Productivity Commission slams TPP for stringent IP measures

The Australian Productivity Commission has highlighted in a report that potential IP arrangements negotiated in free trade agreements may result in greater costs and encourage anti-competitive behaviour.

The Australian Productivity Commission has raised concerns about how increasingly stringent intellectual property rights regulations could potentially impose restrictions on bypassing technological protection measures (TPMs), and encourage anti-competitive behaviour.

The annual Trade and Assistance Review 2013-14 report (PDF), which looks at how recent international policy developments will affect Australian trade, has indicated that when the Trans-Pacific Partnership (TPP) is signed off, the protection around intellectual property could become even more stringent.

The TPP agreement is nearing finalisation, and is aimed at simplifying trade between 12 nations: Australia, the United States, Canada, Japan, Mexico, Peru, Vietnam, Malaysia, Brunei, Chile, New Zealand, and Singapore.

The commissioner has said that the TPP could potentially go beyond the TPMs that have been set out by the World Trade Organisation Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement and the Australian Free Trade Agreement (AUSFTA).

The commissioner has highlighted this could mean that copyright holders, who are in the position to use TPMs, can potentially create their own additional de facto monopoly rights by restricting access on their own terms, and lead to anti-competitive results, with increased costs and decreased choice for consumers.

"The history of IP arrangements being addressed in preferential trade deals is not good," the commission said.

"Indeed, to the extent that the return to IP holders awarded by more stringent IP laws outweighed the benefits to the broader economy, the provision would also impose a net cost on both partners, lowering trading and growth potential across the bloc."

The commission reiterated, as it did initially in its report in 2010, that "Australia's participation in international negotiations in relation to IP laws should focus on plurilateral or multilateral settings, and that its support for any measures to alter the extent and enforcement of IP rights should be informed by a robust economic analysis of size and distribution of the resultant benefits and costs".

A similar recommendation was made by the Australian government's Harper Competition and Policy Review, which said that an overarching review into IP needs to be conducted by an independent body, and should cover IP provisions in international trade agreements.

Department of Foreign Affairs and Trade officials have insisted that Australia would not sign up to provisions in the TPP that would be inconsistent with existing intellectual property laws. However, Attorney-General George Brandis' speech on copyright reforms last February indicated that he would be mindful of international trade agreements when deciding on changes to Australia's Copyright Act.

Leaks of the TPP negotiations had highlighted that there were significant disagreements between the US and the other countries over the IP chapter in the agreement. It revealed that Australia had been rejecting a US term of copyright protection, and criminal offences for copyright infringement.

Earlier this week, the legislation that will allow rights holders to obtain court orders to block overseas websites that link to copyright-infringing content, such as The Pirate Bay, was passed by the Senate with the support of the Labor opposition.

The Bill had the backing of rights holders, but was criticised by internet service providers, Google, consumer groups, and other organisations for its wide scope and potential to limit access to legitimate content.

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