Monday, January 11, 2010

Google DC Talk: ACTA

Google is trying to be more involved in East Coast code, and this was a wonderful implementation of that greater involvement. Kudos to all concerned.

Side notes: Google’s space is not a very Washingtonian office. It was the hanging paper lanterns that really pushed it over, if you ask me. And their background music is not quite to my taste. (Background music? See: not very Washingtonian.)

Moderator: Washington Post Consumer Technology Columnist Rob Pegoraro

Steve Metalitz, Mitchell, Silverberg & Knupp: represents copyright organizations/International IP Alliance in DC on international matters.

James Love, director, Knowledge Ecology Int’l: a human rights/consumer advocacy organization. Interested in pharmaceuticals/access to medicine as well as copyright. Generic drugs have been seized in Europe en route from India to Africa—creates a lot of concern among people in public health community. Interested in ACTA as it relates to what countries can do with respect their own copyright law. And in the transparency of int’l trade negotiations—secrecy doesn’t sit well with them.

Ryan Clough, legislative counsel to Congresswoman Zoe Lofgren (San Jose, CA). Lofgren is concerned about international effects—some US concerns in that USTR is looking at this as an executive agreement which wouldn’t require congressional approval. But she is concerned about what this means for copyright laws in other countries; the Internet is global and this will affect the US.

Jonathan Band, attorney for Library Copyright Alliance, Computer & Communications Industry Ass’n, & Net Coalition. Outward-looking and inward-looking problems: outward-looking in terms of impact on internet companies’ ability to compete internationally. Our legal system is extremely balanced: strong protections and enforcement provisions, and strong exceptions. ACTA only tries to export the protection/enforcement side, and as a result it could lead to imbalance abroad, which in turn makes it more difficult for US companies to operate abroad. Inward-looking: IP in general and copyright in particular is subject to constant evolution in caselaw and congressional action. If you have an international agreement that is too specific/granular, even if it’s now consistent with US law, it will prevent Congress/courts from allowing law to evolve in the future. Relatedly, copyright law is ambiguous—an international agreement can codify Metalitz’s interpretation of US law, but that won’t be his, and it won’t be the Supreme Court’s interpretation.

Pegoraro: What’s the problem that ACTA is trying to solve?

Metalitz: The copyright industries make up 1/10th of our economy, 6 million jobs that pay 30% more than the average wage. Disproportionate amount of economic growth in longer run has come from these industries. These facts are also basically true of other countries involved in ACTA, about 40. There is widespread piracy of copyrighted material: vast majority of copies available online are pirated; the internet is not the world, and outside the internet, there’s a serious piracy problem. People can disagree about magnitude of harm, but it’s big. On the issue of enforcement standards, not exceptions/rights, the last time countries got together was 20 years ago in TRIPs. A lot has happened in 20 years, among countries, copyright industries, and pirates [comment: a lot has happened, as in, who counts as a pirate?]. It’s a no-brainer to say let’s get countries together that are concerned about the problem and share best practices, improve communications, and refine international standards to better reflect today’s situation.

Love: it’s one thing to say there’s a problem, another that the current legal/technological regime has a solution. Compare past failed attempts.

Clough: Biggest sources of pirate/fraudulent material, like China and Russia, aren’t involved in this. The countries with the biggest problems aren’t nearly as willing to participate in these kinds of efforts. By the same measurements Metalitz cited to show IP is important to the economy, the industries & people who rely on exceptions to copyright, including fair use and DMCA safe harbors, are also enormous parts of the economy. We’ve heard many concerns about how ACTA could diminish those protections abroad, affecting American and foreign businesses. IP policy can’t just be about enforcing to the max because there are real costs.

Band: If this were really just about counterfeiting, this would be a shorter conversation. The name of the agreement has “counterfeiting” in it, but infringement is a broader category. Are we talking copyright, trademark, patent? Start to get into added complications as you broaden the range of issues. Improving coordination of law enforcement is cool. More tools for prosecutors to go after counterfeiting/cooperation among countries for that: great. But the agreement under consideration goes way beyond that, and beyond enforcement into issues like grey market goods, which are not counterfeit and not even infringing but may move across borders. These are controversial and complex issues.

Love: For the record, disputes Metalitz’s numbers. A lot of jobs are in the knowledge industries, and regulating them is hard. If you strictly enforced trade secret laws, you wouldn’t have Silicon Valley, where people swap information in bars. Even the illegal part of infringement has economic benefits. Example: we don’t have a real research exception for patents in US law, but people just ignore them and do the research because US law should have an exception. Look at what’s on your own desk: people send you copies of articles—strict enforcement against unauthorized distribution would make us dumber, less creative, and less knowledgeable when making decisions. Sometimes the laws that deal with information are not realistic about what people do on a daily basis.

Metalitz: Illegal activity does have an economic impact—the people involved in big int’l criminal enterprises cross int’l borders, which is why we need coordination, but law enforcement coordination may not go far enough. Gov’ts aren’t getting any of that money in taxes, which is another reason for gov’ts to be concerned.

Love: If it’s really such a serious issue, it doesn’t make any sense to develop an agreement as a national security exercise. The countries involved and the lobbyists on K streets have access to the proposal—but not voters, taxpayers, citizens. If the future of our economy depends on this, why is it a shameful secret?

Metalitz: I’m not negotiating this agreement. Our government—Obama and Bush administrations both—negotiates with other governments, and so all the countries have to agree on the level of transparency. This agreement is more transparent than other trade negotiations have been. More information has been made public over ACTA than in recent FTAs.

Love: Wasn’t the text of the 1996 treaties available for public comment? Didn’t you attend the negotiations?

Metalitz: Yes, though there were meetings into which I wasn’t allowed. The formal text was available, but there were other negotiations.

Pegoraro: People say in defense of ACTA that there’s nothing in ACTA that isn’t in US law. He can’t confirm that for himself, of course, because he hasn’t signed the NDA. Is it coloring outside the lines?

Metalitz: The US government has said this a couple of times. Negotiating it as an executive agreement means, by definition, it can’t be inconsistent with US law. Practically: Congress may not be that eager to change the law in any trade related area, so any agreement that would require a change in the law would be much harder to get through. So he doesn’t have much doubt that what the US is putting forward won’t require changes in US law.

Clough: Metalitz is correct in a broad sense. Substantive liability changes in US courts would require congressional action. But executive agreements still create obligations/constraints on the US in the future if we want to revise copyright law. It’s really hard to say at this point.

Band: The EU has written a detailed memo about the internet chapter, which has been leaked, so he can talk about the leaked memo. (Background: basically everyone in the conversation has seen one country’s draft of a chunk and signed an NDA agreeing not to disclose what they saw.) What it says about secondary copyright liability can be analyzed—US law is very complicated and all judge-made. Nobody knows whether inducement is a subset of contributory infringement, swallows contributory infringement, or is something different—the 9th Circuit has two different panels interpreting inducement in different ways. Law is unstable/constantly evolving—we don’t know where the lines, which makes coloring within them difficult. Even an executive agreement will influence litigation: litigants cite international agreements and try to convince courts to follow them.

Pegoraro: If ACTA doesn’t require any change in US law, and other countries agree about that, what’s in it for them?

Metalitz: That’s oversimplified. It depends on granularity/level of detail in agreement. The US has negotiated a dozen FTAs with detailed copyright provisions, criticized (fairly, in his opinion) for being too detailed/prescriptive and making their laws read too much like ours. ACTA is different, appropriately so: focused on general principles/overall framework. Secondary liability is a good example: we don’t have it in our statute because we’re a common-law system. Lines become clearer over time as cases are decided—Grokster was a unanimous decision; clarified things for purposes of advising clients—if you put together a business to encourage infringement, you’ll get nailed—recent isoHunt case in California is to the same effect. ACTA embodying that principle could be a big step forward. Many of the countries have similar legal principles already, but they would lead by example—showing China and Russia etc. the direction that countries that want to be responsible international players take.

Love: It’s often true that negotiators say “this won’t change anything,” and yet for some reason they spend a lot of political capital/effort on international conventions. It would definitely change norms in the US, which is why the US is keeping it secret. Canadian government is keeping it secret because it means big changes for them.

EU proposal: injunction must always be available. A number of proposals ramp up amount of damages: things like full commercial value—a plaintiffs’ greatest hits. With things like orphan works/Google Books Settlement, this would be a big deal. Proposals to deal with orphan works include limited liability for damages/injunction—this could be collateral damage from these existing proposals. Response to this criticism has been: that’s not the current proposal! But how are we to know? The government won’t defend the conversation because it’s embarrassed by what’s on the table.

Pegoraro: Why is secrecy appropriate? But is it really possible to keep this a secret with nearly 40 countries?

Love: Secret from whom though? It’s not secret from big corporations, just from the public.

Metalitz: But even the stuff I (and you) saw under the NDA isn’t the agreement, it’s one country’s proposal.

Love: I’ve reviewed parts of it in the European Parliament: if you’re well-connected, you can see it—and Metalitz’s clients are well-connected. This isn’t about secrecy, it’s about marginalizing the public: a cynical effort to empower people disproportionately.

Metalitz: Apparently Love has seen more of it than anyone else. There’s more transparency in this than in other trade agreements.

Pegoraro: Multilateral or bilateral?

Love: Concededly, there are horror stories of secrecy. But is that what we aspire to?

Metalitz: Reality: our gov’t has to get the agreement of all the other gov’ts to have transparency.

Love: It would be a cinch if the US insisted on transparency—Finland and Sweden have asked; if Obama did, it would happen.

Metalitz: Moving forward to protect the economy is more important.

Love: WIPO was transparent in 1996. The minutes were on the internet!

Clough: Not an expert on precedent, but he thinks the USTR will be forced to have meaningful transparency to defend the agreement; right now its defenders can’t defend it against rumors, some justified and some unjustified. It’s not enough to have transparency after the final draft, before the president signs. We need transparency earlier on.

Band: This is not about counterfeiting, it’s about IP enforcement generally. It’s also a misnomer to call it a trade agreement, and comparing it to other trade agreements is inaccurate; confidentiality in trade agreements does raise different issues. With IP, what is the justification for secrecy? Would transparency lead to collapse? Doesn’t think so—many provisions are noncontroversial, including counterfeiting; transparency might lead to a narrowing of the issues. Maybe the more controversial issues need more debate/need to be raised to a higher level of generality. Transparency could leave us with something very useful in combating counterfeiting.

Metalitz: True that a lot of opponents of improved enforcement have a big meta issue, transparency, and it’s difficult for proponents/government to respond. That will help drive in the direction of transparency. But no one would think that enforcing IP rights is a high priority for this government. Our industries think it’s a top issue, and many governments around the world think so.

Pegararo: So you think secrecy is justified but politically untenable?

Metalitz: He thinks Clough is right that time will make secrecy harder. But we have to get governments to agree on this.

Love: The USTR asked us to do a research project on trade negotiations and transparency; there’s not a huge history of full tranparency, but as WIPO became more transparent, and as the WTO became more oriented to civil society, they’ve been more pro-consumer: Doha Declaration, WIPO Development Agenda. That’s why the Chamber of Commerce wants secrecy: transparency doesn’t work to its advantage in the outcome. Seeing it when it’s finished is not enough—people attend WIPO meetings and discuss the drafts, and that influences the results. ACTA is an example of a DC insider game at its worst: people pay to be on the inside.

Q from Q submitted to Google Moderator: Will providers still enjoy safe harbors? What about remix/UGC?

Band: According to EU, there would still be safe harbors, but EU safe harbors are somewhat different from US safe harbors. So an open Q: who has to give? Or does this have to be raised to a higher level of generality so both the EU E-commerce directive and the US §512 protections would comply? (Japan also has its own safe harbors and probably doesn’t want to change its law.)

Metalitz: Doesn’t think US law would change. Most of the other countries involved in ACTA have safe harbors, sometimes because of compliance with FTAs that were very prescriptive. He would hope that ACTA would be a positive step for Canada, which is an outlier.

Gigi Sohn, Public Knowledge: Why are we still waiting for transparency? Hears rumors that USTR is the bottleneck, trying to bring in the National Security Council for no apparent reason.

Metalitz: The MPAA is one of my clients, not sure they all share the view of the MPAA’s Glickman that transparency is justified, but that’s up to the US government.

Q from ColdWind (online): What about anticircumvention?

Band: The EU memo includes reference to some anticircumvention requirements. One point raised by the EU is that the DMCA targets both access and rights controls, whereas the EU only focuses on copy controls; he doesn’t recall more.

Metalitz: Most of these countries have pretty much the same rules. The difference lies in the area of exceptions. These were all adopted to implement the WIPO treaty, which had no exceptions. Possible that ACTA might give guidance on what constitutes a legitimate exception, which Band should like.

Clough: There’s a broader issue here of how exceptions/limitations are articulated. One question: are they required, or are they merely permitted? ACTA apparently requires the enforcement but permits the exceptions/limitations—that’s a push in a particular direction. Also, what does that mean for other countries’ understanding of US copyright interests?

Q: To say that it just colors within the US lines, but it’s really important to change others’ laws, is disingenous. To get US law, you’d have to attach the Sony decision to ACTA, and a thousand other pages. No other country has secondary liability like we do; Commonwealth countries have “authorization,” which works differently. Intel and IBM get protection from the current doctrine. Changing secondary liability without the protections of §107 and Sony affects a lot of countries.

Band: This goes back to the issue of “what’s in it for them?” We need to focus not just on US law, or on other negotiating partners’; what is the long-term objective? Not 40 countries, but 120 other countries that aren’t in ACTA. Developed countries have concluded that traditional fora for negotiating like WIPO or WTO aren’t as friendly as they used to be; developing world is standing up for itself. There was a desire to seek a new, more friendly forum, and so one was created.

Love: WIPO committee on copyright now hears all the stakeholders, and discussed the relation of TPMs to limitations and exceptions, including orphan works. Began a conversation of reconciling technological protection measures with user rights. A lot of people question whether US implementation of 1996 WIPO treaty is the best balance, or whether it needs to be rethought. Orphan works mean there are a lot of inaccessible works, and a layer of technical barriers is being put on top. Concerns: in the rush to protect entertainment industries, what is the collateral damage/unintended consequence? This is where secrecy is the enemy of good policy; you need more eyeballs. Time for this administration to take the lead in treating ordinary citizens as entitled to the same knowledge as campaign contributors.

Band: US delegation at WIPO made a fabulous statement in favor of addressing the needs of the visually disabled, and arguing for the importance of strong exceptions in copyright law along with strong enforcement. So when we bash the US government, it isn’t across the board.

Q from Andre in the free world (ok!): How does ACTA enforcement of GIs comply with free trade objectives?

Love: There’s dispute among the parties over the scope of the agreement. Patent laws, for example, differ a lot from country to country. Refers back to incident of transshipment of drugs seized in Europe that were totally legal where they came from and totally legal where they were going. Europeans have asked to eliminate “goods in transit” from the agreement—goods in transit are normally treated differently from goods destined for a particular country. It shouldn’t matter what the patent law is in the airport of Amsterdam. This is why public health groups are active on ACTA.

Pegararo: This seems like a key difference between a bilateral FTA and a multilateral agreement—a FTA only deals with South Korea-US trade, for example, not things like this.

Metalitz: Can’t comment on patents. One significant development in piracy is that it increasingly crosses borders, especially but not exclusively on the internet. One advantage of getting together a group of likeminded countries is to address this and lead by example.

Band: Question about GIs circles back to “be careful what you wish for.” The Bush administration folks who started this were thinking of exporting US law abroad, but the EU has its own view, and if we raise the bar in one way they will want to raise it in another, and GIs are a perfect example: very important to the EU and we typically resist it. EU wants criminal provisions for patent infringement, etc. Once you start down this road, it is a global community and the EU has very definite views that often differ from those of the US.

Love: The EU is negotiating the agreement through one small group of people, even though there isn’t necessarily unanimity among the governments; same has happened with USTR here. The WTO says you have to balance the public interest; covers exhaustion of rights/first sale; other consumer safeguards like allowing regulation of anticompetitive conduct. The rightsholders took the parts they liked about TRIPs and doubled up on them, and took the parts they didn’t like about TRIPs and left them out—gutted the consumer protection side. And they’re adding dispute resolution.

Q: Distinguish between copies on the internet and counterfeit airplane parts. What are the common threads and the distinct stakeholders?

Clough: It’s impossible to do things narrowly and talk just about copyright enforcement. You need to talk about what the liabilities are and how they’re enforced, as it matters to everyday life. That’s why people want to see ACTA.

Metalitz: Copyright is not enforcement. The international agreements differentiate between substantive and enforcement provisions. ACTA probably wouldn’t impact Google Books because that’s a question of the scope of an exception.

Clough: But if a provision in the agreement changes obligations on injunctive relief, that constrains changes of law that could affect orphan works.

Metalitz: Takes the point that this could affect digitization without rightsholders’ consent. (Comment: hee. Really, they’re all in fine form up there.)

Band: If we’re really talking counterfeiting, airplane parts and drugs, we can get to agreement; but if it’s also about trademark infringement and copyright infringement, then we get a bunch of new issues. Pending case in Supreme Court, called a copyright case, but it’s about Costco buying legit Omega watches and importing them into the US for sale, which is cheaper than buying from the US authorized dealer. Omega printed a logo on the back of the watch and claims copyright protection. This is not a counterfeiting issue but gets pulled into the enforcement issue.

The nature of the remedies affect the nature of the right. Google’s exposure for displaying snippets in France is actual damages, constraining its risk even without a fair use defense. If ACTA exports statutory damages, that changes Google’s risk calculation—but France doesn’t have our defenses, so their adoption of statutory damages would change the balance that US law has overall.

Metalitz: Red herring. Statutory damages under US law—99.9% of orphan works won’t be able to claim statutory damages. (My Q: Will France require timely registration for eligibility for statutory damages if adopted? Seems unlikely since nobody else has our overhang of formalities.)

Band: Not a red herring. Ratcheting up enforcement without ratcheting up exceptions would have bad effects.

Metalitz: The issue of covering trademark and copyright in one treaty was settled with TRIPs 20 years ago—you have to have remedies.

Q from audience: I still don’t get why we need this if it’s not going to change our law. What is the industry looking to achieve?

Metalitz: If the parties can’t come to a unified view on secondary liability, then it won’t be in the agreement. There’s a lot more harmonization taking place around some aspects of secondary liability: inducement in the Netherlands, Korea, Australia. There is something that could be derived as a general principle about entities that make it their business to encourage people to massively violate copyright protection.

Love: He thinks counterfeiting is perceived in focus groups as being like lack of patriotism or child pornography—no one can vote against a anticounterfeiting measure. Big discussion about unsafe drugs, one of the main rationales for the agreement. What percentage of drugs are counterfeit, and what percentage substandard but legal? Focusing in speeches on counterfeits brings attention and funds, but the real problem is substandard manufacturing. The solution is better regulation and prequalification for manufacturers, which the US has opposed in the past, because they thought poor-quality drugs in the developing world gave a competitive advantage to US and European manufacturers.

Pegararo: Caveat: many measures assume that if you ban something, it will go away. But it’s very easy to play a DVD on Linux these days. Anticircumvention hasn’t worked. Hoping we can ban copyright infringement tech, which can also have perfectly legit uses, may not make any difference in the real world.


Adam said...

Thanks for posting this, Rebecca. It makes for fascinating reading.

Adam Smith
World Trademark Review
Follow WTR on Twitter @WTRmagazine

Anonymous said...

Curious that nobody on the panel other than Metalitz seemed to address the impact of illegal counterfeiting and piracy on the livelihoods of Americans in the entertainment / pharmaceutical / software businesses.

I think most Americans would be *shocked* if they heard that there was a movement against the greater global protection of our own intellectual property. Totally out of touch, and far too ivory tower for my tastes.

It's easy if you're sort of fat and happy feeding off of academic and foundation funding without any consequence of your perspectives being wrong or right.