Michael Geist has leaked the lasted draft of the intellectual property chapter of the Canada – EU Comprehensive Economic Trade Agreement. These are some brief comments on the new document.
It applies to both parties.
When a very large trading partner negotiates with a smaller one, it is sometimes overlooked that the norms are designed to bind both parties. So the Canada/EU IPR agreement should be of interest to Canada and the 27 members of the European Union.
Article 1, Objectives
The Objectives of the Agreement are among the elements that will frame how it is interpreted in any dispute resolution. In this regard, consider, for example, the objectives in TRIPS Agreement
TRIPS: Article 7 Objectives
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.
Now take a look at the Canada/EU IPR chapter:
Article 1 Objectives
The objectives of this chapter are to:
(a) facilitate the production and commercialization of innovative and creative products between the Parties; and
(b) achieve an adequate and effective level of protection and enforcement of intellectual property rights.
It should be pretty clear that the Canada/EU objectives are a giant step backwards for people.
Article 2, Nature and Scope of Obligations
In TRIPS, the first paragraph in the Article on the Nature and Scope of Obligations provides an assurance that “Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.” For some reason, this has been eliminated in the Canada/EU agreement.
TRIPS – Article 1.1 – Nature and Scope of Obligations
1. Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement. Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.
Article 3, Public Health Concerns
There are two options, one by the EU and one by Canada. The Canada proposal is the better of the two, focusing on the key elements of paragraph 4 of the 2001 Doha Declaration, which was the best part.
Either of the two options would be nice to have in ACTA.
Article 4, Exhaustion
This is a strong, pro-consumer article. Should be included in ACTA.
Article 5, Copyright and Related Rights
Paragraph 3 of Article 5.1 on limitations and exceptions is quite important. The EU proposal is restrictive, and the Canada language is only slightly less restrictive. Not all limitations and exceptions need be subject to the three step test. Both the Rome and the Berne have exceptions that are not subject to a three step test, and so does the TRIPS, including those related to Article 40 of the TRIPS.
I will comment later on the other copyright issues.
Article 10 Protection of Data Submitted to Obtain an Authorisation to put a Pharmaceutical Product on the Market
Canada is already subject to requirements in NAFTA for 5 to 3 years of exclusive rights to rely upon test data for registration of new drugs. The new EU proposal would expand the obligations, and extend them to 10 to 11 years, depending upon the efficacy of the products.
KEI notes that unlike some other trade agreements, the EU does not propose any mechanisms to effectively grant compulsory licenses on such data, as can be done for drug patents. The EU propose creates a monopoly that is without recourse. As it is a 10 to 11 year exclusive right, it will be expensive.
KEI notes that the Article 10 require generic manufacturers to violate Article 20 of the Declaration of Helsinki – Ethical Principles for Medical Research Involving Human Subjects, which reads as follows:
Physicians may not participate in a research study involving human subjects unless they are confident that the risks involved have been adequately assessed and can be satisfactorily managed. Physicians must immediately stop a study when the risks are found to outweigh the potential benefits or when there is conclusive proof of positive and beneficial results.
Ironically, in the proposed Article 11, concerning data for plant production products, steps are taken to avoid “duplicative testing on vertebrate animals.”
7. Rules to avoid duplicative testing on vertebrate animals will be laid down by the Parties. Any applicant intending to perform tests and studies involving vertebrate animals shall take the necessary measures to verify that those tests and studies have not already been performed or initiated.
8. The new applicant and the holder or holders of the relevant authorisations shall make every effort to ensure that they share tests and studies involving vertebrate animals. The costs of sharing the test and study reports shall be determined in a fair, transparent and non-discriminatory way. The prospective applicant is only required to share in the costs of information he is required to submit to meet the authorisation requirements.
9. Where the new applicant and the holder or holders of the relevant authorisations of plant protection products cannot reach agreement on the sharing of test and study reports involving vertebrate animals, the new applicant shall inform the Party.
10. The failure to reach agreement shall not prevent the Party from using the test and study reports involving vertebrate animals for the purpose of the application of the new applicant.]
11. The holder or holders of the relevant authorisation shall have a claim on the prospective applicant for a fair share of the costs incurred by him. The Party may direct the parties involved to resolve the matter by formal and binding arbitration administered under national law.
Now, if the Canada would express as much concern about testing on humans, they could modify Article 10 to include such cost sharing agreements (As KEI has recommended elsewhere).
Article 21 – Injunctions
The proposed language on injunctions comes from the EU, and reads as follows:
[EC: Article 21 Injunctions
1. The Parties shall ensure that, where a judicial decision is taken finding an infringement of an intellectual property right, the judicial authorities may issue against the infringer an injunction aimed at prohibiting the continuation of the infringement.
2. Where provided for by domestic law, non-compliance with an injunction shall, where appropriate, be subject to a recurring penalty payment, with a view to ensuring compliance. The Parties shall also ensure that right holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right.]
The EU want injunctions to be available to prohibit the continuation of an infringement, without any exceptions.
Note that Canada’s copyright law currently limits the ability of parties to obtain injunctive relief for architectural works, as follows:
“40. (1) Where the construction of a building or other structure that infringes or that infringes or that, if completed, would infringe the copyright in some other work has been commenced, the owner of the copyright is not entitled to obtain an injunction in respect of the construction of that building or structure or to order its demolitions. (2) Sections 38 and 42 do not apply in any case in respect of which subsection (1) applies. R.S., 1985, c. C-42, s. 40; 1997, c.24, s.21”
Canada’s law was done under the more liberal norms on injunctions found in the TRIPS, including specifically, the last sentence in Article 44.2.
TRIPS – Article 44 Injunctions
1. The judicial authorities shall have the authority to order a party to desist from an infringement, inter alia to prevent the entry into the channels of commerce in their jurisdiction of imported goods that involve the infringement of an intellectual property right, immediately after customs clearance of such goods. Members are not obliged to accord such authority in respect of protected subject matter acquired or ordered by a person prior to knowing or having reasonable grounds to know that dealing in such subject matter would entail the infringement of an intellectual property right.
2. Notwithstanding the other provisions of this Part and provided that the provisions of Part II specifically addressing use by governments, or by third parties authorized by a government, without the authorization of the right holder are complied with, Members may limit the remedies available against such use to payment of remuneration in accordance with subparagraph (h) of Article 31. In other cases, the remedies under this Part shall apply or, where these remedies are inconsistent with a Member’s law, declaratory judgments and adequate compensation shall be available.
What Canada will lose if the EU proposal is accepted are the flexibilities now found in the 2nd sentence of Article 44.1 and all of Article 44.2, subject only to the much narrower flexibilities found in the new Article 22.
The EU also wants to add this new obligation :”shall also ensure that right holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right.” No one really knows the consequences of this provision.
Article 22 – Alternative Measures
Canada would have to refashion its injunction laws to work within Article 22, on “Alternative Measures,” which would only be used if “that person acted unintentionally and without negligence, if execution of the measures in question would cause him disproportionate harm and if pecuniary compensation to the injured party appears reasonably satisfactory.”
Article 23 – Damages
The EU proposal is TRIPS+. The TRIPS reads as follows:
TRIP Article 45 – Damages
1. The judicial authorities shall have the authority to order the infringer to pay the right holder damages adequate to compensate for the injury the right holder has suffered because of an infringement of that person’s intellectual property right by an infringer who knowingly, or with reasonable grounds to know, engaged in infringing activity.
2. The judicial authorities shall also have the authority to order the infringer to pay the right holder expenses, which may include appropriate attorney’s fees. In appropriate cases, Members may authorize the judicial authorities to order recovery of profits and/or payment of pre-established damages even where the infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity.
The NAFTA provisions on damages are as follows.
Article 1715: Specific Procedural and Remedial Aspects of Civil and Administrative Procedures
2. (d) to order the infringer of an intellectual property right to pay the right holder damages adequate to compensate for the injury the right holder has suffered because of the infringement where the infringer knew or had reasonable grounds to know that it was engaged in an infringing activity;
(e) to order an infringer of an intellectual property right to pay the right holder’s expenses, which may include appropriate attorney’s fees; and
(f) to order a party in a proceeding at whose request measures were taken and who has abused enforcement procedures to provide adequate compensation to any party wrongfully enjoined or restrained in the proceeding for the injury suffered because of such abuse and to pay that party’s expenses, which may include appropriate attorney’s fees.
The new EU proposal for the Canada/EU agreement is this:
[EC: Article 23 Damages
1. The Parties shall ensure that when the judicial authorities set the damages:
(a) they shall take into account all appropriate aspects, such as the negative economic consequences, including lost profits, which the injured party has suffered, any unfair profits made by the infringer and, in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the right holder by the infringement ; or
(b) as an alternative to (a), they may, in appropriate cases, set the damages as a lump sum on the basis of elements such as at least the amount of royalties or fees which would have been due if the infringer had requested authorisation to use the intellectual property right in question.
2. Where the infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity, the Parties may lay down that the judicial authorities may order the recovery of profits or the payment of damages which may be pre-established.]
Briefly, in TRIPS and NAFTA, damages are “adequate to compensate for the injury the right holder has suffered.” In the new agreement, damages shall take into account, among other things, “negative economic consequences, including lost profits, which the injured party has suffered, any unfair profits made by the infringer and, in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the right holder by the infringement.”
In the TRIPS and NAFTA, there is NO obligation for damages in cases where the infringer did not have reasonable grounds to know they were engaging in infringing activity. The Canada/EU agreement would change that.
The agreements lacks many of the consumer safeguards in the TRIPS. There is no language similar to Article 7, 8, 40 or 44.2 in the TRIPS.