US IP Enforcement Ambitions In Trans-Pacific Trade Agreement Stir Reactions

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An alleged official document leaked last week showed that the United States is taking the lead in escalating intellectual property rights enforcement in negotiations for a regional trade agreement among countries bordering the Pacific Ocean. But there may be some concern about IP protection going beyond existing international trade obligations.

In December, New Zealand had expressed concerns over IP protection exceeding international trade rules, in reference to previous US trade agreements, according to sources.

The Trans-Pacific Partnership (TPP), originally called the Trans-Pacific Strategic Economic Partnership Agreement, was signed in 2005 between four countries: Brunei Darussalam, Chile, New Zealand, and Singapore, according to the New Zealand Ministry of Foreign Affairs and Trade.

In December 2009, the US decided to enter negotiations to join the trade agreement. In March 2010, negotiations began to extend the agreement to new partners, including Australia, Peru, the United States, and Vietnam. Malaysia joined the negotiations in October 2010.

The fifth round of TPP negotiations took place in Santiago, Chile, from 14-18 February, and the sixth round is planned for 28 March-1 April in Singapore. According to a source, the negotiations might start a day early to allow for discussion on the IP chapter of the agreement.

In a December 2009 letter to Nancy Pelosi, then-speaker of the House of Representatives, and Robert Byrd, then-Senate president, US Trade Representative Ron Kirk said the partnership “would create a potential platform for economic integration across the Asia-Pacific region, a means to advance US economic interest with the fastest-growing economies in the world, and a tool to expand US exports.”

In the letter, Kirk also said “we have seen a proliferation of trade agreements in the Asia-Pacific region to which the US is not a party,” leading to a decline in US share of key Asia-Pacific markets over the last decade.

The USTR has been promoting the TPP and posted a page displaying an interactive map of the US with benefits from the TPP for each US state.

The document [pdf] leaked to and published by Knowledge Ecology International, dated 10 February, is the US proposed intellectual property chapter of the agreement under negotiation.

The general provisions give a list of international treaties and agreements that the TPP signatories would have to sign “by the date of entry into force of this agreement”, most of these managed by the World Intellectual Property Organization. These include (but are not limited to): the Patent Cooperation Treaty (Brunei is currently not a member); Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite (Brunei, Chile and New Zealand are not current members); the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure (Brunei, Chile, New Zealand, Vietnam not current members); WIPO Copyright Treaty (Brunei, New Zealand, and Vietnam not current members); the Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms (Brunei and Singapore not current members); and the International Convention for the Protection of New Varieties of Plants (UPOV). (Brunei and Peru not current members).

The US IP rights chapter covers all areas of protection, such as trademarks, internet domain names, copyrights and related rights, and patents.

While rights holders see a need for greater protection, such as longer copyright terms, civil society groups have shown concern. The US document asks for term of protection of a work to” be calculated on the basis of the life of a natural person, the term shall be not less than the life of the author and 70 years after the author’s death,” and “not less than 95 years from the end of the calendar year of the first authorized publication of the work, failing such authorized publication within 25 years from the creation of the work, performance, or phonogram, not less than 120 years from the end of the calendar year of the creation of the work.”

In a press release from 15 March, Jane Kelsey, a law professor at the University of Auckland, said the leaked document “includes material not contained in the previous leak of the US IP text … and confirms the extreme nature of US demands.”

Broad Patentability Criteria

As patents on genes and in particular genetic diagnostics are currently under challenge in the US (IPW, IP Live, 30 March 2010), the US proposal appears to call for broad patentability criteria.

For example, said Kelsey, “according to analysts, the US text would stop countries from adopting practices that India and the Philippines have used to prevent the ‘evergreening’ of patents, which further restricts the production of cheaper generic medicines.”

On patents, the document states that “Each Party shall make patents available for any invention, whether a product or process,in all fields of technology, provided that the invention is new, involves an inventive step, and iscapable of industrial application. In addition, the Parties confirm that: patents shall be available for any new forms, uses, or methods of using a known product; and a new form, use, or method of using a known product may satisfy the criteria for patentability, even if such invention does not result in the enhancement of the known efficacy of that product.”

The provision also states that each party “shall make patents available for inventions” on plants and animals, and diagnostic, therapeutic, surgical methods for the treatment of humans or animals.

Exclusion from patentability could only be done on the grounds of necessary protection of ordre public or morality, and parties could provide limited exceptions to the exclusive rights if those exceptions do not “unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.”

Criminal Penalties Measures for Infringers

The document asks that “each party provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright or related rights piracy on a commercial scale,” even in cases where the infringements have no direct or indirect motivation of financial gain.

Criminal procedures and penalties would have to be applied against people trying to record a motion picture in a cinema, for example, as well as trademark counterfeiters. Penalties that “include sentences of imprisonment as well as monetary fines sufficiently high to provide a deterrent to future infringements, consistent with a policy of removing the infringer’s monetary incentive,” should be applied, the document says.

The text also provides high protection of computer software and other materials protected by copyright, including regulation of the “acquisition and management of software and other materials for government use.”

Internet service providers would have legal incentives to cooperate with copyright owners “in deterring the unauthorised storage and transmission of copyrighted materials,” with providers being associated with preventing copyright infringement under pain of prosecution.

Domestic Support for TPP

On 14 February, 18 of the 435 members of the House of Representatives wrote a letter to President Obama [pdf] calling for a high standard IP chapter in the TPP, according to a US Chamber of Commerce press release. In the letter, the signatories said that “the TPP presents an opportunity to establish 21st century IP protections that can serve as a template for future FTAs in the Asia-Pacific region and around the world.” They also asked that the ambition to conclude the TPP negotiations by November 2011 “should not be pursued at the expense of a strong agreement with a modern IP chapter – one that opens new markets for American companies in today’s knowledge-based economy.”

US Chamber of Commerce President and CEO Thomas Donohue in November said “the United States must seize another tremendous opportunity to boost our competitiveness in the region – and that is to successfully negotiate” the TPP.

“With the United States and 8 other countries taking part in the negotiations, the TPP has the potential to become a cutting-edge free trade agreement which other APEC countries may join over time,” Donahue said. The Asia-Pacific Economic Cooperation (APEC) has 21 members, among them the 8 countries negotiating the TPP, Japan, and the Philippines. “Some are expressing interest in joining the negotiations now, which we welcome. But our first goal is to achieve a comprehensive agreement – one that covers all sectors, including agriculture, with no exceptions for any party,” he said.

KEI also published a US industry memo on IP in December, urging the US government to seek the “highest possible IP protections from TPP negotiating parties.”

Calls for Transparency, TRIPS Framework

In what seems to be a remake of the recently concluded Anti-Counterfeiting Trade Agreement (ACTA) (IPW, IP Law, 6 December 2010), negotiations are opaque, with civil society groups calling for greater transparency in countries involved in the TPP.

A paper allegedly submitted by New Zealand in December, obtained by civil society groups and published by Public Citizen, a US group, was interpreted as showing that some disagreements had arisen between New Zealand and the US on intellectual property. In the paper, the country says the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) provides the adequate framework for the IP chapter of the agreement.

New Zealand asks for a “TRIPS-aligned” structure and warned against strengthening IP standards “beyond those agreed to in TRIPS.” The paper said “there is a tendency towards overprotection of IP in all our societies, particularly in the areas of copyright and patents.”

“The problems of overprotection are particularly acute for technology importing countries, including developing countries,” the paper said, adding that countries trying to limit the TRIPS flexibilities “simply act against the interests of technology importing countries.” It is also warning against the temptation of a strict harmonisation of the IP regimes as “the TPP region consists of countries differing in size, incomes, levels of development and economic structure.”

Peter Maybarduk, an intellectual property lawyer at Public Citizen, told Intellectual Property Watch that the TPP text submitted by New Zealand showed “TRIPS” coherence, while the text provided by the US showed measures going beyond the TRIPS agreement, known as “TRIPS-plus.”

The leaked proposed text on IP from New Zealand [pdf], and the text on preliminary considerations on IP chapter from Chile [pdf], both submitted at the last round of negotiations, along with the US proposal, are available from the Public Citizen’s website.

Catherine Saez may be reached at info@ip-watch.ch.

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