Trans-Pacific Partnership Agreement

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Currently both the Intellectual Property and Investment Chapters of the Trans-Pacific Partnership Agreement have been leaked. This page is to provide a basic critique of proposed Agreement. It will get updated as new information comes to light.

Intellectual Property Chapter

16/05/2012 US Congressman Darrell Issa published the Feb 2011 draft of the Trans-Pacific Partnership Agreement(TPPA) as proposed by the US delegation, citing reasons of transparency. There are something very wrong with the negotiation of this agreement when an effort of transparency means releasing a draft that is over one year old.

February 2011 U.S. Draft of the Trans-Pacific Partnership Agreement Intellectual Property Chapter

Pirate Party Australia took part in the Melbourne round of negotiations community consultation. We didn't have access to the draft for that and could only argue against what had been leaked, it was a strange situation arguing against something that technically you weren't meant to know about. The speech that Deputy President Simon Frew prepared (with the help of other pirates) and was given by the President David Campbell is here:

Pirate Party Australia's submission to Trans-Pacific Partnership Agreement stakeholders meeting Melbourne 2012

It is a thorough look at the leaked chapter which is a slightly worse proposal than the version published by Congressman Issa. It has a lot of the background research into what is wrong with the IP chapter of the TPPA. What is below is an initial critique of the February 2011 draft itself. It will be updated as academic and legal experts publish their opinions.

Generally, this is a proposal weighted completely in favour of a few major US corporations, with civil society largely barred from negotiations after what seemed to be a successful intervention from civil society groups in the Melbourne round. (IE progress in the IP chapter stalled)

Much of the content of the leak is a wish-list for old media corporations who refuse to adapt to the Internet and instead pay massive “donations” to their governments in order to push their legislative agenda against the interests of modern society. This wish-list echoes that of the intellectual property segments of the Stop Online Piracy Act – known as SOPA – and the Anti-Counterfeiting Trade Agreement – known as ACTA. The US TPPA provisions have been nicknamed “the son of ACTA”. The proposed solutions to online file-sharing will fundamentally change the operation of the Internet, to its detriment.

The extreme position of the leaked United States’ Intellectual Property chapter was highlighted by the unprecedented request for the negotiating texts to remain secret for four years after the agreement is signed. This secrecy is a perversion of democracy. The public would not be given a chance to oppose such a draconian attack on both the Internet and the civil liberties of citizens in all of the signatory countries. All of this has been done to protect the corporate interests of a small sector of one industry? What about the cost to our democratic rights?

Considering the widespread international opposition to ACTA and SOPA, any secrecy around this agreement will discredit the TPPA in the eyes of many. We demand that a draft agreement be released before the treaty is finalised and signed to ensure our rights are adequately protected from marauding United States media conglomerates.

Transparency is the only way the Agreement will have any legitimacy. It is the 21st century and the time for secret negotiations on behalf of cashed up special interests has passed. The technology exists for governments to carry out these negotiations with complete transparency and it is time for citizens to have the right to know what is being carried out in their names. Our representatives cannot represent us if we are blind to their choices.

The secrecy surrounding the content of the negotiations makes discussing the Agreement extremely difficult. We are not exactly sure what we are arguing against. Our only verifiable guide is a leaked position paper provided to the citizens of the world by a non-profit whistle-blowing website – the same whistle-blowing website that is under constant attack by the United States for obeying the letter of the law and shedding light where corruption and greed have cast their sinister shadow. We would be able to provide a much clearer argument about what the Agreement should and should not include if we knew what was on the table. If negotiations were transparent, and if access to information was properly provided, the contributions from stakeholders & delegates at this consultation would be vastly improved.

In Australia, we have seen the harm that tighter intellectual property restrictions can cause through the Australia–US Free Trade Agreement. The Productivity Commission, a body that investigates the economic benefit or hindrance of various Australian economic policies, warned that agreeing to intellectual property provisions in free trade agreements needs to be subjected to a rigorous cost/benefit analysis.

The Australia–US Free Trade Agreement is believed to cost the Australian economy between 88 million and 763 million dollars a year in copyright enforcement alone. This is wealth being directly transferred from Australia to the United States – there is no net benefit to Australia derived from the tighter restrictions.[1]

If the US delegation gets its way, that and more will be forced upon your people and local economy, to what benefit? We urge delegates to reject the inclusion of any intellectual property provisions in your own national interests as they WILL harm your economies.

The intellectual property section of the Agreement as pushed for by the US in our leaked copy, will force Internet Service Providers along with large online content service providers such as Facebook, Google and other similar companies, to be liable for what their users access using their services. As an example, this in itself will make it impossible for Facebook to exist in its current form, as each photograph posted by every single user will need to be moderated to weed out copyright infringement before Facebook can host it. The same is true of YouTube, a Google owned service, in regard to video content. Their servers receive user content well in excess of an entire days worth of footage, every 60 seconds.

What is being proposed will not only harm the interests of the vast majority of countries at the negotiations, it will harm the interests of many companies in the United States. SOPA was opposed by the likes of Google and Facebook precisely because such a regime will make it difficult for these companies to maintain their current business models.

Dissection of TPPA Feb 2011 U.S. Draft Agreement

Article 3. Regulation of signatory countries DNS looks nasty, probably for moves like in Holland and Britain, with Pirate Bay blocking etc.

Article 4.1 Grants publishers the right to prohibit transient copying. This could hinder the functioning of sites like Youtube and Vimeo. All streaming video requires the ability to perform transient copying to play on your computer.

Article 4.2 Grants rights holders the right to control their products entry into each countries’ markets. Essentially this bans parallel imports, which is a direct attack on free trade. Without some ability to access goods from other countries, the rights holders can dictate pricing on a country-by-country basis, being able to milk maximum profit from each customer. Allowing parallel imports keeps prices down because retailers and consumers can find the lowest price for a product. The right to find the cheapest price for a good is one of the fundamental tenets of free trade, and the emerging global economy.

Another issue relating to parallel imports regards globalised communications – particularly the use of social media – and the need for people in ‘foreign’ markets to have access to content as soon as possible. One of the biggest motivations for people to share content online is the artificial and unnecessary delay of release times on a country-by-country basis.

It makes sense for media companies to adopt synchronised global release dates, because any social media buzz, which will be global whether you like it or not, will help promote the product globally. Staggered release dates weaken any benefit from social media, and people denied access for living in the ‘wrong’ geographical region will be coerced by social pressures and advertisement displayed on globally available websites to access the material in the only way available to them – through online file-sharing.

Article 4.5.A Term Life + 70 years. Protecting rights holder after death of artist does not benefit creators, nor provide motivation for new works to be produced. Purely a term to benefit major media companies. This extends copyright terms across the TPPA countries. For most countries involved in the negotiations, plans to extend copyright terms will directly harm your economies. These provisions in the Australia–US Free Trade Agreement had a negative impact on the Australian economy and will on all signatory countries except the US.

Article 4.9A Criminalises breaking DRM, although there are some sensible exceptions now that were missing from the leaked version. Using a work for any reason other than as stated in the licence would risk criminal charges, even if the use is considered legal under current arrangements. This directly assaults the rights currently enjoyed by citizens in signatory countries to use media they have purchased how they wish. Rights could be locked up and sold once for each device, requiring consumers to purchase multiple licences to any media they wish to access. If they purchase a new iPod for example, they can no longer access their music collection on their new device and would need to re-licence all of their music.

Article 8.1 Patents can be granted even if there is no known enhancement of a product, just needs to demonstrate ' new forms, uses, or methods' new forms could be interpreted to include Apples 'trade dress' patents on shape etc. of mobile devices.

Article 8.3 has a nice patent exception for outlawing patents that can negatively impact the health of citizens, animals, plants or could harm the environment. This seems to be offset by 8.4 which refuses exceptions when they 'unreasonably prejudice the legitimate interests of the patent owner,'

Article 9.1b If Agricultural Chemical product passes safety + efficacy standards in one country, approval expected in all others to streamline commercialisation of new products. Considering the different safety standards in the signatory countries, this could lead to a significant worsening of safety standards in all signatory countries.

Article 9 there are blank place-holders for the Pharmaceutical sections. This is ominous as some of the pharma provisions around generic medicines were particularly nasty in the leaked version.

Article 10 States that there must be a presumption that the rights holders’ claims to the right is valid, unless evidence to the contrary is produced. In terms of patent law, this presumption is extremely problematic, as many granted patents have no actual basis for the claim. The effects of these policies can be witnessed primarily in the US, where there is a plethora of frivolous lawsuits around patents relating to computer software. Companies known broadly as ‘patent trolls,’ apply for patents on broad, obvious and fundamental ideas, violating the principle that a patent should be granted for only original and innovative developments. Recently a company called Eolas Holdings attempted to claim ownership of a patent for “any program that allowed access to the interactive web”. This means that basically any program that uses the Internet would be required to pay Eolas Holdings a licencing fee to be able to distribute their products.

They lost the case, yet it highlights the danger and cost of dealing with a presumption in favor of the organisation claiming the rights. A claim like this would need to be fought in court because the burden of proof would fall on the defendant to show the patent is invalid.

A similar trend can be found in copyright law. YouTube has an automated take-down system that allows rights holders to remove material that they hold copyright for. In the last week, a company called Rumblefish had a YouTube video taken down for breaching copyright on a ‘sound recording’. The closest thing to a recording in the video was a real bird call, which according to copyright law cannot be copyrighted as it occurs in nature.

This is precisely the sort of thing that will eventuate from the assumption in favour of rights holders, as proposed. Ordinary people who post videos for friends and acquaintances are not in a financial position to challenge such claims. Wrongful claims are a way for old media to directly obliterate the competition. As this is already happening, any claim that the TPPA would not cause such problems is patently ludicrous. This would just export the problem to all signatory countries.

Article 15 i A Sets out criminal liability provisions that include criminal provisions for people engaged in copyright, trademark or patent violations on a “commercial scale”. Commercial scale includes: “significant willful copyright or related rights infringements that have no direct or indirect motivation of financial gain;” in other words, people not engaged in any sort of commercial activity at all. This is essentially to criminalise non-commercial file-sharing by stealth. This could lead to people being held criminally liable for copying a CD for a friend. Sharing should never be considered a criminal act.

Article 15.3 criminalises the use of camcorders in cinemas, regardless of intended use of said video, whether for personal or private use. There are already a raft of agreements and laws that cover this issue, and such a proposal would complicate an already confusing aspect of law.

Article 15.4 criminalises “aiding and abetting” intellectual property crimes (sic). There is no definition of what this means, and is so broad that it could mean anything from imposing liability upon intermediaries, such as Facebook and Google, to prosecuting the owners of a compromised wireless Internet hotspot that has been used to download copyrighted content. This poses a serious risk of inadvertently criminalising a significant portion of the population.

Article 16.3 vi A ISP liability, there are more exceptions than the original draft, yet the main exception seems to be that the ISP is 'implementing a policy that provides for termination in appropriate circumstances of the accounts of repeat infringers;' IE 3 strikes style graduated response for file-sharers.

Article 16.3 viii A Orders ISPs to comply with Court ordered site blocking, such as Britain and Holland blocking The Pirate Bay. This is simply censorship to protect commercial interests.

Article 16.3 xii ISPs to hand over customers private data at copyright holders request, such privileged access to peoples private data without Judicial oversight is massive invasion of privacy.

Investment Chapter

Leaked Draft of the Investment Chapter of the Trans-Pacific Partnership Agreement

The Investment Chapter, as described in the leak would grant wide ranging powers to foreign companies to sue for any loss of profit that could be incurred by any change of law in the signatory countries. The proposed tribunals do not meet a minimum Judicial requirement for enforcing the rule of Law. This is a serious assault on democracy as the very bodies that are elected by the people of the signatory Countries are to place a tribunal, made up of Lawyers, with no oversight, above their Legislation, their Courts and their Constitutions. The tribunal would have the power to award costs for any legislation that could harm profits, regardless of the needs or desires of the people of the signatory countries.

Australia has refused to submit itself to such an unaccountable Judiciary, which is to be applauded. It is still a great concern for the other negotiating Countries.

Article 12.2 Defines terminology used throughout the rest of the Investment Chapter.

Investment broadens the definition of investment to go far beyond any definition of 'real property' to include a wide swathe of what is currently considered domestic policy, including Intellectual Property (IP) laws, financial, environmental, health regulation etc. This means that companies whose profits get affected by changes in environmental Laws for E.G. will have grounds to appeal to an investment tribunal (more on that later).

Investor is defined so broadly that any company incorporated in any signatory country has access to provisions within the investment chapter of the TPPA. Companies can set up subsidiaries in participant countries to get access to the privileged positions granted to corporations based in the member states.

Article 12.4 orders governments to treat investors of other signatory countries the same as investors of that country. Australia has governmental bodies such as the Foreign Investment Review Board (FIRB) who oversees various aspects of foreign investments in Australia. They do this to ensure food security, national security, to regulate local media content to ensure the continuation of Australian culture Etc.. These legal structures are seen as vital in protecting the national interest, for E.G. the FIRB have denied purchases of farmland in order to ensure food supply for the people of Australia is protected from future shortages. Under the TPPA these measures will be banned. This also applies to other jurisdictions, such as state and local governments.

Article 12.5 ensures signatory countries investors are granted equally favourable treatment with any other investor group.

Article 12.7 specifically prohibits signatory countries from regulating or influencing investors or a range of issues. It seems that the goal of this clause is to prohibit governments passing legislation that in any way benefits its own, or any other signatory countries' investors, or organisations.

It will impact Australia through banning local content restrictions mandated for the mass media.

This clause specifically excludes a number of areas. Including: TRIPS (Trade-Related aspects of Intellectual Property rights) and by extension the Intellectual Property section of the TPPA, measures designed to protect the environment, laws designed to control anti-competitive behaviours and regulation of training requirements.

Article 12.11 prohibits signatory nations from legislating capital controls. This was originally part of the agenda of the World Trade Organisation (WTO), but was dropped after the Global Financial Crisis(GFC) as the need for states to be able to continue to regulate financial transactions became readily apparent to all, but the US negotiators of the TPPA.

Article 12.12 requires signatory countries pay compensation for any legislation that can impinge on a companies profit. Through broadening the definition of Investment and Investor in 12.2, this requires that compensation be paid for any change in law that could reduce the expected income of an investment, including environmental legislation, workers conditions, mandated safety requirements etc..

Article 12.18 describes the conditions under which a Claim of Arbitration can be made. Deliberately vague and broad, companies that lose income from any change of investment conditions caused by legislative changes can claim for compensation. This undermines the legal systems of all signatory countries, as the Tribunal will have jurisdiction above all existing legal frameworks. This undermines the legal systems of all signatory countries, as the Tribunal will have jurisdiction above all existing legal frameworks.

Article 12.21 designates the make-up of tribunals. Both the applicant and defendant pick one arbiter each and they agree on a third. Arbiters are to be lawyers. For a system of 'justice' that sits above the legal systems of participant countries, legal representatives that lack Judicial experience and authority will be expected to make decisions that can override the national Courts, legislation and even Constitutions. This is a serious erosion of the rule of Law as centuries of checks and balances will be cast aside for an unaccountable tribunal.

The proposed tribunals would not be accessible for local companies, giving foreign companies greater power to challenge decisions made by national governments than companies based in the country in question.

Other works on TPPA Intellectual Property Chapter


Investment Chapter

More to come as found.