August 2004

CLIENT CIRCULAR #1: THE FTA AMENDMENTS

Ignore the election points-scoring: The current public debate about the FTA amendments presents business leaders with a reminder to revisit their IP management and IP strategies.

Certain commentators see in the FTA a move towards harmonisation of the IP laws of Australia and the USA. Of course, apart from some recent grudging concessions at the WTO, when it comes to IP laws, the US has always been out of step with the rest of the industrialised world. But there remains a long way to go. Is Australia moving toward the States and away from other trading blocs? Is this a trend or an aberration? What effect will it have on our trade? Do we need to adapt our IP strategies?

First, consider what drives our IP strategies (what we patent and why): Our long term market view? If so, does our view align with the FTA trend? Does our IP programme support our point of view? Conversely, will a changing trend provide opportunity for innovation and new IP? Can we envisage now what such IP may look like? If so, we can set out to design it and, in turn, formulate a marketing strategy that rides on its back. In other words, we can devise a market strategy that already has built-in IP support.

Consider a baseline example: At US law, a patent goes to the first inventor of the invention. The rest of the world (and Australia) awards it to the first to claim the invention by filing the patent at the patent office. Suppose Australia continues harmonise with the US and introduces legislation recognising (at least in part) the rights of the first to invent. This could affect your policies and practices – not only internally but also how you deal with external inventors, such as those paid to research, as in universities.

Outsourcing R&D is currently the trend. Academic institutions responded by becoming more savvy about the value of their IP. If, in future, the first to invent will by default be first owner of the ensuing patent rights, the risks inherent in outsourcing could become unacceptably high. The trend may end up being reversed. Expertise may need to be brought back in-house. Targeted technology areas may become difficult to service. Overexposure here may lay waste to marketing efforts in those directions.

IP Strategies International is ready to work with you and your clients in assessing the strategic impact of the recent FTA negotiations on their IP management. We will move them beyond uncomfortable speculation.

Next week: The Amendments – a Closer Look