IP. Schools and unis charged millions for things that are free

Australian schools pay $9 million each year to display web pages that are available freely on the internet. They are even charged for displaying thumbnail images of book covers on their school intranet sites.

They and other institutions pay another $11 million each year to collection agencies for the display of works whose authors can't be found, which the agencies then pool and distribute to members who weren't the authors.

Addressing a copyright forum at the National Library on Friday, the co-chair of the Productivity Commission's intellectual property inquiry, Karen Chester, said she regarded her recommendation that Australia adopt a US-style system of "fair use" as more important than the recommendation that Australia allow the free import of books.

Removing the remaining restrictions on importing books would cut prices by $25 million. On average books bought in Australia are 20 per cent more expensive than identical titles bought in places such as Britain.

Of the $25 million, $15 million flowed overseas.

"So it's hard not to view import restrictions as anything but the least effective way to support local authors, and perversely at the expense of local readers," she said.

"We did listen to the case made by locally based publishers that the additional money they make from import restrictions delivering them higher prices is then used to cross subsidise local authors."

"We requested this evidence – show us the money. But we were met with the sound of deafening silence."

However she said of the recommendations presently before the government, allowing "fair use" was far more important.

"We know with import restrictions that technology, the digital age and new business models have proved a great equaliser. Digital books and real time publishing will continue to discipline the price premium local publishers will extract. So perhaps where we find ourselves today, with import restrictions costing Australian readers around $25 million each year, is about as bad as it will get."

"The same cannot be said for our system of copyright exceptions. And here's the policy rub and where the greatest policy imperative looms largest for government. The inequities and costs the present system are growing and will continue to do so with technological and digital advances."

"Think, no access to data for data mining means no incentive to the workforce to develop those skills — skills which other jurisdictions are developing in spades."

"Think, hampering access to cloud computing means that Australian firms and families are left to use inefficient, antiquated systems in comparison to other markets and countries that can make use of the latest technology."

"Think, schools and universities not paying $9 million each year for material that is freely available."

"The Commission heard from Universities Australia about how institutions were reluctant to use material for Massive Open Online Courses because fair dealing might not extend to them."

"It's not just about the millions of lost export dollars of our universities. It's about what's needed to re-equip our workforce to remain relevant. A university student today will have 17 different jobs. Fair use is a policy lever to avoid the looming education divide of haves and have not's."

At present new uses of copyrighted material are presumed to break the law until Parliament gets around to changing it, which took until 2006 in the case of home taping of television programs.

In the United States, Singapore and Israel new uses are permitted on the condition that they are "fair", taking account of the purpose and nature of the use, how much is used, and whether or not it harms the market for the original work.

The Commission's report was delivered to the government in September and is with the Industry Minister Arthur Sinodinos.

In The Age and Sydney Morning Herald

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High prices hurt. Why Sinodinos is under pressure over books

Strong governments stand up for little people.

In working-class Brisbane in the early 1970s, no one stood up for the Chesters.

"Working parents, three kids. My mother had been squirrelling away money for two years to afford a return flight to Perth to visit her mother," daughter Karen told a conference late last year.

"The price of domestic air travel at the time was in real terms over fourfold what it is today. The price of clothing, with tariffs north of 40 per cent – think President Trump – was also more than threefold higher in real terms than today. And three kids, each five years apart in age, experienced a simultaneous exponential growth spurt."

"A perfect storm for my mother, who ended up raiding the squirrel tin to re-clothe us. No flight to Perth. She never saw her mother again."

By the early 80s, Chester was studying economics at the University of Queensland. She'd wanted to get into law, but didn't get the marks. One day in the second semester, during microeconomics, what had happened to her family began to become clear. Punitive tariffs on clothes and the two-airline policy had prevented her mother getting to Perth.

Four years further on, hired as an economics graduate at the Department of Prime Minister and Cabinet, a 20-something Chester was sitting in prime minister Bob Hawke's office taking notes.

He asked the assembled officials to tell him why he should cut tariffs.

"Because tariffs screw workers," Chester mumbled, in a voice she had hoped was too quiet to be heard.

But it was heard. Hawke asked the officials to explain how, asked for modelling on exactly how much they hurt workers, and started to drive tariffs down.

Twenty years on, after some years away in the private sector, Chester found herself back in government chairing a Productivity Commission inquiry into (among other things) the price of books.

So-called parallel import restrictions make it illegal for booksellers to import from wholesalers, except in limited circumstances. Forced to go through Australian publishers, even for the big name foreign books by authors such as JK Rowling or Elena Ferrante, the bookshops can be hit up for more and made to charge their customers more.

Except that the Booksellers Association and the Publishers Association told Chester it didn't happen. The booksellers prepared a chart of the price of 75 books in Australia, the US and the United Kingdom and argued there was little difference. The publishers compared 200 titles and said most were cheaper in Australia.

But Chester noticed that the samples were limited, in odd ways. And the booksellers' list compared the price of Australian paperbacks to foreign hardbacks, even where Australian hardbacks were available and more expensive.

She commissioned her own higher-quality survey of the price of 1000 identically matched books from the top 5000 titles sold in Australia and the UK and found the pre-tax Australian prices exceeded the prices charged in the UK by a staggering 20 per cent.

Worse still, limiting her comparison to just the majority of books that were more expensive in Australia (which is what's relevant for examining the effect of trade restrictions) she found the average difference was 30 per cent.

Despite their protestations, the Australian publishers seemed fully aware that they charged more for overseas books than was charged overseas, because they argued before her that they used those profits to subsidise the production of Australian books. But when she asked them for details about the cross-subsidy none returned with an answer, although several promised to.

It's the same argument that was used by Australian record labels right up until 1998, when John Howard (with Arthur Sinodinos as his chief of staff) extended Hawke's program of trade liberalisation by allowing the free import of compact discs. It was going to kill Australian music.

Two decades on, it's an easy claim to assess. Back in 1998 the Triple J Hottest 100 contained 42 Australian recordings, an all-time record. By this Australia Day it contained 66. The industry tally of all genres finds that back in 1998 Australian recordings accounted for 1 in every 5 recordings bought here. After two decades of open trade, it's 1 in every 3.

Sinodinos is now industry minister, and says he is as committed now as he was then to blasting away rules that hurt consumers. "Protection stops you being lean, it leads to companies padding themselves out," he told Fairfax Media this week. He has before him Chester's report, and he wants responses within a fortnight.

The Harper competition review has already recommended removing the remaining import restrictions on books, as has the Competition and Consumer Commission, the old Prices Surveillance Authority and a Senate inquiry. The government accepted Harper's recommendation and asked Chester's inquiry how to do it. She's recommended an immediate end in December this year, with no phase out.

Labor, shamefully, is backing continued high prices as it did for compact discs two decades ago. This time it wants to "support Australian stories".

Chester wants to support Australian consumers. She says there's $15 million to $25 million in it on just the 1000 titles she examined, depending on freight costs. Sinodinos will have to decide whether to back us.

In The Age and Sydney Morning Herald

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PC: Copyright rules make us break the law 80 times a day

If you are anything like the typical Australian, you probably break the copyright law 80 times a day, according to figures included in the Productivity Commission's final report to the government on intellectual property.

Most of the breaches are harmless, things such as including a copy of an email in the reply to an email. But the commission says that laws that are routinely flouted are bad laws, bringing themselves into disrepute.

In place of the labyrinthine system of complicated rules governing what can or can't be copied, the report released on Tuesday recommends the US system of fair use, under which the use of copyrighted material is legal so long as it is fair, taking into account the purpose of the use, the nature of the work, the amount copied and the effect on the potential market value of the work.

A study released with the report finds that Singapore had fewer copyright disputes after adopting fair use, suggesting the change made copyright easier to understand.

The commission says the change would put beyond doubt the ability of universities to use innovative technologies such as data mining and other technologies that haven't yet been invented, allowing Australia to innovate as quickly as competitors in Israel, South Korea and the United States.

It wants universities, schools, cloud computing services and other suppliers of internet services to be granted the same "safe harbour" status as internet service providers, meaning they cannot be held liable for the actions of their users.

In order to discourage piracy, it wants the government to legislate to guarantee the right of Australians to circumvent so-called geoblocks that prevent Australians accessing music, ebooks and software when it is available overseas at overseas prices. It says Australians subject to geoblocks are typically charged an 'Australia tax' of 13 per cent. Its survey of 1000 books found that parallel import restrictions, which can prevent retailers sourcing books from overseas, typically add 20 per cent to the US or British price. It wants the remaining restrictions removed by 2018, saving readers up to $25 million per year.

The commission has asked the government to urgently remove the anomaly, which grants perpetual copyright to the 13 million unpublished documents and letters held in cultural institutions, meaning they can't be digitised unless the heirs of the authors can be tracked down. It also wants to make it to be easier to make use of "orphan works" for whom the copyright owners cannot be found. It says the National Film and Sound Archive has told it that 20 per cent of its holdings are in a legal "no man's land", meaning it can't use them to celebrate Australia's heritage without tracking down owners who can't be found.

The report recommends a separate small claims list in the Federal Court that would allow self-represented litigants who felt their work had been used unfairly to get redress at low cost.

It is especially critical of the role of collection agencies, including the Copyright Agency chaired by former News Corporation chief Kim Williams, which it says are not open about what they do with the funds they collect on behalf of different classes of rights holders.

It wants them to hand to the government the funds they collect for the use of orphan works rather than distribute them to other rights holders, as happens at present. It wants the Competition and Consumer Commission to review their governance and rules.

The Copyright Agency struck back, saying in a statement the commission's recommendations seemed "to be straight out of the US Big Tech playbook" and would wreak havoc on Australia's creative community. Author Richard Flanagan said the commission was like "a deranged hairdresser insisting their client wears a mullet wig".

Universities Australia welcomed the report, saying the US had had fair use since 1976 and its creative industries were flourishing. The Digital Alliance representing libraries and other users of copyright material said the changes would ensure the everyday behaviour of millions of Australians was no longer illegal.

Minister Greg Hunt asked for comments on the report by February 14. The government will respond in the middle of the year.

 

What the Productivity Commission recommends

• Legislation to enshrine the right of  consumers to circumvent geoblocks
• Repealing remaining import restrictions on books from 2018
• Allowing "fair use" of copyrighted material as in the US
• Freeing up access to orphan works for whom no owner can be found
• Extending "safe harbour" protection to all providers of online services
• Subjecting copyright collecting agencies to a governance review by ACCC
• Raising the inventive standard needed to gain a patent
• Restructuring patent fees so that they climb over time
• Providing open access to publicly funded research
• Introducing a low-cost federal court list for hearing IP claims

Source: Report of the Productivity Commission inquiry into intellectual property arrangements

In The Age and Sydney Morning Herald

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Our copyright laws are holding us back, and there's a way out

Imagine a land in which everything was outlawed, except for the things that were specifically allowed. Things would more-or-less work, until you tried something new.

It would be illegal at first, perhaps for years, until the parliament got around to permitting it. This slow-moving land (which we'll call Australia) wouldn't stand a chance against competitors that could move quickly.

For the most part, we're not like that. We outlaw killing, rather than specific methods of killing. We permit the earning of income, rather than the earning of income from specific activities. Our laws are based on principles rather than prescriptions.

Except for copyright.

Google couldn't have grown up here because our copyright laws didn't explicitly permit the copying and indexing of the web. Video cassette recorders couldn't have developed here because our laws didn't explicitly allow home taping. Dr Rebecca Giblin of Monash University says if VCRs had been introduced here first instead of in the US, "rights holders may well have succeeded in suing them out of existence".

In the US, Google and Sony were able to rely on "fair use". The law there allows copying so long as it is fair, taking account of what's copied, the purpose for which it is used and whether or not it harms the market for the original work. It's based on principles rather than specifics, which means it copes with change.

In Australia, it's full of specifics. New activities are presumed to break the law until Parliament gets around to changing it, which can take years. Parliament didn't get around to legalising home taping until 2006, decades after the arrival of the video cassette recorder. You are now allowed to copy music from your CDs to play on another device, but only if you own that device. If your phone is leased on a contract, or your tablet is owned by your employer, your copies infringe copyright. You are allowed to take a photograph or scan of a newspaper, but only if afterwards you read only from the photograph or scan and not from the original paper. If you've complied fully with almost 600 words of dense text and succeed in making a legal copy but then lend it to a friend, that's no dice, even though you would be perfectly entitled to lend the paper to the friend.

The law obsesses about details, but never asks the most important question: is what's proposed fair?

Schools are also penalised for attempting to use new technologies. It's legal for them to use small amounts of copyrighted material in printed exam papers, but not in ones they email or put online. For universities attempting to compete with those in agile countries such as Israel, Singapore and the United States, it's a serious restriction. Universities Australia says its members typically spend between 1250 and 1740 staff hours seeking copyright permissions their competitors don't need to.

Like other Australians they're not even sure they can legally back up what they own. Backing up is essential in the age of computers but it involves the making of copies which can be charged for.

Five major inquiries have recommended that Australia future-proof its law by moving to the US system of fair use, as it probably should have as part of the US-Australia Free Trade Agreement.

Shortly, there'll be a sixth. The final report of the Productivity Commission inquiry into intellectual property will come with a detailed analysis from Ernst & Young that eviscerates work done by the main copyright collecting agency on the costs to the Australian economy of adopting fair use.

There would certainly be costs to it. Records tendered to the inquiry by Australian schools show the Copyright Agency is billing them millions of dollars for the display of materials that are freely available on public websites including tourism maps, health fact sheets and the homepages of institutions such as the Commonwealth Bank.

And they are are hit up for the use of so-called "orphan" works for which there is no longer an identifiable owner. The Copyright Agency, a government-mandated collection body, takes the money, holds some of it in case the owner ever comes forward, and distributes the rest to the owners of other works as a windfall, creaming off a generous amount for administration.

Australian schools say they pay 10 times more per student to use copyrighted materials than schools in New Zealand.

Students are entitled to copy small portions of copyrighted works for study – it's a right protected under a clunky alternative to fair use known as "fair dealing". But a quirk in the law means that if a teacher asks the students to make the copies, or presses the button on the photocopier, the school has to pay for them.

You're going to hear a lot in coming weeks about how "fair use isn't fair". That's impossible, by definition, because under fair use, if a use isn't fair it can't be permitted. What a switch towards it would do is move our law away from niggardly technology-specific details towards the one simple principle that's used in the countries that are getting ahead: whether, in all the circumstances, a use is fair. It'd be our entry ticket to the modern world.

In The Age and Sydney Morning Herald

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While the government dithers, millions can't read properly

In Hitler's Germany and Mao Zedong's China they burnt books. Here, we prevent people from reading them.

Government inaction and fear of doing anything to weaken copyright have denied millions of Australians with print disabilities ranging from blindness to dyslexia the kind of access to books the rest of us take for granted.

In the United States there's BookShare, a web platform that allows visually impaired Americans to listen to high-quality text-to-speech versions of books, to read digital braille and enlarged-font versions and to create physical braille and large-font books directly from the website. So far it has 460,000 titles. Here, our copyright rules restrict us to 193,000.

The best format for making audio copies of books is called DAISY. It allows readers to search, insert bookmarks and regulate speed. But here, if disability organisations try to convert a book into DAISY format the Copyright Act requires them to check first that there are no commercial audio or large-print versions already available. If there are, even if they are not searchable or useful like DAISY, its no dice. If there's a commercial large-print version available and the reader needs a larger-print version, it can't be done. If there's written music or graphs or diagrams in the book it's also no dice for those parts of the book. That's because our Copyright Act is painfully prescriptive, using rigid "blackletter law" rather than general principles such as the US "fair use" provisions. There, if it's fair, it's allowed. Here, it's only allowed if parliament specifically enactis a provision. It can take decades. In the US, home taping of TV programs was recognised fair use in 1984. Here it took until 2006.

Our system of specific copyright exceptions is also why a six-year-old girl might be entitled to save some music to a disk for homework, but it would be illegal for her parent to do it for her. Bizarrely, our blackletter law requires organisations making accessible copies for the disabled to check for commercial alternatives before every single download of the copies they make.

Educational libraries are similarly handcuffed. They are allowed to scan books for conversion into accessible formats, but only if they destroy the scans after each use, even if they know they'll need them for other students.

Last year after decades of lobbying, the government released a draft amendment that would have fixed most of the problems. Nine months on it still hasn't been before the parliament. Minister Mitch Fifield says he'll do it "at the earliest opportunity". He should. But it won't fix the broader problem.

Our current approach means we need to keep amending the Act every time there's a new technological development or use that ought to be permitted.It would be far, far simpler to adopt US-style fair use provisions, as the Productivity Commission recommended earlier this year in a draft report. It'll deliver its final report in September.

In The Age and Sydney Morning Herald

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'Book famine' as government prepares to miss deadline

The Turnbull government has been accused of extending Australia's "book famine" by sitting on draft legislation designed to give blind, partially sighted and dyslexic Australians the sort of access to books available overseas.

Former disability commissioner Graeme Innes says he and other vision-impaired Australians can't import legally-produced audio and braille books without the specific permission of the publishers. He says when he asks, he often doesn't get a response.

The US-based Bookshare website offers almost half a million braille, large print and audio titles on line, but Australia's restrictive copyright rules mean only 193,000 are available here.

Draft legislation released in December would have opened up BookShare to Australians in one of the biggest ever shakeups of Australian copyright law. It would also have protected local organisations and carers who wanted to make their own accessible copies of copyrighted books.

It was designed to come into force with the introduction of the Marrakesh treaty on international access to published works on September 30, but it hasn't yet been introduced into parliament and isn't on the program for next week.

On Friday shadow attorney general Mark Dreyfus wrote to communications minister Mitch Fifield offering his support for an urgent passage through parliament. A spokeswoman for Senator Fifield told Fairfax Media that the bill wasn't essential in order to comply with the Marrakesh treaty, but said it would be introduced "at the earliest opportunity".

"It's pretty mean to suggest that it's not essential," Mr Innes responded. "It's easy to say if you are able to read books. I don't understand why it's not high up on the program."

Bruce Maguire, lead policy advisor for Vision Australia said the law was needed to allow accessible to be shared between countries as the treaty intended.

"Swift passage will be a great example of how the new Parliament can work for all Australians," he said.

The bill also removes an anomaly that has given perpetual copyright to historic letters and other unpublished documents, meaning that organisations such as the Australian War Memorial are unable to digitise them if there are no heirs left to provide permission.

In The Age and Sydney Morning Herald

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The real drug problem that could cause a catastrophe

Count yourself lucky if you are laid low this winter. You probably won't die.

But not long ago you could have. Back in the 1930s before the widespread introduction of penicillin, infectious diseases were responsible for 5600 of Australia's 62,000 annual deaths. These days they bring about just 2600 of 148,000 deaths.

Nothing has improved health and brought down the cost of staying alive as much as antibiotics. But they are losing their power. A decade ago only 1800 Australians died of infectious diseases, but the death rate is climbing and is back to where it was in the late 1960s. Last month the United States was presented with its first patient carrying a bacteria resistant to the drug of last resort, Colistin.

There are literally no backups left, and for financial reasons, there is nothing on the horizon.

Australia has had several cases of Carbapenem-resistant Enterobacteriaceae, some brought in from overseas, and some transferred from patient to patient in hospital. It kills up to 50 per cent of the people it touches. If it gets a bigger foothold and becomes commonplace, we'll enter what the experts call the "post-antibiotic era".

 

 

It's true that to a large extent we've done it to ourselves. Right at the beginning of the modern era, accepting the Nobel Prize for his work on penicillin, Alexander Fleming forecast "the time may come when penicillin can be bought by anyone in the shops".

"Then there is the danger that the ignorant man may easily underdose himself, and by exposing his microbes to non-lethal quantities of the drug make them resistant," he went on.

"Here is a hypothetical illustration. Mr X has a sore throat. He buys some penicillin and gives himself not enough to kill the streptococci, but enough to educate them to resist penicillin. He then infects his wife. Mrs X gets pneumonia and is treated with penicillin. As the streptococci are now resistant to penicillin the treatment fails. Mrs X dies. Who is primarily responsible for Mrs X's death? Why, Mr X whose negligent use of penicillin changed the nature of the microbe. Moral: If you use penicillin, use enough."

We haven't. We've often taken antibiotics only until we felt well. Then we've infected other people with the bugs that survived and no longer feared the antibiotic. And we've handed them out where they are not needed and dosed up pigs and chickens on overstocked farms in conditions that breed resistance. Carbapenem-resistant Enterobacteriaceae developed first in pigs before jumping to humans through raw pork.

As a business model, guaranteed obsolescence has worked well for the pharmaceutical industry. It has had to keep coming up with replacement drugs, each time getting new patents.

But what hasn't worked for it is the more important need to come up with a genuine antibiotic of last resort; something that is held in reserve and hardly ever used, because there's no incentive to make such a thing.

Patents typically last only 20 years. Even at an appropriately high price per unit sold, the manufacturer and developer of such a drug would be unlikely to get their money back. Tripling or quadrupling the patent term wouldn't much help.

Antibiotics aren't like other products, or other drugs. The less they are used, the bigger the pay-off. But our system of incentives encourages the reverse. It's in large measure an economic problem, with an economic solution.

The most promising is called "delinkage​". One its most influential proponents is Boston University law professor Kevin Outterson.

Under delinkage companies will no longer be paid according to sales. Instead they would be paid handsomely for developing drugs that weren't to be used. Promotion and free samples (usually the drug company's lifeblood) would be banned. Where the drugs were used, the drug companies would receive nothing other than the actual cost of producing them. Doctors might be given special payments ("bribes") tied to how little they prescribed them.

As an attempt to re-engineer a market it's on a par with carbon pricing, and about as important. Outterson says the long lead times involved mean we've got to act a decade before the need becomes urgent.

The UK government's review into antibiotic resistance has reached a similar conclusion. It believes that unless we act quickly, drug-resistant superbugs could kill as many as 10 million people per year by 2050, more than cancer kills now. Britain's prime minister David Cameron is talking to the group of seven leading industrial nations and to the G20 later this year. I'd like to hope we got on board.

In The Age and Sydney Morning Herald

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Copyright. Australia's leading authors are wrong

Australia's leading authors are wrong.

Richard Flanagan won the Man Booker Prize. Addressing last month's Book Industry Awards, he said the Turnbull government was considering cutting the copyright term, "so Mem Fox has no rights in Possum Magic, Stephanie Alexander has no rights in A Cook's Companion".

"This is a government that has no respect for us and no respect for what we do," he thundered. "If you care at all about books, don't vote Liberal."

Tom Keneally won the Booker for the painstaking research involved in Schindler's Ark. He told the ceremony the government was proposing "something neither the Brits nor Americans propose to do to their writers: to slice Australian authors' copyright to 15 to 25 years".

Magda Szubanski won book of the year and said she was thinking of leaving the country. Jackie French wrote an open letter on HarperCollins letterhead saying she had always assumed the royalties from her books would support her husband and herself in their old age.

None of these living national treasures appears to have read through the report about which they complained.

The draft Productivity Commission report on intellectual property includes just five recommendations on copyright, none of which would cut its length.

Australia can't cut its copyright term. It is bound by the treaties it has signed with the United States, Singapore and Korea, and will also be bound by the Trans-Pacific Partnership should it be ratified. It is true that the Productivity Commission would have very much liked to recommend a shorter copyright term, and said so. But it also said plainly that wasn't an option open to any government, Labor or Liberal.

What the commission does recommend, and what might be really behind the confused cries of our leading authors and the publishers who feed them lines, is an opening up of the market for books.

Most of us hate geoblocks, the annoying restrictions that prevent us from using in one country a DVD made for another, or force Australians to choose from a smaller or more expensive range of products when buying online.

The commission wants the government to state clearly that it is perfectly legal to attempt to circumvent geoblocking, and it wants it to avoid signing agreements that would make it illegal. And it goes further. It says the laws that prevent Australian booksellers from buying books from overseas suppliers are no more than "an analogue equivalent of geoblocking".

You and I can already buy books from overseas. Asked at a Sydney Writers Festival event last month how many present had bought from Amazon, almost everyone in the room put up their hands. Bookshops are able to buy from overseas too, as long as it's one book at a time. Attempts to buy in bulk – attempts to buy American books at American prices – are outlawed unless they are done through or with the permission of the Australian licence holders.

It's enforced through the Copyright Act, even though the restrictions on so-called parallel imports are nothing to do with copyright. The licence holders divide the world into zones which can't compete with each other, like they used to do with records and CDs. If the legal framework allowing them to do so was removed, booksellers such as Dymocks would be able to threaten to buy from overseas if the Australian price wasn't good enough. Deloitte Access Economics says if they could, as they can in New Zealand, Australian prices could be 10 per cent lower.

It's easy to see how the system we've got benefits Australian distributors and foreign authors, harder to see how it benefits our own.

One concern is that without substantial profits on foreign books the Australian distributors wouldn't be able to invest in local talent (an argument the Productivity Commission deals with by saying it would be cheaper and more certain to support Australian authors directly). Another is that Australian books are heavily discounted overseas. Some are in bargain bins. Their fear is that if Australians weren't overcharged relative to, say, Canadians, Australian books would never be published.

But websites such as Amazon are already eating away at that overcharging, and destroying bookshops in the process.

After seven reports recommending the free import of books the government said yes in November. It asked the Productivity Commission to advise on how to do it. The commission wants the restrictions gone by December 2017.

This isn't because the commission members are philistines or have a "perverted world view", as Flanagan puts it. The head of the inquiry, Karen Chester, says she comes from a family of hard-copy bookworms. For years she was among the biggest buyers of books at her local bookstore. She is on the side of consumers, and on the side of bookstores, believing that if they are able to compete on a level footing with websites they might just survive.

The worst outcome for consumers would that Labor backed Flanagan and Keneally and Szubanski and won the election. We'd keep paying much more for our books or drift away and move online.

The commission's report deals with much more than imports. Submissions close on Friday. Access to books is too important a question to leave to authors.

In The Age and Sydney Morning Herald

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PC calls for free trade books in copyright shake-up

The Productivity Commission has recommended the free import of books, the free use of copyrighted material under new so-called "fair use" rules, a leglislated guarantee that consumers have the right to defeat internet geoblockers and much tighter restrictions on the granting and use of patents, under reforms it says could save consumers up to $1 billion a year.

Consumers should also have a legislated right to defeat internet geoblocks set by such companies as Amazon, it says.

Subtitled Copy(not)right, the draft report of the commission's nine-month inquiry into intellectual property finds copyright terms are way in excess of what is needed, offering more than 100 years of protection for works that ought to be protected for 15 to 20 years.

It says the typical commercial life of a book, film or piece of music is less than five years, but that Australia's copyright rules often grant 120 years, which is the life of the author plus 70 years.

"To provide a concrete example, a new work produced in 2016 by a 35-year-old author who lives until 85 years will be subject to protection until 2136," it says.

"The evidence (and indeed logic) suggests that the duration of copyright protection is far more than is needed. Few, if any, creators are motivated by the promise of financial returns long after death."

The report says the Howard government's decision to extend Australia's copyright term by 20 years to life plus 70 years as part of the US-Australia Free Trade Agreement probably added an extra $88 million to the annual sum sent offshore to foreign rights holders.

The decision to allow pharmaceutical manufacturers to extend the term of their 20-year patents by an extra five years probably costs Australian governments and consumers $250 million >a year.

Australia imports six times as much patented and copyrighted material as it exports, making it a net consumer rather than a producer whose interests ought to be aligned with those of consumers. The report says the gap is widening.

It backs proposals to introduce an open-ended and non-prescriptive right of "fair use" of copyrighted material that would allow many uses presently illegal in Australia, including the use of thumbnail images by search engines, the "quotation" of lyrics or song fragments in songs, the use of politicians' jingles by their opponents in election advertisements, and the use of extracts from films in documentaries.

It goes further than recommendations of the Australian Law Reform Commission in recommending fair use allow the publishing and digitisation of so-called "orphan works", where no rights holder can be found, and copyright-protected works that the owner chooses not to make commercially available. The change would deny authors the right to prevent the publication or performance of their works.

The report says Australia's patent rules are too lax, requiring claimed inventors to provide evidence of a "mere scintilla of invention" in order to lock up the use of their ideas. Patent fees should be higher and applicants should be required to explain why their ideas are not obvious, it says.

Consumers should have a legislated right to defeat geoblocks imposed by companies such as Netflix and Amazon in order to prevent Australians buying products sold overseas. The law that at present prevents Australian retailers importing books without the permission of local publishers should be repealed in the same way as the laws preventing the import of music without local publishers were repealed.

The commission has called for comments on its draft report by June 3. It will deliver its final report to the government in August.

In The Age and Sydney Morning Herald

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The Productivity Commission's hands were tied on copyright

Buried within this week's landmark Productivity Commission report on copyright and patents is seething resentment at the way Australia has negotiated trade agreements.

In one of his last acts as treasurer Joe Hockey referred the topics to the Productivity Commission after his colleague, Attorney-General George Brandis sat on the recommendations of an Australian Law Reform Commission report for 18 months rather than free-up copyright as it wanted. It's now been two years, and one of the new excuses is that the inquiry Hockey started is re-examining the question.

The Law Reform Commission wanted to allow "fair use" as happens in the United States. It would mean, for example that the legendary Australian band Men at Work would have been able to include a musical phrase from the ditty Kookaburra sits in the old gum tree in their 1981 hit Land Down Under without being forced to pay damages for copyright infringement in a battle whose aftermath claimed the life of Down Under's composer Greg Ham. Sampling, referencing, making audio copies of books for the visually impaired; all of this would have been regarded as "fair" so long as it didn't unreasonably harm the interests of the copyright owner.

The Productivity Commission took that as a starting point and went further. It wants to define the use of "orphan works" as fair. These are books or photographs or pieces of music for which no one can find the copyright owners, something that's become more and more of a problem as the length of the copyright terms has grown. Right now it's legally risky to assume things are OK, even for libraries wanting to digitise ancient documents. Their lawyers tell them not to take the risk. And the commission wants it to be fair to publish works that copyright owner won't bother to publish or won't allow anyone else to publish.

The overriding consideration would be whether or not the use does any harm.

As the commission puts it: "The key question is whether transformative works have any appreciable impacts on the demand for, and creation of, the original material. If they do not, then there are few grounds for regarding the use of the original material as an infringement."

It's a principles-based rather than a black letter law based approach of the kind favoured by Senator Brandis whose main contributions to copyright law have been to crack down on infringers. The commission derides such tactics as ineffective, noting that the easiest way to wind back illegal downloading would be for the makers of movies and television programs to make them easy to watch legally. To that end it wants the Australian government to legislate to put beyond doubt the legality of breaking geoblocks. And it wants the import of books to be free, something the Australian Society of Authors says will "essentially dismantle the concept of territorial copyright".

What it wanted to do was to wind back Australia's 120 years plus copyright terms. It reckons 15 to 25 years is all that's needed. It says the average commercial life of a book is 1.4 to 5 years. Beyond that, the harm copyright does by locking things up outweighs any conceivable benefit to the authors in extra income. But it couldn't. Australia's trade agreement with the US prevents Australia backsliding, as do the new agreements with Korea and Singapore and the upcoming Trans-Pacific Partnership. It says the Australian government shouldn't have made the commitments on copyright without first assessing the costs and benefits. It wants Australia to try and unpick those deals, something it acknowledges is next to impossible.

In The Age and Sydney Morning Herald

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Relax, Spotify won't stop the music

Remember how the internet was going to kill music?

Seriously. And before that home taping, the arrival of the radio, and the invention of the record player.

Each was going to cut the return for making music. As a result, we would be surrounded by less of it. Seriously. At home I have a copy of a 1990s CD entitled "Don't stop the Music". The Australian record industry sent it around to warn that Australian music would vanish if the government allowed the unregulated import of CDs, which it did. The record player was going to cut sales of sheet music, putting composers out of business. Radio was going to cut sales of records, putting recording artists out of business. Home taping was going to cut multiple sales of records, meaning that artists would no longer find it worth their while to record. And the internet was going to cut payments to artists altogether.

Now there's streaming radio. It charges two prices: nothing (backed up by advertising), and very little. It pays the recording companies just 0.7 US cents per play. The artists and composers get a fraction of it.

Yet all these years on we are still surrounded by music. It follows us throughout a day from our bedside to our commutes to our earphones at work to our drive home to settling into bed.

And an astonishing amount of it is new. A decade after the arrival of file sharing, US economist Joel Waldfogel charted what had happened in a paper called Bye, Bye, Miss American Pie? The Supply of New Recorded Music since Napster.

There is no doubt that recording companies are making less money since file sharing, he says. But that doesn't necessarily mean they are making less music, or even less good music...

Assembling data on the quality of songs from the "all-time best" lists compiled each year by Rolling Stone and other magazines he finds that the albums regarded as good tend to be recent, and increasingly so as the internet age wears on.

The good new ones aren't even by old artists. He says around half of the good new albums are by artists who only started recording since file sharing. It has neither killed new music, nor frightened people away from beginning to make music.

But it is killing albums. The biggest revolution wrought by the internet wasn't illegal downloading (it's diminishing rather than growing), it was the ability to buy tracks one at a time.

Most albums are filled with fillers. After the standout tracks (the ones the producers put an effort into) the rest are close to junk, the kind of tracks that wouldn't be bought unless they were bundled onto albums.

While it has always been possible to buy individual tracks in the form of singles, they used to be inconvenient to play. Who wanted to change a CD every few minutes? Now that it's easy to play hours of single tracks without interruption, there's no longer much reason to buy albums.

A decade ago albums (physical and digital) outsold singles four to one. Now singles outsell albums four to one.

We are no longer buying what we don't want, and increasingly, we are no longer buying at all. Pandora, Spotify and similar services allow us to pay just to listen. So they've become the next big threat. At the annual general meeting of the American Economic Association last week Waldfogel previewed a new paper he has written examining whether they boost or harm sales.

It's quite clear they boost the sales of particular tracks. When Pandora tried playing some tracks in some regions and not others the sales of the tracks increased in the locations where they were played. It's what happens with radio and it's why artists are keen to get airplay. But that doesn't mean that Pandora itself boosts sales. Without Pandora and Spotify, would music sales in general be higher?

His answer is yes, but not by much, and it's not the end of the story. Every 137 streamed tracks appear to cut legitimate sales by one track (and to cut illegitimate downloads by much more).

That lost sale is a cost to the record company. It misses out on the 82 US cents it would have got from a retailer such as iTunes. In return it gets 0.7 US cents per play. Multiplied by 137 that gives it 95.9 cents in return for losing 82 US cents, putting it slightly ahead.

So please don't feel guilty listening to music at work. It isn't going to stop.

In The Age and Sydney Morning Herald

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Bigger on the inside. Turnbull's administrative reshuffle

There's more to Malcolm Turnbull's reshuffle than a change of ministers. There has also been change in the nature of ministries.

Copyright, long the responsibility of the Attorney-General's Department, has been quietly moved out of the hands of Attorney-General George Brandis and given to the Minister for Communications and Arts, Mitch Fifield.

Senator Brandis was a strong proponent of heavy copyright enforcement, pushing for internet service providers to send copyright warning notices to users they suspected of illegal downloading. For almost two years he has sat on a report from the Law Reform Commission that recommended more liberal access to access to published works through a system known as fair use.

Matthew Rimmer, professor of intellectual property law at the Queensland University of Technology, said Senator Fifield would have a "clean slate" to reconsider options "pointedly ignored" by Senator Brandis.

The Attorney-General's Department was always an odd place for copyright, apparently justified because it involved the law. The Treasury might have made more sense, on the ground that copyright is a restriction of trade with implications for competition policy.

The inclusion of copyright in the Communications and Arts portfolio opens up the possibility of change.

Monash University copyright specialist Rebecca Giblin said the minister would need to examine reforming Australia's "archaic exceptions regime", finally ending the ban on the so-called parallel import of books, ending perpetual copyright for unpublished works, and ratifying the Marrakesh Treaty which would give greater access to books to the vision impaired. 

The Department of Communications has also lost a responsibility...

It will no longer look after Government 2.0, the move to get all government services online. The responsibility will move to the Department of Prime Minister and Cabinet where it will remain under the eye of the former communications minister, new Prime Minister Malcolm Turnbull.

Another change transfers responsibility for childcare benefits and family assistance from the Department of Social Services to the Department of Education and Training. The move will give Education Minister Simon Birmingham a much broader responsibility than his predecessor Christopher Pyne, encompassing all forms of financial support to families with children.

In a move interpreted as a sign that the Clean Energy Finance Corporation will not be abolished as had been government policy, the agency will move from the Treasury to the Department of the Environment. The department will also gain responsibility for the Renewable Energy Agency.

As foreshadowed in the agreement between the new Prime Minister and the National Party, responsibility for the management of water resources moves from the Environment Department to the renamed Department of Agriculture and Water.

Although seldom examined closely, changes in the so-called administrative arrangements can provide useful clues to the government's plans.

On its election in 1996 the Howard government moved responsibility for ports from the Transport Department to the Department of Industrial Relations. Two years later the industrial relations minister rather than the transport minister was able to handle the 1998 waterfront dispute.

In The Age and Sydney Morning Herald

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Happy Birthday: How copyright lost touch with reality

The world's most popular song is about to have a birthday.

It's Happy Birthday to You, and it will turn 121 on October 13.

Yet unbelievably, if we are to take at face value the claims of Warner/Chappell Music, it is still in copyright.

An awful lot of people find it easier to take the claims at face value. They pay up, making Warner/Chappell a reported $2 million a year from the song. It even hit up the American Girl Scouts for a fee after they sang it at a camp. Others buckle in different ways. At least one documentary movie has been withdrawn from circulation because it included footage of subjects singing Happy Birthday without authorisation. Most movies avoid it. How long since you've seen it in a birthday scene?

You're safe singing it at home though. That's a private rather than a public performance.

How can it be that a tune almost universally regarded as public property is still be in copyright 121 years after it was composed? Especially given that at the time the initial term of copyright was 28 years. The answers are spilling out in a US court case which is exposing how murky and fear-ridden the world of copyright really is.

One of them is that the world's favourite composition was a composition. Just like Kookaburra Sits in the Old Gum Tree, wrongly listed in the Angus and Robertson All-time Favourite Australian Song Book as "traditional", Happy Birthday was actually composed by a person: two people in fact, Patty and Mildred Hill – one of them a teacher, the other a musicologist. They tried out their compositions on Patty's students.

Somewhere in the late 1880s they achieved something remarkable: a song that fitted the limited vocal range of children yet was meaningful, a bit like Kookaburra.

Initially named "Good Morning to All", they published it in a 1894 book called Song Stories for the Kindergarten.

Decades later it began appearing in other books under a different title: Happy Birthday to You.

Until that point America hadn't had a birthday song.

Legal historian Robert Brauneis​ has made the song his life's work. He says birthday parties only became common in the early-1880s and birthday cakes in the mid-1880s. American schools weren't age-graded until the late 1800s, meaning America lacked "the prerequisites for the development of a standard birthday song – the proliferation of birthday celebrations that involved a dramatic moment at which a group of invitees, often children, addressed the honoree".

Until Happy Birthday.

By rights it ought to be long out of copyright, if it was ever in it. Back in those days authors had to register to stake a claim. The initial term was 28 years, with an extension of 14 years on application. But in 1909 the US extended the term of the extension, then extended it again in 1976 and again in 1998.

Every one of those extensions was retrospective, right up to the present 67 years, making a total of 95. This means that because the version Warner/Chappell claims to own was published in 1935, its multimillion-dollar copyright won't expire until 2030.

Or so it says. The performers it has touched up for money have found it easier to pay than argue, until now.

Touched up for a mere $US1500 in 2013, filmmaker Jennifer Nelson said no. She crowdfunded a lawsuit and has come up with what her legal team describe as a "proverbial smoking gun". Buried within a cache of documents initially withheld and too blurry to read was a copy of a book with the music with birthday lyrics published in 1922, well before the 1935 publication that Warner/Chappell claimed was the first. After finding the original in a library, her legal team determined that it lacked the copyright notice required at the time of first publication, meaning that Happy Birthday to You was probably never in copyright and was merely reprinted in 1935.

If the court rules in Nelson's favour Warner/Chappell might have to repay a fortune. But she has uncovered more than potential fraud. She's discovered how difficult it is for anyone to be sure of what happened so long ago. In Australia scores of songs and books are unavailable for public use merely because no one knows who owns them. They're called "orphan works", locked away forever, just in case.

This week Treasurer Joe Hockey announced a long-overdue Productivity Commission inquiry into Australia's intellectual property laws. It might turn out to be one of his most important decisions.

Peter Martin is economics editor of The Age.

In The Age and Sydney Morning Herald

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Indefinite copyright is a joke - the recipe for carrot marmalade proves it

I'm suddenly keen on carrot marmalade.

It's sugar-free and "one of the best remedies against the scurvy". I know this because Captain Cook received a letter in 1771 telling him so as he prepared for his second voyage to Australia.

It's in a book of his correspondence in the National Library, complete with the recipe.

About the beginning of October when the yellow carrots are the sweetest, you take fresh out of the ground as many as you intend to make use of. Take care to chose them well, that none with black spots be left between them.

But it's illegal for the National Library to reproduce it. Anyone who comes in to the library is free to look at it, but if the library tries to put it on its website or someone tries to copy it down, they would be in breach of the law. Seriously.

Under Australian law the copyright on published works expires 70 years after the death of the author. In the United States the constitution specifies that copyright shall last "for a limited time". But not so here. Australian copyright on unpublished works never expires.

This means the National Library is unable to digitise the recipe (although a renegade group known as the Australian Library and Information Association has put it on its website along with recipes for rhubarb chutney and muddle cake as part of Cooking for Copyright Day last Friday in which illegally published recipes were used to create treats for morning teas). Useful information is locked away forever. And not only letters to Cook.

If you intend to make but a small quantity of the marmalade you may grate your carrots upon a tin grater but should you want any large quantity, you may mince or hatch the carrots which you put into a kettle and add as much fresh water that your carrots be covered with about four inches.

The National Library also holds original letters written by Jane Austen, Charles Darwin, Henry Lawson, Banjo Paterson and Dame Nellie Melba - about 2 million in all, all of which will never fall out of copyright until the law is changed.

The State Library of South Australia holds the early records of the Holden motor company, including design drawings, from 1853. The War Memorial holds diaries and letters from soldiers who died in World War I. It devotes "enormous" resources to conserving them, but it can't put them online even though that's probably the only way to connect with surviving family members.

When your carrots are boiled enough, you must strain them well through a clean linen, and press the felt well, that all the juice may come out. The dregs are a good food for hogs, geese and ducks.

Australia's copyright term is too long. It was boosted from 50 years after the death of the author to 70 years a decade ago for no reason other than that the United States demanded it in return for granting us a free trade agreement. But that's for public works. The copyright on unpublished works is immortal.

You put the filtrated juice of carrots into another kettle and boil it again over a small fire until it gets the thickness of a fluid honey, at this last boiling you must take great care by constant stirring and by small firing to prevent its sticking to the kettle and burning, which will give to your marmalade a bitter and disagreeable taste.

All our librarians say they want to be able to one day digitise what they've got and share it with us. They've been lobbying the Attorney-General Senator Brandis, but he has other priorities.

In July he rushed through a law that would allow entertainment companies to apply to a court to block sites that illegally displayed programs such as Game of Thrones. It was urgent. Way back in November 2013, he received a series of recommendations from Australian Law Reform Commission report that would open up rather than close down access to information. He was going to carefully consider them.

Brandis is a big supporter of Australia's copyright laws. By waiting rather than acting, he is opening them to ridicule.

Should your marmalade spoil by some accident or other and get some moisture at the top, you take off the moisture with a spoon and boil it again and it will regain its first sweetness.

In The Age and Sydney Morning Herald

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Patently ridiculous. Why it's time to wind them back

Sunday column

Hands up if you like the idea of running chocolate through a 3D printer.

Hands up if you wish you had “invented” it?

That’s what four US inventors claim to have done. They say they also invented the (fairly obvious) related concept of keeping the chocolate at a constant temperature as it moves through the equipment. They’ve applied for a patent. If they get it they’ll make money every time someone builds a 3D printer that can make shapes out of chocolate. They thought of it first.

It raises an alarming prospect, that of 3D printing patents without end. One for each different material that can be melted and squeezed through a printing head before becoming solid - a different patent for for each different person who “invented” the idea.

Why do I think the idea is alarming? It’ll do the exact opposite of what the patent system is meant to do. It is meant to encourage innovation. But having to send off a cheque here, a cheque there to an unknown number of people who can claim to have “invented” a fairly obvious idea means some of the people who actually build things won’t bother.

You don’t need to have built something, or even know how to build something, to get a patent.

US patent 6025810 is a case in point. It is a method for transmitting information faster than the speed of light, using the fifth dimension.

All you need is to be able to claim that you thought of the idea first, and to describe it in complex language.

Jim Logan has a patent for a “system for disseminating media content representing episodes in a serialized sequence”. He is using it to demand money from podcasters. He says he invented the podcast. But he doesn’t podcast and he didn’t help develop podcasting software. His contribution was to distribute audio programs on cassette tapes in the mid-1990s and patent the idea. I distributed them while I was at high school in the mid-1970s, but I never thought of applying for a patent. Jim has already got a court to order Apple to pay him $8 million for (inadvertently) infringing his patent on the idea of a playlist...

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Jim is a patent troll. He doesn’t like the term, and you can hear him quibble with it in the latest edition of the US National Public Radio podcast Planet Money. A troll is someone who neither makes the product nor provides the service but who makes money threatening legal action against people who do.

MPHJ Technology Investments and an array of shell companies has been sending out thousands of letters to small businesses across the US demanding they pay $1000 per worker because they use scanners to email documents. Almost every business uses scanners to email documents. Many have paid up.

President Obama this week published a report defining trolls as firms that “focus on aggressive litigation using such tactics as threatening to sue thousands of companies at once without specific evidence of infringement against any of them, creating shell companies that make it difficult for defendants to know who is suing them, and asserting that their patents cover inventions not imagined at the time they were granted.”

It says lawsuits by trolls have tripled in the past two years, accounting for two thirds of of all infringement suits. Obama went on the offensive, asking Congress to limit lawsuits to people who make rather than people who use technology. He also wants courts to award “loser pays” judgements where the trolls have to pay their intended victims for wasting their money and their time.

But I am not sure it is enough. I am not sure we shouldn’t abolish patents altogether. It’d do little to slow innovation in the information technology industry, almost certainly quickening it. The authors of a Federal Reserve Bank of St Louis study The Case Against Patents argue that James Watt’s patents on the steam engine held back Britain's industrial progress for decades.

They say during the thirty years of Watt’s patents they the UK added just 750 horsepower of steam engines per year. In the thirty years after they expired it added more than 4000 per year. And the engines became much more efficient. Watt had used his patents to block the development of the high-pressure steam engine.

Rather than hacking away at patents Australia has been extending them. In 1994 at the request of the World Trade Organisation Australia retrospectively extended the life of existing patents from 16 to 20 years. An Industry Commission study found the decision could have cost the economy $2 billion.

The health minister has before her a report recommending winding back the practice of extending drug patents. It’d be a start.

In today's Canberra Times and Sun Herald


When Patents Hit the Podcast: Planet Money May 31 2013

22 minutes, play or RIGHT CLICK to download mp3
































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Copyright. Users might get rights

In the land down under

JJ Harrison, Creative Commons

The composers of the iconic song “Land Down Under” might never have been taken to court for allegedly stealing notes from the tune “Kookaburra Sits on the Old Gum Tree” had a new law proposed by the Australian Law Reform Commission been in force at the time.

The Commission has proposed scrapping the existing piecemeal exemptions from the Copyright Act and replacing them with a simple exemption allowing “fair use”.

The “creative quotation” of copyrighted works would become legal as would “non consumptive use” where copyrighted material is incidentally copied in the process of transferring legally-aquired files from one storage medium to another.

At the moment both fall foul of Australian law even though both are allowed in the United States which specifically protects “fair use”.

“This would bring us into line with the United States with whom we have a free trade agreement,” said Australian National University intellectual property expert Matthew Rimmer.

“It would give people rights when it comes to technologies such as 3D printing which can’t possibly be provided for by specific exemptions because the shape of the technologies is not yet clear.”

“Men at Work and EMI could have used it as a defence in the Kookaburra case. I think what they did was fair use. It would have been allowed as a creative quotation"...

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The Law Reform Commission wants comments on the proposal by the end of July. It will report to the government in November.

In today's Age

Recommended reading

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Patents. The rules that hurt the Australian drug industry

Yes - that's hurt. Really.

Australia’s enthusiastic approach to extending the life of pharmaceutical patents has cost the economy “billions of dollars” an independent review has found.

Originally 14 years, then 16 years and now the 20 years enshrined in the US Australia Free Trade Agreement, the review finds the extensions to the standard life of drug patents have been made “without careful regard to whether this was in our own economic interest”.

Justified at the time a measures to “encourage the development of the pharmaceutical products industry in Australia” the review finds instead they’ve suppressed the development of a generic drugs industry and cost the government $200 million per year by slowing the entry of cheap generic drugs into the pharmaceutical benefits scheme.

Generic manufacturers have missed out on an estimated $2 billion over eight years.

The report says 70 per cent of drug patents expire later in Australia than in other countries.

“If you want to fill the gap when an original drug comes off patent you want to manufacture and stockpile generics to be ready,” said the inquiry’s chairman Nicholas Gruen Tuesday.

“But, and this is really quite remarkable, patent rights have been defined to mean Australian firms can’t do that while the drug is under patent her, even though foreign firms where patents have expired can. So they get the first-mover advantage.”

“Likewise Australian firms can’t manufacture for export to countries where the drugs have come off patent even though it is legal to sell them there.”..

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Dr Gruen said part of the problem was that the legal situation was murky.

“A generic manufacturer is by definition a lower profit per unit than an originator and legal proceedings are highly expensive, five to seven million dollars believe it or not.”

“And there are layers of difficulty. There is the domestic law and then there is the United States Australia Free Trade Agreement which can allow an originator to get the US government to represent its interests.”

“Our government should be helping clarify the law, but there is no evidence we can find that the government has made representations on behalf of the manufacturers affected.”

The draft report recommends Australia cut the term of the five year semi-automatic patent extension to one year, using part of the savings to directly subsidise research and development.

“The funding can be directed to build research and development patents would not. New antibiotics are one example, the sort which once developed would be used as sparingly as possible to prevent the development of antibodies. Also so-called orphan drugs which treat rare and not commercially lucrative diseases, and drugs for diseases in the third world”.

The review wants trade negotiations such as those over the proposed Trans Pacific Partnership to be much more focused on the costs and benefits to Australia of extending intellectual property.

“So far we’ve seen no evidence suggesting the Australian government has shown any vigor in pursuing any of these issues or an agenda for a patent rights regime that would more fully advantage Australia,” Dr Gruen said.

The review wants written responses to its draft report by the end of the month.

It will deliver its final report to industry minister Greg Combet in May.

In The Age


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You use a computer, you think you're safe...

Wednesday column

You sign up for a web service. You violate the terms and conditions. What’s the worst that could happen?

Aaron Swartz was 24. No saint, he hid a laptop and a hard drive in a cupboard at the Massachusetts Institute of Technology, signed up to the journal storage service JSOTR, and began downloading.

Some five million journal articles later (there was apparently an allowable limit, but neither JSTOR nor the MIT enforced it) he was arrested and charged with computer fraud.

JSTOR didn’t want him charged. It felt he had merely broken a contract. It asked for the copies back and left it at that. Going further would be “like trying to put someone in jail for allegedly checking out too many books from the library,” was how one of his friends put it.

If Swartz had broken any other sort of contract, say one involving real estate or the purchase of a multi-million dollar corporation, the authorities couldn’t have touched him. Those sort of contracts, no matter how big, are settled between the parties, through litigation if necessary.

But in the United States contracts involving computing services are different. The US Computer Fraud and Abuse Act makes it a crime to violate a website’s terms of service where a sum of more than $5000 is involved. There doesn’t need to be a victim and it doesn’t need to complain.

The secret service took over the investigation, just as it had that of Bradley Manning who is charged with handing classified files to WikiLeaks, also in part under the disturbingly broad Computer Fraud and Abuse Act.

Boasting of its “aggressive stance in the investigation of computer intrusions” the service swept together enough charges to put the 24-year old in jail for a jaw-dropping 35 years (although six months or laughed out of court might have been more likely).

An Obama appointee, Attorney Carmen Ortiz grandstanded, issuing a press release declaring: “Stealing is stealing whether you use a computer command or a crowbar, and whether you take documents, data or dollars. It is equally harmful to the victim whether you sell what you have stolen or give it away.” Her office refused to plea-bargain unless Swartz pleaded guilty to every single charge.

On January 11, two years into his ordeal, Swartz killed himself... He was 26. At last week’s funeral his father said he was “pushed to his death by the government”.

An expert in computer protection who was to speak at the trial said if he had been asked whether what Swartz did was wrong he would have replied that it was “inconsiderate, in the same way it is inconsiderate to write a cheque at the supermarket while a dozen people queue up behind you or to check out every book at the library”.

“I know a criminal hack when I see it,” he wrote. “Aaron’s downloading of journal articles from an unlocked closet is not an offense worth 35 years in jail.”

It looks as if the authorities wanted to make an example of Swartz. He was part of the successful fight against the punative Stop Online Piracy Act. At age 13 he helped design the RSS code that many of us use today to keep up to date with websites. He had previously distributed for free costly US court records and come to the attention of the FBI.

In extraordinary intervention shortly before his death JSTOR made a limited version of its service available to the public free worldwide. It may have been what Swartz was trying to achieve. In a tribute it described Swartz as “a truly gifted person who made important contributions to the development of the internet and the web from which we all benefit”.

“The case is one that we ourselves had regretted being drawn into from the outset,” it confirmed. “Our mission is to foster widespread access to the world’s body of scholarly knowledge”.

In response Democratic congresswoman Zoe Lofgren has drafted ‘Aaron’s Law’, an amendment to the Computer Fraud Act that would specifically prevent violations to the terms and conditions of a web service being treated as crimes. But she’ll be up against as powerful forces as if she taken on the gun lobby.

They extend to Australia.

Early one morning in 2003 the Australian Federal Police raided the weatherboard house Hew Griffiths shared with his father on the NSW central coast and charged him with breaking a US law.

His crime had been to share illegally-downloaded software. He had never been to the United States. Like most Australians he had assumed he wasn’t subject to US law.

John Howard’s justice minister Chris Ellison refused to intervene (the government was negotiating the US-Australia free trade agreement at the time). Griffiths became the first foreign national anywhere to be forcibly taken to the United States to face copyright charges.

“Whether committed with a gun or a keyboard – theft is theft,” declared US attorney Chuck Rosenberg, hailing the precedent. “For those inclined to steal intellectual property here, or from halfway around the world, they are on notice that we can and will reach them.”

Facing ten years in prison, Griffiths pleaded guilty and served six months. He was well-treated. He told me later the US is “good at running prisons”. The three years he had spent in Sydney’s Silverwater Detention Centre fighting the extradition were much less pleasant.

Australia’s decision to surrender sovereignty over Griffiths took place as it made another. In order to get the free trade agreement through it agreed to make intellectual property part of Australia’s criminal as well as civil law. Our government (or the US government for that matter) is now free to prosecute an Australian for a breach of copyright and threaten a jail term whether or not the injured party minds. It can be pressed into taking action the injured party would otherwise have to take itself.

The US is pushing for even more in negotiations currently underway over the Trans Pacific Partnership trade agreement.

We should say no.

In today's Sydney Morning Herald and Age


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