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Intellectual Property and Free Trade Agreements in the Asia-Pacific Region pp 315–333Cite as

Limits of Free Trade Agreements: The New Zealand/Australia Experience

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Part of the book series: MPI Studies on Intellectual Property and Competition Law ((MSIP,volume 24))

Abstract

This chapter discusses the several reasons why relations between New Zealand and Australia have not become closer notwithstanding the Closer Economic Relationship (CER) Agreement between the countries. The authors suggest that the experience of CER offers a salutary tale on the limits of ‘old style’ broad agreements in developing free trade; especially when compared to the new style FTA. The authors conclude that the differences between Australia and New Zealand intellectual property law are considerable in detail and in approach. In Australia, where intellectual property standards tend to track those in the US and Europe (even beyond those levels prescribed by the international agreements), it is often wondered why New Zealand is so intent on maintaining its own course in matters such as copyright term and parallel imports. Conversely, the attitude of many New Zealanders is that the New Zealand position is best for New Zealand, even if something else may be better for Australia.

S. Frankel: LLB (Hons) (Well), LLM (London), Professor of Law and Director.

M. Richardson: BA, LLB (Well), LLM (Yale), LLM (Brussels), Professor of Law.

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Notes

  1. 1.

    Belich (2001), pp. 46–48.

  2. 2.

    Ibid.

  3. 3.

    OECD (2009), p. 12. This report here indicates that from 2006 to 2008 NZ had the lowest subsidies of all the OECD countries, followed by Australia. It states: ‘The level of producer support in OECD countries in 2006–08 ranged widely: it was 1 % in New Zealand, 6 % in Australia, 10 % in the United States, 13 % in Mexico, 18 % in Canada, 21 % in Turkey, 27 % in the European Union, 49 % in Japan, 58 % in Iceland, 60 % in Switzerland, 61 % in Korea and 62 % in Norway.’

  4. 4.

    This was particularly important to China because New Zealand waived discriminatory anti-dumping measures that China had to agree to in its WTO Accession Protocol, see Haufbauer and Yee (2005), p. 9.

  5. 5.

    Department of Foreign Affairs and Trade (2009), Table 16, ‘Trade in Goods and Services by Top Ten Partners, 2007–08 (a)’. (China is Australia’s second ranked export and import market for top 10 export markets and top 10 import sources respectively).

  6. 6.

    For instance, according to New Zealand’s published trade statistics for 2008–2009 (see www.stats.govt.nz/methods_and_services/tablebuilder/exports-and-imports-tables.aspx. Accessed 24 November 2008, Australia was New Zealand’s largest single source of imports and largest single market for exports (merchandise trade 2000–2008); while New Zealand ranked 6th and 8th among Australia’s top 10 export markets and import sources: Department of Foreign Affairs and Trade (2009).

  7. 7.

    For some useful background, discussion and prognosis, see Lloyd (2002), p. 153; Walker (2004), pp. 390 (Part 1), 440 (Part 2).

  8. 8.

    Singapore, Brunei, Chile and New Zealand entered into a FTA with open accession (known as P4). That agreement provided the starting point for the Trans-Pacific Partnership Negotiation which has, at the time of writing undergone several rounds of negotiation. The members of the negotiation are the P4 members and Australia, United States, Vietnam, Peru, Malaysia, Canada and Mexico. At the time of writing, Japan has been invited to join. For a discussion of the intellectual property chapter of the agreement, see Frankel (2012).

  9. 9.

    Both Australia and New Zealand have negotiated with the United States, EU, Canada, Japan, Korea and Switzerland in regards to an instrument known as the Anti-Counterfeiting Trade Agreement (ACTA). The full text of the agreement can be found at http://www.med.govt.nz/business/intellectual-property/pdf-docs-library/intellectual-property-enforcement/anti-counterfeiting-trade-agreement-acta/final-text-of-the-anti-counterfeiting-trade-agreement-216-kb-pdf.pdf. Accessed 18 March 2013.

  10. 10.

    Grimshaw (2002), pp. 17–18.

  11. 11.

    In today’s New Zealand the relationship between Māori and the Government of New Zealand (the Crown) is termed a ‘partnership’.

  12. 12.

    Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization, opened for signature Marrakesh, Morocco, 15 April 1994 (entered into force 1 January 1995).

  13. 13.

    We use the term ‘free trade agreements’ in preference to ‘regional trade agreements’ as some of the agreements in the Australia/NZ region (if such a region exists) lack a regional basis. The Trans-Pacific Partnership is one such agreement, which is neither bilateral nor regional (its parties being Brunei, Chile, Singapore and New Zealand).

  14. 14.

    See, e.g., TRIPS Agreement, art. 1.1.

  15. 15.

    Australia–United States Free Trade Agreement 2004, done 18 May 2004 (entered into force 1 January 2005).

  16. 16.

    See especially Bhagwati (2008).

  17. 17.

    For the text of the ‘2000 Memorandum of Understanding between the Government of New Zealand and the Government of Australia on Business Law Coordination’ (2000 MOU), which superseded the ‘1988 Memorandum of Understanding between the Government of New Zealand and the Government of Australia on Business Law Harmonisation’ (1998 MOU), see Department of Foreign Affairs and Trade, Australia–New Zealand Closer Economic Relations Trade Agreement, 2000 Memorandum of Understanding between the Government of New Zealand and the Government of Australia on Coordination of Business Law’ (2000 MOU) www.dfat.gov.au/geo/new_zealand/anz_cer/memorandum_of_understanding_business_law.html. Accessed 18 December 2009. It was subsequently superseded by the ‘The Memorandum between New Zealand and Australia on Coordination of Business Law’ (2006 MOU) http://archive.treasury.gov.au/contentitem.asp?ContentID=1073. Accessed 2 July 2013.

  18. 18.

    2000 MOU, ‘Work Programme for the Coordination of Business Law’.

  19. 19.

    2006 MOU, Annex, ‘Work Programme for Coordination of Business Law’, item j.

  20. 20.

    ‘“Trade Marks (International Treaties and Enforcement) Amendment Bill” First Reading’, Parliamentary Debates, First Session, Forty-ninth Parliament, 2008–2009 (Hansard) 7 April 2009 (Week 9, Volume 653), p. 2476 (Simon Power (Associate Minister of Finance)); and Judith Tizard, Associate Minister of Commerce, ‘International Trade Mark Treaties Paper B: Accession to the Madrid Protocol and the Nice Agreement’, Office of the Associate Minister of Commerce, File No: 1/3/1/4, para. 17 and Appendix C, http://www.med.govt.nz/business/intellectual-property/pdf-docs-library/trade-marks/trade-mark-treaties-cab-20060814-b.pdf. Accessed 14 March 2013.

  21. 21.

    ‘“Trade Marks (International Treaties and Enforcement) Amendment Bill” First Reading’, Parliamentary Debates, First Session, Forty-ninth Parliament, 2008–2009 (Hansard) 7 April 2009 (Week 9, Volume 653), p. 2476 (Simon Power (Associate Minister of Finance)).

  22. 22.

    Patents Bill 2008 (NZ), cll 6–8 (The Bill awaits its third reading).

  23. 23.

    For a discussion of patent law differences and potential for co-ordination, see Frankel et al. (2013).

  24. 24.

    IP Australia (2009), pp. 10–11.

  25. 25.

    Generally 70 years from the death of the author in Australia under the Copyright Act 1968 (Cth) s. 33; 50 years from the death of the author in New Zealand, under the Copyright Act 1994 (NZ), s. 22 et seq.

  26. 26.

    The different ownership rules mean that the owner of copyright in New Zealand might be different from the owner in Australia. This creates a number of barriers for copyright owners who may use their copyright to trade in both countries. Difficulties include enforceability and issues relating to choice of law and jurisdiction, see Enzed Holdings v. Wynthea Pty Ltd (1984) ATPR 40–447 (FCA). See also discussion in Frankel (2011).

  27. 27.

    Fair dealing for purposes of parody or satire is a defence in the Copyright Act 1968 (Cth) ss 41A and 103AA; but not (specifically) in the fair dealing defences in the Copyright Act 1994 (NZ).

  28. 28.

    Ministry of Economic Development (MED) (2000), paras 219–223; Network Economics Consulting Group for the Ministry of Economic Development (2004), pp. 24–31. For recent—unsuccessful—recommendations from the Australian Productivity Commission to reform the Australian provisions on books (in Copyright Act 1968 (Cth) ss 44 and 112A) especially, bringing them closer to the New Zealand ones, see Productivity Commission (2009).

  29. 29.

    Australia has an international prior art base for both standard and innovation standard patents but ameliorates this by referencing to common general knowledge in Australia in the Patents Act 1990 (Cth) s. 7 (but see IP Australia 2009 as to mooted reforms); also innovation patents have a lower test of innovative step rather than (the standard patent) inventive step in the Patents Act 1990 (Cth) s. 18(1a)(b)(ii). Currently a domestic prior art base applies under Patents Act 1953 (NZ) s. 21(1)(e)—although this will soon change to an international prior art base under the Patents Bill 2008 (NZ) cll. 7 and 8, which is supposedly modelled on the Australian Act. There is no provision for innovation patents in the current New Zealand Act or Bill.

  30. 30.

    Functionality does not preclude registration of a design under the Designs Act 2003 (Cth) whereas it does under the Designs Act 1953 (NZ) s. 2 interpretation of ‘design’.

  31. 31.

    The Trade Marks Act 1995 (Cth) provides for defensive registration of registered trade marks in cases where, because the extent of use with respect to registered goods and/or services to date, ‘it is likely that its use in relation to other goods or services will be taken to indicate that there is a connection those other goods and services and the registered owner of the trade mark’ in Part 17; whereas the Trade Marks Act 1953 (NZ) has no provisions for defensive registration.

  32. 32.

    See Frankel (2005), pp. 83–98.

  33. 33.

    Patents Bill 2008 (NZ) cll. 275–278.

  34. 34.

    See Frankel and Richardson (2008).

  35. 35.

    The word ‘Indigenous’ when capitalised is taken to indicate the Aboriginal and Torres Strait Islander population of Australia. Lower case is used to indicate the more general use of the term to indicate a population indigenous to a particular land, e.g. Māori are indigenous to New Zealand.

  36. 36.

    (1998) 41 IPR 513.

  37. 37.

    Article 2 of the Tiriti o Waitangi/Treaty of Waitangi guarantees Māori peoples the ‘full, exclusive and undisturbed possession of their lands and estates, forests, fisheries and other properties which they may collectively or individually possess’. The Te Roa version accords the peoples tino rangatiratanga over all their taonga (treasures): Pacific Centre for Participatory Democracy (2007), pp. 2–3.

  38. 38.

    Mātauranga Māori and Taonga—The Nature and Extent of Treaty Rights held by Iwi and Hapu in Indigenous Flora and Fauna, Cultural Heritage Objects, and Valued Traditional Knowledge. (‘Wai 262’). In relation to traditional knowledge, the Wai 262 claim ‘seeks the protection of matauranga Māori (Māori traditional knowledge) from inappropriate use’ and also of ‘its control by Māori. Included in the protection of knowledge is the knowledge system itself, and its internal mechanism for transmission, dissemination, tuition, and development’: Pacific Centre for Participatory Democracy (2007).

  39. 39.

    For summary, see Ministry of Economic Development (2007). The claim was filed with the Tribunal in 1991, and was resolved in 2011. The full report by the Tribunal can be found at http://www.waitangitribunal.govt.nz/reports/downloadpdf.asp?ReportID={BF981901-5B55-441C-A93E-8E84B67B76E9}. Accessed 18 March 2013.

  40. 40.

    See Sharwood (1890), pp. 125–126.

  41. 41.

    Frankel (2008).

  42. 42.

    See, for instance, Rimmer (2006); and generally Weatherall and Burrell (2008), pp. 259–319. Also, of course, the fact that the term extension was a European import to the US before it was extended to Australia may also have made it less broadly unappealing than some other aspects of the FTA.

  43. 43.

    For a review of New Zealand’s parallel import laws, see Frankel et al. (2013).

  44. 44.

    See Farrar (1989), p. 461 (where Farrar compares the harmonization objective under the 1988 MOA with the New Zealand Law Commission’s mandate to ‘consider objectively what is the best model and to look at Australian law as part of the total mix’.

  45. 45.

    Crean and Goff (2008). There is a lot to be said for this: patent examination is enormously costly and some of the world’s largest patent offices have expressed difficulty in keeping up with the pace of applications. Having one centre that examines patents would be much more efficient than two centres duplicating the work. This would not necessarily mean, however, that New Zealand would cede control to Australia, rather they could examine for novelty and probably also inventive step, but final registration decisions might be a matter for each individual office. That would mean, for example, where New Zealand might decline a patent because of an exclusion in its law, Australia may not do so.

  46. 46.

    ‘Australia–New Zealand Comparative Examination Project’, Intellectual Property Office Newsletter, 6 November 2007. For further details of the project to date see also ‘Trans-Tasman Harmonisation Project’ www.ipaustralia.gov.au/pdfs/news/tm_transtasman_hamonisation_project.pdf. Accessed 18 December 2009.

  47. 47.

    Frankel and Richardson (2011), pp 527–553.

  48. 48.

    Goddard and NZIER (1999).

  49. 49.

    Goddard (2002), p. 220.

  50. 50.

    For some tentative moves encompassing intellectual property disputes (on the procedural side at least), see McClelland and Dalziel (2008); and as discussed in Mortensen (2009), pp. 213–242.

  51. 51.

    Goddard (2002), p. 212.

  52. 52.

    Hence the establishment of a ‘permanent consultation process between the two offices for dealing with technical matters relating to trade mark examination’ flagged in the trade mark examination project.

  53. 53.

    Frankel et al. (2013).

  54. 54.

    Although that is a core function: see ‘What is IP Australia?’ on IP Australia website, http://www.ipaustralia.gov.au/about-us/what-we-do/. Accessed 18 March 2013.

  55. 55.

    Goddard (2002), p. 214.

  56. 56.

    Or ‘competitive federalism’, as it is more traditionally called: see (for the classic text) Romano (1998), pp. 2359–2430.

  57. 57.

    Here we are talking about unilateral lawmaking, more even than bilateral or plurilateral agreements, although the latter may also may offer a degree of tailoring to individual needs: Cf. Hirsch (2008), pp. 277–299.

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Acknowledgements

S. Frankel: I am grateful to my research assistant Jessica Lai and subsequently Danielle Torne for invaluable research in preparing the chapter, especially the tables.

M. Richardson: Thanks to Jake Goldenfein for excellent research support. This chapter was largely written in 2009 and was further updated in July 2013.

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Authors and Affiliations

  1. New Zealand Centre of International Economic Law, School of Law, Victoria University of Wellington, Wellington, New Zealand

    Susy Frankel

  2. Melbourne Law School, The University of Melbourne, Melbourne, Australia

    Megan Richardson

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Correspondence to Susy Frankel .

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Editors and Affiliations

  1. School of Law Faculty of Business and Law, Deakin University, Melbourne, Australia

    Christoph Antons

  2. Max Planck Institute for Innovation and Competition, Munich, Germany

    Reto M. Hilty

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Frankel, S., Richardson, M. (2015). Limits of Free Trade Agreements: The New Zealand/Australia Experience. In: Antons, C., Hilty, R. (eds) Intellectual Property and Free Trade Agreements in the Asia-Pacific Region. MPI Studies on Intellectual Property and Competition Law, vol 24. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-30888-8_11

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