'A number of businesses are complaining a Defence Department organisation has stolen their intellectual property, Crikey can reveal.
Chris Seage reports new legislation [The Defence Trade Controls Act] makes the problem worse.'
Are you a high-tech developer? Do you own a high-tech company? A startup? Do you work with computers, IT, telecommunications, electronics or medicine? Do you have an R&D department? Are you an innovator?
Soon sending an e-mail or making a phone call to a colleague or someone overseas could land you to prison for up to 10 years. We're not talking about selling your product; We're talking about just discussing your work.
University of Sydney Deputy Vice Chancellor of Research Jill Trewhella warns of the DTCA: "It would impede top scientists in developing technologies for tomorrow's high-tech manufacturing industries, new vaccines and potential cures for cancer. The Australian government worries about a brain drain in advanced technology, but is poised to pass legislation that could force our best and brightest offshore"
Despite the name of the Act, this isn't just for Defence! It's for High-tech, and applies to anyone developing technology from an absurdly-broad dual use list. The DGSL is 380 pages long and so complicated you need to hire lawyers to interpret it. Many are caught in its net. Take this Ad from the Queensland Medical Research Institute whom must now hire a DTCA Compliance Specialist:
The DTCA was rushed through last year, but due to poor media coverage hardly anyone knows about it. The Universities did know and fought it hard, but even most academics are ignorant of it. However Australia's tech press missed the ball completely, so Aussie high-tech companies haven't got a clue. Once the grace period is up, you and your employees will face imprisonment from 6 months to 10 years, and fines of hundreds of thousands of dollars.
The DTCA robs businesses of their right to confidentiality, forcing them to reveal confidential IP (trade secrets) to public servants. Commonwealth lawyers have determined they have no duty of care to protect others' IP, and the Commonwealth cannot be held liable what public servants do with it. There have already been IP thefts by public servants from companies, large and small, which the Commonwealth refuse to prosecute.
The DTCA threatens to drive Aussie research and high-tech companies overseas. University of Sydney Deputy Vice Chancellor of Research Jill Trewhella warns: "they're definitely telling me that they're going to have to assess the impact of this regulatory regime on their ability to be competitive and to do their work in Australia. They're definitely worried that it is going to have a big impact and they're concerned that they may have to go elsewhere to do their research."
Brendan Jones, former CEO of Kestrel Defence, a victim of DSTO corruption, told Commonwealth Chief Scientist Professor Ian Chubb: "I would not create a technology company in Australia under these circumstances". On April 4, 2013 he told Labor's then-Attorney-General his new civilian Hi-tech company would be based overseas, warning: "If [DTCA] is not reversed then academics and high-tech start-ups will transfer research and development operations overseas to protect their IP. The US is already a far more attractive destination with better access to talent, connections and venture capital."
At the very least, you should be talking to lawyers to ensure your business is compliant. You will need audits, assessment protocols, permits, trading and legal counsel. Be prepared to pay $230-$500 an hour, and budget additional employee time to meet compliance overheads.
Consider moving your business overseas. America has better access to talent, connections, venture capital, strong laws protecting trade secrets and apolitical federal law enforcement.
Or stay and fight the DTCA. Click here to find your local member, then e-mail or better yet, call them. Tell them you object to a new law which will:
The Liberals initially opposed the legislation, but joined with Labor to pass it just before US Defense Secretary Leon Panetta visited. The then-Shadow Defence Minister Liberal David Johnson said: "This legislation is a disgrace. It is inadequately prepared, it is inadequately thought through, but the fact is that it contains a very important diplomatic tool for Australian defence industry participants and that is a treaty with the United States."
But an American academic who reviewed the DTCA said "Not even the Americans have this". And even if the Australian defence industry benefits from increased access to the US market, it doesn't change the fact they are exposed to IP theft by public servants. One large company who had a particular problem with IP theft physically refused them access to their premises. Another large company described DSTO staff visiting their premises stealing documents. These companies are now forced by law to give physical site access. Further, increased access to the US Defence market shouldn't be at the expense of civilian high-tech companies.
Remember the new laws aren't about limiting exports to hostile regimes as these were already banned. Export licenses aren't a problem per se, because by the time you apply your product is ready to ship. But forcing you to reveal your IP during development exposes you to IP theft at a time of maximum vulnerability. Public servants can patent your invention before you do. Unlike the US, in Australia theft of trade secrets is not a crime. If they breach your confidentiality you will get no help from Defence. Defence does not use "Chinese walls", so public servants reviewing technology are also permitted to conduct research in the same area. A DMO IP Lawyer warned they could use your IP without even realising it. (Reference: IG-D Report 2011-04-07, Correspondence of 2011-04-11)
Tell the new Liberal Ministers for Industry, Defence and Defence Science they must replace Labor's disgraceful legislation with laws that respect the inherent rights of academics and high-tech companies. Email them by clicking here. You can copy-paste suggested text for your e-mail from here.
Don't expect anyone else to do the heavy lifting for you, because no one else has. This is your problem:
If you do nothing, don't complain when you're hit with red tape, compliance costs and forced to seek public service permits to communicate about your work, let alone the threat of jail.
At a minimum, e-mail your local member and the new Liberal ministers to register your concern. You can copy-paste suggested text for your e-mail from here.
If you would like do more, please contact us at email@example.com.
"Tighter Defence ties will bind academics and stifle innovation", Jill Trewhella, SMH, 2012-10-10.
"Science and the slammer: the consequences of Australia's new export control regime", 2012-10-16, Michael J. Biercuk, Senior Lecturer in the School of Physics, University of Sydney.
"Laws will stifle research claim scientists", Matt Carney, ABC, 2012-10-31.
"Why Defence Bill threatens Australian research and innovation", Radio National, 2012-10-13.
Youtube: Scott Ludlam's Final Speech on Defence Trade Controls Bill, 2012-10-31 (worth watching).
Speech: Robert Oakshott MP on the Defence Trade Controls Act, 2012-10-30: “The McCarthyist intent may be honourable, but the delivery through this legislation is dangerous. It is jeopardising our commitment to a research sector in Australia that I would have thought is important to all of us in the many fields that we deal with in this chamber, from food and fibre production all the way through to the medical and health sciences. ... why on earth are we therefore including a criminal offence for a researcher in that space?”
“The Unintended Consequences Of The Defence Trade Controls Act 2012”, Air Commodore Edward Bushell RAAF (Rtd) & Mr Peter Goon. “In its current form, the potential for manipulation, misuse, and abuse of the DTCA 2012 legislation is real, present and self evident.” Senate Submission
“Exploring the Impacts of the Defence Trade Controls Act 2012”, Dr. Carlo Kopp, 2013-08-29. “Major risks which [a small or medium businesses] must consider include the arbitrary denial of licences; the arbitrary suspension or withdrawal of licences; the arbitrary censorship of disclosures to a client; weak regulatory agency protection for IP produced for a client; weak protection for client background IP being used; weak mechanisms for resolving disputes or differences with the regulator; and the possibility of vexatious investigations or prosecutions being initiated over matters outside the scope of the licence.” Summary
“Australia's Act of Intellectual Terrorism: DTCA 2012”, Kevin B. Korb, Reader, Monash University. 2013-07. ‘The Australian government adopted an extraordinarily broad definition of military goods and to impose an impossibly harsh regulatory regime on activities concerning them, to the point that what is today ordinary academic research into, for example, Bayesian network technology may tomorrow become a criminal activity subject to 10 years imprisonment.’
“Royal Petition concerning Crime and Corruption within the Australian Public Service”, Brendan Jones, 2014-02-06. “The Defence Trade Controls Act 2012 is dangerous legislation rushed through Parliament which has regrettably already received Royal Assent, giving the Australian Public Service overreaching powers over Her Majesty's subjects.”
"Revealed: the government agency stealing ideas from businesses",
Chris Seage, Crikey.com.au, 2013-12-02. 'A number of businesses are complaining a Defence Department organisation has stolen their intellectual property, Crikey can reveal. Chris Seage reports new legislation [The Defence Trade Controls Act] makes the problem worse.'
Contact: FAL Lawyers
Contact: Griffith Hack Lawyers
The DTCA was ostensibly to allow a US Free Trade pact with the US, but "Not even the Americans have this".
If the following terms seem strong, read them and make up your own mind...
Stupidity: The laws were dreamed up by the Australian public service who (ironically enough) did not do proper research. For example, after declaring there was no statistical data on how many research programs would be affected, they declared that only a small number of specialised research programs would be affected. When the Universities pointed out this was not the case, rather than admit their mistake the public service ignored them.
Arrogance: Defence public servants ignored the universities' concerns, and rammed the bill through parliament thanks to what can only be described as sheer incompetency by Labor. When the universities proposed amendments, Labor Defence Minister Stephen Smith rejected them out-of-hand. The Commonwealth Chief Scientist dismissed the universities concerns saying: "Those boxing at shadows and guessing at what it (the laws) might mean to some unspecified but allegedly 'substantial' number of researchers can continue to do that if it makes them happy."
Lack of Consultation: Public servants failed to appreciate the environment in which academics and high-tech businesses work. They failed to understand how private-sector employees have no job security nor the security of a government-funded retirement. They failed to appreciate how hard business people must work to earn their success, or how important it is for them to protect their work. They failed to appreciate how much time businesses must already spend complying with public service red tape, and that high-tech startups are inevitably short staffed and overworked. They failed to appreciate that if businesses can't make ends meet then their employees lose their jobs and cannot support their families.
By comparison Public Service executives earn up to $800K per year, have generous benefits and the security of a government-funded retirement, and a guaranteed stream of income regardless of how they treat their "customers"... the public. The public does not get to vote for them, and it is almost impossible for elected politicians to fire them, even when they don't perform. Agency Heads, for example, can only be sacked by the Governor General.
The definition of power is the ability to cause harm to someone who cannot harm you back. These are privileged people who have caused great harm to academics and high-tech who are powerless to do anything about it, except to move their research and businesses overseas.
Corruption: Until now companies had fought back against IP thefts by denying public servants access to their confidential data, but under the DTCA they must by law give public servants access to their facilities and by way of the permit system tell public servants what they are working on.
Surveillance: The DTCA forces high-tech companies to accept commercial surveillance by public servants under penalty of imprisonment.
Public servants in the Attorney-General's Department have eroded Australians' right to privacy. Last year, even before the PRISM revelations, Fairfax revealed that public servants have warrantless access to our communications and physical location (via our mobile phones). These include not just law enforcement as you'd expect, but the Tax Office, Immigration, Defence, Health and Ageing, Medicare, state and local government and even the RSPCA. Monitoring includes phone and internet account information, outwards and inwards call details, internet access, and details of websites visited.
Public servants make 300,000 such accesses per year. Public servants can be junior and no warrant is required. The citizen targeted is not notified their personal data has been viewed. Although this is only supposed to have limited uses, experience has shown confidential data will be abused by public servants for extralegal purposes, economic advantage, commercial advantage, economic espionage, persecuting whistleblowers, monitoring journalists, and personal reasons including titillation, invasion of privacy and stalking.
Forcing high-tech companies to reveal encryption, telecommunications and IT security will allowing increased monitoring. Labor Attorney-General Nicola Roxon claimed mass surveillance is needed to reduce crime, but if that were true why did she not express concern at endemic crime in the public service? (Letter to Nicola Roxon: May 14, 2012) Roxon also moved to eliminate anonymity on the Internet, making it harder to criticise the government, report corruption and maladministration.
Access to police databases at least has some level of oversight, but if Defence abuse surveillance databases for commercial advantage no one would know anything about it. Neither the Defence complaints unit, the public service, the AFP, nor the oversight agencies have been shown capable of policing the department.
Theft of IP by a public servant misusing their position is a violation of the Criminal Code and breach of the APS Code of Conduct, but these are selectively enforced; They are used to punish public servants reporting corruption or criticising the government, but not senior public servants or those engaged in crime.
So yes, it is illegal, but the AFP will not prosecute them. (Letter to Labor Justice Minister Jason Clare: March 12, 2012)
Commonwealth lawyers have determined they have no duty of care to protect your IP, and that the Commonwealth cannot be held liable what public servants do with it.
In practice, a Non-disclosure Agreement with the Commonwealth is unenforceable. Unlike the US, in Australia the theft of trade secrets is not a crime. You can only sue them through the civil courts, but this is not practical.
The AFP cover up corruption by stonewalling complaints (e.g. Reserve Bank Bribery, AWB, Australian Public Service corruption, Leighton Holdings and Foreign Bribery). They threaten whistleblowers, persecute them for reporting corruption, manipulate evidence to secure a conviction and silence journalists.
If you report corruption to the AFP, they will ignore you, for years. If you follow-up, they turn nasty. Whistleblowing expert William De Maria warns: "It is one thing to say to an agency such as the Australian Federal Police (AFP) 'Look at the wrongdoing over here. Please do something about it.' (primary disclosure). It is entirely different to say, 'You've had my disclosure for five years now, which have you not acted? I am going to report this' (secondary disclosure). Secondary disclosures about investigative probity and competence can be more dangerous to whistleblowers than the original disclosure of wrongdoing because they bring the game right up to those who took the primary disclosures in the first place. In response, agencies often become negative, defensive, and in some cases hostile and even violent."
The AFP claim to be modelled on the FBI, but they're very different organisations. The FBI began as a federal investigative body. The AFP exists because some people threw eggs at Billy Hughes, and he wanted to have personal control of their prosecution.
The Commonwealth Ombudsman's office presents itself as a powerful oversight agency, but the reality is they are a craven organisation reluctant to use their powers. e.g. Whistleblower Monica Bennett-Ryan reported that Defence were forging security clearances, but the Ombudsman refused to act: "They put it in the too-hard basket. We were given the impression that no one wins against Defence; they are too big and too powerful."
Don't waste your time! The defence complaints unit is systemically corrupt.
He knows, but failed to act: (Letter to Dr. Ian Watt: July 4, 2011)
He knows, but also failed to act: (Letter to General Hurley: April 16, 2012) (Letter to Senator-elect Jacqui Lambie re General David Hurley: March 25, 2014)
Labor Minister for Defence Science Warren Snowdon knew, but in this letter to another MP he falsely claimed the whistleblower did not want the IP thefts from other companies to be investigated. When the whistleblower learned of his letter and pointed out the falsehood to him, Snowdon did not respond. On October 16, 2012 Snowdon, confronted with an 18 page document describing crimes and misconduct by public servants, simply declared the matter settled.
The Defence Probity Board has no power to look at "individual cases." They can only offer the Department "general advice."
Despite Labor Public Service Minister Gary Gray's claim that the Public Service Commissioner has anti-corruption powers, Mr. Segdwick claims he is powerless to act.
Don't waste your time!
Using the civil courts and involving lawyers (litigators, or "dispute resolution specialists" as they now prefer to be known) is generally a bad idea. A pro bono lawyer warned, "The only people who win out of these things are the lawyers."
The Australian public service fights dirty in the courts. This is to the mutual benefit of corrupt officials who get to conceal their corruption (at the expense of the taxpayer), and outsourced government lawyers get to run up huge legal bills (also at the expense of the taxpayer). It also benefits your lawyers who earn more from protracted litigation, and get paid, win or lose. Suing the Commonwealth will cost you up to $2M and can take years. Because of the way the courts calculate damages, it is possible to win and still be bankrupt by legal fees. Further the Australian court system is not truth-seeking; Whoever has the deepest pockets wins, and no one has deeper pockets than the Commonwealth.
The Model Litigant Policy (Legal Service Directions) are laws that require government lawyers to act fairly, honestly, to offer arbitration and to keep legal costs to a minimum. These laws are not worth the paper they're written on; The public service simply ignores them, even when politicians order them to abide by them. Public servants who break these laws are not held accountable. Given the chance, government lawyers will bankrupt you. Lawyers routinely antagonise people who have already suffered terribly. They do not care what this does to them or their families. This is how lawyers make a living, and lawyers earn more for escalating and protracting litigation, even the Australian Government Solicitor. The dishonoured Model Litigant Policy not withstanding, lawyers are expected to win cases by any means necessary; The Queensland Legal Services Commission says lawyers are allowed to act unlawfully and unethically if instructed to do so by their clients. (Reference: Correspondence with QLSC) (That probably isn't true, but the fact remains, the QLSC will not prosecute them for it.)
This is recommend reading for anyone considering litigation: Using the civil courts to seek justice against the public service is a case of choosing to fight a powerful enemy the way they fight best.
The only law firms in the country with the resources to take on the public service are the so-called "Big Law" law firms. These are all on retainer to the Commonwealth. They won't help you due to their "client alignment policies" (their words).
"No Win No Fee" doesn't mean what you think it does; You can still be hit for court fees, expenses and your opponent's legal fees. In any case, No Win No Fee lawyers only take on simple "sure-thing" cases, such as personal injury; These are straight-forward, and usually settled without ever stepping foot into court. No Win No Fee lawyers avoid corruption cases against the Commonwealth, which are long and costly. Further recent changes to the Commonwealth's whistleblowing laws discourage lawyers from representing whistleblowers by limiting damages.
(Something that may change this are US-style False Claims laws which would give lawyers a financial incentive to help whistleblowers.)
Unlike the US which has a Bill of Rights and a strong civil rights movement, in Australia civil rights lawyers are almost non-existent. Of the few civil rights organisations that exist in Australia, most only make submissions to government committees; They don't help with individual cases. Civil Liberties Australia only has the resources to take on one case a year, and priority is given to cases of wrongful imprisonment.
One large company who could afford to take the Commonwealth to court said, in terms of legal costs and loss of employee time (and reprisals from the government), it just isn’t worth it; They are far better off taking the money they would be paying lawyers and investing it in their business instead. To stem the IP thefts they refused physical access to their premises, although now they can't even do that.
Firstly, 'daily' and 'beat' reporters never cover corruption. 'Daily' reporters don't have the time, and 'beat' reporters will not report corruption which could embarass their regular informants.
The only reporters who do cover corruption is Australia's small number of investigative journalists, but investigative journalism is expensive, time consuming and risky. Corrupt politician Eddie Obeid told investigative journalist Kate McClymont: "I tell you what, you put one word out of place and I will take you on again. You are a lowlife. I will go for you, for the jugular." Chris Masters who was dragged through the courts after reporting endemic corruption in Queensland said "Journalists and broadcasters are just not going to do stories when defamation proceedings become as arduous and lengthy as this one was." Australia's harsh defamation laws are such a problem the media couldn't tell NSW that Premier Robert Askin was corrupt until he was dead.
The media have known about IP theft by Defence for many years,
but are yet to break the story.
You may be lucky enough to find an investigative journalist, but there are more stories than there are journalists. It might take years.
Further if you file a law suit, the media cannot report your story.
The public assume when a corruption story breaks in the media that police start an investigation, arrest and charge the perpetrators. That might be what happens on Law & Order, but the reality in Australia is different:
In fact, the police (the AFP) - usually do nothing. If the media asks why, the police justify their inaction by claiming "We have received no formal complaint."
Even when they do receive a complaint the AFP will still do nothing. Reserve Bank Whistleblower Brian Hood said: "'I was surprised that a serious matter like this and its serious implications for people involved in this activity, that it could be just sort of dismissed relatively easily,'' he said. ''It was always 'Yeah, we're working on something else' or 'I'm overseas, we'll get back to you'. And it sort of petered out after four or five months to no contact at all …''".
A criminal complaint regarding IP thefts by DSTO staff was first made to the AFP nearly two and a half years ago on August 22, 2011, but the AFP never acted on it. Another criminal complaint was made on December 3, 2013. State police have acknowledged it. The AFP still have not.
Yes, the Australian Department of Defence actually has their own business partners to fulfil their "wealth creation" role.
However if public servants provide your IP to a government business partner there is nothing you can do about it. Theft of trade secrets is not a crime in Australia, so they can't be charged with anything. You can't sue them for Breach of Confidentiality in the civil courts either, because your Non-disclosure Agreement is with the Commonwealth; not their business partners. The Commonwealth for its part says they have no duty of care to protect your IP, so they cannot be held liable either.
Defence's business partner can safely ignore you as CAE, a Canadian defence giant, did here.
Don't expect any help from Transparency International.
Transparency International promote themselves as "the world's leading anti-corruption organisation," but they have known about the thefts since December 7, 2012 and have not acted. However they have accepted sponsorship from the Australian government as they have corrupt organisations including Leighton Holdings. It's naive to think TI could report corruption by one of their sponsors; They would be tarred by association. TI also failed to answer allegations it allowed officials in the Australian Department of Defence to rig Transparency International's Defence Anti-corruption Index, awarding them a bogus "A" rating.
Open letter to Public Service Commissioner Stephen Sedgwick: Systemic-corruption in the APS.
Open letter to Tech Community: DSTO and CSIRO theft of IP.
Victims of DSTO: Support DSTO Whistleblowers.
Victims of CSIRO: Support CSIRO Whistleblowers.
Ozloop: Good public servants don't despair. There are many like you.
Open Australia: Find out which politicians represent you and what they are saying.
"Our Corrupt Legal System" is a book by Walkley award-winning journalist Evan Whitton.
Written in plain-speak, anyone contemplating court action should read it. If your court case is tomorrow, start reading right now.
Legal Researcher Dr Bob Moles ACII (UK) LLB (Hons) (Belf) PhD
says "This is one of the most important books I have ever read on the common law legal system".
Click here for:
[10 Page Summary]
[Buy Online (A$35)]
[Download for Free (PDF)]
Dissent: Learn how to Speak Out in Australia.
victimsofdsto.com. 2013-10-13 8:30PM. 2013-12-31 3:31PM. 2014-02-18 2:24 PM. 2014-02-19 5:22 PM. 2014-03-27 3:18PM.