Tuesday, October 02, 2018

NAFTA/USMCA is Even Worse Than You Thought on Intellectual Property: CETA Victory is Now Forfeited & Long Live Life + 70 etc.

(What Goes Up Must Come Down - Except in the case of IP in treaty law)

A possibly unintended and certainly unwelcome consequence of the sad capitulation of Canada in the IP Chapter of NAFTA/USMCA is that the positive aspects of CETA – holding the line on copyright term of life + 50, the effective 8-year term of protection of market exclusivity for biologics, etc. - have been thrown under the bus. 

The extension of the copyright term to life + 70 and the period of market exclusivity for biologics to 10 years will cost Canada billions and are effectively irreversible policy errors that should have been avoided.

This is because of the operation of national treatment and most favoured nation (“MFN”) provisions in CETA itself and the tangled web of other treaties and agreements to which Canada is bound. Indeed, Canada may now have effectively made these concessions to at least the other 163 members of the WTO, except perhaps where the Berne Convention rule of the shorter term may apply in the case of copyright.

National treatment is the golden rule of international IP law. Every country must provide nationals of other treaty countries the same rights as their own nationals.

The MFN principle holds that each country must provide investors, for example, with treatment no less favourable than the treatment it accords in like situations.

This means that the stronger protection now conceded by Canada to Trump’s USA will apply to the EU, thus vitiating Canada’s successful negotiation where we held the line on Canada’s existing regimes for copyright term and market exclusivity for biologics.

It is sad to see Canada’s proud history of 150 years of being a smart middle power on IP and acting largely in our own interest and even leading the world in some respects fade so quickly.

As I and many others never cease to remind, IP is a one-way ratchet. Needless increases in IP protection are not only bad for free trade and innovation. They cannot be reversed.

Both I and Ton Zuijdwijk discussed these principles in our CIGI Papers that formed the IP substantive component of the recent book publication Reflections on Canada’s Past, Present and Future in International Law.

Our papers are here:

Canada is now worse off in terms of IP than we were before and under CUSFTA, NAFTA and WTO TRIPS. It will be interesting to find out – if we ever do – why this happened.

And, in this case, contrary to that great golden oldie hit of Canadian David Clayton Thomas and Blood, Sweat and Tears, what goes up can’t come down.


Monday, October 01, 2018

The Cost of Canadian IP Capitulation in NAFTA.


Here are a few quick initial points on the IP chapter in the new NAFTA and Canada’s capitulation to US lobby groups, their Canadian surrogates and American bluffing and bullying.

The extension of the copyright term to life + 70 was a very unfortunate, gratuitous, unnecessary and costly mistake. This could cost Canada more than  $450 million a year and most of this would be outflows to the USA.  It will make research and education more expensive and chill innovation. And, according to at least a couple of respected Canadian academics, namely Ariel Katz and Graham Reynolds, it may well be unconstitutional.

The extension of criminal penalties is alarming and dangerous. This could affect employment relationships and even reach into class rooms, especially if the Federal Court’s decision in Access Copyright v. York University is not convincingly overturned on appeal.

It is of little or no use or comfort to say that Canada can reassess this in the future. Increasing IP rights is a one-way ratchet. There is rarely if ever a legally or politically acceptable way to back down from vested rights, no matter how improvidently bestowed.

This is a significant setback to the multilateral liberal order in free trade. Canada has now become a victim by capitulating to a bluffing bully regime bent on weakening or destroying institutions such as the WTO and WIPO. I have written about how Canada was smart and managed to mostly punch well above its weight and in its own best interests and even positively influence and show leadership on the world stage involving trade and IP for 150 years. It seems that those days are sadly over.

I have no doubt that Canada’s negotiators did their homework and did their best. But there will no doubt be lots of questions about whether there was adequate consultation and transparency, whether Canada should have called the American’s bluff and waited until the mid-terms are over, why we retreated from victories in CETA and CPTPP, etc. But for now, regarding the IP chapter, all that can be said is that Canada caved and capitulated “bigly”.


PS: Here's the statement of  Canadian Generic Pharmaceutical Association (CGPA), on the pharmaceutical intellectual property aspects of the United States-Mexico-Canada Agreement (USMCA).