The US – Australia Free Trade Agreement

The US – Australia Free Trade Agreement

The Australian Federal Parliament has passed legislation1 (the "Implementation Act"), allowing the Free Trade Agreement ("FTA") with the United States to be implemented as soon as 1 January 2005. The Implementation Act includes significant changes for Australia's copyright law. Changes have also been included for the treatment of geographical indications ("GIs") and regulation of therapeutic goods, as well as relatively minor changes for Australia's patent law.

Copyright

Schedule 9 of the Implementation Act includes the extensive changes to the Copyright Act, and in summary, the main features include:

  1. Extension of the term of copyright protection from 50 years to 70 years.
  2. Expansion of existing performers' rights, including:

    • the creation of performers' copyright in sound recordings of their performance and moral rights in their performance;
    • expanding performers' exclusive rights to authorise communication of their performances to the public; and
    • reduction in the exemptions available for use of sound recordings of performances.
  3. Measures enhancing the scope of protection for copyright material protected by electronic rights management information ("ERMI"), including:

    • a broader definition of ERMI;
    • new civil and criminal penalties for persons distributing or importing copyright material with the ERMI altered and/or removed; and
    • civil liability no longer being contingent on distribution or importation for a commercial purpose.
  4. New criminal offences for infringement of copyright, including offences which require proof of intention to obtain a commercial advantage or profit, and the offence of "significant infringement of copyright" for conduct which results in substantial prejudicial impact on the copyright owner on a commercial scale.
  5. Expanding the scope of copyright to works stored in any form, regardless of whether the work can be seen or reproduced in that form. This effectively includes protection for all temporary reproductions of a work, except an exemption is provided for reproduction that is incidentally made as part of a technical process of using a copy of the work.
  6. Limiting the liability of carriage service providers ("CSPs") when (i) a CSP is considered to have authorised a person to infringe copyright using their facilities, and (ii) the CSP has complied with relevant conditions (such as implementing a policy for termination of repeat infringer's accounts and complying with relevant industry codes of practice).

Patents

Given the reports in the Australian media and submissions made to the Senate Select Committee on the FTA, one would be led to believe that the changes required to Australian patent law by the FTA would be extensive.

For example, the Senate Select Committee's Interim Report indicated that the FTA requirement that patents must extend to 'all fields of technology' would give rise to software patents that would be arguably very damaging to the software industry2. This of course gives a false impression given that software patents have been granted in Australia for over a decade since the Federal Court Decisions in IBM v Commissioner of Patents3 and CCOM v Jeijing4.

The actual amendments to the Patents Act, in Schedule 8 of the Implementation Act, are minor and are as follows:

  1. Amend s.59 to expand the opposition grounds to include all the requirements of s18 for a patentable invention, rather than maintain the specific reference to patentable subject matter, novelty and inventive step. This introduces the additional grounds of utility and prior secret use in opposition proceedings, and meets the requirement under Article 17.9.5 of the FTA that the grounds for revocation of a patent match those on which a patent can be refused.
  2. Amend s.104(3) so as to remove the ability for the Commissioner of Patents to allow an amendment to a patent application subject to conditions. Consequently, the revocation provisions are also amended, by repealing s.138(3)(c) to remove as a ground of revocation, that the patentee has contravened a condition in the patent. The FTA does not allow for patents to be granted on a conditional basis.

The FTA includes a number of articles which could have led to the introduction of specific aspects of the US patent law5, but the Government has considered that no further changes are required to legislation.

In summary, the Implementation Act has simply enhanced the basis on which a patent application can be opposed before it is allowed to proceed to grant.

Therapeutic Goods

Schedule 7 of the Implementation Act, however, includes amendments to the Australian Therapeutic Goods Act that affect patents that relate to therapeutic goods, eg pharmaceuticals. The amendments introduce a new certification requirement for applicants seeking marketing approval for therapeutic goods (other than therapeutic devices) from the Australian Therapeutic Goods Agreement ("TGA").

In an application for marketing approval, the applicant must also provide a certificate under the new section 26B, which requires the applicant to certify that:

  1. The applicant, acting in good faith, believes on reasonable grounds that it is not marketing, and does not propose to market, the therapeutic goods in a way that would infringe a valid claim of a patent granted "in relation to" the therapeutic goods;

    or

  2. (a) the applicant is aware that a patent has been granted "in relation to" the therapeutic goods;
    (b) the applicant proposes to market the therapeutic goods before the patent expires; and
    (c)the applicant has notified the patentee of the application for registering or listing the therapeutic goods.

An applicant will face a fine (of up to AU$110,000 at present) for providing a certificate under section 26B that is false or misleading in material particulars.

There has been suggestion that the changes to the marketing approval process will encourage patentees to consider "evergreening" of existing patents for therapeutic goods to prevent or deter others from marketing the same good by filing additional patent applications directed at different uses or improvements of the good.

Accordingly, the Government has accepted additional amendments that require a party, who intends to commence proceedings for patent infringement against the applicant, to certify that the proceedings:

  1. are commenced in good faith; and
  2. that the party has reasonable grounds to believe that (a) the patent is valid and infringed, and (b) that the proceedings are not otherwise vexatious or unreasonably pursued; and
  3. will be conducted without unreasonable delay.

If the certificate is found to be false or misleading or the party breaches any of these undertakings, the party faces a maximum fine of AU$10,000,000 and, if an interlocutory injunction is granted, compensation and damages to the Commonwealth, a State or a Territory.

Geographical Indications

The Register of Protected Names established under the Australian Wine and Brandy Corporation Act ("AWBC Act") contains the names of Australian declared geographical indications, and includes GIs of members of the European Union ("EU") of which Australia has been notified under the Australia/EU Wine Agreement. The AWBC Act prohibits the use of a registered GI in respect of wines not originating from the place denoted by the GI. This protection is not affected by pre-existing rights (e.g. trade mark rights).

Schedule 3 of the Implementation Act introduces a procedure that permits owners of or applicants for the registration of a trade mark and persons claiming trade mark rights in common law, to object to an application for registration of an Australian GI. The objection can be made on the basis that the GI is identical to, or is likely to cause confusion with, the pre-existing trade mark right. The objection is then referred to the Registrar of Trade Marks for determination. If the grounds of the objection have been successfully made out, the Geographical Indications Committee will not register the GI unless the Registrar of Trade Marks recommends that the application should be registered in light of special circumstances.

The amendments to the AWBC Act only concern the registration of GIs relating to places in Australia, and do not affect the registration of European GIs which have been made pursuant to the Australia/EU Wine Agreement.

Endnotes

  1. The US Free Trade Agreement Implementation Act 2004, assented to 16 August 2004.
  2. Senate Select Committee on the Free Trade Agreement between Australia and the United States, Interim Report, Parliament House, Canberra, 24 June 2004, p 27.
  3. (1991) 22 IPR 417.
  4. (1994) 122 ALR 417.
  5. For example, the US standards of utility and disclosure under Articles 17.9.11 and 17.9.13