ACTA the Sequel: The Transpacific Partnership Agreement

January 04, 2011

The ink on the Anti-Counterfeiting Trade Agreement has not yet dried and the Office of the United States Trade Representative (USTR) is already negotiating another trade agreement. This one, called the Transpacific Partnership Agreement (TPP), would cover trade in goods and services and also include a proposed chapter on intellectual property (IP). Countries negotiating the TPP are Australia, Brunei, Chile, Malaysia, New Zealand, Peru, U.S, and Vietnam.

In the past, the United States has used trade agreements as a tool to ratchet up intellectual property (IP) protections, ACTA being the most recent and perhaps the most egregious example. This upward ratchet harms U.S. citizens by codifying harmful provisions, such as the U.S. statutory damages regime and the anti-circumvention of DRM provisions in international rules and consequently preventing domestic reform. It also harms citizens of our trading partners when their governments are forced to adopt IP provisions not in their best interest. The TPP poses the danger of continuing this approach to IP in trade agreements.

Content industry’s vision for the IP chapter

While a text may not have been drafted yet, content owners are doing their bit to ensure that the TPP would contain IP provisions that aggressively protect their interests at the expense of the rest of ours. A paper prepared by the U.S. Business Coalition for TPP (reported to be drafted by the Pharmaceutical Research and Manufactures of America, the US Chamber of Commerce, and the Motion Picture Association of America) and leaked on the Internet, indicates that rights holders are urging the USTR to include in TPP IP protections more extensive than those present in ACTA. Specifically, the paper suggests that the following issues be addressed in TPP:

Temporary copies: The US Business Coalition paper urges TPP countries to include a provision requiring protection for temporary copies. Temporary copies are copies made when you access webpages, or music, or any other content on the Internet. In addition, your computer makes transient copies, such a buffer copies, in the course of replaying such content. These copies have no value independent of the ultimate use they facilitate – your viewing of the movie or listening to the music. Treating them as worthy of copyright protection allows rights holders to claim additional rents where none are due.

Circumvention of digital locks: The paper urges TPP countries to prevent circumvention of digital locks. The WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty (WPPT) were the first international instruments to impose this obligation on countries. Within the U.S., these treaties were cited as the reason for the enactment of the Digital Millennium Copyright Act (DMCA). The harms caused by the DMCA’s anti-circumvention provisions have been well documented. In a nutshell, while on the one hand the DMCA attempts to prevent copyright infringement by prohibiting an infringer from breaking digital locks (ex: locks used on DVDs) on the other hand, it also prevents lawful uses (ex: preventing you from breaking the locks on the DVD you purchased to play it on your computer running on Linux).

Copyright terms: The paper urges the TPP to provide for longer copyright terms. Current copyright term in the U.S. is life of the author plus 70 years. The TRIPS agreement, which is the baseline IP agreement to which most countries adhere, requires a copyright protection for life of the author plus 50 years. The paper’s suggestion implies that the all TPP countries should extend their terms beyond this minimum. However, most works do not have a commercial life this long. For example, a textbook becomes out of date far before 70 years after the death of its author. Similarly, movies, and music are likely to lose their popular appeal much before the end of their copyright term. Too often, copyright owners lose interest in works whose commercial lives have ended; works become obscure; and historians, educators and documentarians interested in using the work cannot do so because they cannot find the owner to seek permission to use the work. All of this warrants a reassessment of the proper copyright term, not an extension of current copyright terms.

Statutory damages: The paper urges TPP to include a provision on statutory damages, ostensibly similar to the U.S. statutory damages regime. As PK and its allies have pointed out, the U.S. statutory damages regime has led to excessively large damages awards. This regime has resulted in discouraging reliance on fair use thereby stifling innovation because of the threat of a multi-million dollar lawsuit.

The coalition suggests many other worrisome provisions such as requiring ISPs to act as copyright cops and treating individual infringers with the same severity as large-scale pirates.

All countries not on the same page

Fortunately, some of the countries negotiating the TPP seem to be aware of concerns with IP provisions in trade agreements. An internal document of the New Zealand government, leaked on the Internet, indicates the government’s reticence to adopt an IP chapter similar to ACTA. The document observes:

"Analysis of the costs and benefits of IP protection shows that there is a tendency towards overprotection of IP in all our societies, particularly in the areas of copyright and patents. The analysis also shows that the optimal rate of protection differs between countries and that it can differ across time as countries move through different stages of economic development.”

The document also notes how current international policy-making limits the ability of countries to formulate their own policies, suited to the interests of their citizens. It further notes:

“These developments are underpinned by an increasing pressure from rights holders to internationalise a larger array of issues and find international solutions to issues that have only had limited consideration at the national level. This is particularly true for the area of copyright, where rights holders have been seeking the adoption of more intrusive international rules with respect to a range of copyright issues at an early stage of norm development.”

The document cites the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT), (treaties that were cited as the basis for the DMCA), as examples of policies adopted prematurely. It goes on to note how current international IP policies do not address contemporary issues and must be re-evaluated. Referring to the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT), which require countries to prevent the breaking of digital locks, the document observes:

“Developments in the digital content market on the other hand indicate that businesses increasingly recognise that it is not in their interest to enforce copyright through DRM but to focus on monetising current internet user behaviour rather than trying to restrict it. This suggests that neither the WCT nor the WPPT reflect the complexity of creative investment in an online environment and their scope to act as a promoter of innovation remains questionable.”

In addition to the substantive problems with IP chapters of trade agreements, the document reveals awareness that these agreements are perceived as “secret” deals. It talks about the need to engage civil society groups on these issues.

Like the New Zealand Government, the U.S government should re-evaluate its domestic IP policy and its international engagement on these issues. Many aspects of current copyright law harm US consumers, consumer electronics manufactures, and Internet service providers. Exporting them to other countries would create a binding obligation on the US to retain these policies and prevent it from undertaking any reform.

While we would prefer that the TPP have no IP chapter at all, if the USTR does press ahead with one, it should reflect the interests of all instead of just IP owners. In addition, the process adopted for negotiation should be transparent. The last thing we want is a repeat of the secretive process adopted in negotiating ACTA. This would allow public interest representatives, like PK, to access negotiating texts and influence its substance, just as members of the IP industries can.