FTA concerns for ICT

THE intellectual property clauses of the recently negotiated Australia-US Free Trade Agreement are causing concern to some in the ICT and software development industry.

Some in the industry claim the agreement will stifle innovation and leave businesses and individuals open to legal action from US multinationals.

Exactly how the AUSFTA will translate into legal practice and what it will mean for Australian organisations won’t be evident until if, and when, it is passed through Federal Parliament and US Congress – which may not be until January 1 2005.

However, doubts have already begun to surface about the implications for the IT sector.

The full text of the AUSFTA was made available on the Department of Foreign Affairs web site in March this year, and dialogue on what it means is emerging.

The statement by DFAT that the AUSFTA would “harmonise our intellectual property laws more closely with the largest intellectual property market in the creative world, which is recognised as a global leader in innovation and creative products” has drawn particular criticism from some quarters.

Electronic Frontiers Australia (EFA), an independent national online lobby organisation, is just one group to condemn the IP clauses.

In a statement, EFA board member Dale Clapperton expressed dismay at the IP clauses.

“Their Digital Millennium Copyright Act (DMCA) has been widely condemned by civil liberties and user groups throughout the world, and now the Howard Government has committed itself to implementing its worst, most insidious provisions.

“There is nothing positive for Australia in these clauses. No additional usage rights are granted to Australians or Australian companies, and these provisions are a blatant sell-out to the interests of large US-based media companies.”

The DMCA was legislated in the US in 1998 and is intended to prevent the circumvention of copyright protection in that country. It continues to attract criticism, as some believe it is too open to interpretation.

Legal professionals contacted by WA Business News said the implications for WA businesses would be clearer if and when the AUSFTA was put into practice.

However, generally speaking, the changes to IP provisions would bring the Australian experience more into line with the US and Europe.

Freehills senior associate Campbell Thomson said closer convergence of Australian and US law and practice had already occurred in some areas in the fields of registered IP rights, such as patents.

Copyright provision is one area amended under the AUSFTA. Referred to as the ‘Mickey Mouse amendment’ in the US (because the changes were implemented follow-ing intense lobbying by Walt Disney and others), the length of copyright would apply for life plus 70 years.

This has angered groups such as the EFA, which argue that extending the duration of copyright “has no purpose but to protect the vested interests of large corporate copyright holders”.

Copyright law was originally designed to protect the rights of the creator of a product or work for the duration of their life (and a certain period following their death), at which time the work would revert to the public domain to support innovation and creativity.

IP changes could also mean the application of broader criminal sanctions for copyright infringement, particularly in relation to private end-users.

Further, the “harmonisation” of Australian patent law with similar laws in the US is of concern to some, particularly in the State’s IT industry.

In the US, software patents exist over common computer functions, such as embedding animation in a web page.

The copyright owner is then able to sue a business or individual that uses the same method, and thereby infringes the copyright.

However, Freehills’ Campbell Thomson said it was already possible under Australian law to take out a software patent, and the agreement would not change the patentability requirements. Chapter 17 also contains provisions that address the liabilities of ISPs with regards to copyright infringements transmitted or stored by its operations.

Mr Thompson said a “safe harbour” defence would apply to any communications the ISP does not control, initiate or direct where the ISP had complied with a notice from the copyright owner to remove or disable the transmission of the material.

“There is still quite a bit of uncertainty as to what the agreement will mean in practice and ISPs is one area,” he said.

However Mr Thompson said there would likely be some benefit to ISPs in terms of clarifying their legal position and procedural requirements when receiving letters from copyright owners.