Tag Archives: trade agreements

Australian Productivity Commission Recommends Fair Use, Shorter Copyright Terms

On April 29, 2016, the Australian Productivity Commission issued a nearly 600 page draft report on Intellectual Property Arrangements recommending a number of positive changes to provide better balance to the intellectual property system, including recommendations on fair use, shorter copyright terms, and specifying that copyright licensing does not override limitations and exceptions for libraries and archives.

In the overview, while the Commission acknowledges the importance of incentivizing creation, the report also notes that

the use of an idea by one party does not reduce its capacity for use by another, and and that ideas provide economic and social value as other parties draw on existing knowledge to create their own.  Since new ideas are a major source of economic growth, any defects in IP arrangements intended to encourage their creation and diffusion can be very costly

[ . . .]

Indeed, overly strong restrictions on diffusion can be so detrimental to innovation that it can undo the benefits of the IP system in the first place . . .

The Commission begins a section entitled “Copy(not)right” by pointing out that “Australia’s copyright arrangements are weighed too heavily in favour of copyright owners, to the detriment of the long-term interests of both consumers and intermediate users.”  Much of the framework emphasizes balance and also recognizes the need for adaptability.

The Commission’s report also points out the importance of erring on the side of weaker IP protections because:

Recent experience would also tend to suggest that it is easier to extend IP rights than narrow them, especially where international agreements are concerned.  Given the asymmetric nature of how policy can be changed, the Commission considers it is appropriate “to err on the side of caution” where there is imperfect information, and deliberately set weaker parameters in the way that rights are assigned, used or enforced.  Extending rights should only occur after careful consideration of how such a change might affect future innovations, whether IP rights are the best way to drive the desired outcome, and how it might affect the greater number of consumers relative to producers of IP.

Ultimately, “the current Copyright Act is weighted too heavily in favor of copyright owners, to the detriment of the long-term interests of users.”

Fair Use

The Commission examines fair use and fair dealing exceptions and explains that Australia’s fair dealing exception provides a closed list of uses.  The US fair use approach, by contrast, relies on factors to determine whether the exception applies.  Thus, “In Australia, legislative change is required to expand the categories of use deemed to be fair.  In contrast, US courts have latitude to determine if, on the facts, a new use of copyright material is fair.  This allows the exception to be flexible and adaptive over time.”

The draft report includes a illustrative list of uses considered to be fair use in the US which would require a license in Australia, as it is not permitted by the current fair dealing provision.  These uses include: an internet search engine’s publication of thumbnail images in search results; an author’s quotation of unpublished letters in a biography; an artist’s collage using images from a photography book; a searchable database of TV clips; the use of scenes from a film for a biographical film about the lead actor; text and data mining, among others.

The Commission rejects the argument that fair use is too uncertain and therefore should not be adopted:

In the Commission’s view, legal uncertainty is not a compelling reason to eschew a fair use exception in Australia, nor is legal certainty desirable in and of itself.  Courts interpret the application of legislative principles to new cases all the time, updating case law when the circumstances warrant it.  To say otherwise would be to argue that all laws should be prescriptive — a doctrine that is inconsistent with many laws across all social and economic arenas, and completely inimical to the common law.  In addition, even under a fair use regime it is possible to specify a non-exhaustive list of illustrative purposes which provides strong guidance to parties.

Additionally, the Commission points out that there are similarities between the US’ fair use factors and the factors within Australia’s current fair dealing exception for research or study and that fair use may not be as uncertain as suggested.  The report points out that, while not binding, Australia could also look to US court opinions for guidance on fair use.

In 2014, the Australia Law Reform Commission recommended inclusion of a fair use provision with illustrative examples including those found in the US fair use statutes as well as parody or satire; professional advice; quotation; non-commercial private use; incidental or technical use; library or archive use; and access for people with disabilities.  The Productivity Commission states that “the ALRC’s recommendation on fair use represents the minimum level of change the Australian Government should pursue” and recommends expansion of a fair use provision to apply to orphan works and out-of-commerce works (meaning that these would be included in the non-exhaustive illustrative list of purposes).

Explaining the problem of orphan works, the Commission states that it “is not aware of any country that has fully resolved the issue of orphan and unavailable works” then examines the three approaches others are considering including: requiring a statutory license, creating an exception for the use of orphan works (such as the EU directive) and limitations on damages and remedies (proposed by the US Copyright Office).  The draft report concludes:

in the case of orphan and out-of-commerce works, creators are not actively exploiting their creation in order to generate an economic return.  Proposals to create licensing schemes, whereby consumers can pay to access such works, is one approach to unlocking their value, but likely represents a windfall gain to producers.  The Commission considers it unlikely that a creator, prior to investing the time and effort in a new work, does so on the basis that their work will have an initial commercial life, a period ‘out of the market’, and a subsequent revival perhaps decades down the track.  While this does occur for many works, it is largely by happenstance rather than design.

The Commission recommends that, “At its heart, Australia’s exception for fair use should allow all uses of copyright material that do not materially reduce a rights holder’s commercial exploitation of their work at the time of use.”

Copyright Term

The Commission’s report points out that a copyright term of life of the author plus 70 years is excessive.  While it acknowledges that Australia is bound to its long copyright terms as a result of trade agreements, it recommends international negotiations to lower the term.  The Commission notes:

An effective and efficient copyright system sets term at a level that encourages creation without unduly constraining access to creative works.  Since it is not possible to define terms specific to each given work, an “optimal” term is a period that, on average, creates reasonable incentives for creation while avoiding the consumer losses associated with exclusivity.  The situation is conceptually similar to that apply to patents.  Australia’s copyright term provides protection for the author’s life plus 70 years . . . Providing financial incentives so far into the future has little influence on today’s decision to produce.  For example, the addition of twenty years of protection many years in the future, such as occurred when Australia increased term from life plus 50 years to life plus 70 years . . . only increases revenue by 0.33per cent.  Such a small increase in revenue “offers at most a very small additional incentive for an economically minded author of a new work.” (citations omitted)

The Commission also reports that “evidence suggests the vast majority of works do not make commercial returns beyond their first couple of years on the market” and that the average commercial life of music is 2-5 years, for literary works 1.4-5 years, for visual artistic works 2 years, and for film 3.3-6 years.

In addition to the financial costs of copyright term extension in which consumers pay higher prices for a longer period of time, the report also acknowledges other costs such as orphan works.

Ultimately, the Commission finds that “While hard to pinpoint an optimal copyright term, a more reasonable estimate would be closer to 15 to 25 years after creation; considerably less than 70 years after death.”  The Commission acknowledges, however, that “Australia has no unilateral capacity to alter copyright terms, but can negotiate internationally to lower the copyright term” and “the Commission considers that there are strong grounds ofr Australia to work with other countries to attempt, over the long term, to achieve a system that gives greater recognition to consumer interests.”

Relationship Between Contracts and Limitations and Exceptions

The Commission examines the Australian Law Reform Commission’s 2014 recommendation that would prevent copyright licenses from relying on limitations and exceptions and concludes:

exceptions play an important role in balancing the interests of copyright producers and users.  Given the evidence presented by the Australian Libraries Copyright Committee, the Council of Australian University Libraries and National and State Libraries Australasia, the problems appear to mainly relate to libraries and archives, rather than other users.  Given this, the Commission considers that copyright license in the digital world should maintain the copyright exceptions for libraries and archives.

Because “It is less clear license conditions for digital content are undermining consumers’ ability to use Australia’s current copyright exceptions,” the Commission requests more information on this issue beyond the impact on libraries and archives.

Parallel Importation

The Commission also recommends repeal of Australia’s parallel importation restrictions on books and that the reform take effect no later than the end of 2017.

Trade Agreements

The draft report points out some of the harms of increasing intellectual property rights in trade agreements.  For example, with respect to copyright term extension implemented as a result of the Australia-US Free Trade Agreement, the estimated cost to Australia was $88 million per year.  The report points out that “A similar obligation to New Zealand as a result of the Trans-Pacific Partnership was estimated to cost $55 million per year.”

Another key point from the report was that “Multilateral and bilateral trade agreements are the primary determinant of Australia’s IP arrangements.  These agreements substantially constrain domestic IP policy flexibility.”

Senate to Move Ahead with Vote on Fast-Track Legislation

On June 23, 2015, the U.S. Senate cleared the procedural hurdle of attaining 60 votes on a motion for cloture to move ahead with a vote on Trade Promotion Authority (TPA), also known as “fast-track” legislation.  Under “fast-track,” Congress grants the President the authority to sign trade agreements and Congress can only approve or reject these agreements in a straight up-down vote, meaning that it must take the agreement as a complete package and cannot amend the agreement.  As noted in a February 5, 2015 letter from the Library Copyright Alliance (LCA), fast-track authority limits Congress’ ability to meaningfully weigh in on an agreement, particularly given the lack of transparency in trade negotiations.  Notably, no trade agreement presented to Congress under fast-track legislation has ever been rejected.  TPA has been seen as critical in concluding negotiations of the Trans-Pacific Partnership Agreement (TPP), a large regional trade agreement that currently has twelve negotiating parties.

Today, the Senate voted 60-37 to proceed with a vote on TPA.  While the Senate had passed TPA in an earlier vote in May, that bill packaged fast-track legislation with Trade Adjustment Assistance (TAA), legislation that reduces the negative impacts of imports on certain sectors in the U.S.  On June 12, 2015, the House of Representatives took separate votes on TPA and TAA, voting to pass the TPA portion of the bundled package by a vote of 219-211 but rejecting TAA by 302 to 126.  The House then voted to separate the package and passed TPA in a standalone bill on June 18, with the intention of scheduling a vote on TAA at a later date.  Because the Senate had packaged TPA and TAA, the TPA went back to the Senate.  Although some critics expressed concerns over the separation of the two bills and suggested that TPA could not pass without TAA, the Senate reached its 60 vote threshold to move ahead with the vote which will likely occur later this week.

 

 

35 Organizations Write to TPP Ministers Opposing Lengthy Copyright Terms

On July 9, 2014, ARL joined thirty-four other organizations in sending a letter to ministers of the Trans-Pacific Partnership (TPP) negotiating parties opposing the copyright term of life plus seventy years proposed by the United States. These organizations, representing libraries, archives, authors, educators, students, digital rights advocacy groups, and technological innovators, note that this extended copyright term threatens the public domain. The letter notes that “the extension of the copyright term results in a net welfare loss to society, and effectively amounts to a transfer of wealth to a small number of multinational copyright-holding companies … This transfer of welfare in favor of large corporate copyright owners will come at the cost of those who depend upon access to copyright works that would otherwise be in the public domain—libraries, students, artists, writers, and millions of other people.”

TPP negotiators are currently meeting behind closed doors in Ottawa, Canada, in an effort to finalize negotiations for the large regional trade agreement which now has twelve negotiating parties: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States.

Copyright Week: Transparency and the TPP

Transparency in government is a fundamental aspect of a democratic society. Citizens have the right to be informed and have access to information regarding political affairs and the laws and regulations that will impact them. Without access to information, the public is disadvantaged in its ability to make substantive commentary, challenge and influence public policy, or participate in the political process in a meaningful way.

For the past four years, the United States has been involved in secretive negotiations for a large, regional trade agreement known as the Trans-Pacific Partnership Agreement (TPP). Over the course of negotiations, the membership has grown and now includes twelve negotiating parties including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, covering a trading area that comprises forty-percent of the world’s GDP. Eventually, the agreement is intended to cover the entire APEC region.

The intellectual property chapter has been one of the most controversial chapters in the TPP. Over the course of the four-year negotiations, no government has officially released any of the negotiating text. The only reason that the public is aware of the proposals that have been drafted results from leaked text, primarily a March 2011 leak of the United States’ proposal for the chapter and a November 2013 leak of the consolidated intellectual property chapter which reflected each country’s negotiating position. The negotiations themselves take place behind closed doors and observers are not permitted. Although stakeholders are often permitted to make presentations, there is no guarantee that the relevant negotiators will attend such presentations. Further, it can be difficult to give meaningful presentations when the texts are kept secret. As ARL and other groups have noted previously with respect to the TPP and other agreements, transparency is key to the ability to comment on the negotiating text and “will ensure the forging of an agreement that does not unfairly prejudice any stakeholders.” With respect to the Free Trade Area of the Americas Agreement (FTAA), after the consolidated negotiating text was made public and comments invited, numerous library associations wrote positively regarding the open process for reviewing and commenting on the draft text.

The standards set in the TPP will create new global norms and it is important that those who will be affected by these standards have access to information about the agreement. Substantive and meaningful engagement can take place only with full knowledge and understanding of what provisions are at stake in the agreement. Without transparency, the negotiations lack legitimacy and represent a highly undemocratic process.

Unbalanced Access to Information

It should be noted that while the general public must rely on the possibility of leaks in order to gain substantive information about the agreement, hundreds of “cleared advisors” on the International Trade Advisory Committees (ITAC) have had access to the United States’ negotiating positions and texts throughout the process. ITAC-15, the committee on intellectual property rights, currently has seventeen members, all of whom represent corporate interests.

Not only is the general public kept in the dark, but there have also been reports that USTR has denied access to the text to Congressional staffers.

Members of Congress have criticized the secrecy of the agreement. Senator Sanders (I-VT), for example, in a December 1, 2011 letter to USTR concluded, “I firmly believe that the public has a right to monitor and express informed views on proposals of such magnitude as the TPP. While I recognize that some opportunity has been provided for the public to make presentations to delegates, I urge you to make the negotiating text of the TPP available to the public for review and comment. Without access to the actual texts being discussed, in my view the effective input and informed participation of the public is severely curtailed.”

After the November 2013 leak of the consolidated intellectual property chapter, Representative Zoe Lofgren (D-CA) criticized the copyright provisions, noting in a December 5, 2013 press statement that the agreement “is something that is backdooring, through a trade agreement, that which could not be obtained in Congress.” Numerous organizations and individuals have decried such “policy laundering.”

The final text of the TPP will bind all members to the agreement and make any changes extremely difficult. Even where the United States’ proposals do not seek to change current law, many of the provisions could be harmful by locking in standards and preventing reform. The inclusion of a chapter on investment in the TPP, including strong investor-state provisions by the United States, means the agreement has strong enforcement mechanisms. Not only can one TPP member country sue another for violations of the provisions of the agreement, but a corporation may sue the government directly for failure to implement the text of the TPP.

Locking in lengthy copyright terms

The United States tabled the copyright term that currently exists domestically, a period of the life of the author plus an additional seventy years. For corporate works, the period of protection is ninety-five years for published works or one-hundred-and-twenty years for unpublished works. The United States and the four countries with which it has existing bilateral trade agreements have supported this proposal of life plus seventy. By contrast, other countries have proposed the international standard of life plus fifty years.

The effect of including the life plus seventy copyright term in the TPP would be to lock in a lengthy term of protection that shrinks the public domain. In advance of the December 2013 TPP ministerial meeting, 29 organizations—including library and archival associations such as ARL, The American Library Association (ALA), the Australian Library and Information Association (ALIA), and the International Federation of Library Associations (IFLA), and the American Archivists (SAA)—and 71 individuals signed a letter directed to the trade ministers that warned that “The primary harm from the life + 70 copyright term is the loss of access to countless books, newspapers, pamphlets, photographs, films, sound recordings and other works that are ‘owned’ but largely not commercialized, forgotten and lost. The extended terms are also costly to consumers and performers, while benefiting persons and corporate owners that had nothing to do with the creation of the work.”

If the final text of the agreement includes a period of protection of life plus seventy years, such a term would be very difficult to change and would require re-negotiation with all TPP members. While Maria Pallante, Register of Copyrights, has suggested that the current term should be re-thought and that formalities should be re-introduced for the last twenty years of protection, the United States will be unable to amend its law to include formalities without violating the TPP.

Preventing reform of technological protection measures (TPMs)

The United States proposal includes highly prescriptive provisions on TPMs. The proposal makes the very act of circumvention of a TPM an independent cause of action, apart from any copyright infringement that may occur. The United States proposal uses a narrow and closed list of limitations and exceptions to anti-circumvention measures. The proposal also includes a three-year rulemaking procedure for additional limitations and exceptions, modeled after Section 1201 of the DMCA. The new limitations and exceptions are valid only for a three-year period and then must be renewed. If included in the final text of the agreement, new permanent limitations and exceptions could not be added without violating the TPP.

Several proposals have been made in Congress to add new permanent exceptions to permit the unlocking of cell phones after outrage over the Librarian of Congress’ refusal to renew such an exception. The Unlocking Technology Act of 2013, introduced by Representatives Zoe Lofgren (D-CA), Thomas Massie (R-KY), Anna Eshoo (D-CA) and Jared Polis (D-CO), goes beyond the cell phone issue and would permit all circumvention of TPMs for all non-infringing uses. However, because such legislation would create new permanent exceptions, it would violate the TPP if approved as currently drafted under the United States’ proposal. Thus, new permanent exceptions to allow unlocking of cell phones, or for example, to permit persons who are visually impaired or blind to overcome TPMs designed to limit access to the text-to-speech function on e-readers, would not be permitted.

Conclusion

The agreement is reportedly in its final stages. Although many areas of the intellectual property chapter remain controversial with little agreement, trade ministers met in Singapore in December to try to come to a deal. It is expected that the United States will make concessions regarding market access on sugar, dairy, textiles, and automobiles in exchange for other countries’ concessions to the United States’ demands on intellectual property.

In the next few weeks, another meeting of the TPP trade ministers will take place and is expected to take place in late January or early February. As with the last ministerial meeting, stakeholders will likely not be invited to attend, present, or meet with ministers. After the last ministerial, the ministers released a short statement with little substantive information regarding any agreements or offers that had been made.

The stakes for the TPP are high, creating new global norms and locking in provisions of United States law that may be controversial and in need of repeal or reform. The general public must have access to the negotiating texts in order to understand how the TPP will affect them and to contribute meaningful and substantial commentary regarding the proposals.

Link

LCA Comments on TTIP trade agreement