Background
6.1
Chapter 18 of the previous Trans-Pacific Partnership Agreement (TPP), relating to Intellectual Property and copyright, is built on the World Trade Organisation’s Agreement on Trade-Related Aspects of Intellectual Property (TRIPS Agreement).
6.2
Chapter 18 covered copyright, trademarks, geographical indications, patents, industrial designs, confidential information, plant variety protection, and civil, border and criminal enforcement.
6.3
Chapter 18 included, amongst other matters:
five years protection for data about the safety or efficacy of new pharmaceutical products submitted to the regulatory authority for the purposes of obtaining marketing approval;
protection of patents for biologics medicines;
protecting the exclusive rights of authors, performers and producers with respect to the reproduction, communication, distribution, and broadcasting of their works, performances and phonograms, while providing certain limitations and exceptions;
protections for copyright and related rights through technological protection measures and rights management information; and
a framework of legal incentives for internet service providers to cooperate with content owners to deter unauthorised storage and transmission of copyrighted materials.
6.4
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP 11) suspends a number of the provisions of Chapter 18, including:
provisions on the protection of patents for biologics medicines;
a requirement that new patents be made available for: new uses of a product and new processes using a known product (called secondary patents); and inventions derived from plants;
the ability for a patent holder to extend their patent if there is a delay in approving a patent, or if the sale of a pharmaceutical product is delayed as a result of marketing approval;
a provision establishing a five year protection for patent holders on test data supplied to a government as part of the process for approval for pharmaceuticals;
copyright protection for the life of the author plus 70 years;
the application of civil and criminal penalties for a number of types of changes to protected copyright works; and
the obligation on on-line service providers to cooperate with rights holders to deter online copyright infringement.
Intellectual Property
Medicines
6.5
The TPP 11 suspended provisions relating to pharmaceuticals are a focus of debate by inquiry participants.
6.6
Amongst the suspended provisions are the provisions relating to biologic medicines. Biologic medicines are a rapidly evolving class of medicines that treat difficult to cure diseases and illnesses such as cancer.
6.7
The Public Health Association of Australia (PHAA) described the original TPP 11 provisions relating to biologics as ‘ambiguous’ in their application.
6.8
Biologics are very expensive medicines to develop, and so cost a great deal. The adoption of ‘biosimilar,’ or generic, products from biologic products, would have saved the Australian health system $A367 million in 2015/16, according to the PHAA.
6.9
Another of the suspended provisions that may have increased the cost of health care to Australia is mandating recognition of secondary patents. Secondary patents are patent claims made on a medicine by the original patent owner to cover other uses of a patent medicine.
6.10
Secondary patents effectively extend the patent life of a medicine beyond the original patent term and prevent the introduction of cheaper generic versions of the medicine.
6.11
In Australia, the top 15 most expensive drugs are subject to a mean of 49 patents per drug, extending the patent life of the drugs for long periods.
6.12
Other suspended provisions identified as problematic by the PHAA include:
Data retention provisions which enable medicine patent holders to withhold data such as trial results necessary to allow the development of generic alternatives; and
Patent extensions are granted to patent holders as a mechanism to recoup research and development costs by preventing generic alternatives from entering the market. A number of organisations, such as the Productivity Commission, believe that patent extensions are too easily granted, and should be better targeted.
6.13
The removal of provisions relating to mandatory recognition of secondary patents, data retention periods and patent extensions are also supported by Mylan, a large supplier of generic medicines in Australia.
6.14
Medicines Australia is in favour of the reinstatement of the suspended Intellectual Property provisions, recommending that any expansion of the Parties to the TPP 11 should revisit this issue.
6.15
In particular, Medicines Australia supports:
extending the data retention provisions on the basis that the protection specified in the now suspended articles of the TPP is insufficient; and
ensuring a strong, enforceable patent notification scheme: thereby providing certainty and preventing delay in generic market entry.
6.16
Medicines Australia argues that data retention protection should be strengthened from the current 5 years, and suggests that claims that data protection adds significant costs to Australian patients when accessing Pharmaceutical Benefits Scheme medicines are misleading.
Copyright and open source software
6.17
Open Source Industry Australia (OSIA) discusses the treatment of open source software in the TPP 11.
6.18
Open source software is software that can be freely accessed, used, changed, and shared and modified by anyone.
6.19
Open source software is extensively used in Australia:
The three main things I can put to you as major issues are the Linux operating system, Android phones and the Drupal website that runs the government websites…
… theres an awful lot of infrastructure and things like that in mining and in defence.
6.20
For commercial purposes, open source software uses a model that removes the proprietary aspects of software licencing. In practice, this means that the software can be used for a commercial purpose, but cannot have proprietary restrictions, such as restricting the use of the software by other persons, placed on it.
6.21
The nature of open source software complicates the application of copyright law. The issue is whether an open source software licence constitutes a copyright licence or a contract.
6.22
The argument that open source software licences are copyright licences hinges on the assumption that their users don’t have any rights in relation to the software other than those provided in the open source software licence.
6.23
On the other hand, open source software licences may be contracts in the sense that an open source software licence involves an exchange of some sort, referred to as a ‘consideration.’ This interpretation rests on whether there is an obligation on a person who makes use of open source software to distribute the results as required in the open source software licence. The ‘consideration’ here is the obligation to distribute.
6.24
The nature of the open source software industry is not conducive to litigation, so no legal precedent has been set to resolve this argument.
6.25
According to Open Source Software:
….whats defined as a copyright licence; is FOSS [Free and Open Source Software] classed as a commercial copyright licence; and does the Australian government have the ability to override international copyright laws? The suspended clause actually says that you do not need to give the software when you hand over a system. The GPL [General Public Licence] and FOSS licences, in most cases, say, Yes, you do.
6.26
The problem for the Australian Government is the extent to which open source software is used to run the infrastructure of the electronic environment.
6.27
If the TPP 11 or any other trade agreement compels this issue to be resolved in the courts, the result could be significantly costly:
…if open-source software licences were no longer enforceable in Australia, the cost the Commonwealth alone would face, just in terms of its web presence, from migrating to closed-source systems would be substantial.
Support for suspensions
6.28
OSIA notes that the suspension of Chapter 18 provisions in the TPP 11 is welcomed by the open source software industry. However, OSIA is concerned that these provisions have been suspended rather than excised completely.
6.29
The Australian Digital Alliance is also happy with the suspensions:
…we note that many of the provisions that we identified in that submission as concerning have been suspended in the TPP-11, including overly strict copyright restrictions with respect to technological protection measures and the intermediary safe harbours. This goes a long way to alleviating the detrimental effect of the overly prescriptive copyright provisions in the previous agreement on Australia’s ability to adapt its copyright system in the future in response to changing technologies and social norms.
Uncertainty
6.30
All inquiry participants discussing the suspensions are unhappy about the uncertainty appending to the concept of ‘suspended’ provisions that could be brought back to life by the consent of the TPP 11 parties.
6.31
The National Tertiary Education Union (NTEU) points out that:
… the news that US President Trump intends to potentially re-negotiate the [TPP 11]…could mean that Australia would be subject to the reintroduction of currently excluded provisions, such as copyright extensions, longer monopoly rights on medicines and other controversial provisions… Even if the Australian government currently represented the broad interests of the Australian people in signing the [TPP 11], they would not be required to seek a mandate in reaching an agreement if the US sought to renegotiate.
6.32
OSIA states that the suspension gives rise to an unacceptable degree of uncertainty which will discourage investment in the open source software industry.
So, what we have here is a trade treaty which has optional clauses in it. We may put these clauses back in; we may not put these clauses back in. We don't know at the moment. Our point of view as a business is, how can we measure the risk that's associated with this treaty? We have a totally undefined set of issues in there which fundamentally could affect our business.
6.34
For example, an open source software business may be liable to penalties for using information currently in the public domain that will return to private ownership if the suspensions are removed.
6.35
There is also a degree of concern about the impact on the price of medicines should the suspended provisions be reinstated. If the suspended provisions are reinstated, the introduction of generic medicines will take longer than it currently does.
6.36
Consequently, the original TPP provisions would have seen prolonged higher costs to government or individuals.
6.37
Dr Elizabeth Thurbon warns:
…if the Australian government did decide to concede these highly contentious aspects of the [TPP 11] to the US for geopolitical reasons, it would risk further eroding public support for international economic agreements, exacerbating the already fractured consensus that is so troubling the government.
6.38
The Australian Digital Alliance is of the view that, should the suspended provisions be considered for reinstatement, a process of public consultation should take place:
Should any of the suspended provisions from the former TPP be reintroduced ADA would welcome consultation and public disclosure in relation to those provisions. By extension, ADA renews our advocacy for the implementation of a more rigorous and transparent assessment process before Australia commits to future treaties that would impact Australian IP law.
6.39
The Committee believes that the reimposition of the suspended provisions will have a significant enough impact on Australian business that the suspended provisions should not be reimposed without a public consultation process.
6.40
The Committee therefore recommends that a proposal to reimpose any of the suspended provisions should be considered a treaty amendment, resulting in an inquiry by the Committee into the proposal.
6.41
The Committee recommends that, in the event that the Parties to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership between the Government of Australia and the Governments of: Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam agree to reinstate the suspended provisions of the Trans Pacific Partnership Agreement, the reinstatement be treated as an amendment to the Treaty and be subject to an inquiry by the Committee.