Canada’s NAFTA IP and E-commerce Priorities: My Appearance Before the Standing Committee on International Trade

Posted: 19 Sep 2017 07:04 AM PDT

The House of Commons Standing Committee on International Trade has been conducting hearings on the NAFTA negotiations. I appeared before the committee yesterday on a panel that included the dairy industry, food and beverage sector, and my comments on IP and e-commerce. The MPs showed considerable interest in both IP and e-commerce, asking questions about notice-and-notice, fair use, copyright balance, the public domain, and the privacy implications of the e-commerce chapter.  My opening remarks are posted below.

Appearance before the House of Commons Standing Committee on International Trade, September 18, 2017

Good afternoon. My name is Michael Geist.  I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law. I appear today in a personal capacity representing only my own views.

There is much to say about NAFTA – I have written numerous articles and posts on the agreement – but I have limited time so I’ll focus on the intellectual property chapter with a brief additional comment on the e-commerce chapter.

While Canada is accustomed to “playing defence” to U.S. intellectual property demands in trade talks, this round of renegotiation offers the chance to pro-actively ensure that Canadian IP priorities and policies are reflected in the agreement. To place the IP issue in context, over the past five years, Canada has implemented anti-circumvention laws similar to those found in the U.S., added stronger enforcement measures, enacted anti-counterfeiting laws, extended the term of protection for sound recordings, and engaged in patent and trademark reforms.

It should therefore be recognized that Canada already meets its international IP obligations and has largely addressed previous U.S. demands regarding further reforms. At a broad level, the Canadian negotiating goal should be to retain an appropriate IP balance that fosters creativity and access, while ensuring that there is room for Canadian-specific policies that sit within the flexibilities of the international IP framework.

What might that look like?  I’d raise five points.

First, Canada should insist on the inclusion of language on maintaining balance across all IP rights, the legitimate interests of users, promoting access to and preserving the public domain, ensuring that IP rights do not create barriers to legitimate trade, and facilitating access to affordable medicines.  Similar language was raised during the TPP negotiations and it belongs in NAFTA.

Second, the availability of U.S. fair use represents a significant competitive advantage for U.S. businesses and creators. To ensure a level playing field for innovation, the NAFTA IP chapter should require that all parties feature a fair use or fair use equivalent provision.

Third, Canadian copyright law’s anti-circumvention provisions are among the most restrictive in the world and badly undermine the traditional copyright balance in the digital world creating unnecessary restrictions on innovation. While the Canadian exceptions were narrowly constructed and limited to a handful of circumstances, the U.S. has actually been expanding its digital lock exceptions. The imbalance in exceptions creates an uneven playing field for innovation and should be remedied within NAFTA.

Fourth, the NAFTA IP chapter should also address the abuse of intellectual property rights that may inhibit companies from innovating or discourage Canadians from taking advantage of the digital market. The benefits of an anti-IP abuse law could be used to touch on patents, trademarks, and copyright.

Fifth, one of the chief concerns with past trade negotiations is the expectation that the U.S. requires other countries to mirror its IP laws, even if those laws extend far beyond international law requirements. The Canadian approach should be to require NAFTA parties to meet international law, but to retain the full flexibility found within those laws. For example, the term of copyright in Canada is presently life of the author plus an additional 50 years, a term compliant with the international standard set by the Berne Convention.

I recently conducted research on the role of copyright term and the public domain in Canadian schools using data obtained by the Ontario Book Publishers Organization.  According to data submitted by hundreds of school teachers and school districts, half of the most popular books taught in Grades 7 – 12 are in the public domain or about to enter it. If we extend the term of copyright, dozens of books used by thousands of students today that are scheduled to enter the public domain would be shut out for decades. The prospect of using those books in new and innovative ways without the need for further licensing or royalties – as well as increasing access in open electronic form – would be lost for a generation. These are crucial IP issues and should not be overlooked.

My time is limited to discuss the e-commerce chapter in these opening remarks and I would welcome the chance to do so during questions.  I would only note that Canada should be wary of provisions that undermine legitimate public policy interests, including privacy and security.

The U.S. has identified restrictions against local data storage – often called data localization – as one of its objectives. The Canadian government should resist efforts within NAFTA to limit the ability of federal or provincial governments to establish legitimate privacy and security safeguards through data localization requirements.

Limitations on data transfer restrictions, which mandate the free flow of information on networks across borders, raises similar concerns. While the U.S. is seeking a ban on data transfer restrictions, Canada should ensure that privacy and security laws will not be superseded by NAFTA restrictions. In fact, throughout the e-commerce chapter, Canada should seek higher level privacy protections and e-commerce regulations.

I welcome your questions.

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