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USTRO TPPA likely impact assessment: copyright protections and internet service providers

U.S. International Trade Commission (Commission or USITC), assesses the likely effects of the Trans-Pacific Partnership Agreement (TPP, TPP Agreement, or the agreement) on the copyright protection and on the internet services providers.

The IP chapter addresses the scope of protections for copyrights and related rights. Separate provisions address the issue of the remedies and safe harbors applicable to Internet service providers (ISPs) for infringement online (see a table below). Key new provisions would require that the parties seek to achieve an appropriate balance between liability for copyright infringement and exceptions to liability, including for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. This section also requires a copyright term of protection of life plus 70 years or 70 years from publication. While this is the standard in the United States and many other countries, it represents a substantial increase from current 50-year terms in Brunei, Japan, Malaysia, New Zealand, and Vietnam.

Key TPP commitments related to copyrights and ISPs

Subject matter

Commitments

Copyrights and related rights• Requires that parties provide certain rights such as reproduction, communication to the public, and distribution, including in electronic form.

• Requires protections for the rights of performers and producers of phonograms.

• Requires a term of protection of at least the life of the author plus 70 years, or 70 years from publication for corporate works.

• Confines copyright limitations to special cases that do not conflict with the normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the rights holder, consistent with international agreements.

Technological protection measures (TPMs) and Rights Management Information (RMI)• Requires effective remedies for tampering with the TPMs used to protect access to and use of copyrighted works, including trafficking in circumvention technologies, subject to certain exceptions.

• Requires effective remedies for the knowing removal or alteration of the RMI used to identify digital works

ISPs• Requires parties to ensure that legal remedies are available for rights holders to address online infringement.

• Requires parties to establish safe harbors that include legal incentives for ISPs to cooperate with copyright owners to deter the unauthorized storage and transmission of copyrighted materials.

• Precludes monetary relief against ISPs for copyright infringement on their systems that they do not control, initiate, or direct, subject to certain conditions.

• Provides that limitations of liability with respect to storage or linking must require ISPs to expeditiously disable access to material on their networks upon obtaining actual or red flag knowledge of infringement.

• Provides that limitations of liability cannot be conditioned on requiring ISPs to monitor services or affirmatively seek out infringing activity.

• In separate annexes (18-E and 18-F), describes requirements for ISPs in Canada and Chile.

Representatives from a wide range of industry sectors have expressed support for the IPR chapter. For example, Industry Trade Advisory Committees (ITACs) that include representatives of IPR-intensive industries support the chapter to the extent it enhances U.S. economic interests and modernizes standards for IPR protection and enforcement, particularly in countries that do not have an FTA with the United States. According to the U.S. Conference of Mayors, the IPR chapter creates strong institutional “rules of the game” that make it possible for more companies, including small and medium-sized enterprises (SMEs), to engage in exports, expand their work, and help grow the U.S. economy. High standards of IPR protection are particularly important for U.S. manufacturers, who state that international IPR theft threatens large and small companies in every sector and every state. In contrast to this general support, opposition to the IPR chapter generally focuses on protections applicable to pharmaceuticals and biologics.

Representatives of content industries (including movies, music, books, and software) and of providers of digital services endorse the IPR chapter as a whole, given the different interests of industries active in the copyright space and the complexity of the subject matter. Digital service providers state that they support new provisions that require countries to seek an appropriate balance between liability and limitations or to make exceptions to liability for copyright infringement in the online environment. Representatives of content industries state that they expect that, if effectively implemented, the overall impact of TPP’s IPR provisions on U.S. creative sectors would be “substantial and positive.”

The copyright industries consider several commitments particularly valuable. First, they state that enhanced criminal and civil protections for TPMs reportedly would assist U.S. firms in protecting their content from unauthorized access and use, while also permitting exceptions to enable non-infringing use. The Entertainment Software Association and the Motion Picture Association of America, Inc. (MPAA) state that online business models rely on TPMs to provide customers with a diversity of price points and offerings; without effective protections, these business models would not succeed. ITIF states that the TPM requirements would be particularly valuable in Brunei, Chile, Japan, Mexico, New Zealand, and Vietnam, where legal protections have been inadequate.

Content industry representatives also state that they see particular value in the extension of copyright terms to 70 years from the life of the author or publication. They state that this provision would increase copyright terms in Brunei, Canada, Japan, Malaysia, New Zealand, and Vietnam. Increased terms are expected to increase returns for the content industries in key markets; Japan, for example, is the world’s second-largest market (behind the United States) for recorded music. With regard to the obligations of ISPs, content industry representatives state that strong implementation and monitoring will be essential going forward, particularly in Canada and Chile, where online piracy and weak mechanisms for ISP liability reportedly present substantial problems.