Special Report: TPP Negotiations To Heat Up In Melbourne Over Patents, Copyright, Medicines

Precious little is known publicly about the details of the Trans-Pacific Partnership (TPP) agreement being negotiated by the United States and other Pacific-bordering nations, but some sources say the agreement could contain some of the strongest language on intellectual property rights that has come under attack in other agreements. The US trade office, meanwhile, says they are consulting stakeholders widely.

The TPP is gaining attention throughout the world not only because it holds the promise of opening up markets in participating countries and exporting stronger intellectual property protections enjoyed in the United States, but because some fear a greater backlash could ensue in the wake of outcry over the Stop Online Piracy Act (SOPA) and the Anti-Counterfeiting Trade Agreement (ACTA). SOPA critics were able to slow that legislation in the US Congress, arguing that it would permanently hurt the internet and force draconian enforcement laws on international partners, while protests are popping up all over Europe in opposition to ACTA provisions they say will curtail internet freedoms. For instance, Slovenia’s new government is actually considering putting a freeze on ACTA implementation there.

The European Commission has sought to counter the rising criticism of ACTA. “ACTA will not lead to limitation of civil liberties or harassment of consumers,” Cezary Lewanowicz, a European Commission spokesman, wrote on Twitter on 13 February. “#ACTA does not change EU law, does not prevent people from sharing content online, will not monitor the internet.”

Related: ACTA Doubts Rampant In Europe; Industry Call For “Reasoned Assessment”

“As protests against the Anti-Counterfeiting Trade Agreement (ACTA) sweep across Europe, two conclusions are possible: the era of closed-door IP policy is over; and the content industry’s insatiable quest for more power and control is no longer irresistible,” Ed Black, president of the Computer & Communications Industry Association, wrote recently on The Huffington Post. “Internet users realized during the debate over SOPA and its companion bill, PIPA, that because they were not at the table, they were on the menu. …TPP can and must be negotiated in a transparent process and become an agreement that supports innovation and Internet freedom. It would do a disservice to all if that agreement were SOPAfied.”

‘The Proof Will Be in the Pudding’

Participating TPP countries include: Australia, Brunei Darassalam, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam. Japan, Canada and Mexico have also signalled interest, but groups such as the American Automotive Policy Council and International Intellectual Property Alliance say some of those countries need to do more in terms of enforcement to live up to TPP partner standards. IIPA’s statement on Mexico is here [pdf].

Negotiations are coming under fire for not being transparent and open enough; many civil society and other stakeholder groups argue that large corporations have had too heavy a hand in the talks. Knowledge Ecology International has prepared a list of groups and individuals involved in the talks on the US side here. IP trade advisors are from groups such as the Pharmaceutical Research and Manufacturers of America, Entertainment Software Association, Verizon, Johnson & Johnson and the Recording Industry Association of America.

“Although the general public is not permitted to see the texts, hundreds of ‘cleared advisers’ – often representing large corporate interests – are permitted to analyse the text and offer feedback … USTR also routinely provides detailed briefings to corporate lobbyists,” reads a letter sent to Vermont Sen. Patrick Leahy, the Democratic chairman of the Senate Judiciary Committee, sent by Knowledge Ecology International (KEI) on 26 January, appealing to lawmakers to make the process more transparent. KEI argues that little information is even known about “intersessional” rounds on IP negotiations in between major scheduled discussions. “This secrecy is an effort to further limit public participation.”

The fact that so many intersessional rounds are going on could be a sign the US isn’t getting as much as it wants in the negotiations, sources said. Heading into the high-octane round of TPP discussions in Melbourne, Australia, early next month, the more contentious provisions will likely include those involving patents, copyrights and access to medicines.

“The proof will be in the pudding of the copyright and patent negotiations where the issues are likely to be much more contentious and where the US has some more dominant industry interests backing those demands,” said Sean Flynn, associate director of the Program on Information Justice and Intellectual Property at the American University Washington College of Law.

Thus far, the only text of the TPP available to the public are leaked versions of the IP chapters proposed by the United States, New Zealand and Chile. There are many brackets in the text, sources said, which means other countries’ proposals are on the table for inclusion.

USTR Offers Some Insight

A spokeswoman for the US Trade Representative (USTR) told Intellectual Property Watch last week that there are no current plans to release the text, but pointed to white papers on key proposals involving access to medicines and environmental conservation on the USTR website, as well as information about progress and goals for the TPP, released last November.

The spokeswoman said negotiators have not signed any confidentiality agreement to not discuss TPP with the public, “but there is such a confidentiality agreement regarding texts and working papers themselves, to ensure the ability to draft, revise, and change texts freely among the partners according to evolving stakeholder input and individual partners’ equities, but all negotiating parties are free to discuss overall TPP and related issues as they please.”

The spokeswoman said the Obama administration discusses TPP with, and listens to, “a wide range of stakeholders with opposing inputs on various aspects of TPP, and then we fulfill our responsibility to synthesize a negotiating position that will best achieve TPP’s goals.” She noted that at the last US-hosted round in September, stakeholders were invited to be on site to interact with delegates, and more than 250 people from business, labour, academia and non-governmental organisations attended. Stakeholders also have presented at other meetings – and are invited to do so in Melbourne, as well. In addition, chief US negotiators have held mid-round briefings for stakeholders at US rounds and Congress is involved, as well.

“We believe our increased stakeholder input has resulted in better tabled texts and better negotiations throughout the process,” she added.

There are two contrasting approaches to TPP, according to sources: the US approach, which includes what is being described as more maximalist norms, and a more development-oriented agenda reflected in leaked texts from Chile and New Zealand, which uses TRIPS as a floor and encourages further coordination among countries in IP enforcement.

“You have, on the one side, developing countries fearing the developmental impacts of the US proposal but on the other side, wealthier countries like New Zealand and Australia fearing for the impacts it could have on developments in their countries,” such as the impact of limitations and exceptions to patents language, pharmaceutical provisions, and regulatory concerns, Flynn said. “That’s creating a very interesting alliance with the non-US wealthy countries and the more developing countries who all seem to stand essentially in agreement in opposition to the US proposals to the IP chapter.”

What We Know

According to leaked drafts and documents released by USTR within the past year, this is what we know so far about the IP and related chapters; many of these are expected by observers to be hot topics in Melbourne…

The US wants:

-To work with TPP partners to create a “TPP access window” and establish a pathway for generics to enter TPP markets with pharmaceutical-specific IP protections requiring innovators to bring medicines to TPP markets within an agreed window of time. Critics call this “window dressing” for piling on monopoly privileges for large drug companies and would inappropriately extend patent protections for drugs, thereby undermining progress made by the Bush administration in 2007 to roll back such perceived monopolies. The US wants to allow for patent exceptions and incentives for generics; large numbers of medicines have had their patents expire in recent years. HIV/AIDS patients in Malaysia worry that US proposals could lead to price hikes in their medicines, while Peru’s trade minister has said the IP enforcement provisions in TPP go beyond the Peru free trade agreement when it comes to access to affordable medicines.

Related: US Copyright Industries Call for Action on Piracy; NGOs Call for Scrutiny

-To curb trade in counterfeit medicines

-Many brand-name pharmaceutical firms would like to see 12 years’ data exclusivity included in the TPP to protect their research on biologic drugs before generic firms can use brand companies’ data to produce their own cheaper versions. Brand names argue more times is needed to recoup costs incurred from researching, developing, and marketing these drugs. The 2010 US Affordable Care Act gives 12 years of exclusivity, but the Obama administration is trying to reduce that to seven years. To date, there is only a placeholder included in the text for specific provisions applying to biologics. “We think the industry demands are excessive, they’re strained, they’re odd in light of the current domestic context,” said Peter Maybarduk, Access to Medicines Program Director at Public Citizen.

-Trademark protection similar to what is included in the US-Korea FTA; elimination of the requirement that trademark licences must be recorded in order for the trademark owner or licensee to enforce their rights against infringers

-Language to clarify that temporary copies are fully subject to reproduction rights

-All TPP parties to fully implement World Intellectual Property Organization “internet treaties” that provide global minimum standards for electronic commerce (WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty).

-Exclusive rights for sound recordings

-Copyright extensions to mirror US law

-TPP countries’ laws to provide for statutory damages regarding IP enforcement

-Law enforcement officials to have the power to seize infringing goods even if not specifically named in a warrant and without complaint by a right holder

-Clearly defined guidelines on ISP liability in copyright infringement claims

-Availability of civil remedies – using TRIPS as a floor – for infringement, including: providing for injunctive relief, ex parte procedures, seizure and destruction of infringing copies, and requirement for those accused of copyright infringement to identify third parties in the production or distribution of pirated goods

-TPP parties to prosecute not only direct electronic commerce infringers, but also those who “purposefully take steps to promote infringement and ‘profit from developing and maintaining services that effectively induce it.’”

Some are concerned that the TPP would create a loophole for US copyright holders to take over all secondary markets for their works, as well as to control primary markets by requiring retailers to obtain a “licence to sell,” in addition to ownership of the copies. Similar importation provisions have been rejected in previous FTAs. eBay is one American company that has been asking USTR for this language to be stripped but so far, to no avail.

There is also worry that pressure will be placed on countries employing – or soon to employ – “notice and notice” takedown provisions in Chile and Canada, which provide some liability protections to internet service providers from alleged copyright infringement. This is in contrast to the US notice and takedown approach; Canada and Chile routinely make the USTR’s annual Section 301 watchlist.

“One of the key questions is whether the TPP more explicitly makes these kind of ‘notice and notice’ systems illegal, which is the current position of the US proposal,” Flynn said.

[Editor’s Note: Chile officially employs a “notice and takedown” procedure to comply with an FTA, but that procedure forces the copyright holder to first get a court order from a judge to force infringing content off the internet, which many consider more “notice and notice,” rather than “notice and takedown.”]

IP Policies Are ‘Based on Existing US Law’

An overarching concern is that the IP chapter may escalate the IP protections included in the US-South Korea FTA (KORUS) and ACTA and export overly protective provisions to TPP countries. This is particularly concerning given that the TPP region ranges from very underdeveloped countries, to wealthier countries such as Australia.

“The question is whether the maximalist provisions you find in ACTA and the Korea Free Trade Agreement … are appropriate for exporting to the widest possible range of countries,” Flynn said. “I would say everyone except the US opposes the idea on that broad level.”

The suggested Chilean text, considered more minimalist, includes language that seems more general than the US language, such as:

-“Parties shall be free to determine the appropriate method of implementing the provisions of this Chapter within their own legal system and practice.”

-“Nothing in this Chapter shall prevent a Party from adopting appropriate measures to prevent the abuse of intellectual property rights by right holders or the resort to practices that unreasonably restrain trade or adversely affect the international transfer of technology, provided that such measures are consistent with this Agreement. … [nothing] shall prevent a Party from adopting measures necessary to prevent anti-competitive practices that may result from the abuse of intellectual property rights.
and…

-TPP parties may “establish that provisions in standard form non-negotiated licenses for products do not prevent consumers from exercising the limitations and exceptions recognised in domestic intellectual property laws”

Despite some groups’ concerns that some US TPP proposals conflict with even US law, the USTR spokeswoman said that is not the case.

“The administration has made it a top priority to build high standards of IPR protection and enforcement in the TPP that will stand alongside those of prior US FTAs in the Asia Pacific region, that will foster regional integration, and that will support US economic growth and the creation and retention of American jobs,” she said. “Congress has set out US IP law, and our IP trade policy and negotiating positions are based on existing US law.”

The spokeswoman also noted that negotiators have made “encouraging progress” in the area of removing barriers to electronic commerce in the TPP region, including provisions addressing customs duties in the digital environment, authentication of electronic transactions, and consumer protection.

“Additional proposals on information flows and treatment of digital products are under discussion,” she said.

Still, stakeholder groups are gearing up to make their case once again in Melbourne.

“This is a new template that we can’t afford to have be made entirely under the radar,” said Maybarduk, “because it looks to change the rules in the knowledge economy of many countries and many people.”