Government policy on IP: Is your house in order?

By Richard Morrison, Lisa Keeling and Magdalena Iwasiw.

Key Points:
Agencies covered by the FMA Act must develop their own IP management policies by 1 July 2008. The new IP Principles are a valuable reference for good IP management practice in all Government bodies.

The dust has just had time to settle since the release of the Australian Government’s new intellectual property ("IP") management policy, the IP Principles for Australian Government Agencies, affecting Government agencies covered by the Financial Management and Accountability Act 1997 ("FMA Act"). Compliance with the IP Principles may require Australian Government FMA Act agencies to identify, record, value, and strategically manage their IP.

The policy and its application

The IP Principles contain 15 principles, which provide guidance to agencies in relation to the management of their IP, and require agencies covered by the FMA Act to develop their own IP management policies by 1 July 2008. Agencies covered by the Commonwealth Authorities and Companies Act 1997 are encouraged to consider the policy as an expression of good practice in the management of IP.

At this early stage, it is difficult to tell how agencies will respond to implementing the policy, primarily because some agencies currently manage IP according to mature IP policies and systems, while others have less developed policies and systems, and also because the IP Principles are fairly abstract.

To assist, the Government is currently developing a guidebook, the IP Manual for Australian Government Agencies, which will provide agencies with guidance and advice on implementing the IP Principles.

While the policy does not bind State Government and CAC agencies, it does embody a current theme in public sector management, that of recognising and managing IP as the valuable asset it is. This makes the IP Principles a valuable reference for good IP management practice in State Government and CAC agencies.

What will IP management policies will need to cover?

IP management policies are intended to provide guidance to staff on each agency’s principles, practices and procedures for managing IP, and how these relate to the achievement of the agency’s objectives.

Amongst other things, an agency’s IP management policy will need to outline the agency’s approach to:

• dealing with the acquisition, use, sharing, commercialisation and disposal of, and public access to IP
• identifying and recording ownership of IP, which may include the use of IP registers and the development of valuation systems for IP; and
• monitoring and protecting IP, which will involve risk assessments, and strategies to minimise risks of infringing the agency’s and third parties’ IP rights.

Agencies will also need to ensure that:

• the implementation of their IP management policies is supported by appropriate training and resources; and
• their policy provides for appropriate reviews of the agency’s systems and processes to make sure that the agency’s IP is being managed effectively, efficiently and in an ethical manner.

In relation to sharing, commercialisation and disposal of, and public access to, IP, agencies will need to:

• maintain a flexible approach in considering options for ownership, management and use of IP
• recognise innovation and creativity in the development of IP
• ensure that contracts in which IP is created address the identification of new and pre-existing IP and arrangements that apply to the ownership and use of the IP, including licensing arrangements
• encourage public use and easy access to copyright material that has been published for broadly public purposes
• consistently look for opportunities to share IP with other agencies; and
• be more sophisticated in dealing with opportunities to commercialise IP.

What are the practical expectations underlying the policy?

Being the Government’s first binding policy in relation to IP, it demonstrates an expectation for agencies to manage IP in a better manner than has been done in the past. As to what will constitute "better", the content and focus of the policy indicate that an agency’s management of IP will require analysis from many angles, including record-keeping, ownership, staff skilling, information management, and infringement risk.

Therefore, an agency’s response will need to be developed from the ground up, having regard to the specific functions, activities and objectives of the agency. In this context, it is clear that agencies may adopt appropriately flexible policies and systems to enable case specific decisions on matters such as ownership and commercialisation of IP. For example,
an agency’s position in relation to managing IP in the context of research and development activities is likely to differ from the approach taken in procurements for commercial off-the-shelf products.

Developing something workable

Agencies will need to carefully consider their approaches to different IP scenarios in developing their IP management policies, particularly from the three perspectives of workability, efficiency, and the ability to demonstrate compliance into the future. Given that policy compliance will occur in the context of the Commonwealth’s financial management framework, and its focus
on efficient, effective and ethical use of resources, the need for careful consideration should not be underestimated.

The need for investment

Given the sophisticated nature of IP rights, the law that regulates them and their valuation, it is likely that agencies will need to apply resources:

• towards being properly advised upon the IP that is relevant to the agency, and the management options available to the agency
• to determining how best to leverage off existing asset management systems and processes to include IP (if it is not already included); and
• to ensure staff are aware of the requirements of the policy and the agency’s response to it.

For further information, please contact Lisa Keeling and Magdalena Iwasiw.