I recently had the privilege of speaking about the Trans-Pacific Partnership (TPP) at the Fordham 24th Annual Intellectual Property Law and Policy Conference, a stellar international IP conference. The other speakers on my panel were Probir Mehta (lead U.S. negotiator of the IP portion of the TPP), Pedro Velasco Martins (lead EU negotiator of the IP portion of the TTIP), and Daren Tang (lead Singapore negotiator of the IP portion of the TPP). The title of the panel was “Examination of TPP & TTIP”. My talk focused on how the IP provisions of the TPP are being inaccurately depicted to the public.
I had previously responded to a series of blog posts and articles by Michael Geist on the TPP. In one of my prior blog posts, TPP, copyright, e-commerce and digital policy: a reply to Michael Geist, I showed that he criticized the TPP’s intellectual property and e-commerce chapters by incorrectly or misleadingly describing them, using exaggeration, and basing his criticisms on unreasonable or inapt expectations for a trade deal.
To prepare for the Fordham conference, I took a look at his latest salvo of attacks on the IP portions of the TPP in his “The Trouble with the TPP” series. Gone were some of his prior assertions that had been thoroughly debunked (such as his claim that the TPP required Canada to implement a DMCA notice and takedown process). However, his new series contains new claims about the TPP (as well as some repeated ones) that continue to be inaccurate or misleading. Some of his claims also reveal just how extreme his anti-intellectual property opinions are.
I discuss some of the claims pertaining to the IP chapter below. For the sake of brevity, I do not repeat criticisms of his opinions about the TPP set out in my prior blog post.[1]
Adding border measures without court oversight
Geist claims that Canada will have to implement new border measures that “will require Canada to create a system to allow for the detention of goods with “confusingly similar” trademarks. He warns that customs officers don’t have the training to make these assessments; that Canada opposed this during the TPP negotiations and caved to pressure from the U.S. He made these assertions saying:
Article 18.76 of the TPP establishes “special requirements related border measures” which includes allowing for applications to detain suspected confusingly similar trademark goods as well as procedures for rights holders to suspend the release of those goods. The required change is striking since Canada just overhauled its rules for border measures under pressure from the U.S. The Canadian approach did not include “confusingly similar” trademark goods, recognizing that such goods are not counterfeit and that requiring border guards (who rarely have legal training) to make exceptionally difficult judgments about whether imported goods violate the law is bad policy.”
Given those concerns, it should not come as a surprise that Canada opposed the extension to confusingly similar trademarks throughout the TPP negotiations. In fact, earlier leaked drafts show that almost half the TPP opposed the extension (Singapore, Brunei, Malaysia, Vietnam, and Canada). Yet as is the case in so many other areas, Canada ultimately caved on the issue and if we decide to ratify the TPP, will be required to change domestic law months after passing new rules specifically designed to provide enhanced border measures provisions.
Geist is wrong. He misreads the TPP and the Trade-marks Act. Geist failed to notice that the border measures he refers to that pertain to “confusingly similar” trademark goods permits detention to be made by “competent authorities”, which the TPP makes clear includes “the appropriate judicial, administrative or law enforcement authorities under a Party’s law.” (emphasis added) The detention powers required by Article 17.86 already exist in Section 53 of the Trade-marks Act and are not exercised by customs officers.[2]
Geist also claims that Canada caved to U.S. demands that Canada agree to expand the powers of customs officers to initiate border measures for goods that are in-transit (i.e., not destinated to stay within the country). However, as he concedes, footnote 123 (not 122, to which Geist mistakenly refers) provides an exemption where a Party merely makes available “information to another Party in respect of goods that it has examined without a local consignee and that are transhipped through its territory and destined for the territory of the other Party, to inform that other Party’s efforts to identify suspect goods upon arrival in its territory”. Canada also offered to the US a side letter which provides for semi-annual reporting of its compilations of such efforts.
Geist concludes that by negotiating the exemption option, “Canada is once again bullied into complying with U.S. demands on intellectual property laws and enforcement”. This is untrue. Canada actually refused to agree to the U.S. demand for border measures for in-transit goods. Leaving aside the separate question of the appropriateness of Canada’s refusing to inspect these goods for the common purpose of combatting counterfeiting, on any reasonableness basis, an obligation to provide periodic reports should be viewed as a win for Canada in this negotiation context.
Statutory damages for circumventing technological protection measures (TPMs)
The TPP permits Parties to exempt not-for-profit libraries from statutory damages for violating the anti-circumvention provisions of the TPP. Geist claims that if Canada decides to ratify the TPP, it will have to amend the Copyright Act (the “Act”) to remove for-profit libraries from a current exemption which limits statutory damages against libraries. After referring to the exemption in the TPP he says:
First, the Canadian Copyright Act includes a similar, though not identical, damages exclusion for a library, archive, museum or educational institution at Section 41.2… . However, the Canadian provision is not limited to non-profit libraries (think of a commercial digital library that charges subscription fees or an online library archive) and limits the remedies solely to an injunction… . Given the difference between the treaty and Canadian law, there may be instances where Canada excludes the possibility damages in violation of the TPP.
Geist is simply wrong. The exemption in s.41.2 which applies to a library, archive, or museum is limited to not-for-profit entities, as the definition in the Act makes clear.[3] No amendment would be required.
This is not his only error regarding remedies respecting TPMs. Geist also now claims that the TPP requires Parties to provide either statutory damages or additional damages as a remedy for circumventing a TPM, and that Canada does not provide additional damages for such violations. Accordingly, he says Canada will need to amend the Act to add statutory damages to comply with the TPP.
Geist is wrong again. He either misinterprets the TPP or doesn’t understand the remedies available under the Act for copyright infringement. The TPP makes clear that the term “additional damages” “may include exemplary or punitive damages”.[4] Both exemplary and punitive damages are available for infringement under the Act and would be available as a remedy for violation of the anti-circumvention provisions.[5]
No requirement to implement the Marrakesh Treaties
Geist claims that the TPP is unbalanced, favoring rights over exceptions. As an example, he asserts that the TPP contains no obligation for Parties to implement the Marrakesh Treaty. He says:
For example, consider the international IP treaty obligations in the TPP. Article 18.7 identifies nine international IP treaties and protocols that are all requirements for TPP members (Patent Cooperation Treaty, Paris Convention, Berne Convention, Madrid Protocol, Budapest Treaty, Singapore Treaty, UPOV 1991, WCT, and WPPT). What about the Marrakesh Treaty to facilitate access to published works for the blind and visually impaired? It is relegated to a footnote with no obligation to implement.
He is wrong. He misinterprets the TPP. Art.18.66 contains an explicit obligation to endeavor to facilitate access “to published works for persons who are blind, visually impaired or otherwise print disabled”, a clear reference to the Marrakesh Treaty. (Canada just tabled Bill C-11 intended to bring Canada into compliance with that treaty.) In another blog post, he interprets an “endeavour” obligation to be a “best efforts” obligation.
Geist also inaccurately describes the footnote in the treaty to which he refers. Rather than being a footnote about implementing Marrakesh, it recognizes that under the TPP the parties can go beyond Marrakesh to make works available to persons who are blind or visually impaired:
As recognised by the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled, done at Marrakesh, June 27, 2013 (Marrakesh Treaty). The Parties recognise that some Parties facilitate the availability of works in accessible formats for beneficiaries beyond the requirements of the Marrakesh Treaty. (emphasis added)
Geist also complains that the objectives set out in the IP chapter of the TPP do not maintain “a balance between rights holders and users on all IP provisions”. He asserts this is because some objectives were removed from the leaked draft that was still being negotiated (such as “the legitimate interests of users”) though, as he points out, “there are references to some of these issues elsewhere within the text”.
Many would dispute Geist’s claims as to what is the proper balance in copyright and whether his views about the balance should have been reflected in the treaty. However, he is wrong to suggest that the objectives and agreed understanding about the IP chapter set out in the treaty are not balanced.
It is true some of the objectives were removed as the text was being negotiated and finalized, including to remove duplication between the objectives at the beginning of the chapter and those that deal with specific subject matter. But, as he fails to acknowledge, the final text in Article 18.2 (which he refers to) contains explicit references to “balance”, including to the mutual advantages of producers and users, social and economic welfare and a balance of rights and obligations.
The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.
He also fails to refer to Article 18.4 titled “Understandings in Respect of this Chapter” which expressly refers to “taking into account the interests of relevant stakeholders, including right holders, service providers, users and the public”.
Restrictions on creating TPM exemptions
The Act gives the Governor in Council broad powers to issue regulations to create new exemptions from the anti-circumvention provisions of the Act. This includes a right provided by s.41.21(2) to enact a regulation requiring the owner of the copyright in a work protected by a TPM to provide access to the work.
Geist claims that this may not be permitted by Art. 18.68(4) of the TPP, which permits parties to provide limitations or exemptions in a broad variety of circumstances.[6] He argues that the right to enact this form of regulation in the Act is
not a limitation or exception as it does not envision the possibility of permitting a user to circumvent a digital lock. Instead, it lays the groundwork to create a requirement to unlock content. The Trouble with the TPP is that its limitation and exception may not permit requiring this form of unlocking requirement.
It is not clear why Geist has any concerns here. He points to no case in which such a regulation has been required in Canada. In any event, Geist is wrong and misinterprets the TPP. The TPP does not create any prohibition on a law that requires providing access to a work protected by a TPM. The prohibitions fall into two broad classes: circumventing TPMs and trafficking in circumvention devices and services. Thus, enacting a regulation that requires providing access to a TPM protected work is not prohibited by the TPP. In fact, the owner of the copyright in the work would likely not have to circumvent any TPMs to provide a TPM-free copy if required to do so. However, even if the only copies of the work were protected by a TPM (which would likely not be the case), the person would be required by regulation to circumvent a TPM to comply with the regulation. The TPP permits Parties to enact exemptions or limitations that permit circumventing TPMs. This would include those reasonably required to provide access to a work, free from a TPM protection.
Locks in US notice and takedown system
Geist claims the TPP “lock(s)-in the [U.S.] DMCA notice-and-takedown system within the TPP”. Leaving aside the question as to whether that is a bad thing, he is wrong to claim the TPP requires it. Article. 18.62 of the TPP provides for a basic notice and take-down system and, like the notice and take-down regimes of many of Canada’s trading partners, does not include some of the prescriptive requirements of the DMCA.
Geist often complains that the TPP is too prescriptive when it comes to the IP chapter. Yet, while arguing that the TPP locks in the DMCA notice and take-down process, he criticizes the TPP because it does not hard code DMCA-specific processes and formalities into the TPP – in other words he criticizes the TPP for mandating the DMCA notice and take-down process and for not including several features of the DMCA process.
The TPP, in fact, gives parties flexibility in how they can meet the notice and take-down conditions, such as by not requiring the Parties to provide a system for counter-notices (although, like Article 5.5 of CETA, it does permit the Parties to do so and is a useful process) and not requiring more than basic information that must be in notices.
Geist asserts that by not mandating some of the processes required by the DMCA, the TPP is not as protective of speech as the DMCA. He quotes from an article by Prof. Annemarie Bridy, who compares the TPP notice and take-down and DMCA notice and take-down processes. Yet he doesn’t mention one of her key points, namely that “the TPP is potentially more user-friendly and more speech-protective than the DMCA,” as it does not contain its requirement that exemptions from infringements be conditioned on the service provider’s adoption and implementation of a policy to terminate the accounts repeat infringers. While many would disagree with prof. Bridy’s characterization of this condition as impinging on free speech and would contend instead it is a reasonable condition in view of the safe harbour protections given to service providers, her comparison shows that the TPP does not reproduce the DMCA notice and take-down regime into the TPP, as Geist claims.
Geist’s criticisms of the notice and take-down section of the TPP highlights the striking inconsistency in his standards for evaluating different TPP provisions. Where he opposes a particular part of the treaty, as he does for notice and take-down, he criticizes the inclusion of prescriptive measures (although, as pointed out, the TPP doesn’t actually do that). However, where the TPP does not include prescriptive measures he favours, he claims that is a problem.
For example, he claims that the TPP has weaker anti-spam provisions than those in Canada. Leaving aside that the TPP is not an anti-spam treaty and the impracticalities of even trying to reach international agreement on the nuances of a law to combat spam, the Canadian law (CASL) is the worst law of its kind anywhere and would hardly serve as a model any country would want to emulate.
Another example is the TPP provision that addresses minimum standards for privacy, which he claims should have been more prescriptive. Though he acknowledges that the TPP is a trade treaty and not a privacy treaty, he completely ignores the realpolitik of even attempting to force countries including the U.S. to re-write their privacy laws as part of the trade treaty and the challenges attendant with harmonizing privacy laws across all Parties.
The same inconsistency is apparent in his criticism of the net neutrality rules, which he claims are too weak and his claim that the TPP should have contained an outright ban on laws that permit judicial orders to unlock encryption on cell phones. He uses the dispute between Apple and the FBI as an example of the latter, completely oblivious to the difficult public policy issues which have not yet even been resolved in the U.S., let alone in all TPP countries.
Changes to the TPM provisions
Geist claims “the TPP will require Canada to make further changes to its “digital lock rules”. Yet, the TPP requires no changes to the anti-circumvention (TPM) provisions of the Act. Geist makes a references to a change in the protection of rights management information (RMI), but gives no examples of any change required to the existing TPM provisions.[7]
Changes to the rights management information (RMI) provisions
Geist claims that “Article 18.69 of the TPP requires Canada to add criminal liability to the list of potential remedies.” Geist exaggerates the scope of any potentially required amendment.
The TPP’s criminal provisions relating to RMI only require criminal sanctions where a “person is found to have engaged willfully [requiring knowledge] and for the purposes of commercial advantage or financial gain [or commercial purposes]”. In short, the provision requires sanctions against digital pirates who carry on businesses directed at content theft by removing information that identifies the owner of the copyright in the good, a sanction that as a matter of public policy is hard to argue with.
Geist, in his latest series of blog posts goes further now expressly asserting that this potential amendment has “troubling impact” on the agreement and Canadian law. He does not explain why he believes that criminal sanctions against those who willfully facilitate content theft are inappropriate. His position on this issue is itself troubling, illustrating just how extreme his anti-intellectual property views are.
Protection of trade secrets
Geist takes issue with the trade secret provisions in the TPP. His first criticism is stated as follows:
Trade secrets represent an ill-fitting part of intellectual property law. While rules for patents and copyright seek to strike a balance between rights and access (patents requiring disclosure of the invention and copyright balancing creator and user rights), trade secrets do not involve any disclosure. In fact, trade secrets must remain secret to constitute a trade secret. (emphasis added)
Geist doesn’t explain why trade secrets are “an ill-fitting part of intellectual property law”. His statement appears to be a claim that trade secrets should not be protected as they involve no requirement for public disclosure of information, or that they should not be protected as an intellectual property right. A clear inference from his statement, however, is that providing legal protection for trade secrets is somehow problematic.
Geist clearly misunderstands the need, and the basis, for the protection of trade secrets. Trade secrecy is a legal regime that protects relationships of trust.[8] The common law has protected confidential information such as trade secrets for hundreds of years. It is an essential part of the law that protects information that is disclosed in confidence from being used for a purpose other than that for which it was disclosed to the detriment of the disclosing party. It also protects trade secrets against misappropriation, a right that has increased in importance with the proliferation of cyber-crime. At its core, the law that protects trade secrets encourages parties to disclose confidential information to others and prevents the recipient from dealing with the information in an unconscientious manner.
In recognition of the challenges of addressing misappropriation of trade secrets, both the European Union and the United States are in the process of enhancing their laws to give trade secrets more robust protection. In December 2015, the European Parliament and the Council reached a preliminary agreement on the text of a new Directive. The agreement will need to be formalised by the European Parliament and the Council. The U.S. Senate recently passed a Bill, The Defend Trade Secrets Act of 2016, to provide federal protection for trade secrets.
The EU[9] and U.S. [10] reports leading up to the proposed EU Directive and to the recently passed U.S. Senate bill explain how important trade secret protection is for business competitiveness as well as for research and development and innovative performance. The EC report summarizes the importance of trade secret protection as follows:
Businesses and non-commercial research institutions invest in acquiring, developing and applying know-how and information, which is the currency of the knowledge economy and gives a competitive advantage. This investment in generating and applying intellectual capital determines their competitiveness and innovative performance in the market and therefore their returns to investment, which is the underlying motivation for business research and development… By protecting such a wide range of know-how and commercial information, whether as a complement or as an alternative to intellectual property rights, trade secrets allow the creator to derive profit from his/her creation and innovations and therefore are particularly important for business competitiveness as well as for research and development and innovative performance…
Collaborative research, including cross-border cooperation, is particularly important to increase the levels of business research and development within the internal market. The dissemination of knowledge and information should be considered essential for the purpose of ensuring dynamic, positive and equal business development opportunities, especially for SMEs…Trade secrets have an important role in protecting the exchange of knowledge between businesses, including, in particular, SMEs, and research institutions within and across the borders of the internal market, in the context of research and development and innovation. Trade secrets are amongst the most used form of protection of intellectual creation and innovative know-how by businesses, yet they are at the same time the least protected by the existing Union legal framework against their unlawful acquisition, use or disclosure by third parties.
The report also describes the increasing threats and challenges to protecting trade secrets:
Innovative businesses are increasingly exposed to dishonest practices aiming at misappropriating trade secrets, such as theft, unauthorised copying, economic espionage, breach of confidentiality requirements, whether from within or from outside of the Union. Recent developments, such as globalisation, increased outsourcing, longer supply chains, increased use of information and communication technology contribute to increasing the risk of those practices. The unlawful acquisition, use or disclosure of a trade secret compromises the legitimate trade secret holder’s ability to obtain first mover returns using the outputs of its innovative efforts.
Without effective and comparable legal means for defending trade secrets across the Union, incentives to engage in innovative cross-border activity within the internal market are undermined and trade secrets are unable to fulfil their potential as drivers of economic growth and jobs. Thus, innovation and creativity are discouraged and investment diminishes, affecting the smooth functioning of the internal market and undermining its growth enhancing potential.
Geist’s claim that protection for trade secrets is an “ill-fitting part of intellectual property law” (and the implicit suggestion that trade secrets should not be subject to protection) because such protection is for information that is secret – the universally understood basis for protection of trade secrets – is a radical departure from core precepts about what is a legitimate and necessary framework to promote honesty in business and to maintain a competitive and innovative economy.
Geist also criticizes the measures in the TPP that requires parties in very limited circumstances to add a criminal sanction for trade secret violations. He claims the “TPP dramatically changes trade secret law by also requiring criminal penalties, raising the spectre of government prosecutions for violations.” He notes that the TPP creates “some flexibility for TPP countries,” but never quotes from the TPP provision or explains the full breadth of the flexibility or the type of conduct that the criminal provisions would cover.
As I explained in a prior blog post, TPP and trade secrets: a wonderful idea, the actual requirements of Art. 18.78 of the treaty would enable parties to limit criminal liability quite significantly. For example, Canada could comply by having a criminal sanction that solely targets computer hacking to steal trade secrets that is detrimental to Canada’s economic interests, international relations, or Canada’s defense or national security.
Geist claims there is a concern that the U.S. may ask Canada to go further. But, under the treaty, the U.S. has no right to do so.
Canadians from all sectors know, as the recent EU and U.S. reports explain, that cyber-crime is a significant threat to individuals, businesses, and governments. Geist’s suggestion that trade secrets should not be subject to trade secret protection and his opposition to limited criminal sanctions against cyber-criminals, including state sponsored criminals that would threaten Canada’s economic interests, international relations, defense or national security, is very troubling. It illustrates, again, just how extreme his anti-intellectual property opinions are.
Term Extension
Geist continues to criticize the TPP’s requirement to extend the term of copyright from life plus 50 to life plus 70 years. His most recent post does not even attempt to address the economic and other arguments summarized in my prior blog post that would justify a term extension.
He continues to rely on a questionable New Zealand estimate for the claim that extending the copyright term would costs Canadians millions. In testimony recently to a Senate committee studying the TPP, he stated:
The Government of New Zealand conducted a study on what its term extension will cost, estimating that the extension alone will cost $55 million New Zealand per year. As an economy that is nine times the size, that estimate suggests that term extension alone will run costs… in Canada into the hundreds of millions of dollars.
Although in his most recent blog post he now makes a reference to an Industry Canada study conducted by Université de Montréal economics Professor Abraham Hollander, he makes no mention of one of its most relevant findings, namely its conclusion that the user costs of a 20 year term extension “may increase slightly in response to a higher cost of locating right holders and negotiating rights to works whose protection term has been extended”[11]. He also didn’t mention it to the Senate committee studying the TPP, where he made his exaggerated claim about the economic costs of a term extension.
Despite the continual reliance on the New Zealand estimate, Geist never explained why he believes the estimate is reliable or applicable to Canada. In fact, the accuracy of New Zealand estimate has been seriously undermined by a study conducted by renowned economist, Professor. George Barker. His paper, Copyright Term Extension and the Effect on the NZ Economy, concluded that the New Zealand estimate “is clearly incorrect, and indeed seriously over-estimates costs, when in fact it is likely the term extension will have a net benefit for the New Zealand economy”.[12]
Concluding remarks
Michael Geist’s commentary on the TPP continues to show that many of his claims are incorrect, misleading, or exaggerated. It also illustrates how extreme some of his anti-intellectual opinions are, something that former Industry Minister James Moore referred to during the Canadian copyright reform process.[13] His most recent series “The Trouble with the TPP” does not appear to have been written in haste. Accordingly, one does have to ask why so many of his assertions could be just so wrong or unreliable or grasps at straws.
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[1] This article focuses only on the blog posts referred to here. It does not address his other blogs, including those dealing with patent law or the e-commerce Chapter, which are also problematic.
[2] Section 53 states: “Where a court is satisfied, on application of any interested person, that any registered trade-mark or any trade-name has been applied to any goods that have been imported into Canada or are about to be distributed in Canada in such a manner that the distribution of the goods would be contrary to this Act…, the court may make an order for the interim custody of the goods, pending a final determination of the legality of their importation or distribution in an action commenced within such time as is prescribed by the order.”
[3] “library, archive or museum” is defined to mean:
(a) an institution, whether or not incorporated, that is not established or conducted for profit or that does not form a part of, or is not administered or directly or indirectly controlled by, a body that is established or conducted for profit, in which is held and maintained a collection of documents and other materials that is open to the public or to researchers, or
(b) any other non-profit institution prescribed by regulation;
[emphasis added]
[4] See footnote 112 to Art 18.76(6).
[5] See section 4.1.(2), which sets out the available remedies for violating the anti-circumvention provisions in the Act: “(2) The owner of the copyright in a work, a performer’s performance fixed in a sound recording or a sound recording in respect of which paragraph (1)(a) has been contravened is, subject to this Act and any regulations made under section 41.21, entitled to all remedies — by way of injunction, damages, accounts, delivery up and otherwise — that are or may be conferred by law for the infringement of copyright against the person who contravened that paragraph.” Both exemplary and punitive damages are available as remedies for copyright infringement. Pro Arts, Inc. v. Campus Crafts Holdings Ltd., 1980 CanLII 1636 (ON SC), Louis Vuitton Malletier S.A. v. 486353 B.C. Ltd., 2008 BCSC 799 (CanLII), Microsoft Corporation v. PC Village Co. Ltd., 2009 FC 401 (CanLII), Slumber-Magic Adjustable Bed Co. Ltd. v. Sleep-King Adjustable Bed Co. Ltd., 1984 CanLII 54 (BC SC).
[6] Exemptions or limitations can be provided “in order to enable non-infringing uses if there is an actual or likely adverse impact of those measures on those non-infringing uses, as determined through a legislative, regulatory, or administrative process in accordance with the Party’s law, giving due consideration to evidence when presented in that process, including with respect to whether appropriate and effective measures have been taken by rights holders to enable the beneficiaries to enjoy the limitations and exceptions to copyright and related rights under that Party’s law”.
[7] As I pointed out in my prior blog post, TPP, copyright, e-commerce and digital policy: a reply to Michael Geist, “the term “digital locks” is widely understood to refer to technological protection measures or TPMs which are used by content creators and publishers on physical media such as CDs, DVDs, e-books and other devices and in service offerings such as music and video streaming services. Further, Geist, has consistently referred to “digital locks” as being synonymous with TPMs and the digital lock rules as being legislative measures prohibiting acts of circumvention or providing tools or services to circumvent TPMs.” See endnote 8 to that blog post.
[8] Trade Secrets: the other IP right, WIPO Magazine, June 2013.
[9] See Report of the European Parliament Committee on Legal Affairs on Trade Secrets, 17/12/2015.
[10] The Senate Report recommending the Bill describes the challenges as follows:
Trade secrets are a form of intellectual property that allow for the legal protection of commercially valuable, proprietary information and make up an increasingly important part of American companies’ intellectual property portfolios. Comprising all types of financial, scientific, technical, engineering, or other forms of information, trade secrets are an integral part of the operation, competitive advantage, and financial success of many U.S.-based companies.
The growing importance of trade secrets as a form of intellectual property makes their theft a particularly economically damaging crime. In a recent report, the Commission on the Theft of American Intellectual Property estimated that annual losses to the American economy caused by trade secret theft are over $300 billion, comparable to the current annual level of U.S. exports to Asia. This same report found that trade secret theft has led to the loss of 2.1 million American jobs each year and that the illegal theft of intellectual property is undermining the means and incentive for entrepreneurs to innovate. This in turn is slowing the development of new inventions and industries that could raise the prosperity and quality of life for everyone. In another study, PricewaterhouseCoopers LLP and the Center for Responsible Enterprise and Trade found that the annual cost of trade secret theft may be as high as $480 billion.
Protecting trade secrets has become increasingly difficult given ever-evolving technological advancements. Thieves are using increasingly sophisticated methods to steal trade secrets and the growing use of technology and cyberspace has made trade secret theft detection particularly difficult. The growing problem of trade secret theft has been acknowledged by industry, Congress, and the administration — with Attorney General Eric Holder stating during a White House conference “There are only two categories of companies affected by trade-secret theft: those that know they’ve been compromised and those that don’t know yet.”
[11] Professor Hollander did not attempt to quantify the economic costs of a term extension. His study was a qualitative one. He states the object of his study as follows: “While the principles underlying the optimal blend of scope and duration of protection are well understood, a lack of data makes it impossible to determine what that combination is. For that reason, this report makes no claims in regard to the optimality of a particular protection term. It provides only a qualitative assessment of likely effects of term extension on creative effort, prices, dissemination of works, and the external balance of royalty flows.”
[12] The paper was originally submitted to the New Zealand committee studying the TPP. See Dr. George Barker 2016 “Copyright Term Extension and the Effect on the NZ Economy,” Submission to the New Zealand House of Representatives Select Committee on Foreign Affairs, Defence and Trade, March 17, 2016; also his slides presented to the committee. For a summary of the study, see Hugh Stephens, The TPP and Copyright Term Extension: What is the true cost to Canada?
[13] See Minister Moore’s Speech on C-32, https://barrysookman.com/2010/06/23/minister-moore%E2%80%99s-speech-on-c-32/.
