Significant Concerns About The New NAFTA Agreement’s Impact On Innovation And The Internet

Earlier this week, we wrote about how the USTR itself appeared to be totally confused about its own NAFTA-replacement agreement with Mexico in the “Intellectual Property” section, in that it was reporting that the agreement included copyright in some works for “75 years” in places and “life + 75 years” in other places, and acted as though they were the same thing. The USTR seemed legitimately confused over this issue, which did not give people much confidence that it knew what it was doing in these negotiations on the intellectual property questions. However, since that issue appeared to be one of pure confusion, which should be easily fixed in the final text, we should put our attention more towards the actual problems with what the USTR appears to be doing here.

We don’t yet have the full text — though that should be available soon — but from the USTR’s fact sheet there are many reasons to be concerned that this agreement is a massive handout to Hollywood and patent trolls, and against innovation. Let’s dig in:

Enforcement authorities must be able to stop goods that are suspected of being pirated or counterfeited at all areas of entry and exit.

This seems to be an attempt to bring back some of the features of the long-derided and eventually discarded ACTA agreement, which had all sorts of problems. A big part of ACTA was ramping up enforcement by ICE in seizing “infringing” goods. Of course, this is the same ICE who wrongly seized blogs and search engines they eventually had to return years later because there was no actual evidence they were infringing. Incredibly, it announced these evidence free seizures from Disney’s headquarters, making it quite clear whose interests they were representing. There are lots of other concerns with ICE these days, but the idea that it should have more power to “enforce” copyright and trademark law is problematic.

Enforcement against counterfeits and piracy occurring on a commercial scale.

This is another one that was in ACTA. The issue was that in ACTA, they greatly expanded the definition of what counted as “commercial scale” such that it would certainly catch a ton of individuals who may have been infringing at a much smaller scale than anyone would actually consider “commercial.”

Meaningful criminal procedures and penalties for camcording of movies.

This is another bogeyman that the MPAA has been overreacting to for over a decade. Despite the fact that the majority of infringing films these days leak out of the Hollywood studios and their partners directly, there are still some that are cammed in a theater. It’s not a huge deal, as the quality of those tend not to be that good anyway. But, the MPAA acts as if this is a total affront to America and apple pie. And, again this leads to ridiculous situations like ICE being called in by the MPAA to interrogate a guy who happened to wear his Google Glass device into a movie theater. Really. There is no need to increase penalties here and it won’t noticeably impact piracy in any way. It may lead to more felony charges for kids filming their friends at a movie theater birthday party, though.

Establish a notice-and-takedown system for copyright safe harbors for Internet service providers (ISPs) that provides protection for IP and predictability for legitimate technology enterprises who do not directly benefit from the infringement, consistent with United States law.

The “consistent with US law” part seems good — but there is a very notable absence here. The fact sheet says absolutely nothing about user rights, such as fair use. Indeed it was a big deal six years ago when the USTR for the very first time agreed to include “fair use” and other user rights in a trade agreement (even if we had some concerns about the implementation). But, prior to that, all other agreements that included US style copyright requirements on other countries only exported the enforcement side, with none of the user rights. That was a huge problem, and it appears it is back again.

During meetings with the USTR over the past few days, multiple people have asked whether or not the agreement includes fair use and other rights along with the enforcement language, and the USTR has literally ignored the question multiple times. That’s extremely worrisome.

Require full national treatment for copyright and related rights so United States creators are not deprived of rights in foreign markets that domestic creators receive.

This is a backdoor favor to the recording industry, which has spent years aggressively pushing for a performance rights bill, that would make radio and internet streaming sites pay even more to the labels. Other countries do have this, but many of those other countries then withhold that money from US artists since the US doesn’t have such a law. The fact that the US recording industry remains so successful and the envy of the world certainly suggests that such a law is not necessary to incentivize the creation of music, but nonetheless it is still a key plank that the industry has been asking for.

This sentence in the fact sheet certainly suggests that it will be used to pressure Congress into passing a law to “harmonize” US law with Mexico (and Canada if they join in).

Provide strong patent protection for innovators by enshrining patentability standards and patent office best practices to ensure that United States innovators, including small- and medium-sized businesses, are able to protect their inventions with patents.

Include strong protection for pharmaceutical and agricultural innovators.

It’s unclear what this would mean in practice, as we already have this, so I worry that there’s something nefarious snuck into the language that would prevent other fixes that Congress has opposed to limit the damage of patent trolls and bad patents.

All in all, from what the USTR has revealed, this appears to be a massive handout to a few industries: the legacy ones which have been failing to innovate lately, at the expense of the public and the industries that have continued to innovate. We’ll have the full text soon, but it’s not looking good. For all of the promises of Donald Trump as the ultimate dealmaker who would drain the swamp, this looks like an extra swampy handout to some giant industries.

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