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TPP Deep Dive: The TPP’s Myopic Focus on Enforcement Will Cause Collateral Damage

May 13, 2012 ,

This is the third in the series of our deep dive blog posts talking about concerns with specific aspects of the TPP. In this one, I will talk about the copyright enforcement provisions of the TPP and why they are not in the best interests of Americans or citizens of the other TPP countries.

Like most of our other our substantive analyses, this one is based on the US proposed draft text that leaked in February last year.

The US proposed text reveals that the TPP’s enforcement chapter is based on the flawed assumption that more draconian enforcement measures will lead to lower levels of piracy. This proposition is undermined by a recent study that the Social Science Research Council conducted. That study looked at piracy in emerging economies, like India, Brazil, and South Africa and found that piracy was much more a result of high prices of media and low cost of storage technology and much less a result of corrupted morals. Yet the moralistic approach is one that animates the TPP’s enforcement chapter. This approach results in provisions that will impose spectacular punishment far out of proportion to the nature of the infringement, ignore basic principles of fair procedure in trial, and harm the rights of innocent bystanders who might be caught in the web of enforcement.

Disproportionate punishment

The TPP requires countries to institute US style statutory damages. We have highlighted the problems with this regime before. To recap: the US statutory damages regime would impose a pre-set amount of damages per work infringed without consideration for how this amount would relate to the damage caused to the copyright owner. Because statutory damages can be as high as $150,000 per work, the possibility of exposure to statutory damages chills new and innovative uses of works by users and technology companies.

A provision that takes a similar, if a more draconian, approach appears in the criminal section of the enforcement chapter. That section requires imposition of jail terms and deterrent level fines for infringements done for “private financial gain” or done without a “direct or indirect motivation of financial gain”. Application of the section could easily send an individual who downloaded a few songs to jail.

Both the statutory damages and the criminal enforcement provision will often impose punishments that far outweigh the seriousness of the crime. On a practical level, its application will likely face resistance from judges, particularly judges in developing economies, who are faced with poverty and high crime and do not view small scale infringement as a criminal activity. As the SSRC study notes, because of the strain that these provisions put on enforcement resources, these measures are likely to result in selective enforcement. But it is not likely to reduce infringement levels, particularly where the incumbent IP industries insist on maintaining antiquated business models and treating their customers without respect.

Fairness in trial procedures

Many provisions of the TPP’s IP chapter assume that rights holder assertions will be true, or at least more true, than anything an accused user would have to say. This assumption results in provisions that give an unfair procedural advantage to rights owners, ignoring basic principles of fairness as well as settled principles of US law.

One such provision calls on courts to look at the value of the infringed good as they are deciding how much damages an infringer would owe the copyright owner. In doing so, it directs courts to consider, among other things, “the suggested retail price or other legitimate measure of value submitted by the rights holder.” This bias towards claims of rights holders is opposed to the fundamental principle that courts should objectively evaluate claims made by both sides to the dispute. It also reverses the principle of US law that actual damages should reflect a license fee that a willing copyright owner and willing user would have negotiated before the use began.

The collateral damage

When enforcement mechanisms expand in scope to include people and things with increasingly attenuated connection to infringement, someone who has done nothing wrong is likely to get punished. Yet, the copyright- enforcement-on-steroids approach is blind to this danger. And this blindness is reflected in some of the seizure and forfeiture provisions of the TPP.

These provisions would give judges the power to seize infringing goods, materials, and implements that are used in infringement, and “any assets traceable to the infringing activity”. They would also give judges the power to forfeit “assets traceable to infringing activity” and assets whose “value corresponds to that of assets derived from infringing activity.”

These provisions will extend to a broad swath of private property, a lot of which would only tangentially be related to infringement. For example, in a case where one person in a family downloaded some infringing material, the family’s computer could be considered an asset that aided the infringement and seized or forfeited. Similarly, in the MegaUpload case, servers that hosted content of the site’s clients were seized under powers similar to those mentioned above. Whether or not the allegations against MegaUpload are true, the seizure resulted in locking down content of non-infringing users of MegaUpoad’s servers.

To be clear, seizure and forfeiture provisions similar to, though not quite as expansive as, the TPP’s provisions are part of US law. However, this part of US law is recent and its ramifications are not completely clear. Recent developments, like the seizure of MegaUpload servers and websites like Dajaz1, give us cause to believe that these provisions are likely to cause a lot of collateral damage. Given this state of affairs, the wise course of action would be to take a step back and examine their working within the US before exporting these standards to other countries.

Yet, are the TPP negotiators going to pause and consider the consequences of their actions? From what we see the opposite seems to be the case. The negotiators are negotiating away feverishly. And the public’s ability to influence this process continues to be thwarted by the secrecy surrounding the process.