Intellectual property biggest issue for Canada in TPP, says Doer

BY PETER MAZEREEUW
EMBASSYNEWS.CA

Despite all the ink spilled over what the Trans-Pacific Partnership deal would mean for Canada’s supply management system and auto sector, it was intellectual property that presented the “biggest issue” for Canada, says the country’s ambassador to the United States.

Gary Doer told an Economic Club audience Dec. 2 that intellectual property—which includes issues like copyright protection for books and music, extended drug patents and trademark law—was not only the biggest issue for Canada and its peers at the negotiating table, but in getting to the table as well. 

Canada’s previous federal government made a series of changes to its intellectual property laws in the years prior to signing the deal, such as those in the 2012 Copyright Modernization Act and the copyright changes in the 2015 budget. The budget the year prior also committed Canada to signing onto five international intellectual property treaties, including the Madrid Protocol on trademarks.

Experts including Michael Geist, who holds the Canada Research Chair on internet and e-commerce law at the University of Ottawa, and Gowlings’ Robert MacDonald, and Canadian Chamber of Commerce president Perrin Beatty told Embassy at the time that signing those treaties would help Canada get in line with its international trading partners in Europe and the TPP zone.  

The intellectual property chapter of the TPP includes 11 sections, 83 articles and six annexes. Many of the those provisions align with Canada’s current intellectual property laws, but implementing the TPP would require Canada’s government to make a handful of changes as well, with implications for the pharmaceutical and music industries and the general public. 

Canada’s new federal government is currently weighing the merits of implementing the TPP, which Trade Minister Chrystia Freeland has described as incredibly difficult.

Hill Times Publishing, which publishes this newspaper, was among the sponsors of the Economic Club event attended by Mr. Doer.

Copyright protection boosted

One of the most obvious differences between the TPP and current Canadian law is in the length of copyright protection for books, songs, art, software and other works. The TPP requires 70 years of protection for copyrighted works after the death of their creator, while Canadian law currently provides for 50 years of protection after death. 

That standard would fit with changes made to Canadian law in the 2015 federal budget, which increased protection for sound recordings from 50 to 70 years after a recording is made. Taken together, those changes would keep music, books and other works out of the public domain for longer, allowing rights holders to earn more as the sole publisher of the work. 

A summary of the TPP published by the New Zealand government in October predicted that the extra copyright protections in the TPP would cost the public tens of millions per year, as copyright holders would be able to sell their product to the public without competition for longer.

Robert Hutton, executive director of the Canadian Music Publishers Association, argues that the extra income to rights holders would help to support the Canadian music industry. Music labels would earn more, and use the extra money to promote and produce new Canadian artists, he said.

However, another study conducted for the Canadian government by Université de Montréal economist Abraham Hollander in 2005 found that an increase in protection to life plus 70 years would have an “insignificant impact” on the number of works produced in Canada, and create only a slight increase in costs to consumers.

Extended drug patents 

The TPP also includes clauses that would increase the patent protection for brand-name drugs, meaning a longer wait before generic companies could begin to sell their own version of the drug, which are often much cheaper.

Drug patents would be made longer by bringing in a practice known as patent term restoration. Drug companies typically patent their drugs before sending them to the government—in Canada, Health Canada—for safety approval and permission to begin sales. That process can take years, burning away years of the patent. The TPP requires members to add time to a pharmaceutical patent if there are “unreasonable delays” to the marketing approval process. It also allows member countries to put “conditions and limitations” on how they fulfill that commitment.

Canada already agreed to bring in patent term restoration under the Comprehensive Economic and Trade Agreement with Europe. The CETA text is currently under a legal review and translation process, but political opponents of the deal’s investor-state arbitration provisions may stall its implementation for the foreseeable future.

Opponents of patent-term restoration have argued it would result in higher costs for Canada’s health care system by forcing health care providers to pay for more expensive brand-name drugs for longer—once patents expire, generic pharmaceutical manufacturers can begin to produce and sell the drug for much less. 

Declan Hamill, vice president of legal affairs for Rx&D, the lobby group for Canada’s brand pharmaceutical industry, counters that nothing in the CETA or TPP dictates how government health insurers negotiate their pricing with pharmaceutical manufacturers.

Canadian priorities protected: Sookman

The TPP text raises questions about how the privacy of data from Canadians would be protected under the deal, and would force Canada to bring in criminal penalties for tampering with copyright information, said Mr. Geist.

The TPP requires member countries to maintain an online database of contact information for the owners of internet domain names, though each can do so “in accordance with…relevant administrator policies regarding protection of privacy and personal data.”

The Canadian Internet Registration Authority, which manages “.ca” domain names, currently allows individuals—but not companies—who own domain names to remain anonymous to the public, said Mr. Geist, who sits on the organization’s board.

That part of the TPP could be a problem for Canada if a complaint over CIRA’s policy is launched through the TPP, he said. CIRA is an independent body, so it is unclear how Canada’s government would handle such a complaint.

The TPP also requires member countries to criminalize the removal of copyright information—known as rights management information—from a copyrighted work, since doing so makes it easier to illegally sell or distribute that product. That goes a step further than Canada’s Copyright Modernization Act, which allows civil but not criminal penalties for the removal of rights management information from copyrighted sound recordings. 

In the big picture, however, Mr. Sookman said Canada’s negotiating team did a good job of ensuring that the wording of the TPP gave Canada the flexibility to maintain its current intellectual property laws.

“You can see Canadian fingerprints all over the copyright section of the TPP,” he said.

That includes a special annex in the deal that Mr. Sookman says protects Canada’s “notice and notice” system, in which internet service providers alert website operators when they post material that may violate copyright, instead of removing the material outright as is the practice in the United States.

Canada ‘unambitious’ in TPP IP negotiations: Geist

Yet Canada’s government was “incredibly unambitious” when it came to shaping intellectual property standards in the TPP, argues Mr. Geist.

Instead of trying to concede as few changes as possible to Canada’s current laws, the government should have used the agreement as a way to make the more progressive aspects of Canadian IP law standard around the Pacific.

For example, Canada’s government has taken a “hands off” approach to intervening in the management of the Internet, and pushed other countries to do the same, he said. The TPP intellectual property chapter does little to move other countries towards that philosophy, he said. 

 

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