An Analysis of Digital Provisions in the CETA Draft

One of the many trade agreements being proposed is the Comprehensive Economic and Trade agreement (CETA). We decided to review sections that relate to digital rights to see what is in it.

Earlier, we reviewed the Trans-Pacific Partnership agreement (TPP) and made numerous findings that is of concern from a digital rights perspective. One thing about the TPP is the fact that it isn’t the only trade agreement proposal floating around.

Another trade agreement that is being circulated is the CETA. This agreement generally revolves around Europe and Canada and digital rights is one of the seemingly countless areas that this agreement covers. Back in January of 2013, we discussed what is reportedly in the agreement.

One key difference between the TPP and CETA is the fact that an actual copy of the draft document was officially released. According to Wikipedia, this happened in 2014. While the draft agreement is 1634 pages long, it is divided into chapters. So, we decided to review some of the chapters that we could analyze. If you would like to check and verify our citations against the original document, you can read this yourself via the European Union here (7.6MB PDF file).

ISP Liability

While we weren’t really able to find anything in the Telecommunications chapter, we were able to find something in the Electronic Commerce chapter. On page 294, we find the following:

Article X-05: Dialogue on E-Commerce

1. Recognising the global nature of electronic commerce, the Parties agree to maintain a dialogue on issues raised by electronic commerce, which will inter alia address:

[…]

(b) the liability of intermediary service providers with respect to the transmission, or storage of information,

(c) the treatment of unsolicited electronic commercial communications

This seems relatively straight-forward. This appears to address spam. Not a bad thing. On the other hand, this also addresses ISP liability when it comes to the data being transmitted. Does this mean copyright enforcement or something else? As far as this excerpt is concerned, that’s unknown.

Conformity with WIPO

Moving ahead to page 335, we find the following:

1. The Parties shall comply with the Berne Convention for the Protection of Literary and Artistic Works (1886, last amended in 1979), the WIPO Copyright Treaty – WCT (Geneva, 1996), and the WIPO Performances and Phonograms Treaty – WPPT (Geneva, 1996).

This is largely consistent with previous accusations of CETA where countries would be forced to conform with the WIPO treaties. This is significant because these treaties prohibit the circumvention of Digital Rights Management (DRM) or Technical Protection Measures (TPM) regardless if the circumvention is for fair dealing or other exceptions to copyright. This is one of the many controversies surrounding these treaties.

Anti-Circumvention Laws

Echoing the previous sentiment, anti-circumvention provisions are found starting on page 336:

Article 5.3 – Protection of Technological Measures

5.3(1) Each Party shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures48 that are used by authors, performers or producers of phonograms in connection with the exercise of their rights in, and that restrict acts in respect of, their works, performances, and phonograms, which are not authorized by the authors, the performers or the producers of phonograms concerned or permitted by law.

5.3(2) In order to provide the adequate legal protection and effective legal remedies referred to in paragraph 5.3(1), each Party shall provide protection at least against:

(a) to the extent provided by its law:

(i) the unauthorized circumvention of an effective technological measure carried out knowingly or with reasonable grounds to know; and

(ii) the offering to the public by marketing of a device or product, including computer programs, or a service, as a means of circumventing an effective technological measure; and

(b) the manufacture, importation, or distribution of a device or product, including computer programs, or provision of a service that:

(i) is primarily designed or produced for the purpose of circumventing an effective technological measure; or

(ii) has only a limited commercially significant purpose other than circumventing an effective technological measure.

To add further restriction, the treaty goes on to say on page 337:

Article 5.4 – Protection of Rights Management Information

5.4(1) To protect electronic rights management information,49 each Party shall provide adequate legal protection and effective legal remedies against any person knowingly performing without authority any of the following acts knowing, or having reasonable grounds to know, that it will induce, enable, facilitate, or conceal an infringement of any copyright or related rights:

(a) to remove or alter any electronic rights management information;

(b) to distribute, import for distribution, broadcast, communicate, or make available to the public copies of works, performances, or phonograms, knowing that electronic rights management information has been removed or altered without authority.

5.4(2) In providing adequate legal protection and effective legal remedies pursuant to the provisions of paragraph 5.4(1), a Party may adopt or maintain appropriate limitations or exceptions to measures implementing the provisions of paragraph 5.4(1). The obligations set forth in paragraph 5.4(1) are without prejudice to the rights, limitations, exceptions, or defences to copyright or related rights infringement under a Party’s law.

So, you can’t circumvent any DRM even if there are exceptions such as fair dealing. If you want to circumvent a DRM for the purpose of archiving (i.e. you are a library) or you want to report on something (i.e. journalism), then the government has to step in and create those exceptions explicitly.

Three Strikes Law/Account Termination and Site Blocking

Continuing on on page 337, we see the following:

Article 5.5 – Liability of Intermediary Service Providers

Subject to the other paragraphs of this Article, each Party shall provide limitations or exceptions in its domestic legislation regarding the liability of service providers, when acting as intermediaries, for infringements of copyright or related rights that take place on or through communication networks, in relation to the provision or use of their services.

The limitations or exceptions referred to in the previous paragraph:

shall cover at least the following functions:
hosting of the information at the request of a user of the hosting services;
caching carried out through an automated process, when the service provider:
does not modify the information other than for technical reasons;
ensures that any directions related to the caching of the information that are specified in a manner widely recognized and used by industry are complied with; and
does not interfere with the use of technology that is lawful and widely recognized and used by the industry in order to obtain data on the use of the information;
mere conduit, which consists of the provision of the means to transmit information provided by a user, or the means of access to a communication network;
may also cover other functions including:
providing an information location tool, by making reproductions of copyright material in an automated manner, and communicating the reproductions.

Eligibility for the limitations or exceptions in this Article may not be conditioned on the service provider monitoring its service, or affirmatively seeking facts indicating infringing activity. Each Party may prescribe in its domestic law, conditions for service providers to qualify for the limitations or exceptions in this Article. Without prejudice to the above each Party may establish appropriate procedures for effective notifications of claimed infringement, and effective counter-notifications by those whose material is removed or disabled through mistake or misidentification.

This Article is without prejudice to the availability in a Party’ law of other defences, limitations and exceptions to the infringement of copyright or related rights. This Article shall not affect the possibility of a court or administrative authority, in accordance with Parties’ legal systems, of requiring the service provider to terminate or prevent an infringement.

While ISP liability doesn’t hinge on ISPs having a three strikes law or website filtering, this treaty does almost suggest this as an idea. Of course, history would indicate that neither website blocking nor a three strikes law is effective by any means. The Internet was designed to rout around damage. Censorship is pretty much seen as a form of damage. Naturally, the Internet would rout around it. This is currently commonly achieved through anonymous networks and proxies. The three strikes law has been ineffective because it generally costs quite a lot to accomplish almost nothing (as seen in France with the HADOPI law) or it creates excessive administrative overheard while, again, accomplishing virtually nothing. Yes, some people may find themselves disconnected, but when tens of millions of users are engaged in file-sharing every day, it’s not even a dent. On top of that, some forms of file-sharing go virtually undetected by any enforcement mechanism. This can include direct hosting or services such as Usenet thanks to a user to server connection.

Damages

What damages can be awarded is also found in this agreement. This starts on page 351:

1. Each Party shall provide that:

(a) in civil judicial proceedings, its judicial authorities shall have the authority to order the infringer who knowingly or with reasonable grounds to know, engaged in infringing activity of
intellectual property rights to pay the right holder:

(i) damages adequate to compensate for the injury the right holder has suffered as a result of the infringement; or

(ii) the profits of the infringer that are attributable to the infringement, which may be presumed to be the amount of damages referred to in paragraph (i);

(b) in determining the amount of damages for infringements of intellectual property rights, its judicial authorities may consider, inter alia, any legitimate measure of value that may be submitted by the right holder, including lost profits.

What we see here is that if someone is found guilty of copyright infringement, the amount the fine could be is completely up to the rights holder. It’s not based on actual value (for instance, a song costs 99 cents on iTunes will never mean the fine is 99 cents). Instead, it could be statutory damages like what is seen in the US. The problem is that if a country has a provision in the constitution about unreasonable fines, this could provide major legal challenges. It’s exactly what was seen in the US regarding the Jammie Thomas case or the Joel Tenenbaum case where statutory fines applied, but was then appealed on the basis that the fine was unconstitutional. This legal question, while started in the days of Kazaa, is still being hashed out in court to this very day. What this agreement does is propose the exact same legal problem to Europe and Canada.

Seizing Your Cellphone at the Border

A controversial element that sunk the Anti-Counterfeiting Trade Agreement (ACTA) was provisions that would essentially allow border authorities to seize your iPod at the border for the purpose of enforcing copyright. If you own a cell phone and you like traveling from one country to another, the next section applies to you:

2. Each Party shall adopt or maintain procedures with respect to import and export shipments under which a right holder may request its competent authorities to suspend the release of, or detain goods suspected of infringing an intellectual property right.

3. Each Party shall adopt or maintain procedures with respect to import and export shipments under which its competent authorities may act on their own initiative to temporarily suspend the release of, or detain goods suspected of infringing an intellectual property right to provide a right holder an opportunity to formally request assistance under paragraph 2.

4. Either Party may enter into an arrangement with one or more third parties to establish common security customs clearance procedures. Goods cleared pursuant to the terms of the common customs procedures of such an arrangement shall be deemed to be in compliance with paragraphs 2 and 3, provided the Party concerned retains the legal authority to comply with these paragraphs.

5. Each Party may adopt or maintain the procedures referred to in paragraphs 2 and 3 with respect to transhipments and shipments in customs transit.

6. Each Party may exclude from the application of the above provisions small quantities of goods of a non-commercial nature contained in travellers’ personal luggage or small quantities of goods of a non-commercial nature sent in small consignments.

This is definitely a case where wording is everything. This section does say that the authorities at the border can seize your cell phone at the border for the purpose of enforcing copyright. The only protection afforded here is in the final paragraph where an exclusion can be made with regards to devices such as your cell phone. The problem is that the government in question has to explicitly make this exception. It is not an exception explicitly made in the this agreement, but rather, a possibility that this treaty opens the door to.

The treaty further states on page 355:

Article 24.6 – Remedies

1. Each Party shall provide that its competent authorities have the authority to order the destruction of goods following a determination referred to in Article 24.5 that the goods are infringing. In cases where such goods are not destroyed, each Party shall ensure that, except in exceptional circumstances, such goods are disposed of outside the channels of commerce in such a manner as to avoid any harm to the right holder.

So, if the authorities want, they also have the power to destroy your cell phone if they determine that infringing content is found on it.

Final Thoughts

While we couldn’t, in any practical sense, independently verify that these are absolutely every relevant provision with regards to digital rights (after all, this is a 1634 page document), we were able to uncover a number of provisions that would most definitely raise questions. If something is buried elsewhere in the document, we weren’t able to find it in our initial analysis. We do encourage others to look, however, and look for anything we may have missed or overlooked. This trade agreement covers a significant number of topics including pharmaceuticals, geographical indicators, and even a few instances of actual trade.

From what we’ve seen, major winners include large corporations such as major record labels, major multinational software developers, major multinational game manufacturers, and major movie studios. The losers of this trade agreement include average citizens, digital rights, privacy, creativity (given the reduction of exceptions thanks to anti-circumvention), and even the judicial systems of the world given the potential for overwhelming the court system with endless cases (many of which would have poor optics for the public).

Many backers of this agreement simply push this trade deal as good for everyone. Some say that this agreement will simply allow countries like Canada to participate in a so-called global economy. Obviously, what we’ve uncovered here alone shows that there something else happening besides general trade.

Drew Wilson on Twitter: @icecube85 and Google+.


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