Early Copyright Reviews Mixed for New USMCA Pact

It is being rebranded as the USMCA, but the substance is now being analyzed. It seems that reviews are mixed on the copyright side of things.

In the lead up to the final agreement of the North American Free Trade Agreement (NAFTA), things began looking doubtful that an agreement would be reached before the deadline in the first place. In fact, negotiations ran into the late hours of the night right before the deadline. It was unclear if the finish line could be reached. Then, at the 11th hour, negotiators and officials emerged to announce that an agreement has been reached.

One key thing is the fact hat the agreement has been rebranded to the much harder to remember US Mexico Canada Agreement (USMCA). It just rolls off the tongue, doesn’t it?

Still, how did they make it under the wire? Critics on Canada’s side seem to be summing it all up in one word: “capitulation”. There was a capitulation on dairy. There was a capitulation in the automotive sector. In fact, it was capitulations everywhere from softwood lumber industry to pharmaceuticals to copyright laws. The Trudeau government, however, stuck to their guns by saying that they managed to get a good deal for Canada and that Canadians should be proud of what was accomplished. Of course, that is what a lot of the early broadcast reports focused on with little substance to go along with it.

So, for us, the question is, did Canada come out on top on the copyright side of things or is it nothing but capitulations? It turns out, the answer is “yes” and “yes”.

First, the bad news. The Americans pushed for a lengthening of copyright laws. In Canada, it is currently life plus 50 years. That is a term that many argue is far too long. What the Americans wanted is a term of life plus 70 years. By all accounts, the Americans got what they wanted. As a result of this, Canadians face the prospect of having 20 years where nothing is added to the public domain. It’s unclear if this lengthening of copyright laws will be retroactive so as to rip content back out of the public domain again, but it seems that the unnecessary lengthening of copyright laws is going to happen.

The good news is that it seems that Canada will be able to keep the notice-and-notice system for accusations of copyright infringement. A fear is that the American’s might finally make Canada bend and take a notice-and-takedown system that has plagued American’s for decades. A mere accusation is enough to assume guilt and those accused must pay thousands of dollars or else face millions in fines and court costs as they are sued for infringement they may or may not have committed. If that is destiny for Canada’s copyright system, it will not be happening through NAFTA- er USMCA.

Michael Geist is noting some other changes to the agreement as well:

Biologics

On the patent side, the big change is the extension of data protection for biologics drugs to 10 years. This is a significant increase on the TPP which offered 8 years or 5 years plus other measures to provide a comparable outcome in the market. This was one of the most contentious TPP issues as countries recognized that every additional year potentially adds billions of health care costs. In fact, even U.S. agencies have expressed doubt about the need for long term protections. Coming on the heels of the Canada – EU Trade deal, which effectively extended patent terms, the additional costs for pharmaceuticals in Canada in the long-term will be enormous.

Broadcasting

While a cultural exemption was touted as one of the major Canadian wins, Canada actually did cave to U.S. pressure by agreeing to change its broadcast policy. In 2016, the CRTC changed its policy on simultaneous substitution for the broadcast of the Super Bowl, allowing for the U.S. signal to air in Canada with the commercial intact. Bell, the broadcast rights holder, and the NFL objected with multiple appeals and court cases (including one currently before the Supreme Court of Canada). In Annex 15-D, Canada agreed to rescind the CRTC policy with a requirement that all programs be treated equally. That means that Canada could drop simultaneous substitution altogether, but not for an individual program. The same annex also includes a commitment to authorize U.S. home shopping program services.

Digital Trade

The digital trade chapter largely mirrors the one found in the TPP. That means that there are provisions on prohibiting customs duties, facilitating electronic transactions, anti-spam measures, and very weak language on having domestic privacy and consumer protection rules. The USMCA does not include a stand-alone net neutrality provision as found in the TPP.

The two most important features of the chapter involve (i) data localization and transfer and (ii) safe harbours for Internet companies. Data localization has emerged as an increasingly popular legal method for providing some additional assurances about the privacy protection for personal information. Although heavily criticized by those who fear that it harms the free flow of information, requirements that personal information be stored within the local jurisdiction is an unsurprising reaction to concerns about the lost privacy protections if the data is stored elsewhere. The USMCA restricts the ability for a country to impose data localization rules, which could have an impact on future privacy reforms. Similarly, the data transfer provisions limit the ability to restrict data transfers across borders, which could become a challenge should the EU require restrictions to meet its privacy standards. Canada effectively agreed to similar provisions in the TPP and their inclusion in this agreement is unsurprising.

Internet safe harbours did not make it into the TPP and is a welcome addition to the USMCA. The provision states:

no Party shall adopt or maintain measures that treat a supplier or user of an interactive computer service as an information content provider in determining liability for harms related to information stored, processed, transmitted, distributed, or made available by the service, except to the extent the supplier or user has, in whole or in part, created, or developed the information.

In other words, Internet companies are not liable for the content of their users. While this does not require the creation of a legislative safe harbour, it restricts the ability for a country to create a system premised on liability for Internet companies. Moreover, the same provision excludes liability for actions taken by Internet companies to remove harmful or objectionable content on a voluntary basis.

So, on multiple fronts, there are bits of good news and bits of bad news. Such a mixed bag will no doubt be political fodder for months, if not, years to come. Regardless, the full text is available for all to read now, so there will be plenty of analysis on the agreement to come.

Drew Wilson on Twitter: @icecube85 and Google+.

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