PresidentialSealToday the Obama Administration’s inter-agency Trade Policy Staff Committee held the first day of its two-day hearing on the Transatlantic Trade and Investment Partnership (TTIP).  Many of the witnesses who testified in the afternoon offered comments related to intellectual property and/or privacy on the internet – both subjects that are expected to be among the most highly controversial in the upcoming trade negotiations. Below is an account of the testimony related specifically to intellectual property, along with links to the full text of written materials they submitted to USTR (the full docket with 378 comments is available here).

The TPSC panel was chaired by Doug Bell and Assistant USTR for Europe and the Middle East Dan Mullaney.  Also present were representatives from the Departments of Health and Human Service, State, Labor, and Commerce.

Stephen Metalitz testified for the International Intellectual Property Alliance, a coalition of seven trade associations that represent firms reliant on copyright protection.  [Written submission here: Comments]

Metalitz said that the US and EU share an interest in strong copyright policies, because both have copyright industries that are responsible for “outsized contributions to economic growth.” He noted that the High Level Working Group on Jobs and Growth (the US-EU body that recommended the negotiation of TTIP) has noted that both sides are committed to high levels of intellectual property protection and enforcement.

Metalitz thinks TTIP should include an IP chapter that is substantively different than that of other US agreements – not because those trade agreements have IP chapters that are too rigid or unbalanced, but because the strength of IP law and enforcement is already strong in both the US and the EU.  Instead, TTIP should focus on

  1. US-EU cooperation in international forums like the WTO and WIPO, as well as newer forums such as those negotiating internet governance.
  2. Joint engagement to address challenges in third-county markets where piracy is tolerated.
  3. Information exchanges to share best practices in the way that each side implements its already-strong commitments on intellectual property.

The Committee member from State asked Metalitz to provide examples of areas where the US and EU could learn from each other regarding the efficient execution of copyright protection. Metalitz said that the two sides have different approaches to national treatment of sound recordings (some European countries have a different type of protection) and camcording (some European countries do not have federal-level laws against it).  The two sides have different policies regarding online piracy, and the U.S. has gone further in the area of voluntary agreements among affected industries.

AUSTR Mullaney asked Metlitz to identify particular third countries or issues where the US and the EU could work together to address problems related to IP. Metalitz said there is a lot of overlap between American and European rightholder concerns.  China and Ukraine are two countries where we should focus efforts to strengthen IP.   There are two problems found in many third countries around the world: government agency use of illegal software; and problems with collective management organizations.

Krista Cox testified for Knowledge Ecology International, a nonprofit organization that searches for new solutions to the management of knowledge resources. (KEI’s comments are available here: Comments)

Cox said that the negotiating text should be made public as soon as it is tabled.  The current advisory system for the negotiation of trade agreements allows hundreds of corporate advisors to see the texts, but not the general public. Other forums where international IP norms are negotiated – such as WIPO and the World Trade Organization – have greater transparency, and could serve as a better model.

Negotiators should be cognizant of congressional and other domestic efforts to reform intellectual property, and should not create more trade obligations that would block these efforts.  These include the Register of Copyrights’ recent call for revisiting the law and the recent Judiciary Committee hearing (the first of many) on copyright reform.  TTIP negotiators should not tie policymakers’ hands on copyright matters such as the term of protection or limitations and exceptions.  Similarly, negotiators should be aware of, and respect, the recent Supreme Court ruling on parallel imports that directly conflicts with the U.S. position in the Trans Pacific Partnership talks.

Cox noted that European DG Trade and Head of Unit Pedro Martins recently said that TTIP shouldn’t harmonize levels upwards.  KEI suggests that TTIP should instead include positive proposals that benefit consumers and users. For instance, it should include a proposal that encourages cross-border sharing of works accessible for the visually impaired.

The Committee Member from the Department of Commerce asked for examples of more forums and issues on which the US and the EU could collaborate on positive proposals.  Cox noted efforts at the World Health Assembly for a binding convention on R&D, the WIPO Conference for the Visually Impaired, and work at WIPO on limitations and exceptions for libraries and educators.

AUSTR Mullaney asked what kinds of internet intermediaries should be covered by limitations to liability. Cox noted that the leaked US proposal for the TPP had been modeled after the DMCA, but it lacked some of the specific protections (such as those for universities and higher education). All safeguards from DMCA should be in the TPP and the TTIP.

Sean Flynn from PIJIP at American University Washington College of Law testified on his own behalf.  (His comments are here:  Comments)

Flynn’s principle point was that TTIP should exclude intellectual property, as originally recommended by the US-EU High Level Working Group that proposed the trade pact.  Flynn argued that the main reason to exclude IP from the TTIP is that US trade policy fails when it tries to take IP provisions negotiated in small, bilateral trade agreements, and use them as a template for larger, plurilateral trade agreements. That’s the lesson from ACTA. Is lesson from the TPP, where intellectual property has stalled the overall negotiations.  It is the lesson from the Free Trade Area of the Americas, which failed due to objections to US demands on IP.

Flynn also said that the lack of transparency under which the U.S. tries to negotiate these deals contributes to their downfall.  Secret negotiations on IP foment opposition. ACTA met widespread dissatisfaction both on substance and process, from street protestors, academics, and even government officials who resigned in protest.  The ongoing and deadlocked TPP negotiations show that US isn’t learning the lesson.  Negotiators would do better if they looked towards processes used by multilateral organizations like WIPO.

AUSTR Mullaney then asked Flynn what particular issues exist where the US and the EU could proceed together to constructively advance protection of IP.    Flynn responded that he wasn’t going to list particular policies.  Efforts to change IP policies should be made in an open, transparent way (such as through the EU legislative process).  If the US wants new international IP norms, it should push for them in the multilateral forums where those things are negotiated.

Mullaney then asked if there are areas where the two sides perceive that some kind of joint effort would be appropriate vis-à-vis other countries?  Flynn answered that the goal of US trade policy in IP for some time has been to globalize the standards found in its own law. But this leads to problems that are now becoming apparent as the US seeks to change its law, but finds itself bound by trade obligations. Our past decisions bind us to our old law. The lesson is that our FTA template is far too specific.  Flynn said that if Mullaney’s question was geared at identifying countries where the US and EU could work together to change law there, then it was the wrong kind of question to be asking – if the U.S. wants India to change its laws, then it should negotiate with India.

David J. Ohrenstein testified for the Business Software Alliance. (BSA’s written submission is here: Comments).  He said that TTIP presents an opportunity for the U.S. to recalibrate our trade framework for the current economy, to acknowledge reality of digital trade that has evolved since the Uruguay Round. Among his suggestions was that TTIP should provide certainty that countries will not discriminate against new models of delivering software (online, through licenses rather than traditional sales).

Ed Black testified for the Computer and Communications Industry Association. (His full comments are available here: Comments)

Black stated that Free Trade Agreements should promote the free flow of commerce, and they should not lock in protections for protected industries. A strong e-commerce chapter should aim to prevent discrimination against firms that operate in the digital environment.  TTIP provisions that promote the free flow of information would provide a good example for other countries.

Provisions to protect internet intermediaries are important, because they handle a mind-boggling amount commerce.  In situations where the intermediaries have deeper pockets than end users, they become a target.  EU intermediary protections exist but are not always applied to US internet firms.

Black noted that it is unclear if TTIP ought to include an intellectual property chapter.  IP has been a divisive set of issues in transatlantic relations, so negotiators might want to leave it out.  But if there is an IP chapter, it should include robust language on limitations and exceptions to copyright..

AUSTR Mullaney asked Black what the most critical issues are for Small and Medium Enterprises (SMEs) that participate or want to participate in global trade. Black said that SMEs are disproportionally affected by all barriers to trade.  The continuation of an open internet that not balkanized by a amalgamation of different national regulations is continued to the further growth of new businesses.

David Sohn testified for the Center for Democracy and Technology, a nonprofit that promotes public policies that will keep the Internet open, innovative, and free. (His written comments are here: Comments)

Sohn said that negotiators should exercise caution and restraint in the areas of data protection and copyright.  There is a large democratic debate over reform in both areas currently underway.  Therefore, “TTIP negotiators should take care to avoid the appearance of trying to either (i) bypass or preempt the regular legislative process, or (ii) undermine or weaken individuals’ rights. This is best done by minimizing TTIP’s commitments regarding the substantive legal rules in these areas, and focusing instead on matters of fair process and equal treatment… rather than embrace specific legislative choices regarding copyright, TTIP could focus on processes for cooperating in enforcing existing laws against cross-border offenders. Alternatively, if TTIP nonetheless delves into substantive copyright law, it should promote a balanced approach that includes meaningful provisions on matters such as limitations and exceptions and intermediary safe harbors.”

Peter Maybarduk from Public Citizen testified on behalf of 45 American and European civil society groups which signed a declaration on calling for intellectual property to be entirely excluded from TIIP.  Signatories included the Electronic Frontier Foundation, Health Action International, the European Digital rights Initiative, and the American Medical Student Association. Many of the groups were very active in bringing down ACTA in Europe, and were active in the fight against SOPA in the U.S. The declaration is available here.

Maybarduk read the civil society statement to the panel.  The specific ‘ask’ for the exclusion of intellectual property from the agreement is:

“we insist that the proposed TAFTA [Trans-Atlantic Free Trade Agreement] exclude any provisions related to patents, copyright, trademarks, data protection, geographical indications, or other forms of so-called “intellectual property”. Such provisions could impede our rights to health, culture, and free expression and otherwise affect our daily lives. Past trade agreements negotiated by the US and EU have significantly increased the privileges of multinational corporations at the expense of society in general. Provisions in these agreements can, among many other concerns, limit free speech, constrain access to educational materials such as textbooks and academic journals, and, in the case of medicines, raise healthcare costs and contribute to preventable suffering and death. Unless “intellectual property” is excluded from these talks, we fear that the outcome will be an agreement that inflicts the worst of both regimes’ rules on the other party. From a democratic perspective, we believe that important rules governing technology, health, and culture should be debated in the US Congress, the European Parliament, national parliaments, and other transparent forums where all stakeholders can be heard—not in closed negotiations that give privileged access to corporate insiders. The TAFTA negotiations must not lead to a rewriting of patent and copyright rules in a way that tilts the balance even further away from the interests of citizens.”

AUSTR Mullaney noted that intellectual property covers a broad range of protections, and he asked if there is any area of IP that Maybarduk thought might be constructively addressed in TTIP. Maybarduk said that he could not speak for the entire coalition, but that he’d be concerned that the type of IP proposals offered by negotiators in TTIP negotiations would be harmful to consumers.  And the lack of transparency in the negotiations would mean that civil society groups wouldn’t know what the proposals were.