Pursuing Innovation - Intellectual Property Laws

Ms WELLS (Lilley) (17:49): In our modern history, man's invention has propelled mankind and its economy through four technological revolutions. Starting in the 1760s, the first revolution saw coal, water and steam being used to mechanise manufacturing. Electricity, gas and oil emerged as effective sources of energy to facilitate mass production during the second revolution, in the 1870s. From the 1950s we began to see electronics and information technology used to automate production and enable new ways to process and share information.

Today, we are on the cusp of a fourth industrial revolution: the cyber revolution. We have begun the era of artificial intelligence, renewable energy, biometrics, genome editing and 3D printing. The cyber revolution has huge potential for economic growth in Australia. Pursuing innovation in the cyber revolution will be the key to creating high-skilled and highly paid job opportunities in our local economies for the coming generations of Australians.

Strong intellectual property rights are a key component to protecting the commercial success of our own Australian innovation. Intellectual property rights reward an investor's idea and turn it into a commercial opportunity for business growth and job creation through joint ventures and through licensing. This success motivates further innovative endeavours and investment in research and development—and the member for Hotham has just articulated why that is so important and how short we are falling so far.

The innovation patent scheme was introduced back in 2001 as a second-tier patent to create a quicker and more affordable way for our small and medium enterprises to protect their inventions—to protect their innovation. An innovation patent can protect an invention with a short market life that might be superseded by newer inventions, like computer based inventions.

Fifteen years on, the 2016 report from the Productivity Commission found that the majority of small and medium-sized enterprises who use the innovation patent system do not obtain value from it, and instead the system imposes significant costs on third parties and our broader Australian community. So this bill seeks to implement some of the recommendations of that Productivity Commission report, and those of other key stakeholders, by abolishing the dedicated innovation patent scheme designed for the small and medium enterprises.

I commend the government for using their common sense and agreeing to Labor's amendments in the Senate to extend the grandfathering period for the innovation patent scheme and to conduct a review of the accessibility of patents for small and medium sized enterprises. Without this amendment a significant and serious gap for small and medium enterprises would have been created in the patent system.

I note my support for this bill as a necessary first step to ensuring Australia's intellectual property scheme is fit for purpose and balances access to ideas and products, whilst still encouraging innovation, investment and the production of new technology. But it is only a first step.

It is imperative that the minister's review, referred to in this bill, pinpoints gaps and challenges that are preventing small and medium enterprises from accessing the intellectual property scheme and the necessary changes that will need to be made to reduce vulnerability in the competitive market. The bill as it stands does not make the application process or cost for standard patents easier for small and medium enterprises, and it also does not make any changes to the standard patent process to account for the incremental innovation gains often secured by smaller businesses.

I challenge the government to consider the broader problem of access to justice in small and in medium enterprises. Intellectual property law can be considered highly technical and complex to small and medium enterprises—interesting though it is to all of us here! Consultations undertaken by the department in 2019 found that the majority of small and medium enterprises consulted did not have the skills or the experience to effectively recognise and exploit their intellectual capital, and they lacked the foresight, or the resourcing, to deal with enforcement and infringement actions as they arose.

These concerns have also been voiced by the Australian Small Business and Family Enterprise Ombudsman, who has noted that, while this bill goes some way towards simplifying the application process for small businesses to obtain and protect intellectual property, it does not improve the legalistic language or reduce the complexities of the underlying legislation.

As a former negligence lawyer, I understand how difficult it can be for everyday workers to figure out legal jargon and how that very easily becomes an entire barrier to accessing justice. This becomes a significant problem for small and medium enterprises who can often not afford the equivalent strategic legal advice that larger corporations have access to—that larger corporations often have internally within the firm. As the member for Hotham discussed previously, this is especially concerning in light of the view that there is now evidence that some law firms specialising in intellectual property are strategically using these very innovation patents as a way to increase uncertainty over the scope of rights for competitors and improve their own clients' bargaining position in patent disputes and to frustrate entry by competitors.

What are we going to do about it? We must strengthen intellectual property to make sure that small and medium enterprises in Australia are able to take full advantage of the commercial opportunities available to them. We must have fair reward for invention. Amending Australia's intellectual property scheme is only a small portion of the work needed to be done to encourage small and medium enterprises to pursue innovative ideas. Innovation and intellectual property are globally tradeable assets that have the potential to play a significant role in our economy. Australian businesses are no longer competing with the shop down the road. We need to make sure that these businesses have the tools and the infrastructure that they need to compete and succeed against global giants. In response to the Productivity Commission's report, the Morrison government stated that more targeted access will stimulate innovation in small and medium enterprises in Australia. So my question is: where is this targeted assistance? Despite the wealth of opportunities for Australians, the Morrison government has no plan to address the systemic shift in technology and globalisation. Only $5.5 million of the coalition's research infrastructure investment plan was spent in the 2018-19 financial year. The Morrison government plans to spend less on innovation over the next four years than it did in the previous four.

While the Morrison government rests on its laurels, our global competitors are out there being smart and strategic. Artificial intelligence is at the forefront of the cyber revolution, and while other countries are already locked in an arms race to capitalise on the opportunities, the Morrison government is gazing contentedly at its navel. PricewaterhouseCoopers estimates that artificial intelligence will deliver $22.9 trillion to the global economy by 2030. China has a very public and very well-funded commitment to artificial intelligence. It has been estimated that the total spending on artificial intelligence in China in 2017 was $12 billion, and it's estimated to grow to $70 billion by 2020. In France, President Macron developed a national artificial intelligence strategy, and earmarked 1.5 billion euros to fund the plan. Germany has planned to invest three billion euros to accelerate the adoption and development of artificial intelligence technologies. The Russian Direct Investment Fund raised $2 billion to support domestic companies developing artificial intelligence solutions. In the US, venture capital investment in the artificial intelligence sector tops $8 billion.

And Australia? The Morrison government has allocated $29.9 million over four years in artificial intelligence. How will we compete? We won't compete. This complacency does over huge opportunities for enterprising Australians, and it's a shame. Small and medium enterprises cannot compete in a global market when they are receiving such a small fraction of competitive country funding. There is a huge economic opportunity right in our line of sight. In 2018, the World Economic Forum projected that artificial intelligence will create 58 million new jobs across the globe by 2022. We want those jobs. We want them here and we want them in our local economies.

But to drive job growth governments must take an active role in supporting existing workforces through reskilling and upskilling. Australian TAFEs and universities are the springboard for innovation and the pursuit of skills and knowledge. Education and training is the great equaliser, because it gives all people of all backgrounds, no matter their postcode, an opportunity for self-improvement and to pursue their own aspirations. While higher education and innovation are inextricably linked, there is a myth that innovation will be the ultimate demise of traditional job security and traditional jobs.

But where a candle is blown out, a light bulb, and preferably an LED light bulb, is switched on. According to Deloitte, over the next six years Australia will need 121,000 workers with undergraduate or postgraduate degrees in IT related fields. The benefit of reskilling workers to meet this demand could potentially be worth more than $11,000 per employee per year. I know from the mobile offices I did in my electorate each Saturday last year in the six months after I was elected that there are plenty of people struggling in this soft economy who would welcome a shot at that. However, looking at our current trajectory on 2018 numbers, we'll produce about 38,000 graduates in that time, which is a projected shortfall of around 83,000 qualified applicants for high-skill and highly paid local jobs.

In 2002, the number of Australian domestic students who completed an IT related degree was 9,513. In 2017, there were only 5,958. So as we're watching this opportunity, the giant global jobs growth in the cyber-revolution, pass us by, what is this government doing? They're cutting funding. As the member for Hotham articulated before me, the coalition government has introduced cuts of $2.2 billion from universities over the coming years, and a further $3.9 billion was removed from the sector with the closure of the Education Investment Fund.

In 2019, of the $1.1 billion TAFE and training budget, the Morrison government only spent $928 million, which is an underspend of $170 million in our TAFE and training budget. This is a pattern of behaviour we have come to expect from this seven-year coalition government. In 2014 and 2015 they spent $138 million less on VET programs than promised; $247 million less in 2015 and 2016; $118 million less in 2016 and 2017; and $202 million less in 2017 and 2018. In total, that's almost $919 million of promised investment not spent over the past five years. Meanwhile, we have 150,000 fewer Australians in apprenticeships than when the coalition government came to office.

By cutting funding to universities and to TAFE we are robbing both millennials and older Australians of the opportunity to retrain, to upskill and to seize the job opportunities the cyber-revolution presents us with. As technology changes the way we work, Australia has the potential to be a world leader in exciting innovation and to create highly skilled, high-wage local jobs. But we are going to get left behind if we don't get competitive in the global innovation race, and there is no time to lose. Today represents a wasted opportunity. We need an innovation platform and a pathway to patents within this system that genuinely contribute to our national prosperity and the growth of new, modern jobs for our local economies and our coming generations. It is so disappointing to see that intellectual property is just another area that shows this government is led by an ad man with no plan or vision for future innovation in Australia.