John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

My question is to Senator Lundy, the Minister representing the Minister for Industry and Innovation. Minister, many businesses are investing in proprietary software as part of new product development. However, the laws that protect this type of property rely on civil action which is often beyond the reach of many manufacturers. In light of the recent Victorian example, when an employee of a small regional manufacturing business removed proprietary software as part of a demand for the proprietors to sign over control of their business, and the employers had no recourse in criminal law, thereby leaving the business without its intellectual property and unable to deliver product without taking expensive and time-consuming civil action, does the government recognise that there is a need to put in place tougher laws, possibly even criminal sanctions, to help protect manufacturers from the theft of intellectual property?

Kate Lundy (ACT, Australian Labor Party, Minister Assisting for Industry and Innovation) Share this | Link to this | Hansard source

With increasing automation of the manufacturing processes, software is becoming—and in fact is for many, many businesses—a critical asset for manufacturers and of core value to their company. On the basis of the information provided by Senator Madigan, I am not able to comment on the applicable law and whether or not it provides a remedy in this situation, and it would not be appropriate to provide legal advice on the options available in such a situation. But, to the extent that the theft of the software involved an exercise of a copyright right, criminal offences may be applicable under the Copyright Act 1968. There may be general criminal law offences that also have some application to the circumstance you describe.

The government has implemented a number of initiatives that assist businesses to protect their data and software. The Defence Signals Directorate has published detailed cybersecurity guidance for management to help advise them on the prevention of loss and theft of information assets in the first place. This is a very comprehensive guide. It comes in the form of an information pack to business, and this is an excellent opportunity for me to reinforce to businesses in Australia that, if they do not have the DSD advice on protecting their information assets, then I suggest they get it because this kind of occurrence is of great concern and it is a growing problem. There is also information available on the business.gov.au website that advises businesses on how to protect information and systems from misuse by employees and contractors, and that may also be of some assistance to the business that Senator Madigan described. (Time expired)

John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the minister explain why legislation is in place to provide retailers with recourse to criminal sanctions for the most minor acts of shoplifting whilst manufacturers who may be subject to the theft of tens of thousands of dollars in property, such as proprietary computer code, only have recourse to expensive and time-consuming civil law, with no certainty of recovering either their property or legal expenses?

Kate Lundy (ACT, Australian Labor Party, Minister Assisting for Industry and Innovation) Share this | Link to this | Hansard source

As I mentioned in my first answer, without knowing further details, I am not able to point to particular sanctions that may apply under the Copyright Act. They may have some relevance in that regard. If the circumstance is of a criminal nature, a criminal offence may also apply.

I think it is necessary to get more detail about what actually occurred before I am able to provide any advice on a particular type of remedy that might be available. Whilst it may be too late, unfortunately, for the firm concerned, this type of incident does underscore the importance of businesses taking measures to prevent the loss of data and software and to protect it adequately, especially when the viability of the very business depends on it.

John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Given that civil sanctions and remedies are not a financially realistic means for many small enterprises to protect their investment in new intellectual property, would the government consider reviewing the present civil actions and remedies to better protect both small enterprise and taxpayer investment in innovation through the general grant schemes now in place?

Kate Lundy (ACT, Australian Labor Party, Minister Assisting for Industry and Innovation) Share this | Link to this | Hansard source

Relying on changes to civil remedies alone is not the whole answer to this kind of business risk. Apart from the cost of legal proceedings, this kind of event can cause significant damage to a business. So focusing on prevention is still going to be a really important part of the response.

Even in relation to patent infringement, the government is not contemplating introducing criminal offences. This is because of the complexity of determining patent infringement and validity. In addition, the complex issue of whether the patent has been infringed must be decided beyond reasonable doubt in the criminal system rather than in a civil test of the balance of probabilities. Finally, the threat of criminal prosecution for patent infringement may deter further innovation. So all of these issues become a complex part of what is a very challenging problem but one to which businesses are right to turn their minds. (Time expired)

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

Mr President, I ask that further questions be placed on the Notice Paper.