Significant economic benefits would be gained by both governments and industry if intellectual property rights were owned and commercialised by ICT suppliers to government, says Australia’s peak ICT lobby group, AIIA.

Governments and industry can realise cost savings, more innovative ICT solutions and greater participation in government markets if suppliers retain the commercialisation rights of intellectual property (IP), according to a paper released last week by AIIA.

“Growing the Australian economy and the ICT industry depends largely on our ability to innovate,” says AIIA’s Chief Executive Officer, Rob Durie. “In order to do so efficiently, the ‘building blocks’ of innovation – intellectual property – should be in the hands of the party best able to further develop and commercialise them.

“Both federal and state governments have recognised the importance of IP to suppliers, and some progress has already been made in addressing this issue,” Mr Durie says.

“This report aims to take the issue of IP ownership forward another step by providing analysis that can help governments to understand the issues and the opportunities. AIIA is keen to continue working with governments on this important issue to get the right outcome for governments, industry and the economy,” Mr Durie adds.

Current policies and practices often result in the government, not the supplier, owning the IP created under a government ICT contract. AIIA members have identified wider access to this IP as one of the key opportunities to grow the Australian economy, particularly through exports.

Unfortunately, AIIA members find that current practices, rather than driving opportunities, often act as a barrier to doing business in government markets by significantly increasing time and costs and producing outcomes which are poorer for both parties. Moreover, the building blocks of innovation are “locked away” with their potential not being fully realised.

The report, Unleashing Our IP Potential, developed by national law firm, Corrs Chambers Westgarth, provides extra information for governments on the issue of IP ownership, and makes a number of key recommendations to government, including:

• Moving from default positions of government IP ownership towards supplier IP ownership under appropriate decision making frameworks;
• Ensuring that commercialisation rights can be retained by the supplier;
• Providing clear guidance to decision makers on these issues, including intensive IP training for procurement officials; and
• Working collaboratively with the ICT industry to improve guidance to ICT suppliers to increase their understanding of government requirements.

Government is the largest single ICT market in Australia – the federal government alone enters into 24,000 ICT contracts per year. The government market is strategically important to industry growth, providing opportunities to work on leading-edge solutions and offering an internationally recognised reference site for companies interested in export markets.

Yet, governments’ current approach to IP ownership can prevent or inhibit companies from bidding for government business and as a consequence limit the potential for export growth, the paper has found.

“IP ownership is one of the most hotly contested issues in contract negotiations,” Mr Durie explains. “Some suppliers will not bid for government business if they lose their IP. As a result, there is less competition for government business, along with higher costs and fewer ICT solutions to select from.

“AIIA’s paper shows that amending government policy at minimal cost would result in annual savings of millions of dollars and better value for money for the taxpayer, more opportunities for the ICT industry, more innovative ICT solutions for government and growth in export revenues,” Mr Durie adds.

“ICT is a driving force of the Australian economy, contributing 4.6 per cent of the nation’s Gross Domestic Product – more than the contributions made by the agriculture, forestry and fishing, defence and education sectors and almost as much as the mining sector. ICT is also responsible for between half and three quarters of all productivity growth, depending on the industry sector, Mr Durie concludes.

A downloadable PDF of AIIA’s Unleashing Our IP Potential report is available from AIIA’s website. A separate PDF of the Executive Summary only also is available.

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