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:

• Knopf: Canada's Role in the Relationship of Trade and Intellectual Property
• Ton Zuijdwijk: Integrating the Rules of International Intellectual Property Law into the Body of International Trade Law

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.

HPK

How WIPO Treaty Ratification - and not Bill C-32 - would Double the blank media levies ("taxes") in Canada

Michael Geist has a blog today about the potential political debate concerning an “iPod tax” and how Bill C-32 would have supposedly doubled the "iPod tax"  due to the national treatment requirements of the 1996 WIPO WPPT treaty. I've been writing about this for years and have testified about it to a Parliamentary Committee, and its gratifying to see some of these points being repeated in the government document that Michael exposes and in his own blog.

However, it is incorrect to suggest that “... it is worth noting that Bill C-32, the Conservatives own copyright bill, would likely have doubled the fees that Canadians pay on blank CDs.”

Bill C-32 itself would not have resulted in the doubling the dwindling levy proceeds, which now effectively come only from blank CDs. The “doubling” would only result from a subsequent separate decision to actually ratify the WPPT and the then inevitable issuance of a statement by the Minister pursuant to s. 85 of the Copyright Act that would cause foreign “makers” and “performers” to be considered “eligible” for reciprocal payments. This would require recognition in turn by the Copyright Board in a new tariff, which the Board would doubtless not hesitate to provide - assuming that that blank CDs would still be considered to be an “audio recording medium” - which is probably not the case, but would need to be vigorously contested, given the Board’s past decisions.

Indeed, it is well understood that, while this and the previous Governments both wished their bills to be “WIPO Ready”, any decision to actually ratify the 1996 treaties might need to await the demise or significant reworking of the levy scheme precisely in order to avoid the “doubling” aspect and the arithmetically inevitable major royalty outflow, which could serve no useful purpose whatsoever for Canadian interests and would thus potentially be an acute embarrassment to whatever government were to be in power at the time. 

HK

Our Neighbour and Neighboring Rights

Billboard reports that:

As expected, the Performance Right Act has been reintroduced jointly to Congress today with Senator Patrick Leahy (D-VT), chairman of the Senate Judiciary Committee, and Senators Orrin Hatch (R-UT), Dianne Feinstein (D-CA), Bob Corker (R-TN), and Barbara Boxer (D-CA) submitting it in the Senate, while in the House by Representatives, it was sponsored by Rep. John Conyers (D-MI), chairman of the House Judiciary Committee, and Representatives Howard Berman (D-CA), Darrell Issa (R-CA), Marsha Blackburn (R-TN), Jane Harman (D-CA), John Shadegg (R-AZ), and Paul Hodes (D-NH).

While radio already pays songwriters for songs they broadcast over the air, the bill would require royalties to also be paid the artists and musicians performing the songs and master recordings copyright owners, as well.

Now, it's easy to cheeky and point out how the lack of legislation to date in the USA on these rights shows once again how much stronger and better Canadian copyright is than American, as I've done elsewhere.

But, if the Americans ever get around to enacting real neighbouring rights, it could cost a lot of money to Canadian broadcasters and others whose liabilities are currently limited by the lack of automatic national treatment for neighboring rights under the Copyright Act. S. 22 provides a mechanism whereby the Minister "may" grant national treatment or material reciprocity under specified circumstances. There would be a lot of pressure on the Minister to declare that the Americans would be eligible for national treatment. While s. 22 says "may", there may be considerable pressure to treat "may' as "must".

In any event, if we ratify WPPT, there would be a mandatory requirement to provide national treatment to the Americans on these rights if they have enacted similar provisions.

There are big bucks at stake here...

HK

Lobbying for Big Bucks

Jeff Norquay, a prominent pundit and lobbyist with Conservative ties (he is a former Harper PMO Communications Director) is quoted in the Hill Times today as follows:

Mr. Norquay also said the copyright lobby will be in full force when the House returns and he expects a draft legislation to be tabled within months. The government introduced copyright legislation in the last Parliament, but it died on the Order Paper when the election was called.

In its 2008 platform, the Conservatives said they would reintroduce it if re-elected. "Because of the complexities of finding the right balance in copyright between creators and users, I expect it will be fairly controversial," Mr. Norquay said. "That's the reason that it's taken so many years for copyright reform to occur."

The Hill Times goes on to say:

Lobby groups Canadian Recording Industry Association and the Canadian Private Copying Collective have recently registered lobbyists.

CRIA no doubt wants a "making available" right and a clear path to suing its members' Canadian customers. CPCC no doubt wants to expand the levy scheme which is rapidly evaporating due to the fact, as confirmed twice by the Federal Court of Appeal, that the levy scheme doesn't apply to "devices" such as iPods.

CRIA dislikes the current levy scheme, which it more than anyone is responsible for creating, because it makes downloading from the internet onto audio recording media legal. But it loves the money its members get from it through the CPCC, which has collected well over $200 million to date.

It will be interesting to see how CRIA and CPCC try to untangle the legal and policy webs they have woven together over the years - to the point that CRIA last year actually opposed CPCC in the Federal Court of Appeal case in which I acted strking down the "iPod Tax".

And when CRIA continues to whine about WIPO ratification for the purpose of helping Canadian artists, it knows perfectly well that the direct and inevitable result will be that the cost of the levy will almost precisely double due to the requirement to provide full national treatment, so that Canada will send potentially tens and possibly hundreds of millions a year in windfall levies to foreign record companies and performers (most performers will probably never see any of it), and get back virtually nothing in return. Hardly sound economics, even in normal times, which we won't see again for a long time. Officials who understand this situation are well aware of this problem.

HK

HK