Some Possible Canada EU FTA IP issues

The Canada/EU FTA negotation process is underway. The EU has published a consultation document (HT to Jamie Love) asking what stakeholders think of Canada.

From an IP standpoint, there are many clear opportunities and pitfalls for Canadian interests depending on point of view. For example, consider the following - which apart from the first and the above illustrations relate to copyright law:

1. The EU is very aggressive on geographical indications. Does Canada want to take away the right of its food manufacturers, retailers and restaurants to sell domestically made products such as the following that we have referred to for years as:
a. "parmesan" cheese
b. “dijon” mustard
c. “prosciutto” ham?

2. The EU is has a life plus 70 year copyright term and is heading towards a 70 year term for sound recordings. The EU will clearly not harmonize downwards to meet Canada on this. Canada will be under great pressure to harmonize "upwards" to these lengthy terms. This would clearly be highly controversial in Canada.

3. The EU will doubtless press for quick Canadian ratification of the 1996 WIPO internet treaties, even though the EU has not ratified these treaties to date and has been claiming that such ratification is imminent for many years.

4. The EU has a very complex labyrinth of laws concerning parallel imports or "grey market" products. Essentially, they amount to a strong "Fortress Europe" regime to keep parallel imports out but such products are allowed to flow freely within the EU if they have been imported with the appropriate "consent", whatever that may mean. If goods can flow freely between Canada and the EU, the EU will probably want Canada to drastically change its laws to tighten up the possibility of allowing parallel imports into Canada because Canada could become a "back door" to Europe. This could prove costly for Canadian consumers, because IP has hitherto been essentially ineffective to block parallel imports of consumer goods into Canada, except for books. The EU is generally a very "high price" market for the types of goods that are subject to parallel trade, perhaps in large part because of its IP policies on parallel imports.

5. The EU has much more a much active antitrust policy and enforcement mind set and mechanism than Canada, and is extremely cognizant that IP rights are prone to abuse and other anticompetitive practices.

6. The EU will no doubt press for expanded ex officio border actions without Court orders that could interfere with legitimate trade and may not be necessary or desirable from a Canadian standpoint. This effort will no doubt be linked to the still secretive ACTA process.

7. The EU also has a rather strange database protection regime, which has led to some odd results in terms of "extraction" of information. Whether the EU will press for this remains to be seen.

I have not yet considered patent or trade-marks law, or the seal hunt.

Canada EU FTA

As I indicated on January 16, 2009, Canada seems to be lurching ahead on a Canada EU FTA with the EU. There was virtually no time for anyone to provide input before the Government's January 20, 2009 deadline. Clearly, the Government wasn't very interested in public input, having announced the consultation deadline just before Christmas.

IP, of course, is on the table in TRIPS + format. Canada can only lose on the IP front overall if IP remains on the table. We will probably have to agree to copyright term extension, ACTA, and lots of other maximalist positions. The RIAA, MPAA and their Canadian operations , CRIA and CMPDA, will, of course, be delighted.

While freer trade with Europe may be a good thing overall, and Canada needs to move beyond total dependency on trade with the USA. the IP matrix holds little hope of anything positive for Canada overall in this exercise. Europe cannot ratchet down from its largely American induced follies that have been implemented in many cases by clever US corporate and government "policy shopping."

Policy shopping is a the practice of obtaining legislation and/or treaties that would be unacceptable if initiated in the home country. However, once done, there is enormous pressure in the home country to "harmonize" to the other jurisdiction. Many believe that this is how the life + 70 Mickey Mouse term came into being in Europe, although the official excuse in the EU was harmonization to Germany's term.

Canada's only hope on this issue is to somehow try to get IP off the table. However, as is Canada's custom, we seem to have agreed at the outset to negotiate on IP issues where we cannot win overall other than maintaining the status quo, which seem to have been conceded away at the outset.

I cannot think of any important IP issue where Canada would make demands on the EU. However, on many important and controversial IP issues, the EU will probably force Canada into policies that will be clearly contrary to Canada's interest.

HK

Is Canada Protecting Itself From Protectionism?

The Toronto Star is reporting that Stockwell Day is essentially already claiming victory in the business of the nearly trillion dollar “Buy American” bill.

Speaking in Toronto this morning, he also said Ottawa must remain vigilant as the legislation moves forward.


"This shows the importance of and the power of diplomacy," Day told a Bay Street audience of about 100 people at the Toronto Board of Trade.


He emphasized that Ottawa's "full-court press" to counter growing protectionism in Washington is being successful. The minister said there has been "enormous pressure" on Ottawa to enact retaliatory legislation against U.S. business, but he and Prime Minister Stephen Harper resisted, preferring the diplomatic route.


"Prime Minister Harper was the first world leader to raise this issue and speak against it," he said.


Noting that Canadian firms ship $11 billion in steel to the U.S. annually, Day warned that a "Buy American" policy on Washington's stimulus spending projects would have severely hurt Canada.

If Minister Day and the Prime Minister really believe that a clause to the effect that the bill will be "applied in a manner consistent with U.S. obligations under international agreements” will make this issue go away, we could be in big trouble.

Canada got seriously outsmarted on IP negotiations (particularly on the pharmaceutical patent file) and many other issues with the Americans in the FTA and NAFTA, which set the stage for the WTO agreement and much that has happened since. Now, the Americans have their sights on copyright.

Besides, we don't want to have to start a NAFTA or WTO dispute to figure out what “in a manner consistent with U.S. obligations under international agreements” means on the basis of a particular case or potentially thousands of them. These cases take many years, cost a fortune to prosecute, and have uncertain outcomes. Moreover, when the Americans don't like the outcome, they basically ignore or even flout it.

If Canada and other major G-20 powers stick together, President Obama will have not only the basis but the necessity to play hardball with Congress and to veto a protectionist bill. If Canada runs off and declares victory on the basis of something as flimsy as this, we will have played right into the protectionists' hands.

And we may never know what was discussed in the corridors that led to The Star reporting that:

He [Day] emphasized that Ottawa's "full-court press" to counter growing protectionism in Washington is being successful.

Besides, we should be entitled to assume that American law will be applied "in a manner consistent with U.S. obligations under international agreements." What else have the past 2.5 decades of trade negotiations been about? That's hardly a concession.

In Canada, at least, there is a presumption that all statutes, both federal and provincial, do comply with international treaties and should be interpreted in such a way as to ensure compliance. Thus, the kind of language that Minister Day seems so happy about would add nothing to the meaning of a Canadian statute. I would be surprised if things are different in the USA.

The new wording is at best redundant and political. More likely, it is a smoke screen. Minister Day ought to be very careful about proclaiming what amounts to "Mission Accomplished" at this stage. Once again, "it ain't over 'till its over."

HK