Friday, February 16, 2007

IIPA "recommendations" regarding Compulsory Licenses

by Manon Ress

February 16, 2007

As usual, at this time of the year, it's icy in Washington, DC and Eric H. Smith of the International Intellectual Property Alliance (IIPA) has sent his response to the Request for Written Submissions in the Federal Register regarding the USTR 301 list.

In case you do not know, the “Special 301” provisions of the Trade Act of 1974 require the US Trade representative "to identify foreign countries that deny adequate and effective protection of intellectual property rights or fair and equitable market access for U.S. persons that rely on intellectual property protection." The Special 301 was amended in the 1994 Uruguay Round Agreements Act to clarify that a country can be found to deny adequate and effective intellectual property protection even if it is in compliance with its obligations under the TRIPS Agreement.

Every year, the IIPA submits a long report to USTR about the types, levels, and costs of piracy, an evaluation of enforcement practices, and the status of copyright law reform in separate country reports. They also recommend where these countries should be ranked on the various Special 301 watch lists.

The IIPA submission makes it on the front page in the countries that expect the U.S. will escalate trade pressure. This week, Michael Geist wrote an excellent blog about Canada’s ranking. As he demonstrates, Canada is in “good company” since “the majority of the world's biggest economies face criticism”: Japan, Sweden, New Zealand, Switzerland, South Africa, Hong Kong, South Korea, Israel, Mexico, Italy, Brazil, Greece, Spain and India. They are all in trouble for many different reasons such as term limits, TPM not strong enough, proposals for exceptions for educational purposes, considering having a US-like fair use provision, not placing enough liability on their ISPs etc.

"This IIPA report is always the same, said one of my copyright colleague, so why do you keep reading it?" Hum, good question. However, I think it is interesting to see year after year how the IIPA claims more and more piracy and thus the need for better enforcement... while at the same time requesting an upward push of the copyright norms... putting countries in situations where the little progress on enforcement they could make are always a failure. If you keep pushing the norms AND the enforcement UP and it does not work maybe it's worth trying something different? Not for the IIPA obviously.

In their cover letter, the industries "are extremely grateful for the U.S. government’s efforts in promoting copyright reform and effective enforcement" but as their report demonstrates in the country surveys "organized commercial piracy, whether digital or analog, tangible or over the Internet, combined with the failure of foreign governments to enforce their existing copyright and related laws, threatens to outpace the fight to combat it." So, the IIPA asks for "a significantly heightened effort" by the US government to put pressure on other governments. The "new" Special 301 process "must specifically target enforcement in a very direct and clear way." The IIPA explains that the "the challenge is two-tiered" and governments need to adopt stronger laws and those laws must be vigorously enforced.

Here's some description of the “piracy” in question and where it is taking place according to the IIPA:
End-user piracy is of course not limited to software but now affects all copyright sectors. For example, in government, school and university facilities, photocopy machines are routinely used for commercial-scale book piracy. Where the government is directly involved or directly responsible for the facilities and implements used, policies and decrees must be promulgated and strictly enforced to ensure that these facilities are not used for infringing conduct.
This photocopying takes place in a variety of venues—commercial photocopy shops located on the perimeters of university campuses and in popular shopping malls; on-campus copy facilities located in academic buildings, libraries and student unions; and wholly illicit operations contained in residential areas or other underground establishments.
Publishers also “suffer from unauthorized photocopying for commercial research purposes in both for-profit and non-profit institutions” and they “continue to suffer from unauthorized translations of books and journals of all kinds and genres”.

Here are some examples of their recommendations. They include the need to adopt strong anti circumvention measures, narrow limitations and exceptions for education and research, extend term of protections, eliminate government use and completely delete compulsory licenses provisions. You have to admit they are thorough since they even mention “ideas of possible future compulsory license” as in Sweden:
In the fall of 2006, Swedish politicians from the ruling party and main opposition party openly supported the idea of a compulsory license to address unauthorized internet file sharing. […] No concrete legislative proposals have been advanced to date. The copyright industries are deeply concerned about the potential of any compulsory license initiative, and are monitoring the situation closely.
For Indonesia, they go to the point:
The key improvements recommended include but are not limited to the following:
• Delete the compulsory translation and reproduction license which does not meet the requirements of the Berne Convention (and therefore violates TRIPS Article 9).

• Delete Article 18(1) which appears to amount to a statutory license for “publication of a work” by the Indonesian government “through a radio, television broadcast and/or other means,” which goes beyond what is permitted by TRIPS and the Berne Convention.
For Kuwait:
We believe the Kuwaitis have attempted here an approximation of a limitation which exists in U.S. law, namely, Section 117(a)(1), which provides that it is not an infringement of copyright for the owner of a computer program to copy or adapt a computer program if “such a new copy or adaptation is created as an essential step in the utilization of the computer program in conjunction with a machine and that it is used in no other manner.” The purpose of the Kuwaiti provision seems to be the same as 117(a)(1), namely, to ensure that someone who is the lawful owner of a computer program may use it on a particular machine, and to allow adaptation or copying when such adaptation or copying is an “essential step” to use the program on that machine. The Kuwaiti provision, however, goes well beyond what is required to use the program on a particular machine, exempting such activities as “deriv[ing]” or “upgrad[ing]” the program or even “translat[ing]” the program “into another computer language.” Such activities take the Kuwaiti provision outside the scope of what the three-step test as enumerated in the FTA would allow.
The report goes article by article:
• Article 33 provides what we believe may be a faulty translation of the Berne Article 11bis(3) "ephemeral recordings” exception. This should be clarified and confirmed. The provision appears to be broader than that permitted by the Berne Convention since it does not seem to include the two conditions prescribed in Berne Article 11bis(3) for the archival exception: neither of "official archives," nor of "exceptional documentary character."

• The Article 34 and 35 compulsory licenses are Berne- and TRIPS-incompatible, and Article 34 also fails to satisfy the Berne Appendix with regard to reproductions and translations.

• Article 41 would allow, without authorization or payment to the relevant right holders, the “copy[ing] for the purposes of scientific research” any performance, sound recording, or broadcast. This blanket exemption is overly broad, goes well beyond what would be permissible under the Berne three-step test.

IIPA on exceptions and limitations in copyright law in Lebanon:
Article 25, even as implemented by decision No. 16/2002 (July 2002), still does not meet the standards/requirements of the Berne Convention or the TRIPS Agreement. While many modern copyright laws include specific exceptions for the copying of computer programs under narrowly defined circumstances and/or exceptions allowing the copying of certain kinds of works for “personal use” (but almost never computer programs, except for “back-up” purposes), Article 25 sweeps far more broadly than comparable provisions of either kind, to the detriment of copyright owners. The implementing decision addresses some areas of concern raised by IIPA in the past, but not the chief area, which is that the exception is essentially a free compulsory license for students to make multiple copies of a computer program. Such an exception violates the requirements of Berne and TRIPS since it “conflicts with a normal exploitation of the work” (software aimed at the educational market) and it “unreasonably prejudices the legitimate interests of right holders” (eliminating completely the educational market for software).
For Pakistan, the IIPA has a “simple” recommendation:
Fix Royalty-Free Book Compulsory License That Violates TRIPS: The government of Pakistan amended its copyright ordinance in 2000 to include Section 36(3) that allows a royalty-free compulsory license of books. This amendment was passed without any opportunity for publishers to comment. This provision threatens to further diminish a market already almost completely overrun by piracy. This royalty-free compulsory license violates the Berne Convention and TRIPS and the government of Pakistan must repeal it.
For Egypt:
Broad Compulsory License. Article 170 of the IP Code contains a compulsory license for copying and translating works. It is not limited to literary works in printed form, and apparently extends to computer programs and audiovisual works. Such a compulsory license is contrary to international law and would be devastating to the copyright industries if the Egyptian government allows for such practices. It must be fixed or deleted altogether.17 The 2005 Implementing Decree (Articles 4 and 5) failed to resolve this issue and leaves in place a Berne- and TRIPS-incompatible compulsory license.
Compulsory License Provision for Broadcasts. Article 169 permits broadcasting organizations to use works without seeking authorization. This compulsory license should be deleted.

17 The Egyptian government must confirm that, if it intended to avail itself of Articles II and III of the Berne Appendix, it has kept up its renewals of its declaration, under Article I of the Berne Appendix. Otherwise, Egypt is no longer entitled to avail itself of these provisions.
For Vietnam:
Article 7(2) gives the State unchecked power to decide when a right holder may exercise rights and under what circumstances, without taking into account the balance already created through exceptions to protection, e.g., in Article 25. Leaving Article 7(2) intact creates inconsistencies with the Berne Convention, the TRIPS Agreement and the WIPO Treaties. The second half of Article 7(3) violates Vietnam’s current and future obligations by permitting the State to restrict the ability of a right holder to exercise lawful rights, and could even result in an open-ended compulsory licensing to use copyright materials seemingly without limitation or reason. The provision should be deleted. The first clause of Article 8 also runs afoul of Vietnam’s bilateral commitments and would be Berne and TRIPS-incompatible since it establishes impermissible content-based restrictions of protection under copyright. That clause should be deleted. 12 Article 4 of the draft implementing regulations we have reviewed does not do anything to allay the concern raised.
The Philippines is a good example of how after changing the norm, having repealed a compulsory license for textbooks, the situation got worst:
Book piracy in the Philippines remains a major problem, increasingly
decimating the market for foreign and domestic book publishers alike. Illegal commercial-scale photocopying of entire books plagues academic publishers. Pirate reprints are common and still being sold under the excuse of a long-ago-repealed compulsory license. Increasingly, “burned” CD-Rs are sold with 100-200 titles on board, and scanned files available for download onto PDAs in hospitals, educational institutions, and even shopping malls are becoming quite common. […]
Illegal photocopying most often takes place in commercial establishments surrounding universities or in street stalls concentrated on a single street or small group of streets.5 Photocopy shops also operate on campuses, in hospitals, and in medical and nursing schools, often in highly organized fashion, selling door to door to doctors’ offices and medical establishments. These shops avoid holding stockpiles of infringing goods by copying on a “print to order” basis, complicating investigations and enforcement actions. It is disturbing that one set
of photocopiers is in operation near the Philippine Regulations Commission, the government institution that regulates professional businesses in the country.
In the past, pirate booksellers relied on the “excuse” that their books were produced pursuant to Presidential Decree 1203, albeit that PD was repealed more than nine years ago. The National Book Development Board (NBDB) published a resolution in January 2006, declaring that “[t]he commercial reprinting of books without the knowledge of their copyright owners is definitely illegal under R.A. 8295.”8 This declaration is a good start, but must be reinforced by action. Prior to the issuance of this statement, the IPO had gathered the distributors of books purporting to be reproduced or left over under Presidential Decree 1203, asking them to remove the illegal stocks from their stores. While this no doubt resulted in some improvement, the industry remains concerned that the illegal stock has merely moved from the front display area to the back room.
For Switzerland, IIPA recommends that:
an out-of-cycle-review be conducted this year to evaluate the efforts of the Swiss Government to amend its copyright law, and specifically: the removal of proposed sweeping exemptions and compulsory licenses for broadcasting organizations for online use of content; the removal of right to circumvent technological protection measures for use of exceptions; and the introduction of legal source requirement
For Nigeria:
Copyright protection in Nigeria is governed by the Copyright Act (Cap 68 Laws of the Federation of Nigeria, 1990) as amended. The law, while by no means perfect, provides a solid basis for enforcing copyright and combating piracy. Unfortunately, there is apparently a new broadcast compulsory license being proposed that would curtail the ability of U.S. channels to freely contract to show sporting events.9 This should not be imposed in Nigeria.
You get the idea, right? For the IIPA, compulsory licensing provisions should all disappear in Nigeria, Vietnam, Indonesia, Pakistan, Lebanon etc. For now, I hope the US is relatively safe and can keep its many compulsory licenses. In the Copyright Act (title 17 of the United States Code), we have Statutory license for secondary transmissions by cable systems (section 111), for making ephemeral recordings (section 112), for the public performance of sound recordings by means of a digital audio transmission (section 114), for secondary transmissions by satellite carriers for private home viewing (section 119), for secondary transmissions by satellite carriers for local retransmissions (section 122), for distribution of digital audio recording devices and media (chapter 10) and Compulsory license for making and distributing phonorecords (section 115) and for the use of certain works in connection with non-commercial broadcasting (section 118).

Let's imagine that IIPA gets all that it wants. Would higher norms lead to higher enforcement? Would no compulsory licenses lead to “better” enforcement?

A better approach is badly needed. I cannot wait to see the USTR 301 list. It usually comes in the spring.