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By Office of the President of the United States (@realDonaldTrump on Twitter) [Public domain], via Wikimedia Commons https://commons.wikimedia.org/wiki/File%3ADonald_Trump_Justin_Trudeau_2017-02-13_03.jpg

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NAFTA Modernization and IP/E-commerce: My Appearance at the Senate Open Caucus

I appeared earlier this week before the Senate Open Caucus to discuss the IP and e-commerce implications of the NAFTA renegotiation. The panel, which included Jerry Dias, Al Mussel, and Brenda Swick, featured an engaging discussion with senators from across the political spectrum. My opening remarks emphasized three points from a Canadian perspective: meeting international standards, doing no harm, and seeking a level playing field. The comments are posted below.

Appearance before Senate Open Caucus, October 18, 2017

Good morning. My name is Michael Geist. I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law. I appear today in a personal capacity representing only my own views.

In light of yesterday’s events, it may be hard to focus on NAFTA’s intellectual property and e-commerce chapters. It goes without saying that the Minister has identified other issues that are bigger sources of contention.  However, precisely because there are other issues demanding attention, there is a risk that important IP and e-commerce issues may be overlooked to the detriment of Canadian policy.

I’d like to focus on three main points in these opening remarks.

1.    Meet International Standards

First, while modern trade agreements typically feature IP chapters – e-commerce chapters are still unusual – significant reforms are invariably best left to domestic policy processes. Canada has a strong record of innovative IP and e-commerce rules. We have some of the toughest anti-piracy laws in the world with declining piracy rates, strong e-commerce and privacy rules, and some unique balancing provisions in copyright. These frameworks are the result of extensive domestic consultations and the crafting of laws that reflect Canadian priorities.

Within a trade negotiation context, many of those priorities can easily be lost amidst the myriad of other issues. The reports on rules of origin, dispute settlement, and supply management point to a challenging and somewhat contentious negotiations. That suggests that IP and e-commerce may get lost in the noise of even more contentious issues.

The solution is simple: NAFTA should require each party to meet international standards as found in global agreements on IP and e-commerce.  It is reasonable to expect all parties to meet international standards. It is not reasonable – nor advisable – to undertake significant domestic change on those issues through secretive trade negotiations that features limited consultation and distorts the traditional efforts at balance.

2.    Do No Harm

Second, we can assume the U.S. wants more than just harmonization on IP and e-commerce. Rather, it will push for Americanization those rules. Canada should resist changes that can harm our domestic market and undermine a “made in Canada” approach.

For example, there have been recent calls for North America-wide website blocking and the full criminalization of copyright. Those proposals have been widely criticized, but point to the harm that trade agreement provisions can create.

Similarly, the US is likely to seek an extension in the term of copyright beyond international law. The term of copyright in Canada is presently life of the author plus an additional 50 years, a term compliant with the international standard set by the Berne Convention.

I recently conducted research on the role of copyright term and the public domain in Canadian schools using data obtained by the Ontario Book Publishers Organization. According to data from hundreds of school teachers and school districts, half of the most popular books taught in Grades 7 – 12 are in the public domain or about to enter it. If we extend the term of copyright, dozens of books used by thousands of students today that are scheduled to enter the public domain would be shut out for decades. The prospect of using those books in new and innovative ways without the need for further licensing or royalties – as well as increasing access in open electronic form – would be lost for a generation.

The e-commerce chapter also raises risks of harm. For example, Canada should be wary of provisions that undermine legitimate public policy objectives, particularly privacy and security. The U.S. has identified blocking restrictions against local data storage requirements – often called data localization – as one of its objectives. The Canadian government should resist efforts within NAFTA to limit the ability of federal or provincial governments to establish legitimate privacy and security safeguards through data localization requirements.

Limitations on data transfer restrictions, which mandate the free flow of information on networks across borders, raise similar concerns. While the U.S. is seeking a ban on data transfer restrictions, Canada should ensure that privacy and security laws will not be superseded by NAFTA restrictions as it runs the risk of losing sovereignty over privacy policy and could place Canada between a proverbial rock and a hard place, with Europe requiring restrictions and the U.S. banning them.

3.    Level Playing Field

If Canada were to adopt a more pro-active approach on the IP and e-commerce chapter, our focus should be on ensuring a level playing field for innovative businesses and creators.
What might that look like?  Five possibilities include:

First, Canada should insist on the inclusion of language on maintaining balance across all IP rights, the legitimate interests of users, promoting access to and preserving the public domain, ensuring that IP rights do not create barriers to legitimate trade, and facilitating access to affordable medicines. Similar language was raised in the TPP and it belongs in NAFTA.

Second, the availability fair use in copyright in the U.S. represents a significant competitive advantage for U.S. businesses and creators. To ensure a level playing field for innovation, the NAFTA IP chapter should require that all parties feature a fair use or fair use equivalent provision.

Third, Canada’s anti-circumvention provisions – also known as digital lock rules – are among the most restrictive in the world creating unnecessary restrictions on innovation. While the Canadian exceptions were narrowly constructed and limited to a handful of circumstances, the U.S. has actually been expanding its digital lock exceptions. The imbalance in exceptions creates an uneven playing field for innovation and should be remedied within NAFTA.

Fourth, the NAFTA IP chapter should also address the abuse of intellectual property rights that may inhibit companies from innovating or discourage Canadians from taking advantage of the digital market. The benefits of an anti-IP abuse law could be used to touch on patents, trademarks, and copyright.

Fifth, Canada has established strong privacy and anti-spam rules.  If anything, the U.S. is out of step with international standards on these issues. Canada should seek better privacy protections to level the playing field for businesses and consumers.

In conclusion, there are opportunities for Canada to advance its interests in the IP and e-commerce chapters in NAFTA. It starts by emphasizing international standards, rejecting harmful proposals, and focusing on the creation of a level playing field throughout the North American market.

I look forward to the discussion and your questions.

3 Comments

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