A fair trade
A fair trade
The free trade agreement between Australia and the United States has stirred up its share of controversy in Australia, not least from the IT community. Here, Pia Smith, chairman of open source advocacy group Linux Australia, expresses her concerns over the ramifications of the agreement for software development in Australia.
The Australia-US Free Trade Agreement has been passed, with two amendments intact as proposed by the Opposition. One amendment was about protecting local content, and the other was about holding companies responsible for "dodgy patents"-as Mark Latham called them-in order to protect the integrity of our PBS system. Our PBS system is envied worldwide, based on generic drugs, and ensures Australians affordable prices of drugs.
Interestingly enough, chapter 17 in the FTA, which deals with Intellectual Property protections and covers some similar grounds in terms of patents, was not brought up as a major issue. Chapter 17 has been a topic of hot debate since the FTA text was released publicly, and most experts agree that increasing IP protections is not in our best interests, considering we as a country are net importers of IP by a factor of 2:1.
A significant part of Chapter 17 is based on the US Digital Millennium Copyright Act (DMCA), introduced in the US in 1998. This bill has seen some unprecedented and destructive activity under its name, and has been criticised both internationally and locally in the US. Locking ourselves into such immature and largely untested legislation under the guise of an FTA, where we have little control to change the legislation locally, is potentially quite dangerous to our ICT sector and consumers.
In the US under the DMCA, we have seen software developers thrown in jail, small companies threatened, research and development stifled, US technical and security conferences boycotted, and even the generic markets threatened (such as printer cartridges, remote controls)1.
Even senior White House official Richard Clarke called for DMCA reform in 2002, saying: "I think a lot of people didn't realise that it would have this potential chilling effect on vulnerability research". The DMCA was designed to protect IP creators and punish pirates, but it has ended up being a huge weapon of anti-competitive, anti-innovative behaviour, wielded by those looking to control the market -all this usually at the cost of legitimate activities and consumers rights.
Back to Australia, how will this legislation affect us? Over the past four years, we have been experimenting with our own Digital Agenda Act (DAA). This legislation was a toned down version of the DMCA, and we have had a good review of the legislation which has shown up issues to address. Through our own system, we have been slowly testing and reviewing legislation to protect IP creators and healthy competition, while ensuring that illegal activities are justly punished.
We have in effect ignored our own discovery process and lessons by taking on chapter 17 of the FTA. One of the most concerning issues is that in Australia we do not have equivalent "fair use" laws as exist in the US. Therefore we have taken on the world's most restrictive IP law without any of the consumer protections that in part balance it out in the US.
Linux Australia investigated the FTA when the text was release earlier this year. Our legal advice on what it contained concerned us greatly, hence our efforts to ensure the Government and Australian public understand what is in chapter 17. There are several specific issues, the most worrying being the locking in of the US-style patents system, the anti-circumvention law modifications and reductions of consumer rights. A full text of exactly what changes will happen to our Australia law under the FTA can be found on our website2, along with the 3600 signatures to our petition against chapter 17 and other easy to read information3. We encourage all concerned individuals to look over our conclusions to make their own decisions.
Australia has recently made changes to its patent law, experimenting with approaches similar to those in the US. We are now permanently committed to those changes. We currently have a fairly low threshold for software patents, and thus some quite trivial patents are allowed through. For the uninitiated, a software patent basically takes a method within software and locks it up.
There have already been cases in Australia of companies patenting an idea with no intention to develop the idea, but rather to make money off it when someone else puts in the effort. Every piece of software will infringe upon some patent, due to the trivial patents being lodged currently, and thus owning a patent doesn't necessarily protect the inventor. It becomes a case of the biggest patent portfolio winning. Several big companies such as Oracle have come out against patents in general, and in Europe software has been treated very much the same as maths, or art, in that software methods are simply not able to be patented. On the patents issue specifically, no one could put it better than Bill Gates himself, who in a 1991 memo entitled "Challenges and Strategy" commented: "If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today."
Anti-circumvention laws imposed in the FTA basically redefine the meaning of a "protection measure", and these laws have seen printer companies in the US sue after-market printer cartridge companies. It has seen ICT companies sue smaller companies. Even Apple has used it to threaten RealPlayer, which produced its own software that can be used to put music onto Apple's iPod. It has redefined consumer rights for the worse.
The laws are being created largely for the benefit of the IP holders, being the large music industry and movie industry players, large software companies, etc. There has been a global scare about how much piracy and illegal activities exist, even though we have not seen a significant impact on sales or profits in the movie or music industries. These companies have been promoting the image of a tidal wave of piracy destroying their businesses, despite the fact that profits tell a different story: ARIA announced record album sales again for last year, and the US movie industry set a new record for box-office sales with over US$1billion in June this year.
These laws lock consumers into giving up their rights, and push out the smaller competition. They threaten developers and researchers, which leads to less innovation. Chapter 17 does not benefit society in any way, but rather locks Australia further into the whims of the US market, removing our ability to locally change and review them. We hope the Government is willing to call upon Linux Australia, and other organisations focused on Australian interests, to assist with translating the FTA into Australian law, doing so in a way that hopefully protects IP creators, innovation and healthy competition without unduly threatening users, developers or researchers.
References
1. http://www.eff.org/IP/DMCA/unintended_consequences.php
2. http://linux.org.au/papers/fta_comparison_table_040322.pdf
3. http://linux.org.au/fta/
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