Saturday, February 20, 2016

WIPIP Session 7: International issues

Session 7 Room 145: International IP
Sean Flynn, Mike Palmedo, & Walter Park, Creating a Database of Changes to Copyright User Rights in 40 Nations
Fair dealing is flexible (uses a balancing test) but not open (limited classes of acts).  There are counts of industries in different countries; empirical question: how does the law actually impact behaviors?  Scattered data, such as lack of enforcement of German ©s in US during WWII, but not broad data.  Existing surveys are static, not dynamic.  There are various exceptions around the world; South Africa’s quotation exception, cabined only by fair practice, not criticism/review—looks like fair use in its openness internally.  Looking for whether this openness has consequences for innovation.
Calboli: Do you find major differences b/t common and civil law?  Portugal has adopted something like fair use.
A: We’re finding openness within civil law as well.  Civil law systems often say “we don’t use abstract norms,” but even w/o multifactor test there’s often flexibility.
Lunney: You show larger revenues for big content industries in nations with fair use v. those without, but you aren’t making causal claims.
A: not yet.
Lunney: How do I figure out for the US whether flexibility is increasing?  Not sure you can get a map of equivalent changes v. each district court/court of appeals cases in the US.  Explain how you will map changes/growth in fair use.
A: regionalization is extremely difficult, but the key aspects are use of citations—we probably will look for circuit court level stuff. In Brazil we’re looking at court changes—3-4 decisions opened up interpretations of exceptions.
Alexandra George, Alternative Dispute Resolution in International Intellectual Property Disputes: A Solution to Jurisdictional Challenges?
Conciliation: like mediation, but conciliator puts forward a nonbinding settlement proposal at some point—can be good if conciliator is an expert in the field.
MedArb: blend of mediation and arbitration; binding if mediation doesn’t work. The neutral may be the same at both stages (mediator hears your secrets, finds your bottom line, and that’s controversial) or may be different.
Expert determination: usually binding unless otherwise agreed; expert has inquisitorial powers to gather info; usually only decides issue w/in their area of expertise; can be useful in patent cases.  Mutuals generally can be experts, which may be an improvement on judges.
Benefits: certainty; few avenues of appeal exist. Cost, confidentiality, control over neutrals, location, date, even outcomes for mediation/conciliation.  Outcomes that wouldn’t be available in court; speed; high resolution rate—80% for mediation, nearly 100% for arbitration.
WIPO is involved in ADR: maintains a list of neutrals & matches them to cases; domain name dispute resolution; trade mark office mediation.  ADR hubs: major cities like London, Paris, Geneva, NY, Tokyo, Singapore—but Hong Kong, Delaware, etc. promote themselves as good places—stable & predictable legal system, lack of corruption, high quality lawyers, perception of neutrality, arbitration law based on UN model law, geographic convenience.
Int’l dimension: mediation gets more complicated, but if we get a treaty allowing settlements to be enforced worldwide, could be an important development. Another possibility: ADR divisions of courts.  Online ADR: newly developing.  Model: UDRP through WIPO.  Small parties w/o much money may be able to solve int’l problems this way.
Q: worried about capture of ADR by well-resourced interests like TM bullies that then skew the results.  Concerted effort by large corporations in US to mandate arbitration in consumer contracts—less fair to smaller parties/more vulnerable groups.
A: Agree it’s an issue.  When both parties seek arbitration, it works a lot better.
Peter Yu: Dealing with distrust of developing countries’ legal systems doesn’t deal with the choice of law issue.
A: Depends on how arbitration agreement is drawn up.  May allow arbitrator to choose equitably.
Kamil Kiljanski & Benedikt Herz, Survey of IP Piracy in the EU: Actually about displacement rates of consumption of AV content—unpaid consumption is common in Europe, but effect on movie sales is unclear.  Existing studies find very different displacement rates, 0.27 to 1—all over the place for movies.  Our study is the first to use consistent methodology and a big sample.

Dataset: survey.  6 different European states.  Post-treaty/recent.  Surveyed minors: 14-17, also not done before.  Survey how much unpaid and paid consumption each had; don’t ask them what-if questions.  Trying to find if an individual consumers more unpaid content consumers less paid content.  Endogeneity problem: Individuals differ in unobserved tastes for films.  If you don’t control for this, you get bias and more modest displacement rates than the truth.  Control: some sort of supply instrument.  Event study: close of MegaUpload may give you more truthful estimate of displacement. But we didn’t have such events systematically across member states. Control for broadband, but density is now very high/not good any more.  Use Rob/Waldfogel methodology: exploit the fact that most films are seen in the year of release.  Except they did it for 500 US students and we did it for 30,000 people in Europe.
Germany, Spain, France, UK, Poland, Sweden; 2014.  Report the way they saw the movies surveyed. What about underreporting? We ensured anonymity; avoided terms w/negative association, such as “illegal” and “piracy,” embedded questions in other questions; specifically named known sites in each country.
Results: big differences b/t countries.  Much less illicit consumption in Germany than in Sweden or Spain.  1/7 movies viewed through illegal means.  1 illegal 1st view reduces legal 1st views by 0.416 units.  Estimated displacement rate is higher than with cross-sectional approach.  Illegal first view slightly increased 2nd legal view: 0.04 units.  Higher in Spain than France or Germany.  For the whole sample, we estimate lost movie sales to be 4.27%.  Germany v. Spain: 4x difference in percentages.
Bartow: kind of movie? Blockbusters/special effects v. romantic movie?  Some movies have staying power.
A: this is just blockbusters/biggest sellers in the country.  If it’s the rate for blockbusters, it’s probably lower for other movies, because blockbusters are the most-pirated.
Q: Are you just looking at movie attendance?
A: Cinema attendance, DVD, legal download—etc.
Q: what about delayed release of DVD?
A: we used release date country by country.
Q: Views v. downloads: people download stuff they don’t watch.
Peter Yu, The Investment-Related Aspects of Intellectual Property Rights:
Eli Lilly’s $500 million complaint against Canadian gov’t; challenges against plain packaging by tobacco companies.  Concerns: (1) process—high arbitration cost, $8-10 million on average and up to $30 million, compared to $300,000-400,000 in TRIPS WTO dispute; (2) impartial/unaccountable artibrators; lack of transparent proceedings; frivolous disputes; (3) interpretation: lack of binding precedent, no appeallate process, oversimplified view of IPRs; ignore TRIPS flexibilities and safeguards; narrow focus on IP side of bargain.
Outcome: large awards, $50 billion to Yukos Oil; used to challenge legit regulations: environmental, labor; more forums to sue gov’t; more lawsuits by private actors; more coverage beyond TRIPS based IPR; rewriting TRIPS and other multilateral bargains.
TPP: says hearings will be open and available to public; all submissions will be published for US cases.  Attorneys’ fees for unreasonable claims.  Amicus submissions allowed for stakeholders.  Right to regulate in public interest for public health, safety, financial stability, and environment; also a tobacco-specific measures allowing regulation.  Burden on claimant in all instances to prove all elements of claims; investor expectations aren’t enough.

Remaining concerns: Some improvements in TPP, but still concerns—high arbitration costs; ignore TRIPS flexibilities and safeguards. To prevent forum shopping, a claimant must waive the right to institute parallel proceedings in other forums.
Suggestions for improvement: interrogate whether IPRs at issue constitute investment.  Rights don’t equate to investment in a country—investment protection focuses on investment being taken away.  Registration of patents, for example: you can register based on foreign examination in some cases; just claiming patent rights shouldn’t be enough.
Contingency: there are a lot of contingencies in IPRs—invalidation; maintenance/renewal fees; free speech and competition law constraints. This should be recognized.  Many patentees will stop paying maintenance fees if patent not valuable. 
IP investment protection—might need to look at overall protection for investor, such as FDA protection, or understand that competition law reduces protection.  State: recognize state’s foundational contribution to registration and enforcement infrastructure; bargain-based contribution—some companies might get tax concessions/free land and that should be considered.
Examine relationship between TPP and other int’l agreements like TRIPS.
Institutional improvements: Advisory center, similar to WIPO’s. Small claims arbitration.  Appellate process improvements.
Silver lining: TPP investment chapter maybe can be baseline for ISDS safeguards.  Developing countries may make traditional knowledge/traditional cultural expression claims and may be able to use ISDS against them.  May reduce WTO litigation as home gov’ts say: bring your own claim!  Benefits to small/medium enterprises if costs of arbitration can be limited.

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