
  2. Directive (EU) 2019/790 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC, art. 15. For Communia’s outline and guidelines see here and here.  ?
  3. Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020.  ?
  4. The $ may change as they are included in “curly” brackets.  ?
  5. It presumably being a coincidence that date was the 75th anniversary of the D-Day landings.  ?
  6. Strictly speaking, it is 2 calendar years commencing on 1 January following the year in which the article was published: art. 15.4.  ?
  7. For exmple, here and here. The ACCC has denounced Google’s position as misleading.  ?

Repeal of s 51(3)

The bill repealing (amongst other things) s 51(3) of the Competition and Consumer Act did get passed and has received royal assent.

The repeal takes effect on 13 September 2019.

So, if you thought you were relying on s 51(3)’s protection, you have a bit less than 6 months to get your house in order.

Your licences and assignments of IP rights probably will not get you into trouble for the most part unless you have market power. But that is not exactly a hard and fast rule so you should discuss your arrangements with your lawyers ASAP.

As discussed in this post, one area of potentially significant concern is where the IP holder has its own retail outlets and also licenses other retail outlets – e.g. not uncommon for franchisors who have their own outlets and franchisees. There is a concern that may give rise to criminal cartel conduct.

If you want to know about the prohibitions on cartel conduct, Ian Wylie has published a paper “Cartel conduct or Permissible Joint Venture?

On Tuesday, the ACCC also announced it hopes to publish draft guidelines by “mid-2019” and finalise them before 13 September. Amongst other things, these proposed guidelines will outline:

how the ACCC proposes to investigate and enforce Part IV in relation to conduct involving intellectual property rights. They will also provide hypothetical examples to illustrate conduct that the ACCC considers is likely or unlikely to contravene Part IV.

AIPPI Sydney 3 – sufficiency

My attempt to summarise Parma Session 1 ‘Sufficiently plausible’ has been posted on IPKat here.

Clare Cunliffe’s report on the session about IP and competition is here.

Google gets EUR2.43 billion fine

The European Commission has fined Google EUR2.43 billion (approx. AU$3.6 billion) for misusing its market power over internet searches.

According to the Commission, Google has over 90% market share for internet searches in the EU.

The Commission found that Google had abused this dominant position in internet searching by promoting results for its own Google comparison shopping service over results for competing comparison shopping services.

At this stage, the Commission’s press release and Factsheet are available.

While this is no doubt the start of a long legal process, Ben Thompson at Stratechery has an interesting, succinct analysis of the application of competition rules to Internet players here which is well worth reading.

Selected links,from last week

Here is a selection of links to IP-related matters I found interesting this week:

Patents

Trade marks

Copyright

Remedies

Not categorised

I hope you find some interesting. If you did or have a question, leave a comment or send me an email

Selected links from last (couple of) weeks

Here is a selection of links to IP-related matters I found interesting this past week (or two):

Patents

Trade marks

Copyright

Not categorised

I hope you find some interesting. If you did or have a question, leave a comment or send me an email

Productivity Commission reports on IP (in draft)

The Productivity Commission has released its draft report into Intellectual Property Arrangements.

You will be startled to learn that the Productivity Commission has discovered Australia is a net importer of intellectual property. We buy more IP from the rest of the world than we sell to it. Fig. 2 in the Report indicates Australian IP earned AUD1 villion from overseas, but we paid out about AUS4.5 billion for the use of their IP. The Productivity Commission then notes that we provide surprisingly strong IP protection for a country in our position.[1] This finding guides the Productivity Commission’s recommendations which might broadly be characterised as: take the least restrictive option in terms of IP protection (where our international obligations permit).

The Productivity Commission explained its position this way:

Intellectual property (IP) arrangements need to balance the interests of rights holders with users. IP arrangements should:[2]

• encourage investment in IP that would not otherwise occur;

• provide the minimum incentives necessary to encourage that investment;

• resist impeding follow-on innovation, competition and access to goods and services. (emphasis supplied)

So, for example, after much gnashing of economists’ teeth about the (let’s face it, indefensible) term of copyright protection, the Productivity Commission considers that the appropriate term of protection is somewhere between 15 and 25 years.[3] However, what it actually recommends is rather more limited:

4.1: remove the current unlimited term of protection for published works.[4]

5.1: implement Parliament’s At What Cost? IT pricing and the Australia Tax recommendation to make it clear that it is not an infringement of copyright to circumvent geoblocking.

5.2 repeal the remaining parallel import restrictions for books.

5.3 amend the Copyright Act 1968 to replace the current fair dealing exceptions with a broad exception for fair use.

The latter two, so far, have elicited the loudest complaints here and here.[13] Meanwhile, the US’ Register of Copyrights is celebrating the first anniversary of her Fair Use Index.

18.1 expand the safe harbours to online service providers.[5]

Patents

The Productivity Commission reports that there are 120,000 active patents registered in Australia. 93% of these have been granted to non-residents. There are also 25,000 – 30,000 applications each year; of which about 60% ultimately proceed to grant.

According to the Productivity Commission, however, there are too many granted patents which do not contribute social value and are not “additional” – in the sense that they would not have been made if there was no patent protection.[6]

This needs to be remedied. However, the Productivity Commission acknowledges that international agreements put constraints on our freedom of action. There are 10 recommendations for patents.

The key recommendation for standard patents is yet another go at raising the threshold of inventive step.

an invention is taken to involve an inventive step if, having regard to the prior art base, it is not obvious to a person skilled in the relevant art.

This looks very similar to what we already have. As the Productivity Commission envisages matters, however, there are important differences. First, it reverses the onus currently expressed in s 7(2). According to the Productivity Commission, the current position is the opposite of where the onus lies in the USA, Japan, the EU and the UK (amongst others). Rather than a challenger having to prove the invention is obvious, therefore, the patentee will have to prove it is not.

Secondly, the Productivity Commission sees the current requirement that there be only a scintilla of invention being raised. The Productivity Commission sees this low threshold being reflected in the limitation on “obvious to try” being something which the skilled addressee would be directly led as a matter of course. Instead, the Productivity Commission considers that the test should be at least:

whether a course of action required to arrive at the invention or solution to the problem would have been obvious for a person skilled in the art to try with a reasonable expectation of success (as applied by the Boards of Appeal of the EPO).[7]

This change would be buttressed with appropriate comments in the Explanatory Memorandum and, additionally, the insertion of an objects clause into the Act. The latter would be intended to ensure that the Courts focused on the social objectives of the Patents Act including, in particular, the public interest.[8]

On the more colourful fronts, the Productivity Commission also recommended repeal of the abomination innovation patent and amendment of s 18 explicitly to exclude from patentable subject matter business methods and software.[9]

Pointing to analysis which estimates the net present value to R & D of the extension of term for a pharmaceutical patentat at year 10 at $370 million – of which only $7.5 million would accrue to Australia because our industry is so small – while the cost to the Australian government and consumers of the same extension of term is estimated at $1.4 billion, the Productivity Commission also wants a significant tightening up of the regime for extending the term of pharmaceutical patents. The Productivity Commission also opposes any extension of the period of data protection for therapeutic goods, including biologics.[10]

The Productivity Commission also recommends exploring raising the renewal fees payable, particularly in later year’s of a patent’s life.

Registered designs

The Productivity Commission considers the registered design system deficient but, as we have committed to it internationally and there is no better alternative, we are stuck with it.

However, continuing the net importer theme, Australia should not go into the Hague system “until an evidence-based case is made, informed by a cost–benefit analysis.”

Trade marks

I’m just going to cut and paste here: the Government should:

  • restore the power for the trade mark registrar to apply mandatory disclaimers to trade mark applications, consistent with the recommendation of the Advisory Council on Intellectual Property in 2004 (the only people that won’t support this are in the place that counts – IP Australia)
  • repeal part 17 of the Trade Marks Act 1995 (Cth) (Trade Marks Act)
  • amend s. 43 of the Trade Marks Act so that the presumption of registrability does not apply to the registration of marks that could be misleading or confusing
  • amend the schedule of fees for trade mark registrations so that higher fees apply for marks that register in multiple classes and/or entire classes of goods and services.
  • require the Trade Marks Office to return to its previous practice of routinely challenging trade mark applications that contain contemporary geographical references (under s. 43 of the Trade Marks Act). Challenges would not extend where endorsements require goods and services to be produced in the area nominated
  • in conjunction with the Australian Securities and Investments Commission, link the Australian Trade Mark On-line Search System database with the business registration portal, including to ensure a warning if a registration may infringe an existing trade mark, and to allow for searches of disclaimers and endorsements.

Also, s 123 should be fixed up so that parallel importing does not infringe.

Like the rest of us, the Productivity Commission is bemused by the Circuits Layout Act and recommends implementing “without delay” ACIP’s 2010 recommendation to enable “essentially derived variety declarations to be made in respect of any [plant] variety.”

On competition policy, s 51(3) should be repealed and the ACCC should develop guidelines on the application of our antitrust rules to IP.

Innovatively, the Productivity Commission also recommends free access to all publications funded directly by Government (Commonwealth, State or Terriroty) or through university funding.

There are also at least 17 requests for further information.

If you are inspired to make a further submission, you should get it in before 3 June 2016.[11]


  1. Not much discussion here whether the best way to get more technological development is through a strong IP regime or to,scrap the IP system and fully commit to free riding.  ?
  2. Despite the tentative nature of this declaration, it is the first “Main key points”.  ?
  3. Draft finding 4.2.  ?
  4. The Government is trying to do this – see schedule 3 of the exposure draft of the Copyright Amendment (Disability Access and Other Measures) Bill (pdf).  ?
  5. See schedule 2 of the Disability Access and Other Measures bill.  ?
  6. You will have to read Appendix D to find out how the Productivity Commission works out which patents are socially valuable and “additional”.  ?
  7. The EPO cases the Productivity Commission referred to are T 149/93 (Retinoids/Kligman) (1995) at 5.2 and T 1877/08 (Refrigerants/EI du Pont) (2010) at 3.8.3.  ?
  8. Here, the Productivity Commission notes that the Full Federal Court rejected reference to the public interest in Grant.  ?
  9. Dr Summerfield tells you why he thinks that’s a bad idea over here and of course, the Europeans (including the UK in that) do not have all sorts of complications carrying out their nice, clean exclusion.  ?
  10. In an interesting departure from its overarching premise that patents do not really contribute much to innovation because there are other protections such as lead time and trade secrets, the Productivity Commission warns that reliance on data secrecy is sub-optimal compared to patent protection.  ?
  11. Bearing in mind they have to submit their Final Report to Government by 18 August 2016.  ?
  12. In between buying your books from Amazon and Bookdepository, some references to the larger economic issues affecting booksellers here.  ?

Canada’s IP and antitrust enforcement guidelines

The Canadian Competition Bureau has published updated guidelines relating to the enforcement of intellectual property rights and the antitrust (competition) rules.

The Bureau does not presume that the exercise of IP rights violates competition rules but, in assessing whether there are competition law ramifications, it distinguishes between two types of conduct: conduct “involving something more than the mere exercise of the IP right, and those involving the mere exercise of the IP right and nothing else.” Special rules, which may be applied in “very rare circumstances” apply to the latter. While the general competition rules apply to the former.

According to the Canadian firm, Tories, the updated guidelines include consideration relating to:

  • patent litigation settlement arrangements including reverse payment settlements
  • product switching
  • patent assertion entities
  • standard essential patents

Why should someone in Australia care?

For one thing (bearing in mind the ACCC’s challenge to Pfizer’s practices when its Lipitor patent was expiring – judgment is reserved in the appeal), the US Supreme Court is expected to hand down a decision this year on how US antitrust laws apply to reverse payment settlements.

For another thing, following the Competition Review here in Australia:

  • the Government announced its intention to implement the Harper Review’s recommendation that s 51(3) be repealed and, if that happens, the ACCC is supposed to produce its own guidelines; and
  • in the meantime, at the Government’s direction, the Productivity Commission is undertaking a review of Intellectual Property Arrangements including its alleged anti-competitive effects.[1]

Lid dip: Peter Willis

  1. The draft report is due to published “any day now”.  ?

Harper Review: Government Response

Yesterday (November 24), the Government published its response to the Competition (Harper) Review.

According to the response, “Harper” made 5556 recommendations; the Government has accepted 39 of them in full, 5 in part and the remainder are still under advisement.

In the intellectual property field, the item receiving most press (here and here) is the Government’s acceptance of the recommendation to remove all remaining restrictions on parallel importing books. At the moment,[1] the importation of a genuine book published first in Australia or within 30 days of first publication overseas may be blocked provided the copyright owner complies with the convoluted regime to supply copies in response to an order. This guarantees availability, but still leaves the copyright owner free to set the price it charges the person placing the order.

Harper recommended:

Restrictions on parallel imports should be removed unless it can be shown that:

• the benefits of the restrictions to the community as a whole outweigh the costs; and

• the objectives of the restrictions can only be achieved by restricting competition.

Consistent with the recommendations of recent Productivity Commission reviews, parallel import restrictions on books and second?hand cars should be removed, subject to transitional arrangements as recommended by the Productivity Commission.

Remaining provisions of the Copyright Act 1968 that restrict parallel imports, and the parallel importation defence under the Trade Marks Act 1995, should be reviewed by an independent body, such as the Productivity Commission.

What the Government plans:

The Government supports the removal of parallel import restrictions on books. The Government will progress this recommendation following the Productivity Commission’s inquiry into Australia’s intellectual property arrangements (see Recommendations 6 above) and consultations with the sector on transitional arrangements.

The terms of reference for the inquiry provide that the Productivity Commission is to have regard to the findings and recommendations of the Harper Review in the context of the Government’s response, including recommendations related to parallel import restrictions in the Copyright Act 1968 and the parallel importation defence under the Trade Marks Act 1995.[2]

Harper’s recommendation 6 was a reference to the Productivity Commission to undertake a 12 month long “overarching review of intellectual property” focusing on

competition policy issues in intellectual property arising from new developments in technology and markets; and the principles underpinning the inclusion of intellectual property provisions in international trade agreements.

The Government response notes that in August it had already made this reference to the Productivity Commission.[3] The response on this point is curiously even-handed. The Productivty Commission:

is to have regard to Australia’s international arrangements, including obligations accepted under bilateral, multilateral and regional trade agreements to which Australia is a party. The global economy and technology are changing and there have been increases in the scope and duration of intellectual property protection. Excessive intellectual property protection can result in higher costs for Australian businesses and consumers and inhibit innovation. However, weak intellectual property protection can lead to under?investment in research and development (R&D) which also stifles innovation. A comprehensive evaluation of Australia’s intellectual property framework is needed to ensure that the appropriate balance exists between incentives for innovation and investment and the interests of both individuals and businesses, including small businesses, in accessing ideas and products. (emphasis supplied)

However, an independent inquiry into the processes for negotiating intellectual property provisions in treaties is not necessary: there are already robust processes in place and publishing an independent cost benefit analysis before the negotiations have concluded might tip our hand in the negotiations.

Section 51(3) gained a slight reprieve. Harper’s recommendation 7 was that it be repealed (and a new power for the ACCC to create block exemptions be introduced). Despite Prof. Harper’s injunctions that this is old news and we should just, er, do it, the Government thinks it should wait and see what the Productivity Commission says. Anyone betting the Productivity Commission won’t recommend …?

The Government also supports conferring a power to grant block exemptions on the ACCC:

A block exemption removes the need to make individual applications for exemption. The exemption is granted if the competition regulator considers that certain conditions are satisfied: either that the category of conduct is unlikely to damage competition; or that the conduct is likely to generate a net public benefit.

A block exemption power that supplements the existing authorisation and notification frameworks will be helpful in establishing ‘safe harbours’ for business. Block exemptions will reduce compliance costs and provide further certainty about the application of the CCA. They are an efficient way to deal with certain types of business conduct that are unlikely to raise competition concerns, either because of the parties engaged in the conduct or the nature of the conduct itself.

So, in the interests of promoting competition, we are going to introduce a European-style power for the regulator to design the marketplace.


  1. Copyright Act s 44A.  ?
  2. The Government also said it would not proceed with the recommendation about second hand cars, in the interests of consumer protection and community safety.  ?
  3. Indeed, you should already be putting the finishing touches on your submissions in response to the Issue Paper since they are due on Monday!  ?

Productivity Commission to review all IP laws

The Harper Review[1] recommended that the Government should direct the Productivity Commission to undertake an overarching review Australia’s IP laws.

The Treasurer and the Minister for Small Business have now announced that review.

According to the Harper Review:

an appropriate balance must be struck between encouraging widespread adoption of new productivity-enhancing techniques, processes and systems on the one hand, and fostering ideas and innovation on the other. Excessive IP protection can not only discourage adoption of new technologies but also stifle innovation.

Given the influence of Australia’s IP rights on facilitating (or inhibiting) innovation, competition and trade, the Panel believes the IP system should be designed to operate in the best interests of Australians.

The Panel therefore considers that Australia’s IP rights regime is a priority area for review. (emphasis supplied)

In reaching that view, the Harper Review flagged concern about entering into new treaties with extended IP protections.

The terms of reference state:

In undertaking the inquiry the Commission should:

  1. examine the effect of the scope and duration of protection afforded by Australia’s intellectual property system on:

    a. research and innovation, including freedom to build on existing innovation;

    b. access to and cost of goods and services; and competition, trade and investment.

  2. recommend changes to the current system that would improve the overall wellbeing of Australian society, which take account of Australia’s international trade obligations, including changes that would:

    a. encourage creativity, investment and new innovation by individuals, businesses and through collaboration while not unduly restricting access to technologies and creative works;

    b. allow access to an increased range of quality and value goods and services;

    c. provide greater certainty to individuals and businesses as to whether they are likely to infringe the intellectual property rights of others; and

    d. reduce the compliance and administrative costs associated with intellectual property rules.

Then follows a catalogue of 9 matters for the Commission to have regard to. These include the Government’s desire to retain appropriate incentives for innovation, the economy-wide and distributional consequences of recommendation and the Harper Review’s recommendations in relation to parallel imports.[2]

The Commission must report within 12 months.


  1. The Competition Policy Review, recommendation 6.  ?
  2. Rec. 13 and section 10.6 of the Competition Policy Review: i.e., repeal any remaining restrictions unless the benefits outweigh the costs and the objectives of the restrictions can only be achieved by restricting competition. Cue diatribe about “restricting competition” especially given the oft mouthed formula that IP rights rarely (if ever) restrict competition.  ?