The Australian Innovation Community

Here is today’s column for the Financial Review.
Patently there’s a problem
As Mark Twain said, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so”.
Our biggest mistakes often come when we’re most untroubled by our logic – even when it’s wrong! For decades we’ve been applying this syllogism: Intellectual property (IP) stimulates innovation and creativity. Therefore stronger IP generates more.
We might know it for sure, but surprisingly often, it just ain’t so.
Given its costs to consumers’, stronger intellectual property protection is only worthwhile where it encourages IP production that would not otherwise have occurred.
Yet we’ve often strengthened protection for IP that’s already in existence. For instance we’ve lengthened the period of protection retrospectively.

• Like when we agreed with all the other intellectual property importers in the world – that’s pretty much everyone except the US – to retrospectively extend patent terms from sixteen to twenty years.
• Like when we negotiated the Australia U.S. Free Trade Agreement to extent copyright protection for an additional 20 years. The pre-WWI song “Happy Birthday” finally escaped Australian copyright in 1997 – but back it went. Happy birthday indeed.

This lurch towards IP mercantilism hasn’t just been driven by the US’s trade negotiating muscle. From the early eighties, judges around the world somehow caught the zeitgeist. Intellectual property came to be seen as such a Good Thing that well reasoned judicial taboos on patenting software and business methods and various doctrines which stood in the way of patenting the obvious were whittled away.
The result? Today we have people successfully patenting garden swings and toast! Litigation on software patents is four times more likely than chemical patents; business methods patents twelve times more likely; finance patents 49 times.
But what’s ultimately much more serious are road blocks preventing further innovation. And massive uncertainty as software developers must now use lawyers as minesweepers as they negotiate the patent thicket before them – at hundreds of dollars an hour.
Last week the lawyers struck again! The Copyright Agency Limited (CAL) collects royalties for copyright owners. Over the last decade they’ve driven up their royalties from around $7 million to $50 million per year.
A lot of this comes from the penurious education sector and, given that quite a bit of the content on which CAL earns royalties is generated by those on the public purse, a simple public subsidy to content creation would get more money through to creators. And see more creation.
CAL is still broadening its horizons. It’s seeking royalties from the NSW Government whenever it ‘republishes’ the surveyor’s plans of your housing block.
These documents have already been created, often ages ago, by surveyors paid by the original developer of the block. They’ve been deposited on the public record and so are available for free distribution.
The case went to the Full Court of the Federal Court which held unanimously in favour of NSW’s free right to use and disseminate the plans. But last Wednesday, in a case that’s gone all but unreported, the High Court held unanimously that what the Federal Court seemed to know for sure just ain’t so.
I’ll leave the legal reasoning to the lawyers, but one lawyer – Professor Brian Fitzgerald of the Queensland University of Technology – may be underwhelmed having proffered a range of legal arguments that their Honours dealt with sketchily if at all.
Economically it’s the usual travesty.
The decision increases costs for users – including you next time you need a copy of your title documents. Yet the increased IP will encourage not one additional unit of surveying (Is a unit of surveying a serve?). And how far has the free flow of other content been jeopardised by their Honours’ reasoning?
While an extra $20 odd here or there for surveyors’ plans is small beer, these imposts frustrate those who might otherwise add value to the content in unforeseeable ways. Five years ago, who would have predicted ‘street view’ on Google maps – which launched in Australia last week along with the CAL decision?
That’s why around the world in places like the UK and New Zealand, Governments have established comprehensive policies to optimise public access to publicly owned information. Australia has hastened more slowly and spasmodically.
Our Parliament could pick up the pace by legislating so that that in the future, it just ain’t gonna be so.