Who's down with TPP?

Not every last lady. TPP is strangely becoming a key debate in the US presidential campaign, with Democratic candidate hopeful Hillary Clinton turning her stance on TPP. Considered naughty by nature by some, a suspected near final draft of the Trans Pacific Partnership agreement, known as TPP, was released on Wikileaks last week.

TTP is causing a lot of consternation.  Critics say the agreement benefits developed countries at the cost of developing countries.  They also argue that negotiations have been suspiciously secret. Proponents argue that TPP will reduces barriers to trade, support economic and job growth, improve IP protection and, 'create new 21st century trade rules.'  

Thor, Cool Cat Patriot
by Don Graham
It will indeed establish new trade rules.  The agreement exports a number of American institutions and cultural aspects of IP.  This should lead to harmonisation of laws, which can improve business prospects as it reduces uncertainty.  However, harmonisation often benefits existing, wealthier rights holders (typically in developed nations) and at the expense of developing nations.

With the promise of increased trade at the end of the agreement, the IP provisions could be considered the price of admission for developing countries.  The New Zealand government has put it rather bluntly, estimating an additional $2.7 billion in additional GDP by 2030, however,
"The only significant cost comes from extending New Zealand’s copyright period from 50 to 70 years. This cost – in terms of foregone savings on books, films, music and other works – increases gradually over 20 years and averages around $55 million a year over the very long term. "
Cats VS Dogs by Mythee
This economic case for the extension of copyright term to a minimum of life plus 70 years is poor.  There is little evidence that extending copyright term incentivises innovation.  There may be a tipping point in copyright, where a shorter term could dissuade innovation, but death plus 70 years is far from this point.  It is hard to imagine starving artists, creative geniuses and dead creators increasing their production because their heirs might receive more years of copyright protection.

While the economic arguments are against term extension, there is evidence that public domain content spurs innovation and new content. Under the agreement, "The Parties recognise the importance of a rich and accessible public" and recognise the importance of good registers.  Despite this, the agreement's copyright terms will reduce the public domain.

There are also provisions for making the circumvention of DRM illegal (and everyone knows how much consumers looooove DRM) and vague liability for ISPs.  Not in the leaked draft are the different copyright terms for corporations, which were discussed earlier, presumably as life-support for Mickey Mouse.

Another interesting provision is that of damages in infringement cases.  For trademarks and copyright, Article QQ.H.4, 9 damages, "shall be set out in an amount that would be sufficient to compensate the right holder for the harm caused by the infringement, and with a view to deterring future infringement." The sky's the limit.

In more money matters, the wording may also introduce the right for rights holders to pursue compensation from governments for lost profits stemming from non-compliant regulations.  This is already the case elsewhere.  In the UK, companies may sue the UK government for damages stemming from non-compliance with EU regulations, but the UK-EU relationship is entirely different from this trade partnership.  Combine that with the litigious American culture and who knows...

Gangsta Kat by Petful
Counterpunch, <who, Merpel notes, unfortunately misspell the acronym>, notes that pro rights holders arguments are binding, whereas those supporting the public domain are not. They also point out that TPP also has trade secret provisions which criminalise the theft of trade secrets via computers, but without protection for whistleblowers.

There are some silver linings.  This more positive article by Jeffery Frankel, a specialist in capital formation and economic growth, notes that the agreement provides environmental provisions and promotes better labour conditions. Given how heated and polarising the debate has become, there may be some cause for both sides to revisit.

Article QQ.H.3, 2 on enforcement practices makes the data geek in me happy, "Each Party recognises the importance of collecting and analysing statistical data and other relevant information concerning intellectual property rights infringements..." In addition, there are a host of other considerations I've not covered: TK, exhaustion of rights, bits and bobs on trade marks, cybersquatting, GIs, a lot of issues related to patents, criminalisation and others.  

All of this makes for unique foreign American policy. So, hip hop hooray for TTP.
Who's down with TPP? Who's down with TPP? Reviewed by Nicola Searle on Thursday, October 15, 2015 Rating: 5


  1. What is interesting to note, inter alia, in the text leaked by Wikileaks (https://wikileaks.org/tpp-ip3/) is that the definition of patentable inventions and exceptions to patentability resembles to that of the EPC, the patenting of medical methods or plants being nevertheless possible, cf. QQ.E.1.
    What is however interesting is that the US grace period is extended to all parties to TPP, cf. QQ.E.2.
    Fraud, misrepresentation or inequitable conduct may be the basis for cancelling revoking the patent or making it unenforceable, cf. QQ.E.3.1.
    In other words US Patent procedures have been exported!
    PACE is also institutionalised, cf. QQ.E.12.2, whereby the term of a patent may be extended should the granting procedure takes too long, cf. QQ.E.12.3-4, 5 years from filing or 3 years from requesting examination.
    It would be interesting to see what the IP part of TIPP contains, especially if the US procedure would overthrow EP procedures.

  2. Thanks Observer. I see that QQE1 is a garbled version of the EPC text. I suppose it went in translation from the EPC into the patent statutes of the Far East, and then got translated back out again, into garbled English, for the TPP. For example, how can a diagnostic method be "for treatment"?

    At least QQE1 is in permissive language. The other provisions you cite are ("shall") mandatory. I wonder whether they are one reason why the TTIP is not making any progress.

  3. The $55m quoted as the "cost" to term extension in New Zealand has not been substantiated by the government and is likely to be based on an economic model that has been discredited many times since it was first used. Extending to 70 years will finally bring NZ into line with other OECD countries and is a vital boost to the NZ creative economy. The NZ government needs to get diversity into the economy and reduce the country's reliance on primary product exports. NZ is a country that's great with ideas and creativity but needs to do better at monetizing those, especially in an export sense.

  4. Paula, I was unable to find the details of the calculation - could you point me in their direction?

    Some thoughts:

    While the transparency of the calculation should be better, the fact that is a cost is clear.

    The UK estimated (http://www.legislation.gov.uk/ukia/2013/252/pdfs/ukia_20130252_en.pdf) that the cost of extending the copyright of performance and sound recordings from 50 to 70 years is £476 million over 20 years. The net impact is largely neutral (£300k per year) as a the payments go from consumers/broadcasters to artist.

    However, in the case of New Zealand, much of the royalty payments will go to imported content (e.g. American artists) and therefore will not stay in New Zealand. Given that the UK estimate is only for recordings and the NZ estimate for all copyright, the $55M may be an underestimate.

  5. There are of course wider political issues with TPP and the related TTIP (the trans-Atlantic agreement which the UK will be a part of). The agreeements will give corporations more power over governments, and in matters of health and the environment that is potentially of very serious concern. If we ended up with specialist tribunals where sovereign nations had to defend why they passed through certain legislation that would be undemocratic and very worrying.

  6. Nicola you are correct, it is a certainty that NZ exports of royalty payments would always exceed its imports of royalties. In fact it's pretty obvious that the trade off for NZ is that the benefits of the reduction of tariff barriers to the sale of their primary industry exports , will more than compensate for the increased export of royalty payments

  7. MaxDrei

    Paragraph QQ.E.1(1) seems to be derived from TRIPS Article 27(1), first sentence.

    Footnote 33 provides a translation into US-style language. The first sentence of that seems to be derived from TRIPS footnote 5.

  8. And diagnostic methods "for the treatment of humans or animals" comes from TRIPS Article 27(3)(a).

  9. It is not a certainty that NZ's current situation with royalty exports will remain that way in the future. The past 2 years have seen major international breakthroughs by NZ artists. NZ's distance from markets is also now less of an issue given the opportunities of online distribution.

    We don't have the details of the calculations, however we understand that it was based on a model that is clearly countered here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2600769

    Using any overseas model and then trying to compare that to the NZ market is fraught. NZ content creation has only been at a significant level since the 1950's - we're a young market in that sense which makes comparisons with the UK or Europe a nonsense.

  10. Paula NZ is a small country, the idea that they might somehow ,someday ,produce enough exports of copyrighted best sellers to offset their increased payments for imported best sellers from, the whole world, is irrational.

    As for the paper you reference, it's not very convincing, seems to contradict it self at times. Mind I suppose it is true that if the range of public domain product was sufficiently reduced , I.e if copyright was forever, it could improve the situation of those who control a good slice of rights.

  11. Thank you Paula, for the link. The paper is largely an op-ed, so I don't think that we can use it to reach a conclusion. I would really like to see more details on the NZ government's calculations rather than a generic critique (although I am perhaps guilty of the same.)

    One point the paper is, "In each of those cases, these arguments were considered and rejected by policy makers in deciding to extend the term of copyright." The truth is probably more "In each of those cases, these arguments were considered and rejected by POLITICIANS in deciding to extend the term of copyright." which is a different story.

    And I agree with Paul Walker that it is unlikely NZ will be a net exporter of copyrighted goods in a time horizon worth accounting for in this discussion. According to this site, http://www.ip-watch.org/2012/02/27/%E2%80%98balanced%E2%80%99-copyright-not-a-magic-solving-word/, only the UK and US are net exporters of copyrighted goods.

    There may also be some niche net-exporters. The only small country that I'm aware of which is a net exporter of music is Jamaica because of its strong reggae music. (http://www.wipo.int/export/sites/www/copyright/en/performance/pdf/econ_contribution_cr_ja.pdf)


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