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The Trouble with the TPP, Day 14: No U.S. Assurances for Canada on Privacy

Michael Geist Law RSS Feed - Thu, 2016/01/21 - 11:23

The Trouble with the TPP series focus on privacy has thus far examined weak privacy laws, restrictions on data localization requirements, and a ban on data transfer restrictions. The data transfer restriction post cited one of my recent technology law columns in concluding that the net effect of a recent European privacy case and the TPP provisions is that Canada could end up caught in a global privacy battle in which Europe restricts data transfers with Canada due to surveillance activities and the TPP restricts Canada’s ability address European concerns.

Interestingly, at least one TPP country identified the potential risk of a clash between European privacy rules and the TPP. Australia obtained a side letter with the United States that largely addresses the concern. The letter states:

Should the Government of the United States of America undertake any relevant additional commitments to those in the TPP Agreement with respect to the treatment of personal information of foreign nationals in another free trade agreement, it shall extend any such commitments to Australia. The United States will also endeavor to apply extensions of privacy protections with respect to personal information of foreign nationals held by the United States Government to Australian citizens and permanent residents.

The letter contains two key undertakings: a U.S. promise to extend any privacy commitments in other trade agreements to Australia and a promise to work to extend privacy protections to Australian data held by the U.S. government. The side letter could prove important should the U.S. and European Union renegotiate the safe harbour agreement in order to address the concerns expressed in the Schrems case. While Australia would enjoy the benefits of additional protections, Canadian officials did not obtain a similar commitment, potentially leaving Canada caught in privacy perfect storm.

(prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements, Day 13: Ban on Data Transfer Restrictions)

The post The Trouble with the TPP, Day 14: No U.S. Assurances for Canada on Privacy appeared first on Michael Geist.

The Trouble with the TPP, Day 13: Ban on Data Transfer Restrictions

Michael Geist Law RSS Feed - Wed, 2016/01/20 - 10:10

The Trouble with the TPP yesterday examined the barriers to data localization requirements, an emerging policy choice for countries concerned with weak privacy protections once personal data is transferred outside the country. The TPP goes further in undermining potential privacy protections, however, as it also establishes a ban on data transfer restrictions (prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements).

Data transfer restrictions are a key element of the European approach to privacy, which restricts data transfers to those countries with laws that meet the “adequacy” standard for protection. That approach is becoming increasingly popular, particularly in light of the Snowden revelations about governmental surveillance practices. Several TPP countries, including Malaysia, Singapore and Chile, are moving toward data transfer restrictions as are countries such as Brazil and Hong Kong.

The TPP’s restriction on data transfer limitations is very similar to the data localization provision. Article 14.11 states:

Each Party shall allow the cross-border transfer of information by electronic means, including personal information, when this activity is for the conduct of the business of a covered person.

The rule is subject the same general exception found in the data localization provision that the historical record overwhelmingly suggests will not work. As noted yesterday, a Public Citizen study found that the exception is illusory since the the requirements are so complex (each aspect must be met) that countries relying on the exception have failed in 43 out of 44 cases.

The problem for Canada with the TPP’s data transfer restriction goes beyond just the loss of a potential legislative tool to address privacy concerns. As I discuss in my weekly technology law column (Toronto Star version, homepage version), Canada could find itself in caught in a privacy perfect storm due to a European privacy decision and the TPP.

The European case starts with Max Schrems, an Austrian law student, who became interested in privacy issues several years ago as a visitor at Santa Clara University in California. Concerned with the privacy implications of personal information collected by companies such as Facebook, he filed numerous complaints against the social media giant. While most were dismissed, one ended up before the European Court of Justice, which considered whether transferring data to the U.S. violated European privacy laws in light of the widespread use of government surveillance.

Last fall, the court shocked observers by siding with Schrems, effectively declaring the agreement that governs data transfers between the U.S. and European Union invalid. The decision sparked immediate concern among the thousands of companies that rely on the decade-old “safe harbour” agreement.

As noted above, European law sets strict restrictions on data transfers to countries without “adequate” privacy protections (as determined by European officials). The U.S. and European Union avoided an earlier data battle by compromising on the safe harbour approach in which the U.S. agreed to enforce privacy violations and the EU agreed to overlook the absence of a national privacy law.

Given the Schrems decision, the future of the data transfers between the U.S. and the European Union remains up in the air, but the case could have implications that extend to other countries, including Canada. Canadian privacy law received an adequacy designation in 2001, but there is mounting concern that the finding may be at placed at risk in light of the ease with which U.S. surveillance practices may capture data coming from Canada.

In fact, the risk to data transfers between the Canada and the European Union extend beyond the immediate reaction to the Schrems case. If the European Union requires data transfer restrictions as a condition for maintaining the Canadian adequacy ruling, the TPP means that Canada may be unable to comply. The net effect of the Schrems case and the TPP provisions is that Canada could end up caught in a global privacy battle in which Europe restricts data transfers with Canada due to surveillance activities and the TPP restricts Canada’s ability address European concerns.

The post The Trouble with the TPP, Day 13: Ban on Data Transfer Restrictions appeared first on Michael Geist.

Why Canada Could Get Caught in a Global Privacy Battle

Michael Geist Law RSS Feed - Wed, 2016/01/20 - 10:01

Appeared in the Toronto Star on January 18, 2015 as Why Canada Could Get Caught in a Global Privacy Battle

Amazon’s announcement last week that it plans to establish Canadian-based data centres to address mounting fears over the privacy and surveillance implications of information stored in the United States highlights how businesses and consumers have become increasingly concerned with where their data is transferred and stored. Yet two unconnected developments – a recent European privacy decision and the Trans Pacific Partnership – could create a Canadian privacy problem that even local data centres will not solve.

The European case starts with Max Schrems, an Austrian law student, who became interested in privacy issues several years ago as a visitor at Santa Clara University in California. Concerned with the privacy implications of personal information collected by companies such as Facebook, he filed numerous complaints against the social media giant. While most were dismissed, one ended up before the European Court of Justice, which considered whether transferring data to the U.S. violated European privacy laws in light of the widespread use of government surveillance.

Last fall, the court shocked observers by siding with Schrems, effectively declaring the agreement that governs data transfers between the U.S. and European Union invalid. The decision sparked immediate concern among the thousands of companies that rely on the decade-old “safe harbour” agreement.

European law sets strict restrictions on data transfers to countries without “adequate” privacy protections (as determined by European officials). The U.S. and European Union avoided an earlier data battle by compromising on the safe harbour approach in which the U.S. agreed to enforce privacy violations and the EU agreed to overlook the absence of a national privacy law.

Given the Schrems decision, the future of the data transfers between the U.S. and the European Union remains up in the air, but the case could have implications that extend to other countries, including Canada. Canadian privacy law received an adequacy designation in 2001, but there is mounting concern that the finding may be at placed at risk in light of the ease with which U.S. surveillance practices may capture data coming from Canada.

In fact, the risk to data transfers between the Canada and the European Union extend beyond the immediate reaction to the Schrems case. The TPP, the massive Pacific trade deal that the Canadian government is currently considering for signature and ratification, could further complicate the issue by restricting the ability of Canadian officials to react to global privacy developments.

The TPP features a ban on the ability of member countries to establish restrictions on data transfers. Financial services are exempt from the rule since the U.S. Treasury wanted to ensure it could implement such requirements for its banking institutions. There is also a “public policy” exception. However, that exception relies on rules that have proven notoriously difficult to apply. If the European Union requires data transfer restrictions as a condition for maintaining the Canadian adequacy ruling, the TPP means that Canada may be unable to comply.

Interestingly, other TPP countries appear to have anticipated this issue and obtained additional privacy assurances from the U.S. For example, a TPP side letter between the U.S. and Australia features a U.S. promise to extend any privacy commitments in other trade agreements to Australia. Moreover, the same side letter promises to work to extend privacy protections to Australian data held by the U.S. government.

The side letter could prove important should the U.S. and European Union renegotiate the safe harbour agreement in order to address the concerns expressed in the Schrems case. While Australia would enjoy the benefits of additional protections, Canadian officials did not obtain a similar commitment.

The net effect of the Schrems case and the TPP provisions is that Canada could end up caught in a global privacy battle in which Europe restricts data transfers with Canada due to surveillance activities, the TPP restricts Canada’s ability to address European concerns, and the absence of a U.S. commitment means that Canada can’t count on it to provide Canadians with upgraded privacy protections.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

The post Why Canada Could Get Caught in a Global Privacy Battle appeared first on Michael Geist.

Who Will Secure the Internet of Things?

Freedom to Tinker - Tue, 2016/01/19 - 13:44
Over the past several months, CITP-affiliated Ph.D. student Sarthak Grover and fellow Roya Ensafi been investigating various security and privacy vulnerabilities of Internet of Things (IoT) devices in the home network, to get a better sense of the current state of smart devices that many consumers have begun to install in their homes. To explore this question, […]

The Trouble with the TPP, Day 12: Restrictions on Data Localization Requirements

Michael Geist Law RSS Feed - Tue, 2016/01/19 - 10:37

If all TPP countries implemented similarly strong privacy protections, there would be little need to consider alternative mechanisms to enhance public confidence in their privacy through additional legal safeguards. However, the Trouble with the TPP is that it actually weakens privacy protections by treating voluntary undertakings as equivalent to comprehensive privacy laws (prior posts include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards). The TPP goes further in harming privacy, however, by restricting the use of data localization requirements that might otherwise be used to provide privacy protection.

Data localization has emerged as an increasingly popular legal method for providing some additional assurances about the privacy protection for personal information. Although heavily criticized by those who fear that it harms the free flow of information, requirements that personal information be stored within the local jurisdiction is an unsurprising reaction to concerns about the lost privacy protections if the data is stored elsewhere. Data localization requirements are popping up around the world with European requirements in countries such as Germany, Russia, and Greece; Asian requirements in Taiwan, Vietnam, and Malaysia; Australian requirements for health records, and Latin America requirements in Brazil. Canada has not been immune to the rules either with both British Columbia and Nova Scotia creating localization requirements for government data.

In response to mounting public concern and government regulations, global companies are starting to offer local servers. Last week, Amazon announced plans to establish Canadian-based cloud computing services, and last year Microsoft pledged to do the same. In fact, Microsoft’s general counsel Brad Smith is on record that people should be able to choose where their data resides.

Despite the momentum toward data localization as a privacy protection measure, Article 14.13 of the TPP establishes a restriction on legal requirements to do so:

No Party shall require a covered person to use or locate computing facilities in that Party’s territory as a condition for conducting business in that territory.

This general provision is subject to at least three exceptions. First, government services are excluded, meaning that the Canadian provincial laws remain in place. Second, there is an exception for financial services, which has sparked protest from some members of the U.S. Congress. The exclusion is reportedly due to demands from the U.S. Treasury, which wanted to retain the right to establish restrictions on financial data flows.

The third exception is cited by supporters of the TPP as evidence that privacy protections are still a possibility. The exception states:

Nothing in this Article shall prevent a Party from adopting or maintaining measures inconsistent with paragraph 2 to achieve a legitimate public policy objective, provided that the measure:
(a) is not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade; and
(b) does not impose restrictions on the use or location of computing facilities greater than are required to achieve the objective.

When combined with a 1999 WTO reference to privacy, the argument is that privacy could be viewed as a legitimate public policy objective and therefore qualify for an exception.

The problem is that the historical record overwhelmingly suggests that reliance on this exception will not work. As Public Citizen noted in a study on the general exception language:

the exceptions language being negotiated for the TPP is based on the same construct used in Article XX of the World Trade Organization’s (WTO) General Agreement on Tariffs and Trade (GATT) and Article XIV of the General Agreement on Trade in Services (GATS). This is alarming, as the GATT and GATS exceptions have only ever been successfully employed to actually defend a challenged measure in one of 44 attempts. That is, the exceptions being negotiated in the TPP would, in fact, not provide effective safeguards for domestic policies.

In other words, the exception is illusory since the requirements are so complex (each aspect must be met) that countries relying on the exception have failed in 43 out of 44 cases.  For countries concerned about the weakened privacy protections, the TPP restricts the use of data localization requirements as a remedy just as more and more countries are exploring such rules.

The post The Trouble with the TPP, Day 12: Restrictions on Data Localization Requirements appeared first on Michael Geist.

Access Copyright Demands Higher Royalties Due to Education Investment in Technology

Michael Geist Law RSS Feed - Tue, 2016/01/19 - 10:20

When the Supreme Court of Canada issued its SODRAC v. CBC decision last fall, critics warned that the decision may be anti-technology. The majority of the court ruling included a paragraph in which it suggested that users that invest in new technologies may be required to share some of the benefits with copyright holders:

Where the user of one technology derives greater value from the use of reproductions of copyright protected work than another user using reproductions of the copyright protected work in a different technology, technological neutrality will imply that the copyright holder should be entitled to a larger royalty from the user who obtains such greater value. Simply put, it would not be technologically neutral to treat these two technologies as if they were deriving the same value from the reproductions.

The danger with the decision should be immediately obvious as it creates disincentives to invest in new technologies. I argued in a post on the decision:

linking compensation to user investment does not seem relevant for an analysis of value of copyright works. Indeed, if technological neutrality is a foundation of Canadian copyright law (as everyone agrees), why would the amount of the investment in different technologies designed to achieve the same purposes lead to different amounts of copyright royalties? The user investment and the technology used is a red herring and should be viewed as irrelevant.

It didn’t take long for Access Copyright to use the Supreme Court decision to argue that it is entitled to increased royalties due to educational investment in course management systems and other new technologies for distributing works. The copyright collective told the Copyright Board last week that it plans to argue:

A post-secondary institution that, by reason of its investment in technology that affords it the ability to copy and distribute the content of a copyright-protected work to instructors and students in a more efficient and less costly manner obtains a benefit, the value of which must be appropriately shared with Access Copyright.

Technology neutrality should mean that it is irrelevant which technology is used to disseminate works. Indeed, good policy would create incentives to use more efficient and effective technological solutions. Yet the SODRAC case does the opposite. Depending on how the Copyright Board addresses the issue, technology neutrality could be back before the Supreme Court before too long.

The post Access Copyright Demands Higher Royalties Due to Education Investment in Technology appeared first on Michael Geist.

The Trouble with the TPP, Day 11: Weak Privacy Standards

Michael Geist Law RSS Feed - Mon, 2016/01/18 - 10:54

The Trouble with the TPP continues this week with a series of posts on the TPP and privacy (prior posts include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law). The inclusion of privacy within the TPP has been touted by governments as one of the benefits of the agreement, but the privacy provisions are so weak as to move global privacy backwards, weakening emerging international standards and locking countries into rules that restrict their ability to establish additional privacy safeguards.

While some have questioned the concerns associated with privacy and the TPP by arguing that it is it a trade agreement, not a privacy treaty, the reality is that the commercial importance of big data has never been greater. Indeed, it is odd to see some emphasize the importance of increased, harmonized intellectual property protections but simultaneously express satisfaction with bare minimum privacy protections that provide companies with a patchwork of rules and consumers without standardized protections. Personal information is a critical part of e-commerce and the need for public confidence in privacy protections alongside corporate certainty about their rights and obligations with the personal information they collect should be beyond debate.

For most TPP countries, the starting point for privacy protection is a national privacy law modeled on the OECD privacy principles. In fact, the majority of the TPP, including Canada, Mexico, Peru, Australia, New Zealand, Malaysia, Japan, and Singapore, have national privacy laws (Chile is developing a privacy law). Moreover, many of these countries have privacy or data protection commissioners with some form of enforcement powers as well as additional rules on issues such as mandatory disclosure of security breaches (overview of Latin America rules, Asia rules). The key exception is the United States, which does not have an omnibus privacy law nor a privacy commissioner, relying instead on FTC enforcement of privacy policies.

Rather than setting the TPP privacy bar at having a national privacy law based on the OECD principles, the agreement weakens the shift toward a minimum standard of privacy protection.  Article 14.8 looks promising with respect to privacy protection:

each Party shall adopt or maintain a legal framework that provides for the protection of the personal information of the users of electronic commerce. In the development of its legal framework for the protection of personal information, each Party should take into account principles and guidelines of relevant international bodies

Unfortunately, the provision is subject to a footnote that effectively eviscerates the requirement for a privacy legal framework:

For greater certainty, a Party may comply with the obligation in this paragraph by adopting or maintaining measures such as a comprehensive privacy, personal information or personal data protection laws, sector-specific laws covering privacy, or laws that provide for the enforcement of voluntary undertakings by enterprises relating to privacy.

The footnote effectively means that the TPP’s privacy requirements can be met without the need for any privacy law at all. Enforcing voluntary undertakings isn’t a privacy law, it’s an anti-fraud approach that requires companies to be truthful about their privacy promises. If the law does not feature specific requirements for the consent, use, and disclosure of personal information, it isn’t a privacy law. The TPP weakens global privacy protections by failing to establish a minimum privacy law standard and then makes matters worse by limiting the ability for member countries to establish some additional safeguards. More on those limitations throughout the coming week.

The post The Trouble with the TPP, Day 11: Weak Privacy Standards appeared first on Michael Geist.

in defense of fair dealing

Fair Duty by Meera Nair - Mon, 2016/01/18 - 09:18

A response to Heather Menzies and the Globe and Mail.

Last Thursday, the Globe and Mail published an op/ed penned by author Heather Menzies, chair of The Writers’ Union of Canada. Ms. Menzies claims that a provision of law, fair dealing, is responsible for a decline in the income and well-being of Canadian authors. While she is perfectly entitled to her opinion, her argument is based on a number of inaccuracies.

At the outset, it must be noted that the system of copyright, since its inception as statutory law in 1710, was never intended to operate as a grant of absolute control. Rights offered in the name of copyright were limited, for the vital reason that the goals of the system of copyright (creativity and innovation) rely on some degree of unauthorized uses of prior works. The mantra that more control brings about more creativity is no more than political theatre; the age of Shakespeare, the industrial revolution, and even the 20th century offer enough evidence that creativity has thrived in periods of lesser control. Nevertheless, fair dealing enthusiasts will agree that it is as important to respect the rights afforded to authors, as to respect the use provided to future authors via fair dealing.

Ms. Menzies writes: “Authors have always made copyright legislation work for them, even though it originated in a 16th-century move to restrict the right to copy texts to the Stationers’ Company, a booksellers’ cartel based in London, England, and had nothing to do with writers.” It is true that copyright’s entrance into law was at the behest of booksellers eager to protect their assets, not necessarily their authors. Yet some authors obliged with the trope of the starving author during negotiations. In the three hundred years since, with the same trope, the rights of control in the system of copyright were systematically expanded, while the rights of unauthorized use were inexorably whittled away. Given that, at the present time, copyright is more expansive in breadth and depth than it has ever been, if authors are still starving, perhaps copyright is neither the problem, nor the solution.

As to the role of collective licensing in the management of educational uses of copyrighted material throughout Canada, it is true that Access Copyright facilitated this effort in the past. As to why post-secondary institutions no longer wish to rely on Access Copyright’s services, Ms. Menzies omits to indicate that in 2010 Access Copyright sought a 1300% increase in fees, demanded absurdly intrusive reporting requirements from institutions, and took it upon itself to redefine the very nature of copyright. (A privilege that Parliament, and no other, enjoys.) Yet post-secondary institutions continue to spend millions of dollars in purchasing and licensing fees, and make these payments directly to copyright owners. As to where those funds go after that point, it is not for an institution to say.

Furthermore, even though “education” was added to the allowable purposes of fair dealing through the amendments which came into force in 2012, three Supreme Court decisions upholding fair dealing in teaching and learning, and research, were all based upon the earlier language of fair dealing. That detail is also omitted in Ms. Menzies’ account. Instead, she opts to equate the decline of authors’ incomes with the later expansion of fair dealing and invokes a PricewaterhouseCoopers study to present dire consequences for education in Canada in the years ahead.

That study, commissioned by Access Copyright, was based upon very narrow parameters. (I provide analysis in “With due respect to PricewaterhouseCoopers.”) The study focuses upon revenue streams within the educational publishing industry and finds that revenue has declined over recent years. This observation is correlated to heightened attention paid to fair dealing by educational institutions, arriving at the seeming causality that fair dealing is to blame. Whereas in reality, there are more options for obtaining quality content at lesser or no cost. Teachers may avail themselves of publicly available material from the internet, open-access content, and material expressly developed by other teachers and local communities. As with any market, when more options are available, former monopolies must see their market-share decline. And lurking in the background of recent trends was nothing less than the global economic mayhem that began in 2008, which ensured that, across all walks of life, individuals and institutions had less money to spend. Yet the study’s authors appear unaware, or unconcerned, about larger macroeconomic conditions.

Finally, Ms. Menzies invokes the realm of First Nations’ writings and the importance of protecting their writers. No argument there. Our pantheon of writers is worthy of praise and we all benefit when that roster swells. Yet Ms. Menzies will not acknowledge that of the writers we laud today, many enjoyed their public education before the mania to count the number of words a teacher or librarian might share with their charges became the educational norm. Those writers enjoyed a more open reading environment in their classrooms; times being what they were, it was not necessary to speak of “fair dealing.” But it was fair dealing.

It would be only fair to suggest that such openness contributed to the success of members of The Writers’ Union of Canada. That they should now begrudge future generations of writers that same benefit, is truly disappointing.


The Trouble with the TPP, Day 10: Criminalization of Trade Secret Law

Michael Geist Law RSS Feed - Fri, 2016/01/15 - 10:10

The Trouble with the TPP series continues with a surprising and troubling aspect of the intellectual property chapter: the criminalization of trade secret law (prior posts include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection). The trade secret issue was flagged by Professor Dan Breznitz of the Munk School of Global Affairs in a column in the Globe and Mail late last year.  While some have tried to downplay the issue, the reality is that the TPP represents a radical shift on trade secrets law for most participating countries, who can expect years of pressure to gradually expand the scope of criminal penalties for trade secret violations.

Trade secrets represent an ill-fitting part of intellectual property law. While rules for patents and copyright seek to strike a balance between rights and access (patents requiring disclosure of the invention and copyright balancing creator and user rights), trade secrets do not involve any disclosure. In fact, trade secrets must remain secret to constitute a trade secret. Most TPP countries provide civil remedies for unauthorized trade secret disclosures, so that if a company believes that there has been a violation, they must initiate a case before the courts to seek damages. The TPP dramatically changes trade secret law by also requiring criminal penalties, raising the spectre of government prosecutions for violations. Article 18.78 includes requirements for criminal penalties and procedures for trade secret violations.

The inclusion of criminal penalties for trade secret violations comes directly from lobbying by the U.S. Chamber of Commerce, which made the issue a top priority. Agreement was presumably reached by creating some flexibility for TPP countries. The provision contains a mandate to include penalties for at least one of three forms of trade secret breach involving at least one of five different types of harm (commercial advantage or gain, intent to injure an owner, etc.). The flexibility has led some to argue that countries like Canada are already compliant with the bare minimum in the provision given the existence of an economic espionage provision in the Security of Information Act (Canada).

Yet meeting the bare minimum is unlikely to last for long. The U.S. Chamber of Commerce identifies both Canada and Australia as examples of countries that it believes have weak remedies, procedural obstacles and an insufficient deterrent under existing law. The examples it provides (in Canada’s case, focused on 2004 allegations that WestJet stole confidential data from an internal Air Canada website) would not be covered by the SIA’s economic espionage provision. Rather, the examples are focused on conventional, domestic commercial issues that could be (and have been) dealt with through civil law means, yet the U.S. wants the issue escalated to a criminal matter.

In addition to the concerns about criminalization, Professor Jeremy deBeer notes that the expansion into trade secrets raises potential constitutional concerns. In a study on CETA issues, deBeer argued that “ordinarily, there would be little doubt that trade secrets and confidential information are matters within provincial jurisdiction over ‘Property and Civil Rights’.”  While the federal government has given itself the power to regulate these issues, there remains the prospect of a constitutional challenge.

The post The Trouble with the TPP, Day 10: Criminalization of Trade Secret Law appeared first on Michael Geist.

The Web Privacy Problem is a Transparency Problem: Introducing the OpenWPM measurement tool

Freedom to Tinker - Thu, 2016/01/14 - 19:30
In a previous blog post I explored the success of our study, The Web Never Forgets, in having a positive impact on web privacy. To ensure a lasting impact, we’ve been doing monthly, automated 1-million-site measurement of tracking and privacy. Soon we’ll be releasing these datasets and our findings. But in this post I’d like […]

The Trouble with the TPP, Day 9: Limits on Medical Devices and Pharma Data Collection

Michael Geist Law RSS Feed - Thu, 2016/01/14 - 10:15

The link between health care and the TPP’s intellectual property chapter is easy to spot, but there are other chapters with implications for the issue. The Trouble with the TPP series today considers Chapter 8, which covers Technical Barriers to Trade (TBT). The chapter contains some surprising restrictions on the ability for national regulators to require the disclosure of certain information as part of the regulatory review process for pharmaceutical products and medical devices (prior posts include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection).

The Canadian government summary of the TBT chapter does not disclose that there are data collection restrictions. In fact, the only reference to the issue states that the chapter “improves regulatory transparency in the areas of cosmetics, medical devices, and pharmaceutical products.” Yet the chapter does far more than address regulatory transparency. For example, Annex 8-C 7bis requires each party to makes its determination on whether to grant marketing authorization for a specific pharmaceutical product on the basis on factors such as clinical data, manufacturing quality, and labelling information. However, it also states that:

no Party shall require sale or related financial data concerning the marketing of the product as part of such a determination. Further, each Party shall endeavour not to require pricing data as part of the determination

Annex 8-E for the approval of marketing of medical devices is similar:

no Party shall require sale, pricing, or related financial data concerning the marketing of the product as part of such a determination

As KEI notes in its presentation to the U.S. International Trade Commission:

It is certainly desirable to require drug and device makers to provide information about product prices, revenues, and a variety of related financial data, including the outlays on R&D and marketing of products. These are the very topics that the State of California and other state governments are seeking to obtain from drug companies, but it is much easier to mandate such disclosures at the federal level.

Much of the pricing and sales data for drugs is now controlled by IMS, the company that holds a near global monopoly on the most detailed information on sales revenue and pricing of drugs. Other “related financial data concerning the marketing of the product” might include data on R&D outlays, a topic shredded in unhelpful secrecy and subject to too much controversy, when the facts exist and could be shared. From the text, it is not that clear how far the ban on requiring financial data extends, and to which activities of a regulatory agency or another government body would be constrained by these provisions.

It is not clear why the Canadian government has agreement to these limitations nor why the summary documents do not reference them. This information could assist regulators in making better decisions on medical devices and pharmaceutical products, yet the TPP will inexplicably block them from doing so.

The post The Trouble with the TPP, Day 9: Limits on Medical Devices and Pharma Data Collection appeared first on Michael Geist.

The Trouble with the TPP, Day 8: Locking In Biologics Protection

Michael Geist Law RSS Feed - Wed, 2016/01/13 - 11:36

As the TPP negotiations reached their conclusion in Atlanta last October, one outstanding issue stood above all others: protection for biologics. While not well understood by the public, at issue was billions of dollars and access to cutting edge medicines. The Trouble with the TPP series examines the outcome of the biologics issue and argues that even with less protection than the U.S. advocated, the TPP’s requirements still represent a significant problem for global health (prior posts include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions).

Biological drugs are pharmaceuticals involving complex molecules or mixtures of molecules that are made of biological sources manufactured within a living system. They differ from conventional drugs that are manufactured by combining chemical ingredients. Building on greater knowledge of genetics and cell processes, the area represents a major growth area for the pharmaceutical industry. With the complexity comes cost, however, with biological drugs far more expensive than conventional ones. Much like the generic pharmaceutical industry creates cheaper, generic versions of chemical drugs, companies have begun to create “biosimilars” as cheaper versions of biological drugs, relying on data from clinical trials to formulate the alternative. Pharmaceutical companies have therefore sought protection for the clinical data.

As a relatively new area with billions at stake, countries have adopted a wide range of approaches to the issue of data protection. The U.S. currently offers 12 years of data protection (which it wanted emulated within the TPP), though President Obama has seemingly recognized the mistake of offering such long protection (the term was part of the negotiation over health care reform) and recently sought to reduce the term to seven years, which would have yielded billions in health care savings. Other countries have taken different approaches: Australia and New Zealand offer five years of protection, Japan and Canada eight years, and some TPP countries such as Mexico, Peru, Vietnam, Malaysia and Brunei have no protection at all.

The optimal term of protection remains a contentious issue. The Federal Trade Commission released a study in 2009 that raised doubts about the need for any biologics-specific protection, citing the protections offered by patents and the high costs of entry as evidence that biosimilar competition would be limited.  Moreover, it noted that there were already sufficient market incentives to support biologic competition and innovation.

The TPP compromise remains contentious, as Article 18.52 provides for at least eight years of protection or five years of protection plus other measures to provide comparable outcome in the market. The ongoing dispute over what this provision means is the source of some of the opposition to the TPP in the United States (particularly since Australia maintains its current approach is compliant with the TPP). Canada currently meets the eight year standard, so no further legislative changes would be required.

Yet even the compromise represents a problem. As the FTC concluded, it is far from clear that any protection is needed given market incentives and the protections that may be granted through patents. Moreover, President Obama’s second thoughts on the term of protection in the U.S. points to both the enormous costs that come with each year of additional protection and the prospect that countries may wish to reduce protections in the future. The TPP locks-in protection, however, making it difficult for any TPP country to later amend its rules. That binding policy, which comes at a still early stage of new technological development, may create long term health costs to the detriment of patients, innovation, and marketplace competition.

The post The Trouble with the TPP, Day 8: Locking In Biologics Protection appeared first on Michael Geist.

Do privacy studies help? A Retrospective look at Canvas Fingerprinting

Freedom to Tinker - Tue, 2016/01/12 - 13:04
It seems like every month we hear of some new online privacy violation in the news, on topics such as fingerprinting or web tracking. Many of these news stories highlight academic research. What we don’t see is whether these studies and the subsequent news stories have any impact on privacy. Our 2014 canvas fingerprinting measurement […]

The Trouble with the TPP, Day 7: Patent Term Extensions

Michael Geist Law RSS Feed - Tue, 2016/01/12 - 10:54

The Trouble with the TPP series now shifts to patent law reforms and the likely costs to the health care system (prior posts include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry). The TPP patent provision changes are very significant since they lock Canada into extending the term of patent protection, which will ultimately increase health care costs. Moreover, global organizations such Doctors Without Borders has warned that the agreement will raise the price of medicines for millions of people, particularly in the developing world.

The Conservative government tried to downplay the impact of patent law changes in the TPP, arguing that the agreement is consistent with current law or is “in line with outcomes secured in the Canada – EU Comprehensive Trade and Economic Agreement (CETA)”. The reference to CETA, which comes from the government’s TPP IP summary, represents a neat of sleight of hand.

The CETA changes, which the government admitted would result in increased health care costs, are not part of current Canadian law. They are not part of any bill that has been introduced before the House of Commons. In fact, given the long delays in proceeding with any implementation of CETA (indeed, the growing sense that Europe may reject the agreement in its current form), the CETA patent provisions are best described as aspirational. The inclusion of CETA-style patent provisions in TPP should be viewed on their own as ratification of the TPP could easily come before CETA ever makes its way before the House of Commons. Should that happen, the TPP will be responsible for increased health care costs arising from the extension of patent protection for pharmaceuticals.

The TPP requires several significant changes to Canadian patent law. Article 18.48 creates a requirement for a patent term adjustment for delays due to marketing approvals (described as unreasonable curtailment). The Canadian government believes that CETA’s two year patent restoration provision will meet the TPP requirement. The effect of the TPP is therefore to lock in CETA’s patent restoration extension even if CETA is never ratified or implemented. According to one study, the impact of these provisions in CETA could lead to increased drug costs of between $850 million and $1.6 billion annually.

In fact, the TPP expands the extension requirements even beyond those found in CETA. Article 18.46 requires a patent term adjustment due to patent office delays. The section provides that “an unreasonable delay at least shall include a delay in the issuance of a patent of more than five years from the date of filing of the application in the territory of the Party, or three years after a request for examination of the application has been made, whichever is later.” No similar extension is found under current Canadian law nor within CETA.

As one of my recent technology law column noted (Toronto Star version, homepage version), the escalation in patent protections is set to occur just as drug prices hit all-time highs in Canada and pharmaceutical investment in research and development sinks to decade-long lows. Those results come from a recent report released by the Patent Medicines Panel Review Board (PMPRB), an independent body charged by the government to track patent medicines pricing and spending alongside investment in research and development by pharmaceutical companies.

The report indicates that Canadians pay more for patented drugs than consumers in France, the U.K., Italy, Sweden, and Switzerland (only the U.S. and Germany pay more among the countries tracked by the PMPRB). The PMPRB says that this represents a change over time:



In 2005, Canadian prices were, on average, approximately equal to or below corresponding prices in all comparators other than Italy. By 2014, Canadian prices were decidedly above prices in the United Kingdom, France and Italy, and somewhat higher than prices in Sweden and Switzerland.



Moreover, over the past 12 years, Canadian expenditures on drugs has outpaced all other comparator countries, including the U.S., with 184.4 per cent growth in total drug expenditures.

Not only have Canadian expenditures on drugs been high, but the ratio of sales to research and development in Canada by pharmaceutical companies has fallen to record lows. In the 1980s, the industry lobbied for patent reforms that provided new rights and longer protections. In return, it promised to increase spending on research and development in Canada so that it would rise to 10 per cent of total sales by 1996. 

The report indicates that the ratio is now at only 4.4 per cent, the lowest recorded since 1988 (the peak rate was 11.7 per cent in 1995).

Canada is a significant laggard when it comes to pharmaceutical research. Despite ranking as one of the 10 most important markets and paying some of the world’s highest prices, the ratio of sales to research in other comparator countries is triple the Canadian rate. In other words, in countries such as the UK and France, drug prices are lower and research expenditures are far higher.

The confluence of high prices, low investment in research and development, and ever-increasing demands for further patent protections has caused the PMPRB to question the effectiveness of the Canadian system. It notes with regard to CETA:

Its implementation will require amendments to the Patent Act to provide pharmaceutical patentees with up to two years of additional market exclusivity. Such a change would come at a time of high drug prices and record low R&D, causing some to question the effectiveness of the PMPRB and whether a policy balance conceived over 25 years ago continues to serve its intended purpose.



The concern over Canadian pharmaceutical policy is long overdue as the evidence leaves little doubt that catering to the demands of the largely foreign-based companies have yielded few benefits. Canadians pay significantly more for pharmaceutical drugs than consumers in many other developed countries and the promised increased investment in research and development has not materialized. Yet despite the costly state of affairs, the government is set to reward the industry with even stronger protections through the TPP that will result in an extension of the higher prices.

The post The Trouble with the TPP, Day 7: Patent Term Extensions appeared first on Michael Geist.

The Battle Over the Future of Broadband in Canada: Mayors Tory & Watson v. Nenshi

Michael Geist Law RSS Feed - Tue, 2016/01/12 - 10:41

Cities across the country have long emphasized the importance to the local economy of creating innovation hubs. There are different roads toward that goal, however, as shown by competing submissions from the mayors of Toronto and Calgary in a high-stakes battle over the future of broadband Internet services. Toronto mayor John Tory and Ottawa Mayor Jim Watson sided with large telecom companies, while Calgary mayor Naheed Nenshi emphasized the importance of open networks and more robust competition.

My weekly technology law column (Toronto Star version, homepage version) notes that the submissions stem from a crucial ruling issued by Canada’s telecom regulator in July. Hoping to foster a more competitive market and having used various “open access” policy measures to give independent Internet providers a chance to compete in the Internet services market, the Canadian Radio-television and Telecommunications Commission (CRTC) decided to extend those rules to fast fibre connection services.

The upshot of the ruling was that companies such as Bell would be required to share their infrastructure with other carriers on a wholesale basis. The companies would enjoy a profit on those wholesale connections, but the increased competition would facilitate better services, pricing, and consumer choice. Indeed, the policy approach is similar to the one used for slower DSL broadband connections that has been instrumental in creating a small but active independent ISP community that serves hundreds of thousands of Canadians.

Months later, Bell filed a cabinet appeal over the decision, asking the new Liberal government to overrule the CRTC. Industry Canada recently posted the comments from interested stakeholders and in the process revealed a fascinating split on the issue.

On one side, Bell garnered support from large business groups and technology companies such as Cisco and Blackberry. Those companies have strong business relationships and were unsurprisingly willing to support Bell’s position. On the other side, consumer groups, independent Internet providers, some cable providers, and the Canadian Federation of Independent Business lined up in support of the CRTC decision, emphasizing the benefits of a more competitive market.

While the corporate divide was to be expected (most corporate submissions supporting Bell used similar language and some even copied Bell executives), the more interesting difference arose from submissions from several large Canadian cities.

Toronto and Ottawa both submitted brief letters expressing support for Bell’s position. The two-page letters both cite planned Bell investments in the cities and express fear that the CRTC ruling might delay company plans. Tory, a former Rogers executive, says that Bell deserves to be treated fairly, but does not explain how the implementation of a policy designed to create more competition for his constituents represents unfair treatment.

By contrast, Calgary submitted a 28 page document supporting the CRTC ruling and explaining why increased competition was good for the city and consumers. Addressing issues seemingly ignored by Toronto and Ottawa, Nenshi noted that without some form of network access for competitors, there would invariably be challenges to grant all providers the necessary municipal infrastructure to construct their networks. Given limited capacity of municipal right of ways, the market might be limited to a few large competitors.

Moreover, Calgary focused on the need for cities to build their own network infrastructure to complement the services offered by the telecom giants. It noted the public interest benefits that arise from building municipal networks, which offer the chance for more competition and ensure that cities are not held hostage by large companies threatening to delay or withdraw network investments.

Calgary also reminded the government that companies like Bell have long enjoyed benefits from public funding, protection from competition, and access to municipal infrastructure. While the new fibre connections do not rely on legacy infrastructure, their powerful market positions are directly linked to those earlier privileged positions.

The federal government decision on the appeal may be months away, but the competing submissions paint dramatically different pictures of how Canadian cities are addressing the critical need for affordable high-speed Internet services.

It suggests that Toronto and Ottawa are seemingly content to wait for the large telecom companies to install new networks and have no problem with the higher consumer and business costs that reduced competition would bring. Calgary, meanwhile, is actively building competitive networks, monitoring municipal developments around the world, and promoting a more open, competitive environment. All the mayors claim their cities are working to become leading hubs of innovation, yet only one seems to be doing much about it.

The post The Battle Over the Future of Broadband in Canada: Mayors Tory & Watson v. Nenshi appeared first on Michael Geist.

Why Mayors John Tory and Jim Watson Are Against Competition for Access to Affordable Fast Broadband

Michael Geist Law RSS Feed - Tue, 2016/01/12 - 10:29

Appeared in the Toronto Star on January 11, 2015 as Why Mayor John Tory is Against Competition for Access to Affordable Fast Broadband

Cities across the country have long emphasized the importance to the local economy of creating innovation hubs. There are different roads toward that goal, however, as shown by competing submissions from the mayors of Toronto and Calgary in a high-stakes battle over the future of broadband Internet services. Toronto mayor John Tory (joined by Ottawa Mayor Jim Watson) sided with large telecom companies, while Calgary mayor Naheed Nenshi emphasized the importance of open networks and more robust competition.

The submissions stem from a crucial ruling issued by Canada’s telecom regulator in July. Hoping to foster a more competitive market and having used various “open access” policy measures to give independent Internet providers a chance to compete in the Internet services market, the Canadian Radio-television and Telecommunications Commission (CRTC) decided to extend those rules to fast fibre connection services.

The upshot of the ruling was that companies such as Bell would be required to share their infrastructure with other carriers on a wholesale basis. The companies would enjoy a profit on those wholesale connections, but the increased competition would facilitate better services, pricing, and consumer choice. Indeed, the policy approach is similar to the one used for slower DSL broadband connections that has been instrumental in creating a small but active independent ISP community that serves hundreds of thousands of Canadians.

Months later, Bell filed a cabinet appeal over the decision, asking the new Liberal government to overrule the CRTC. Industry Canada recently posted the comments from interested stakeholders and in the process revealed a fascinating split on the issue.

On one side, Bell garnered support from large business groups and technology companies such as Cisco and Blackberry. Those companies have strong business relationships and were unsurprisingly willing to support Bell’s position. On the other side, consumer groups, independent Internet providers, some cable providers, and the Canadian Federation of Independent Business lined up in support of the CRTC decision, emphasizing the benefits of a more competitive market.

While the corporate divide was to be expected (most corporate submissions supporting Bell used similar language and some even copied Bell executives), the more interesting difference arose from submissions from several large Canadian cities.

Toronto and Ottawa both submitted brief letters expressing support for Bell’s position. The two-page letters both cite planned Bell investments in the cities and express fear that the CRTC ruling might delay company plans. Tory, a former Rogers executive, says that Bell deserves to be treated fairly, but does not explain how the implementation of a policy designed to create more competition for his constituents represents unfair treatment.

By contrast, Calgary submitted a 28 page document supporting the CRTC ruling and explaining why increased competition was good for the city and consumers. Addressing issues seemingly ignored by Toronto and Ottawa, Nenshi noted that without some form of network access for competitors, there would invariably be challenges to grant all providers the necessary municipal infrastructure to construct their networks. Given limited capacity of municipal right of ways, the market might be limited to a few large competitors.

Moreover, Calgary focused on the need for cities to build their own network infrastructure to complement the services offered by the telecom giants. It noted the public interest benefits that arise from building municipal networks, which offer the chance for more competition and ensure that cities are not held hostage by large companies threatening to delay or withdraw network investments.

Calgary also reminded the government that companies like Bell have long enjoyed benefits from public funding, protection from competition, and access to municipal infrastructure. While the new fibre connections do not rely on legacy infrastructure, their powerful market positions are directly linked to those earlier privileged positions.

The federal government decision on the appeal may be months away, but the competing submissions paint dramatically different pictures of how Canadian cities are addressing the critical need for affordable high-speed Internet services.

It suggests that Toronto and Ottawa are seemingly content to wait for the large telecom companies to install new networks and have no problem with the higher consumer and business costs that reduced competition would bring. Calgary, meanwhile, is actively building competitive networks, monitoring municipal developments around the world, and promoting a more open, competitive environment. All the mayors claim their cities are working to become leading hubs of innovation, yet only one seems to be doing much about it.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

The post Why Mayors John Tory and Jim Watson Are Against Competition for Access to Affordable Fast Broadband appeared first on Michael Geist.

Canada’s Pharma Failure: Why High Drug Prices Are About to Soar Higher

Michael Geist Law RSS Feed - Tue, 2016/01/12 - 10:28

Appeared in the Toronto Star on December 21, 2015 as Why Canada’s High Drug Prices Are About to Soar Higher

Patent protections for the pharmaceutical companies have been among the most controversial aspects of recent high profile trade agreements such as the Canada – EU Trade Agreement (CETA) and the Trans Pacific Partnership (TPP). For example, CETA would require Canada to extend the term of protection for patents through a patent term restoration rule, which the Conservative government acknowledged would add billions to provincial health care costs. The TPP would reinforce those reforms, requiring changes even if CETA falls through.

The escalation in patent protections is set to occur just as drug prices hit all-time highs in Canada and pharmaceutical investment in research and development sinks to decade-long lows. Those results come from a recent report released by the Patent Medicines Panel Review Board (PMPRB), an independent body charged by the government to track patent medicines pricing and spending alongside investment in research and development by pharmaceutical companies.

The report indicates that Canadians pay more for patented drugs than consumers in France, the U.K., Italy, Sweden, and Switzerland (only the U.S. and Germany pay more among the countries tracked by the PMPRB). The PMPRB says that this represents a change over time:



In 2005, Canadian prices were, on average, approximately equal to or below corresponding prices in all comparators other than Italy. By 2014, Canadian prices were decidedly above prices in the United Kingdom, France and Italy, and somewhat higher than prices in Sweden and Switzerland.



Moreover, over the past 12 years, Canadian expenditures on drugs has outpaced all other comparator countries, including the U.S., with 184.4 per cent growth in total drug expenditures.

Not only have Canadian expenditures on drugs been high, but the ratio of sales to research and development in Canada by pharmaceutical companies has fallen to record lows.  In the 1980s, the industry lobbied for patent reforms that provided new rights and longer protections. In return, it promised to increase spending on research and development in Canada so that it would rise to 10 per cent of total sales by 1996. 

The report indicates that the ratio is now at only 4.4 per cent, the lowest recorded since 1988 (the peak rate was 11.7 per cent in 1995).

Indeed, Canada is a significant laggard when it comes to pharmaceutical research. Despite ranking as one of the 10 most important markets and paying some of the world’s highest prices, the ratio of sales to research in other comparator countries is triple the Canadian rate. In other words, in countries such as the UK and France, drug prices are lower and research expenditures are far higher.

The confluence of high prices, low investment in research and development, and ever-increasing demands for further patent protections has caused the PMPRB to question the effectiveness of the Canadian system. It notes with regard to CETA:

Its implementation will require amendments to the Patent Act to provide pharmaceutical patentees with up to two years of additional market exclusivity. Such a change would come at a time of high drug prices and record low R&D, causing some to question the effectiveness of the PMPRB and whether a policy balance conceived over 25 years ago continues to serve its intended purpose.



The concern over Canadian pharmaceutical policy is long overdue as the evidence leaves little doubt that catering to the demands of the largely foreign-based companies have yielded few benefits.

Canadians pay significantly more for pharmaceutical drugs than consumers in many other developed countries and the promised increased investment in research and development has not materialized. Yet despite the costly state of affairs, the government is set to reward the industry with even stronger protections that will result in an extension of the higher prices.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

The post Canada’s Pharma Failure: Why High Drug Prices Are About to Soar Higher appeared first on Michael Geist.

The Trouble with the TPP, Day 6: The Price of Entry

Michael Geist Law RSS Feed - Mon, 2016/01/11 - 10:30

An examination of the Trouble with the TPP copyright provisions would not be complete without discussing how Canada reformed its law before entering the negotiations as part of the price of admission to the TPP talks (prior posts include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”). The pre-TPP reforms must surely be considered part of the cost of the agreement even if proponents now argue that the TPP is consistent with (the reformed) Canadian law.

Canada was not an initial participant in the TPP negotiations. The Harper government began working on entry into the TPP in 2009, leading to a formal request for participation in the negotiations in 2011. The U.S. held a consultation on Canada’s proposed entry into the TPP a year later, resulting in the IIPA, the lead lobby group for the movie, music, and software industry, urging the U.S. government to keep Canada out of the negotiations until a copyright bill was passed that satisfied U.S. expectations. The Canadian government responded by promising to pass the law and noting that it had also signed the Anti-Counterfeiting Trade Agreement (ACTA). The U.S. demands had an enormous impact on the contents of the Canadian copyright bill, particularly the retention of restrictive digital lock rules that were at the very top of the U.S. priority list.

In fact, the Canadian government was not shy about acknowledging that some reforms were driven by U.S. demands as the price for TPP entry.  For example, Canada enacted anti-counterfeiting legislation in 2014 that then Industry Minister James Moore admitted was a U.S. condition for TPP participation:

“This legislation contributes to a more effective relationship between Canada and the United States on raising Canada to the international standard and meeting the standard that the American government frankly asked the government of Canada to meet in order for us to move forward with our participation in the Trans Pacific Partnership negotiations so we think we’ve checked all the necessary boxes.”

Once the U.S. was convinced that Canada would meet its IP and anti-counterfeiting demands, it set two further conditions for entry. The first was that Canada could not re-open any chapter that had already been concluded. The second was that Canada would not have any “veto authority” over any chapter. That meant that Canada could not hold up any chapter if it was the lone opponent. This concession became important in the IP chapter, where there were several issues were Canada ultimately did stand alone. For example, Canada was the only opponent of adding new criminal measures for rights management information. Given the terms of entry into the negotiations, it had little to choice but to cave on the issue, creating another example of how rules set before formal entry into the TPP negotiations have had a troubling impact on the agreement and on Canadian law.

The post The Trouble with the TPP, Day 6: The Price of Entry appeared first on Michael Geist.

The Trouble with the TPP, Day 5: Rights Holders “Shall” vs. Users “May”

Michael Geist Law RSS Feed - Fri, 2016/01/08 - 10:17

The Trouble with the TPP series concludes the first week with a look at how the TPP treats the interests of rights holders and users completely differently (prior posts include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules). I noted in the discussion on Internet providers that the most telling provision comes at the very end, where the parties recognize the importance of taking into account the impacts on rights holders and Internet providers. Internet users and the general public do not merit a mention as their interests do not seem to count for the purposes of a notice-and-takedown system for copyright works on the Internet.

The absence of users in the Internet provider section is not an anomaly. Throughout the TPP IP chapter, there are two distinct approaches. Where rights holders interests are concerned, the requirements are typically mandatory (ie. “shall”). Where the issue involves user rights or access, the requirements are not requirements, but rather non-mandated provisions (ie. “may”). For example, consider the international IP treaty obligations in the TPP.  Article 18.7 identifies nine international IP treaties and protocols that are all requirements for TPP members (Patent Cooperation Treaty, Paris Convention, Berne Convention, Madrid Protocol, Budapest Treaty, Singapore Treaty, UPOV 1991, WCT, and WPPT). What about the Marrakesh Treaty to facilitate access to published works for the blind and visually impaired? It is relegated to a footnote with no obligation to implement:

As recognised by the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled, done at Marrakesh, June 27, 2013 (Marrakesh Treaty). The Parties recognise that some Parties facilitate the availability of works in accessible formats for beneficiaries beyond the requirements of the Marrakesh Treaty.

The TPP also contains dozens of obligations that guarantee rights holders everything from a longer copyright term to limitations on any limitations and exceptions. What about requiring balance within copyright? Article 18.66 falls back on “shall endeavour” language, meaning countries do not face a positive obligation for balance:

Each Party shall endeavour to achieve an appropriate balance in its copyright and related rights system, among other things by means of limitations or exceptions that are consistent with Article 18.65 (Limitations and Exceptions), including those for the digital environment, giving due consideration to legitimate purposes such as, but not limited to: criticism; comment; news reporting; teaching, scholarship, research, and other similar purposes; and facilitating access to published works for persons who are blind, visually impaired or otherwise print disabled.

That this provision is regarded as a positive step forward highlights just how little user interests factor into the IP chapter.  In fact, Jonathan Band notes that efforts to strengthen the balancing language during the Hawaii round of negotiations was “vehemently opposed by movie studios and other U.S. rights holders.” Negotiators ultimately caved to those pressures and retained the weaker language.

The weak language can similarly be found in safeguards against abuse of intellectual property rights. The TPP is filled with provisions aimed at guarding against misuse or infringement of IP rights. But what about when rights holders misuse their rights? Article 18.3(2) provides more weak language:

Appropriate measures, provided that they are consistent with the provisions of this Chapter, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.

How about provisions to enhance access to the public domain? No such luck as Article 18.15 merely “recognizes” the importance of a rich and accessible public domain as well as the importance of publicly accessible databases to identify works that are now in the public domain. Or how about legal protection for libraries and educational institutions against criminal liability for circumventing a digital lock? Unlike the many digital lock requirements in the TPP, Article 18.68 says that countries “may” provide that the criminal provisions do not apply to those institutions.

The examples go on and on with obligations when rights holder interests are involved and optional provisions for users. The public still has the option of being heard, however. As part of its consultation process, the Canadian government is inviting comments on the TPP at any time via email at TPP-PTP.consultations@international.gc.ca.

The post The Trouble with the TPP, Day 5: Rights Holders “Shall” vs. Users “May” appeared first on Michael Geist.

The Trouble with the TPP, Day 4: Copyright Notice and Takedown Rules

Michael Geist Law RSS Feed - Thu, 2016/01/07 - 10:20

The Trouble with the TPP series focuses today on the TPP’s effort to regulate how Internet providers and hosts address allegations of copyright infringement on their networks and sites (prior posts include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension). The goals of the U.S. and Canadian government in the negotiations were clear from the outset: the U.S. wanted to export its DMCA notice-and-takedown system to the rest of the TPP, while Canada wanted to preserve its newly created notice-and-notice approach (more on the notice-and-notice system, which does a better job of striking a balance and preserving user privacy, here). In fact, Canada rushed through the notice-and-notice system without regulations (causing major problems of misleading notices) in order to argue that it should not be required to adopt the U.S. approach.

The end result is a compromise that allows Canada to maintain notice-and-notice, but no other TPP country can adopt it in order to comply with the ISP liability and notice rules. The Canadian rules can be found in Annex 18-E, which states that the standard TPP ISP rules do not apply to a country that meets the conditions of the annex “as from the date of agreement in principle of this Agreement.” Since that date is now long passed (October 4, 2015), no other TPP country can implement the notice-and-notice system to meet its TPP obligations. It should be noted that Chile, which objected to the special treatment for Canada, obtained a similar exception for its system based on the U.S. – Chile Free Trade Agreement in Annex 18-F.

That compromise highlights one of the major sources of trouble with the TPP. More than a mere trade agreement, the TPP is a clear effort by the U.S. to export its regulatory framework to other countries, creating a competitive advantage for its companies. Canada and Chile were able to push back to retain their system, but no other TPP country (present or future) will be permitted to adopt those systems to meet their treaty obligations. This compromise presumably comes at the behest of the major U.S. movie, music, and software industries, which have used their lead lobby group to criticize both Canada and Chile over their systems.

For those countries stuck with the TPP’s implementation of U.S. law, Annemarie Bridy points out that the TPP is “less speech-protective and more prone to over-enforcement and abuse.” For example, the TPP does not contain a mandatory counter-notice system that would allow users to effectively challenge claims of infringement by requiring providers to re-post their content. Moreover, the TPP has fewer requirements for the contents of takedown notices as compared to the DMCA, with no requirement for rights holders to state their good faith belief that the content in the notice infringes copyright. The absence of a good faith belief requirement is a major omission given that it has played a role in litigation in the U.S. where rights holders misuse the takedown system.

The decision lock-in the DMCA notice-and-takedown system within the TPP comes just as the U.S. Copyright Office undertakes a public study of its costs and burdens on rights holders, service providers, and the general public. As with the prior discussion on digital locks, the risk that the TPP may mandate a particular approach that limits domestic reforms is an enormous problem for all stakeholders, regardless of their perspective.

Perhaps the most telling provision in the Internet provider section comes at the very end. Article 18.82 (9), the final sentence in the section, states:

The Parties recognise the importance, in implementing their obligations under this Article, of taking into account the impacts on right holders and Internet Service Providers.

There is no reference to users or the general public in the provision, as the impact on the public simply doesn’t matter. This reflects an approach in which the broader public is not even an after-thought. It is missing altogether.

The post The Trouble with the TPP, Day 4: Copyright Notice and Takedown Rules appeared first on Michael Geist.

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