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Program on Information Justice and Intellectual PropertyAmerican University Washington College of Law

Public Interest Analysis of TPP Art. 4; the US Proposal Feb 2011TPP Proposal for an IP Chapter

Draft Version 1.3June 28, 2012December 6, 2011

Sean FlynnAmerican University Washington College of Law, Associate Director, PIJIP

TPP Intellectual Property Chapter

Margot KaminskiYale Law School, Executive Director, Information Society Project

Brook BakerNortheastern University School of Law, Program on Human Rights and the Global Economy

Jimmy H. KooAmerican University Washington College of Law, Fellow, PIJIP

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Public Interest Analysis

I. COPYRIGHT AND RELATED RIGHTS ....................................................................................................... 2 A. Art. 4.1– Exclusive Reproduction Rights .............................................................................5

1. Analysis .............................................................................................................................................52. Positive proposals .............................................................................................................................8

B. Art. 4.2 – Parallel Importation ...........................................................................................91. Analysis .............................................................................................................................................92. Positive proposals ...........................................................................................................................11

C. 4.3 Making available .......................................................................................................111. Analysis ...........................................................................................................................................112. Positive proposals ...........................................................................................................................12

D. 4.4 Hierarchy of rights .....................................................................................................121. Analysis ...........................................................................................................................................122. Positive proposal .............................................................................................................................13

Art. 4.5 – Terms of Copyright Protection ..............................................................................13E. .................................................................................................................................................13

1. Analysis ...........................................................................................................................................132. Positive proposal .............................................................................................................................15

F. Art. 4.6, Application to Existing Works .............................................................................151. Analysis ...........................................................................................................................................152. Positive proposal .............................................................................................................................16

G. Art. 4.7: Contracting rights ..............................................................................................161. Analysis ...........................................................................................................................................162. Positive proposal .............................................................................................................................16

H. 4.8 Placeholder for exceptions and limitations ................................................................171. Analysis ...........................................................................................................................................172. Positive proposals ...........................................................................................................................18

i. Clarifying the 3-step test ............................................................................................................18ii. Open-ended limitation and exceptions ......................................................................................20iii. Access for persons with disabilities ......................................................................................22

I. Arts. 4.9(a), 16.3 – Technological Protection Measures .......................................................221. Analysis ...........................................................................................................................................23 Positive Proposals ...........................................................................................................................272. .............................................................................................................................................................27

J. Art. 4.10 – Rights Management Information ........................................................................271. Analysis ...........................................................................................................................................28

2. Positive proposals ...............................................................................................29

INTRODUCTION .............................................................................................................................. 2

SECTION BY SECTION ANALYSIS ...................................................................................................978

I. ..........................................................TRADEMARKS, INCLUDING GEOGRAPHICAL INDICATIONS .......................................................................................................................................................... 119

II. .......................................................................................DOMAIN NAMES ON THE INTERNET ........................................................................................................................................................ 1412

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III. ........................................................................................COPYRIGHT AND RELATED RIGHTS .................................................................................................................................................... 161314

IV. ...........................................................................................................................PATENTS ........................................................................................................................................................ 2421

V. .....................................................................................PATENT AND DATA-RELATED RIGHTS .................................................................................................................................................... 302726

VI. .............................................................GENERAL OBLIGATIONS RELATING TO ENFORCEMENT .................................................................................................................................................... 423938

VII. .....................................................CIVIL AND ADMINISTRATIVE PROCEDURES AND REMEDIES .................................................................................................................................................... 434038

VIII. ..................................................................................................PROVISIONAL MEASURES .................................................................................................................................................... 484543

IX. ................................................SPECIAL REQUIREMENTS RELATED TO BORDER ENFORCEMENT .................................................................................................................................................... 494644

X. ...................................................................................CRIMINAL ENFORCEMENT – OFFENCES .................................................................................................................................................... 514846

XI. ...................................................................................................CRIMINAL ENFORCEMENT .................................................................................................................................................... 524947

XII. .....................SPECIAL MEASURES RELATING TO ENFORCEMENT IN THE DIGITAL ENVIRONMENT .................................................................................................................................................... 545149

XIII. .........................................Transparency and Procedural Fairness for Healthcare Technologies .................................................................................................................................................... 565351

INTRODUCTION

broad Most of the literature discussing the TPP intellectual property chapter does so within broader discussions of institutional regime shifting in law making forums,1 the general trend toward of secrecy in law making,2 tensions with other areas of international law, e,g, human rights,3 and __________.proposals of text for the

1 SellSee generally Susan K. Sell, TRIPS Was Never Enough: Vertical Forum Shifting, FTAS, ACTA, and TPP, 18 J. Intell. Prop. L. 447 (2011) [hereinafter Sell 2011] (explaining that since TRIPS, IP maximalists have pursued their agenda in various forums through bilateral, regional, and plurilateral agreements)

2 David Levine, forthcoming CardozoSee generally Levine 2012, supra note 3 (discussing the secrecy, under which, ACTA was and TPP is being negotiated and offering a “policy proposal for consideration . . . that allow for a more focused analysis of when it is desirable to force disclosure where the default would otherwise be secrecy.”).

3 See generally Peter K. Yu, Intellectual Property and Human Rights in the Nonmultilateral Era , 64 Fla. L. Rev. (forthcoming 2012) [hereinafter Yu 2012] (examining the human rights implications of the post-TRIPS intellectual property agreements containing TRIPS-plus provisions). (referring to “the ongoing negotiation of the Trans-Pacific Partnership Agreement” as making it “high time we revisit

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agreement – documents that would be public if this negotiation were going on at the multilateral level, but are withheld from the public in this negotiation. We thus stand in the position of writing a review of unverified secret government proposals for a new international legal regime on intellectual property – an occurrence that is odd and discomforting, if no longer rare, within in the legal academy.4

This briefing paper provides preliminary analysis of two leaked U.S. proposals for an intellectual property chapter in the Trans Pacific Partnership (TPP) agreement and of a related proposed chapter regulating pharmaceutical reimbursement programs.5

The U.S. proposals, if adopted, would upset the current international framework balancing the minimum standards for exclusive rights for of media and technology owners, on the one hand, and the access rights of the public, competitors, innovators and creators, on the other. The proposed U.S. IP chapter greatly exceeds the imperfect, but more balanced provisions codified in the 1994 WTO Trade-Related Aspects of Intellectual Property Rights Agreement [hereinafter TRIPS].6 The proposals are primarily based on, and frequently go beyond, the maximalist and controversial standards of the U.S.-South Korea Free Trade AgreementKorea-U.S.

the debate on intellectual property and human rights”). 4 Cite to articles on ACTA, AU Declaration on ACTA, PIJIP Working Paper Series collection on

ACTASee Kaminski, supra note 2; Peter K. Yu, Six Secret (And Now Open) Fears of ACTA, 64 SMU L. Rev. 975 (2011) [hereinafter Yu 2011 ACTA]; See generally PIJIP Research Paper Series, DIGITAL COMMONS @ AMERICAN UNIVERSITY WASHINGTON COLLEGE OF LAW , http://digitalcommons.wcl.american.edu/research/ (providing a large collection of research papers on ACTA written by scholars from around the world throughout the secretive negotiation processes); The Washington Declaration on Intellectual Property and the Public Interest , INFOJUSTICE.ORG (Sept. 21, 2011), http://infojustice.org/wp-content/uploads/2011/09/Washington-Declaration1.pdf (presenting the conclusion of The Global Congress on Intellectual Property and the Public Interest which “. . . convened over 180 experts from 32 countries and six continents to help re-articulate the public interest dimension in intellectual property law and policy.”).

5 Trans-Pacific Partnership, Intellectual Property Rights Chapter February Draft [hereinafter TPP], available at http://keionline.org/sites/default/files/tpp-10feb2011-us-text-ipr-chapter.pdf; Trans-Pacific Partnership, Intellectual Property Rights Chapter September 2011 Draft (Selected Provisions) [hereinafter TPP-2], available at http://www.citizenstrade.org/ctc/wp-content/uploads/2011/10/TransPacificIP1.pdf; Transparency Chapter – Annex on Transparency and Procedural Fairness for Healthcare Technologies June 22, 2011 Draft [hereinafter TPP Transparency Chapter] available at http://www.citizenstrade.org/ctc/wp-content/uploads/2011/10/TransPacificTransparency.pdf.

6 Agreement on Trade-Related Aspects of Intellectual Property Rights, Art. 15, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, Legal Instruments--Results of the Uruguay Round, 1869 U.N.T.S. 299 [hereinafter TRIPS].

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Free Trade Agreement (hereinafter KORUS)7 and the Anti-Counterfeiting Trade Agreement (ACTA),8 neither of which was subject to an open and transparent negotiation process.9 The provisions of the TPP proposals are inconsistent with the current laws in every TPP member country for which public analysis is available,10

including the U.S. itself.11 The proposals isare also a new step for U.S. international policy, abandoning the development-oriented flexibilities on access to medicines expressed in the 2007 New Trade Deal between Congress and the Bush Administration.12

The combined U.S. combined proposals are particularly inappropriate for developing countries where the risks and effects of exclusionary pricing by foreign monopolists are most acute.13 The U.S. TPP proposals are the latest manifestation of its maximalist agenda in international intellectual property,14 which stands in stark

7 Free Trade Agreement between the United States of America and the Republic of Korea, U.S.-S. Korea, June 30, 2007 [hereinafter KORUS], available at http://www.ustr.gov/trade-agreements/free-trade-agreements/korus-fta/final-text.

8 Anti-Counterfeiting Trade Agreement, Dec. 3, 2010 [hereinafter ACTA], available at http://www.dfat.gov.au/trade/acta/Final-ACTA-text-following-legal-verification.pdf.

9 See generally David S. Levine, Transparency Soup: The ACTA Negotiating Process and “Black Box” Lawmaking, 26 AM. U. INT’L L. REV. 811 (2011) [hereinafter Levine 2011] (discussing the unprecedented level of secrecy involved during the ACTA negotiation processes and the use of FOIA to prevent the disclosure of facts and data).

10 See Public Citizen, Comparative Analyses of the U.S. Trans-Pacific Partnership IP Proposals and Existing Laws in Participating Countries, PUBLIC CITIZEN , http://www.citizen.org/Trans-pacific-FTA-charts (comparing the leaked TPP IP chapter to the laws of Vietnam, Malaysia, Australia, Peru).

11 See Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP) Agreement and US Law, PUBLIC KNOWLEDGE , www.publicknowledge.org/files/TPP%20Analysis.pdf

12 New Trade Policy for America, House Committee on Ways and Means, [hereinafter New Trade Policy], available at http://waysandmeans.house.gov/media/pdf/NewTradePolicy.pdf. An extended summary of the New Trade Policy provisions on patents/IPRs and access to medicines can be found in Mac Dressler, American Trade Politics in 2007: Building Bipartisan Compromise, Policy Brief, Peterson Institute for International Economics 25-26 (May 2007) available at http://www.iie.com/publications/pb/pb07-5.pdfhttp://www.iie.com/publications/pb/pb07-5.pdf. The New Trade Deal was included in revisions to the U.S.-Peru Trade Promotion Agreement and U.S.-Colombia Free Trade Agreement IP Chapters. U.S.-Peru Trade Promotion Agreement, Chapter 16 Intellectual Property Rights (revised June 29, 2007) available athttp://www.ustr.gov/webfm_send/1031; U.S.-Colombia Free Trade Agreement, Chapter 16 Intellectual Property Rights, available at http://www.ustr.gov/webfm_send/1336http://www.ustr.gov/webfm_send/1336. See Public Citizen Media Alert: On Access to Medicines, Obama Trade Pact Proposal Appears Set to Undo Bush-Era Improvements. Public Citizen, 13 September 2011.

13 See Sean Flynn, Aidan Hollis & Michael Palmedo, An Economic Argument for Open Access to Medicine Patents in Developing Countries, 37 J.L. MED. & ETHICS 184 (2009) (explaining that intellectual monopolies in developing countries with high income inequality predictably lead to more exclusionary pricing practices than in wealthier countries).

14 See Susan Sell, The Global IP Upward Ratchet, Anti-Counterfeiting and Piracy Enforcement

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contrast to the “development agenda”15 being debated in more open, transparent multilateral forums.16 Substantively, the development agenda is focused on maximizing differentiation and flexibility in protection and enforcement, while globalizing a set of mandatory minimum limitations and exceptions – including for persons with visual impairments, for libraries, for educational uses and to promote access to needed medicines and technologies. A summary of some the key differences between the maximalist agenda and the development agenda are included in the table below.

Efforts: The State of Play, PIJIP Working Paper No. 15, at 3, available at http://digitalcommons.wcl.american.edu/research/; see also Analysis of the Leaked New Zealand Paper on the Trans-Pacific Partnership Agreement and Intellectual Property, THIRD WORLD NETWORK & PUBLIC CITIZEN (Dec. 3, 2010), available at http://www.citizen.org/documents/analysisoftheleakednewzealandpaper.pdf (warning that “[a]ny enforcement measures adopted in the TPPA would have to depart considerably from the global IP Enforcement agenda that has emerged in recent years, or would be likely to undermine the culture of flexibility and context in intellectual property rules.”).

15 See WORLD INTELLECTUAL PROP. ORG., DEVELOPMENT AGENDA FOR WIPO (2007), available at http://www.wipo.int/ip-development/en/agenda/. For a declaration of principles of hundreds of intellectual property academics and experts calling for a policy agenda more supportive of the public interest, see THE GLOBAL CONG. ON INTELLECTUAL PROP. AND THE PUB. INTEREST, WASHINGTON DECLARATION ON INTELLECTUAL PROPERTY AND THE PUBLIC INTEREST , available at http://infojustice.org/washington-declaration. See generally, Peter Yu, A Tale of Two Development Agendas, 35 Ohio N.U. L. Rev. 465 (2009) [hereinafter Yu 2009] (comparing present and past intellectual property policy agendas led by developing countries).

16 See Jeremy Malcolm, Public Interest Representation in Global IP Policy Institutions 19–21 (PIJIP, Research Paper No. 6, 2010), available at http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1006&context=research.

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MAXIMALIST AGENDA POSITIVE/DEVELOPMENT AGENDA

PROCESS: Plurilateral, unilateral; closed processes

e.g. ACTA, TPP, Special 301 Watch List.

PROCESS: Multilateral; open processes

e.g. WIPO, WTO, WHO, UN.

SCOPE OF RIGHTS: One-size-fits-all rights; voluntary limitations and exceptions

e.g. Expansions of trademark to non-visual identifiers, lengthening copyright terms, extension of patents to new uses of known products.

SCOPE OF RIGHTS: Differentiation in scope and enforcement of IPRs and mandatory, minimum limitations and exceptions

e.g. India sec. 3(d) (banning new use patents with no increase in efficacy), WIPO proposed treaty for Visually Impaired Persons.

ENFORCEMENT: Shift resources and responsibility to public; summary processes with minimal checks and balances.

e.g. ex parte, ex officio seizures and injunctions; decreased evidentiary standards.

ENFORCEMENT: Retain private burden of enforcement; maximize due process for accused.

e.g. maintain enforcement processes in judicial forums initiated by rights holders.

LIABILITY: shift criminal and civil liability to end-users and intermediaries.

e.g. redefine “commercial scale” to “indirect economic advantage”; graduated response obligations on internet; ISP and intermediary liability; information disclosure mandates.

LIABILITY: Target large commercial entities, high liability thresholds.

e.g. China’s qualitative (for profit) and quantitative thresholds for criminal counterfeiting, upheld in U.S-China: Measures Affecting the Protection and Enforcement of Intellectual Property Rights (WTO/DS362).

DAMAGES: “Deterrent” level penalties set through statutory and presumed damages.

e.g. Tenenbaum case, $675,000 in damages for uploading 30 songs to a sharing cite. Limewire damage request -- $75 trillion.

DAMAGES: Damages adequate to compensate rights holder.

e.g. TRIPS Art. 31(k) permitting zero royalty compulsory licenses in cases of anticompetitive conduct..

The U.S. TPP proposal includes a Transparency/Pharmaceutical Pricing Chapter [insert actual name of the chapter in quotes]”Transparency chapter – Annex on Transparency and Procedural Fairness for Healthcare Technologies” that has never been proposed for any developing country. The proposal extends international minimum standards for domestic regulation beyond intellectual property and into health policy itself. The chapter advances proposals that would undermine countries’ policy space to adopt and enforce therapeutic formularies,

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reimbursement policies and other price moderating mechanisms within public health systems.

The U.S. succeeded in obtaining similar pharmaceutical chapters in trade agreements with Australia and Korea, two OECD countries. These standards are inappropriate for developing countries . Aand in many ways, the TPP proposal goes further than these controversial agreements with Australia and Korea. IronicallyHypocritically, the substantive provisions in the proposal (and included in the Australia and Korea agreements) are not followed by U.S. pharmaceutical reimbursement programs, most notably Medicaid.

No country, including the U.S., has an interest in ceding this much policy flexibility to an international agreement, particularly through an international agreement subject to such a limited public process. As with the recently concluded and highly criticized ACTA, the TPP proposal seeks to put in place a major and consequential shift in international standards for domestic regulation with scant public process, on the one side, and a highly structured and consultative relationship with a limited range of commercial interests on the other. This process denies TPP negotiators access to a full range of views and analysis that deliberation in a public forum would attract. A better process would be to reject the U.S. TPP proposal in its entirety and limit any intellectual property, internet and pharmaceutical regulations to standards already adopted through an open and transparent multilateral process.17

Section by Section Analysis

This part summarizes the many ways in which the U.S. proposal for the IP chapter of TPP implements and exceeds the TRIPS-plus provisions of ACTA, KORUS, and U.S. law. The U.S. TPP proposal would:

Expand the scope of trademark protection to sounds, scents and “well known” marks that are not well known in the local territory, while diluting geographic indication protections – all in direct contravention to flexibilities in TRIPS allowing

17 See Washington Declaration on Intellectual Property and the Public Interest. Washington D.C., August 2011. A, available at: http://infojustice.org/washington-declarationhttp://infojustice.org/washington-declaration (“International intellectual property policy affects a broad range of interests within society, not just those of rights holders. Thus, intellectual property policy making should be conducted through mechanisms of transparency and openness that encourage broad public participation.”). Somewhat ironically, the closed-door process for policy making being used in TPP violates the standards included in the leaked chapters on “Regulatory Coherence” and “Transparency and Procedural Fairness for Healthcare Technologies,” for example. See Leaked Trans-Pacific Free Trade Agreement Texts Reveal U.S. Pushing Extreme Pharmaceutical Corporation Demands that Would Undermine Consumers’ Access to Affordable Medicine, CITIZENS TRADE CAMPAIGN ( Oct. 22, 2011) , leaked text available at http://www.citizenstrade.org/ctc/blog/2011/10/22/leaked-trans-pacific-fta-texts-reveal-u-s-undermining-access-to-medicine/.

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policy choice in these areas.18

Adopt provisions on internet domain names that would preempt expert discussions on this very topic in ICANN's multi-stakeholder forum.19

Dramatically expand international obligations on the length and scope of copyrights, including extending protection to “temporary” storage on the internet and doubling the mandatory minimum length of many copyright terms.20

Require the adoption of a highly controversial form of anti-circumvention liability that would punish circumvention of digital locks regardless of intent.21

Expand the international mandatory scope of patentability to include monopoly protections for (1) new uses or forms of known products, and (2) for plants, animals, and medical procedures. The first set of standards is in direct conflict with the anti-evergreening provisions recently enacted in India and Philippines. The second set of standards is direct conflict with the flexibility in Section 27.3 of TRIPS.22

Alter the international legislative framework on patent applications, oppositions, revocation, required disclosure and utility standards to make patents easier to obtain, harder to challenge or revoke, and less beneficial to technology transfer. 23

Abandon the access to medicines flexibilities of the 2007 New Trade Deal and the U.S.-Peru Free Trade Agreement and put in their place a set of patent extensions and registration monopolies for branded drugs conditioned only on compliance with an “access window” defined without regard to affordability. These provisions will predictably lead to higher prices and lower availability of pharmaceutical products, especially in developing countries.24

Implement the most draconian enforcement provisions of ACTA and U.S. law to shift the cost and burden of enforcing private intellectual property rights enforcement to the government, internet and other intermediaries, and consumers, while reducing due process and administrative justice rights in their implementation.25

Export a new and controversial set of restrictions on the efficacy of price negotiations in pharmaceutical reimbursement programs that have never before

18 See infra Part. I.A.19 See infra Part II.20? See infra Part III.21 See id.22 See infra Part IV.23 See id. 24 See infra Part V.25 See infra Part VI.

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been proposed for developing countries and that are not adhered to in the U.S. itself.26

Each of these points is explained more fully below.

Trademarks, Including Geographical Indications

A. Art. 2.1 – Protectable Trademark Subject Matter

TPP Art. 2.127 would expand the mandatory scope of trademark protection by deleting the TRIPS Art. 15 flexibility that a country may require “as a condition of registration, that a sign be visually perceptible.”28 It additionally prohibits a Party from denying “registration of a trademark solely on the grounds that the sign of which it is composed is a sound or a scent.” This provision is identical to Art. 18.2.1 of the U.S.-South Korea Free Trade Agreement (KORUS)29 and incorporates the scope of trademark subject matter under § 45 of the U.S. Lanham Act. The latter has been interpreted to include, inter alia, colors per se, 2D/3D designs, motion marks, sound (NBC’s three chimes30), scent (plumeria blossoms on sewing thread31), and non-visual marks.32 A risk of the provision is that, by removing the requirement that a trademark be a visual mark, it will expand the areas in which trademark law serves as a species of general (and perpetual) monopoly protection, including for products that cannot obtain copyright or patent protection.33

B. FN 4 – Definition of “Geographical Indications”

While the U.S. proposal expands the scope of trademark protection, it restricts the operation of geographical indications as a field of protection distinguishable

26 See infra Part XIII.27 As noted above, throughout this analysis the U.S. TPP proposal is referred to merely as “TPP.”

This reference therefore refers to Art. 2.1 of the U.S. TPP proposal as leaked to the public in February 2011, TPP, supra note 10, Art. 2.1.

28Agreement on Trade-Related Aspects of Intellectual Property Rights, Art. 15, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, Legal Instruments--Results of the Uruguay Round, 1869 U.N.T.S. 299 [hereinafter TRIPS].

29 Free Trade Agreement between the United States of America and the Republic of Korea, U.S.-S. Korea, June 30, 2007 [hereinafter KORUS], available at h ttp://www.ustr.gov/T rade_A greements/Bilateral/Republic_of_Korea_ FTA/Final_Text/Section_Index.html KORUS , supra note 3.

30NBC’s 3-Note Chime, available at http://www.uspto.gov/web/offices/ac/ahrpa/opa/kids/soundex/72349496.mp3.

31 In re Clarke, 17 U.S.P.Q.2D (BNA) 1238, 1240 (TTAB 1990) (allowing registration of plumeria blossom scented sewing thread).

32 U.S. PATENT & TRADEMARK OFFICE, U.S. TRADEMARK LAW – RULES OF PRACTICE & FEDERAL STATUTES § 2.25(e) (explaining that “[a]n applicant is not required to submit a drawing if the mark consists only of a sound, a scent, or other completely non-visual matter.”).

33 See Glynn S. Lunney, Trademark Monopolies, 48 EMORY L.J. 367 (1999) (criticizing the shift in U.S. trademark law away from a consumer protection motivation).

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from trademark. The first encroachment on this field is contained in the definition in footnote 4, but continues in other sections as described below. Footnote 4 broadens the TRIPS Art. 22.1 definition of a geographic indicator (GI),34 requiring the protection of a “sign or combination of signs . . . in any form whatsoever.”35 The non-exhaustive list of examples of “sign or combination of signs” contains many elements similar to protectable trademarks, such as personal names, letters, numerals, figurative elements, and colors, including color per se.36

C. Art. 2.4 – Identical/Similar Signs and Identical/Similar/Related Goods or Services

TPP Art. 2.4 expands the scope of trademark protection in TRIPS Art. 16.1 from prohibiting the use of identical or similar signs “for identical or similar goods or services” to a prohibition of the use of similar signs “for goods and services that are related to those goods or services in respect of which the owner’s trademark is registered.”37 The impact of this change in standards is unclear. Presumably a good could be “related to” the trademarked good without being identical or similar to it. This raises the possibility that trademark will be used to cut off uses of marks that are not confusing consumers or competing with the branded product at all – making trademark a new form of monopoly protection rather than a consumer protection norm.38

Unlike TRIPS, the U.S. TPP proposal includes GI’s within the purview of this provision. This is another instance of the apparent aim of the proposal to reduce GI protection to that of trademark.

D. Arts. 2.6, 2.7, and FN 5 – Well-Known Marks & the “Use In Commerce” Standard

TPP Art. 2.6 exports the “use in commerce" standard of trademark protection in the U.S. The “use in commerce” standard in § 1 of the Lanham Act provides the

34 TRIPS, supra note 24, Art. 22.1 (defining ‘geographical indications’ as “indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.”).

35 TPP, supra note 10, FN4.36 Id. 37 Compare TPP, supra note 10, Art. 2.4 (emphasis added). Compare to with TRIPS, supra note 24,

Art. 16.1 (stating that “[t]he owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed.”).

38 See Mark McKenna, Testing Modern Trademark Law’s Theory of Harm, 95 IOWA L. REV . 63 (2009).

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fundamental basis for trademark protection in the United States.39 Unlike in other jurisdictions, this standard does not require registration as a condition precedent for trademark protection.40

In defining a “well-known mark”, TPP FN 5 twists the language of TRIPS Art. 16.2, which requires that, “[i]n determining whether a trademark is well-known, Members shall take account of the knowledge of the trademark in the relevant sector of the public.” The TRIPS provision is open ended. Members may also take into consideration other factors. The TPP proposal turns the TRIPS language into a closed list, banning any other consideration than whether the reputation of the well-known in “sector of the public that normally deals with the relevant goods or services.”

E. Arts. 2.15, 2.18 – Refusing Protection or Recognition of GI

Articles 2.15 and 2.18 continue the trend of refusing to fully recognize geographical indicators at the TRIPS standard.

1. Art. 2.15

TPP Art. 2.15 makes GIs a subsidiary doctrine to trademark. TRIPS Art. 22 protects GIs by requiring parties to prevent designation of geographical origin where such designation “misleads the public as to the true place of origin.”41 TPP Art. 2.15 changes this focus on geographic origin confusion by prohibiting the use of a GI that is “likely to cause confusion with a trademark.” The provision thus alters the fundamental focus of GI protection from the protection of goods from a specific place of origin to the protection of goods with specific trademark or indication, giving priority to trademarks over GIs in the case of conflict between the two.

2. Art. 2.18

Article 2.18 defines a generic GI in a way that would allow one country’s generic use of a term to defeat a claim of a GI that is protected in another country. TPP Art. 2.15(a)(iv) recognizes that generic terms should not be protected as GIs. TPP Art. 2.18 notes that “a term is generic if it is the term customary in common language as the common name for the goods or services associated with the trademark or

39 Lanham Act, 15 U.S.C. § 1051 (2005); see also U.S. PATENT & TRADEMARK OFFICE, ALL ABOUT TRADEMARKS , available at http://www.uspto.gov/smallbusiness/trademarks/registering.html (explaining the required steps for trademark protection in the United States).

40 Trademark Protection in France, EURIMARK , http://www.eurimark.com/index.php/de/nationales-recht/45-france/135-french-trademarks (explaining that “[u]se of a Trademark in France does not confer any rights without a trademark registration to support it.”).

41 TRIPS, supra note 24, Art. 22.

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geographical indication.”42 This definition is similar to TRIPS Art. 24.6,43 but omits the restriction that the term should have become generic “in the territory of the Member.”44 This appears to open the possibility that a GI term could be considered generic in one country (e.g. Peru) because it has become generic in another member country (e.g. U.S.).

F. Art. 2.22 – GI Use for Goods and Services Not From the True Place of Origin

Continuing the proposal’s recognition of trademarks as superior to GI protection, TPP Art. 2.22 permits the use or registration of signs or indications that reference a geographical area even though it is not the true place or origin of the goods or services.

II. DOMAIN NAMES ON THE INTERNET

TPP Art. 3.1 requires that country-code top-level domain (ccTLD) provide dispute settlement based on principles established in the Uniform Domain-Name Dispute-Resolution Policy. TPP Art. 3.2 requires that there be online public access to a reliable and accurate database of contact information concerning domain-name registrants. These requirements are in KORUS, but do not appear in TRIPS.

As explained in a note provided by cyberlaw expert Wendy Seltzer, these provisions preempt expert policy debates currently under way at the Internet Corporation for Assigned Names and Numbers (ICANN):45

As the United States knows, both the UDRP [Uniform Domain-Name Dispute-Resolution Policy] and WHOIS are subjects of active policy debate in ICANN's multi-stakeholder forum. It damages that process to freeze elements of it through trade agreements.

Country Code TLDs (ccTLDs, such as .uk, .br, .pe, .mx) are operated by groups in their countries, some governmental, some not. They are not under contract to ICANN (unlike the generic TLDs), and are free to develop their own policies, to reflect their own national laws and local needs. Extending U.S.-based law to them would deprive us of the experimentation and better speech-protections they can offer. (Domain names matter both for their expressive value as pointers to speech, and for the speech they convey directly.)

42 TPP, supra note 10, Art. 2.18.43 TRIPS, supra note 24, Art. 24.6 (stating that “N[n]othing in this Section shall require a Member

to apply its provisions in respect of a geographical indication of any other Member with respect to goods or services for which the relevant indication is identical with the term customary in common language as the common name for such goods or services in the territory of that Member.”).

44 TRIPSId. Art. 24.6 (defining generic as “the term customary in common language as the common name for such goods or services in the territory of that Member”).

45 Letter from Wendy Seltzer, Fellow, Yale Law School Info. Soc’y Project, to Sean Flynn, Assoc. Dir., Program on Info. Justice & Intellectual Prop. (Oct. 31, 2011).

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WCLUSER, 06/23/12,

We need to explain the relation of the tpp changes to this text.


The UDRP was one of the earliest-established ICANN policies for gTLDs. More than a decade ago, it was put in place as an arbitration-like procedure for domain/trademark disputes. Since then, several academic studies have cataloged its procedural and substantive problems, such as forum shopping and unfairness to domain registrants with criticism and parody domains,46 and many within ICANN's GNSO have called for the UDRP's review. Some ccTLDs have modified procedures based on the UDRP.

For example, Nominet, the .uk registry, has a dispute policy based on the UDRP's framework but with greater free-speech protections, and specific reference to fair use defenses.

WHOIS, the public listing of contact info of domain registrants, is another hotly contested issue here at ICANN. The Article 29 Working Party of European data protection commissioners found likely conflicts with privacy laws,47 and these identification databases pose serious problems to speakers and critics in hostile regimes. Iranian activists in the green movement have been questioned in police detention about people identified in domains' WHOIS records.48

The proposal is also counter to existing ICAAN Principles for the Delegation and Administration of ccTLDs, which “should recognise that ultimate public policy authority over the relevant ccTLD rests with the relevant government or public authority." 49 The WSIS Tunis Agenda for the Information Society – agreed upon by the UN-sponsored World Summit on the Information Society in 2005 – similarly states that “Countries should not be involved in decisions regarding another country’s country-code Top-Level Domain (ccTLD). Their legitimate interests, as expressed and defined by each country, in diverse ways, regarding decisions affecting their ccTLDs, need to be respected, upheld and addressed via a flexible and improved framework and mechanisms.”50

III. COPYRIGHT AND RELATED RIGHTS

It was not long ago that copyright was seen as perhaps the less controversial field of intellectual property law, especially as compared to patents on medicines.51

46 See Comments of the Noncommercial Users Constituency (NCUC) on the Preliminary GNSO Issue Report on the Current State of the Uniform Dispute Resolution Policy (UDRP), available at http://forum.icann.org/lists/prelim-report-udrp/pdfn9gXwk5UTa.pdf.

47 See Letter from Peter Schaar, Chairman, Art. 29 Data Protection Working Party, to Vinton G. Cerf, Chairman of Bd. Of Dir., Internet Corporation for Assigned Names and Numbers (ICANN) (June 22, 2006), available at http://www.icann.org/en/correspondence/schaar-to-cerf-22jun06.pdf.

48 For an older sample of the still-ongoing debate, see Wendy Seltzer, WHOIS redux: Demand privacy in domain name registration, SELTZER.ORG (Oct. 25, 2007), http://wendy.seltzer.org/blog/archives/2007/10/25/whois-redux-demand-privacy-in-domain-name-registration.html.

49 Principles for Delegation and Administration of ccTLDs, Presented by Governmental Advisory Committee. 23 February 2000. Available at http://www.icann.org/en/committees/gac/gac-cctldprinciples-23feb00.htm

50 Tunis Agenda for the Information Society, WSIS-05/TUNIS/DOC/6(Rev. 1)-E. 18 November 2005. Available at: http://www.itu.int/wsis/docs2/tunis/off/6rev1.html

51 See, e.g., ICTSD, UNCTAD Hanbook on TRIPS p. 136 (remarking that a “more equal playing field

15


But with the rapid technological evolution of the internet into the primary means through which many communicate and engage in economic trade, the threat and promise of nearly free and ubiquitous digital copying of informational goods has brought the public interest effects of copyright into stark relief. It is thus largely around the copyright concerns, rather than those on patents and medicines, that hundreds of thousands of people marched on the streets of Europe to call for a rejection of the Anti-counterfeiting Trade Agreement and millions of Americans wrote and called on their representatives to reject the Stop Online Piracy Act.

In some respect, the growing public debate around copyright is around the very real question of when and under what conditions our public policies will allow the price of expressive goods to be reduced to the very low costs of digitally copying them. While allowing all expressive works to be so distributed would likely sap all incentives to produce or mass market many important cultural goods, there are also important examples where this is not the case, and rather making incredibly wide distributions of knowledge and information available throughout the world can be accomplished with little or no harm, and often benefits, to the incentives to produce and distribute that copyright is meant to provide.

One key challenge to assessing the public interest dimension of copyright policy is that we do not know the costs and benefits of copyright expansion. It is well established in the academic and economic literature that the public interest will only prevail through a careful balance. This balance is often promoted through the limitations and exceptions to rights – limitations referring to the bounds of a right where the public domain is left as the default background rule, and exceptions being the carved out areas from the right which would otherwise apply.52 But the leaked U.S. proposal for an IP chapter in the TPP, as has been the case with its FTA agenda more broadly, is composed primarily of robust expansions in proprietor rights, with scant attention to the need for limitations and exceptions to balance those rights.

The burden of the provisions is likely to be especially hard felt by developing countries. ICTSD and UNCTAD reported such concerns with regard to the more moderate terms of the TRIPS agreement:

From a development perspective, it is common to all forms of copyright that enhanced protection may in the long term stimulate the establishment of local cultural industries in developing countries, provided that other obstacles to such development are avoided.

in copyright” because of the lower cost of creating a copyrighted work, and the flourishing culture in developing countries, “is reflected in a lower level of controversy so far between developednd developing countries regarding copyright protection than is evident in some other areas regulated by TRIPS.”).

52 The distinction is explained further in Andrew F. Christie, Maximising Permissable Limitaitons and Exceptions to Intellectual Property Rights, in The Structure of Intellectual Property: Can one Size Fit all?, 121, 122-125.

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However, in the short and medium term, stronger copyright protection does give rise to some concern. Since copyrights are exclusive, they create access barriers to the protected subject matter, such as books, computer software and scientific information. It is thus essential to developing country policy makers to strike the right balance between incentives for creativity on the one hand and ways to enable their societies to close the knowledge gap vis- ` a-vis developed countries, on the other hand.53

The Commission on Intellectual Property Rights came to a similar conclusion:

We believe that copyright-related issues have become increasingly relevant and important for developing countries as they enter the information age and struggle to participate in the knowledge-based global economy. Of course, some developing countries have long standing concerns that copyright protection for books and learning materials, for example, may make it harder for them to achieve their goals in education and research. These were prominently expressed at the 1967 Stockholm Conference of the Berne Convention and remain valid today.

Copyright deserves special attention now not only because millions of poor people still lack access to books and other copyrighted works, but because the last decade has seen rapid advances in information and communication technologies, transforming the production, dissemination and storage of information. This has been accompanied by a strengthening of national and international copyright protection. Indeed, it was largely these technological changes that led the copyright-based industries in the developed countries to lobby for TRIPS and the WIPO Copyright Treaty, as well as the sui generis protection system for databases established by the EU in 1996. These trends are likely to have both positive and negative aspects for developing nations and it is important to understand how they impact on such countries, particularly the poor.

The crucial issue for developing countries is getting the right balance between protecting copyright and ensuring adequate access to knowledge and knowledge-based products. It is the cost of access, and the interpretation of “fair use” or “fair dealing” exemptions that are particularly critical for developing countries, made more so by the extension of copyright to software and to digital material. These issues need to be addressed to ensure developing countries have access to important knowledge-based products as they seek to bring education to all, facilitate research, improve competitiveness, protect their cultural expressions and reduce poverty.

The U.S. proposal includes many dramatic expansions of the international minimum standards on the scope and length of copyright protection, including provisions not reflected in current U.S. law. The economic case for these provisions has not been made, neither for locking the U.S. into these provisions in an international agreement, nor for the wide range of other countries of all development levels included in the TPP coalition.

From a public interest perspective, expansions in proprietor rights should be accepted with extreme caution, and balanced with appropriate limitations and

53 ICTSD/UNCTAD Handbook on TRIPS, 138

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exceptions. The safest route would be to focus on which multilateral copyright treaties should be entered by TPP members, rather than attempting to fashion new plurilateral commitments that have not been subject to an inclusive and transparent global decisiona making process. This is especially important as the TPP members have expressed an ambition to expand the TPP standards into a new “21st Century” that will bind all APEC members, and ultimately all countries of the world.

A. Art. 4.1– Exclusive Reproduction Rights

1. Each Party shall provide that authors, performers, and producers of phonograms8

have the right9 to authorize or prohibit all reproductions of their works, performances, and phonograms,10 in any manner or form, permanent or temporary (including temporary storage in electronic form).

8 References to “authors, performers, and producers of phonograms” refer also to any successors in interest.

9 With respect to copyrights and related rights in this Chapter, the “right to authorize or prohibit” and the “right to authorize” refer to exclusive rights.

10 With respect to copyright and related rights in this Chapter, a “performance” means a performance fixed in a phonogram unless otherwise specified.

1. Analysis

The U.S. proposal includes many dramatic expansions of the international minimum standards on the scope and length of copyright protection, including provisions not reflected in current U.S. law.

TPP Art. 4.1 proposes an expansion of international minimum requirements on the right of reproduction required for performers, and also extends the minimum requirements of the right to reproduction for all protected works to include the right to exclude “temporary storage in electronic form.”

At its core, Article 4.1 appears to be a highly paraphrased summary of the reproduction rights required to be given to performers and producers of phonograms under the WPPT.54 If that was the only intent, then the paragraph would be unnecessary if the obligation to join the WPPT remains in Article 1(3) of the proposed TPP chapter. But Article 4.1 expands the WPPT obligations in small but important ways.

It is important to recognizes that the WPPT represents a recent expansion in “related” or “neighboring” rights in copyright. The first multilateral copyright treaty, the Berne convention, limited its protections to the literary and artistic work of authors. Rigths for performers or producers of phonograms (meaning a recording of

54 See WPPT Art. 7 (right of reproduction of performers); WPPT Art. 11 (right of reproduction of producers of phonograms).

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sound, but not an audiovisual work like a movie) were letter protected to a lesser extent under the Rome convention. Rome allows, for example, shorter terms of copyright for related rights (e.g. potentially 20 years from creation) than are permitted for authors under Berne (50 years plus life of author). The WPPT harmonized the terms of related rights with author’s rights to a 50 year minimum and strengthened the exclusive rights of related rights holders, for example by giving them the rights to “authorize” rather than only “prohibit” certain acts.

The U.S. has long protected related rights under the same copyright laws that apply to authors. But this is not the norm in every country. As explained by ICTSD and UNCTAD:

“Other countries, such as Germany and France, protect these rights under the separate category called “neighbouring rights.” The reason for this differentiation is the perception in those countries that works protected under related rights do not meet the same requirement of personal intellectual creativity as literary and artistic works.”

Article 4.1 extends performers rights beyond the WPPT by removing the WPPT requirement for most protections that the protected performance be “fixed in phonograms.” Article 7 of the WPPT, for example, states: “Performers shall enjoy the exclusive right of authorizing the direct or indirect reproduction of their performances fixed in phonograms, in any manner or form.” The Rome Convention similarly generally conditions protection requirements on the performance being “incorporated in a phonogram” or broadcast. The U.S. TPP proposal in Art. 4.1 leaves out these requirements.

Second, the TPP proposal requires that the right of reproduction extends to “temporary storage in electronic form.”grants intellectual property rights holders the exclusive right to “prohibit all reproduction . . . in any manner or form, permanent or temporary (including temporary storage in electronic form).”55 The WPPT extends the right of reproduction for performers and producers of phonograms to “any manner or form.” But proposals to include a specific right to block temporary reproduction in electronic form were considered and rejected in the negotiation.56 Instead, the WPPT contains only a footnote explaining that the

55 TPP, supra note 10, Art. 4.1.56 See Chairman of the Committees of Experts on a Possible Protocol to the Berne Convention and

on a Possible Instrument for the Protection of the Rights of Performers and Producers of Phonograms, Basic Proposal for the Substantive Provisions of the Treaty on Certain Questions Concerning the Protection of Literary and Artistic Works to be Considered by the Diplomatic Conference 28 (1996), available at http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CFUQFjAD&url=http%3A%2F%2Fwww.wipo.int%2Fedocs%2Fmdocs%2Fdiplconf%2Fen%2Fcrnr_dc%2Fcrnr_dc_4.doc&ei=D_LET6ypHYno0QHHpsHPDQ&usg=AFQjCNH6Cx5JMraG2l2XZHwVRhRpLTNb-g (proposing that “Contracting Parties would articulate their agreement that the right of

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http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CFUQFjAD&url=http%3A%2F%2Fwww.wipo.int%2Fedocs%2Fmdocs%2Fdiplconf%2Fen%2Fcrnr_dc%2Fcrnr_dc_4.doc&ei=D_LET6ypHYno0QHHpsHPDQ&usg=AFQjCNH6Cx5JMraG2l2XZHwVRhRpLTNb-g




reproduction rights “fully apply in the digital environment,” and that storage “in digital form in an electronic medium constitutes a reproduction.”57 Whether, when and how a temporary electronic copy must be considered a reproduction is left to the policy discretion of member states.

The language Although the language of the U.S. proposed in TPP Art. 4.1, although included in some other US Free trade agreements, is not a full expression of U.S. law on the topic. was included in KORUS, it is not fully present in U.S. Copyright law. Section § 106(1) of the Copyright Act does not contain language prohibiting reproduction “in any form.” It rather prohibits reproduction of the “copyrighted works in copies or phonorecords.”58 Nor does U.S. law include an extension to “temporary storage in electronic form.” U.S. law requires that an infringing copy be “fixed,” meaning “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.”59 Likewise, Tthe Digital Millennium Copyright Act [hereinafter DMCA] recognizes a safe harbor for “system caching.,”60 which is not included in the U.S. TPP proposal.

The distinctions are particularly important for enforcement of copyright on the internet. Lower courts in the U.S. have, for example, held that copyright does not extend to buffer copies on the internet.61 Similarly, although not a party to this agreement, the EU Copyright Directive (Directive 2001/29/EC, Article 5) contains an explicit exception for temporary reproductions addressing automated caching.62

The proposed TPP language could threaten these types of limitations and exceptions in TPP member countries.

It is unlikely that the TPP would prevent countries from taking advantage of the flexibilities in U.S. and multilateral law concerning fixation requirements for performances and temporary copies. But it would more clearly harmonize the

reproduction in the Berne Convention includes direct and indirect reproduction, whether permanent or temporary, in any manner or form.”).

57 WPPT fn 6.58 See Jodie Griffin, supra note 16.Inconsistencies Between the Trans-Pacific Partnership (TPP)

Agreement and US Law, PUBLIC KNOWLEDGE , www.publicknowledge.org/files/TPP%20Analysis.pdf 59 Copyright Act, 17 U.S.C. § 101 (defining that “[c]opies” are material objects, other than

phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term “copies” includes the material object, other than a phonorecord, in which the work is first fixed.”).

60 Digital Millennium Copyright Act, 17 U.S.C. § 512(b) (1998).61 See Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (holding that

buffer copies are saved for ‘more than transitory duration’ and are therefore insufficient for a work to be ‘fixed’).

62 See Council Directive 2001/29, art. 5, 2001 O.J. (L167) 10.

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limitation with the general rule if these were also built in as minimum standards. Without such provisions, countries that cut and paste FTA language into their law to meet implementation requirements, which is unfortunately common,63 will fail to fully protect their own consumer and competitor interests to the level even of actually existing U.S. law.

2. Positive proposals

In multilateral treaties, it is common to build clear authorizations of exceptions into the rule itself. For example, the right of reproduction for artists in Berne is followed by subparagraph (2):

It shall be a matter for legislation in the countries of the Union to permit the reproduction of such works in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.64

Several proposals could be made to limit article 4.1 to a minimum standard more appropriate for the range of countries represented in the TPP. The provision could be deleted in entirety, relying instead on accession to multilaterally negotiated commitments on the topic, Berne and WPPT. Alternatively, suggested or mandatory limitations and exceptions to the right could be articulated in a subparagraph. Technology and internet companies have proposed, for example, a specific requirement that members create an exception for temporary electronic copies that they argue are necessary to enable electronic commerce to operate smoothly. Their proposed addition to the TPP text would state:

Such exceptions and limitations [provided by each member] shall include temporary acts of reproduction which are transient or incidental and an integral and essential part of a technological process and whose sole purpose is to enable (a) a lawful transmission in a network between third parties by an intermediary; or (b) a lawful use of a work or other subject matter to be made; and which have no independent economic significance, in that the reproductions are of short duration or are not perceptible to the user.65

The essence of the technology companies’ proposal is reflected in a number of international and domestic legal protections cited in the proposal, including in the

63 See, e.g. An Open Letter to the Colombian Legislature Regarding Bill No. 201, available at http://infojustice.org/archives/9414 (letter from nearly 70 copyright academics and practitioners finding that Columbia’s law reform implementing the U.S>-Columbia FTA implements “changes that upgrade protection for copyright [that] go beyond what the FTA requires and are, in fact, more restrictive than U.S. law itself.”).

64 Berne Art. 9(2).65 CCIA proposal.

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http://infojustice.org/archives/9414


Chile-U.S. FTA,66 EU Information Society Directive67 EU Software Directive68

Malaysia Copyright (Amendment) Act,69 Singapore Copyright Act,70 Australia Copyright Act,71 and New Zealand Copyright Act.72

It is noteworthy that the TPP language appears to derive from proposals that were rejected in the negotiation of the Basic Proposal for the 1996 WIPO treaties. Language addressing temporary copies was considered in these negotiations but ultimately left out of the treaties.73 The U.S. proposal seeks to revive debate of these rejected norms in a more limited forum with insufficient transparency.

Art. 4.2 – Parallel Importation

Each Party shall provide to authors, performers, and producers of phonograms 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 that Party’s territory with the authorization of the author, performer, or producer of the phonogram.11

66 Chile-US FTA Art. 17.7(3) fn. 17 (“For works, other than computer software, and other subjectmatter, such exceptions and limitations may include temporary acts of reproduction which are transient or incidental and an integral and essential part of a technological process and whose sole purpose is to enable (a) a lawful transmission in a network between third parties by an intermediary; or (b) a lawful use of a work or other subject-matter to be made; and which have no independent economic significance.”)

67 2001/29/EC (“EUISD”), art. 5(1) (protecting “temporary acts of reproduction” with “no independent economic significance”)

68 art. 5(1) (providing that acts of reproduction of a computer program “shall not require authorisation by the rightholder where they are necessary for the use of the computer program by the lawful acquirer in accordance with its intended purpose, including for error correction”).

69 2012 sec. 9(b), amending section 13(2) (adding exception for “the making of a transient and incidental electronic copy of a work made available on a network if the making of such copy is required for the viewing, listening, or utilization of the said work”)

70 sec. 38A (permitting temporary or transient reproductions made in the course of communication)

71 sec. 43A and 43B (permitting temporary reproductions as part of making or receiving a communication or as a necessary part of using a work)

72 sec. 43A (permitting transient or incidental reproductions).73 See CHAIRMAN OF THE COMMITTEES OF EXPERTS ON A POSSIBLE PROTOCOL TO THE BERNE CONVENTION

AND ON A POSSIBLE INSTRUMENT FOR THE PROTECTION OF THE RIGHTS OF PERFORMERS AND PRODUCERS OF PHONOGRAMS, BASIC PROPOSAL FOR THE SUBSTANTIVE PROVISIONS OF THE TREATY ON CERTAIN QUESTIONS CONCERNING THE PROTECTION OF LITERARY AND ARTISTIC WORKS TO BE CONSIDERED BY THE DIPLOMATIC CONFERENCE 28 (1996), available at http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CFUQFjAD&url=http%3A%2F%2Fwww.wipo.int%2Fedocs%2Fmdocs%2Fdiplconf%2Fen%2Fcrnr_dc%2Fcrnr_dc_4.doc&ei=D_LET6ypHYno0QHHpsHPDQ&usg=AFQjCNH6Cx5JMraG2l2XZHwVRhRpLTNb-g (proposing that “Contracting Parties would articulate their agreement that the right of reproduction in the Berne Convention includes direct and indirect reproduction, whether permanent or temporary, in any manner or form.”).

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11 With respect to copies of works and phonograms that have been placed on the market by the relevant right holder, the obligations described in Article [4.2] apply only to books, journals, sheet music, sound recordings, computer programs, and audio and visual works (i.e., categories of products in which the value of the copyrighted material represents substantially all of the value of the product). Notwithstanding the foregoing, each Party may provide the protection described in Article [4.2] to a broader range of goods.

3. Analysis

TPP article 4.2 would create a new international legal requirement to provide copyright owners an exclusive right to block “parallel trade” of copyrighted works, at least for named categories of works “in which the value of the copyrighted material represents substantially all of the value of the product.” This provision is directly contrary to the dominant multilateral rule in international intellectual property agreements protecting the ability of domestic law to determine when copyrights and other intellectual property rights exhaust.74

– meaning the importation of a copyrighted work from one country where the good is voluntarily placed on the market to another country where the same good at the same price is unavailable.75 The language of the U.S. proposed TPP Art. 4.2 is not consistent with current U.S. law, is not required by any multilateral agreement and is not in the best interests of TPP member countries.76

The issue of parallel trade arises because rights owners desire the ability to segment markets and determine their own prices and policies for entry into each market. Many countries are disadvantaged by such rights, particularly where they lack a sufficient consumer base to attract market entry at the lowest possible prices. Parallel trade allows distributors to seek supplies of the legitimate copyrighted work in another market where the good is available. If for example, as is often the case, a text book is sold at a higher price in a smaller market (which might be a developing country or wealthier country with fewer residents, e.g. New Zealand), a poor country than in a wealthier one, a supplier in the small market may poor country could purchase the book in the lower priced market and resell it in the

74 See WIPO Copyright Treaty (Article 6(2)) (“Nothing in this Treaty shall affect the freedom of Contracting Parties to determine the conditions, if any, under which the exhaustion of the right in paragraph (1) applies after the first sale or other transfer of ownership of the original or a copy of the work with the authorization of the author.”); TRIPS Art. 6 (“nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights”).

75 TPP, supra note 10, Art. 4.2 (“Each Party shall provide to authors, performers, and producers of phonograms 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 that Party’s territory with the authorization of the author, performer, or producer of the phonogram”).

76 See Alberto Cerda, USTR New Exclusive Right for Copyright Holders: Importation Provision in the Trans Pacific Partnership Agreement (TPPA) (July 5, 2011) http://keionline.org/node/1176.

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domestic market – benefiting both consumers and the local importing firm. In recognition of the divergence of legitimate policies between countries, the

WTO TRIPS agreement leaves countries free to adopt domestic policies on parallel importation through their regimes of on exhaustion of intellectual property rights.77

TThe extension of copyrights to parallel trade is unsettled in current U.S. law, and this is a prime example where the TPP could affect the contours of existing U.S. law. . The issue was recently litigated in the Supreme Court in Costco v. Omega78 , but the split decision did not finally resolve whether copyright holders have a right to s prevent parallel importation in the U.S. The issue is set to be revisited in another U.S. Supreme Court case this fall -- Kirtsaeng v. Wiley & Sons.

Regardless of the ultimate shape of U.S. law on the topic of parallel importation, , as explained above, many countries in the TPP membership will have different economic interests than the U.S. and may legitimately desire different exhaustion regimes. A recent study in New Zealand, for example, described by Alberto Cerda of Knowledge Ecology International, found that its 1998 lifting of bans on parallel importation of copyrighted goods “has not affected the investment in and promotion of New Zealand creative sector, but improved choices and quality of services to retailers and consumers through increased competition, a result similar to Australia.”79

The TPP proposal would also “be a significant constraint on Australian copyright policy.” As explained by Kim Weatherall, Australian law generally prohibits importation of copyright works, but it has exceptions for software (s 44E), electronic books and music (s 44F), and sound recordings (s 112D) where the product is placed on the market in another country with the consent of the copyright owner. Weatherall explains further:

Australia’s Productivity Commission has produced numerous reports in favour of more parallel importation of copyright works, most recently books. As a small but affluent market, Australia has a history of experiencing higher prices for copyright works than

77 TRIPS, supra note 24, Art. 6 (providing that “nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights”).

78 Costco Wholesale Corp. v. Omega, S.A., 541 F.3d 982 (9th Cir., 2008), aff’d per curiam, No. 08-1423, 562 U.S. __ (2010) (affirming, by an equally divided Court, the Ninth Circuit decision which applied the ‘first-sale’ doctrine codified in Section 109(a) of the Copyright Act to prevent diverted sales of foreign-made products).

79 Alberto Cerda, USTR New Exclusive Right for Copyright Holders: Importation Provision in the Trans Pacific Partnership Agreement (TPPA) (July 5, 2011) http://keionline.org/node/1176 (citing the 1998 New Zealand Copyright (Removal of Prohibition on Parallel Importing) Amendment Act and the government’s 2005 Cabinet Paper on Parallel Importing and the Creative Industries, http://www.med.govt.nz/templates/MultipageDocumentTOC____5706.aspx).

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markets such as the US and UK.80


To protect domestic flexibility to determine each country’s own parallel importation regime, the TPP could include a provision much like in Berne and TRIPS, e.g. providing that “[n]othing in this Treaty shall affect the freedom of Contracting Parties to determine the conditions, if any, under which the exhaustion of the right in paragraph (XX) applies.” Technology companies are advocating a positive mandate for every country to at least have a national exhaustion regime.81

B. 4.3 Making available

Each Party shall provide to authors, performers, and producers of phonograms the right to authorize or prohibit the making available to the public of the original and copies of their works, performances, and phonograms through sale or other transfer of ownership.

1. Analysis

This provision is substantially similar to the distribution rights recognized in the WIPO Copyright and Performances and Phonograms treaties, except the latter treaties are followed by a specific provision protecting the freedom of countries to determine exhaustion of rights.82 The WCT (Article 6(2)) states:

Nothing in this Treaty shall affect the freedom of Contracting Parties to determine the conditions, if any, under which the exhaustion of the right in paragraph (1) applies after the first sale or other transfer of ownership of the original or a copy of the work with the authorization of the author.

The WCT also carries a footnote limiting the expressions “copies” and “original and copies” subject to the right of distribution to “refer exclusively to fixed copies that can be put into circulation as tangible objects.” Neither of these limitations is included in the U.S. proposal.

As Kim Weatherall reports, a protection for freedom to determine exhaustion rules was included in the AUSFTA:

AUSFTA includes an identically worded provision: Article 17.4.2, except AUSFTA has a qualifying footnote stating that ‘Nothing in this Agreement shall affect a Party’s right to

80 Weatherall, p.5.81 http://infojustice.org/wp-content/uploads/2012/03/CCIA-positive-proposal.pdf (proposing a

requirement that “[e]ach party shall provide that the first sale in any of the parties’ territories of the original of a work or copies thereof by the right holder or with his/her consent exhausts the right to control resale of that object.”).

82 Article 6, WIPO Copyright treaty (“Authors of literary and artistic works shall enjoy the exclusive right of authorizing the making available to the public of the original and copies of their works through sale or other transfer of ownership.”)

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http://infojustice.org/wp-content/uploads/2012/03/CCIA-positive-proposal.pdf


determine the conditions, if any, under which the exhaustion of this right applies after the first sale or other transfer of ownership ... with the authorisation of the right holder.’

It is difficult to assess the impact of this provision. It is possible that without the qualifying footnote, the provision read literally could impact on second hand sales.

Weatherall also notes that the provision is missing an affirmative limitation that is included in many laws. Australia, for example, provides a right to make available in its Copyright law, but “liability only arises where the person ‘knew, or ought reasonably to have known’ that the article is infringing.”83


The following language from the WCT should be added:

Nothing in this Treaty shall affect the freedom of Contracting Parties to determine the conditions, if any, under which the exhaustion of the right in paragraph (1) applies after the first sale or other transfer of ownership of the original or a copy of the work with the authorization of the author.

C. 4.4 Hierarchy of rights

In order to ensure that no hierarchy is established between rights of authors, on the one hand, and rights of performers and producers of phonograms, on the other hand, each Party shall provide that in cases where authorization is needed from both the author of a work embodied in a phonogram and a performer or producer owning rights in the phonogram, the need for the authorization of the author does not cease to exist because the authorization of the performer or producer is also required. Likewise, each Party shall provide that in cases where authorization is needed from both the author of a work embodied in a phonogram and a performer or producer owning rights in the phonogram, the need for the authorization of the performer or producer does not cease to exist because the authorization of the author is also required.

1. Analysis

This clause does not have an analogue in the WPT, WPPT, Berne, Rome or TRIPS. A similar clause was included in the AUSFTA and is reflected in current Australian law.

The first clause – “to ensure that no hierarchy is established between rights of authors, on the one hand, and rights of performers and producers of phonograms, on the other hand” – indicates a principle that has not existed in international intellectual property agreements previously. Historically, there was a kind of hierarchy of rights with authors of literary and artistic works being ensured of stronger rights and longer protection terms that those of “related” or “neighboring rights” (e.g. performers and producers of phonorecords). But much of that distinction was erased with the WPPT and there has never been an international

83 Weatherall, p.6.

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protection of a hierarchy of licensing rights would promote allowing one group of rights holders to hold out licenses required from others.

This clause may prohibit some best practices in copyright licensing. A country may desire to speed licensing of some works by allowing one group of right holders to license their rights and providing for compulsory licensing or other disposition of the rights of any remaining rights holders. Documentary filmmakers, for example, often decry the difficulty of licensing audiovisual clips for their films which may require separate clearances from writers, performers, producers and other rights holders for both the visual and audio tracks. In addition, the clause could be read to pose barriers to the resolution of rights where some rights holders are unknown or no longer exist – so called orphan works.

2. Positive proposal

Limiting affirmative commitments that are present in multilateral agreements would exclude this clause.

To protect policy space in areas that may be subject to local limitations, exceptions and compulsory measures, a limitation and exception clause for any commitment in this area should be added to the section. An example could be:

Nothing in section XX shall limit the freedom of a member states to provide for limitations and exceptions to the right that are [3 step], or to subject any rights to a compulsory license, including to enable the licensing of works where some rights holders are unknown or no longer exist.

D. Art. 4.5 – Terms of Copyright Protection

E.

1. Analysis

Art. 4.5 of the U.S. proposal for TPP would raise the international minimum requirement for a copyright term from the current life+ 50 year period included in TRIPS, Berne and the WPPT, to a new life+ 70 minimum termTPP Art. 4.5 attempts to export the TRIPS-plus and KORUS-plus copyright terms of U.S. law—life of the author plus 70 years, or not less than 95 years from the first publication or 120 years from creation. It would also raise the term for works of corporate or collective authorship (e.g. many films in the U.S.) from fifty years from publication or making of the work (under TRIPS and Berne) to 95 years from publication, or 120 years from the making of the work.

Through the promulgation of the TRIPS agreement, copyright terms in international agreements had been converging on a minimum term of 50 years after the life of the author, for individual works, and 50 years from the date the work is

27


lawfully made available to the public, if so published, or, if not published, 50 years from the date of making of the work.84

Most copyright laws in the world adhere to the life plus 50 year models of the Berne and subsequent international copyright agreements. In 1993, the EU shifted its term of protection to a life plus 70 year model, but retained 50 year copyrights for corporate works.85 In 1998 the U.S. followed suit with life plus 70 year terms for individual authors, but extended corporate copyrights to 95 years from the date of publication, or 120 years from the date of making unpublished works.86 These terms were the longest in the world at the time. Many FTAs with the U.S. have required signatories to adopt similar term extensions in their own law.87 Although these requirements are generally consistent with the U.S. Copyright Act,88 it is noteworthy that the TPP proposal, like other FTAs, lack some of the moderating principles contained in U.S. law.89

90 Length of copyright terms is an area of law where the U.S. model should not be considered an appropriate standard for the rest of the world. The latest terms in the U.S. are the result of the controversial and much criticized “Sonny Bono Copyright Term Extension Act” of 1998. As a coalition of law professors reported to Congress in opposition to that act at the time, the lengthening of copyright terms

impose[s] severe costs on the American public without providing any public benefit. It would supply a windfall to the heirs and assignees of dead authors (i.e., whose works were first published around 1920) and deprive living authors of the ability to build on the cultural legacy of the past.91

These views are supported by numerous academic studies finding no public 84 See Berne Art. 7; TRIPS Art 12; WPPT; WCT.85 See ICTSD 182.86 17 U.S.C. § 302 (2002) (specifying the duration of copyright for works created on or after

1/1/78).87 See Roffe, 2004. The extensions required in US FTAs has not been uniform. The AUSFTA

requires like plus 70 terms for individual authors, and 70 years from publication or the date of making for other works. Thus, accepting the US TPP proposal would require Australia to extend its copyright term for corporate authored films and sound recordings by 25 years. Kim Weatherall, Australian Analysis, p.7; accord Chile FTA art. XX; [which ftas require the 70/95/125 formulation?).

88 §§ 302(a)-(b)89 See Griffin, supra note 16 (noting that although TPP sets the specified terms as the minimum

level of protection, U.S. law sets the term as a limit, and the TPP proposal fails to incorporate presumption in 17 U.S.C. § 302(e) that after 95 years from first publication or 120 years after creation, an author’s death is presumed).

90 17 U.S.C. § 302 (2002) (specifying the duration of copyright for works created on or after 1/1/78).

91 Statement of Copyright and Intellectual Property Law Professors on the Public Harm from Copyright Extension, http://homepages.law.asu.edu/~dkarjala/opposingcopyrightextension/commentary/opedltr.html

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benefit, but great public cost, from extending copyright terms to the current U.S. levels.92

The disproportionate costs associated with lengthening copyright terms in the other TPP members is likely to be even higher than in the U.S. Either because of the small size of their markets or high levels of poverty in their consumer base, the non-U.S. members to TPP all likely face higher barriers to accessing copyrighted works and are therefore more dependent on the public domain for accessing information and knowledge.

2. Positive proposalAdoption of this provision would could double many copyright terms from the TRIPS minimums of publication plus 50 years, or 50 years from creation.93

The best option for the public interest on copyright terms would be to use the TPP to roll back all FTA requirements with the U.S. to the 50 year minimum terms currently expressed in binding multilateral agreements.

F. Art. 4.6, Application to Existing Works

Each Party shall apply Article 18 of the Berne Convention for the Protection of Literary and Artistic Works (1971) (Berne Convention) and Article 14.6 of the TRIPS Agreement, mutatis mutandis, to the subject matter, rights, and obligations in this Article and Articles [5] and [6].

1. Analysis

Article 4.6 requires the extension of rights in the agreement to existing works. This occurs through application of Article 18 of the Berne Convention, which states that the “Convention shall apply to all works which, at the moment of its coming into force, have not yet fallen into the public domain in the country of origin through the expiry of the term of protection.”

Perhaps the most important negative impact of Article 4.6 in the present text

92 See, e.g., DOUGLAS GOMERY, RESEARCH REPORT: THE ECONOMICS OF TERM EXTENSION FOR MOTION PICTURES ; Marci A. Hamilton, Copyright Duration and the Dark Heart of Copyright, 14, CARDOZO ARTS & ENT . L . J . 655 (1996); Dennis S. Karjala, The Term of Copyright, in GROWING PAINS: ADAPTING COPYRIGHT FOR LIBRARIES, EDUCATION, AND SOCIETY ( Laura N. Gasaway ed., 1997); Cecil C. Kuhne III, The Steadily Shrinking Public Domain: Inefficiencies of Existing Copyright Law in the Modern Technology Age, 50 LOY. L. REV . 549-563 (2004); EDWARD RAPPAPORT, CONG. RESEARCH SERV., 98-144E, COPYRIGHT TERM EXTENSION: ESTIMATING THE ECONOMIC VALUES (1998); J.H.Reichman, The Duration of Copyright and the Limits of Cultural Policy, 14 CARDOZO ARTS & ENT . L.J. 625 (1996); see also Stephen Breyer, The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies, and Computer Programs, 84 HARV. L. REV. 281, 324 (1970) (opposing what became the 1976 extensions).

93 TRIPS, supra note 24, Art. 12. The proposal is also in excess of KORUS Art. 18.4.4, providing for terms to be not less than 70 years from the end of the calendar year of the first authorized publication.

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would be to require the local implementation of copyright term extensions in Art. 4.5 to existing works. As described above, the local economic benefit from lengthened copyright terms is minimal when applied to future works. With respect to existing works – works already created under the then-applicable system – the economic benefit from longer terms is literally zero. You can’t incentivize the creation of a work that already exists.94 And thus copyright term extensions for existing works only gives a windfall to existing proprietors with no correlative benefit to the public at large.


This is an instance where the clause would be vastly improved by changing the applicable “shall” to a “may,” at least with regard to any copyright term extensions included in the agreement. Although the life of the author plus 70 years standard of TPP Art. 4.5 is consistent with U.S. Copyright Act §§ 302(a)-(b), TPP sets the specified terms as the minimum level of protection, whereas U.S. law sets this limitthese terms as the limit ceiling of the term.95 TPP Art. 4.5(b) also fails to incorporate the U.S. law presumption that after 95 years from first publication or 120 years after creation, an author’s death is presumed,96 which can assist some works in entering the public domain.

Length of copyright terms is an area of law where the U.S. model should not be considered an appropriate standard for the rest of the world. The latest terms in the U.S. are the result of the controversial and much criticized “Sonny Bono Copyright Term Extension Act” of 1998, extending the already TRIPS-plus and frequently criticized copyright terms by another 20 years. As a coalition of law professors reported to Congress in opposition to that act at the time, the lengthening of copyright terms “impose[s] severe costs on the American public without providing any public benefit. It would supply a windfall to the heirs and assignees of dead authors (i.e., whose works were first published around 1920) and deprive living authors of the ability to build on the cultural legacy of the past.”97 These views are

94 See Statement by law professors (“Except in special cases, the economically efficient term of intellectual property protection for works already in existence is zero, because by definition intellectual property is not depleted by use.”).

95 See Griffin, supra note 16.Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP) Agreement and US Law, Public Knowledge, www.publicknowledge.org/files/TPP%20Analysis.pdf.

96 17 U.S.C. § 302(e) (“After a period of 95 years from the year of first publication of a work, or a period of 120 years from the year of its creation, whichever expires first, any person who obtains from the Copyright Office a certified report that the records . . . disclose nothing to indicate that the author of the work is living, or died less than 70 years before, is entitled to the benefit of a presumption that the author has been dead for at least 70 years.”).

97 Statement of Copyright and Intellectual Property Law Professors on the Public Harm from Copyright Extension, http://homepages.law.asu.edu/~dkarjala/opposingcopyrightextension/

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supported by numerous academic studies finding no public benefit, but great public cost, from extending copyright terms to the current U.S. levels.98

G. Art. 4.7: Contracting rights(b)

Each Party shall provide that for copyright and related rights, any person acquiring or holding any economic right in a work, performance, or phonogram:

(a) may freely and separately transfer that right by contract; and

(b) by virtue of a contract, including contracts of employment underlying the creation of works, performances, and phonograms, shall be able to exercise that right in that person’s own name and enjoy fully the benefits derived from that right.

1. Analysis

This is provision is included in some US FTAs but has no analogue in the multilateral accords. TPP Art. 4.7 would require that parties provide any person “acquiring or holding any economic right in a work” by virtue of a contract, “be able to exercise that right in that person’s own name and enjoy fully the benefits derived from that right.” As Jodie Griffin of Public Knowledge notes, this provision is likely consistent with U.S. law, but “could be construed to grant authorship to employers or contractors without meeting the requirements [of] the work made for hire definition” in U.S. law.99 The real target of the provision may be prevent TPP member countries from following some European practices with respect to copyright management and regulation. Kim Weatherall notes:

The provision appears to be aimed at preventing Parties from introducing unwaivable or unassignable rights of a type found in Europe. It would prevent a Party from prohibiting the outright assignment of copyright (as, for example, is the case in Germany and Austria). In addition, this language is arguably sufficient to prevent the introduction of unwaivable rights to equitable remuneration like those found in the European Union’s Rental Rights Directive. This language might also be treated as excluding the compulsory collective administration of rights – a form of control on the exploitation of

commentary/opedltr.html 98 See, e.g., DOUGLAS GOMERY, RESEARCH REPORT: THE ECONOMICS OF TERM EXTENSION FOR MOTION

PICTURES ; Marci A. Hamilton, Copyright Duration and the Dark Heart of Copyright, 14, CARDOZO ARTS & ENTERTAINMENT ENT . L . AW J . ournal 655 (1996); Dennis S. Karjala, The Term of Copyright, in GROWING PAINS: ADAPTING COPYRIGHT FOR LIBRARIES, EDUCATION, AND SOCIETY ( Laura N. Gasaway ed., published by Fred B. Rothman & Co. 1997); Cecil C. Kuhne III, The Steadily Shrinking Public Domain: Inefficiencies of Existing Copyright Law in the Modern Technology Age, 50 LOY. L. REV . 549-563 (2004); EDWARD RAPPAPORT, CONG. RESEARCH SERV., 98-144E, COPYRIGHT TERM EXTENSION: ESTIMATING THE ECONOMIC VALUES , Congressional Research Service, Library of Congress, May 11, (1998); J.H.Reichman, The Duration of Copyright and the Limits of Cultural Policy, 14 CARDOZO ARTS & ENTERTAINMENT ENT . L.J. 625 (1996);. Ssee also Stephen Breyer, The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies, and Computer Programs, 84 HARV. L. REV. 281, 324 (1970) (opposing what became the 1976 extensions).

99 Jodie Griffen, supra

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copyright that also enjoys some popularity in European copyright policy making circles.100 in §101” of the U.S. Copyright Act, and could also conflict with termination rights in §203.

As such, including this provision in the TPP may inhibit European countries, or countries whose laws are more closely modeled on Europe from joining the standard.


Limiting commitments to those found in a multilaterally negotiated agreement would eliminate this article.

H. 4.8 Placeholder for exceptions and limitations

[Placeholders for provision on (1) exceptions and limitations, (2) Internet retransmission, and (3) any other appropriate copyright/related rights provisions]

1. Analysis

The general tendency in US FTA intellectual property chapters, as well as in much of the multilateral intellectual property agreements, is to provide very strong, specific and ever expanding provisions on proprietor rights, and vague enabling clauses for, or restrictions on the scope of, limitations and exceptions. But there is a strong countercurrent being expressed in negotiations in WIPO as well as in the academic community that is pushing for increased attention to the need for international harmonization of mandatory minimum limitations and exceptions (aka “substantive maximums”101 ).102

The increasing calls for international instruments to incorporate mandatory minimum limitations and exceptions arise in the context of the growth in the scope, specificity and enforceability of internationally recognized proprietary rights,103 and through the recognition that limitations and exceptions to such rights are paramount to the development and free flow of trade in many goods and services,

100 Weatherall, p. 8.101 Dinewoody, in The Structure of IP: Can one Size Fit all (Kur Ed.)102 See, The Structure of IP: Can one Size Fit all (Kur Ed.); Dreyfuss, TRIPS Round II: Should Users

Strike Back (2004). For a European example of a harmonizing “code” for copyright including limitations and exceptions, see http://www.copyrightcode.eu/index.php?websiteid=3

103 Dinwoodie, in Kur ed. The Structure of IP, p. 13 (arguing that the Post-TRIPs trend in international intellectual property law has “disrupted” the low protection/national autonomy basis of the 19th century model, triggering increasing demands that “the substantive pressures created by minimum standards that are more real and less minimal need to be countered by ceilings that constrain in the other direction”); Martin, Overprotection, in Kur ed. The Structure of IP at 136-37, 144 (tracing the history of expansion as a justification for adoption of “fair use” rights in copyright and patent law).

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http://www.copyrightcode.eu/index.php?websiteid=3


especially with regards to trade over the internet and of follow-on innovations,104 as well as to promote access to the products of innovation and creativity. Limitations and exceptions are especially important in developing countries, which have, for example, long been vocal on the need for international copyright law to promote access to books and learning materials necessary for educational development.105 A final argument for the importance of including specific limitations and exceptions within FTAs is that they give implementing authorities guide essential posts for the creation of balanced implementing legislation. Creating international legal documents with highly specific rights provisions, and no counterbalancing guidelines on limitations and exceptions, can lead to the latter being inadequately considered in law reform processes.106


There are several major categories of limitations and exceptions that are now being promoted for international agreements and that should be considered in the TPP or any other international agreement on intellectual property.

i. Clarifying the 3-step testAs a subsequent agreement between parties of the Berne Convention and TRIPS,

the TPP provides an opportunity to clarify the application of the so-called 3-step test in Berne and TRIPS which restrains limitations and exceptions to rights.

What is called the “three step test” arises originally from the clause in Article 9(2) of the Berne Convention, added in 1967, to enable domestic legislation to limit the new international obligation to recognize a right of reproduction recognized in the Article.107 The clause states:

(2) It shall be a matter for legislation in the countries of the Union to permit the reproduction of such works in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.

Various forms of the article have re-appeared in multilateral agreements, including in four places in TRIPS with different formulations. In U.S. FTAs, the test is

104 Hugenholtz and Okediji, intro (positing that L&Es are needed to ““open up rapid advances in information and communication technologies that are fundamentally transforming the processes of production, dissemination and storage of information”); CCIA positive proposal, http://infojustice.org/wp-content/uploads/2012/03/CCIA-positive-proposal.pdf; Landes and Posder, An Economic Analysis of Copyright Law, 18 The Journal of Legal Studies 325

105 These concerns took center stage in the 1967 Stockholm Conference of the Berne Convention, and remain a key focus of the Development Agenda and the call for an international treaty on limitations and exceptions for educational purposes being considered at WIPO.

106 See Letter from International Academics to Colombia Legislature, infojustice.org107 See Hugenholtz and Okediji, 16-17.

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http://infojustice.org/wp-content/uploads/2012/03/CCIA-positive-proposal.pdf


frequently included as the main reference to limitations and exceptions, and operates as a restriction on their promulgation.

The 3 step test, as it is has been interpreted by several WTO panels, is the subject of robust academic criticism.108 A key problem is that the interpretation of the clause as creating three separate and “cumulative” “steps.” In this interpretation, the test requires each of the three steps to be considered independently and in order of their presentation so that the general balance of interests in the third “step” of the clause can only be considered after an analysis of whether the policy passes the first two “steps” (i.e. 1. being limited to special cases, and 2. not conflicting with normal exploitation of the right holder). This interpretation has been widely criticized as being formalistic and contrary to the general balance of private and public interest that should be at the heart of any limitations and exceptions analysis.

The Max Plank Institute declaration promoting A Balanced Interpretation of the “Three-Step Test” In Copyright Law argues that the best interpretation and implementation of the Three Step Test is as “a comprehensive overall assessment, rather than the step-by-step application that its usual, but misleading, description implies.”

No single step is to be prioritized. As a result, the Test does not undermine the necessary balancing of interests between different classes of rightholders or between rightholders and the larger general public. Any contradictory results arising from the application of the individual steps of the test in a particular case must be accommodated within this comprehensive, overall assessment.109

The Max Plank Declaration offers several principles for the reinterpretation of the Three Step Test that could be incorporated into the TPP:

1. The Three-Step Test constitutes an indivisible entirety.

The three steps are to be considered together and as a whole in a comprehensive overall

108 See, e.g., Geiger, Exploring the Flexibilities of the TRIPS Agreement’s Provisions on Limitations and Exceptions, in Kur ed. The Structure of Intellectual Property Law, 287-207; Martin Senftleben, Copyright, Limitations and the Three-Step Test in International and EC Copyright Law (2004); Kur, Of Oceans, Islands, and Inland Water – How Much Room for Exceptions and Limitations under the Three Step Test; Daniel Gervais, Towards a New Core International Copyright Norm: The Reverse Three-Step Test, 9 Marq. IP L Rev, 1 (2004); R. Cooper Dreyfuss, TRIPS—Round II: Should Users Strike Back?, 71 U. CHI. L. REV. 21 (2004); R. Cooper Dreyfuss & G. Dinwoodie, TRIPS and the Dynamics of Intellectual Property Lawmaking, 36 CASE W. RES. J. INT’L L. 95 (2004); Ruth Okediji, TRIPS Dispute Settlement and the Sources of (International) Copyright Law, 49 JCPS 585 (2001). See also South Centre, The TRIPS Agreement: A Guide for the South (Geneva,

November 1997), available at http://www.southcentre.org/publications/trips/tripsagreement.pdf

109 Max Plank Declaration (noting that “[t]he present formulation of the Three-Step Test does not preclude this understanding. However, this approach has often been overlooked in decided cases.“)

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assessment.

2. The Three-Step Test does not require limitations and exceptions to be interpreted narrowly. They are to be interpreted according to their objectives and purposes.

3. The Three-Step Test’s restriction of limitations and exceptions to exclusive rights to certain special cases does not prevent (a) legislatures from introducing open ended limitations and exceptions, so long as the scope of such limitations and exceptions is reasonably foreseeable; or (b) courts from - applying existing statutory limitations and exceptions to similar factual circumstances mutatis mutandis; or - creating further limitations or exceptions, where possible within the legal systems of which they form a part.

4. Limitations and exceptions do not conflict with a normal exploitation of protected subject matter, if they

- are based on important competing considerations or

- have the effect of countering unreasonable restraints on competition, notably on secondary markets,

particularly where adequate compensation is ensured, whether or not by contractual means.

5. In applying the Three-Step Test, account should be taken of the interests of original rightholders, as well as of those of subsequent rightholders.

6. The Three-Step Test should be interpreted in a manner that respects the legitimate interests of third parties, including

- interests deriving from human rights and fundamental freedoms;

- interests in competition, notably on secondary markets; and

- other public interests, notably in scientific progress and cultural, social, or economic development.

Another alteration of the three-step test toward the interest of those relying on limitations and exceptions to rights is to make the clause a mandatory floor rather than a limiting ceiling. Technology companies have proposed, for example, that the clause be amended to state that countries “shall” make exceptions that meet the terms of the test:

Each Party shall provide for limitations or exceptions to rights in special cases which do not conflict with a normal exploitation of the work, performance, or phonogram, and do not unreasonably prejudice the legitimate interests of the right holder.110

ii. Open-ended limitation and exceptions The same context of unprecedented growth and change in communication and

information technologies that has motivated the alteration of international and domestic copyright protections for rights holders demands more attention to the

110 CCIA proposal, infojustice.org

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needs of competitors and users who rely on limitations and exceptions. The potential for reform creates opportunity to modernize and expand limitations and exceptions to serve a variety of public interest purposes, including harnessing of the digital environment to promote the attainment of educational, informational, and business innovation (economic development) goals. Toward these latter public purposes, a key issue that reforms need to address is how to best enshrine limitations and exceptions that are open and flexible to adapt to changing technology and social and economic contexts – so that the technological advance that happens five years from now will not be hampered by a system that did not foresee its arrival.

The proposal of technology companies offered the following language to insert into the exceptions and limitations section of the TPP:

Such exceptions and limitations shall permit the utilization of works and other subject-matter to the extent justified by the purpose of free expression (including commentary, criticism, and news reporting), participation in the cultural life of the community, transformative use, teaching, research, scholarship, personal use, and the functioning of, and innovation in, the digital environment, provided that such utilization is consistent with fair practice.111

Rights shall not extend to the utilization of works and other subject-matter protected under this chapter to the extent justified by the public interest

legitimate governmental purpose the purpose of free expression (including commentary, criticism, and news reporting), participation in the cultural life of the community, transformative use, teaching, research, scholarship, personal use, and the functioning of, and innovation in, the digital environment, provided that such utilization .112

This provision is carefully crafted to look very similar to many exceptions that one can see in almost any copyright law. But by including broad ends such as “free expression,” “transformative use” and “innovation in the digital environment” as potential triggers for exceptions, it would allow (indeed require) exceptions in other countries to have the best feature of U.S.-style “fair use” — which is its ready adaptability to changing technologies and circumstances without requiring changes in statutory law.

The lack of such flexibility is a real problem in many countries with “closed list” systems with specifically enumerated, and often very narrow, limitations. PIJIP and the Institute on Information Law (IVIR) in Amsterdam hosted a recent workshop where we reviewed the laws of 14 countries from around the world and found that

111 http://infojustice.org/archives/8662112 http://infojustice.org/archives/8662

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nearly every one of them, in the opinion of copyright scholars from their countries, lacked exceptions that could be interpreted to allow important modern digital activities, such as the making available of digital copies of library collections and creation and dissemination of user-generated content that transforms copyrighted work. The subject was also discussed in the inaugural Global Congress on and the Public Interest, whose Washington Declaration on Intellectual Property and the Public Interest called for “discussion of employing ‘open-ended’ limitations in national copyright legislation, in addition to specific exceptions.”

iii. Access for persons with disabilitiesOne interest not explicitly mentioned in the CCIA proposal for an open-ended

limitation and exceptions is that of people with disabilities. If it is the goal of the TPP to endorse a new TRIPS-plus IP framework for the 21st century, it should include mechanisms that will push forward the debates at the multilateral level on a treaty for the blind and visually impaired. KEI has proposed, for example, that TPP include “a provision to permit the cross-border exchange of accessible format works for persons who are visually impaired or otherwise disabled.”113

I. Arts. 4.9(a), 16.3 – Technological Protection Measures

In order to provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that authors, performers, and producers of phonograms use in connection with the exercise of their rights and that restrict unauthorized acts in respect of their works, performances, and phonograms, each Party shall provide that any person who:

(i) circumvents without authority any effective technological measure that controls access to a protected work, performance, phonogram, or other subject matter; or

(ii) manufactures, imports, distributes, offers to the public, provides, or otherwise traffics in devices, products, or components, or offers to the public or provides services, that:

(A) are promoted, advertised, or marketed by that person, or by another person acting in concert with that person and with that person’s knowledge, for the purpose of circumvention of any effective technological measure,

(B) have only a limited commercially significant purpose or use other than to circumvent any effective technological measure, or

(C) are primarily designed, produced, or performed for the purpose of enabling or facilitating the circumvention of any effective technological measure,

113 http://keionline.org/sites/default/files/TPP_Copyright_KEI2Weisel_26june2012.pdf (explaining “it can be difficult to exchange works across borders even where similar limitations and exceptions exist. Permitting cross-border exchange of these works would expand the availability of accessible format works. In addition, it would increase the availability of accessible format works in other languages.”)

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WCLUSER, 06/23/12,

Add discussion of ccia proposal. Would WIPO copyright treaty standard be better? Add discussion of issue from CIPD report and UNCTAD/ICTSD handbook.

http://keionline.org/sites/default/files/TPP_Copyright_KEI2Weisel_26june2012.pdf


shall be liable and subject to [criminal] remedies

. . .

(c) Each Party shall provide that a violation of a measure implementing this paragraph is a separate cause of action, independent of any infringement that might occur under the Party’s law on copyright and related rights.

(d) Each Party shall confine exceptions and limitations to measures implementing subparagraph (a) to the following activities, . . .

(i) [reverse engineering activities of a computer program”for the sole purpose of achieving interoperability”];

(ii) [activities by researcher on flaws and vulnerabilities of technologies for scrambling and descrambling];

(iii) [preventing access of minors to inappropriate online content];

(iv) [testing, investigating, or correcting the security of that computer, computer system, or computer network];

(v) [disabling a capability to carry out undisclosed collection or dissemination of personally identifying information];

(vi) [law enforcement, intelligence, essential security, or similar];

(vii) [nonprofit library, archive, or educational institution for the sole purpose of making acquisition decisions]; and

(viii) noninfringing uses of a work, performance, or phonogram in a particular class of works, performances, or phonograms when an actual or likely adverse impact on those noninfringing uses is demonstrated in a legislative or administrative proceeding by substantial evidence; provided that any limitation or exception adopted in reliance upon this clause shall have effect for a renewable period of not more than three years from the date of conclusion of such proceeding.

1. Analysis

TPP Art. 4.9 proposes to require all TPP countries to adopt a specific legal regime for the criminal punishment of individuals that circumvent technological protection measures (sometimes referred to as “digital locks”), regardless of whether such circumvention is effected for a use that is itself protected by copyright. By removing the link between illegal circumvention and copyright violation, the proposal goes far beyond the requirements of the WPPT, existing U.S. free trade agreements and the bounds of U.S. law.

The issue arises from the growing trend among distributors of digital copies of music, movies books and other content, as well as with the publication of content on-line, to impose access restrictions on the work through an encryption or other technology. As described by the CIPR:

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This sophisticated form of technological protection rescinds traditional “fair use” rights to browse, share, or make private copies of copyrighted works in digital formats, since works may not be accessible without payment, even for legitimate uses. For developing countries, where Internet connectivity is limited and subscriptions to on-line resources unaffordable, it may exclude access to these materials altogether and impose a heavy burden that will delay the participation of those countries in the global knowledge-based society.

The WIPO Copyright Treaty first introduced an international standard for its members to provide:

adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law.114

It is important that this provision, although controversial when enacted, included important flexibilities tying anti-circumvention remedies to copyright infringement. The article specifically requires remedies for circumvention of digital locks only “in connection with the exercise of [authors’] rights under this Treaty or the Berne Convention,” and only to prevent acts not “permitted by law.” Accordingly, a country can implement this obligation with an exception for the circumvention of locks for any purpose protected by the country’s copyright law. The WPPT also does not require that the remedies provided be through the criminal law.115

U.S. law is currently unclear on whether the assignment of liability for circumvention can arise independent of a violation of copyright in the use of the underlying work. The U.S. Digital Millennium Copyright Act (DMCA) of 1998 implemented the U.S. ratification of the WCT with a more far reaching prohibition, including use of criminal penalties and extension of liability to those who make or traffic in devices “primarily designed or produced for the purpose of circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner.” But the influential Federal Circuit Court of Appeals has rejected a proposed construction of the DMCA that owners of a copyright may “hold circumventors liable under under 1201(a) merely for accessing that work, even if

114 WCT Art. 11.115 See Int’l Ctr. For Trade & Sustainable Dev., Resource Book on TRIPS and Development: An

authoritative and practical guide to the TRIPS Agreement 160 (2004), available at http://ictsd.org/downloads/2008/06/rb_21-213_copyright_update.pdf (explaining that “adequate legal protection” under WCT art. 11 “is to be determined by national legislation, according to national preferences” and therefore it is up to each country “. . . to judge in which degree encryption technologies are justified, and to which extent cases of fair use should prevail.”).

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http://ictsd.org/downloads/2008/06/rb_21-213_copyright_update.pdf


that access enabled only rights that the Copyright Act grants to the public.”116 The court explained its reasoning in part on the inclusion in the DMCA limitation and exceptions saving clause not found in the U.S. TPP proposal:

Such a regime would be hard to reconcile with the DMCA's statutory prescription that “[n]othing in this section shall affect rights, remedies, limitations, or defenses to copyright infringement, including fair use, under this title.” A provision that prohibited access without regard to the rest of the Copyright Act would clearly affect rights and limitations, if not remedies and defenses.”

Despite the lack of clarity in U.S. law, the U.S. TPP proposal appears to require member countries to recognize liability for circumvention of TPMs regardless of rights to use the underlying content. This follows from several provisions not reflected in U.S. law, namely:

Section (c), requiring that parties “provide that a violation of a measure implementing this paragraph is a separate cause of action, independent of any infringement that might occur under the Party’s law on copyright”

Section (d), requiring that “each Party shall confine exceptions and limitations to measures implementing subparagraph (a) to the following activities, . . .”

As phrased in the U.S. proposal, TPM provisions would appear to have the ability to negate important limitations and exceptions included in a country’s own law, including the right to quote copyrighted work (e.g. a quote of a song or video clip in a documentary film), to use content for protected educational purposes, to shift the format of a work to one accessible for people with disabilities or for an alternative device,117 to transform copyrighted work into a new work that does infringe the underlying copyright, or other purposes. Such an antircumvention law could also sacrifice the first sale doctrine,118 and essentially create an indefinite term of protection.119

U.S. law does not contain any requirement that Congress “confine” limitations and exceptions to those originally passed in 1998. Adopting this standard would restrict countries from developing their own exceptions to liability not based on

116 Chamberlain Group Inc., v. Skyling Technologies, Fed. Cir. (“A copyright owner seeking to impose liability on an accused circumventor must demonstrate a reasonable relationship between the circumvention at issue and a use relating to a property right for which the Copyright Act permits the copyright owner to withhold authorization-as well as notice that authorization was withheld.”).

117 Some technological protections can forbid playing on a device running open source software, for example.

118 CIPR, at … (“[i]n the case of a book you are free to resell it to someone else – technological protection may prevent the equivalent digital act.”).

119 Id. ( “technological protection is indefinite, whereas copyright is time limited.”).

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present U.S. law, as it is allowed under Art. 11 of the WIPO Copyright Treaty (WCT).

There are other variations with U.S. law, including:

Whereas DMCA § 1201(a)(2)(C) prohibits products “marketed” for use in circumventing a technological protection measure,120 TPP Art. 4.9(a)(ii)(A) extends to products that are “promoted, advertised” for this purpose.

DMCA § 1201(a)(2)(A) extends only to products designed “for the purpose of circumventing,” while the TPP 4.9(a)(ii)(C) extends to any product “for the purpose of enabling or facilitating the circumvention,” a potentially broader standard.121 This also goes beyond ACTA Art. 27.6(a)(ii).122

Art. 4.9(a), by virtue of the requirement to include “the remedies and authorities listed in subparagraphs (a), (b), and (f) of Article [15.5] as applicable to infringements,” requires “the imposition of actual terms of imprisonment when criminal infringement is undertaken for commercial advantage or private financial gain.” This is inconsistent with 17 U.S.C. § 1204, which permits fines or imprisonment for violations of anti-circumvention standards.123

Art. 4.9(d)(viii) imposes a “substantial evidence” standard for approving new limitations and exceptions to the circumvention provisions, and implies that this evidence would be the only factor in the determination.124 These are not current U.S. law requirements. As explained by Jodie Griffin of Public Knowledge, the U.S. Library of Congress currently grants exemptions to U.S. anti-circumvention restrictions where there is “sufficient evidence” of a substantial adverse

120 17 U.S.C. § 1201(a)(2)(C) (prohibiting product, service, device, component, or part thereof that “is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title.”).

121 Griffin, supra note 16..122 ACTA, supra note 13, Art. 27.6(a)(ii) (prohibiting “the offering to the public by marketing of a

device or product, including computer programs, or a service, as a means of circumventing an effective technological measure.”).

123 Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP) Agreement and US Law, PUBLIC KNOWLEDGE , www.publicknowledge.org/files/TPP%20Analysis.pdf

124 TPP, supra note 10, Art. 4.9(d)(viii) (permitting exceptions for “noninfringing uses of a work, performance, or phonogram in a particular class of works, performances, or phonograms when an actual or likely adverse impact on those noninfringing uses is demonstrated in a legislative or administrative proceeding by substantial evidence; provided that any limitation or exception adopted in reliance upon this clause shall have effect for a renewable period of not more than three years from the date of conclusion of such proceeding.”).

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effect on non-infringing uses, and has noted that “how much evidence is sufficient will vary,” and “is never the only consideration in the rulemaking process.”125

new anti-circumvention standards that go beyond the high and controversial standards included in the Anti-Counterfeiting Trade Agreement (ACTA, Art. 27.6(a)(i)), and KORUS (Art. 18.4.7(a)(i)), and are not fully consistent with current U.S. law.

Policies governing the creation or use of circumvention technology must be carefully crafted to avoid dampening technological innovation and freedom of speech. There are many lawful and appropriate uses of technologies that permit copying of digitally locked material. Documentary filmmakers, for example, may use such devices to lawfully quote other films in their new works. And it is lawful under U.S. law to “jailbreak” a locked phone to run software not authorized by the hardware seller.

The ACTA and KORUS anti-circumvention standards are very strong and controversial forms of these norms. The TPP proposal is also more extreme than other FTAs. For example it , eliminates the norm in other FTAs that require remedies only for a ing from these standards the requirement that any punished punishable use of circumvention that equipment occurs “knowingly or having reasonable grounds to know” that the action is illegal.126 ACTA more broadly permits parties to “adopt or maintain appropriate limitations or exceptions” to anti-circumvention liability and clarifies that circumvention liability obligations are “without prejudice to the rights, limitations, exceptions, or defences to copyright or related rights infringement under a Party’s law.”127 The TPP standard would thus appear to allow the punishment of circumvention of technical protection measures regardless of any intent to infringe copyright. The TPP also removes the proviso in ACTA that the minimum standards only apply only to anti-circumvention measures “to the extent provided by its law,” -- which is a potentially broad exception allowing countries without such protection in their current law to continue not providing such protections.

2. Positive Proposals

3. The TPP proposal is not entirely consistent with U.S. law.

125 Griffin, supra note 16 (quoting 73 Fed. Reg. 58075). 126 ACTA, supra note 13, Art. 27.6(a)(i) (prohibiting “the unauthorized circumvention of an

effective technological measure carried out knowingly or with reasonable grounds to know.”).127 ACTA, supra note 13, Art. 27.8.

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4. Whereas DMCA § 1201(a)(2)(C) prohibits products “marketed” for use in circumventing a technological protection measure,128 TPP Art. 4.9(a)(ii)(A) extends to products that are “promoted, advertised” for this purpose.

5. DMCA § 1201(a)(2)(A) extends only to products designed “for the purpose of circumventing,” while the TPP 4.9(a)(ii)(C) extends to any product “for the purpose of enabling or facilitating the circumvention,” a potentially broader standard.129 This also goes beyond ACTA Art. 27.6(a)(ii).130

6. Art. 4.9(a), by virtue of the requirement to include “the remedies and authorities listed in subparagraphs (a), (b), and (f) of Article [15.5] as applicable to infringements,” requires “the imposition of actual terms of imprisonment when criminal infringement is undertaken for commercial advantage or private financial gain.” This is inconsistent with 17 U.S.C. § 1204, which permits fines or imprisonment for violations of anti-circumvention standards.131

If countries deem it necessary to include anti-circumvention measures in TPP, the best course would be to repeat or reference Article 11 of the WPPT, combined with a clear statement authorizing limitations and exceptions similar to those which exist in U.S. court decisions and in ACTA. For example, the provision would read, in its entirety:

To the extent provided by its law, each party shall provide:132

(a) Adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law.133

(b) appropriate limitations or exceptions to measures implementing the provisions of paragraph (a). The obligations set forth in paragraph(a) are without prejudice to the rights, limitations, exceptions, or defenses to copyright or related rights infringement

128 17 U.S.C. § 1201(a)(2)(C) (prohibiting product, service, device, component, or part thereof that “is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title.”).

129 Griffin, supra note 16.Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP) Agreement and US Law, PUBLIC KNOWLEDGE , www.publicknowledge.org/files/TPP%20Analysis.pdf.

130 ACTA, supra note 13, Art. 27.6(a)(ii) (prohibiting “the offering to the public by marketing of a device or product, including computer programs, or a service, as a means of circumventing an effective technological measure.”).

131 Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP) Agreement and US Law, PUBLIC KNOWLEDGE , www.publicknowledge.org/files/TPP%20Analysis.pdf

132 ACTA133 WPPT Art. 11

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under a Party’s law.134 No person may be held liable under the standards in paragraph (a) merely for accessing a work if that access enabled only uses that are permitted by the Party’s Copyright law.135

Art. 4.9(d) – Exceptions and Limitations

TPP Art. 4.9 proposes confining limitations and exceptions to circumvention liability to a set of provisions that are similar to, but not identical to, the various exceptions and limitations in DMCA § 1201.136 Adopting this standard would restrict countries from developing their own exceptions to liability not based on present U.S. law, as it is allowed under Art. 11 of the WIPO Copyright Treaty (WCT).137 ACTA more broadly permits parties to “adopt or maintain appropriate limitations or exceptions” to anti-circumvention liability and clarifies that circumvention liability obligations are “without prejudice to the rights, limitations, exceptions, or defences to copyright or related rights infringement under a Party’s law.”138

The TPP proposal does not track the DMCA limitations in every detail. Importantly, Art. 4.9(d)(viii) raises the evidentiary standard currently applied in U.S. law to develop anti-circumvention exceptions. As explained by Jodie Griffin of Public Knowledge, the U.S. Library of Congress currently grants exemptions to U.S. anti-circumvention restrictions where there is “sufficient evidence” of a substantial adverse effect on non-infringing uses, and has noted that “how much evidence is sufficient will vary,” and “is never the only consideration in the rulemaking process.”139 TPP Art. 4.6(viii) raises the standard from “sufficient evidence” to “substantial evidence” and implies that this evidence would be the only factor in the determination.140

134 ACTA135 Fed. Cir. 136 See TPP, supra note 10, Art. 4.9(d) (providing that parties “shall confine exceptions and

limitations to measures implementing subparagraph (a) to the following activities”).137 See World Intellectual Property Organization Copyright Treaty art. 11, Dec. 20, 1996, 36 I.L.M.

65 (1997) [hereinafter WCT] (enumerating that “Contracting Parties shall provide adequate legal protection an effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law.”); see also Int’l Ctr. For Trade & Sustainable Dev., Resource Book on TRIPS and Development: An authoritative and practical guide to the TRIPS Agreement 160 (2004), available at http://ictsd.org/downloads/2008/06/rb_21-213_copyright_update.pdf (explaining that “adequate legal protection” under WCT art. 11 “is to be determined by national legislation, according to national preferences” and therefore it is up to each country “. . . to judge in which degree encryption technologies are justified, and to which extent cases of fair use should prevail.”).

138 ACTA, supra note 13, § 5, Art. 27.8.139 Griffin, supra note 16 Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP)

Agreement and US Law, Public Knowledge, www.publicknowledge.org/files/TPP%20Analysis.pdf (quoting 73 Fed. Reg. 58075).

140 TPP, supra note 10, Art. 4.9(d)(viii) (permitting exceptions for “noninfringing uses of a work, performance, or phonogram in a particular class of works, performances, or phonograms when an actual or likely adverse impact on those noninfringing uses is demonstrated in a legislative or administrative proceeding by substantial evidence; provided that any limitation or exception

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WCLUSER, 06/23/12,

Add discussion of ccia proposal. Add discussion from L&E network and present chart from Amsterdam meeting

http://ictsd.org/downloads/2008/06/rb_21-213_copyright_update.pdf


J. Art. 4.10 – Rights Management Information

Each Party shall provide that any person who without authority, and knowing, or, with respect to civil remedies, having reasonable grounds to know, that it would induce, enable, facilitate, or conceal an infringement of any copyright or related right,

(i) knowingly removes or alters any rights management information;

(ii) distributes or imports for distribution rights management information knowing that the rights management information has been removed or altered without authority; or

(iii) distributes, imports for distribution, broadcasts, communicates or makes available to the public copies of works, performances, or phonograms, knowing that rights management information has been removed or altered without authority,

shall be liable and subject to the remedies set out in Article [12.12 Each Party shall provide for criminal procedures and penalties to be applied when any person, other than a nonprofit library, archive, educational institution, or public noncommercial broadcasting entity, is found to have engaged willfully and for purposes of commercial advantage or private financial gain in any of the foregoing activities. Such criminal procedures and penalties shall include the application to such activities of the remedies and authorities listed in subparagraphs (a), (b) and (f) of Article [15.5] as applicable to infringements, mutatis mutandis.141

(b) each Party shall confine exceptions and limitations to measures implementing subparagraph (a) to lawfully authorized activities carried out by government employees, agents, or contractors for the purpose of law enforcement, intelligence, essential security, or similar governmental purposes.

1. Analysis

TPP Art. 4.10 proposes a new regime of protection of rights management information, an issue not required to be addressed by any multilateral intellectual property agreement. The carve out for limitations and exceptions is incredibly narrow that lowers the threshold for violation and expands the scope of prohibited activities. – only allowing the alteration of RMI for law enforcement purposes. ACTA, on the other hand, allows the protection of rights management information to be subject to the full scope of limitations and exceptions recognized under the parties’ laws.

proposes that the discipline on rights management information policies be The standard proposed goes beyond the standards of other TRIPS-plus agreements, including both similar TRIPS-plus provisions in KORUS and , ACTA, and DMCA..142

The TPP proposal also includes provisions that go beyond U.S. law. For example,

adopted in reliance upon this clause shall have effect for a renewable period of not more than three years from the date of conclusion of such proceeding.”).

141 Enter quotes form article 15.5 (a), (b) and (f).142 See 17 U.S.C. § 1202; ACTA Art. 27.7; KORUS Art. 18.4.8(a).

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Current U.S. statutory law does not only prohibits the distribution, importation or public performance of works knowing that rights management information has been removed or altered. 143 The TPP proposal also prohibits a person from broadcasting, communicating, or making available the work to the public.144 It is noteworthy that the “making available” standard is in other U.S. free trade agreements and in the WIPO copyright treaties, but is not reflected in U.S. law.

The definition of “rights management information” in TPP Art. 4.10(c) is similar to that in the DMCA, except it specifically omits the exception for “public performances of works by radio and television broadcast stations” in DMCA §§ 1202(c)(4),(5).145


Limitation of the norms in the TPP to areas governed under current multilateral agreements would eliminate this provision.

A provision crafted to adhere to both the contours of U.S. law and to the parallel provision in ACTA would read:

To the extent provided by its law, each Party shall provide:

(a) adequate legal protection and effective legal remedies against any person knowingly performing without authority any of the following acts knowing, or with respect to civil remedies, having reasonable grounds to know, that it will induce, enable, facilitate, or conceal an infringement of any copyright or related rights:

(i) to remove or alter any electronic rights management information;

(ii) to distribute, import for distribution, broadcast, communicate, or make available to the public copies of works, performances, or phonograms, knowing that electronic rights management information has been removed or altered without authority.

143 17 U.S.C. § 1202(b)(3) (“distribute, import for distribution, or publicly perform works, copies of works, or phonorecords, knowing that copyright management information has been removed or altered without authority of the copyright owner or the law.”).

144 See Griffin, supra note 16; 17 U.S.C. § 1202(b)(3) (“distribute, import for distribution, or publicly perform works, copies of works, or phonorecords, knowing that copyright management information has been removed or altered without authority of the copyright owner or the law.”)..Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP) Agreement and US Law, Public Knowledge, www.publicknowledge.org/files/TPP%20Analysis.pdf

145 17 U.S.C. §§ 1202(c)(4), (5) (“(4) With the exception of public performances of works by radio and television broadcast stations, the name of, and other identifying information about, a performer whose performance is fixed in a work other than an audiovisual work. (5) With the exception of public performances of works by radio and television broadcast stations, in the case of an audiovisual work, the name of, and other identifying information about, a writer, performer, or director who is credited in the audiovisual work.”). See Griffin, supra note 16.Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP) Agreement and US Law, Public Knowledge, www.publicknowledge.org/files/TPP%20Analysis.pdf

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(b) appropriate limitations or exceptions to measures implementing the provisions of paragraph (a). The obligations set forth in paragraph(a) are without prejudice to the rights, limitations, exceptions, or defenses to copyright or related rights infringement under a Party’s law.146 No person may be held liable under the standards in paragraph (a) for any alteration of rights management information for a purpose permitted the country’s laws.147

3.

4. Art. 5 – “Making available”

TPP Art. 5 would require each party to provide the exclusive right to prohibit the “making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chose by them.” There is a circuit split on the issue of whether §106(3) of the U.S. Copyright Act includes a “making available” right absent actual transfer.148

K. Art. 6: Related Rights

TPP Art. 6 incorporates various provisions from the WIPO Performances and Phonograms Treaty (WPPT)149 and KORUS. There are some provisions that exceed even these agreements.

TPP Art. 6.1 closely resembles KORUS Art. 18.6.1 but adds the last sentence, “[a] performance or phonogram shall be considered first published in the territory of a Party in which it is published within 30 days of its original publication.”

TPP Art. 6.3 adds to KORUS Art. 18.6.3 and WPPT Art. 10 “producers of phonograms” in addition to performers.

TPP Art. 6.5 alters the KORUS definition of “broadcasting” by adding that it does not include transmissions over computer networks or any transmission where the time and place of reception may be individually chosen by members of the public (e.g. Netflix, Hulu). The U.S. Copyright Act does not include this definition.150

Patents

Arts. 8.1, 8.12 FN 15 – Easing and Expanding Standards of Patentability

TPP Art. 8.1 contains a controversial TRIPS-plus provision, most relevant to 146 ACTA147 Fed. Cir. 148 Griffin, supra note 16.Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP)

Agreement and US Law, Public Knowledge, www.publicknowledge.org/files/TPP%20Analysis.pdf149 World Intellectual Property Organization Performances and Phonograms Treaty, adopted by

Diplomatic Conference at Geneva, Dec. 20, 1996, 36 I.L.M. 76 [WPPT].150 See Griffin, supra note 16.Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership

(TPP) Agreement and US Law, Public Knowledge, www.publicknowledge.org/files/TPP%20Analysis.pdf

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pharmaceutical patents, that the scope of patentability include “any new forms, uses, or methods of using a known product; and a new form, use, or method of using a known product . . . , even if such invention does not result in the enhancement of the known efficacy of that product”. This language goes far beyond definition of patentability contained in TRIPS Art. 27.1, which merely states that “patents shall be available for any inventions, whether products or processes, in all fields of technology provided that they are new, involve an inventive step and are capable of industrial applicability.”151

Art. 8.1 could require countries to open flood gates to patent applications on minor modifications or variations of existing chemical entities; on new uses or methods of using existing medicines,152 or on new formulations, dosages, and combinations.153

Countries would be required to do so even if there is no enhancement of therapeutic efficacy – indeed there could be a decrease in therapeutic effect. Each new patent on new forms, uses, or formulation of an existing medical product will result in a new 20-year patent running from the date of patent application, thereby “evergreening” monopoly rights on the underlying medical product.154

TPP Art. 8.1 is inconsistent with the laws of other TPP negotiating countries, including Australia, Malaysia, and Vietnam.155 But the most direct target of the section is probably India, although India is not a TPP party.156 The TPP proposal is

151 TPP, supra note 10, Art. 8.1 also goes beyond KORUS, supra note 12, Art. 18.8.1, which altered that TRIPS standard by adding “each Party confirms that patents shall be available for any uses or methods of using a known product.”

152 See Graciela Andrei et al, Topical Tenofovir, a Microbicide Effective against HIV, Inhibits Herpes Simplex Virus-2 Replication, 10 CELL HOST & MICROBE, 379-89 (2011) ( describing use of tenofovir, and AIDS drug, to treat hepatitis for herpes simplex virus-2 prophylaxis).

153 eE.g., heat-stable ritonavir/lopinavir or extended release formulations.154 For example, since the filing of the original patent application on ritonavir in 1980 there have

been over 800 families of ever-greening patent applications, most first filed in the U.S. Those patent applications filed in 2009 will extend exclusivity period from the original 2000 date to 2029 – twenty-nine extra years and counting. See World Intellectual Property Organization, PATENT LANDSCAPE REPORT ON RITONAVIR (2011), available at http://www.wipo.int/export/sites/www/patentscope/en/programs/patent_landscapes/reports/documents/ritonavir_plr_08112011_with_old_cover.pdf. Note, some of the ritonavir patents filed are process rather than product patents.

155 See Dangers for Access to Medicines in the Trans-Pacific Partnership Agreement: Comparative Analysis of the U.S. Intellectual Property Proposal and Australian Law, PUBLIC CITIZEN , [hereinafter Public Citizen TPP-Australian Law Comparison], available at http://www.citizen.org/Page.aspx?pid=5025&frcrld=1; Dangers for Access to Medicines in the Trans-Pacific Partnership Agreement: Comparative Analysis of the U.S. Intellectual Property Proposal and Malaysian Law, PUBLIC CITIZEN , [hereinafter Public Citizen TPP-Malaysian Law Comparison], available at http://www.citizen.org/documents/Malaysia-chart.pdf; Vietnam and the Trans-Pacific Partnership Agreement: Access to Medicines Risk for a PEPFAR Partner, PUBLIC CITIZEN & HEALTH GAP , available at http://www.citizen.org/documents/Vietnam-and-the-Trans-Pacific-Partnership-Agreement.pdf.

156 Public Citizen, Health GAP, I-MAK & Third World Network, Briefing Memo: Analysis of the

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clearly drafted to counter the policy embodied in the 2005 Amended India Patents Act section 3(d)157, which prohibits the granting of patents for “the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such process results in a new product or employs at least one new reactant.” India’s section 3(d) was enacted to reduce ever-greening of pharmaceutical patents, and is widely recognized as a pro-public health and TRIPS-compliant exception to patentability.158 It has been offered as a model for other developing countries to follow.159

Art. 8.2 – Eliminating Exclusions from Scope of Patentable Subject Matter

In direct contradiction to TRIPS Art. 27.3, TPP Art. 8.2 would require that “each party shall make patents available for . . . (a) plants and animals, and; (b) diagnostic, therapeutic, and surgical methods for the treatment of humans or animals.” The application of patents to these areas, mirrored in KORUS Art. 18.8.2,160 is expressly contrary to the right to exclude patents on such subject matter found in TRIPS Art. 27.3.161 TPP aArt. 8.2 is also contrary to the actual practice of U.S. law which allows

Leaked U.S. Paper on Eliminating Patent Pre-Grant Opposition, PUBLIC CITIZEN (July 7, 2011), available at http://www.citizen.org/documents/analysis-of-leaked-US-paper-on-eliminating-pregrant-opposition.pdf.

157 The Patents (Amendment) Act, 2005, No. 15, Acts of Parliament, 2005, § 3, India Code (2005).U

158 MSF, MSF CAMPAIGN FOR ACCESS TO ESSENTIAL MEDICINES, TPP ISSUE BRIEF – SEPTEMBER 2011 , [hereinafter MSF TPP Issue Brief] available at http://www.doctorswithoutborders.org/press/2011/MSF-TPP-Issue-Brief.pdf; see Janice M. Mueller, The Tiger Awakens: The Tumultuous Transformation of India’s Patent System and the Rise of Indian Pharmaceutical Innovation, 68 U. PITT. L. REV. 491 (2007); Amy Kapczynski, Harmonization and its Discontent: A Case Study of TRIPS Implementation in India’s Pharmaceutical Sector, 97 CAL. L. REV . 1571-1650 (2009); Sudip Chaudhuri, Chan Park & K. M. Gopakumar, FIVE YEARS INTO THE PRODUCT PATENT REGIME: INDIA’S RESPONSE (2010), available at apps.who.int/medicinedocs/documents/s17761en/s17761en.pdf.Caailable at http://www.iprsonline.org/resources/ docs/Correa_Patentability%20Guidelines.pdf (drawing on sec. 3(d), and recommendingping countri.

159 Carlos Correa, Guidelines for the Examination of Pharmaceutical Patents: Developing a Public Health Perspective 6–25 (Jan. 2007), available at http://www.iprsonline.org/resources/ docs/Correa_Patentability%20Guidelines.pdf (drawing on sec. 3(d), and recommending that developing countries adopt comparable strict patentability standards, e.g., that they treat new formulations, compositions, salt patents, and enantiomers as obvious and/or as exceptions to patentability).

160 KORUS, supra note 12, Art. 18.8.2 (preventing the exclusion of “diagnostic, therapeutic, and surgical procedures for the treatment of humans or animals.”).

161 TRIPS, supra note 24, Art. 27.3 (emphasis added) (which provides that “[m]embers may also exclude from patentability : (a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals; (b) plants and animals other than micro-organisms, and essentially biological

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patents on medical procedures but precludes use of such patents to seek remedies against medical practitioners.162 The provision runs counter to the current law in several TPP member countries.163

Art. 8.7 – Limiting Revocation and Eliminating Pre-Grant Opposition

TPP aArt. 8.7 contains TRIPS-plus restrictions on the grounds for patent revocation and on processes for permitting pre-grant opposition of patent applications.

TRIPS Art. 32 requires “[a]n opportunity for judicial review of any decision to revoke or forfeit a patent.” The TPP proposal, modeled on KORUS Art. 18.8.4, restricts the grounds upon which a patent may be revoked to “grounds that would have justified a refusal to grant the patent,” and specifies that such grounds to include fraud, misrepresentation or inequitable conduct. Under TRIPS aArt. 32 there are no limitations on grounds for revocation, only a requirement of judicial review; likewise under the earlier Paris Convention, countries have the right to revoke a patent, including specifically for any abuse of the patent that cannot be remedied through a compulsory license.164

TPP Art. 8.7 additionally restricts the use of pre-grant oppositions. It provides that if proceedings permit a third party to oppose the grant of a patent, the “Party shall not make such proceedings available before the grant of the patent.” Pre-grant oppositions allow opportunities to contest a patent as it is filed, providing a potentially important source of information to patent examiners and generally improving patent quality.165 The U.S. has justified this restriction (in a leaked Memorandum) as in the interest of patent offices.166 The U.S. position and its

processes for the production of plants or animals other than non-biological and microbiological processes.

162 See 35 U.S.C. § 287(c).163 See PUBLIC CITIZEN & HEALTH GAP ( noting that the laws in “Vietnam and many other countries

exclude diagnostic, therapeutic and surgical methods from patentability.”); Public Citizen TPP-Australian Law Comparison (noting that the proposed language would eliminate a flexibility recognized by Art. 17.9.2 of AUSFTA); Public Citizen TPP-Malaysian Law Comparison (explaining that Section 13(1) of Malaysia’s Patents Act of 291 of 1983 “expressly excludes treatment by surgery or therapy and diagnostic methods on the living human or animal body from patent protection.”).

164 Paris Convention for the Protection of Industrial Property, Art. 5(A)(3).165 See Dietmar Harhoff, Frederic M Scherer, & Katrin Vopel, Erratum to “Citations, family size,

opposition and the value of patent rights”, 33:2 Research Policy 363, 363-64, Volume 33, Issue 2, March (2004), Pages 363-364 (noting that patents tested by opposition systems have greater value); Tahir Amin et al., Expert Review of Drug Patent Applications: Improving Health in the Developing World, 28:5 HEALTH AFFAIRS , 948, 951-52 (Aug. 25, 2009), available at http://content.healthaffairs.org/content/28/5/w948.full.pdf+html (arguing that pre=grant opposition systems lead to efficiency gains without causing problems of abuse of the system or rising costs of delay).

166 See Pre-Grant Opposition, PUBLIC CITIZEN , available at

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reasoning was promptly criticized by public health advocates as removing an important tool for “preventing patent applicants from gaining patent monopolies based on weak for erroneous information, for improving the quality and efficiency of patent office examinations, and for safeguarding access to medicines.”167

The U.S. TPP proposal would require change in Australia’s law, which already includes a pre-grant opposition system.168 As in other areas of the TPP, the clearest target of the proposal may be India. Adopting this proposal would prevent the countries of the TPP from adopting the kind of pre-grant opposition processes that India has found useful.169

Art. 8.9 – Unlimited Amendments to Patent Applications

Whereas Art. 8.7 makes it harder to challenge and revoke patent rights, aArt. 8.9 makes it much easier to successfully apply for them. Art. 8.9 forces countries to allow patent applicants to make multiple amendments to their patent claims prior to approval on the merits. TRIPS does not require Members to allow amendment of patent applications. KORUS Art. 18.8.8 includes a TRIPS-plus requirement to allow applicants at least one opportunity to make amendments, corrections, and observations in connection with their applications. The U.S. TPP proposal would make the number of amendments unlimited.

The interests of many patent offices will be best served by maximizing pre-grant oppositions and minimizing opportunities to amend patent claims after they are filed. In such a system, companies have incentives to only file their strongest claims, leading to a lower volume of weak applications and stronger overall patent value.170

http://www.citizen.org/documents/Leaked-US-TPPA-paper-on-eliminating-pre-grant-opposition.pdf. (“A lengthy or onerous pre-grant patent opposition system place undue burdens on patent applicants and create additional costs to patent offices, thereby causing uncertainty and deterring innovators and enterprises that would otherwise bring innovative products and services to TPP partners.”).

167 Public Citizen, Health GAP, I-MAK & Third World Network, Briefing Memo: Analysis of the Leaked U.S. Paper on Eliminating Patent Pre-Grant Opposition, PUBLIC CITIZEN (July 7, 2011), available at http://www.citizen.org/documents/analysis-of-leaked-US-paper-on-eliminating-pregrant-opposition.pdf.; K.M. Gopakumar & Sanya R. Smith, IPR Provisions in FTAs: Implications for Access to Medicines, in INTELLECTUAL PROP. & ACCESS TO MED: PAPERS & PERSPECTIVES, WORLD HEALTH ORG. 141, 144 (2010) (criticizing the elimination of pre-grant opposition in U.S. FTAs).

168 Public Citizen TPP-Australian Law Comparison (commenting that the TPP proposal would proscribe the “pre-grant opposition [process] in Australia [which] improves patent quality with minimal interference to well-drafted patent applications.”).

169 See Shamnad Basheer, India’s Tryst With TRIPS: The Patents (Amendment) Act, 2005, 1 INDIAN J.L. & TECH. 15, 26; Peter Drahos, The Jewel in the Crown: India’s Patent Office and Patent-Based Innovation, in INTELLECTUAL PROPERTY POLICY REFORM 80, 95 (noting 150 pre-grant oppositions filed by Indian generic industry since 2005).

170 Cf. Dietmar Harhoff, Frederic M Scherer, & Katrin Vopel, supra note 95. Erratum to “Citations,

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Under the U.S. TPP proposal, applicants have more opportunities to game the system in their favor and can demand the elongation of processes. They can, for example, respond to a challenge or weakness in their application by adding entirely new claims. They will lack an incentive to make all possible claims in an initial completed application.171 Patent applicants will be rushed to file incomplete applications to gain priority dates over other potential inventors, and will not be penalized for filing incomplete or imperfect claims only to correct them after.

Art. 8.10 and Art. 8.11– Minimize Required Disclosure

TPP Arts. 8.10 and 8.11 reduce flexibility that countries have under TRIPS to design domestic patent disclosure standards. TPP Art. 8.10 and 8.11 require that a disclosure be considered sufficient if it “allows the invention to be made and used by a person skilled in the art, without undue experimentation.”172 This provision may impede flexibility in implementing TRIPS Art. 29.1’s permission for a disclosure standard requiring disclosure of the best mode for carrying out the invention. In addition, there could be other disclosure requirements of interest to TPP members, including “information concerning the applicant’s foreign applications and grants.”173 A country might also require, for example, that the description be sufficient to allow a person skilled in the art to be able to apply the technology in the country of the application. Or a country might want to condition approval of the application on disclosure of use of any traditional knowledge or genetic resources in order to facilitate access and benefit sharing.174 Finally, a country might require disclosure of the generic name of a pharmaceutical product that incorporates the

family size, opposition and the value of patent rights” Research Policy, Volume 33, Issue 2, March 2004, Pages 363-364 (finding that patents which are upheld in opposition procedures are particularly valuable).

171 A similar problem occurs as a result of TPP-2 Art. 9(8)(a), which makes the access window toll upon “commencement,” rather than completion, of the marketing approval process.

172 TPP, supra note 10, Art. 8.10. Without any TRIPS counterpart, TPP Art. 8.11 specifies that “Each Party shall provide that a claimed invention is sufficiently supported by its disclosure if the disclosure reasonably conveys to a person skilled in the art that the applicant was in possession of the claimed invention as of the filing date.” Cf. KORUS, supra note 12, Art. 18.8.10(a) (going further than TPP by requiring that a claim invention is sufficiently supported by its disclosure “if the disclosure allows a person skilled in the art to extend the teaching therein to the entire scope of the claim, thereby showing that the applicant does not claim subject matter which the applicant had not recognized and described or possessed on the filling date.”).

173 TRIPS, supra note 24, aArt. 29.2.174 See IUCN, DISCLOSURE REQUIREMENTS: ENSURING MUTUAL SUPPORTIVENESS BETWEEN THE WTO TRIPS

AGREEMENT AND THE CBD , available at . http://www.iprsonline.org/resources/docs/Disclosure_req_book.pdfhttp://www.iprsonline.org/resources/docs/Disclosure_req_book.pdf; http://www.iprcommission.org/papers/pdfs/final_report/Ch4final.pdfhttp://www.iprcommission.org/papers/pdfs/final_report/Ch4final.pdf.

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subject matter of the patent application to ease patent searches on medicines.

Art. 8.12 – Industrial Applicability/Utility

TPP Art. 8.12 imposes a weak, U.S.-centric definition of “industrial applicability” on TPP members. TRIPS Art. 27.1 fn. 5 permits Members to define “industrial application” to be synonymous with the term “useful,” and does not impose any other definition on the term. This was included to permit the U.S. to continue to implement its own standard of a very lax standard.175 TPP Art. 8.12 goes further, however, in exporting the lax U.S. standard, requiring that a claimed invention be considered industrially applicable “if it has a specific, substantial, and credible utility.”176 This weaker standard, based on U.S. law, could be used by firms to press for the patenting of “useful” ideas such as diagnostic, surgical, and therapeutic methods, new uses of known medicines, business methods, and research tools – the extension of patents to which in the U.S. is the subject of frequent academic critique. This provision appears to be designed to foreclose stricter “industrial applicability” standards that in some jurisdictions require a showing that the invention will result in an actual industrial product.177

Patent and Data-Related Rights

TPP-2 Art. 8.6 - Lengthening Patent Term to Compensate for Delays

TPP-2 Art. 8.6 would require TPP members to grant extensions of patent terms beyond the TRIPS 20-twenty year minimum patent term to compensate both for delays in patenting and in granting marketing approval. Patent term extensions delay the introduction of generic products into a market, maintaining monopoly protections and higher prices during the extension.

TRIPS Art. 33 requires a patent term of twenty years. TRIPS does not require extensions beyond the 20-twenty year life of a patent for delays in granting a patent or marketing approval. The 20-twenty year standard was developed in recognition of the known delays encountered through the examination process.

Mandatory patent term extensions have been a highly controversial aspect of the U.S. post-TRIPS U.S. trade agenda on pharmaceutical policy.178 As part of the May

175 See PUBLIC CITIZEN & HEALTH GAP ( commenting that the “U.S. patentability standard of specific, substantial and credible utility is more lenient than the industrial applicability standard used by Vietnam and many other countries.”); Public Citizen TPP-Malaysian Law Comparison (pointing out that TPP Art. 8.12 seeks to “impose the U.S. patentability test . . . [which is] broad enough to cover inventions without true industrial application.”).

176 The language is similar to KORUS Art. 18.8.10(b).177 See UNCTAD-ICTSD, RESOURCE BOOK ON TRIPS AND DEVELOPMENT: AN AUTHORITATIVE AND

PRACTICE GUIDE TO THE TRIPS AGREEMENT , 361 (2005).178 See UNITED STATES HOUSE OF REPRESENTATIVES COMMITTEE ON GOVERNMENT REFORM – MINORITY

STAFF SPECIAL INVESTIGATIONS DIVISION, TRADE AGREEMENTS AND ACCESS TO MEDICATIONS UNDER THE BUSH

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10th 2007 New Trade Deal, implemented in the Peru FTA, patent term extensions for any reason were made optional rather than mandatory. The Peru FTA allowed both countries to exempt pharmaceutical products from patent extension requirements. The U.S. TPP-2 proposal would require patent extensions for unreasonable delays in product registration or issuance of a patent without the May 10 th exemption, thereby punishing patients for bureaucratic delays.

The TPP proposal is KORUS-plus. TPP-2 Art. 8.6 requires an increase in patent terms beyond 20 twenty years to compensate for “unreasonable” delay in the granting of a patent, defined as a delay of more than four years from the date of filing of the application – the same as KORUS – or two years after a request for examination – one year shorter than KORUS.179 This requirement is broadly consistent with U.S. law, which has a three-year window.180 In addition, TPP-2 Art. 8.6 requires additional term extensions for regulatory delays in approving marketing of pharmaceutical products, including for patents that merely cover a new method of making or using a pharmaceutical product. As in other areas of TPP, although patent term extensions are mandatory, the limitation of patent term extensions, e.g. to a maximum of no more than 5five years and no more than one extension (both attributes of current U.S. law181) are permissive.182

The so-called Access Window features of TPP-2 Art. 8.6(e) is subject to TPP-2 Art. 9.2(b) or (d), which will be discussed further below.

The predictable impact of patent term extensions is to lengthen monopolies and thereby raise the medicines bill for member countries. Moreover, the time pressure of early patent examination and early marketing approval might result in over-extended patent offices granting invalid patents and in harried, drug regulatory registering of unsafe or inefficacious medicines. This is especially a problem as the international volume of pharmaceutical patent applications and marketing approval applications grows overwhelming countries, especially developing countries, with weak regulatory capacity.

TPP-2 Art. 9.2 - Expanded Data Exclusivity

ADMINISTRATION (June 2005).179 KORUS, supra note 12, Art. 18.8.6.180 If the USPTO fails to issue a patent within three years from the actual U.S. filing date, it must

extend the patent term one day for each day beyond the three-year period. 35 U.S.C. §154(b)(1)(B).181 See 35 U.S.C. §156. The period of restoration extends from the original expiration date of the

patent; however, the total patent term, with restoration, following FDA market approval may not exceed fourteen years. §156(c)(3).

182 TPP-2, supra note 10, Art. 8.6(d) (permitting regulatory-delay patent term extensions to be limited to a single adjustment for each new pharmaceutical product and for the basis of the adjustment to be the first marketing approval granted to a new pharmaceutical product).

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TPP-2 Art. 9.2 requires data exclusivity, a very strict form of data protection that is in excess of TRIPS requirements and negates the pro-development flexibilities of the 2007 New Trade Deal.183 The U.S. proposal on data exclusivity is a “TRIPS-plus provision that restricts access to essential clinical trial data . . . [and] prevent[s] generic manufacturers from using existing clinical research to gain regulatory approval of their medicines, forcing them to perform duplicate clinical trials or wait for the ‘data monopoly’ period to end.”184 In essence, data exclusivity prevents a drug regulatory agency from referencing regulatory data submitted by a prior registrant and from relying on the fact of prior registration anywhere else. Introducing data exclusivity threatens the registration of generic versions of medicines and creates a system conducive to creating monopolies.

Data exclusivity is not required by TRIPS. In fact, during the negotiation of TRIPS Art. 39.3, the U.S. proposal that TRIPS incorporate a data exclusivity standard was flatly rejected by the negotiating parties.185 TRIPS Art. 39.3 merely requires protection only against the “unfair commercial use” of “undisclosed” data required to be submitted for marketing approval of a “new chemical entity.”186 TPP-2 Art. 9.2(a) and (b), patterned on KORUS Art. 18.9.1, abandons the inherent flexibilities in TRIPS Art. 39.3 and imposes U.S.-style data monopolies.

Rather than banning only the unfair commercial use of information, which could allow for registration authorities to use registration-related information to grant marketing approval of generic drugs,187 the TPP-2 data exclusivity proposal bans

183 MSF TPP Issue Brief, supra note 86, at 5 (explaining that data protection or data exclusivity is a “TRIPS-plus provision that restricts access to essential clinical trial data . . . [and] prevent[s] generic manufacturers from using existing clinical research to gain regulatory approval of their medicines, forcing them to perform duplicate clinical trials or wait for the ‘data monopoly’ period to end.” Introducing provisions for data protection in conjunction with a provision for patent term extension greatly threaten the registration of generic versions of medicines and creates a system conducive to creating monopolies).

184 MSF TPP Issue Brief, supra note 86, at 5.MSF Campaign for Access to Essential Medicines, TPP ISSUE BRIEF (September 2011), available at http://www.doctorswithoutborders.org/press/2011/MSF-TPP-Issue-Brief.pdf.

185 Carlos Correa and Abdulqawi Yusuf , Intellectual Property and International Trade, The TRIPs Agreement, Kluwer Law International, (London-Cambridge 1998); Daniel Gervais, TRIPS Agreement - Drafting History and Analysis, (Sweet & Maxwell. 1998) pp. 182-183.

186 See Carlos Correa, Protecting Test Data for Pharmaceutical and Agrochemical Products under Free Trade Agreements, in NEGOTIATING HEALTH: INTELLECTUAL PROPERTY AND ACCESS TO MEDICINES (2006) ( explaining that, under TRIPS, the reliance on prior reviewed data by a regulation authority to approve a generic version of the same drug need not be considered a “commercial use” of the data); Brook K. Baker, Ending Drug Registration Apartheid: Taming Data Exclusivity And Patent/Registration Linkage , 34 AM. J. LAW & MEDICINE 303-44(2008).

187 See Carlos Correa, Protecting Test Data for Pharmaceutical and Agrochemical Products under Free Trade Agreements, in NEGOTIATING HEALTH: INTELLECTUAL PROPERTY AND ACCESS TO MEDICINES (2006) ( explaining that, under TRIPS, the reliance on prior reviewed data by a regulation authority to

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reference and reliance registration of any new product “based on” safety and efficacy information submitted to it or to another country for an originator product.188

The TPP-2 data exclusivity provision abandons the TRIPS provision that protection only be required for “undisclosed” information and now requires protection for all data whether previously disclosed or not. Often clinical trial data is made public in various ways, including by funders, registration authorities, and academic publication. Thus, TPP-2 would require granting of exclusive rights for information that is already in the public domain and is in no sense a trade secret.

The TPP-2 data exclusivity proposal also abandons the TRIPS rule that requires protection only for “new chemical entities” and instead requires protection of new pharmaceutical product that might incorporate existing chemical entities.189

In addition, TPP-2 Arts. 9.2(c) and (d) both require an additional three-year term of exclusivity for data submitted for approval of a new use or form of an approved chemical entity.190 Moreover, as in U.S. law, there can be successive three-year data exclusivity extensions, meaning that data exclusivity, like patents, can be ever-greened.

The U.S. TPP-2 proposal abandons data-exclusivity flexibilities adopted in the 2007 New Trade Policy191 and thereafter granted to Peru and Colombia in their FTAs with the U.S. 192 Like TRIPS Art. 39.3, the Peru and Colombia FTAs’ data exclusivity

approve a generic version of the same drug need not be considered a “commercial use” of the data). 188 See TPP-2 Art. 9.2(b) (stipulating that the drug regulatory authority may neither reference

previously submitted clinical trial data nor rely on evidence that the product was previously approved either domestically or in another territory).

189 See id. Arts. 9.2(a), 9.2(b).190 See id. Arts. 9.2(c), 9.2(d); see also KORUS Art. 18.9.2.191 Office of U.S. Trade Representative, Bipartisan Agreement on Trade Policy May 2007 3 (2007)

[hereinafter 2007 New Trade Policy], available at http://www.ustr.gov/sites/default/files/uploads/factsheets/2007/asset_upload_file127_11319.pdf (clarifying that “that the period of protection for test data for pharmaceuticals by developing country FTA partners will generally not extend beyond the period that such protection is available for the same product in the United States, coupled with a provision that will encourage our partners to process marketing approval applications for innovative drugs in a timely manner.”).

192 Free Trade Agreement between the United States of America and the Republic of Colombia, U.S.-Colom., Art. 16.10.2, Nov. 22, 2006 [hereinafter U.S.-Colombia FTA], available at http://www.ustr.gov/trade-agreements/free-trade-agreements/colombia-fta/final-text; Free Trade Agreement between the United States of America and the Republic of Peru, U.S.-Peru, Art. 16.10.2, Apr. 12, 2006 [hereinafter U.S.-Peru FTA], available at http://www.ustr.gov/trade-agreements/free-trade-agreements/peru-tpa/final-text. This early filing requirement applied only if Peru or Colombia granted marketing approval based in whole or in part on evidence of marketing approval in the U.S.

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provision is limited to new chemical entities.193 Contrary to U.S. law imposing strict exclusivity periods and the TPP-2 draft which requires “at least” five years of exclusivity, the Peru and Columbia FTAs required data exclusivity for an undefined “reasonable period.”194 The Peru and Colombia FTAs also included a use-or-lose it restriction on data exclusivity whereby if a Party relies on marketing approval granted by the U.S. Food and Drug Administration and if the Party grants approval within six months of an application for marketing approval, the five-year data exclusivity period begins when the drug was first approved in the U.S.195 196 Finally, the Peru and Colombia data exclusivity provisions provided for an express public health exception to data exclusivity allowing reference or reliance registration when either a compulsory licensing had been issued on the underlying patent(s) or even when there was no patent(s) if public health needs so required.197 All of these data exclusivity flexibilities are missing from the U.S. TPP-2 proposal.

Commentators are virtually unanimous in concluding that data exclusivity is not required by TRIPS Art. 39.3.198 Moreover, commentators express alarm that the adoption of data exclusivity would require a generic producer to reproduce clinical

193 U.S.-Colombia FTA, supra note 125, Art. 16.10.2(a); U.S.-Peru FTA, supra note 125, Art. 16.10.2(a).

194 Compare TPP-2, supra note 10, Arts. 9.2(a), 9.2(b), with U.S.-Colombia FTA, supra note 125, Art. 16.10.2(b), and U.S.-Peru FTA, supra note 125, Art. 16.10.2(b).

195 See U.S.-Colombia FTA, supra note 125, Art. 16.10.2(c); U.S.-Peru FTA, supra note 125, Art. 16.10.2(c).

196 Free Trade Agreement between the United States of America and the Republic of Colombia, U.S.-Colom., Art. 16.10.2(c), Nov. 22, 2006 [hereinafter U.S.-Colombia FTA], available at http://www.ustr.gov/trade-agreements/free-trade-agreements/colombia-fta/final-text; Free Trade Agreement between the United States of America and the Republic of Peru, U.S.-Peru, Art. 16.10.2(c), Apr. 12, 2006 [hereinafter U.S.-Peru FTA], available at http://www.ustr.gov/trade-agreements/free-trade-agreements/peru-tpa/final-text. This early filing requirement applied only if Peru or Colombia granted marketing approval based in whole or in part on evidence of marketing approval in the U.S.

197 See U.S.-Colombia FTA, supra note 125, Art. 16.10.2(e); U.S.-Peru FTA, supra note 125, Art. 16.10.2(e).

198 See Aaron Xavier Fellmeth, Secrecy, Monopoly, and Access to Pharmaceuticals in International Trade Law: Protection of Marketing Approval Data Under the TRIPs Agreement, 45:2 HARV. INT’L L.J. 443, 459 (2004) (explaining that despite the argument pursued by the U.S. and the EU, “. . . data exclusivity per se is not required by the plain terms of [TRIPS] Article 39.3” and that “[t]he United Nations Conference on Trade and Development and the World Health Organization (WHO) have adopted consonant interpretations of Article 39.3 as well.”); MÉDECINS SANS FRONTIÈRES , DATA EXCLUSIVITY IN INTERNATIONAL TRADE AGREEMENTS: WHAT CONSEQUENCES FOR ACCESS TO MEDICINES? 3 (2004), available at http://www.citizen.org/documents/DataExclusivityMay04.pdf (explaining that although TRIPS Art. 39.3 says that “WTO Members should protect ‘undisclosed test or data’ against ‘unfair commercial use’ and ‘disclosure’ [n]owhere does TRIPS state that countries should provide exclusive rights to the originator of the data for a given period.”).

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Jimmy Koo, 06/08/12,

PLEASE NOTE: Both Colombia and Peru FTA Art. 16.10.2(b) state: “For this purpose, a reasonable period shall normally mean five years from the date on which the Party granted approval to the person that produced the data for approval to market its product, taking account of the nature of the data and person’s efforts and expenditures in producing them.”

http://www.citizen.org/documents/DataExclusivityMay04.pdf


trial evidence in order to obtain marketing approval during the period of exclusivity.199 Not only would such evidence be duplicative, costly, and time-consuming, its collection would violate human subject protections in clinical trials, as trial participants would be required to submit to double-blind clinical trials even though evidence of efficacy and safety had been previously established.

TPP-2 Art. [X] and Art. 9.3 – Mere Reference to the Doha Declaration, Public Health Protections

The U.S. proposal mentions the Doha Declaration on the TRIPS Agreement and Public Health in TPP-2 Article [X] and Article 9.3.200 But the provisions fail to protect the core of the Doha Declaration’s object – ensuring that all WTO members remain free to exercise “to the full” TRIPS flexibilities that promote access to affordable medicines for all.201 Notably, the provisions fail to incorporate the public health exceptions to data exclusivity and patent/registration linkage from the 2007 New Trade Policy.202

TPP-2 Art. [x].1

Article [X].1 starts with the now standard affirmance of the Parties' prior commitment to the Doha Declaration.203 Although it is boilerplate to acknowledge a unanimous WTO commitment made nearly ten years ago, and although acknowledgement is superior to exclusion or rejection, the boilerplate does not make up for an absence of specific clarifying commitments about how countries can operationalize Doha to overcome the many TRIPS-plus provisions in the TPP proposal.

TPP-2 Art. [x].2

Article [X].2 articulates Doha-related “understandings.” Subsection (a) states that “The obligations of this Chapter do not and should not prevent a Party from taking measures to protect public health by promoting access to medicines for all, in particular concerning cases such as HIV/AIDS, tuberculosis, malaria, and other

199 See Fellmeth, supra note 131, at 448 (criticizing data exclusivity by commenting that “[a]llowing later registrants to free ride on the initial registration prevents wasteful repetition of testing that has already been performed and facilitates rapid development of competition in drug markets.”).

200 TPP-2, supra note 10, Arts. X, 9.3.201 World Trade Organization, Ministerial Declaration of 14 November 2001,

WT/MIN(01)/DEC/1, 41 I.L.M. 746 (2002) [hereinafter Doha Declaration] (explaining in paragraph 4 that, the Parties “. . . reaffirm the right of WTO members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.”).

202 See 2007 New Trade Policy, supra note 124.203 TPP-2, supra note 10, Art. [X].1.

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epidemics as well as circumstances of extreme urgency or national emergency.”204 This statement has at least two problems.

First, it is important that any affirmation of the Doha Declaration not be limited to certain infectious disease epidemics and to a narrow subset of public health needs that can be classified as matters of extreme urgency or national emergency. The burden of non-communicable chronic diseases is escalating throughout the world, particularly in low- and middle-income countries where the cost of many chronic disease medicines, including those for cancers, psychiatric illnesses and other illnesses is too expensive for individual patients, insurers, and governments.205

Likewise, many developing countries face a persistent crisis with respect to neglected tropical diseases where newer, more expensive medicines might again be priced at unaffordable levels.206 The U.S.’s intent to purposefully exclude non-infectious chronic disease can be inferred from its efforts at the UN High Level Meeting on Non-Communicable Diseases to ensure that they were not described as an “epidemic” nor as an “emergency” and that no mention of the Doha Declaration appeared in the meeting’s outcome.207

Second, the affirmation that the U.S. TPP proposals “do not208 ” prevent a Party from taking measures to promote access to medicines may set a dangerous precedent for the interpretation of the Doha Declaration. As described throughout this note, there are numerous TRIPS-plus standards in the TPP proposal that will predictably lead to higher prices and lower availability of pharmaceutical products, especially in

204 TPP-2 Id. Art. [X].2(a) (noting that subsection (a) ends with Doha-consistent boilerplate that the "[c]hapter can and should be interpreted and implemented in a manner supportive of each Party's right to protect public health and, in particular, to promote access to medicines for all.").

205 See e.g. Felicia Marie Knaul, Julio Frenk & Lawrence Shulman for the Global Task Force on Expanded Access to Cancer Care and Control in Developing Countries, CLOSING THE CANCER DIVIDE: A BLUEPRINT TO EXPAND ACCESS IN LOW AND MIDDLE INCOME COUNTRIES , Section 7 (2011), available at http://ghsm.hms.harvard.edu/uploads/pdf/ccd_report_111027.pdfhttp://ghsm.hms.harvard.edu/uploads/pdf/ccd_report_111027.pdf.; World Health Organization, NON-COMMUNICABLE DISEASES: COUNTRY PROFILES 2011 , available at http://whqlibdoc.who.int/publications/2011/9789241502283_eng.pdf.

206 World Health Organization, WORKING TO OVERCOME THE GLOBAL IMPACT OF NEGLECTED TROPICAL DISEASES, UPDATE 2011 , available at http://www.who.int/neglected_diseases/2010report/WHO_NTD_report_update_2011.pdf.

207 William New, Questions Arise over UN Policy on Non-Communicable Diseases and IP Rights , IP- WATCH (Sept. 16, 2011), available at http://www.ip-watch.org/weblog/2011/09/16/questions-arise-over-un-policy-on-non-communicable-diseases-and-ip-rights/. These efforts were ultimately successful, though there were two references to countries’ need to use intellectual property flexibilities to access NCD medicines. See, Political Declaration of the High-level Meeting of the General Assembly on the Prevention and Control of Non-communicable Diseases, A/66/L1 (Sept. 19-20, 2011), available at http://www.un.org/en/ga/ncdmeeting2011/.

208 TPP-2, supra note 10, Art. [X].2(a).

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developing countries.209 Implicitly defining these standards as compliant with the Doha Declaration significantly limits the express statement in the Declaration that TRIPS flexibilities can and should be available “to the full.”210 Doha should be read to prevent the proposal or adoption of any TRIPS-plus measure that may negatively impact public health and access to medicines for all.211 A better provision fully embracing Doha would create an explicit and operational exception for any TPP provision on the basis that the member country concludes that the provision would impede access to affordable medicines or the promotion of public health objectives.

TPP-2 Art. [X].2(b)

Article. [X].2(b) appears as an attempt to narrow the interpretation of TRIPS and Doha-compliant compulsory licenses into the procedurally labyrinth contours of what the U.S. calls the “TRIPS/Health solution.” The TRIPS/Health solution is a current waiver and a proposal to amend the TRIPS agreement to allow export/import of medicines produced under special compulsory licenses to a country with little or no manufacturing capacity.212 The proposed TRIPS aArt. 31bis amendment on export licenses should not be called a “solution” to anything – it is labyrinth and virtually unworkable.213 It has been used only once, as a trial run

209 Chief among them may be: (1) lowered patent standards, presumptions of valid patent status, and express obligations to grant patents for new uses and new forms of existing products, (2) elimination of rights of pre-grant opposition, (3) extension of patent terms beyond the TRIPS requirement of 20 years to compensate for delays in granting patents and/or in granting marketing approval, (4) five-year data exclusivity following the first registration of a new pharmaceutical product with rights to evergreen data exclusivity for an additional three years whenever new clinical trial data is submitted, (5) mandatory patent/registration linkage giving patent holders a right to prevent registration of alleged patent infringing products no matter how weak the patent claim is, (6) unconscionable restrictions on government price control and therapeutic formulary policies, and (7) multiple TRIPS-plus enforcement measures.

210 Doha Declaration, supra note 134, para 4.211 TRIPS flexibilities thus include, for example, the adoption of strict patentability criteria under

TRIPS Art. 27, the avoidance of patent extensions beyond 20 years in implementing TRIPS Art. 33, the avoidance of data exclusivity in the implementation of TRIPS Art. 39.3, and the avoidance of any other TRIPS-plus protection or enforcement measure that will increase market power of brand name pharmaceutical companies.

212 Paragraph 6 of the Doha Declaration required the development of a quick and expeditious mechanism allowing export/import of medicines to countries that had insufficient pharmaceutical capacity locally to either produce medicines that were not patented or those authorized pursuant to a properly issued compulsory license or government use order. Article 31(f) of the TRIPS Agreement had created a major barrier for these non-producing importers because it restricted the quantity of medicines produced pursuant to a compulsory license that could be exported to other countries to "non-predominant" amounts, presumably less than 50% of output. Unfortunately, the TRIPS/Health solution that was adopted on 30 August 2003 is painfully complex. See Frederick M. Abbott, The WTO Medicines Decision: World Pharmaceutical Trade and the Protection of Public Health, 99 AM. J. INT’L L 317 (2005).

213 Brook K. Baker, Arthritic Flexibilities for Accessing Medicines, Analysis of WTO Action Regarding

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between two countries that have not used it again. There is no evidence that the proposed TRIPS amendment will in fact promote global access to medicines, a fact articulated by Ecuador at the most recent TRIPS council meeting.214 Countries should maintain flexibilities to explore other options for meeting the particular challenges of supplying non-producing countries, including: (1) export of unlimited quantities through compulsory licenses issued on competition grounds (TRIPS Art. 31(k); (2) exporting non-predominant quantities pursuant to an ordinary TRIPS Art. 31 license; or (3) export to non-producing countries through an easy-to-use TRIPS Art. 30 limited exception.

TPP-2 Art. 9.3

TPP-2 Art. 9.3, which deals with “measures relating to certain regulated products,” and more particularly with U.S. proposals for data exclusivity and patent-registration linkage, also contains boilerplate references to the Doha Declaration.215 The 2007 New Trade Policy, which led to revisions in the U.S.-Peru and U.S.-Colombia free trade agreementsFTAs, provided express guidance on how to operationalize a text-based public health exception to data exclusivity and patent/registration linkage which is lacking from the current proposal.216 Specifically, TPP Art. 9.3 fails to provide for rights to override data exclusivity and patent/registration linkage either (1) to ensure rights to obtain marketing approval when a compulsory license or government use license is issued or (2) to have a compulsory-license-like exception to data exclusivity and patent/registration linkage even if no patent bar is in place.

TPP-2 Art. 9.5 – Mandatory Adoption of Patent/Registration Linkage

TPP-2 Art. 9.5 contains a TRIPS-plus proposal on what is called patent/registration linkage. Although patent/registration linkage is not mentioned in TRIPS and is not required in many countries, including most TPP negotiating countries,217 it has

Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health , 14 IND. INT’L & COMP. L. REV . 613-715 (2004).

214 See TWN, Review of "Para 6" system, ACTA feature at TRIPS Council, SUNS #7252 (2 November 2011), available at http://www.twnside.org.sg/title2/intellectual_property/info.service/2011/ipr.info.111101.htm

215 See TPP-2 Art. 9.3 (reiterating that "a Party may take measures to protect public health in accordance with" the Doha Declaration, any current waiver (including presumably the TRIPS/Health solution) and any eventual amendment based on implementing the Doha Declaration (presumably referring indirectly to proposed amended Art. 31bis).

216 See 2007 New Trade Policy, supra note 124.217 See PUBLIC CITIZEN & HEALTH GAP ( explaining that “Vietnamese law contains no provision that

links the patent system to the drug marketing approval process” and that many U.S. FTAs require patent linkage which “shifts burdens of early patent enforcement to drug regulatory authorities.”); see also Public Citizen TPP-Malaysian Law Comparison (noting that “Malaysian law contains no provision that links the patent system to marketing approval process.”); cf. Public Citizen TPP-

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become a common and contested feature of U.S. free trade agreements.218 Linking marketing approval to patent status gives patent owners a powerful and cost effective tool to block generic entry. Any company claiming a patent on a drug may halt the regulatory approval of a competing product without any private enforcement action and without a determination as to the validity of the underlying patent claim. This provides strong incentives for the filing of numerous, even if weak or invalid, patent claims which can then be used to halt marketing approval of potential competitors through the linkage system. Generics will then be required to wait until the completion of a patent challenge (for each claim) in order to reach the market, which may take many years. The costs of litigation and delay may be so high as to provide an effective deterrent to generic companies entering marketing with claimed patents – even where underlying patents are patently invalid.

TPP-2 goes even further than KORUS in specifying linkage requirements. TPP-2 proposes that its members be required to provide: (1) a transparent and effective mechanism to identify patent(s) covering an approved pharmaceutical product or its approved method of use; (2) notice to a patent holder of the identity of another person who intends to market the same and "similar" products during the term of the identified patent or patents; (3) automatic stays of marketing approval activity for the follow-on product sufficient to allow an opportunity to adjudicate disputes concerning patent validity or infringement; (4) expeditious judicial or administrative procedures to allow timely adjudication of patent disputes, including rights to issue provisional orders; and (5) for the denial of registration for infringing products for the duration of the patent.219 On the other hand, consistent with U.S. law, where a challenged party successfully challenges the validity or applicability of the patent, it is required to be provided with an effective reward, which might include a period of marketing exclusivity.

Patent/registration linkage turns drug regulatory authorities into patent policing agents who aid patent holders in the enforcement of their private rights. Moreover the automatic stays can be abusive. In response to the experience of the use of linkage to evergreen patents through the filing of subsequent (often invalid) claims to halt generic entry, U.S. law now limits patent holders to one automatic stay to litigate any patent claims.220 Furthermore, there are still concerns that strict forms

Australian Law Comparison (explaining that although “AUSFTA introduced patent linkage in Australia, Australia sought to limit its effect through statutory measures imposing penalties for linkage evergreening” and subsequently, the USTR attacked these safeguards and therefore, the TPP proposal “raises a serious concern that the [U.S.] may seek to limit or eliminate Australian safeguards.”).

218 See KORUS Art. 18.9.5.219 See TPP-2, supra note 10, Art. 9.5.220 21 U.S.C. 355(j)(2) and (5).

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of patent/registration linkage might interfere with effective use of compulsory licenses. This is because licensees could be prevented from marketing their generic equivalents after receiving a license on some patent claims by virtue of subsequent claims being filed on the same product.

TPP-2 Arts. 9.4, 9.6, 9.7, and 9.8 – TEAM Access Window Mainly Benefits Innovator Registration

Well before the new leak of TPP-2, the U.S. released its Trade-Enhancing Access to Medicines proposal (TEAM Access Window).221 The memo stated that the Access Window was “designed to deploy the tools of trade policy to promote trade in, and reduce obstacles to, access to both innovative and generic medicines, while supporting the innovation and intellectual property protection that is vital to developing new medicines and achieving other medical breakthroughs.” The memo immediately became the subject of criticism for both its obscuration of substance and its non-transparent process by public health advocates.222 Now that the actual text of the Access Window has been leaked, it is clear that its main impact will be to ease registration for innovators with no real benefit for access to generics.

As discussed above, the general rule under TPP-2 is that members must grant patent extension for regulatory delays, 5/3five/three-year data exclusivity, and patent/registration linkage. These requirements will apply to the vast majority of marketing requests where the Access Window does not apply either because a country has not changed its law to utilize Access Window provisions (see discussion below) or because the marketing-approval applicant has chosen not to utilize the Access Window mechanism.223

The U.S. Access Window provides countries with the option of having marketing approval procedures that rely in whole or in part on the fact of marketing approval/registration in another country.224 If countries have such a fast-track, reliance mechanism, they can limit patent term extensions related to regulatory

221 See Trans-Pacific Partnership Trade Goals to Enhance Access to Medicines, USTR, available at http://www.ustr.gov/webfm_send/3059.

222 http://www.citizenstrade.org/ctc/blog/2011/10/22/leaked-trans-pacific-fta-texts-reveal-u-s-undermining-access-to-medicine/

223 TPP-2 art. 9.8(b) confirms that “a Party may not refuse to grant approval of a new pharmaceutical product on the basis of a failure of an applicant for marketing approval to satisfy the [Access Window] requirements of subparagraphs 6(e) of Article 8 or paragraph 4 and 6 of this Article.”

224 See TPP-2 arts. 9.4, 9.6, 8-6(e) (noting that countries are not required to create the TEAM Access Window, but they "may" do so in a narrow subset of cases - where the party "requires or permits an applicant to obtain approval for marketing a new pharmaceutical product in its territory by relying, in whole or in part, on the prior approval of the pharmaceutical product by the regulatory authority in another county.").

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delays (not patenting delays),225 data protection, and patent/registration linkage for applicants who use the reliance mechanism within an unspecified number of years – the “access window.”226 If the reliance registrant delays filing a reliance-application until after the access window, the applicant loses rights to these three, TRIPS-plus, registration-related IP benefits.

It is important to remember that the applicant would always have the option to apply for marketing approval by submitting a full registration dossier that does not rely in whole or in part on the fact or prior registration elsewhere. The silver lining for pharmaceutical companies, even where the Access Window does apply, is contained in Article Art. 9.8(a), which requires the TPP country to allow initiation of marketing registration in that country based on any information available to the applicant, including “evidence of prior approval of the product in another Party [country].” This easy-to–meet standard makes it easier to file early for marketing approval, but it does not necessarily ensure quicker final approval of drugs. More importantly, speedier registration will not necessarily result in lower prices – generics will still have to wait until patent terms and/or data exclusivity periods expire.

Pharmaceutical companies have long chaffed over the lack of harmonization of drug regulatory authorities' marketing approval requirements, standards, and processes. The multinational pharmaceutical industry would like a registration process that is very like what is provided by the WIPO Patent Cooperation Treaty, an easy-to-use, standardized mechanism to initiate marketing approval applications before national drug regulatory authorities. Indeed, there is a separate annex on pharmaceutical regulatory harmonization in the U.S. TPP proposals.227 Art.icle 9.8(a) provides the industry with the easy-to-use, fast-track mechanism it has desired. Moreover, pharmaceutical companies can even choose which information and format they want to submit as applicants do not have to submit complete dossiers in order to cross the start-line for the Access Window.228

225 See TPP-2 art. 8.6(e) (applying Access Window restrictions only with respect to art. 8.6(c) extensions – those caused by unreasonable delays in the marketing approval process).

226 See TPP-2 FN 2 (claiming that the length of the TEAM Access Window should enhance certainty, provide incentive for the diffusion of pharmaceutical products, respect commercial consideration, and account for challenges faced by smaller or lesser experienced applicants or the time needed to assess country-specific safety and efficacy issues).

227 See Trans-Pacific Partnership, U.S. Introduction to Proposed TBT Annexes on Medical Devices, Pharmaceutical Products and Cosmetic Products [hereinafter TPP U.S. Intro to TBT Annexes], available at http://www.bilaterals.org/IMG/pdf_TransPacificTBTwMedicalAnnexes.pdf (extending the industry’s intentions and interests); Trans-Pacific Partnership, U.S. Textual Proposal for the TBT Chapter: Annex on PhamaceuticalPharmaceutical Products, Annex IV [hereinafter TPP Annex IV], available at http://www.bilaterals.org/IMG/pdf_TransPacificTBTwMedicalAnnexes.pdf (noting that in paras. 8 and 9, the U.S. seeks TPP partners’ agreement to use the ICD Common Technical Document as the standardized harmonized form to initiate marketing approval requests.)

228 TPP-2 article 9-8 (providing that “[w]here a party chooses to apply subparagraph 6(e) of

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Based on having satisfied minimal Access-Window information and timing prerequisites, right-holders will potentially be entitled to multi-year patent-term extensions for marketing approval delays, to successive data exclusivity periods that will run from the time final marketing approval (not from the time of the simplified initiation of the registration request), and patent-registration linkage -- all without benefit of the flexibilities called for in the 2007 New Trade Deal.229

Article 8 and paragraphs 4 and 6 of this Article [Article 9], the following provisions shall apply: (a) a Party shall permit an applicant to commence the process of obtaining marketing approval by providing the regulatory authority of the Party information supporting approval of the new pharmaceutical product in the Party that is available to the person at the time the request is made, such as evidence of the prior approval of the product in another Party. It is understood, that, while a Party may impose reasonable additional requirements or deadlines as a condition of authorizing the person to market to market the pharmaceutical product in its territory, satisfaction of those additional requirements or deadlines or the granting of approval shall be recognized by the Party as necessarily occurring after the commencement of the marketing approval process within the meaning of subparagraph 6(e) of Article 8 or paragraphs 4 and 6 of this Article.”) (emphasis added).

229 The problem is not simply making a big deal out of very minor process, the Access Window provisions are also likely to result in pressure from the US and Big Pharma for what is essentially a harmonized global registration system, such as those proposed in the Proposed TBT Chapter Annex on Pharmaceutical Products. We can now see that US is arguing with trade partners that they should vicariously grant registration in their countries based on prior marketing approval by drug regulators in the US, Europe, or Japan. If countries are tempted to adopt full-scale reliance registration, there is a risk that they will have reduced ability to assess medicines in light of the particular patient risks and benefits in their country. Although reliance registration may have certain advantages for countries with weak regulatory authorities and although lack of procedural harmonization adversely impacts both innovator companies and generics, countries are being asked to give up far too much TRIPS-plus territory for a quick-registration Access Window that doesn't require fast completion and prosecution of registration applications and that results in greater and longer monopoly protections that will inevitably lead to higher prices and reduced generic competition.

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TPP-2 Art. 9.7 contains another new-to-U.S. FTAs provision encouraging even longer periods of data exclusivity. The provision states that parties would be exempted from the three-year data protection terms for submission of new clinical information, automatic delays of marketing approval in their patent/registration linkage mechanisms, and rewards for successful challenges to patent rights if they adopt periods of data exclusivity for new pharmaceutical products for an undefined duration (“Y”) in excess of five years. If pharmaceutical companies can get substantially longer data exclusivity, especially if it contains mechanisms for evergreening exclusivity such as that involving biologics, they won’t have to rely on patent protections to obtain marketing monopolies. Data monopolies of sufficient length will be superior to patents from the perspective of pharmaceutical firms because data monopolies give the same or higher level of monopoly protection without the need and expenses of proving that a product meets the relatively high standards for patentability.

Admittedly, there is some potential benefit to countries that want to provide inducements to pharmaceutical companies to bring their new medicines to market more quickly. To the extent that differential registration standards and processes have dis-incentivized innovators from quickly launching new products, simplification might speed up market entry. Drug regulatory systems should be made more transparent, efficient, and even harmonized, but only so long as high, country-specific standards for assuring quality, safety, and efficacy are maintained. The desirability of earlier product introduction should have nothing to do with a tradeoff involving greater IP protections that extend and strengthen drug company patent and data-related monopolies. The Access Window is promoted as benefitting TPP parties, but it is clear that the true beneficiaries are innovator companies. 230

General Obligations Relating to Enforcement

230 The problem is not simply making a big deal out of very minor process, the Access Window provisions are also likely to result in pressure from the US and Big Pharma for what is essentially a harmonized global registration system, such as those proposed in the Proposed TBT Chapter Annex on Pharmaceutical Products. We can now see that US is arguing with trade partners that they should vicariously grant registration in their countries based on prior marketing approval by drug regulators in the US, Europe, or Japan. If countries are tempted to adopt full-scale reliance registration, there is a risk that they will have reduced ability to assess medicines in light of the particular patient risks and benefits in their country. Although reliance registration may have certain advantages for countries with weak regulatory authorities and although lack of procedural harmonization adversely impacts both innovator companies and generics, countries are being asked to give up far too much TRIPS-plus territory for a quick-registration Access Window that doesn't require fast completion and prosecution of registration applications and that results in greater and longer monopoly protections that will inevitably lead to higher prices and reduced generic competition.

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Art. 10.2 requires presumptions in civil and administrative proceedings that “the person whose name is indicated in the usual manner as the author, producer, performer, or publisher of the work, performance, or phonogram is the designated right holder” and that “the copyright or related right subsists in such subject matter.” Neither of these presumptions exist in current U.S. law.231

Civil and Administrative Procedures and Remedies

Art. 12.2 – Injunctions

TPP Art. 12.2 requires every party to provide for injunctive relief, similar to ACTA Art. 8.1.232 However, unlike ACTA, TPP Art. 12.2 beneficially narrows the scope of injunctions by providing that injunctive relief has to be consistent with the safeguards contained in Art. 44 of TRIPS.233 Also unlike ACTA, the injunctive relief does not extend to third parties. Overall, the injunction section in the TPP proposal seems to be a watered down version of the ACTA standards. This provision on injunctive relief was not included in KORUS, which did not require injunctions to prevent the exportation of infringing goods.

Art. 12.3 – Damages

231 See Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP) Agreement and US Law, PUBLIC KNOWLEDGE , www.publicknowledge.org/files/TPP%20Analysis.pdf (noting that fulfillment of notice provisions in U.S. law “only affects a defendant’s claim of innocent infringement”).

232 ACTA Art. 8.1 (noting that “[e]ach Party shall provide that, in civil judicial proceedings concerning the enforcement of intellectual property rights, its judicial authorities have the authority to issue an order against a party to desist from an infringement, and inter alia, an order to that party or, where appropriate, to a third party over whom the relevant judicial authority exercises jurisdiction, to prevent goods that involve the infringement of an intellectual property right from entering into the channels of commerce.”).

233 TRIPS Art. 44 (enumerating that “1. The judicial authorities shall have the authority to order a party to desist from an infringement, inter alia to prevent the entry into the channels of commerce in their jurisdiction of imported goods that involve the infringement of an intellectual property right, immediately after customs clearance of such goods. Members are not obliged to accord such authority in respect of protected subject matter acquired or ordered by a person prior to knowing or having reasonable grounds to know that dealing in such subject matter would entail the infringement of an intellectual property right. 2. Notwithstanding the other provisions of this Part and provided that the provisions of Part II specifically addressing use by governments, or by third parties authorized by a government, without the authorization of the right holder are complied with, Members may limit the remedies available against such use to payment of remuneration in accordance with subparagraph (h) of Article 31. In other cases, the remedies under this Part shall apply or, where these remedies are inconsistent with a Member’s law, declaratory judgments and adequate compensation shall be available.”).

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TPP Art. 12.3 mandates that determinations of damages for copyright infringement and trademark counterfeiting exceed the amount judged to be “adequate to compensate for the injury the right holder has suffered.” On top of such compensatory damages, the TPP proposal mandates damages equal to “the profits of the infringer that are attributable to the infringement.” In addition, the provision would require that “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.” These provisions do not have a clear analogue in U.S. law.234

A key problem with these compensation-plus measures is that they ignore the phenomenon of exclusionary pricing, particularly in developing countries. Imagine, for example, the common case of a copyrighted music supplier that charges the same price in a poor country as in the U.S. – e.g. $17 for a music CD. 235 What should be the measure of damages for the infringing the copyright of that CD through the making of illegal copies? A reasonable compensatory damage measure may be based on the percentage of the high price market (those willing and able to pay $17) that are taken away by infringement. But this measure – the true measure of harm to the copyright owner who has chosen to excessively price a product – would be far lower than the two measures suggested by TPP because very few people in poor countries are willing or able to pay U.S.-level prices for media or other protected goods. Multiplying the number of copies made the “retail price” ($17 in our example) would over-compensate the rights holder for sales that would have never taken place at that price.236

TPP members should retain their sovereign rights to develop measures of damages appropriate for their own social and economic contexts. This is particularly important in developing countries where the impact of excessive pricing is likely to be most pronounced.237

234 Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP) Agreement and US Law, Public Knowledge, www.publicknowledge.org/files/TPP%20Analysis.pdf (contrasting the TPP proposal with sec. 504(b) of the Copyright Act and the willing buyer, willing seller standard of Frank Music Corp. v. MGM Inc.).

235 This experience is studies in some detail in MEDIA PIRACY IN EMERGING ECONOMIES (SSRC 2011). 236 See PUBLIC CITIZEN & HEALTH GAP ( noting that “the U.S. proposal [which] would require courts

to consider suggested retail price or other measure of value submitted by the right holder . . . strongly favors the interests of the right holders” since the hypothetical suggested retail price “may turn out to be inflated or otherwise inaccurate”); Public Citizen TPP-Malaysian Law Comparison (commenting that the TPP proposal “would lead to an unrealistic determination of damages, which would empower rights holders in court settlements and discourage defendants from litigating cases” and that “Malaysian courts can better balance the competing interests . . . by maintaining the compensatory approach to damages, filtering claims and continuing to determine appropriate calculations for damages case-by-case.”).

237 Sean Flynn, Aidan Hollis & Michael Palmedo, An Economic Argument for Open Access to Medicine Patents in Developing Countries, 37 J.L. Med. & Ethics 184 (2009).

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There are some key differences in the TPP proposals and other IP chapters in trade agreements.

Unlike ACTA Art. 9.1238 and TRIPS Art. 45(1), TPP Art. 12.3 does not require the infringer to “knowingly or with reasonable grounds to know, engage in infringing activity,” thus converting the liability standard to one of strict liability.

Compared to KORUS, TPP Art. 12.3 uses “and” to require payment of both compensatory damages and lost profits, while KORUS Art. 18.10.5 requires either of the two, but not both, using “or”.

There is also a rewritten definition in Art. 12.3 fn 17, of “exclusive licensee,” stating that it shall “include” the exclusive licensee of any one of exclusive rights encompassed in a given intellectual property right. It is unclear why the definition is not bound more specifically.

Art. 12.4 – Pre-Established Damages

TPP Art. 12.4 further mandates damages in excess of compensatory levels by requiring a system of pre-established damages “sufficiently high to constitute a deterrent to future infringement.”239 In a standard that reaches beyond any international intellectual property agreement signed by any country, TPP Art. 12.4 further provides that in patent infringement cases, the damages may be increased up to three times the amount found or assessed.

U.S. law provides for statutory damages for copyright violations, but does not require that such damages be sufficiently high to constitute a deterrent to future infringements.240 Normally, civil law damages for violation of private rights, including rights to contract and property, are to compensate, not deter. Deterrent-level penalties, by definition, create inefficient exchanges in the market, threatening competition. The opposite of deterrent damages are liability rules that allow use of protected matter in exchange for compensatory damages. Such standards promote rather than retard competition.

238 ACTA Art. 9.1 (providing that “[e]ach Party shall provide that, in civil judicial proceedings concerning the enforcement of intellectual property rights, its judicial authorities have the authority to order the infringer who, knowingly or with reasonable grounds to know, engaged in infringing activity to pay the right holder damages adequate to compensate for the injury the right holder has suffered as a result of the infringement. In determining the amount of damages for infringement of intellectual property rights, a Party’s judicial authorities shall have the authority to consider, inter alia, any legitimate measure of value the right holder submits, which may include lost profits, the value of the infringed goods or services measured by the market price, or the suggested retail price.”).

239 TPP Art. 12.4.240 Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP) Agreement and US

Law, Public Knowledge, www.publicknowledge.org/files/TPP%20Analysis.pdf (citing Sec. 504(b) of the U.S. Copyright Act).

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Pre-established, or “statutory,” damages for copyright infringement are not recognized in every major copyright system, and there are increasing criticisms of the very high statutory damages in current U.S. law.241 In ACTA, pre-established damages were not required. Parties were given the choice between pre-established damages, presumptions for determining the amount of damages, or “additional” copyright damages.242

The proposed triple damages scheme for patent violations is extreme and untested. U.S. law contains the possibility for treble damages for willful patent infringement. But TPP’s standard does not confine its requirement to such cases. This is an extremely dangerous provision that could award windfalls to patent owners, thus encouraging strategic patent filings and litigation for rent seeking.

Art. 12.5—Attorney’s fees

TPP makes the payment of attorney’s fees by the losing party as the norm in civil judicial proceedings. ACTA Art. 9.5 requires that for at least copyright and trademark infringement, the prevailing party “where appropriate” may be awarded payment of court costs or fees and appropriate attorney’s fees, “or any other expenses as provided for under that Party’s law.” TPP Art. 12.5 makes awarding of such fees the norm “except in exceptional circumstances,” and doesn’t leave flexibility for parties to determine whether alternate expenses get paid instead of attorney’s fees. TPP Art. 12.5 also applies court costs or fees to patent infringement as well, and attorney’s fees in patent infringement “at least in exceptional circumstances.”

Art. 12.7 – Remedies

241 See Pamela Samuelson & Tara Wheatland, Statutory Damages in Copyright Law: A Remedy in Need of Reform, 51 WM. & MARY L. REV. 439, 441 (2009) (explaining that the U.S. is “an outlier in the global copyright community in giving plaintiffs in copyright cases the ability to elect, at any time before final judgment.”).

242 See ACTA Art. 9.3.

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TPP mandates a very pro-enforcement regime of remedies against goods that have been found to be pirated or counterfeit, which sets destruction of the goods as the norm. TPP Arts. 12.7(a), (b), and (c) are respectively equivalent to ACTA Arts. 10.1243, 10.2244, and 20.2.245 TPP Art. 12.7(b) goes beyond TRIPS and ACTA by removing the requirement that destroyed goods have been predominantly used in manufacture or creation of infringing goods. The provision also goes beyond current U.S. law by requiring that a broader array of “materials and implements” be destroyed than is the case under sec. 503(b) of the Copyright Act.246

In regards to counterfeit trademarked goods, unlike ACTA Art. 20.2, TPP Art. 12.7(c) does not allow for the removal of the trademark and release of the goods outside of the market in exceptional cases – e.g. as donations to public and charity programs. This could have particularly troublesome impacts on access to medicines – potentially requiring destruction of safe and effective medicines that could be used elsewhere.

Art. 12.8 – Information Related to Infringement

243 ACTA Art. 10.1 (providing that “[a]t least with respect to pirated copyright goods and counterfeit trademark goods, each Party shall provide that, in civil judicial proceedings, at the right holder’s request, its judicial authorities have the authority to order that such infringing goods be destroyed, except in exceptional circumstances, without compensation of any sort.”).

244 ACTA Art. 10.2 (enumerating that “[e]ach Party shall further provide that its judicial authorities have the authority to order that materials and implements, the predominant use of which has been in the manufacture or creation of such infringing goods, be, without undue delay and without compensation of any sort, destroyed or disposed of outside the channels of commerce in such a manner as to minimize the risks of further infringements.”).

245 ACTA at Art. 20.2 (stating that “[i]n regard to counterfeit trademark goods, the simple removal of the trademark unlawfully affixed shall not be sufficient, other than in exceptional cases, to permit release of the goods into the channels of commerce.”).

246 See Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP) Agreement and US Law, Public Knowledge, www.publicknowledge.org/files/TPP%20Analysis.pdf

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TPP Art. 12.8 requires that judicial authorities have authority order to “the infringer” to provide the rights holder with various information, including “regarding any persons or entities involved in any aspect of the infringement and regarding the means of production or distribution channel of such goods or services, including the identification of third persons involved in the production and distribution of the infringing goods or services.” Unlike ACTA, this proposal lacks safeguards requiring that any divulging of information be without prejudice to domestic laws governing privileges, the protection of confidential information sources or the processing of personal data.247 Furthermore, TPP does not require that access to such information to be conditional “upon a justified request of the right holder.” Concerns have been raised that the provision is not consistent with evidentiary privileges in U.S. law, including state law privileges and the Federal Rules of Evidence.248

Art. 12.9 – Additional Punishments

TPP Art. 12.9 goes beyond the purview of intellectual property rights enforcement and reaches into the subject matter of contempt of court. Mimicking KORUS Art. 18.10.11, TPP Art. 12.9(a) allows fines and imprisonment as means of punishing those who fail to abide by valid orders issued by judicial authorities. Additionally, TPP Art. 12.9(b) allows sanctions against “counsel, experts, or other persons subject to the court’s jurisdiction” for violating “judicial orders regarding the protection of confidential information produced or exchanged in a proceeding.”249

Provisional Measures

Art. 13.1 – Provisional Relief Inaudita Altera Parte

TPP increases requirements to grant injunctions inaudita altera parte, i.e. without prior hearing of the other side (also known as ex parte). TPP Art. 13.1 requires that such requests generally be processed by judicial authorities within ten days. Unlike ACTA Art. 12.2250 and KORUS Art. 18.10.17,251 TPP does not require a showing that “delay is likely to cause irreparable harm” or “a demonstrable risk of evidence being destroyed” to adopt provisional measures inaudita altera parte.

247 ACTA Art. 11 (requiring that “[w]ithout prejudice to its law governing privilege, the protection of confidentiality of information sources, or the processing of personal data, each Party shall provide that, in civil judicial proceedings concerning the enforcement of intellectual property rights, its judicial authorities have the authority, upon a justified request of the right holder, to order the infringer or, in the alternative, the alleged infringer, to provide to the right holder or to the judicial authorities, at least for the purpose of collecting evidence, relevant information as provided for in its applicable laws and regulations that the infringer or alleged infringer possesses or controls. Such information may include information regarding any person involved in any aspect of the infringement or alleged infringement and regarding the means of production or the channels of distribution of the infringing or allegedly infringing goods or services, including the identification of third persons alleged to be involved in the production and distribution of such goods or services and of their channels of distribution.”).

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U.S. law does not contain any requirement that preliminary injunction requests be granted within 10 days. Nor does the TPP proposal export the standards in U.S. law that make preliminary injunctions, and especially ex parte preliminary injunctions, difficult to obtain s a matter of course.252

Special Requirements Related to Border Enforcement

Art. 14.4 – Ex Officio Authority

Similar to ACTA Art. 16, and in excess of TRIPS, the TPP proposal grants ex officio authority to customs officials to seize goods “suspected of being counterfeit or confusingly similar trademark goods, or pirated copyright goods.”253 Such ex officio authority extends to imported, exported, and in-transit merchandise.

The standard for a seizure being based on mere suspicion of being “confusingly similar” is an extraordinarily low threshold for blocking the free trade of goods. Nearly every generic medicine or generic version of a trademarked good (e.g. the supermarket brand) is likely to have a label that could be suspected of being confusingly similar to the originator, even thought the label does not in fact violate any trademark right.254


249 TPP Art. 12.9(b).250 Id. at Art. 12.2 (mandating that “[e]ach Party shall provide that its judicial authorities have the

authority to adopt provisional measures inaudita altera parte where appropriate, in particular where any delay is likely to cause irreparable harm to the right holder, or where there is a demonstrable risk of evidence being destroyed. In proceedings conducted inaudita altera parte, each Party shall provide its judicial authorities with the authority to act expeditiously on requests for provisional measures and to make a decision without undue delay.”).

251 KORUS Art. 18.10.17 (requiring that “[e]ach Party shall act on requests for provisional measures inaudita altera parte expeditiously”).


253 Id.254 See PIJIP, Counterfeit vs. Confusingly Similar Products,

www.wcl.american.edu/pijip/go/pdf05072010

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Although TPP excludes patents from the purview of the border measures provisions, this fails to assuage the concerns over its effects on access to medicines.255 In 2009, a shipment of generic medicine amoxicillin, which is the International Nonproprietary Name (INN) name required to be on the label, was seized in-transit by German customs officials due to the suspicion that it was confusingly similar to trademarked brand name drug called “Amoxil.”256 As a result, the cargo was detained for weeks until it was determined that there was no trademark infringement.

FN 20 – Definitions of Counterfeit Trademark Goods & Pirated Copyright Goods

Unlike ACTA, TPP’s definitions of counterfeit trademark goods and pirated copyright goods provide a safeguard against application of the law of in-transit countries. TPP’s definition of counterfeit trademark goods concern the infringement of the “rights of the owner of the trademark in question under law of the country of importation” while ACTA’s definition concerns the rights of the owner under the law of the country in which the procedures are invoked.257 Similarly, TPP’s definition of pirated copyright goods concerns infringement of a copyright under the law of the country of importation while ACTA’s definition concerns the law of the country in which the procedures are invoked.258

255 See Public Citizen TPP-Malaysian Law Comparison (explaining that the U.S. TPP proposal would broader then scope of ex officio authority to cover civil trademark infringement cases and therefore, it will contribute to the risk of “wrongly detaining generic medicines, which may usefully communicate their bioequivalence to consumers through similar packaging.”).

256 Christian Wagner-Ahlfs, Seizure of Indian generic amoxicillin in Frankfurt, ESSENTIALDRUGS.ORG , available at http://www.essentialdrugs.org/edrug/archive/200906/msg00014.php.

257 ACTA Art. 5(d) (defining that “counterfeit trademark goods means any goods, including packaging, bearing without authorization a trademark which is identical to the trademark validly registered in respect of such goods, or which cannot be distinguished in its essential aspects from such a trademark, and which thereby infringes the rights of the owner of the trademark in question under the law of the country in which the procedures set forth in Chapter II (Legal Framework for Enforcement of Intellectual Property Rights) are Invoked.”).

258 Id. at Art. 5(k) (stating that “pirated copyright goods means any goods which are copies made without the consent of the right holder or person duly authorized by the right holder in the country of production and which are made directly or indirectly from an article where the making of that copy would have constituted an infringement of a copyright or a related right under the law of the country in which the procedures set forth in Chapter II (Legal Framework for Enforcement of Intellectual Property Rights) are invoked.”).

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Art. 14.6 – Remedies

TPP mandates a pro-enforcement border enforcement regime, which sets destruction of the goods as the norm. TPP Art. 14.6 is equivalent to ACTA Arts. 20.1 and 20.2.259 Although both TPP and ACTA provide for an exception to destruction of the infringing goods as a form of remedy, TPP does not allow for the option of disposal of such goods outside the channels of commerce.

Art. 14.8 – Small Consignments

This provision resembles ACTA’s restriction of the application of the TRIPS provision allowing “de minimis” shipments of goods to be exempted from border search and seizure provisions. TPP Art. 14.8 is essentially identical to ACTA Art. 14,260 which eliminates the TRIPS Art. 60 exception for small quantities of goods of a sent in small consignments.

Criminal Enforcement – Offensces

Art. 15.1 – Offenses

TPP Art. 15.1 would expand internationally required criminalization of copyright infringement to include “infringements that have no direct or indirect motivation of financial gain.”

259 Id. at Arts. 20.1, 20.2 (providing that “[e]ach Party shall provide that its competent authorities have the authority to order the destruction of goods following a determination referred to in Article 19 (Determination as to Infringement) that the goods are infringing. In cases where such goods are not destroyed, each Party shall ensure that, except in exceptional circumstances, such goods are disposed of outside the channels of commerce in such a manner as to avoid any harm to the right holder. 2. In regard to counterfeit trademark goods, the simple removal of the trademark unlawfully affixed shall not be sufficient, other than in exceptional cases, to permit release of the goods into the channels of commerce.”).

260 Id. at Art. 14 (enumerating that “1. Each Party shall include in the application of this Section goods of a commercial nature sent in small consignments. 2. A Party may exclude from the application of this Section small quantities of goods of a non-commercial nature contained in travellers’ personal luggage.”).

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TRIPS only requires criminalization of counterfeiting or copyright piracy is “willful” and “on a commercial scale”.261 In the U.S.-China case, the WTO affirmed that countries may implement their own definition of “commercial scale,” including both qualitative (e.g. for profit) and quantitative measures for the term.262 TPP Art. 15.1 shifts the potential focus to individual end-users by defining “commercial scale” as including (a) “significant willful copyright or related rights infringements with no direct or indirect motivation of financial gain,” and (b) willful infringements for purposes of “private financial gain.” Footnote 24 further defines “private financial gain” to include the mere “receipt or expectation of anything of value.” Under these definitions, it appears that any knowing receipt of copyright infringing material on the internet or otherwise could be defined as a violation of criminal law.

This provision does not track the details of current U.S. domestic law. U.S. law does not contain this definition of “private financial gain.”263 And U.S. law contains what might be seen as a floor on the term “significant,” limiting criminal infringement to willful infringement of at least $1,000 worth of material in a 180-day period.264

Normally, the responsibility for enforcing IP infringements lies with the right holder. By making the infringement criminal, the duty, cost and decision on whether to enforce the right shift to the state. The TPP proposal would greatly expand the amount of infringement activity subject to state enforcement. In addition to resource concerns, this expansion of criminal liability raises civil liberty concerns about state selection and enforcement of law infringement that is likely to be ubiquitous in many countries.265

The provision conflicts with Art. 17.11.22 of the U.S.-Chile free trade agreementFTA. That agreement criminalizes willful infringement for “commercial advantage or financial gain,” rather than “private” financial gain, and contains a footnote 33, explaining that “evidence of reproduction or distribution of a copyrighted work, by itself, shall not be sufficient to establish willful infringement.”

Art. 15.2 – Offenses

261 TRIPS Art. 61.262 Panel Report, China – Measures Affecting the Protection and Enforcement of Intellectual

Property Rights, ¶ 7.543, WT/DS362/R (Jan. 26, 2009).263 17 U.S.C. § 506.264 See Jodie Griffin, Inconsistencies Between the Trans-Pacific Partnership (TPP) Agreement and

US Law, Public Knowledge, www.publicknowledge.org/files/TPP%20Analysis.pdf265 See New York Times, Russia Uses Microsoft to Suppress Dissent, (Sept 11, 2010).

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TPP Art. 15.2 expands criminal liability for acts “even absent willful trademark counterfeiting or copyright or related rights piracy.” The proposed extension of criminal liability would include any “knowing trafficking in” labels or packaging “to which a counterfeit trademark has been applied” or “counterfeit or illicit labels” have been affixed to (in the case of specific products). These are new criminal provisions that extend beyond TRIPS and ACTA.266 Unlike ACTA, TPP does not require the use of the “confusing” label “on goods or in relation to services which are identical to goods or services for which such trademark is registered.”

Art. 15.4—Offenses

TPP Art. 15.4 criminalizes aiding and abetting infringement. This is likely to be meant for online intermediaries, as discussed further in XII, below.

Criminal Enforcement

Art. 15.5(a) – Penalties

TPP Art. 15.5(a) mandates that criminal penalties follow guidelines that are not included in present U.S. law. The provision, modeled on KORUS and ACTA,267 would require that criminal penalties include “sentences of imprisonment as well as monetary fines sufficiently high to provide a deterrent to future infringements, consistent with a policy of removing the infringer’s monetary incentive.” The provision further requires “policies or guidelines that encourage judicial authorities to impose those penalties at levels sufficient to provide a deterrent to future infringements.” Neither of these standards are reflected in current U.S. sentencing guidelines for copyright infringement.268

266 ACTA Art. 23.2 (requiring that “[e]ach Party shall provide for criminal procedures and penalties to be applied in cases of willful importation and domestic use, in the course of trade and on a commercial scale, of labels or packaging: (a) to which a mark has been applied without authorization which is identical to, or cannot be distinguished from, a trademark registered in its territory; and (b) which are intended to be used in the course of trade on goods or in relation to services which are identical to goods or services for which such trademark is registered.”).

267 See KORUS Art. 18.10.27(a) (same); see also ACTA Art. 24 (stating that “[f]or offences specified in paragraphs 1, 2, and 4 of Article 23 (Criminal Offences), each Party shall provide penalties that include imprisonment as well as monetary fines sufficiently high to provide a deterrent to future acts of infringement, consistently with the level of penalties applied for crimes of a corresponding gravity.”)


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Both TPP and ACTA prescribe both “imprisonment and monetary fines sufficiently high to provide a deterrent to future” infringements. Note, however, that TPP also adds that such penalties should be “consistent with a policy of removing the infringer's monetary incentive.” TPP omits ACTA's safeguard that such penalties shall be consistent with “the level of penalties applied for crimes of a corresponding gravity.” Furthermore, TPP requires party members to establish policies or guidelines to “encourage judicial authorities to [actually] impose those penalties.” TRIPS Art. 61 requires either monetary penalties or imprisonment, but not both.

Arts. 15.5(b), Seizures

TPP Art. 15.5(b), modeled on ACTA Art. 25.1,269 requires that judicial authorities have the authority to order the seizure of “suspected” counterfeit or pirated goods and implements. The TPP proposal adds that “items that are subject to seizure pursuant to any such judicial order need not be individually identified so long as they fall within general categories specified in the order.”

The duty to not require individual identification of property seized by government officials may implicate constitutional and human rights protections. The Fourth Amendment to the U.S. Constitution requires that search and seizure warrants “particularly” describe places to be searched and items to be seized.270 Similar guarantees against arbitrary searches and seizures of property may be implicated in other TPP countries.

15.5(d)(i) – Seizure, Forfeiture, and Destruction

269 ACTA Art. 25.1 (providing that parties “shall provide that its competent authorities have the authority to order the seizure of suspected counterfeit trademark goods or pirated copyright goods, any related materials and implements used in the commission of the alleged offence, documentary evidence relevant to the alleged offence, and the assets derived from, or obtained directly or indirectly through, the alleged infringing activity.”).


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TPP Art. 15.5(d)(i) would require the forfeiture and destruction of all counterfeit or pirated goods. This provision is similar to similar to ACTA Art. 25.3,271 except that ACTA requires the forfeiture orOR destruction of such goods. While both TPP and ACTA allow for an exception, TPP does not adopt the ACTA exception that allows goods to be “disposed of outside the channels of commerce” rather than be destroyed. The lack of this exception may prevent, for example, the donation of the infringing goods to charity.

Special measures Relating to Enforcement in the Digital Environment

Art. 16.3 – Internet Service Provider Liability

TPP contains two sets of standards that encourage internet service providers to police the content of the users of their networks.

271 ACTA Art. 25.3 (“[w]ith respect to the offences specified in paragraphs 1, 2, 3, and 4 of Article 23 (Criminal Offences) for which a Party provides criminal procedures and penalties, that Party shall provide that its competent authorities have the authority to order the forfeiture or destruction of all counterfeit trademark goods or pirated copyright goods. In cases where counterfeit trademark goods and pirated copyright goods are not destroyed, the competent authorities shall ensure that, except in exceptional circumstances, such goods shall be disposed of outside the channels of commerce in such a manner as to avoid causing any harm to the right holder. Each Party shall ensure that the forfeiture or destruction of such goods shall occur without compensation of any sort to the infringer.”).

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First, Art. 16.3(a) requires parties to provide “legal incentives for service providers to cooperate with copyright owners in deterring the unauthorized storage and transmission of copyrighted materials.” ACTA requires only that governments “endeavor to promote cooperative efforts within the business community.”272

Providing legal incentives for ISPs to police the internet is a complex task for which negotiation of standards in secretive international processes is completely inappropriate. Intermediaries’ interests are not perfectly aligned with user interests. Providing legal incentives for intermediaries to police networks may lead to the censoring of content, including legitimate content, choking innovative technology built on their platforms, surveillance of users, and threats to privacy and freedom of expression.273 The kind of private ordering of copyright enforcement represented by the TPP text has been a method of choice in the U.S., as evidenced by a recent Memorandum of Understanding between intermediaries and content-owners, encouraged by the U.S. Copyright Czar.274 Language about encouraging such cooperation should be viewed in light of these developments, which leave businesses unaccountable to users, and users without normal expectations of due process protected through court proceedings.

Second, the TPP proposal introduces a series of liability safeguards for ISPs, and in so doing may promote the extension of secondary liability to ISPs. Intermediary liability is not universally recognized. USTR has recognized that creating limitations on liability encourages countries to adopt intermediary liability in the first instance.275

272 Compare TPP Art. 16.3(a) with ACTA Art. 27.3.273 Margot Kaminski, Plurilateral Trade Agreements Lack Protections for Users, Intermediaries,

http://infojustice.org/archives/5951274 See David Kravets, U.S. Copyright Czar Cozied Up to Content Industry, E-Mails Show, WIRED

(Oct. 14, 2011), available at http://www.wired.com/threatlevel/2011/10/copyright-czar-cozies-up/#more-31071. See generally Annemarie Bridy, Graduated Response and the Turn to Private Ordering in Online Copyright Enforcement, 89 OR. L. REV . 81, 2010) (analyzing private ordering copyright enforcement and graduated response).

275 See U.S.-Peru FTA fn 28 (agreement language explicitly tempering that conclusion) http://www.ustr.gov/webfm_send/1031.

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It can be argued that TPP Art. 16.3 mandates a system of ISP liability that “goes beyond DMCA standards” and U.S. case law.276 For example, TPP Art. 16.3(b)(xi) requires ISPs to identify Internet users suspected of infringement, where U.S. courts have found that ISPs are not subject to identification subpoenas. TPP Art. 16.3(b)(xi) lacks ACTA Art. 27.4’s requirements that (i) there be a sufficient claim of infringement, (ii) the information be sought for the purpose of protecting or enforcing a copyright, and (iii) the procedures shall be implemented in a manner that avoids the creation of barriers to legitimate activity. The TPP Art. 16.3(b)(vii) also fails to include the DMCA’s second privacy provision, that intermediaries may not access material contrary to law.277 ACTA Art. 27.2 similarly requires that any system of digital enforcement be consistent with that Party’s law, and preserve fundamental principles such as freedom of expression, fair process, and privacy. There are other examples of discrepancies between the TPP and DMCA, as well.278

The TPP contains a U.S. side-letter outlining notice-and-takedown, which was rejected by Chile in signing its free trade agreement. That rejection allows significantly more flexibility in implementation of any notice-and-takedown regime.

Finally, TPP contains language in Art. 15.4 criminalizing “aiding and abetting” copyright infringement, that is likely intended to apply to online intermediaries. In ACTA, the provision on aiding and abetting in Art. 23.4 was directly followed by a provision requiring liability for legal persons—that is, companies—in Art. 23.5. Criminal aiding and abetting has not appeared in other free trade agreements, and when read in light of ACTA’s language on legal persons, may very well be intended to apply to intermediaries. In the U.S., the Bureau of Immigrations and Customs Enforcement (ICE) has been seizing domain names based in part on this theory of criminal liability.279 Criminal liability for intermediaries could threaten even those intermediaries that comply with safe harbors, as criminal and civil systems are distinct.

Transparency and Procedural Fairness for Healthcare Technologies

Among the U.S. Trans Pacific Partnership (TPP) proposals leaked during the Peru

276 The Complete Feb 10, 2011 text of the US proposal for the TPP IPR chapter, KNOWLEDGE ECOLOGY INTERNATIONAL , [hereinafter KEI] available at http://keionline.org/node/1091.

277 Digital Millennium Copyright Act, 17 U.S.C. § 512(m)(2).278 Margot Kaminski, Margot Kaminski: Plurilateral Trade Agreements Lack Protections for Users,

Intermediaries, INFOJUSTICE.ORG (Oct. 27, 2011), http://infojustice.org/archives/5951, originally posted on http://www.ip-watch.org/weblog/2011/10/27/plurilateral-trade-agreements-lack-protections-for-users-intermediaries/

279 See David Robinson, Following the Money: A Better Way Forward on the PROTECT IP Act, Information Society Project Working Paper Series, No. 1, http://www.law.yale.edu/intellectuallife/6564.htm.

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Please note: Chile FTA art. 17.11.23(c) nonetheless contains a notice-and-takedown provision.

Jimmy, 06/08/12,

Add cite to the U.S. cases.


round was a proposed chapter on “Transparency and Procedural Fairness for Healthcare Technologies.”280

X.1: Agreed Principles.

The agreed principles are almost verbatim restatements from the KORUS agreement.281 As in KORUS, they understate the role and importance of promoting affordability through pharmaceutical reimbursement policies. The provisions mainly discuss the promotion of “access” and “availability” of pharmaceuticals. The concept of affordability is mentioned only once.282 USTR’s recent white paper on TPP and medicines also defines “access” without reference to affordability concerns.283 One of the key purposes of drug reimbursement programs must be to promote affordable access to pharmaceuticals, not mere availability of the products themselves. This concern applies throughout the proposal.

X.2: Transparency Related to Healthcare Technologies.

The provision creates a vague requirement that “all measures” related to pharmaceutical reimbursement be administered in an “objective” manner.284 This concept of “objective” administration of the law is not a current U.S. legal requirement and is not defined in the agreement. What it means in this context is unclear, which may open opportunities for pharmaceutical companies to attempt to define it through litigation. What is a non-objective administration of the law? Would the choosing of drugs for a formulary based on a multitude of factors including price and availability decisions pass the test?

X.3: Procedural Fairness Related to Healthcare Technologies.

280 TPP Transparency Chapter, supra note 10.281 Compare id. at Para. X.1: Agreed Principles, with KORUS, supra note 12, at Art. 5.1: General

Provisions (mirroring the language of KORUS Art. 5.1, the TPP Transparency Chapter is almost a verbatim restatement, except that subsections (c) and (d) of KORUS states “(c) sound economic incentives and competitive markets for the efficient development of and access to patented and generic pharmaceutical products and medical devices; (d) appropriate government support of research and development in academic and commercial laboratories, intellectual property protections, and other incentives for innovation in the research and development of pharmaceutical products and medical devices” the equivalent subsection in the TPP Transparency Chapter states, “(c) sound economic incentives and the operation of competitive markets, or the adoption or maintenance by a Party of procedures that appropriately value objectively demonstrated therapeutic significance of high quality patented and generic pharmaceutical products and medical devices, for the efficient development of and access to such products and devices”).

282 See KORUS, supra note 12, at Art. 5.1(e); TPP Transparency Chapter, supra note 10, at Para. X.1(d).

283 See OFFICE OF THE U.S. TRADE REPRESENTATIVE, TRANS-PACIFIC PARTNERSHIP TRADE GOALS TO ENHANCE ACCESS TO MEDICINES (2011), available at http://www.ustr.gov/webfm_send/3059.

284 E.g., TPP Transparency Chapter, supra note 10, at Para. X.2.3: Transparency Related to Healthcare Technologies.

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BUT NOTE, KORUS art. 5.3.6 states “Each Party shall ensure that all measures of general application respecting any matter related to the pricing, reimbursement, or regulation of pharmaceutical products or medical devices are administered in a reasonable, objective, and impartial manner.”

WCLUSER, 06/23/12,

Reorder


This is the core section forcing countries to use formal rulemaking processes rather than market negotiations to determine reimbursement prices. International law should not determine this important policy choice. Countries must be free to use reimbursement programs as a player in the market rather than as its regulator.

X.3(a)

The term “reasonable period”285 has no definition in the agreement or in U.S. or international law. It invites litigation.

X.3(b)

The requirement to disclose all methodologies used to negotiate drug prices286 is one of many rules forcing the government to operate as a price regulator rather than market participant. Private companies do not disclose such information to their suppliers.

X.3(c)

The requirement to give notice and comment opportunities during reimbursement decisions287 prevents health authorities from using negotiation rather regulation to set drug prices. Private entities do not invite public comments on their negotiations with suppliers.

X.3(d)

This is one of the most worrisome provisions in the text. The provision has two parts:

285 TPP Transparency Chapter, supra note 10, at Para. X.3(a) (stating that “a Party shall: (a) ensure that consideration of all formal applications for the approval of pharmaceutical products or medical devices for reimbursement or for setting the amount of reimbursement for such products is completed within a reasonable, specified period”).

286 Id. at Para. X.3(b) (requiring that “a Party shall: (b) disclose to applicants within a reasonable, specified period all procedural rules, methodologies, principles, criteria (including those used, if any, to determine comparator products), and guidelines used to determine the eligibility for, and amount of, reimbursement for pharmaceutical products or medical devices”).

287 Id. at Para. X.3(c) (mandating that “a Party shall: (c) afford applicants timely and meaningful opportunities to provide comments at relevant points in the decision-making process related to reimbursement for pharmaceutical products or medical devices”).

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The first part encourages countries to abandon any economy of scale benefits from pooled purchasing through government and instead reimburse pharmaceutical companies at rates “consisting of competitive market-driven prices in the Party’s territory.”288 (The restriction to “in the Party’s territory” was not included in previous agreements and is designed to restrict countries from the common practice of using international reference prices to determine reasonable reimbursement rates.289 ) This rule is not followed in the U.S. Medicaid programs which receive discounts of up to 50% off the list price for pharmaceuticals due to their increased purchasing power. The provision is also practically unworkable since other large private purchasers in the market will not be under any obligation to disclose their “market-driven” prices.

The second part of this section, read with paragraph (i)290 , provides that if countries do not set reimbursement prices at the “competitive market-driven” price, then they must provide companies with appeals of whether reimbursement prices “appropriately recognize the value” of patents. There is no objective measure of the “value” of a patent. Economists normally define value as a function of market price. But in a monopoly market for an essential good, particularly in countries with high income inequality, this market price will be excessively high absent government regulation. It is impossible to know how this provision would be implemented. It invites litigation and promotes uncertainty.

X.3(e)

This provision mandates that countries allow companies to “apply for an increased amount” of reimbursement”291 based on evidence of “superior safety, efficacy or quality.”292 This provision is potentially beneficial in embracing the idea that prices should be set based on efficacy rather than market value. Nonetheless, affordability concerns must also be an integral part of reimbursement decisions, but are not mentioned.

X.3(f)

288 Id. at Para. X.3(d).289 Cf. KORUS, supra note 12, at art. 5.3.5(d) (requiring that “a Party shall: (d) within a reasonable,

specified period, provide applicants with meaningful, detailed written information regarding the basis for recommendations or determinations of the pricing and reimbursement of pharmaceutical products or medical devices, including citations to any expert opinions or academic studies relied upon in making such recommendations or determinations” but not containing the restriction that the verifiable basis consist of “competitive market-derived prices in the Party’s territory” as it is the case under paragraph x.3(d) of the TPP Transparency Chapter).

290 TPP Transparency Chapter, supra note 10, at Para. X.3(i) (mandating that “a Party shall: (i) make available an opportunity for independent appeal or review of recommendations or determinations relating to reimbursement for pharmaceutical products or medical devices”).

291 Id. at Para. X.3(e).292 Id.

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Need to cite the specific U.S. Medicaid program that receive discounts of up to 50%.


This provision mandates that governments allow companies to “apply” for reimbursements for additional medical indications”293 for products. The provision has no requirement that the additional indications applied for first be approved by the government’s medical registration authorities. It rather suggests that the safety and efficacy information would be submitted directly to the reimbursement entity, side stepping regulatory authorities.

X.3(g, h, i)

These provisions require that governments provide written reasons for every decision [(g) and (h)]294 and then provide an “independent appeal” of any reimbursement decision (i)295 , presumably based on the substantive restrictions on reimbursement programs defined in X.32(d). These provisions will likely increase pharmaceutical company negotiating power to exact higher prices from governments through litigation threats.

X.3(k)

This provision requires that all members of reimbursement committees be made public296 , presumably to enable targeted lobbying from pharmaceutical companies. Such lobbying can be detrimental to public decision making, especially when linked to unethical gift giving that has plagued pharmaceutical marketing in the U.S. and elsewhere.297

X.4: Dissemination of Information to Health Professionals and Consumers

293 Id. at Para. X.3(f).294 Id. at Para. X.3(g),(h) (requiring that “a Party shall: (g) within a reasonable, specified period,

provide detailed written information to applicants regarding the basis for recommendation or determination relating to their applications for reimbursement of pharmaceutical products or medical devices, including citations to any expert opinions or academic studies upon which the Party has relied; (h) make available to the public written information regarding its recommendations and determinations relating to the reimbursement of pharmaceutical products or medical devices, subject to any requirements under the Party’s law to protect information considered to be confidential”).

295 Id. at Para. X.3(i).296 Id. at Para. X.3(k).297 See generally Dana Katz, Arthur L. Caplan & Jon F. Merz, All Gifts Large and Small, 3:3 Am. J.

Bioethics 39 (2003), available at http://www.tandfonline.com/doi/pdf/10.1162/15265160360706552 (discussing the recent focus on the ethical implications of “physicians receiving gifts from drug companies” and the considerable evidence which suggests that “gifts of negligible value can influence the behavior of the recipient in ways the recipient does not always realize.”).

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http://www.tandfonline.com/doi/pdf/10.1162/15265160360706552


This provision attempts to set drug marketing policy through trade agreements. It would mandate that countries allow certain kinds of direct-to-consumer and direct-to-physician marketing efforts over the internet.298 This is a subject currently subject to regulatory investigations in the U.S. and would be contrary to the drug marketing laws of many countries. The provision would appear to make illegal a proposal by Representative Waxman that companies not be allowed to engage in certain kinds of direct to consumer promotion in the first three years of a drug’s time on the market.299

X.5: Ethical business practices [no text]

As in other areas of the TPP, provisions protecting corporate concerns are well developed and those potentially protecting consumers are absent. This section should consider standards that would ban gift giving and other pecuniary relationships between pharmaceutical companies and prescribers or government health officials. It should ban off-label marketing of drugs. It should mandate private and public rights of action against fraudulent and misleading marketing practices.

X.6: Cooperation

As in the agreed principles, this provision appears tailored to promote a conception of “availability” that does not include affordability.300 The key concern of countries in the region, and in particular the U.S., should be on sharing information on how best to ensure the affordability of medicines in the context of the ongoing economic crisis.

X.7: Definitions

Few of the key terms in the agreement are defined, including “access,” “value,” “reimbursement” and “health care programs” as applied to the scope of coverage, “transparent,” “verifiable,” “objective,” “competitive-market derived,” “independent” as related to “appeal or review.”

X.7 fn 2. (U.S. carve out?)

298 Transparency Chapter, supra note 10, at Para. X.4 (requiring that “[e]ach Party shall permit a pharmaceutical product manufacturer to disseminate to health professionals and consumers through the manufacturer’s Internet site registered in the territory of the Party, and on other Internet sites registered in the territory of the Party linked to that site, information that is truthful and not misleading regarding its pharmaceutical products that are approved for sale in the Party’s territory, provided that the information includes a balance of risks and benefits and is limited to indications for which the Party’s competent regulatory authorities have approved the marketing of the pharmaceutical products.”).

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I may be missing something but I don’t see the definitions in the text, available at: http://www.citizenstrade.org/ctc/wp-content/uploads/2011/10/TransPacificTransparency.pdf


In previous agreements with the U.S. including pharmaceutical chapters, the U.S. has claimed that they have no application to programs in the U.S. This in part because the largest federal drug reimbursement program in the U.S. – included in the Medicaid program – is administered by state governments (although created by federal statute). The Australian and Korean agreements were crafted to apply to the “central” level of government. The KORUS agreement included a footnote stating: “F[f]or greater certainty, Medicaid is a regional level of government health care program in the United States, not a central level of government program.”301

The Medicaid carve out in the Korea FTAKORUS has been criticized in the U.S. for potentially leaving vulnerable other U.S. programs that control prices on drugs in government programs in similar ways as the Korean and Australian governments, including through Medicare and the so-called 340b program for community hospitals. TPP removes this footnote form the proposed text and substitutes a bracketed place holder for clarification of the scope of application. This should be concerning to U.S. health advocates and officials. A letter from several senior members of the U.S. Congress, released during the Chicago round of negotiations, instructed that “TPP should not undermine either U.S. or other member countries' current or prospective, non-discriminatory drug reimbursement policies and programs (e.g. Medicare, Medicaid, the VA, and other programs).”

Indeed, there are strong voices in the U.S. in opposition to any restrictions on reimbursement programs within TPP, even if they do effectively carve out all existing U.S. programs. Vermont Governor Peter Shumlin wrote President Obama with respect to a possible TPP pharmaceutical chapter:

Even if a chapter was proposed that did include a Medicaid carve-out, state leaders believe it is inappropriate for U.S. trade policy to advance restrictions on pharmaceutical pricing programs that U.S. programs do not meet but for technical carve outs.302

Conclusion

299 See ASSOC. OF NAT’L ADVERTISERS, 2007 COMPENDIUM OF LEGISLATIVE, REGULATORY, AND LEGAL ISSUES 11 (2007), available at www.ana.net/getfile/1237 (mentioning “. . . the Enhancing Drug Safety and Innovation Act of 2007 (S. 484/H.R.1561), sponsored by Senators Mike Enzi (R-WY) and Ted Kennedy (D-MA) and Representative Henry Waxman (D-CA) . . . “ which contained a “. . . three-year moratorium on new prescription drug ads and mandated new disclosure requirements for promotional material.”).

300 See Transparency Chapter, supra note 10, at Para. X.6.1.301 KORUS, supra note 12, at Art. 5.8 FN3.302 Letter from Peter Shumlin, Governor, Vt. to President Barack Obama (June 1, 2011), available at

http://www.forumdemocracy.net/downloads/Letter%20from%20VT%20Gov.%20Shumlin%20to%20President%20Obama%20-%20June%201,%202011.pdf.

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The U.S. proposals, if adopted, would create the highest intellectual property protection and enforcement standards in any free trade agreement to date. If adopted, the TPP would predictably lead to higher prices and decreased access to a broad range of consumer products in many TPP member countries, from medicines to textbooks to information on the internet, with little or no benefit to any TPP member in the form of increased innovation, creativity or local economic activity. Despite the broad ranging impact so the agreement on the public, it is being negotiated under conditions of secrecy that are inimical to the construction of good public policy. Negotiating legislative minimum standards agreements through processes where the public affected by those norms cannot observe the standards being discussed, much less participate in their creation, is an affront to democracy and the principles of good government. We advise that all members of the TPP negotiation reject the maximalist standards of the U.S. proposal and move the debate of global intellectual property norms to an open and transparent process where a full range of stakeholders can observe and participate.

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