Australian Gov't Commission Also Wants To Fix Patent Laws Down Under

from the another-wow dept

So we already wrote about the Australian government’s Productivity Commission’s Draft Report on Intellectual Property Arrangements, talking about what was said about copyright law, but the report also goes into other areas of intellectual property as well, with some pretty good ideas on patent law as well (on this one I think they could go even further, but most of the recommendations in the report are a good start).

Once again, they offer up a nice infographic demonstrating the key points, which focuses on the serious problems of allowing patents on obvious ideas:

The Productivity Commission clearly recognizes that too many patents stifle innovation. In fact, they note that the only time patents really should be issued are in cases where those inventions would not occur without that incentive. And thus, since so much public policy around innovation always seems to focus on figuring out ways to increase patent numbers, the authors of the report recognize that patent policy is probably harming, not helping innovation:

Indeed, it appears to have become accepted wisdom that because patenting plays some role in promoting innovation, more and stronger patents are always better. But research reveals that greater patenting activity is not always associated with more innovation and that a non-trivial number of patented inventions have low social value, or would have occurred anyway.

Low-value patents impede innovation by frustrating the efforts of follow-on innovators and researchers. In some cases, low-value patents can be used as a strategic tool for stalling or excluding market entry, and can contribute to ?patent thickets?, which potential market entrants must ?hack? their way through in order to compete in a particular technology space.

And thus, they suggest that Australia’s entire patent system should be rethought and refocused towards trying to encourage things that are socially beneficial. That is, the system should be set up not with the inventors as the sole focus, but rather what will lead to the greatest possible public benefit. And the failure to do so is creating “substantial costs” on the public.

While the incidence of some low?value patents does not come as a surprise, a multitude of such patents imposes substantial costs on the community. Low-value patents impede innovation by frustrating the efforts of follow?on innovators and researchers.

To fix this, they have a few suggestions — all of which seem worthwhile. First, they say the bar is way too low for granting patents, so Australia should raise the bar for what’s considered “inventive.” They suggest the standard should be changed to if the invention or solution “would have been obvious for a person skilled in the art to try with a reasonable expectation of success.” They even consider going beyond that, but recognize that some patent holders outside of Australia may freak out at such a suggestion and avoid the Australian market.

The second suggestion is giving an “overarching objective” to patent law, which examiners can use as a sort of guiding light or touchstone. Basically, allow Australia to reject patents by arguing that granting such patents would go against the public interest.

The objects clause should describe the purposes of the legislation as being to enhance the wellbeing of Australians by providing patent protection to socially valuable innovations that would not have otherwise occurred and by promoting the dissemination of technology. In doing so, the patent system should balance the interests of patent applicants and patent owners, the users of technology ? including follow?on innovators and researchers ? and Australian society as a whole.

The Australian Government should amend the Patents Act such that, when making a decision in relation to a patent application or an existing patent, the Commissioner of Patents and the Courts must have regard to the objects of the Patents Act.

That would be a big and wonderful change to the patent system.

Next up, they suggest increasing the fees associated with patents (both for applying and for renewals — which would escalate), which acts as a mechanism to better ensure that a patent is valuable (i.e., making it less worthwhile if the patent holder isn’t actually going to do something with it). It also encourages patent holders to stop renewing the patent and push the info into the public domain sooner if the patent itself is no longer making an economic return.

The report doesn’t spend much time on patent trolls, noting that they’re not a big problem down under, and suggests that the existing “loser pays” litigation structure probably helps keep patent trolling at a lower level there. At the very least, that seems like an important data point for folks here in the US looking to add a “loser pays” provision in patent reform.

How about business method and software (BM&S) patents — which make up many of the most abused patents in the US? The Commission is not impressed by the arguments in favor of such patents and suggests making those things unpatentable. They point out that there’s little evidence that such patents encourage innovation, and that most innovation associated with them almost certainly would have happened without the patents, because the focus was on building products (and that there would be first mover advantages for those who got there first, so the copycat issue isn’t that big a deal). Furthermore, they point out that BM&S patents can often hold back important follow-on innovations. Quoting Nobel prize winning economist Eric Maskin, the report notes:

Specifically, in the software industry, progress is highly sequential: progress is typically made through a large number of small steps, each building on the previous ones. If one of those steps is patentable, then the patent holder can effectively block (or at least slow down) subsequent progress by setting high license fees. ? Thus, in an industry with highly sequential innovation, it may be better for society to scrap patents altogether than try to tighten them.

And they conclude:

On balance, the Commission considers it unlikely that granting patents in the area of BM&S increases the welfare of the community. BM&S patents likely compensate activity that would have occurred in any event (are nonadditional) and reward low? (or even no?) value innovations. BM&S patents can also frustrate would?be competitors and follow?on innovators. While broader changes to patents, particularly around the inventive step and dispensing with innovation patents (chapters 6 and 7), may ?knock out? a large share of BM&S patents, the Commission still considers that there is value in making clear that BM&S should not be considered patentable subject matter.

There’s a separate section on pharmaceutical patents, recognizing that the market factors there are somewhat different. Obviously, the pharma industry relies more heavily on patents. But they also note that Australia has a public policy need to “improve the health of all Australians.” They suggest that the government shouldn’t be as willing to hand over “extensions of terms” on phama patents, and should only do so in specific cases.

On the related question around data protection and biologics (a key sticking point in the TPP negotiations), the report finds that the policy should be designed to encourage much more openness and information sharing, rather than locking up information and biologics for too long.

There should be no extension of the period of data protection, including that applicable to biologics.

Further, in the context of international negotiations, the Australian Government should work with other nations towards a system of eventual publication of clinical trial data in exchange for statutory data protection.

These all seem like decent suggestions, though I still think they could go further. For years I’ve pushed for an independent inventor defense and for independent invention being a sign of obviousness (such that it might invalidate a related patent from someone else). That concept doesn’t seem to make it into the report.

Still, as with copyright, the report’s authors do seem to understand the key problems of the patent system in working against innovation.

And, once again, this is fairly amazing. The stunning thing about this report is that it pushes back on a lot of the accepted — but bogus — wisdom around copyright and patents that just gets repeated without question in most government reports. Kudos to the authors of the report.

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Comments on “Australian Gov't Commission Also Wants To Fix Patent Laws Down Under”

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Kronomex (profile) says:

This will last until the lobbyists start screaming stridently about how Productivity Commissions plan would destroy innovation and research and, most horrifyingly, hurt profit. Turncoat and his cronies will quietly shelve the report and hope that this little bit sense will quietly fade away and they can happily continue to sit in the corporate pocket and gratefully keep receiving a few coins every week.

Anonymous Coward says:

Re: Re:

Both sides will quietly shelve the report, They have done before and will do so again.

If you can get either side to come out against it very publicly, you might, just might get the other side to come out for it. But don’t hold your breath.

Most of our pollies are not exactly the wisest of men and women, you know. Just watch Question Time and you will see the school yard in live action.

Whatever (profile) says:

Karen Chester and Jonathan Coppel – two people in the mix over there who write this stuff alone. Anti-copyright and anti-IP people fresh from the Techdirt school of twisted facts…

Sort of hard to take them seriously at a certain point, their “ideas” are nothing but a rehash of everything said here. I am guessing both of them read and post here.

G Thompson (profile) says:

Re: Re:

Is that all you have to say? More ad hominem? It’s like you stopped to think… and forgot to start again.

Oh and your logic fallacies are showing again. Why am I not surprised?

(I’d suggest you actually take the time to research who you are denigrating, but then this is you I’m talking about.. your research methodology is .. If TD ever mentioned something ever it must be wrong.. Psychology researchers would love to analyse your reasonings for coming here, and your constant deflection strategies, and how you post over and over again, though myself I just think its the standard insanity definition)

Whatever (profile) says:

Re: Re: Re:

There is no adhom. The authors have a clear anticopyright and antiIP slant, they have come out against anything and everything copryight, from GEO IP to copyright terms and so on. The documents they produce look like Techdirt 101, as it they just took notes off the site and turn them into graphics. It’s pretty lame.

“If TD ever mentioned something ever it must be wrong..”

I never said that, stop building strawmen. TD often slants things to their preferred view, taking random bits of information and factoids and generating the classic truthiness. Claiming that a 5% drop in wiki searches is absolute proof of chilling effects is classic! Pumping up a couple of anti-copyright crusaders who happen to have landed on an Australian government commission is pretty classic too, especially when the content reads like Mike wrote it (can you say consultant? Smells like it!).

So no, TD isn’t always wrong – they just tell it slant.

Anonymous Coward says:

Re: Re: Re: Re:

Coming from the guy who posts nothing but “omg masnick y u rite about wyden u fukken pirate” comments?

Seriously, if you hate the site so much, why do you spend time on it? Even you trolls love to claim Techdirt isn’t worth taking seriously. If Techdirt poses such an insignificant effect on IP and policy as a whole, why waste time ranting about something you yourselves admit isn’t a threat?

G Thompson (profile) says:

Re: Re: Re: Re:

Explain the ‘clear’ slant then? Firstly you have no clue whatsoever of the individuals, there past histories in NUMEROUS financial and business sectors, and are lambasting the whole report on the basis of the people writing it. When in fact the report is written, OWNED and copyrighted by the Australian Government.

Your whole argument is deflection away from the actual facts presented and the critical analysis shown in the report that is purely contextual to Australian conditions and Australian interests.

In actual fact they come out FOR copyright, there is nothing in the report that states copyright or patents, nor even trademarks (any of the IP triumvirate) needs to be fully removed. Instead the report shows that IP needs to be reigned in to enable better productivity in the Australian sector, and be EQUITABLE for ALL not just the one sided IP structure that currently exist worldwide based on a US-centric model.

Your whole three paragraphs above are so wrong that it would take a few pages to dissect them fully. But you already know this you just confirm your antagonism towards everyone who might not like your unethical and unequitable world view in relation to IP.

Though I will dissect this. The last ‘smells like it’ in relation to ‘consultants’ quote of yours – when neither of the people you named are consultants, you just assumed – speaks VOLUMES of your ad hominem approach to this. Though I’m now wondering what you have against consultants.. since the organisations you supposedly adhere to as the only true IP authorites use consultants all the time… hypocrisy is rife too it seems

Wendy Cockcroft (user link) says:

Re: Re: Re: Re:

The whole idea of intellectual property is wrong. It’s actually incumbent protectionism, which grew out of the old guild system back in the day. I feel a blog post on the lines of “What has copyright, etc., done for us?”

The idea of protectionism is to create an incumbent and bestow on him (or her) a monopoly privilege backed by the full force of the law. The monopoly permits the privileged person to control the dissemination and distribution of his or her work. The term limits on these monopolies vary from type to type, i.e. trademarks exist for as long as they’re in use by the incumbent.

Copyright is limited to allow the eventual transfer of the monopolised work into the public domain so the creative can be the first to make money from it, after which the work becomes a cultural artifact and anyone can make money from it if they want to.

Patents are limited for shorter periods of time because protectionism limits innovation to the privileged incumbent. Releasing it into the public domain when the patent expires permits other people to innovate on it.

This is the part you won’t accept: Mike Masnick recognises property rights in the privilege held by the incumbent, which can be bought, sold, or otherwise exchanged. He is therefore not anti-IP because that would contradict his assertions that there are elements of property rights in the monopoly privileges accorded incumbents by trademarks, copyright, and patents.

I’ve argued against Mike’s position on the basis that, if we give you people an inch over the use of the word “property,” you’ll take a flippin’ parsec. And here you are, proving my point.

Axe says:

Bloody Sepos, and their corrupting of Australia's patent system

Back in the mid 1980’s the then Australian Patent office office was trying to push a proposed change to the law, basally it amounted to abolishing existing patent law, and replacing it with a modification of copyright, formal analysis of the then current state of affairs showed patents weren’t protecting local innovation, but foreign companies were reaping the benefits of the system.

It worked against local interests, since Local inventors could get a new product up in Australian but then some foreign entity would reverse engineer it, maybe patent it overseas, establish a dominant position in their markets’, and then turn their attention to the Australian market, dump a huge quantity of product, depress the price, the local company formed about the patent goes broke before an action can get through the courts.

But back then the patent laws were stricter, inventions really had to be non-obvious.

Back in the mid 1980’s was the appearance of so called “IP” lobby groups. mostly funded by local subsidiaries of foreign companies, (to maintain the fiction of “representing Australian interests”).

After this reform was squelched, we have had some rather insipid revisions to law in the last two decades. Lengthening of the duration of a patent, weakening of the standards to get a patent and Lengthening of the Copyright term to list a few dubious changes.

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