Why Canada has nothing to fear over TPP and Intellectual Property

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Critics have it wrong. Trade deal presents a generational opportunity

The intellectual property chapter of the Trans-Pacific Partnership (TPP) has been misunderstood and attacked by several commentators, and the public is understandably confused. Much has been misinterpreted by those who oppose the TPP, or at least its intellectual property (IP) provisions.

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It is important that these misunderstandings be corrected. The TPP presents a generational opportunity for Canada. The cost of being left out of an international agreement governing trading relations between nations representing as much as 40 per cent of the world’s GDP — including three of Canada’s top five trading partners — could be staggering. Decisions about the TPP should be based on facts, not misunderstandings.

The TPP’s IP chapter essentially maintains our current laws and the international standards that Canada has already agreed to in other treaties, such as the Berne Convention, Rome Convention, TRIPS, and the WIPO Internet Treaties, which are already reflected in Canadian law.

The IP chapter reflects the legal framework under which some of the world’s most successful technology companies, such as Google, Microsoft, Apple, Sony, Amazon, and Facebook have prospered. It has also the framework that has enabled the creative industries, including the music, movie, book publishing, software, and entertainment software industries, to flourish.

Several academics have voiced criticism of the IP chapter, but in doing so, have misinterpreted it. It is important to set the record straight.

Prof. Dan Breznitz, of the Munk School of Global Affairs at the University of Toronto claimed that the trade secret provisions adds “ambiguous trade-secret propositions to the law” that will “seriously restrict entrepreneurship” and “limit the basic economic freedom of individuals.” He also claimed that the requirements for criminal sanctions pose great risks, and that Beijing will celebrate the TPP because it will stifle North America innovation. None of his claims stand up to scrutiny.

The civil law trade secret obligations are substantially identical to the international standard for protecting trade secrets in the World Trade Organization TRIPs Agreement, which 162 countries and territories, including Canada and China, have adopted, as well in NAFTA. Canadian law already meets this requirement. The suggestion that Canadian law would need to be amended is just plain wrong.

With regard to criminal provisions, the treaty gives parties considerable flexibility. One option is to criminalize state-sponsored computer hacking for the purpose of stealing trade secrets. Not surprisingly, state sponsored computer hacking (economic espionage) is already a crime in Canada.

It is hard to understand how such laws could impede legitimate Canadian businesses or innovation, and it is a leap of logic to suggest that China will benefit from a treaty that maintains existing standards for trade secret protection and which encourages TPP parties to make theft by foreign governments or their proxies illegal, especially given the widespread occurrence of such practices in China. In fact, combatting computer hacking has become one of the major 21st-century economic threats and is a crucial component of Canada’s Cyber Security Strategy.

Prof. Michael Geist, a government-appointed Research Chair at the University of Ottawa, has also made inaccurate claims.

Based on a leaked draft of the treaty, he claimed that Internet providers in Canada will be required to take down infringing content as soon as notice is given by rights holders, as occurs in the U.S. and elsewhere. His claim was wrong, as he has now admitted.

He claimed that Canada will have to add new criminal sanctions to the Copyright Act prohibiting willful commercially-motivated breaking of digital locks (““technological protection measures” or “TPMs”). The Act already provides this sanction.

He claimed that a requirement to add a criminal sanction for violations of the rights management information (RMI) prohibitions is a concern. The provision requires sanctions against digital pirates who carry on businesses directed at content theft, who act wilfully and for purposes of commercial advantage. It is hard to see any concern here.

He also raises concerns about being locked into our current anti-circumvention (TPM) rules. These rules are in line with those of our major trading partners, and in any event, we don’t have unlimited flexibility as to how TPMs can be protected to meet our WIPO treaty obligations, as Mihály Ficsor, the world’s leading expert on the issue, pointed out in a rebuke to Geist during the copyright reform process. Further the treaty provides ample room for new exceptions should any problem emerge.

Geist claimed that the TPP is a “digital policy failure,” because Canada failed to persuade other TPP parties to adopt particular Canadian exceptions to copyright such as the user-generated content exception where Canada is, frankly, an international outlier. This misunderstands the nature of the TPP. It’s a trade agreement, not a copyright exception agreement. In any event, nothing in the treaty prevents parties from maintaining existing exceptions or establishing new ones (in accordance with already existing international frameworks).

Geist also criticized the extension of the term of copyright from 50 to 70 years, claiming it will “lock down” content. This hasn’t been problematic in the more than 90 countries that have terms of 70 years or more. It’s mostly an argument for use of works without paying. In fact, Canadian creators could benefit from a term extension in countries (such as EU member states) which only provide longer terms of protection for foreign works on a reciprocal basis.

Without any substantiation or analysis, Geist also claimed that the extended term will cost Canadians in excess of $100 million per year. He has since retreated from that figure.  The reality, as I explained in a blog post, is that determining the net benefits or burdens of a term extension is a complex task. Yet, the only Canadian study on the economic impacts (published by Industry Canada) found that user costs of a 20 year extension “may increase slightly.”

Will the TPP be a panacea for Canada’s economic woes or be the silver bullet that solves our innovation gap? No. The TPP is not a substitute for innovation policies. If Canadians are to succeed in the innovation economy our legal and business frameworks must support innovation and help Canadian innovators win in foreign markets.

But, given what is potentially at stake, let’s base our decision about the TPP on the facts, not distortions of what is in the Agreement.

Barry Sookman is a senior partner with the law firm McCarthy Tétrault and an adjunct professor of intellectual property law at Osgoode Hall Law School. His blog is barrysookman.com, where his views can be found in more elaborate detail.