Canada Says It Won't Attend Special 301 Hearing Because USTR Prefers Industry Allegations To Facts And Data

from the lobbyists-all-the-way-down dept

The US Trade Representative's annual Special 301 Report repeatedly points out how other countries are "failing" US IP industries by not doing enough to prevent piracy. The "name and shame" approach hasn't done much to curb piracy, although it has generated a few pressure points to leverage during trade negotiations.

Countries appear to be tiring of the annual shaming. Michael Geist reports the Canadian government has issued a rebuttal ahead of this year's Special 301 hearing.

I recently obtained documents under the Access to Information Act that confirm the Canadian government’s rejection of the Special 301 process. Canada will not bother appearing today largely because it rejects the entire process.

The two-page memorandum goes directly to the heart of the issue: despite Canada now having some of the world's toughest anti-piracy laws, the USTR continues to make the annual claim that the country could be doing so much more. The memo [PDF] puts it bluntly: the USTR represents no one but industry leaders.

Canada is on the "Watch List" of the United States Trade Representative (USTR) annual Special 301 Report, issued on April 21, This report discusses the adequacy and effectiveness of United States (US) trading partners' protection and enforcement of intellectual property

The Government of Canada does not recognize the validity of the process as the findings tend to rely predominantly on allegations from US. industry stakeholders rather than on objective analysis.

The particular point of complaint is Canada's continued inclusion in the report, despite its many anti-piracy efforts. The press release accompanying it goes even further in expressing its displeasure with the USTR's industry-favoring Special Report.

Canada considers the Special 301 process and the Report to be invalid and analytically flawed because the process relies primarily on US. industry allegations rather than empirical evidence and objective analysis. Canada has a strong regime for the protection and enforcement of lP rights that is fully consistent with its international obligations, including under the North American Free Trade Agreement (NAFTA) and the World Trade Organization's Trade-Related Aspects of intellectual Property Rights (TRIPS) Agreement.

Canada remains on the Watch List in 2016 despite recent significant achievements domestically in relation to reform namely, the passage and coming into force of the Copyright Modernization Act and the Combating Counterfeit Products Act. in previous years, the absence of such reforms was a central concern of the US. in relation to Canada's regime.

The Canadian Government also passed amendments to the Trademarks Act, the Patent Act and the industrial Design Act to make Canada's intellectual property regime consistent with key treaties (the Madrid Protocol, the Singapore Agreement, the Nice Agreement, the Patent Law Treaty and the Hague Agreement). in 2015, Canada also completed its ratification of the 1991 Act of the international Union for the Protection of New Varieties of Plants Convention (UPOV 91).

It appears the Canadian government believes the 2017 Special 301 Report (due at the end of April) will continue to ignore Canada's IP protection capitulations advancements. And if the USTR is going to continue to name and shame without evidence or consultation of all affected stakeholders, there's really no reason for any foreign country to appear in its annual puppet show, much less continue to try to placate an entity that's never going to be satisfied.

Filed Under: 301 report, canada, copyright, special 301, special 301 report, ustr

Trump Advisor Pens Almost Totally Clueless Piece About 'Intellectual Property Theft'

from the this-does-not-bode-well dept

I realize that there are much bigger issues at hand right now, but those of us who follow copyright, patent and trademark policy have been somewhat perplexed about what a Trump administration might do on that front. The issue was basically entirely ignored by Trump and his campaign during election season. And because of that, you now have lots of organizations on all sides of the debate pressing Trump to simply buy into their views of intellectual property, no matter how inane.

However, I recently came across a piece at Business Insider, entitled "Why intellectual property theft is one of the biggest crimes threatening the US economy," that was so clueless of the actual issues related to intellectual property, that I went to see who wrote it -- only to discover that the author, Diana Furchtgott-Roth, was on Trump's transition team (something that is not disclosed by Business Insider for unknown reasons). This does not bode well. The whole article is problematic and confused, so let's dive in.

Many assert that President-elect Donald Trump is against free trade.

Well, that's mainly because Trump himself has argued that free trade is harmful to American interests and has repeatedly argued for protectionist tariffs and other anti-free trade policies.

But standing against the theft of intellectual property and old-fashioned mercantilism, as Trump has promised to do, is an appropriate role for the chief executive. Allowing other countries to cheat us is not free trade.

So, already, we're left with a big giant "huh?" Copyright policy, in particular, is itself a leftover remnant of mercantilism. Patents and copyrights are protectionist anti-free trade policies by their very nature. Historically, patents were a key part of anti-free trade protectionist programs by governments, in which they'd give the sole right to produce certain goods to certain "friends" and block out all others. And that's what copyright and patent law today continue to do, in a slightly modernized form. They still involve central government bureaucracies handing out monopolies and the blocking of free trade. It's kind of bizarre to argue that actual competition is "old fashioned mercantilism" when copyright and patents themselves are directly old-fashioned mercantilism in action.

And, sure, allowing countries to "cheat" may not be free trade, but what do we mean by "cheating" here, because it mostly sounds like copying. And copying is actually a key part of free market capitalism, because it's a part of competition and a driver of innovation. How do you compete when someone copies you? You innovate and keep making your product or service better. That shouldn't be seen as cheating -- it should be seen as competing in a free market world. Copyright and patent laws that are too strict directly impede that free market.

From there, the article gets even more inane.

People throughout the world identify with American art, music, software, and clothing designs, and benefit from American pharmaceuticals and patents.

Weird to include clothing designs in that list, since clothing designs are, somewhat famously, not protected by copyright, which has helped it thrive (thanks to competition and rapid innovation). But, more importantly, Furchtgott-Roth seems to make the totally amateur mistake here of assuming that the product output here is the same thing as "intellectual property laws." This is common among people who either don't understand the space, or who are misrepresenting the role of copyright or patent laws to push an agenda. The argument relies on the simple fallacy that because some of these things (again, notably not clothing designs) are protected by intellectual property laws, they only exist because of those intellectual property laws, and therefore, we have those laws to thank for them existing.

But, of course, nearly all of the evidence contradicts this -- especially in areas of art, music and software. Those are all areas where we've seen much more creative output over the past couple of decades, even as "piracy" and infringement have increased. The reason we've seen so much output has little to nothing to do with the state of intellectual property laws, but much more to do with innovations, such as the internet and computer technology, that have made it easier than ever to create, produce, edit, distribute, promote and monetize works... without having to rely on gatekeepers.

Yet American intellectual property is routinely stolen.

You mean infringed. It's kind of an important distinction.

Each year, the United States Trade Representative publishes a report entitled “Special 301 Report” on intellectual property theft—yet does nothing about it.

Oh goodness. Where to start. First of all, the Special 301 Report is widely considered a total joke by basically everyone with any knowledge of it outside of the USTR. As I've said before, I've even seen the copyright maximalists at the Copyright Office mock the report. Canada has an official stance that it does not recognize the Special 301 report, because the methodology is a complete and utter joke. More recently, Chile announced a similar position.

And that's because it is a total joke. There is no methodology. Basically, the USTR allows anyone to submit their "complaints" about certain countries, and it becomes a Festivus-style "airing of the grievances" for special interests. It's mainly the MPAA, RIAA and similar maximalist organizations that go around whining about any country that won't pass their preferred laws, even in situations where those laws go way, way, way beyond what we require in the US. One of the reasons, for example, that Canada ignores the Special 301 report was that for years the MPAA got the USTR to put it on the really bad list because Canada wouldn't criminalize people filming movies in movie theaters.

From there, the USTR basically just picks and chooses whose complaints it likes the most, and rewrites the complaints into the Special 301 report. There is no data. There is no analysis. There is just the whining of the MPAA/RIAA, the USTR and what countries they decide need to be smacked down. Amusingly, if you submit a report to the USTR about how some country is abusing user rights -- such as trampling on fair use -- well, the USTR will completely ignore that.

Also the "do nothing about it" part is incredibly ignorant of what happens once a country is put on one of the "naughty" lists of the Special 301. At that point, US diplomats start putting ridiculous levels of pressure on those countries to change their laws. The Special 301 report was used to absolutely bully Sweden and Spain into ratcheting up their copyright laws, despite the fact that the public was totally against it in both cases. A few years ago, the US used the Special 301 to bully Ukraine in a way that likely violated the WTO.

In short, the total joke of a policy is (unfortunately) regularly used to apply strong diplomatic pressure on countries to change laws. But that's apparently not enough for Furchgott-Roth, who acts as if she just discovered the Special 301 before writing up this piece. She wants more:

America should take a tough line with countries on the USTR’s Section 301 Priority Watch List. Here are five suggestions.

1. We could limit their commercial activities in the United States. Alternatively, we could limit imports of those products with their intellectual property—or ours.
2. When an American company is being harassed in a foreign country, we could haul the ambassador in and ask what is going on. If China holds up our imports, we could hold up their imports.
3. If the country is on the special watch list, the Commerce Department could request the International Trade Administration do audits of intellectual property protection in those countries.
4. We could limit, and not expand, the commercial activities of countries on that watch list.
5. If a country appears for a second year on the list, the Commerce Secretary could be required to prepare a special report to the President on remedial actions.

Yikes. Again, the list itself is a joke based on no methodology and we already use it to apply a disproportionate level of diplomatic pressure on the countries on that list. And yet, this suggestion is to make it worse. That's not "free trade" that's good old fashioned protectionism of American goods. It's the opposite of free trade. So the crux of this plan is basically letting the MPAA/RIAA decide who the US should block all trade with. What could possibly go wrong?

And, as a kicker, Furchtgott-Roth, suggests that the fact that China has literally been kidnapping book publishers and sellers it doesn't like is a good example of how it can crack down on copying. Really.

Countries may tell us that it is impossible for them to prevent their citizens from copying our goods. But when China, for example, can make book publishers in Hong Kong disappear because it disagrees with the content of the books, it can certainly close down the fake Apple stores.

For once, I'm at a loss for words. Supporting making political dissidents disappear as a good example of how an authoritarian regime might deal with basic competition is downright frightening.

But, unfortunately, this may be what we have to look forward to under a Trump administration.

Filed Under: copyright, diana furchtgott-roth, donald trump, intellectual property, patents, special 301, trade agreements, ustr

USTR: Foreign Governments Engaging In Censorship And Rights Abuses Should Add IP Enforcement To Their 'To Do' Lists

from the let-the-USTR-set-your-priorities-for-you dept

If it's mid-spring, it means it's time for the US Trade Representative's "Special 301 Report," the annual "event" that names and shames countries who don't live up to US industries' intellectual property protection ideals. The same countries that have made the list for years still make the list, although a few have moved up a notch from the "Priority Watch" list to just the normal "Watch" list.

There are lots of familiar names on the lists, including such perennial favorites as China, India, Russia and… Canada. The report offers congratulations to countries like Italy, which has managed to steer clear of the watchlists by instituting censorious IP enforcement procedures like site-blocking. And it pats other countries on the head for ceding to the USTR's IP imperialism in exchange for upgraded 301 listings.

USTR has noted the willingness of two Watch List countries, Turkmenistan and Tajikistan, to work with the United States on improving their IPR protection and enforcement regimes and will conduct an OCR for each country to evaluate whether specific steps taken merit their removal from the Watch List.

The USTR has no interest in determining whether the US's IP laws are actually a good fit for other nations, especially those with a host of more pressing problems. All it cares about it whether they live up to the American ideal, as stated by the loudest "more-is-better" IP enforcement proponents. All in all, it's a completely ridiculous bit of paper rattling, served up annually for maximum theatricality.

Sadly, many of those who have landed on the USTR's Naughty 301 list take this process far too seriously. Even at its gravest, the USTR's only real threat is that if things don't change, it will be forced to print out Country X's name under a different bold sub-header in next year's report.

USTR extends the current OCR of Paraguay, which is currently on the Watch List, to provide additional time for conclusion of a bilateral IPR Memorandum of Understanding (MOU). USTR encourages Paraguay to conclude the MOU by June 30, 2015, and notes that if Paraguay does not do so, USTR will evaluate possible implications accordingly, including with respect to Paraguay’s status under Special 301.

Meanwhile, the USTR wants governments with histories of human rights abuses to institute stricter IP-related policies -- one that should better aid them in achieving their censorious ends. Thailand, which has already put mass internet surveillance in place to make sure its king remains unbesmirched, is encouraged to put its police force to use to round up infringers. Pakistan, itself engaged in censorship and mass surveillance of its citizens, is told it should hand over ex officio power to law enforcement to move against infringers without having to wait around for rights holder complaints. Ecuador, which already knows a thing or two about abusing the DMCA process, is elevated to the "Priority" list for not treating other nations' IP as worthy of the same sort of censorious actions. The USTR wants Mexico to divert law enforcement resources to combating counterfeiting and piracy, as if dealing with the consequences of four decades of US drug warring wasn't enough to keep it busy. And the USTR issues demands to Venezuela, as if that dumpster fire of a government has any interest in listening to what a US representative has to say -- especially one acting on behalf of a handful of US industries.

Like every year, the report is a joke. And it's not even a report -- not in the normal definition of the word. There's no independent action by the USTR to investigate IP laws and violations elsewhere in the world. Instead, it relies on submissions from entities like the MPAA and BSA and writes their accusations up as a "report" on the state of IP protections elsewhere in the world. Unfortunately, there aren't enough countries in on the joke. Canada, for one, at least issues nothing more than an eye roll in response to being listed as one of the world's top offenders, despite having IP laws at least as stringent as the United States'. And there's something both surreal and ugly about a process that includes the executive vice president of the American Apparel and Footwear Association -- whose members depend heavily on cheap foreign labor -- complaining that other countries aren't doing enough to prevent citizens from purchasing affordable knockoffs of the same clothes they're making for US companies, but can't actually afford to buy.

Filed Under: canada, censorship, copyright, ecuador, intellectual property, mexico, pakistan, special 301, special 301 report, ustr

USTR Releases Its Annual Special 301 'Naughty' List Of Countries; EFF Responds With 'Special 404' List

from the who's-naughty,-who's-nice dept

We've written plenty about the ridiculousness of the USTR's Special 301 list that comes out every year at this time, naming what countries are "naughty" on intellectual property issues. The list is based on no objective measurements, but rather on submissions from lobbyists for the big legacy players with an interest in expanding copyright, patent and trademark laws. The USTR then basically takes those submissions, moves around some words, and puts out this "official" list of naughty countries. US diplomats in the various countries then go around threatening those countries if they don't "do something" (which generally means passing more draconian laws that will help these giant US companies, often at the expense of the public). A few countries -- Canada in particular -- has made it publicly known that it does not accept the whole Special 301 list as legitimate, and rejects its findings. Other countries, however, which have less ability to stand up to the US, like Spain, will often scramble to try to pass new laws to "stay on the good side" of the US. Still, pretty much everyone recognizes that the entire process is a joke. As I've pointed out many times, at a conference, I once saw the US Register of Copyrights openly mock the Special 301 list. Unfortunately, this is a joke that is no longer funny. That's because so many countries are legitimately scared about being on the list, and pass laws to get themselves off the list, with little or no concern for the actual impact on the public, free speech or innovation.

Anyway, it's that time of the year again, and the USTR has released the latest list. It is more of the same in almost every way. It tries to shame the same "big guys" as always: China, Russia and India. And it celebrates "progress" from countries that have promoted out and out censorship. For example, it praises Italy:

On December 12, 2013, the Communications Regulatory Authority (AGCOM) in Italy adopted regulations to combat copyright piracy over the Internet. The regulations, which entered into force on March 31, 2014, provide notice-and-takedown procedures that incorporate due process safeguards and establish a mechanism for addressing large-scale piracy. Italy’s subsequent implementation of the regulations has been positive, resulting in successful enforcement actions against several websites that offered infringing content. These websites have ceased operations in Italy, removed infringing content, or initiated cooperation with copyright holders. The adoption and effective ongoing enforcement of these regulations is a significant achievement, which the United States continues to welcome.

This is misleading at best and insulting at worst. We wrote about those Italian "regulations," which actually gave power to regulators to flat out censor websites with no due process at all. It's not clear how the USTR considers those appropriate "due process safeguards" when the same rules in the US would clearly be prior restraint violations of the First Amendment. In fact, in operation, we've seen Italy order tons of websites blocked on the say so of a single individual, and websites blocked entirely, even after they had removed any infringing material, and with no clear due process in place at all.

Is the US really trying to argue that copyright enforcement is more important than Freedom of Expression? Because that's the message that's being sent. Meanwhile, as we wrote about a few months ago, consumer groups are challenging the legality of this system. Will the US condemn Italy for actually recognizing how dangerous this rule is?

Along those lines, the EFF has jumped in to offer a counter list, the amusingly named Special 404 list of stories that were missing from the Special 301 list of the USTR. As the EFF notes:

On the Web, the error code 404 shows browsers that something is missing. EFF believes that in the Internet era, the Special 301 Report is missing real stories from the countries that the Special 301 condemns. Our intention for this report is to show what’s missing from Special 301 and give some balance to the USTR’s biased review of global intellectual property laws by highlighting the arguments for balanced copyright, patent, and trademark law worldwide.

EFF’s Special 404 Report includes a selection of case studies from across the globe showing how overly broad intellectual property laws stifle access to cultural artifacts, artistry, and innovation. Our report also showcases examples in which flexible fair use interpretations have benefited the community, culture, and economy of a country. This report is not an exhaustive analysis of each country listed in the Special 301 Report. Rather, our report is designed to provide insightful case studies that will inform a larger conversation about how the USTR’s report is fundamentally defective.

While the Special 404 list does not include Italy, it does provide examples from other countries. For example, it highlights a story we covered last year of a Colombian student facing four years in prison for uploading an academic article to Scribd. And the reason he's facing such jail time was a terrible copyright law rushed through to appease an angry US government.

Gomez is a Masters student who has been researching biodiversity and working on the conservation of reptiles and amphibians for several years in the South American region. Throughout his career, the biggest obstacle he has faced has been accessing academic resources on global research databases. One day a couple of years ago, he came across a paper that was especially useful to his fieldwork. He later shared the research online on the website Scribd. The author of the paper then pressed charges against Gomez for the “violation of [his] economic and related rights.” Now the Colombian government is criminally prosecuting Gomez, and he could be sentenced to prison for up to eight years and face crippling monetary fines. Gomez is currently awaiting trial.

Analysis

There are two primary causes of these egregious penalties. The demands of the copyright industries in the Colombia-U.S. free trade agreement led to extreme enforcement language in the deal, which then led Colombia to enact new, harsher criminal sanctions over "unauthorized" sharing and uses of copyrighted works. Additionally, Colombia does not have a flexible fair use system like the United States. It has a closed list of exceptions and limitations to the rights of authors (derecho de autor). This list was issued more than 20 years ago and is narrowly tailored to some specific situations that are not at all applicable to the digital age. While the Special 301 Report pressures Colombia to toughen its copyright regime, the current system is already inflexible and has a detrimental effect on researchers like Gomez.

And yet, amazingly, the USTR's Special 301 report says nothing about this abuse of copyright law in a manner that clearly impacts human rights and civil liberties (not to mention the chilling effects on education and research). A couple of years ago, we noted that CCIA had asked the USTR to put Germany on the Special 301 list for attacking fair use. After all, if the point of the list is to highlight those who are abusing US intellectual property laws, shouldn't it work for those who abuse them against free expression and innovation as well? The USTR basically ignored this request, once again cementing the fact that it doesn't seem to care one bit about issues like civil liberties or human rights, focusing solely on intellectual property maximalism.

The Special 301 list remains a joke -- but unfortunately, it's a joke that many countries feel they need to take seriously. Hopefully, the EFF's responsive Special 404 list will provide some more perspective, and help some countries push back on the idea that just because some lobbyists put their name on a list, it doesn't really mean they should have to change their laws.

Filed Under: copyright, intellectual property, patents, special 301, special 301 list, special 301 report, special 404, ustr
Companies: eff

US's 'Naughty List' Of Countries Whose Intellectual Property Rules We Don't Like Is A Joke That's No Longer Funny

from the what's-so-'special'-about-the-special-301-report dept

Mocking the ridiculous "Special 301 report" from the US Trade Representative has become something of an annual sport around these parts. As we've explained, the whole concept of the report is something of a joke: copyright, patent and trademark maximalists send in reports to the USTR, claiming which countries don't do enough to respect US intellectual property, and the USTR -- via no systematic or objective process -- rewrites those complaints into a report that declares certain countries "naughty" for their practices. The whole thing is such a joke that even those in the government will openly mock it. As I've said in the past, I once saw the head of the US Copyright Office openly joke about the purely arbitrary nature of the 301 report at a conference. Countries like Canada -- which are regularly named to the report, despite having copyright laws that are, in many areas, more stringent than the US's -- have openly declared that they do not find the Special 301 process to be legitimate, and thus do not pay any attention to it. A couple of years ago, Chile also made it clear that it felt the 301 process was illegitimate.

However, other countries which rely on good relationships with the US often aren't so lucky. Spain and Sweden, for example, have been openly bullied by US diplomats because of their placement on the list, leading both countries to pass draconian and anti-innovation updates to their copyright laws. The diplomats in various countries often assume, incorrectly, that the Special 301 report has some sort of real analysis behind it -- and they feel the need to put pressure on countries to change their laws in a way that makes the US happy.

The clearest example of what a joke the 301 process is came two years ago, when CCIA tried to use the "process" behind the list to get Germany put on the list for attacking fair use. That actually seemed like a perfectly good use of the list, as Germany was trying to force search engines (mainly Google) to pay up for posting snippets of news and linking to them (a plan that it has continued to push). Here was a clear case of abusing copyright law to harm an American company. And the USTR totally ignored it. Because the Special 301 process is not about saner intellectual property laws. It's about making intellectual property maximalists happy. That's why some of those maximalists have even used the process to get countries declared naughty for merely using open source software.

The EFF has released its own filing to the USTR for this year's Special 301 report, and the filing does a really nice job explaining what a joke the whole report is and how the whole process is broken, with clear examples of just how arbitrary and capricious the USTR's report can be:

In Argentina, widespread copyright infringement in the education sector results directly from the lack of adequate exceptions and limitations for education that U.S. teachers and students take for granted—yet the USTR never makes any comment suggesting that more copyright flexibilities are needed; only ever calling countries out for not doing enough to protect rightsholders.

In Chile, the adoption of that country's “notice and notice” regime of Internet service provider (ISP) liability was the well-considered outcome of a lengthy democratic process, based on the very specific provisions of Chile's constitution—yet the USTR high-handedly expects that Chile will abandon this carefully-chosen model in favor of a carbon-copy of the DMCA.

The U.S. government's tentacles have extended into Paraguay's domestic policy making through a USAID-funded anti-piracy program of the sinister-sounding Millennium Challenge Corporation. This intervention, under the guise of offering development assistance, actually amounts to an interference in that country's sovereign right to determine its own intellectual property policies.

Last year's Special 301 Report makes factually incorrect assertions about Peru's intellectual property system, notably new rules on government use of software, while also failing to comment on long-overdue reforms that advance the public interest through the extension of copyright limitations and exceptions.

Our Russian contributor highlights a range of tough intellectual property enforcement measures, that the Special 301 Report has overlooked. Yet Russia is still highlighted as one of the worst IP offenders—the end result of which, if Russian lawmakers heed the report, may be even more repressive rules that restrict Russian users' rights and freedoms.

In Vietnam, although one of the poorest countries targeted in the Report, our contributor points out that huge strides have been made to address the concerns of rightsholders in such areas as software piracy, book piracy, and music piracy. Conversely, the contributor expresses valid concerns about how an over-emphasis on enforcement can impact on access to knowledge for some of the world's most disadvantaged peoples.

The filing also describes where the USTR goes wrong with its efforts (basically everywhere):

One of the key points that we and our partners make in this submission is that the process for drawing up the Special 301 Report is fundamentally flawed. Indeed, it skirts very close to the line of transgressing international law, by strong-arming other countries into changing their laws, outside of the official channels provided for resolving trade disputes through the World Trade Organization (WTO). Whereas WTO trade disputes (although problematic in other ways) are resolved by a notionally neutral arbitrator, the Special 301 Report is unabashedly partial to the complainant—the USTR acts as its own judge, jury, and executioner.

As such, as our submission points out, the USTR writes its own rules. Rather than sticking to WTO standards such as the TRIPS Agreement, it commonly demands that countries go further than their international obligations require—for example, demanding that they criminalize the act of operating a camcorder in a movie theater, that they accede to the problematic WIPO Internet Treaties that outlaw the circumvention of DRM, and that they adopt a DMCA-style notice-and-takedown regime for intermediary liability.

Conversely, the Special 301 Report completely ignores the trade benefits of copyright flexibilities, such as personal copying exceptions or fair use—or worse, it treats these as a trade barrier, and demands that countries amend or repeal them. No allowance is given to developing countries (which comprise the vast majority of countries called out in the Special 301 Report), despite the fact the intellectual property laws suitable for such countries are quite different to those required by a highly industrialized country such as the United States.

Of course, many of us have been pointing out things like this for years, and the USTR keeps pushing forward, with the same broken process year after year after year. And why not? If it didn't do that, how would all those former USTR employees find jobs as lobbyists after they're done working for the government?

Filed Under: 301, special 301, special 301 report, ustr
Companies: eff

Under Swiss Copyright Reform, Private Sharing And Downloads From Unauthorized Sources Would Still Be Legal

from the truly-remarkable dept

Two years ago, Techdirt noted the price that Switzerland paid for daring to suggest that unauthorized file-sharing really wasn't such a problem: it was put on the USTR naughty step, aka the "Special 301 list." A post on Intellectual Property Watch explains the current copyright situation in Switzerland:

Anybody can download a movie or a soundtrack and share it with his family in the realm of the private sphere. The downloaded movie or soundtrack cannot, however, be made public on the internet -- for example through a social media platform -- or transmitted to third persons, the [Swiss] official said.

Switzerland is in the process of revising its copyright laws, and you might expect that by now it has been "persuaded" by the US to change its mind about allowing people to download files freely and share them in this way, but to its credit, that doesn't seem to be the case (pdf). Here's what the official Swiss working group carrying out the review of copyright, known as AGUR12, is recommending:

In view of the measures proposed below... downloading from illegal sources, as provided for in current law according to the prevailing doctrine, should remain legal.

The proposed measures mentioned there concern new responsibilities for ISPs, designed to help remove unauthorized online content. These include "takedown":

Hosting providers should remove content that has been illegally uploaded when notified to do so by the rights holder or a competent authority.

"Staydown":

Hosting providers, whose business model is clearly designed for the infringement of copyright by users, or who intentionally promote running the risk of performing illegal acts through measures or omissions for which they are responsible, need to remove illegally uploaded content when notified to do so by the rights holder and take all reasonable measures to prevent any further illegal uploading of such content.

And blocking:

On the order of the authorities, access providers located in Switzerland need, in serious cases, to block access to web portals that feature obvious illegal sources by means of IP and DNS blocking. The blocking of approved content along with unapproved content (overblocking) is to be avoided, as far as possible, by the competent authorities. All blocking measures are to be made publicly known in an appropriate form by the competent authorities and they may not compromise the technical functionality of the IP or DNS system.

AGUR12 also proposes introducing a new warning system for users, which concerns sharing materials on P2P networks:

An overzealous enforcement of the law is problematic and is perceived as being aggressive because internet users are often unclear about the legal situation. Prior notification may remedy this. It is therefore important to create the possibility for access providers to issue a one-off notification, when notified by the rights holder or a competent authority, to owners of internet connections who seriously infringe copyright by using peer-to-peer networks. Rights owners should adequately compensate access providers for the costs incurred for delivering such notification. Upon receipt of the notification, the subscriber will then have to take appropriate steps to prevent continued use of his connection for copyright infringement via peer-to-peer networks in order to avoid facing joint civil liability in the event of recurrence. To this end, the necessary legal basis is to be established and a guarantee of judicial review is to be observed; in particular, ISPs and consumer organisations must have the possibility of appealing to the competent authority upon notification from a rights holder.

As these excerpts of the recommended changes indicate, while revising their laws for the digital age, the Swiss seem to be keen to maintain their refreshingly moderate and rational approach to copyright. Which doubtless means that we can expect to see the country placed on the Special 301 list for some years to come.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Filed Under: copyright, copyright reform, downloading, intermediary liability, isps, legality, special 301, switzerland

USTR's Special 301 List Of 'Naughty' Countries Without Strong Enough Patent And Copyright Laws Is A Complete Joke

from the as-if-we-didn't-know-that dept

We've talked plenty of times about what a complete joke the USTR's Special 301 report is. It's supposedly a "listing" of "naughty" countries who don't protect intellectual property enough for the US's tastes. However, as we've noted, there is no methodology behind it: a bunch of industry lobbyists submit lists of what countries they don't like to the USTR, the USTR talks to various diplomats, basically rewrites the list to "shame" certain countries, and releases the list. Canada, which has been put on the list for years despite having stricter copyright laws than the US, has officially stated that it simply does not accept the Special 301 findings as legitimate. Chile did the same thing a year ago. As I've mentioned before, at a conference a few years ago, I even saw the then head of the US Copyright Office mock the Special 301 report as a widely recognized joke.

Unfortunately, however, for countries who are heavily reliant on good relations with the United States, being on "the naughty" list is often an effective way to force them to jump through hoops to make Big Pharma or Hollywood happy. As we've discussed, Spain has been pressured into changing its copyright laws via the 301 list multiple times.

George Washington PhD student Gabriel Michael has decided to dig deep into the Special 301 Report and its history to determine if there's any point to it at all, and his initial results suggest that the process is even more of a joke than initially suspected. He notes that there's no real "enforcement" mechanism (at least not one that the US seems willing to use). He also notes that the US is incredibly hypocritical about it. While the Special 301 report mostly complains that other countries don't have enough intellectual property protection, at other times it goes the other way, like when it's the kind of IP that the US government doesn't like (geographical indicators or GI).

...by any reasonably objective standard, the European Union offers very high levels of IP protection. Yet as recently as 2006, Special 301 listed the European Union on its watch list, citing “concerns” about the EU’s geographical indication (GI) regime. Given that GIs are a form of intellectual property, USTR essentially placed the EU on its watch list for offering too much IP—or, if you prefer, the wrong kind of IP. Interestingly, this is a tacit admission by the U.S. that at least some kinds of IP can act as trade barriers.

In researching the effectiveness of the Special 301, Michael notes that supporters of the effort point to a study done in the International Trade Journal called "Special 301 and Royalty Receipts from U.S. Trade Partners" by David Riker, which argued that the Special 301 is effective, because there's a pretty big increase ($5.4 billion annually) in US royalty receipts from countries after being placed on the list. Michael sets out to replicate Riker's results and discovers very, very different results, in part because Riker made some notable errors (claiming Hong Kong was on the priority list, when it wasn't). Riker also only looked at some of the countries in the Special 301 Report. Michael looked at what happened when you viewed all of them, and he also had two more years of data to research. In the end, Michael finds that Riker's conclusions are simply not supported by the data.

To summarize, while I was able to replicate Riker’s results, simply including additional years of data causes his findings of significance to disappear. Likewise, even in his original dataset and models, if Watch List designations are included, the findings of significance disappear.

Ultimately, these results lead me to conclude that Riker’s 2012 article is both theoretically and empirically flawed. It cannot support the conclusion that Special 301 designations are correlated with increased IP royalties from designated countries in subsequent years.

In another post, Michael points out the obvious: the Special 301 list is never actually about intellectual property protections, but about political considerations. He notes that countries that are considered to have stronger IP protection (using the Park-Ginarte Index) are often listed on the Special 301 Report, while others with less protection are not. He even looks at the average of countries on the list and off, and finds that those on the list have higher protection than those off the list: Given that, Michael looked at the leaked Wikileaks State Department cables, where there are a bunch discussing the Special 301, and quickly notes that it's pretty clear that political considerations were much more important than actual concerns about intellectual property conditions. In short, the Special 301 is just a way to diplomatically slap a country with whom we're having other political issues, in order to give the US leverage on some political point. He quotes State Department cables concerning Taiwan, Saudi Arabia, Bolivia and Norway showing how it's much more about politics.

At some point, it needs to be asked why we have the Special 301 setup at all. It seems designed mainly to piss off other countries, while making Hollywood and Big Pharma feel good. It doesn't seem to do anything beneficial at all.

Filed Under: copyright, diplomacy, evidence, impact, intellectual property, patents, politics, special 301, ustr

Once Again, File Sharing Tools Declared Legal In Spain Because They're Just Tools

from the good-to-see dept

For many years, we highlighted how Spain was a country that actually had much more reasonable copyright laws, in that it did not try to blame third-party tool makers for the actions of their users. In the 2009/2010 time frame, there were a series of rulings that rejected concepts like secondary liability for tool makers, on the same basic principle as the US Supreme Court decided the Betamax case years ago: it's inappropriate to blame the tool/service maker for how the tool is used. If users are using a tool to infringe, that's not the fault of the tool maker.

Of course, the entertainment industry flipped out that Spain would have such reasonable copyright policies. They started a scorched earth campaign, insisting they would pull out of Spain entirely. And, of course, they whined to the USTR, which started putting Spain on the "naughty list" of the Special 301 report. US diplomats in Spain then started putting tremendous pressure on the Spanish government to pass draconian copyright laws. In fact, some of the State Department cables leaked via Wikileaks basically showed that the US entertainment industry wrote the law and handed it to the Spanish government, telling them to pass it.

Public opposition to the law was massive, and even the head of the Spanish Film Academy quit to protest the law, noting that the new law was anti-consumer and no way to embrace the future. And yet, in early 2012, under tremendous pressure, the Spanish government adopted the law. And, of course, because ratcheting up copyright laws never actually stops infringement, it was barely a year before the US entertainment industry kept on complaining.

While Spain was temporarily dropped from the Special 301 list, the legacy entertainment industry demanded it be put back on. So, once again, a year ago, the government started pushing even more draconian copyright laws, flat-out admitting that the only reason they were doing so was to try to stay off the USTR's Special 301 naughty list. And, of course, late last year, new more draconian copyright laws were put in place.

Given all that history, it's fascinating to see a new ruling concerning a Spanish file sharing software called Blubster. As TorrentFreak reports, after all those legal shenanigans by the legacy American entertainment industry, the Spanish courts still seem to recognize how ridiculous secondary liability is for the creators of tools. Despite a massive lawsuit from the record labels, a Madrid court of appeals has upheld a lower court decision that Blubster and related programs from MP2P Technologies are neutral and not liable for infringement. This is a huge victory not only for the company's founder, Pablo Soto, but for the Spanish public and basic common sense around copyright law:

“[Soto's] activity is not only neutral, and perfectly legal, moreover it is protected by article 38 of our Constitution,” the Court wrote in its ruling.

In case you're wondering, Article 38 of the Spanish Constitution protects "free enterprise within the framework of a market economy." The court rejected various theories brought by the labels, including the idea that file sharing software was "looting" or that it was "unfair competition." It noted that since MP2P wasn't in the recording business, it wasn't "unfair competition" and, importantly, that it's simply ridiculous to blame the service provider for the actions of its users.

Of course, given the history we outlined in the first few paragraphs, it doesn't take much of a fortune teller to predict what's likely to happen next. Expect the pressure to ratchet up, yet again, for another change to Spanish copyright law.

Filed Under: blubster, copyright, pablo soto, secondary liability, spain, special 301, third party liability, ustr
Companies: mp2p

US Uses Special 301 To Bully Ukraine, Likely Violating WTO

from the pesky-international-obligations dept

In this year's Special 301 report, the United States Trade Representative listed Ukraine as a "Priority Foreign Country" (aka PFC), triggering a 30 day countdown to initiate an investigation under Section 301 of the Trade Act to determine trade sanctions. 19 USC 2412(2)(A). This is only the second time that the U.S. has threatened a WTO-member country with sanctions as a PFC. And thus it is an appropriate time to ask what restrictions the World Trade Organization places on the operation of the Special 301 program. As described more fully below, any sanction of Ukraine, including removal of General System of Preferences (GSP) benefits, would likely violate WTO rules. Indeed, the listing of Ukraine as a PFC, and the more general operation of "watch lists" threatening sanctions for intellectual property matters, could be challenged under the WTO even prior to any sanction actually going into effect.

Special 301 is a Unilateral Adjudication of Foreign Countries for IP Matters both Covered and not Covered Under any Trade Agreement

Special 301 is an offshoot of the more general "Section 301" program which authorizes the USTR to unilaterally sanction foreign countries for a domestic law which either "violates, or is inconsistent with, the provisions of, or otherwise denies benefits to the United States under, any trade agreement" or which does not itself violate any agreement but nevertheless "is unreasonable or discriminatory and burdens or restricts United States commerce." 19 USC § 2411. One ground for finding an "unreasonable" policy subject to trade sanction includes the denial of "fair and equitable . . . provision of adequate and effective protection of intellectual property rights notwithstanding the fact that the foreign country may be in compliance with the specific obligations of the Agreement on Trade-Related Aspects of Intellectual Property Rights." 19 USC 2411(d)(3)(VB)(ii). Possible sanctions can include the suspension of "benefits of trade agreement concessions," "duties or other import restrictions," or the suspension of General System of Preferences (GSP) benefits. 19 USC 2411(c).

Special 301 is integrated into the Section 301 sanctioning process through a public adjudication and notification mechanism. Under Special 301, the USTR is required to annually publish in the Federal Register a list of countries that deny "adequate and effective protection of intellectual property" or "deny fair and equitable market access for U.S. firms that rely on intellectual property," and then designate among those countries the subset of worst actors to be designated "priority foreign countries."  19 U.S.C. § 2242. USTR holds an annual hearing and publishes an annual report containing two levels of "Watch Lists" below the "Priority Foreign Country" designation. As described by USTR in the 2013 report:

Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on IPR. Countries placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem areas.

Designation as a "Priority Foreign Country" is a statutory criteria that triggers a 30-day countdown during which targeted countries must "(enter) into good faith negotiations" or "(make) significant progress in bilateral or multilateral negotiations" or face an investigation under the Section 301 process for determining unilateral sanctions. Priority foreign country determinations are reserved for countries "that have the most onerous or egregious acts, policies, or practices," that "have the greatest adverse impact (actual or potential) on the relevant United States products," and for which "there is a factual basis for the denial of fair and equitable market access as a result."

This framework for unilaterally sanctioning foreign countries for intellectual property matters pre-dates the World Trade Organization's rules. Indeed, it was the lack of binding international trade adjudication, such as that created under the WTO, that was the primary justification for Congress's enactment of the 301 unilateral adjudication in the 1980s. [See 301 Historical Primer]. There has always been a serious question as to how the statutory program could continue after the WTO, and there has been one adjudication of the more general 301 program explained below.

One of the noticeable trends in Special 301 in the Post-WTO 1994 period is the steep drop off in listings of countries as a "Priority Foreign Country," most directly threatening trade sanctions. Only three countries were designated as PFCs after 1994: China in 1996, Paraguay in 1998, and Ukraine in 2001-05. Of these, only Paraguay was a member of the WTO in the year it was listed as a PFC. Ukraine was not a WTO member when it was initially listed, but now it is.

Using 301 to Adjudicate TRIPS Violations Would Violate the WTO Dispute Settlement Understanding and U.S. Law

On their face, the 301 complaints against Ukraine do not appear to raise challenges to Ukraine's implementation of the WTO agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). The 2013 Special 301 Report describes three grounds for Ukraine's PFC listing:

[T]he specific grounds for the U.S. Trade Representative’s designation of Ukraine as a PFC are: (1) the unfair, nontransparent administration of the system for collecting societies, which are responsible for collecting and distributing royalties to U.S. and other rights holders; (2) widespread (and admitted) use of illegal software by Ukrainian government agencies; and (3) failure to implement an effective means to combat the widespread online infringement of copyright and related rights in Ukraine, including the lack of transparent and predictable provisions on intermediary liability and liability for third parties that facilitate piracy, limitations on such liability for Internet Service Providers (ISPs), and enforcement of takedown notices for infringing online content.

None of these grounds explicitly refer to complaints under TRIPS. Unilateral adjudication of TRIPS violations is prohibited by Article 23 of the Dispute Settlement Understanding, explaining under the title "Strengthening of the Multilateral System":

1. When Members seek the redress of a violation of obligations or other nullification or impairment of benefits under the covered agreements or an impediment to the attainment of any objective of the covered agreements, they shall have recourse to, and abide by, the rules and procedures of this Understanding.

2. In such cases, Members shall:

(a) not make a determination to the effect that a violation has occurred, that benefits have been nullified or impaired or that the attainment of any objective of the covered agreements has been impeded, except through recourse to dispute settlement in accordance with the rules and procedures of this Understanding, and shall make any such determination consistent with the findings contained in the panel or Appellate Body report adopted by the DSB or an arbitration award rendered under this Understanding

The import of this language is fairly clear. The Dispute Settlement Understanding (DSU) procedures, and only those procedures, can be used for findings that lead to the "suspension of concessions or other obligations" under GATT.

After the WTO accords went into effect, the U.S. did not dismantle the Section 301 or Special 301 programs, which became the subject of a trade dispute in the WTO in United States – Sections 301-310. In that case, a WTO panel held that Section 301 sanctions were only still legal under the DSU because of a "Statement of Administrative Action" pledging to "base any section 301 determination" on "panel or Appellate Body findings adopted by the DSB" and only sanction countries with "authority from the DSB to retaliate."

The panel decision went further, discussing in a key package that the U.S. also could not threaten to sanction countries in ways that, if actually implemented, would likewise threaten the WTO:

Members faced with a threat of unilateral action, especially when it emanates from an economically powerful Member, may in effect be forced to give in to the demands imposed by the Member exerting the threat... To put it differently, merely carrying a big stick is, in many cases, as effective a means to having one's way as actually using the stick. The threat alone of conduct prohibited by the WTO would enable the Member concerned to exert undue leverage on other Members.  It would disrupt the very stability and equilibrium which multilateral dispute resolution was meant to foster and consequently establish, namely equal protection of both large and small, powerful and less powerful Members through the consistent application of a set of rules and procedures.

After this ruling, the USTR has been relatively carefully not to use Special 301 to explicitly threaten other countries with trade sanctions for alleged violations of TRIPS. It more commonly describes Special 301 as being a component of the evaluation of whether it will grant other countries GSP benefits, which it asserts unilateral authority to determine the criteria for. And the criteria listed in the 301 reports most commonly refers to the lack of domestic policies that are "TRIPS-plus" -- i.e. go be beyond those required by the TRIPS agreement. But, as explained below, the developed countries do NOT have unilateral authority to determine GSP benefit criteria. Under the reasoning of the Sections 301-310 panel, any country on the various Special 301 Watch Lists would likely have standing to challenge the Special 301 program as threatening denial of GSP benefits for criteria that violate the WTO accords.

TRIPS-Plus standards may be challenged as not being "non-discriminatory" and "non-reciprocal" criteria tailored to "respond positively to the development, financial and trade needs of developing countries."

The U.S. legal authority for denying GSP benefits based on intellectual property policies is contained in 19 USC 2462(c), requiring consideration of the "the extent to which such country is providing adequate and effective protection of intellectual property rights." The 2013 Special 301 report signals that it intends to evoke this criteria with respect to Ukraine, stating:

When Ukraine was designated a PFC in the past, it failed to address the grounds for its designation during the following investigation. As a result, Ukraine lost its eligibility for benefits under the Generalized System of Preferences (GSP). Once Ukraine addressed the issues that led to its designation as a PFC, its eligibility for GSP benefits was reinstated.

Thus, the central question under the WTO accords may be: may the U.S. suspend GSP benefits from a country as a sanction for not adopting TRIPS-plus policies? Current law under the WTO Appellate Body provides a strong argument that the U.S. cannot maintain such policies.

The starting point for the trade law analysis is the WTO's requirement of Most Favored Nation (MFN) treatment for all members, contained in Article I:1 of the General Agreement on Tariffs and Trade 1994 (GATT). The MFN principle requires

any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country be accorded immediately and unconditionally to the like product originating in or destined for territories of all other contracting parties

By withdrawing trade benefits from one country (e.g. Ukraine), but not from other WTO-members, the U.S. GSP program facially authorizes conduct that violates MFN treatment. The conduct must, therefore, be authorized by an exemption to MFN.

GSP programs are authorized by the exception to MFN known as the GSP "Enabling Clause." The two key provisions in this clause for our purposes are located in Paragraphs 2 and 3. Paragraph 2 (footnote 3) of the Clause states that GSP programs are authorized only in so far as their criteria are "generalized, non-reciprocal and non discriminatory." Paragraph 3 of the Clause adds the additional requirement that GSP criteria "be designed and, if necessary, modified, to respond positively to the development, financial and trade needs of developing countries." The use of TRIPS-plus criteria to deny GSP benefits does not appear to meet either standard.

The WTO Appellate Body (the highest court in the WTO and the authority on matters of WTO interpretation) was tasked with interpreting the GSP enabling clause requirements in the case of EC -- Preferential Tariffs. The matter involved a challenge by India of the EC's program to award additional GSP benefits to countries that participated in a special drug eradication program. The Appellate Body held that GSP programs could have criteria that result in different benefits being afforded to different developing countries, but that such differential treatment must itself be based on criteria that meet the Paragraph 3 requirement of responding "positively to the development, financial and trade needs of developing countries." The Appellate Body explained:

In granting such differential tariff treatment, [ ] preference-granting countries are required, by virtue of the term “nondiscriminatory”, to ensure that identical treatment is available to all similarly-situated GSP beneficiaries, that is, to all GSP beneficiaries that have the “development, financial and trade needs” to which the treatment in question is intended to respond.

The Appellate Body continued:

[T]he expectation that developed countries will “respond positively” to the “needs of developing countries” suggests that a sufficient nexus should exist between, on the one hand, the preferential treatment provided under the respective measure authorized by paragraph 2, and, on the other hand, the likelihood of alleviating the relevant “development, financial [or] trade need”. In the context of a GSP scheme, the particular need at issue must, by its nature, be such that it can be effectively addressed through tariff preferences. Therefore, only if a preference-granting country acts in the “positive” manner suggested, in “respon[se]” to a widely-recognized “development, financial [or] trade need”, can such action satisfy the requirements of paragraph 3(c).

Under this standard, TRIPS-plus criteria may be challenged for being insufficiently related to the needs of developing countries and rather tailored to meet U.S. intellectual property industry export needs. The U.S. is not free to define any "needs" it chooses as GSP criteria for developing countries. The Appellate Body admonished that "a 'need' cannot be characterized as one of the specified "needs of developing countries" in the sense of paragraph 3(c) based merely on an assertion to that effect by, for instance, a preference-granting country or a beneficiary country." Such need, the Appellate Body held, must be assessed according to an "objective," "[b]road-based recognition of a particular need," such as those "set out in the WTO Agreement or in multilateral instruments adopted by international organizations."

Here, the U.S. is on the horns of a dilemma. For the criteria to be sufficiently "broad based," the WTO Appellate Body suggests that they need to be incorporated into a broad multilateral agreement like TRIPS. But the U.S. cannot unilaterally adjudicate TRIPS disputes.

The specific issues that the U.S. raises -- the administration of collecting societies, rules on the government use of copyrighted software, and intermediary liability and "enforcement of takedown notices for infringing online content" -- are not subject to broad-based international standards. None are explicitly recognized duties under TRIPS. There are very general standards in the WIPO Internet Treaties on copyright in the digital environment, but only a small number of controversial international agreements -- in the form of bilateral trade agreements with the U.S. -- contain standards on intermediary and third party liability and the enforcement of takedown notices for online infringement. The U.S. would like these to be areas of broad-based agreement, but thus far they are not.

Ukraine may also argue that using removals of GSP benefits as a sanction for disfavored policies and practices is not a "positive" use of GSP benefits. The Appellate body explained that the GSP Enabling Clause "mandates that the response provided to the needs of developing countries be 'positive,'" which it defined as "consisting in or characterized by constructive action or attitudes." It continued:

This suggests that the response of a preference-granting country must be taken with a view to improving the development, financial or trade situation of a beneficiary country, based on the particular need at issue.

It is difficult to explain the use of PFC listings under Special 301 as "positive" in this respect. The PFC listing is rather clearly designed as a threat to withdraw benefits as a punitive sanction for acting against U.S. interests, not as an enticement or reward for responding to its own development needs. As one commenter noted: "The EC rewards "good" behavior with extra preferences; the U.S. penalizes "bad" behavior by taking away preferences." Whether the WTO allows the latter use of GSP criteria as a sanction is yet to be decided by the Appellate Body.

Conclusion

The implications of the two lines of cases discussed above suggest that Ukraine has strong arguments for challenging its PFC listing, and any subsequent denial of GSP benefits, in the WTO. In addition, using the discussion of the prohibition of "threats alone" from the Section 301-310 case, other countries on the various watch lists could challenge Special 301 as implicitly threatening GSP benefit withdrawal for criteria that do not meet the WTO’s standards. Doing so and succeeding would relieve the world of a much hated vestige of the Pre-WTO "aggressive unilateralism" in U.S. trade policy.

Sean Flynn is a professor and associate director of the Program on Information Justice and Intellectual Property (PIJIP) at American University Washington College of Law.

Cross posted from infojustice.

Filed Under: copyright, politics, special 301, trade agreements, ukraine, us, wto

USTR Special 301 Report Doesn't Even Mention Germany Trampling Fair Use

from the did-they-even-look? dept

Last week, when the USTR's infamous Special 301 Report (pdf) came out, one of the things that I was most interested in was how the USTR would treat Germany. After all, back at the beginning of March, Germany's lower house, the Bundestag, passed a somewhat watered-down, but still troubling, bill concerning the quoting of "snippets," saying they would need to be licensed. The watered down part noted that "single words or the smallest excerpts" would not require a license, but no one has defined what "smallest excerpts" means. At the beginning of April, the upper house, the Bundesrat, declined to challenge the bill, effectively making it law in Germany. The text of the bill notes, in part, that:

The producer of press materials (press publisher) shall have the exclusive right to make these press materials publicly available, in whole or in part, for commercial purposes, unless it is a matter of single words or smallest text excerpts.

While there's still uncertainty over what it means, CCIA alerted the USTR that this almost certainly represented a violation of the Berne Convention's Article 10(1), which states:

It shall be permissible to make quotations from a work which has already been lawfully made available to the public, provided that their making is compatible with fair practice, and their extent does not exceed that justified by the purpose, including quotations from newspaper articles and periodicals in the form of press summaries.

It is difficult to see how the German law does not violate that, and thus, it would appear that the new law is a form of a trade barrier on US companies due to improper use of intellectual property laws -- which is exactly what the Special 301 report is supposed to call attention to. Of course, historically, the USTR has only used the Special 301 report to call out countries who aren't creating strict enough copyright, patent and trademark laws -- not those which have made them too strict.

So here we had a clear example where Germany had created a form of an "IP" law that went too far, beyond our trade agreements, in a clear attempt to try to create a form of a trade barrier against US companies, to block them from doing things like creating a new search engine. So how would the USTR react?

Well, apparently by ignoring the issue entirely.

The only mention of Germany in the entire report is the following:

U.S. industry has expressed concerns regarding the policies of several developed trading partners, including Finland, Germany, Greece, Hungary, Italy, Korea, New Zealand, Poland, Portugal, Romania, Spain, Turkey, and Taiwan, on issues related to innovation in the pharmaceutical sector and other aspects of health care goods and services.

No further explanation or discussion is given. Basically, it looks like the USTR really just doesn't much care when other countries create even stricter IP laws -- or when those IP laws might impact the internet industry.

Filed Under: berne convention, copyright, fair use, germany, snippets, special 301, trade barriers, ustr