Collective Management

The issue of collective management of copyright has moved from a relatively obscure and often ignored part of the policy agenda to the forefront. As music sales decrease, collective management in that field has continued to grow. As controls over individual reuse of text and image content has become impossible or undesirable (privacy or confidentiality of use), collective management of reprography has also grown exponentially. Collective management must respond by offering credible, efficient and transparent solutions, and not shroud itself in secrecy and generate mistrust. This calls for enlightened management and supervision by government where required. Canada offers a good, though imperfect, model (see here) and the Songwriters Association of Canada has put forward an interesting proposal (here). In my presentation at Columbia Law School (see the video here or read the text here), I compared various regulatory approaches. The lack of harmonization in this field is staggering, and has not been on the international IP agenda. Much of the international framework is based on private ordering by Collective Management Organizations (CMOs). But if CMOs want to be perceived as a major part of the solution to online copyright issues, such as the Google Books case, they, or those who oversee them, must do more.

It is a false dichotomy to say that there are exclusive rights on the one hand, and exceptions, on the other. Collective management is a middle zone, where uses are legal, not subject to individual authorization (most CMOs cannot refuse an authorization) but subject to payment. For a copyrighted work that has been legally put on the market by the right holder, this sounds better as a business model than trying to shut down web sites.

China

During my most recent visit to Beijing (May 2011), I visited Z Park and an incubator, Innovation Works, created and managed by Kai-Fu Lee’s with whom I had a good meeting. Like many other observers, I am amazed to see the resources and energy devoted to creating new enterprises, and the ability to pool key resources. Of course, the US still leads, by a lot, in global innovation, as do a number of European countries and Japan. The questions that remain open in my mind are whether the obstacles that the EU and US are putting on its own innovators (in particular the over-patenting of software and basic science and lobby-drive–as opposed to policy-driven—regulatory efforts) will slow them enough, so that others will catch up. China has issues of its own, in particular an educational system that favors very hard workers but fails to adequately promote individual creativity. The decoupling of individual freedom and individual innovation, in what Robert Reich has terms authoritarian capitalism, is a fascinating development. Typically, this has led to small or incremental inventions, but not big, transformational leaps.

Brazil and India have cards to play and I am looking forward to my upcoming trips to Bangalore and Rio in 2012 to see what’s changed there. Innovation is a global game. Proper policy may help.

Geographical Indications

Articles 22-24 of TRIPS provide protection for Gis. However, beyond protection for confusing or deceptive GIs (akin to the protection of trademarks), there is only higher protection for wines and spirits, and an agreement to negotiate a possible registration and/or notification system for wine-related indications, a mandate extended to spirits in the Doha Declaration. A higher level of protection of protection is provided in the 1958 Lisbon Agreement, but that Agreement has not been popular among “New World” countries especially the United States.

The issue has surfaced in many ways and many places. WIPO is updating Lisbon. Read WIPO’s proposals here and my comment here.

The issue is on the agenda at the WTO and their notification proposal is available here.

But now it is also part of the (not very public) negotiations on the Trans-Pacific Partnership, an ACTA-Plus effort to update not just enforcement but also substantive TRIPS rules. See Jimmy Koo’s take on it here.

It is hard to discuss this issue on the merits. Lobbying by major users of Old World marks outside of their GI context, from Kraft to Budweiser, on the US side, and similarly heavy efforts by the wine, spirits and cheese industries in Europe have made finding compromise difficult. A detailed analysis of the Lisbon system and possible updates to it (see here) shows that the issue is much smaller and easier to solve than it seems and, much like the Wine Pact, a list of exceptions could deal with the few major issues. Lisbon, like the Madrid system for trademarks, could be adapted to meet worldwide needs, a system that would use existing expertise on GIs in the Lisbon context and avoid creates a new notification-only system at the WTO with undetermined legal effect.

French-language book available

A French-language guide to the TRIPS Agreement is available from Larcier (Brussels) under the title L’Accord sur les ADPIC. Sections on the impact of TRIPS in Belgium and France were contributed by Isabelle Schmitz.

US/China Panel Report is Out

The Panel Report in the US/China dispute was released on January 26, 2009. It is available at http://www.wto.org/english/news_e/news09_e/362r_e.htm.

As most observers had predicted, the Panel accepted the US argument that China could not deny copyright protection to censored works. While the Berne Convention, most of the substantive provisions of which were incorporated into TRIPS, allows countries to control the dissemination of copyrighted works, it does not allow them to deny copyright protection to such works. Article 5(2) of the Convention also provides that the “enjoyment and the exercise of [the rights protected under the Convention] shall not be subject to any formality.” The Panel declined to rule (“as a matter of judicial economy”) on whether the censorship review was a formality, noting that there was evidence of the availability of enforcement during the review process. There is disagreement on this point. The Panel based its ruling mostly on Article 5(1) of the Berne Convention, which provides in part that “authors shall enjoy, in respect of works for which they are protected under this Convention, the rights specially granted by this Convention.” The Panel report also contains a variety of questionable dicta (for example on Article 6bis) but none that should lead to a reversal by the Appellate Body, should the report be appealed. The Article 5(2) matter may, however, be reviewable on appeal.

If the report is adopted by the Dispute Settlement Body), China would have to provide copyright protection to censored works. It is unclear whether this will have much effect in practice because distribution of those works would be illegal for other reasons.
The second US claim was that China’s disposal of counterfeit goods violated Articles 46 and 59 of TRIPS. TRIPS is designed to ensure that seized infringing goods do not re-enter the channels of commerce. Authorities must have the authority to order their disposal or destruction. The first issue under this claim was whether China may auction off or give counterfeit goods to charitable organizations such as the Red Cross. The Panel found that this form of disposal of infringing goods was acceptable, in part because safegaurds were in place.The evidence showed that approximately half of the cases of seizure led to destruction of the goods. The Panel did take issue with China’s public auctions of infringing goods after “eradication” of the infringing mark. The TRIPS Agreement does not allow for re-entry into the channels of commerce of infringing goods after the “simple removal” of the infringing trademark other than in exceptional circumstances. The Panel noted that the “release into the channels of commerce of such goods, while they may no longer infringe upon the exclusive rights in Article 16 of the TRIPS Agreement, will not comply with the requirement in the fourth sentence of Article 46, as incorporated by Article 59. “ Auctions were not exceptional, because a Member must show why and how a measure is “exceptional” not just that it is not applied frequently.

The United States had also challenged the fact that no criminal penalties are available in China under a number of quantitative and qualitative infringement thresholds. The Agreement provides that criminal penalties must be available for infringements “on a commercial scale.” The Panel noted that US had not challenged the principle of establishing predetermined thresholds but rather the level of those thresholds and how they are measured under Chinese law. The Panel concluded, first, that “on a commercial scale” was essentially synonymous with “commercial activity.” It found that China’s approach was acceptable (mostly based on the evidence submitted). It also noted that TRIPS left some flexibility to WTO Members.

The Book is Ready

The Third Edition of the TRIPS Agreement: Drafting History and Analysis, by Daniel Gervais, was published at the end of November 2008 by Sweet & Maxwell. It is almost double the size of the third edition, reflecting a significant growth in TRIPS-related scholarship and litigation.