Tag Archives: limitations and exceptions

USPTO Hosts Unbalanced Global Intellectual Property Academy Copyright Seminar

Several weeks ago, the United States Patent and Trademark Office (USPTO) hosted a copyright seminar at its Global Intellectual Property Academy for two dozen intellectual property officials primarily from countries in Latin America, Asia, and Africa. While the first several days involved an “overview” of copyright and mostly time with United States government officials, September 22 was labeled “Industry Day.” The speaker list revealed a very heavy focus on rightholders, in several cases the panels did not have any voices advocating for the importance of consumers and the role of limitations and exceptions in copyright law.

Although I appreciated the opportunity to have participated on a panel on issues related to publishing, I was disappointed to learn that USPTO planned such a highly unbalanced lineup of speakers, overall. By hosting a day almost exclusively comprised of copyright maximalists, USPTO provides its audience, intellectual property officials in other countries, only one side of the story.

Balance is critical in a functional copyright system to ensure that user rights are protected. In addition to the numerous specific limitations and exceptionsin copyright law, the United States has a strong “safety valve” in its copyright system: fair use. This flexible doctrine accommodates new technologies and circumstances. It ensures that Congress does not need to pass new legislation each time a new limitation or exception is needed. Fair use, of course, is not limited to consumers of copyrighted goods and is essential to rightholders as well. Rightholders have successfully relied on the right of fair use in litigation, even though they often complain about consumers who rely on this doctrine. The U.S. Government also relies on fair use; the Patent and Trademark Office itself relies on it in the patent examination process and for photocopying materials. Despite the importance of fair use and other limitations and exceptions, the panels appeared to be heavily skewed only toward discussing the rights of rightholders. Absent from these panels were voices like documentary filmmakers, remix artists, consumer groups and others who would provide different perspectives from the traditional content industry and give the audience a more balanced view of the United States copyright system.

On my own panel, the other speakers included Allan Adler of the Association of American Publishers (AAP), Ryan Fox of the Authors Guild, and Michael Healy of the Copyright Clearance Center (CCC).  All of these groups strongly advocate for greater rights of rightholders and have been involved in recent cases opposing fair use (such as Authors Guild v. HathiTrust or the Georgia State E-Reserves Case), as parties to the case, as amici, or by funding the litigation (or some combination).

These USPTO seminars would benefit from a more diverse groups of speakers who can provide meaningful balance.

Below is the full list of topics and speakers from “Industry Day”

Overview of Key Issues facing the Music Industry

Part 1: Efficient and fair licensing, collection and distribution of royalties

Tim Dadson, Assistant General Counsel, SoundExchange

Erich Carey, Vice President & Senior Counsel, Litigation at National Music Publishers’ Association (NMPA)

Part 2: Sound recording licensing

Steve Marks, Chief, Digital Business & General Counsel, RIAA

Greg Barnes, General Counsel and Director of Governmental Affairs, Digital Media Association (DiMA)

Overview of Key Issues facing the Audiovisual (Film) Industry

Kevin Rosenbaum, Of Counsel, Mitchell Silberberg & Knupp LLP; Counsel to the International Intellectual Property Alliance (IIPA)

Troy Dow, Vice President and Counsel, Government Relations and IP Legal Policy and Strategy, The Walt Disney Company

Paula Karol Pinha, Director of Public Policy, Latin America -Netflix (invited)

Overview of Key Issues facing the Software Industries

Ben Golant, Entertainment Software Association (ESA)

Christian Troncoso, Director of Policy, Business Software Association (BSA) | The Software Alliance

Chris Mohr, Vice President for Intellectual Property and General Counsel, Software and Information Industry Association (SIIA)

Overview of Key Issues facing Photographers and Visual Artists

Joshua J. Kaufman, Chair, Art, Copyright & Licensing Practices, Venable LLP

Tom Kennedy, Executive Director, American Society of Media Photographers (ASMP)

Overview of Key Issues facing the Publishing Industry

Michael Healey, Executive Director, International Relations, Copyright Clearance Center (CCC)

Allan Adler, General Counsel and Vice President for Government Affairs, Association of American Publishers (AAP)

Ryan Fox, Editorial Director, Author’s Guild

Krista Cox, Director of Public Policy Initiatives, Association of Research Libraries

A New Approach to Copyright Exceptions and Limitations

*Guest post by Jonathan Band, policybandwidth*

Any discussion with policymakers or rightsholders concerning the possible adoption of new copyright exceptions and limitations invariably centers on how to make sure that the exception is not abused. This leads to lengthy negotiations resulting in complex, difficult-to-use provisions that resemble the tax code. This pattern has been repeated in connection to the exceptions to section 1201 of the Digital Millennium Copyright Act, the TEACH Act for distance education (17 U.S.C. § 110(2)), the Chafee Amendment for the print disabled (17 U.S.C. § 121), and orphan works legislation, to name just a few of the more salient examples.

It’s time for this pattern to be broken. Rightsholders have nothing to fear from exceptions and their possible abuse. Infringement deriving from abuse of exceptions likely would be a tiny fraction of the overall incidence of infringement. At the same time, preventing the public benefits that flow from exceptions undermines the purpose of the copyright system.

Section 108

Unfortunately, this pattern of developing overly restrictive exceptions may soon repeat itself in the context of the exception for libraries and archives in 17 U.S.C. § 108. In 2005, the Library of Congress and the Copyright Office convened a study group consisting of librarians and publishers to consider how to update section 108 for the digital age. After three contentious years, the study group issued a report recommending several possible amendments to section 108, but could not reach consensus on the details of those amendments, nor on how to handle other important issues such as copies for users or license restrictions.

Notwithstanding this lack of consensus, and over the objection of most libraries and archives, the Copyright Office has decided to urge Congress to revise section 108. This past June, the Copyright Office issued a notice of inquiry stating that it seeks “to finalize its legislative recommendation” concerning a “re-drafting” of section 108. In meetings with stakeholders pursuant to this notice of inquiry, the Copyright Office stated that it hopes to complete its legislative recommendation and transmit it to Congress this fall.

Although the Copyright Office hopes to make section 108 simpler and more user-friendly, the Office’s likely concern about “leakage” almost certainly guarantees that the re-drafted section 108 will be complicated and not understandable by librarians without law degrees. And even if the Office somehow manages to produce a streamlined and comprehensible proposal, the rightsholders can be expected to insist on changes to eliminate possible abuse that will inevitably make the proposal more complex.

There is no doubt that digital networks have facilitated copyright infringement. And while the adverse impact of this infringement probably has been overstated by rightsholders, it is perfectly legitimate for rightsholders to take reasonable measures to address infringement. The operative word here is reasonable. And making exceptions for libraries, educational institutions, or the print disabled difficult to use in order to reduce potential leakage is not reasonable.

There are approximately 200 million smartphone users in the United States, and 2 billion smartphone users worldwide. Each smartphone has the capability of reproducing entire copyrighted works and uploading them to the Internet, where they can be disseminated globally. In a world where this technological capability is literally at the fingertips of so many users, what possible difference could it make if there is a small amount of leakage from a library?

Consider the following examples. Under existing section 108(c), a library is permitted to make a replacement copy of a published work that is damaged or lost if the library determines that an unused replacement cannot be obtained at a fair price. While the library may circulate a physical replacement copy, it cannot make a copy available in a digital format outside the library premises. The Section 108 study group recommended modifying the prohibition on off-site lending of digital replacement copies only to allow the lending of a copy reproduced in a digital physical medium if the library’s original copy was also in a digital physical medium. In other words, if the library owned an audiobook CD that was deteriorating, the study group proposal would allow the library to make and lend a replacement CD, but it would not be able to stream the digital file to a user. Similarly, if its original copy wasn’t digital, the library would not be able to make a digital copy viewable outside of the library premises.

The publishers in the Section 108 study group insisted on these restrictions because they were afraid that the digital files would be retransmitted on the Internet. This concern overlooks four facts. First, the exception would only be available if a replacement copy couldn’t be purchased, i.e., the work was out of print so there would be no market harm, even if unlawful retransmission occurred. Second, unlawful copies of any work for which there is current and likely future demand are already available online, so how much incremental harm could be caused by unlawful retransmission of the library’s replacement copy? Third, technological measures exist to make retransmission difficult. Fourth, as fair use jurisprudence has evolved, making the digital copy available outside the library premises with appropriate technological protections likely would be a fair use. In other words, the library could probably engage in the activity anyway under a fair use theory, so why not save the library the burden of performing the fair use analysis and simply permit it under an explicit exception?

A similar analysis could be performed for many of the study group’s other recommendations. For example, the proposed exception for the archiving of publicly accessible websites was unnecessarily regulatory, especially considering that commercial entities such as Google and Microsoft routinely engage in this activity under a fair use theory.

It is the awareness that section 108 reform will be extremely contentious and unlikely to produce positive results that has led to library opposition to the Copyright Office’s initiative.

Section 1201 Rulemaking

Likewise, the exemptions that the Library of Congress has adopted during the course of the triennial rulemaking under section 1201 of the DMCA reflect an unhealthy obsession with possible abuse. The current exemption, adopted in 2015, permits circumvention of the technological protections on lawfully acquired motion pictures by college and university faculty and students, for use of short portions for educational purposes “in film studies or other courses requiring close analysis of film and media excerpts…where the person engaging in circumvention reasonably believes that screen-capture software or other non-circumventing alternatives are unable to produce the required level of high-quality content.” Thus, an instructor or a student may circumvent only after determining that no alternative to circumvention will produce the “level of high-quality content.” This would necessitate that the instructor or student determine: 1) whether the course requires “close analysis of film and media excerpts;” 2) what level of quality excerpt she needs to satisfy her educational purpose; 3) what are the various available alternatives to circumvention; and 4) whether any of these alternatives will produce the required level of quality excerpt. In the K-12 context, this exemption is available only to instructors, not students.

The Copyright Office designed an exemption that requires educational users to jump through many hoops so as to ensure that the exemption is not abused. At the insistence of rightsholders, the Copyright Office evidently considers circumvention to be a highly dangerous activity that leaves films vulnerable to widespread infringement, and thus must be regulated carefully. However, there is no evidence that any infringement resulted from earlier iterations of the exemption that were more straightforward. Further, the software necessary to circumvent the technological protection measures on DVDs or other storage media is widely available on the Internet and easy to use. Moreover, infringing copies of most films can be found on the Internet soon after release. Thus, a simple, broad circumvention exemption for any educational use would not harm the market for the films in any meaningful way. (At one time, some film studios planned to create a market for licensing film clips to educational institutions, but the enormous number of works educators need to access made development of such a market infeasible.)

A New Approach

Rightsholders’ frustration with their loss of control over their content is understandable. It also is understandable that this frustration would fuel a desire to exercise control wherever they can, even though it makes no difference to their bottom line.

Although the rightsholders’ frustration is understandable, it is bad copyright policy to impose the costs of overly restrictive exceptions on libraries and educational institutions where there is no offsetting benefit to rightsholders or society at large. As the Supreme Court recently stated in Kirtsaeng v. Wiley, “copyright law ultimately serves the purpose of enriching the general public through access to creative works.” The Supreme Court then explained that “the statute achieves that end by striking a balance between two subsidiary aims: encouraging and rewarding authors’ creations while enabling others to build on that work.” Exceptions and limitations are the means to achieve the aim of enabling others to build on a work.

Rather than fight reasonable adjustments to Title 17 to accommodate digital technology, rightsholders should embrace them. This not only would better meet the objectives of the copyright system, it also would be in the long run best interest of rightsholders. Instead of advocating for narrow section 1201 exemptions for educational uses of film clips, studios should encourage the broadest possible use of films in classrooms. Doing so would more deeply entrench the role of films in American culture and society.

Similarly, publishers should facilitate libraries making the robust use of their collections. Libraries spend $4 billion a year acquiring books and other materials. The more access libraries are able to provide to their collections—the more libraries are used—the easier it is for libraries to secure the budget they need to purchase more materials. Additionally, greater access to written materials encourages literacy, which in turn leads to greater demand for written materials. Finally, for many users, the alternative to accessing materials through libraries would not be to purchase the materials, but to find infringing copies on the Internet.

The same logic applies to remixes and fan fiction. More enlightened rightsholders have recognized that these activities deepen fan loyalty and result in increased sales. Additionally, these activities train the next generation of artists. And of course, reasonable exceptions enhance the credibility of the copyright system generality.

In short, rightsholders should stop treating libraries and educational institutions—their biggest customers—as their copyright enemies, and instead assist them in promoting the creation and dissemination of culture by supporting the broadest possible copyright exceptions. If rightsholders can’t change direction on their own, policymakers in Congress, the Copyright Office, and the Executive Branch should lead the way. But until rightsholders and policymakers change their approach to exceptions, attempts to fashion new exceptions will largely be exercises in futility.

 

Nothing New Under the Sun

It’s Copyright Week, a series of activities and discussions supporting key principles that should guide copyright policy. Every day this week, various groups are taking on different elements of the law, addressing what’s at stake and what we need to do to make sure that copyright promotes creativity and innovation. Today’s topic is “Building and Defending a Robust Public Domain: The public domain is our cultural commons and a public trust. Copyright policy should seek to promote, and not diminish, this crucial resource.”

*Today’s post is brought to you by guest blogger Caile Morris, ARL Law and Policy Fellow*

In support of today’s theme, Jonathan Band and Caile Morris have created a document, entitled “Nothing New Under the Sun” providing examples of famous creators throughout the history of art who have built their works on existing works. The purpose of the document is to demonstrate the importance of copyright limitations to the creative process.

Proponents of strong copyright protection stress the significance of an author’s contribution to the artistic and economic value of a work. In this vision, creativity starts with an author’s spark of genius and is realized through the artist’s talent and hard work.

To be sure, great works reflect their authors’ genius, talent, and hard work. But authors do not create in a vacuum. The raw material for their creativity is existing works. Artists borrow themes, styles, structures, tropes, and phrases from works that inspire them. And if copyright overprotects existing works—if it restricts authors’ ability to build on the creative output of authors who came before them—it will be more difficult for authors to create.

Unfortunately, copyright owners and policymakers often undervalue the importance of this use of source material. They focus on rights, but not on the critical limitations to those rights that enable creativity to flourish. These limitations include: the idea/expression dichotomy and the related doctrines of merger and scenes a faire; fair use; and copyright term, which results in works entering the public domain. The failure to recognize how essential limitations are to new creative expression results in bad policy, such as the Sonny Bono Copyright Term Extension Act (adding 20 years to the copyright term) or the absence of mandatory exceptions and limitations in free trade agreement.

Hopefully, these examples of great works derived from earlier works will remind copyright owners and policymakers of the importance of copyright limitations and exceptions to the creation of new works.

Analysis of the Final TPP (Leaked) Text on Intellectual Property: Mixed Results

*This post is also available as an issue brief here*

On October 5, 2015, the twelve trade ministers of the TPP negotiating parties (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States) announced that they had come to an agreement on the large regional trade agreement that had been under negotiations for the past five years.

While the agreement has been criticized for a number of reasons, it is important to recognize the areas where the agreement has improved from the initial proposals made by the United States in February 2011. Civil society, technology companies and academics have participated throughout the negotiating process to improve the language of the final text and many of these efforts are reflected in the agreement.

Of course, one of the main points of criticism regarding the TPP was the lack of transparency; without the various leaks of the intellectual property chapter throughout the course of the negotiations, substantive debate, criticism and proposed alternatives may not have been possible. It is worth noting that the agreement was signed by the trade ministers of the twelve negotiating parties in Atlanta, GA without a single official release of any chapter of the TPP. Notably, when international agreements are negotiated in multilateral fora such as at the World Intellectual Property Organization (WIPO), the negotiations are much more transparent and stakeholders have the opportunity to view and substantively comment on the proposals.  Even today, the final text has not been officially released, though Wikileaks has released a leaked copy of the final agreement’s intellectual property chapter.

Improvements in the Text

The final text of the TPP saw improvement in several areas, including the removal of certain provisions.

Removal of the Ban on Parallel Importation

The United States’ initial proposal included a ban on parallel importation, granting authors “the right to authorize or prohibit the importation into that Party’s territory of copies of the work, performance or phonogram made without authorization, or made outside the Party’s territory with the authorization of the author, performer, or producer of the phonogram.” This proposal would have prohibited parallel importation, limiting the application of the first sale doctrine to authorized copies made within the Party’s territory. Thus, a legitimate copy made in another country could not be sold in the United States without the author’s consent.

This proposal was controversial at the time it was introduced as other negotiating parties strongly rely on parallel importation of works. Additionally, during this time a high-profile court case, Kirtsaeng v. John Wiley & Sons, involving this very issue was making its way through the court system ultimately ending up before the Supreme Court of the United States. In that case, an individual purchased lawfully made textbooks in Thailand, where they were less expensive, and resold them in the United States.

In March 2013, the Supreme Court ruled that the first sale doctrine applies to lawful copies regardless of their place of manufacture. This ruling clarified that United States law does indeed allow for parallel importation, thus conflicting with the United States’ proposal. Despite this ruling, it took many months and several negotiating rounds for the United States to remove its language banning parallel importation. Ultimately, though, this prohibition was removed and is not in the final text of the agreement.

Removal of Language on Temporary Reproductions

Another area of controversy surrounding the United States’ proposal centered around language granting authors the right to authorize or prohibit reproductions “in any manner or form, permanent or temporary (including temporary storage in electronic form).” Many criticized the inclusion of temporary reproductions, particularly the clarification that it applied to “temporary storage in electronic form” as potentially prohibiting the temporary copies that are constantly made by a computer to read e-mails, store documents, access content, etc. Reference to “temporary reproductions” and “temporary storage in electronic form” is not in the final text, another helpful improvement in the text.

Removal of the Ban on Formalities

The October 2014 leak of the IP chapter, which reflected the state of negotiations as of May 2014, revealed that parties had agreed to new language banning formalities that did not appear in prior leaks. ARL criticized this development noting

This language could be problematic if the United States, or other TPP parties, wanted to re-introduce formalities for copyright protections granted that go beyond minimum international standards. Register of Copyrights Maria Pallante, for example, proposed the re-introduction of formalities for the last twenty years of copyright protection in the United States. If adopted, such a proposal would violate the TPP and subject the United States to investor-state dispute settlement, under which a corporation could sue the Unites States government for failure to comply with the TPP.

However, the August 2015 leak, reflecting the state of negotiations as of May 2015, as well as the final leaked text show that the text was ultimately removed. The removal of this language was a welcome improvement, preserving the ability to re-introduce formalities for protections granted under the TPP that go beyond minimum international standards set by the Berne Convention or TRIPS.

Improvements on Technological Protection Measures

The United States’ initial proposal on technological protection measures (TPMs) included detailed language, including a closed-list set of limitations and exceptions to the anti-circumvention rules. In addition to the very limited set of exceptions, the proposal would have allowed countries to use a three-year rulemaking process, modeled after the Digital Millennium Copyright Act (DMCA) 1201 rulemaking process, to create additional limitations and exceptions subject to a “substantial evidence” burden. This proposal would not have permitted new permanent limitations and exceptions to the anti-circumvention rules and was heavily criticized, particularly as certain events, such as the Register’s refusal to renew an exemption in 2012 to allow for the unlocking of cell phones, highlighted the absurdity of the process.

The 2014 leak and the final text of the agreement reveal that parties have removed the closed list of limitations and exceptions as well as the rulemaking process. Instead, the text allows parties to provide for limitations and exceptions and to use legislative, regulatory or administrative processes to create exceptions. This language would permit the creation of new permanent limitations and exceptions.

Furthermore, while the language still provides that a violation of the anti-circumvention rules “is independent of any infringement that might occur under the Party’s law on copyright and related rights,” this text could be mitigated by a helpful footnote that reads “A Party may provide that the obligations described in paragraph (ii) with respect to manufacturing, importation, and distribution apply only where such activities are undertaken for sale or rental, or where such activities prejudice the interests of the right holder of the copyright or related right.”

The fact that the United States’ initial proposal in 2011 made circumvention a “separate and independent cause of action” was controversial and makes little sense. Establishing that circumvention is independent of any copyright infringement negatively impacts legitimate, non-infringing circumvention. However, the footnote that appeared in the final text could mitigate the harm of this provision because circumvention for legitimate purposes would not prejudice the interests of the right holder.

Inclusion and Improvements on Text on Limitations and Exceptions

The United States’ initial proposal included placeholder text for limitations and exceptions on copyright. The United States tabled a proposal on limitations and exceptions in July 2012. While proposal was a welcome one, including language referencing balance for purposes such as “criticism, comment, news reporting teaching, scholarship and research” which had never been in any prior United States free trade agreement, there were also criticisms of the proposal which noted that this new paragraph was “subject to and consistent with” the three-step test. Critics pointed out that some specific limitations and exceptions, such as the quotation right under the Berne Convention, are not subject to the three-step test (that limitations and exceptions are confined to 1) certain special cases, 2) the at do not conflict with the normal exploitation of the work, and 3) do not unreasonably prejudice the legitimate interests of the right holder).

Ultimately, the language regarding limitations and exceptions was improved and clarification was included that the text on the three-step test did not reduce or extend the scope of limitations and exceptions under international agreements including TRIPS, the Berne Convention, and the WIPO Internet Treaties.

The text of the United States’ proposal also improved with respect to the fact that the list of “legitimate purposes” now specifically references “other similar purposes” as well as “access to published works for persons whoa re blind, visually impaired, or otherwise print disabled.” The text also includes a specific footnote recognizing the Marrakesh Treaty and acknowledges that some Parties facilitate the availability of accessible format works beyond the requirements of the Marrakesh Treaty.

Finally, while the language on limitations and exceptions could have been stronger with language mandating that parties achieve a balance or foster a balance, rather than the agreed to language that “Each Party shall endeavor to achieve an appropriate balance in its copyright and related rights system,” the inclusion of the language in the final text is still a success. The United States has now recognized in a free trade agreement the importance of balance in the copyright system. Furthermore, the United States has stated that this language provides “an obligation for Parties to continuously seek to achieve balance in copyright systems,” because the language requires Party to “endeavor to achieve” balance. The words “shall endeavor” do create a mandatory obligation for parties to seek this balance.

Inclusion of this language signals that the Office of the United States Trade Representative (USTR) has responded to criticisms that the United States proposals only export rights for rightholders and not our balanced system which includes limitations and exceptions. This language should be included in future trade agreements and USTR should seek to improve upon it in the future by strengthening the language requiring parties to achieve a balance or foster a balance. Despite the fact that the language could have been stronger, its inclusion in the final text still reveals a mandatory obligation for parties and represents a positive development.

Remedies Allow for Judicial Discretion

The final language regarding enforcement also shows areas where the text has improved from the United States’ initial proposal.

For example the final text includes language that replicates text from the Anti-Counterfeiting Trade Agreement (ACTA) requiring parties to take proportionality into account. The text reads, “In implementing the provisions of [the enforcement] Section in its intellectual property system, each Party shall take into account the need for proportionality between the seriousness of the intellectual property infringement, and the applicable remedies an penalties, as well as the interests of third parties.” This language on proportionality is a welcome inclusion and would ultimately allow domestic laws to provide judicial authorities discretion in ordering remedies.

Additionally, while the United States’ initial proposal in 2011would have required judges to consider certain measures of damages (“in determining damages for infringement of intellectual property rights, its judicial authorities shall consider, inter alia, the value of the infringed good or service, measured by the suggested retail price or other legitimate measure of value submitted by the right holder”) the final language provides judicial authorities the discretion to consider these measures of damages. The final text provides that “judicial authorities shall have the authority to consider . . .” and this added language “have the authority” changes the text from a mandatory obligation that judges consider these measures of damages to providing them the discretion to do so. This addition is an improvement and consistent with current United States law which permits judicial discretion.

Other provisions on the text on remedies includes similar language, providing that judicial authorities “shall have the authority” to impose certain remedies, but does not actually require that authorities order these remedies. While some have criticized the TPP as prohibiting the Copyright Office’s proposal on orphan works (which is a highly flawed proposal as analyzed here and here), the actual text of the TPP permits considerable discretion and does not actually require authorities to order damages in a particular amount.

General Provisions

As noted in ARL’s analysis of the August 2015 leak, language on general provisions reveal considerable positive developments. The final text includes language provides that the objectives of the agreement are as follows:

The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.

The principles specifically reference the public interest and address the need to prevent abuse of intellectual property by right holders: 

1.  Parties may, in formulating or amending their laws and regulations, adopt measures necessary to protect health and nutrition, and to promote the public interest in sectors of vital importance to their socio­economics and technological development, provided that such measures are consistent with the provisions of this Chapter.

2.  Appropriate measures, provided that they are consistent with the provisions of this Chapter, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.

The final text also includes a section on “Understandings in respect of this Chapter” which reads as follows:

Having regard to the underlying public policy objectives of national systems, the Parties recognize the need to:

  • promote innovation and creativity;
  • facilitate the diffusion of information, knowledge, technology, culture and the arts; and
  • foster competition and open and efficient markets;

through their intellectual property systems, while respecting the principles of transparency and due process, and taking into account the interests of relevant stakeholders, including rights holders, service providers, users and the public.

The August 2015 leaked text, reflecting the negotiating text as of May 2015, also included language proposed by Chile and Canada “acknowledging the importance of preserving the public domain.” This text was, however, opposed by the United States and Japan and ultimately not included in the agreement. It is extremely unfortunate that the United States and Japan would oppose inclusion of such text.

However, in the section on “Cooperation” the text from the August 2015 leak remains in the final text recognizing the importance of the public domain:

The Parties recognize the importance of a rich and accessible public domain. 

The Parties also acknowledge the importance of information materials, such as publicly accessible databases of registered intellectual property rights that assist in the identification of subject matter that has fallen into the public domain.

While it is disappointing that the United States and Japan opposed the inclusion of a reference to the public domain in the general provisions, the fact that the importance of the public domain is recognized on the section regarding cooperation is still welcome language.

Shortcomings/Areas for Improvement in Future Agreements

Flexibility on ISP Liability

The final language of the agreement does provide for some flexibilities with respect to Internet Service Providers (ISP). While the text, contained in Section I, is modeled off the DMCA and provides for safe harbors for ISPs implementing a notice-and-takedown system, an annex specifically preserves Canada’s notice-and-notice system. The annex provides that the notice-and-takedown safe harbors do not apply to a Party that has implemented a notice-and-notice system instead.

Unfortunately, this flexibility will only be permitted for Canada and not for the other negotiating parties. The language under the annex requires the system to be in place “upon date of agreement in principle of this Agreement,” which occurred when the trade ministers announced the agreement on August 5, 2015. Canada was the only country at that time to have a notice-and-notice system in place.

However, another annex to the intellectual property chapter provides that as an alternative to implementing the article on ISP, parties may instead implement Article 17.11.23 of the US-Chile free trade agreement. Chile’s system involves notice-and-takedown, but involves a judicial order before takedowns are required. Countries may therefore choose between implementing the language in the TPP or the language of the US-Chile trade agreement.

Unfortunate Extension of Copyright Term

Copyright Term Extension

One of the biggest areas of criticism that remains in the final agreement is that the parties settled on a copyright term of life plus seventy years, or seventy years for corporate works. The United States’ 2011 proposal would have set copyright term as the life of the author plus seventy years, or ninety-five (or up to one-hundred twenty years if unpublished) years for corporate works. While countries did not accept the United States’ proposals on corporate works, they did agree to the term of life plus seventy years. Some countries with pre-existing free trade agreements with the United States (Australia, Chile, Peru and Singapore) already had obligations to provide for a period of life plus seventy years and Mexico had an even longer term, which it proposed, of life of the author plus one hundred years.

However, it is highly unfortunate that the other countries ultimately agreed to extend copyright term, given the lack of justification for excessively long terms. The Hargreaves report commissioned by the United Kingdom, for example, points out that economic evidence does not support copyright term extensions. Maria Pallante, Register of Copyrights, noted that a Copyright Office study questioned “whether copyright term should be extended to benefit remote heirs or assignees, ‘long after the purpose of the protection has been achieved.’” Despite the lack of policy justification for these terms and the fact that copyright term extension damages the public domain and increases the orphan works problem, the final text of the agreement reveals that countries must provide for copyright terms that go far beyond the minimum international standards.

After the trade ministers announced an agreement had been reached, New Zealand released a fact sheet on the TPP. This fact sheet estimated that the copyright term extension would cause “significant cost” to New Zealand: “This cost – in terms of foregone savings on books, films, music and other works – increases gradually over 20 years and averages around $55 million a year over the very long term.”

Article QQ.A.10bis, however, does provide that countries that are required to implement copyright term extension do not need to restore protection to subject matter that has fallen into the public domain in its territory as of the date of entry into force of the agreement. The extension will therefore apply only to those works that are still under protection as of the date the agreement enters into force for that country (which will depend on each country’s domestic process for approving the final agreement).

While the United States will not require changes to its domestic laws with respect to copyright term, it is unfortunate that this term is being imposed on other countries when it far exceeds international standards. Brunei, Canada, Japan, Malaysia, New Zealand and Vietnam will all be required to increase the copyright terms in their countries. Furthermore, it would be extremely difficult for the United States to revisit this term and reduce copyright term in the United States, even though evidence justifies and supports shorter terms, as the TPP would need to be re-negotiated with all TPP parties.

Conclusion

While there are still areas where the TPP should be criticized and several areas where the language of the TPP could have been better, the final text reveals significant improvements from the United States’ initial proposals. It is possible that some of these proposals resulted from stakeholder engagement, including criticisms of prior texts and proposals which was only made possible through leaks. These improvements and changes in the text over the course of the five years of negotiations reveal the importance of transparency in negotiations.

The TPP will still need to be approved by the domestic procedures set forth in each of the parties. In the United States, Congress will vote under the “fast track” procedures it set when it granted the President trade promotion authority. Congress will be able to approve or reject the agreement in a straight up-down vote, meaning that it cannot amend the agreement. Due to the timing set forth under fast track procedures, a vote in the United States will not occur until 2016. In Canada, a vote will not take place on the TPP until after it concludes its upcoming elections on October 19 and the new Parliament is in place.

Whether or not Congress approves the agreement, the final text of the TPP will likely provide the starting point for future negotiations. USTR has used past agreements, particularly the most recently concluded free trade agreements, as a template for future agreements. The gains made with respect to supporting a balanced copyright system should serve as a basis for additional improvements in the future.

Constitution Day: The U.S. Constitution and Copyright Balance

Happy Constitution Day!  September 17th commemorates the signing of the U.S. Constitution in 1787.  Among its many clauses, the Framers of the Constitution provided for an intellectual property clause in Article I, Section 8, Clause 8, which grants Congress the power:

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

This clause provides the rationale for our intellectual property system.  While the clause is a grant of power to Congress, so too is it an important limitation.  The Supreme Court of the United States has confirmed that the clause “is both a power and a limitation” and, in the patent case, Graham v. John Deere Co., stated that “Congress in the exercise of the patent power may not overreach the restraints imposed by the stated constitutional purpose.”  In copyright cases, the Supreme Court has confirmed that “The immediate effect of our copyright law is to secure a fair return for an author’s creative labor.  But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good.”  Twentieth Century Music Corp. v. Aiken.

It is important to remember that the Constitution allows Congress to set limited-time monopolies over intellectual property, but ultimately the goal is “To promote the Progress of Science and useful Arts.”

Promoting progress depends on a rich public domain.  The public domain not only allows the public to access books and texts for learning and discovery, but also serves as a storehouse of raw materials from which derivative works are created and new ideas are built.

Unfortunately, copyright term has been extended extensively since the first Copyright Act of 1790 (modeled after the 1710 Statute of Anne) which provided for a 14 year initial term, with the possibility of a 14 year renewal.  Currently, the copyright term is the life of the author plus 70 years or 95 works for corporate works, significantly exceeding the international term of life plus 50 years.  The currently negotiated Trans-Pacific Partnership Agreement (TPP), a large free trade agreement between 12 countries in the Asia and Pacific region, includes proposals to export this term to other countries, but also includes a proposal from Mexico to extend our current term to the life of the author plus 95 years.  Lengthy copyright terms hinder the stated Constitutional rationale for the intellectual property protection by shrinking the public domain and exacerbating the orphan works problem.

In the Eldred v. Ashcroft case, the Supreme Court unfortunately upheld by a 7-2 majority that the Copyright Term Extension Act which set the current copyright term, deferring to the judgment of Congress.  The majority opinion in that case did not, however, address the appropriateness of the copyright term extension.  Justice Breyer, however, in dissent vigorously opposed the extension as a violation of the Constitutional rationale of the intellectual property system:

 

The economic effect of this 20-year extension—the longest blanket extension since the Nation’s founding—is to make the copyright term not limited, but virtually perpetual. Its primary legal effect is to grant the extended term not to authors, but their heirs, estates or corporate successors. And most importantly, its practical effect is not to promote, but to inhibit, the progress of “Science”—by which word the Framers meant learning or knowledge.

While the Eldred case had the unfortunate effect of upholding the current term of life plus 70 years, the Supreme Court has interpreted the intellectual property clause to place limits on copyright protections in other areas.  For example, the Court has ruled that copyright does not protect facts, only expression.  See Harper & Row v. Nation Enterprises.  In Feist Publications v. Rural Telephone Service, the Supreme Court held that “Originality is a Constitutional requirement” for copyright protection and that:

As Justice Brennan has correctly observed, however, this is not “some unforeseen byproduct of a statutory scheme.” It is, rather, “the essence of copyright,” ibid., and a constitutional requirement. The primary objective of copyright is not to reward the labor of authors, but “to promote the Progress of Science and useful Arts.” To this end, copyright assures authors the right to their original expression, but encourages others to build freely upon the ideas and information conveyed by a work. This principle, known as the idea/expression or fact/expression dichotomy, applies to all works of authorship. As applied to a factual compilation, assuming the absence of original written expression, only the compiler’s selection and arrangement may be protected; the raw facts may be copied at will. This result is neither unfair nor unfortunate. It is the means by which copyright advances the progress of science and art. (internal citations omitted).

Aside from copyright term and the scope of copyright, copyright limitations and exceptions can help advance the important Constitutional goal of promoting progress.  The Copyright Act has a number of specific limitations and exceptions as well as a flexible doctrine known as fair use, codified under Section 107.  These limitations and exceptions to copyright allow for the reliance on copyrighted works without permission of the rightholder.  Fair use is a critical right of users, allowing copyright law the flexibility to adapt to evolving technologies and promoting the progress of science.

The Supreme Court in Campbell v. Acuff-Rose noted that fair use supports the Constitutional purpose of copyright:

The fair use doctrine thus “permits [and requires] courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which the law is designed to foster.” . . . The goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works.  Such works thus lie at the hart of the fair use doctrine’s guarantee of breathing space within the confines of copyright . . . (internal citations omitted).

In addition to supporting the intellectual property clause of the U.S. Constitution, fair use also provides an important accommodation to the guarantee of freedom of speech in the First Amendment.  In the Eldred v. Ashcroft case, the Supreme Court confirmed that fair use serves as a “First Amendment safeguard.”

In addition to spurring the creation and publication of new expression, copyright law contains built-in First Amendment accommodations.  First, it distinguishes between ideas and expression and makes only the latter eligible for copyright protection . . . Second, the “fair use” defense allows the public to use not only facts and ideas contained in a copyrighted work, but also expression itself in certain circumstances.

The Constitution’s intellectual property clause grants Congress the power to permit limited time monopolies on copyright, but also mandates balance in the copyright system.  The ultimate goal of copyright is to promote progress and advance the public good.  Thus, the Supreme Court has interpreted the intellectual property clause to limit copyright in many ways, by distinguishing between facts and expression and requiring some degree of originality for copyright protection.  While copyright and the First Amendment right to freedom of speech could potentially be in tension with each other, the fair use doctrine provides an important safeguard to both accommodate the rights of users and promote the progress of science.  In celebrating Constitution Day, celebrate that the Constitutional rational for the U.S. intellectual property system is inherently grounded in the concept of balance: providing an incentive to authors, but ultimately advancing the general public good.

 

ICYMI: CCIA Releases White Paper, Copyright Reform for a Digital Economy

On August 25, 2015, the Computer and Communications Industry Association (CCIA) released its White Paper, Copyright Reform for a Digital Economy.  The report notes that the House Judiciary Committee began comprehensive copyright review in 2013 and points out that new technology has changed the way creative industries and communication operate.  For example, the growth of the Internet has lowered the cost of distribution and “radically changed the economics of scholarly communications and other educational resources.  This, in turn, has allowed open access business models to flourish in these markets.”  The report points out the importance of balance and “any copyright reform should acknowledge the significance of doctrines ensuring copyright flexibility, particularly limitations and exceptions like the fair use doctrine and first sale.”

Among the highlights, the report points out:

The principle of copyright remains an important tool in the Government’s toolbox to promote scientific, cultural and economic progress, but in current practice, the complex, opaque, and highly concentrated U.S. system is increasingly incapable of facilitating certain socially and economically desirable uses.  Easily navigated only by the most experienced corporate actors, the credibility of the copyright system is being tested as it leaves ‘”consumers and other private citizens…increasingly frustrated.”

With respect to fair use, the report cites studies done on the fair use economy pointing out the significant role industries relying on limitations and exceptions have played in growing the US economy.  The report continues,

[P]rotection exceeding the amount necessary to incentivize innovation represents a deadweight loss to the economy.  Limitations and exceptions help minimize the deadweight loss, and several, such as the fair use doctrine, provide breathing room for new innovations.

The report goes on to point out that fair use is not limited to the technology sector and has been successfully relied upon by “theatre producers, artists, movie studios . . . patent lawyers, rock bands and an NFL football team.”  In other words, as pointed out in the Fair Use Fundamentals infographic created for last year’s Fair Use Week,* fair use is relied upon by everyone.  While the report notes the importance of fair use, it does not recommend reform of the doctrine but instead cautions Congress to consider the

other reforms [that] may affect the fair use doctrine, and potential effects on fair use should be considered in any reform.  For example, increasing statutory damages may deter socially desirable fair uses, and allowing DMCA abuses to continue unchecked may prevent fair use criticism, commentary and political speech.  Because fair use is so integral to the fabric of the Copyright Act, it must be a central consideration in any legislative effort.

In addition to fair use, the report also emphasizes another important limitation in copyright law: the first sale doctrine.

With respect to other areas under consideration for copyright reform, the report points out that safe harbors in the online environment have ensured predictability, but suggests that safe harbors could be strengthened.  It also points out that the DMCA takedown process can be misused.

The report also points out the chilling effect of statutory damages which has led to copyright trolling.  It notes, “regardless of the propriety of the remedy, however, to whatever extent statutory damages deter misbehavior, they also deter investment by creating substantial uncertainty and risk.”  The report cites several suggestions by scholars to reduce statutory damages and also pointing to a proposal

to generally remit statutory damages in cases where defendants can demonstrate a reasonable good faith belief that their activity was a fair use (or perhaps covered by any defense).  Section 504(c)(2) already has exactly this provision, but limits it to nonprofit educational institutions, libraries, archives and public broadcasters.  Because deterrence is inappropriate where a defendant had a reasonable good faith belief that their conduct was non-infringing, this provision could be extended to all good faith actors.  In the rare case where this might leave plaintiffs under-compensated, they could still obtain actual damages and injunctions.

The report also points out that international agreements can constrain reforms.  For example,

extraordinarily long copyright terms are also a result of international agreements, which have extended the copyright term to last for the life of the author, plus an additional 50 years (in the case of the Berne Convention and TRIPS) or the life of the author plus an additional 70 years (in the case of the free trade agreements).  This exacerbated the orphan works problem while diminishing the ability of artists to make productive uses of older works, e.g., new performances of older plays.  The Supreme Court has validated the most recent extension in Eldred v. Ashcroft, notwithstanding economic studies showing that extending the term of protection from 56 years to life plus 50 or 70 years does not measurably incentivize additional creative activity.

It is no exaggeration to say that international copyright treaty obligations have contributed to a legitimacy crisis in the contemporary copyright system.  Survey data suggests there is a declining public respect for copyright.  Terms extending well over a century have been the source of high-profile disputes casting copyright in a poor light, and when combined with the absence of formalities, exceptionally long terms have proven to be a significant problem for researchers, historians and preservationists, among others.

Another problem the report highlights i the relationship between contract and copyright, where license terms may override limitations and exceptions.  The report points to proposals against “contracting out” in the United Kingdom, Ireland, and Australia and concludes that “effective copyright law reform must recognize that Congress’s intentions can be subverted through contract, and that licensing agreements between competitors can give rise to substantial market power.”  Likewise, the report notes that “substantial aspects of copyright reform could be rendered largely irrelevant if rightsholders can control all uses via TPMs.”

The entire report is well worth a read.

*Fair Use Week 2016 will take place from February 22-26, 2016.  For more information please visit www.fairuseweek.org*

 

Analysis of August 2015 Leaked TPP Text on Copyright, ISP and General Provisions

The United States is currently negotiating a large, regional free trade agreement with eleven other countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. On August 5, 2015, Knowledge Ecology International published a new leak of the Trans-Pacific Partnership Agreement’s (TPP) negotiating text for the intellectual property chapter. This text, dated May 11, 2015 reflects the state of the negotiations prior to the recent Ministerial meeting in Hawaii (and new agreements may have been made during the recent TPP meeting). This latest leak reveals some substantial changes from last year’s October leak of the text by WikiLeaks (which revealed the state of negotiations as of May 14, 2014).

In general, the more recent text shows some improvement over last year’s text, although serious problems remain.

Copyright

Copyright Term

The copyright term has not yet been agreed to, and it has widely been considered to be a political decision to be determined by the trade ministers. Currently, there is a wide range of proposals available for copyright term, ranging from life plus 50 years, to life plus 70 years, to life plus 100 years when based on the life of an author. For corporate works, there are four proposed terms of 50, 70, 75 or 95 years. These are wide ranging proposals and longer copyright terms exacerbate the orphan works problem and hamper the public domain. The potential for excessively long copyright terms that far exceed international standards is one of the largest remaining flaws in the agreement from the perspective of access to knowledge and information. Countries should resist copyright term extension, particularly given the lack of evidence supporting these extensive copyright terms.

Japan’s proposal, which appeared in the previous leak, similar to the Berne rule of shorter term remains. This rule would essentially allow parties to limit the term of protection provided to authors of another party to the term provided under that party’s legislation. For example, if the final TPP text required a period of copyright protection of life plus fifty years, the United States would not be required to provide its period of life plus seventy years to authors in New Zealand, if New Zealand continued to provide a term of life plus fifty years. The United States does not currently implement the Berne rule of shorter term.

Formalities

In last year’s leaked text, Article QQ.G.X appeared for the first time and was unbracketed, signaling agreement by the TPP negotiating parties. This provision read, “No Party may subject the enjoyment and exercise of the rights of authors, performers and producers of phonograms provided for in this Chapter to any formality.” As noted in last year’s analysis by ARL, the language was potentially problematic for countries wanting to re-introduce formalities for copyright protections granted that go beyond minimum international standards. The Register of Copyrights Maria Pallante, for example, proposed the re-introduction of formalities for the last twenty years of copyright protection in the United States, which would have violated the TPP if a period of life plus seventy years was also agreed to.

Although this provision was unbracketed in the 2014 text, it appears from the current leak that this ban on formalities has been removed. The removal of this language is significant as it would not only permit the reintroduction of formalities for the last twenty years of copyright term in the United States, but also allows for formalities in other areas. For example, formalities can be required in order to be eligible for certain remedies for copyright infringement. It could be used to address the orphan works problem by establishing registries in order to receive damages or an injunction for works that are still protected under copyright in the United States, but go beyond the terms required by international law. Footnote 160 in the current leak appears to allow such arrangements, providing that “For greater certainty, in implementing QQ.G.6, nothing prevents a Party from promoting certainty for the legitimate use and exploitation of works, performances and phonograms during their terms of protection, consistent with QQ.G.16 [limitations and exceptions] and that Party’s international obligations.”

Limitations and Exceptions

The language from the previous leak on limitations and exceptions, including a reference to the Marrakesh Treaty, remains in the text and is particularly welcome, given that it has not been included in previous US free trade agreements. The language provides that

Each Party shall endeavor to achieve an appropriate balance in its copyright and related rights system inter alia by means of limitations or exceptions that are consistent with Article QQ.G.16.1, including those for the digital environment, giving due consideration to legitimate purposes such as, but not limited to: criticism; comment; news reporting; teaching, scholarship, research and other similar purposes; and facilitating access to published works for persons who are blind, visually impaired or otherwise print disabled.[164] [165] 

[164] As recognized by the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who are Blind, Visually Impaired or Otherwise Print Disabled (June 27, 2013). The Parties recognize that some Parties facilitate the availability of works in accessible formats for beneficiaries beyond the requirements of the Marrakesh Treaty.

[165] For purposes of greater clarity, a use that has commercial aspects may in appropriate circumstances be considered to have a legitimate purpose under Article QQ.G.16.3

Footnote 164, which references the Marrakesh Treaty, now includes an additional sentence that recognizes that some parties provide for limitations and exceptions for beneficiaries that go beyond the requirements of the Marrakesh Treaty. Currently, ten parties have ratified the Marrakesh Treaty and an additional ten are required for entry into force. Singapore and Mexico, both negotiating parties to the TPP, have already ratified the Marrakesh Treaty, and Canada has introduced a bill paving the way for implementation of the Treaty. A number of other TPP negotiating parties have signed the treaty, signaling an intention to ratify, including Australia, Chile, Peru, and the United States.

While inclusion of language on limitations and exceptions is a welcome addition to the agreement, this provision should be strengthened by making mandatory the obligation to achieve balance rather than using the term “shall endeavor,” as the Library Copyright Alliance pointed out in an August 2012 letter to the United States Trade Representative.

Technological Protection Measures

Last year’s leak revealed language that permits parties to provide limitations and exceptions to technological protection measures “in order to enable non-infringing uses where there is an actual or likely adverse impact of those measures on non-infringing uses.” The leak also revealed that the three-year rulemaking process to create these limitations and exceptions, as earlier proposed by the United States, was removed. The current leak maintains this language, but drops the reference to the three-step test (though the language on limitations and exceptions remains the same) and also eliminates Chile’s proposal that the process for establishing limitations and exceptions requires consideration of “evidence presented by beneficiaries with respect to the necessity of the creation of such exception and limitation.”

Overall, this language is an improvement over the United States’ initial proposal from 2011 regarding technological protection measures, which only allowed for a closed list of specific limitations and exceptions while others could be added through a three-year rulemaking process, because it would allow for new permanent limitations and exceptions to allow for circumvention of TPMs. Such permanent limitations and exceptions could be granted for cell-phone unlocking. However, the language does assume that parties need to provide for limitations and exceptions, even for non-infringing uses.

Article QQ.G.10(c) maintains the unfortunate language that “a violation of a measure implementing this paragraph is independent of any infringement that might occur under the Party’s law on copyright and related rights.” Establishing that the circumvention of a technological protection measure is independent of any copyright infringement negatively impacts legitimate, non-infringing circumvention. It is unfortunate that this language not only remains in the text, but is unbracketed, meaning that countries have agreed to this flawed provision.

Internet Service Providers

The text on Internet Service Providers appears in an addendum and contains important caveats that the text is “Without Prejudice” and “Parties are still considering this proposal and reserve their position on the entire section.” Thus, even where language is unbracketed, it does not necessarily reflect agreement.

The current leak reveals that the text contains significant flexibilities that did not previously exist. For example, the United States and Canada have proposed language that would continue to allow Canada’s notice-and-notice system, rather than require the United States notice-and-takedown system. It appears to protect Canada’s system as one that “forward[s] notices of alleged infringement” but requires that the system exist in the Party “upon the date of entry into force of this Agreement.” If this language is agreed to, it could therefore be conceivable that other parties to the TPP could implement systems of notice-and-notice, provided that they do so before entry into force of the TPP. Similarly, footnote 299 appears to allow Japan to maintain its safe harbor framework.

In last year’s leak, Peru had proposed a footnote that now appears in the general text of the section on ISPs. This paragraph now reads, “It is understood that the failure of an Internet service provider to qualify for the limitations in paragraph 1 does not itself result in liability. Moreover, this article is without prejudice to the availability of other limitations and exceptions to copyright, or any other defences under a Party’s legal system.” This language provides a helpful clarification and clearly establishes the language as a safe harbor, not as a direct creation of liability where an ISP does not qualify for the limitations set forth under the agreement.

General Provisions

In addition to improvements in the copyright section, there appears to be agreement on positive language regarding general provisions. Many of the positive proposals regarding general provisions in last year’s leak were bracketed and not yet agreed to.

The objectives now read:

The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.

Additionally, principles that had previously been agreed to by six parties now appear unbracketed and specifically reference the public interest and address the need to prevent abuse of intellectual property rights by right holders:

1.  Parties may, in formulating or amending their laws and regulations, adopt measures necessary to protect health and nutrition, and to promote the public interest in sectors of vital importance to their socio­economics and technological development, provided that such measures are consistent with the provisions of this Chapter.

2.  Appropriate measures, provided that they are consistent with the provisions of this Chapter, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.

There is also new language, which appears to be mostly agreed to, that promotes the dissemination of knowledge and information. In addition, Chile and Canada have proposed language, which the United States and Japan oppose, emphasizing the importance of the public domain. This article, “Understandings in respect of this Chapter” reads:

Having regard to the underlying public policy objectives of national systems, the Parties recognise the need to:

  • promote innovation and creativity;
  • facilitate the diffusion of information, knowledge, technology, culture and the arts; and
  • foster competition and open and efficient markets;

through their intellectual property systems, while respecting the principles of transparency and due process, and taking into account the interests of relevant stakeholders, including rights holders, service providers, users and the public [CL/CA propose; US/JP oppose; and acknowledging the importance of preserving the public domain.]

It is disappointing that the United States would oppose language acknowledging the importance of preserving the public domain, which provides a storehouse of raw materials from which individuals can draw from to learn and create new ideas or works. The public domain is essential in fostering new creativity and advancing knowledge.

Proportionality in Enforcement

While this analysis does not cover the section on enforcement in detail, there is one significant positive improvement from previous texts. Under the general enforcement provisions, there is new text that appears to be agreed to language that is replicated from the text of the Anti-Counterfeiting Trade Agreement (ACTA) and would require parties to “take into account the need for proportionality between the seriousness of the intellectual property infringement, and the applicable remedies and penalties, as well as the interests of third parties.” Inclusion of this language is a welcome improvement to the text of the enforcement section.

Conclusion

Overall, the text of the copyright section as well as some other key provisions reflect improvements over the initial intellectual property chapter proposed by the United States in February 2011. The section on technological protection measures no longer limits the limitations and exceptions to a closed list and does not impose a three-year rulemaking process. It would allow for permanent limitations and exceptions to anti-circumvention provisions. Additionally, the text shows greater flexibility with respect to ISPs and appears much less complicated than it initially did. Furthermore, the current text reflects agreement on positive language with respect to limitations and exceptions and a reference to the Marrakesh Treaty has been included. The removal of the formalities language that appeared in last year’s text is also a welcome improvement. General provisions and enforcement language has also seen improvements.

While there have been improvements in the text, there are still concerning elements, the biggest of which is the potential for locking-in current lengthy and excessive copyright terms as well as the possibility of even requiring further extension to life plus 100 years. Additionally, the requirement that circumvention of a technological protection measure be independent from copyright infringement is illogical and prevents circumvention for legitimate, non-infringing purposes.  Finally, the obligation to achieve balance through exceptions and limitations should be made mandatory.

ARL Joins New Re:Create Coalition to Promote Balanced Copyright

*Cross-posted from ARL News*

Today, April 28, 2015, ARL joined US technology companies, trade associations, and civil society organizations in the launch of Re:Create, a coalition that promotes balanced copyright policy. A balanced copyright system depends on limitations and exceptions, such as fair use. As technology advances, it is imperative that the copyright law is responsive to these changes, balancing the interests of creators of copyrighted information and products with the interests of users of those products.

Re:Create promotes and defends the important balance of copyright. ARL’s member institutions, as well as the general public, depend on balanced copyright that includes robust limitations and exceptions. A balanced system ensures that copyright does not limit or impede new and valuable technologies and uses.

Fair use is responsive to the quickly evolving technology and has been called the “safety valve” of US copyright law. Fair use also accommodates the First Amendment right to freedom of expression, ensuring that copyright does not prevent freedom of speech. As ARL has shown in an infographic (PDF), fair use is a right, vitally important, for everyone and everywhere. This important doctrine is vital to the economy, innovation, new creativity, learning and education.

Deborah Jakubs, president of ARL said, “The mission of Re:Create squarely comports with the Constitutional rationale for copyright: ‘to promote the progress of science and useful arts.’ ARL is proud to be a member of this coalition, which will work to ensure that copyright law supports this rationale and ensure that the copyright system provides an appropriate balance.”

The Re:Create Coalition launched with the following members: American Library Association, Association of Research Libraries, Center for Democracy & Technology, Computer & Communications Industry Association, Consumer Electronics Association, Electronic Frontier Foundation, Media Democracy Fund, New America’s Open Technology Institute, Public Knowledge, and R Street Institute.

For more information, visit http://www.recreatecoalition.com/.

Library Copyright Alliance Expresses Concerns Over “Fast Track” Trade Promotion Authority

On February 5, 2015, ARL, together with ALA and ACRL, sent a letter to Senators Hatch (R-UT) and Wyden (D-VT) expressing concerns over “fast track” trade promotion authority.  Under “fast track,” Congress grants the President authority to sign trade agreements and Congress is only able to approve or reject the agreement in a straight up-down vote, meaning that it cannot amend this agreement.  Such a process limits Congress’ ability to meaningfully weigh in on the agreement.

Using the Trans-Pacific Partnership Agreement (TPP) as an example, the letter highlights the inequities surrounding access to information about the substance of the agreements.  While the negotiations are conducted in secrecy and the general public is not permitted to see text, cleared advisors are permitted to view proposals and make substantive comments through “trade advisory committees.”  Members of the intellectual property trade advisory committee represent large corporate interests; current members include, for example, representatives from the Recording Industry Association of America (RIAA) and the Copyright Clearance Center (CCC).  Past representatives include Time Warner, the Association of American Publishers (AAP) and the Motion Picture Association of America (MPAA).  While these corporate interests are well represented, the general public has had to rely on leaks in order to view text.  The letter points out, “Policy should not be made in secret, with the general public kept in the dark about what effects the agreement will have.”

The letter also notes concerns that the comprehensive intellectual property chapter included in the TPP could contain provision requiring changes to current law, or locking-in undesirable provisions of U.S. law which would make it difficult to amend the law without violating the agreement.  One such harmful provision is the U.S. copyright term of life plus seventy years, which was recently reported as the term of protection TPP negotiators have agreed to.  This lengthy term has been problematic, contributing to the orphan works problem and hampering the public domain.

The letter concludes:

Given the impacts that agreements like the TPP and TTIP will have, Congress should ensure that it does not delegate its authority to the Executive Branch. Congress must be an active participant in reviewing these agreements before accepting their content and should not grant fast track authority, at least with respect to intellectual property provisions in these agreements. Alternatively, if legislation on fast track does include language on intellectual property, this language must protect the careful balance that exists in US law. Libraries, and the vast public we serve, depend on a balanced copyright system, including important limitations and exceptions such as fair use and the first sale doctrine. Any language granting fast track authority implicating intellectual property must recognize the importance of limitations and exceptions.

New WikiLeaks of the Trans-Pacific Partnership Agreement Intellectual Property Chapter — Analysis of Copyright Provisions

The United States is currently negotiating a large, regional free trade agreement with eleven other countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. On October 16, 2014, WikiLeaks published a new leak of the Trans-Pacific Partnership Agreement’s (TPP) negotiating text for the intellectual property chapter. This text, dated May 16, 2014, contains some substantial changes from last year’s November leak of the text (which revealed the state of negotiations as of August 2013).

The chapter is now shorter and numerous brackets (brackets denote areas of the text which have not yet been agreed to) have been removed. The text also includes some new provisions. Some differences between the copyright provisions from last year’s leak to today’s leak are highlighted below. However, given that the leaked text is from May, further changes may have been made in the last five months and bracketed issues may have been resolved. TPP negotiations will continue in Australia next week where issues may reach further resolution.

Copyright Term

In the prior leak, New Zealand, Brunei, Malaysia, Vietnam, Canada and Japan supported a proposal allowing the copyright term of protection to be determined by “each Party’s domestic law and the international agreements to which each Party is a party.” The current leak reveals that this proposal has been eliminated.

The new text suggests that the copyright term will be specified in the TPP, though the exact number of years has not yet been agreed to. Bracketed language around the period of years reveals that the three options being discussed are life of the author plus fifty, seventy or one-hundred years. The United States, along with the countries with which the United States already has bilateral trade agreements with—Australia, Chile, Peru and Singapore—currently have a period of protection of life plus seventy years. Mexico is the only country that provides for life of the author plus one hundred years. The other countries in the agreement use the international standard of life plus fifty years.

For corporate works that have been published, the bracketed text includes periods of protection of fifty, seventy, seventy-five or ninety-five years.

In addition to these specified periods of years, a new proposal similar to the Berne rule of shorter term appears in the leaked text. This rule would essentially allow parties to limit the term of protection provided to authors of another party to the term provided under that party’s legislation. For example, if the final TPP text required a period of copyright protection of life plus fifty years, the United States would not be required to provide its period of life plus seventy years to authors in New Zealand if New Zealand continued to provide a term of life plus fifty years. The United States currently does not implement the Berne rule of shorter term.

Formalities

Another new provision in the text is a rule against formalities. Article QQ.G.X is unbracketed and therefore appears to be agreed to by the TPP negotiating parties. It reads, “No Party may subject the enjoyment and exercise of the rights of authors, performers and producers of phonograms provided for in this Chapter to any formality.”

This language could be problematic if the United States, or other TPP parties, wanted to re-introduce formalities for copyright protections granted that go beyond minimum international standards. Register of Copyrights Maria Pallante, for example, proposed the re-introduction of formalities for the last twenty years of copyright protection in the United States. If adopted, such a proposal would violate the TPP and subject the United States to investor-state dispute settlement, under which a corporation could sue the Unites States government for failure to comply with the TPP.

Limitations and Exceptions

Parties to the TPP have agreed to include language on limitations and exceptions, including a provision that has not been included in prior U.S. free trade agreements. This language reads:

Each Party shall endeavor to achieve an appropriate balance in its copyright and related rights system, inter alia by means of limitations or exceptions that are consistent with Article QQ.G.16.1, including those for the digital environment, giving due consideration to legitimate purposes such as, but not limited to: criticism, comment, news reporting, teaching, scholarship, research, and other similar purposes; and facilitating access to [AU oppose: published] works for persons who are blind, visually impaired, or otherwise print [AU propose: or perceptually] disabled.116 117

116 {In particular,} As recognized by the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled (June 27, 2013).
117 For purposes of greater clarity, a use that has commercial aspects may in appropriate circumstances be considered to have a legitimate purpose under Article QQ.G.16.3.

Most of this language had already been agreed to in the November 2013 leak. However, the new leak reveals that parties have now agreed to include facilitating access for persons who are blind, visually impaired or otherwise print disabled. Additionally, footnote 116 specifically referencing the Marrakesh Treaty is a new addition. While the Marrakesh Treaty has not yet been ratified by any of the TPP countries and has not yet entered into force (the treaty requires twenty ratifications; India and El Salvador are currently the two countries that have ratified it), several of the TPP negotiating parties have signed the treaty including the United States, Australia, Chile, Mexico, and Peru.

Technological Protection Measures

The language on technological protection measures (TPMs) in last year’s leak was heavily bracketed, highlighting the lack of agreement in this area. The United States initially proposed a closed set of limitations and exceptions to allow circumvention of TPMs, with additional limitations and exceptions possible through a three-year rulemaking process modeled off of Section 1201 of the United States Copyright Law.

The new TPP text eliminates the specific limitations and exceptions and three-year rulemaking process. It now allows limitations and exceptions through legislative, regulatory or administrative processes. Additionally, the United States’ proposed “substantial evidence” burden (proposed in conjunction with allowing new limitations and exceptions through the rulemaking process)—a standard not found in the United States Copyright Law—has been eliminated. This new text, with the exception of a few clauses, has been agreed to by the TPP parties.

The text now provides that:

Each Party may provide [MY/MX/PE oppose: certain] exceptions and limitations to the measures implementing subparagraphs (a)(i) and (ii) in order to enable non-infringing uses where there is an actual or likely adverse impact of those measures on those non-infringing uses, as determined through a legislative, regulatory, or administrative process in accordance with the Party’s law, giving due consideration to evidence when presented in that process, including with respect to whether appropriate and effective measures have been taken by rights holders to enable the beneficiaries to enjoy the limitations and exceptions under that Party’s law [in accordance with Article QQ.G.16] [CL propose:, as well as the evidence presented by the beneficiaries with respect to the necessity of the creation of such exception and limitation]

This language is an improvement over the United States’ previous proposal because it would allow for new permanent limitations and exceptions that would allow for circumvention of TPMs—for example, for cell-phone unlocking. However, the language seems to assume that parties need to provide for limitations and exceptions even for non-infringing uses. As noted in a recent Library Copyright Alliance (LCA) statement, one of the flaws of Section 1201 in the United States Copyright Law is that this section could be interpreted to prohibit circumvention of a TPM even for the purpose of engaging in a lawful use of the work.

Additionally, it may be difficult to create a general permanent limitation and exception allowing for circumvention for any non-infringing use, such as was proposed in the Unlocking Technology Act due to the language requiring consideration of an “actual or likely adverse impact” of TPMs and evidence presented, including “whether … measures have been taken by rights holders to enable the beneficiaries to enjoy the limitations and exceptions under that Party’s law.” Requiring such considerations could be interpreted as allowing new permanent or temporary limitations and exceptions, but only on a case-by-case basis rather than by a general rule.

Internet Service Provider Liability

The latest leak of the TPP text also includes several new non-papers attached as addenda. The non-paper on Internet service provider liability is included as Addendum III and heavily bracketed.