The U.S. released its annual piracy watch list last week, elevating Canada to the priority watch list alongside countries such as China and Russia. If that sounds implausible, that’s because it is. The U.S. has long used its annual report on IP issues to exert pressure on other countries and this year is no different. Indeed, with the IP chapter still unresolved in the NAFTA negotiations, the decision to elevate Canada appears to be an obvious effort to place negotiators on the defensive. In doing so, the U.S. has further undermined the credibility of a review process that is widely recognized as little more than a lobbying exercise.
Canadian officials have long dismissed the U.S. piracy watch list. As an official with the Department of Foreign Affairs once told a House of Commons committee:
In regard to the watch list, Canada does not recognize the 301 watch list process. It basically lacks reliable and objective analysis. It’s driven entirely by U.S. industry. We have repeatedly raised this issue of the lack of objective analysis in the 301 watch list process with our U.S. counterparts.
Last year, I obtained an internal memo from Canadian Heritage officials that again thoroughly dismissed the validity of the U.S. claims:
The Government of Canada does not recognize the validity of the process as the findings tend to rely predominantly on allegations from U.S. industry stakeholders rather than on objective analysis.
Media lines went even further:
Canada does not recognize the validity of the Special 301 and considers the process and the Report to be flawed. The Report fails to employ a clear methodology and the findings tend to rely on industry allegations rather than empirical evidence and objective analysis.
This year’s report is particularly absurd as Canadian piracy data is far below global averages and its laws feature some of the toughest anti-piracy rules in the world. The U.S. concerns identifies four issues, none of which have much merit:
Significant concerns include poor border and law enforcement with respect to counterfeit or pirated goods, weak patent and pricing environment for innovative pharmaceuticals, deficient copyright protection, and inadequate transparency and due process regarding GIs.
With respect to border and law enforcement, Canada just amended its anti-counterfeiting legislation, including border measures, in 2014, establishing unprecedented powers for borders officials. The U.S. continues to pressure for increased powers – some without court oversight – which Canada has rightly rejected. The claims about patents and pharmaceutical protections come in the same week that the Parliamentary Budget Office estimated that patent term extension in the Canada – EU Trade Agreement will add hundreds of millions to Canadian health care and pharmaceutical costs. The Canadian government is considering reforms to address some of the world’s highest costs for pharmaceuticals, which the U.S. somehow argues makes Canada a pirate nation. As for copyright, the U.S. says it is concerned with fair dealing in Canada, yet the U.S. fair use provision already provides broader usage rights (including education) than those found in Canada. The geographic indication complaints have nothing to do with piracy or weak intellectual property protections. Rather, the U.S. is upset that the European approach to protecting geographic indications is spreading to other countries.
The U.S. decision to use the piracy list as bargaining chip for NAFTA negotiations highlights how pointless it is to cave to U.S. pressure on intellectual property policy. The U.S. will always ask for more as no reforms are ever enough. In that sense, the U.S. approach mirrors U.S. rights groups for whom reforms are similarly never enough. For example, the Canadian music industry lobbied the Canadian government for years to amend the law and implement the WIPO Internet treaties. When it did so in 2012, it said:
We commend the government and Canadian Heritage Minister James Moore in particular, for their tenacity in pursuing a modern copyright framework and legislation that will enable Canada to ratify the World Intellectual Property Organization Internet Treaties.
Yet within a few years, it was arguing that the WIPO Internet treaties were a bad policy. Today, despite generating record revenues from the Internet, it is lobbying for new fees on smartphones and content blocking.
The moral of the story from the US piracy watch list and associated demands? There are no ends to the demands and false talking points, even when the market is setting new highs and the laws are among the most favourable for the industry in the world.