Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership

Knowledge Ecology International (KEI) has obtained from Wikileaks a complete copy of the consolidated negotiating text for the IP Chapter of the Trans-Pacific Partnership (TPP). (Copy here, and on the Wikileaks site here: https://wikileaks.org/tpp/) The leaked text was distributed among the Chief Negotiators by the USTR after the 19th Round of Negotiations at Bandar Seri Begawan, Brunei, in August 27th, 2013.

There have been two rounds since Brunei, and the latest version of the text, from October, will be discussed in Salt Lake City next week.

The text released by Wikileaks is 95 pages long, with 296 footnotes and 941 brackets in the text, and includes details on the positions taken by individual countries.

The document confirms fears that the negotiating parties are prepared to expand the reach of intellectual property rights, and shrink consumer rights and safeguards.

Compared to existing multilateral agreements, the TPP IPR chapter proposes the granting of more patents, the creation of intellectual property rights on data, the extension of the terms of protection for patents and copyrights, expansions of right holder privileges, and increases in the penalties for infringement. The TPP text shrinks the space for exceptions in all types of intellectual property rights. Negotiated in secret, the proposed text is bad for access to knowledge, bad for access to medicine, and profoundly bad for innovation.

The text reveals that the most anti-consumer and anti-freedom country in the negotiations is the United States, taking the most extreme and hard-line positions on most issues. But the text also reveals that several other countries in the negotiation are willing to compromise the public’s rights, in a quest for a new trade deal with the United States. The United States and other countries have defended the secrecy of the negotiations in part on the grounds that the government negotiators receive all the advice they need from 700 corporate advisors cleared to see the text. The U.S. negotiators claim that the proposals need not be subject to public scrutiny because they are merely promoting U.S. legal traditions. Other governments claim that they will resist corporate right holder lobbying pressures. But the version released by Wikileaks reminds us why government officials supervised only by well-connected corporate advisors can’t be trusted.

An enduring mystery is the appalling acceptance of the secrecy by the working news media.

With an agreement this complex, the decision to negotiate in secret has all sorts of risks. There is the risk that the negotiations will become hijacked by corporate insiders, but also the risk that negotiators will make unwitting mistakes. There is also the risk that opportunities to do something useful for the public will be overlooked or abandoned, because the parties are not hearing from the less well-connected members of the public.

The U.S. proposals are sometimes more restrictive than U.S. laws, and when consistent, are designed to lock-in the most anti-consumer features. On top of everything else, the U.S. proposals would create new global legal norms that would allow foreign governments and private investors to bring legal actions and win huge damages, if TPP member countries does not embrace anti-consumer practices.

General provisions, and dispute resolution

The existing multilateral copyright and trade treaties, negotiated in the light of day, generally provide better balance between right holders and users. The WTO TRIPS Agreement is the only multilateral agreement with impressive enforcement mechanisms. The TRIPS agreement is defined not only by the specific provisions setting out rights and exceptions, but general provisions, such as Articles 1, 6, 7,8, 40 and 44, that provide a variety of safeguards and protections for users and the public interest. The US is proposing that the new TPP IPR provisions be implemented with few if any of the safeguards found in the TRIPS, or weaker versions of them.

The dispute resolution provisions in the TPP permit both governments and private investors to bring actions and obtain monetary damages if arbitrators find that the implementation of the agreement is not favorable enough to right holders.

This effectively gives right holders three bites at the apple — one at the WTO and two at the TPP. They can lobby governments to advance their positions before a WTO panel, and/or, the separate dispute mechanisms available to governments and investors in the TPP. There are no opportunities for consumers to bring such disputes.

The addition of the investor state dispute resolution provisions in the TPP greatly increases the risks that certain issues will be tested in the TPP, particularly when the TPP provisions are modified to be more favorable to right holders, or lack the moderating influence of the TRIPS type safeguards which the US is blocking in the TPP.

Access to Medicines

The trade agreement includes proposals for more than a dozen measures that would limit competition and raise prices in markets for drugs. These include (but are not limited to) provisions that would lower global standards for obtaining patents, make it easier to file patents in developing countries, extend the term of patents beyond 20 years, and create exclusive rights to rely upon test data as evidence that drugs are safe and effective. Most of these issues have brackets in the text, and one of the most contentious has yet to be tabled — the term of the monopoly in the test data used to register biologic drugs. The United States is consistently backing the measures that will make drugs more expensive, and less accessible.

Some of the issues are fairly obvious, such as those requiring the granting of more patents with longer effective terms, or monopolies in test data. Others are more technical or subtle in nature, such as the unbracketed wording of Article QQ.A.5, which is designed to narrow the application of a 2001 WTO Doha Agreement TRIPS and Public Health, and its obligations to provide for “access to medicine for all.” By changing the language, the TPP makes it seem as if the provision is primarily about “HIV/AIDS, tuberculosis, malaria, [US oppose: chagas] and other epidemics as well as circumstances of extreme urgency or national emergency,” instead of all medicines and all diseases, including cancer.

Patents on Surgical Methods

An interesting example of how the US seeks to change national and global norms are the provisions in the TPP over patents on surgical methods. The WTO permits countries to exclude “diagnostic, therapeutic and surgical methods for the treatment of humans or animals.” The US wants to flip this provision, so that “may also exclude from patentability” becomes “shall make patents available.” However, when a version of the IP Chapter was leaked in 2011, the US trade negotiators were criticized for ignoring the provisions in 28 USC 287 that eliminated remedies for infringement involving the “medical activity” of a “medical practitioner.” The exception in US law covered ”the performance of a medical or surgical procedure on a body.” The US trade negotiators then proposed adding language that would permit an exception for surgery, but only “if they cover a method of using a machine, manufacture, or composition of matter.” The US proposal, crafted in consultation with the medical devices lobby, but secret from the general public, was similar, but different from the U.S. statute, which narrowed the exception in cases involving “the use of a patented machine, manufacture, or composition of matter in violation of such patent.” How different? As Public Citizen’s Burcu Kilic puts it, under the US proposal in the TPP, the exception would only apply to “surgical methods you can perform with your bare hands.”

Why is the United States putting so much effort into narrowing if not eliminating the flexibility in the WTO agreement to provide exceptions for patents on “diagnostic, therapeutic, and surgical methods for the treatment of humans or animals”? It did not hurt that Adva Med, the trade association for the medical device manufacturers, hired Ralph F. Ives as Executive Vice President for Global Strategy & Analysis. Before becoming a lobbyist for the medical device industry, Ives was the head of pharmaceutical policy for USTR. And Ives is just one of an army of lobbyists (including former Senator Evan Bayh) representing the medical devices industry. ITAC 3, the USTR advisory board for Chemicals, Pharmaceuticals, Health/Science Products And Services, includes not only Ralph Ives, but also representatives from Medronic, Abbott, Johnson and Johnson, Deme Tech, North Coast Medical and Airmed Biotech — all companies involved in the medical device business. All are considered “cleared advisors” to USTR and have access to the TPP text.

Uncertainty over compulsory licenses on patents

At present, exceptions to exclusive rights of patents may be implemented under a general exceptions clause (Article 30 of the TRIPS), a rules based system (Article 31), or under other provisions, including limitations to remedies, the first sale doctrine, or the control of anticompetitive practices. The option to use the TRIPS Article 31 mechanisms has been proposed by New Zealand, Canada, Singapore, Chile and Malaysia, but is not currently supported by the US, Japan or other countries. This presents significant uncertainty over the freedom to use compulsory licenses. If QQ.E5quater is not accepted, the rules based WTO approach will not be possible, and governments will have to satisfy a restrictive three step test, and run the risk of litigation under investor state dispute resolution provisions of the TPP.

Article QQ.E.5quater: {Other Use Without Authorisation of the Right Holder}

[NZ/CA/SG/CL/MY propose: Nothing in this Chapter shall limit a Party's rights and obligations under Article 31 of the TRIPS Agreement or any amendment thereto.]

Copyright

There is little reason for any language on copyright in the TPP. All of the TPP member countries are already members of the WTO, which has its own extensive obligations as regards copyright, including obligations to implement Articles 1 through 21 of the Berne Convention. The TRIPS has already expanded copyright coverage to software, and provides extensive protections to performers, producers of phonograms (sound recordings) and broadcasting organizations. Moreover, the United States and Australia have proposed that all TPP member countries “ratify or accede” to two 1996 treaties (the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty), as well as the 1974 Brussels Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite. Despite this, the TPP provides its own nuanced and often detailed lists of obligations. Collectively, the copyright provisions are designed to extend copyright terms beyond the life plus 50 years found in the Berne Convention, create new exclusive rights, and provide fairly specific instructions as to how copyright is to be managed in the digital environment.

Copyright terms

There are significant differences in the positions of the parties on the term of protection. Some countries are opposing any expansion of the term found in the Berne Convention, the TRIPS or the WCT, which is generally life plus 50 years, or 50 years for corporate owned works.

For the TPP copyright terms, the basics are as follows. The US, Australia, Peru, Singapore and Chile propose a term of life plus 70 years for natural persons. For corporate owned works, the US proposes 95 years exclusive rights, while Australia, Peru, Singapore and Chile propose 70 years for corporate owned works. Mexico wants life plus 100 years for natural persons and 75 years for corporate owned works. For unpublished works, the US wants a term of 120 years.

While the US negotiators are indeed promoting US legal norms, they are promoting norms that most experts and consumers see as a mistake, that should be corrected. There is no justification for 95 year copyright terms for corporations, or 70 years of protection after an author is dead, or 120 years for unpublished works.

3-Step Test

One set of technically complex but profoundly important provisions are those that define the overall space that governments have to create exceptions to exclusive rights. The Berne Convention established a system combining “particular” exceptions for the most common and important topics such as quotations, news of the day, public affairs, speeches, uses of musical compositions, and education, and a general purpose exception to the reproduction right that could be implemented in any other case not covered by the particular exception. Any exception not spelled out as a particular exception was subject to a very restrictive three step test. When the WTO incorporated the bulk of the Berne Convention articles, it retained this system, and added additional areas of flexibility, including very broad freedom to apply the first sale doctrine (Article 6 of the TRIPS), to control anti-competitive practices (Articles 8 and 40), and to implement a liability rule approach through Article 44.2 of the TRIPS.

In recent years, the publisher lobby has sought to elevate the 3-step test to a high level filter to limit all copyright exceptions, including the so called “particular” Berne exceptions, as well as anything else that limits exclusive rights. In the TPP, the copyright lobby has succeeded in obtaining a formulation based in part upon the 1996 WIPO WCT treaty, which can be read to provide some recognition of the Berne particular exceptions, but (unlike the 2012 Beijing treaty) does not specifically reference the important agreed upon statements in the 1996 WCT, which support more robust exceptions.

In its current form, the TPP space for exceptions is less robust than the space provided in the 2012 WIPO Beijing treaty or the 2013 WIPO Marrakesh treaty, and far worse than the TRIPS Agreement. While this involves complex legal issues, the policy ramifications are fairly straightforward. Should governments have a restrictive standard to judge the space available to fashion exceptions for education, quotations, public affairs, news of the day and the several other “particular” exceptions in the Berne Convention, and more generally, why would any government want to give up its general authority to consider fashioning new exceptions, or to control abuses by right holders?

Formalities

The TPP goes beyond the TRIPS agreement in terms of prohibiting the use of formalities for copyright. While the issue of formalities may seem like a settled issue, there is a fair amount of flexibility that will be eliminated by the TPP. At present, it is possible to have requirements for formalities for domestically owned works, and to impose formalities on many types of related rights, including those protected under the Rome Convention. In recent years, copyright policy makers and scholars have begun to reconsider the benefits of the registration of works and other formalities, particularly in light of the extended terms of copyright and the massive orphan works problems.

In April 2013 a major workshop on this topic took place in Berkeley, titled: “Reform(aliz)ing Copyright for the Internet Age?” (http://www.law.berkeley.edu/formalities.htm), where the benefits and challenges of reintroducing formalities was discussed.

On the issue of formalities, the TPP language is an unnecessary and unwelcome barrier to introducing reforms.

TPM/DRM

The copyright section also includes extensive language on technical protection measures, and in particular, the creation of a separate cause of action for breaking technical protection measures. The US wants this separate cause of action to extend even to cases where there is no copyrighted works, such as in cases of public domain materials, or data not protected by copyright. It is worth noting that the restrictions on breaking technical protection measures include several exceptions, including, for example:

“lawfully authorized activities carried out by government employees, agents, or contractors for the purpose of law enforcement, intelligence, essential security, or similar governmental purposes” In the United States the problem of TP Ms and the complicated rulemaking process for exceptions and limitations to anticircumvention measures was part of a recent controversy when the Librarian of Congress refused to renew an exemption to allow the unlocking of cell-phones. After a petition by over 100,000 to the White House, the Obama Administration responded, agreeing that an exemption should exist to permit unlocking of cell-phones. Rep. Zoe Lofgren (D-CA) introduced a bill, co-sponsored with bipartisan support, called the "Unlocking Technology Act" which would make clear that there is no liability for circumvention of a TPM where circumvention is done to engage in a use that is not an infringement of copyright. Such a bill is potentially threatened by the aggressive proposals on TP Ms in the TPP. The TPP provisions on technological protection measures and copyright and related rights management information are highly contentious and complex, and as a practical matter, impossible to evaluate without access to the negotiating text. Given the enormous public interest in this issue and other issues, it is very unfortunate that governments have insisted on secret negotiations.

Damages

One of the largest disappointments in the ACTA negotiations was the failure to sufficiently moderate the aggressive new norms for damages associated with infringements. The TPP negotiation has been far more secretive than the ACTA negotiation, and what is now clear is that as far as the issue damages is concerned, the TPP text is now much worse than the ACTA text. Particularly objectionable is the unbracketed Article QQ.H.4: 2ter, which reads as follows: 2ter. In determining the amount of damages under paragraph 2, its 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. Aside from the obvious overreaching of requiring consideration of "the suggested retail price," the US is ignoring all sorts of national laws for copyright, patents and trademarks, and TRIPS rules as regards layout-designs (topographies) of integrated circuits, that set different standards for damages in cases of infringements. The following are just a few examples: Under the Article 36 of TRIPS, damages for certain infringement are limited, by the WTO, to "a sum equivalent to a reasonable royalty such as would be payable under a freely negotiated licence in respect of such a layout-design." Under the Affordable Care Act, a company infringing on undisclosed patents for biologic drugs is only liable for a reasonable royalty, or no royalty, depending upon the nature of the disclosure.

The US DOJ and the USPTO recently took the position that certain patents infringements related to standards setting activities, should be limited to a reasonable royalty.

The US proposal in the TPP will also prevent the United States from using limitations on remedies for infringement as part of a larger effort to expand access to orphaned copyright works — an approach that has been endorsed by the US Copyright Office, and by Senator Patrick Leahy.

For several other examples, see: " Two areas where ACTA is inconsistent with US law, injunctions and damages, KEI Policy Brief, 2011:2, as well as: Access to Orphan Works, and ACTA provisions on damages KEI Policy Brief 2010: 1.

Concluding comments

Although there are some areas of agreed to text, the leaked text from August 30, 2013 also highlights the numerous areas where parties have yet to finalize the agreement. That there are over 900 brackets means that there is still plenty of opportunity for countries to take positions that will promote the public interest and preserve consumer rights. These areas include substantive sections of the most controversial provisions on patents, medicines, copyright and digital rights where there are often competing proposals. The publication of the text by Wikileaks has created a rare and valuable opportunity to have a public debate on the merits of the agreement, and actions to fix, change or stop the agreement.

The Obama administration is caught in a trap as it tries to bring home a trade deal with its Pacific Rim partners...

...Some of the chief beneficiaries may be big drug companies like Novartis AG, Roche Holding AG, and Pfizer Inc. while the losers could be consumers in both the U.S. and the region. The administration says it’s bound by congressionally imposed instructions to try to get as much current U.S. law as possible into trade accords–including stringent protections for patented drugs that it’s repeatedly tried to ease at home to encourage more cost-saving generics.

The disconnect has put U.S. negotiators in the position of pushing provisions in the 12-nation Trans-Pacific Partnership that would preclude the administration from making further attempts to win the legal changes. It also has negotiators pressing the region’s developing countries to sign onto a schedule for adopting the stronger rules, reversing previous exemptions to allow them easier access to cheap medicines.

Even though U.S. Trade Representative Michael Froman says the talks are ‘in a closing mode,’ American proposals for tough intellectual-property protections for drugs are meeting resistance from Australia, New Zealand, Canada and other Pacific Rim nations. Chile’s foreign minister, for one, has said flatly that his country won’t accept some key provisions.”

The TPP has so many awful provisions because it's bound by instructions from Congress Corporations regarding trade accords to seek those shitty provisions.

Well, I don't think Congress was able to think of all but banning no-name generic drugs, copyright nightmares that'll make SOPA look like a dream, and the ability for companies to sue entire nations...