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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 […]
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