“A good IP system balances the interest of rights holders and users, but Australia’s system has swung too far in favour of vocal rights holders and influential IP exporting nations,” a statement from the commission read.
According to commissioner Karen Chester, the IP imbalance is exacerbated in Australia where IP imports “overwhelmingly” outnumber IP exports.
“This gap is widening,” Ms Chester said.
“Most of the profits from excessive IP rights flow offshore, while Australian consumers and taxpayers are left to pick up the tab.”
One of the key issues to emerge from the 601 page draft is the recommendation to make Commercial IP transactions subject to competition law. The commission proposes this can be achieved by repealing the current IP exception in the Competition and Consumer Act 2010.
On the subject of enforcing IP rights enforcement in Australia, the commission found that the courts “work reasonably well for […] disputes between large firms, but small-and medium-size enterprises can find it difficult to enforce their IP rights.”
Despite this, the commission has recommended a number of improvements to the existing court system, which it said will alleviate time and cost constraints for small and medium-size enterprises involved in IP disputes.
“Expanding and separating the jurisdiction of the Federal Circuit Court from the Federal Court may provide another avenue for smaller enterprises to resolve lower value disputes,” the commission added.
A number of recommended changes to the Copyright Act have also been made by the commission. The adoption of a principles-based fair-use exception has been recommended with the intended effect of protecting “user rights without undermining the incentive to create”.
This new exception has been proposed by the Productivity Commission in place of the current ‘fair dealing arrangements’ that it describes in its report as being too narrow and prescriptive.
According to the commission, the current exceptions “do not reflect the way people actually consume and use content in the digital world, and are insufficiently flexible to account for new legitimate uses of copyright material”.
Invitations for submissions responding to the Productivity Commission draft report will be accepted by 3 June.