☆ Meddling In Foreign Affairs

Special 301 Report 2010 Priority Watch List Wa...

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The Special 301 Report is an annual publication by the US Trade Representative (USTR), fulfilling US legal requirements to identify countries whose copyright, patent, trademark and trade secrets laws and practices are of concern to the USA. You may recall I’ve written unflatteringly about USTR before. The report’s content reflects the input of US trade lobbyists, most of whom are in the employ of well-funded industry consortia such as the BSA, MPAA and RIAA, allowing the actual corporate beneficiaries of the lobbying to remain hidden.  This year’s report has just been published and I’ve just read through its 53 pages so you don’t have to. I admit to being left depressed by the experience.

It’s no different in tone or purpose from the reports of earlier years, of course. That means it continues to be an expression of the willingness of the USA to throw its considerable commercial and political weight around in order to persuade other sovereign governments to act against the interests of their citizens and native industries in order to protect and advance the cause of the USA’s movie, music, software and pharmaceutical industries. It’s couched in terms of abiding by treaties, but those who pay the Danegeld will find their prisons filling, their healthcare costs rising and their cultural expression controlled from the west.

Bullying Democracies

A striking characteristic of Special 301 reports is an unapologetic bullying of other states without regard for their own democratic systems. There is a repeated motif along the lines of “we told you to change things so you would police the market for US products, but your legislature or government agency refused to do so to our satisfaction” which shows up time and time again. As Ars Technica noted, the USA’s neighbour and valued trading partner Canada – hardly a wayward banana republic – is severely chastised on page 27 because the operation of its domestic democracy did not lead to the outcome USTR had demanded:

Unfortunately, Canadian efforts in 2010 to enact long-awaited copyright legislation were unsuccessful. The United States encourages Canada to make the enactment of copyright legislation that addresses the challenges of piracy over the Internet, including by fully implementing the WIPO Internet Treaties, a priority for its new government.

On page 32 the USA wants to interfere in the domestic controversy in Brazil around its copyright reform, giving a hint why Ana de Hollander may not care much what her citizens think:

The United States urges Brazil to ensure that any amendments to its copyright law provide strong protections and establish means to enable effective enforcement against IPR violations that are committed on the Internet.

and on page 36 Italy is criticised:

The United States also encourages Italy to address other IPR issues, including a troubling Data Protection Agency ruling prohibiting the monitoring of peer-to-peer networks.

There are other examples too.

Demands

This bullying is the consequence of ignoring earlier demands from the USA to implement laws. You can see these demands too – try the ones to India on page 28:

The United States also recommends that India improve its IPR regime by providing for stronger patent protection. Particular concerns have been raised regarding provisions of India’s Patent Law that prohibit patents on certain chemical forms absent a showing of increased efficacy, thereby possibly limiting the patentability of potentially beneficial innovations, such as temperature-stable forms of a drug or new means of drug delivery.

and to Chile on the same page:

The United States also urges Chile to provide adequate protection against unfair commercial use, as well as unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approvals for pharmaceutical products, and to amend its Internet service provider liability regime to permit effective action against any act of infringement of copyright and related rights.

both of which have a significant story behind them in the country in question. Again, the report is full of other examples.

Harmonisation

Most worrying of all to me is the way the blunt instrument of Special 301 is being used in areas where law and practice in the USA is not going the way USTR and its corporate advisors want it to go. When this happens, the mechanism by which correction is being applied is by creating international agreements and practicies which can then be brought back to the USA “for harmonisation”. Obvious examples listed on page 6 include ACTA and TPP, both of which are likely to be a blunt instrument used in the future to get the US Congress to change the USA’s laws.

My eye was drawn to the actions against China, however. The tirade against China runs to many pages, but the text on page 22 is notable for the way it tries to push RAND (that’s individually and privately negotiated patent royalty terms) on standards and frame royalty-free terms as anti-competitive:

However, the draft measures provide that when mandatory national standards incorporate patented technologies, there is the possibility of a compulsory license if a patent holder does not grant a royalty-free license.    This differs from the typical practice of accredited standards developing organizations in other countries, which require disclosure of intellectual property in the standards development process and support “reasonable and nondiscriminatory” (RAND) licensing policies with respect to intellectual property that is incorporated into a standard.

Certainly in the world of software that is regressive. As open source has risen in importance, so has the understanding of why royalty-free – in fact, restriction-free – licensing terms for patents that read on implementations of standards are vital for an open market. The result has been that more and more specification and standards bodies have agreed to set royalty-free terms as the baseline for new work. In turn, royalty-free terms are becoming a procurement requirement. Pressing China to head in the opposite direction could well be a calculated move to push against this trend.

Worrying Interference

Taken together, Special 301 continues to be a worrying and undesirable interference by the USA in the sovereign affairs of other countries. While exceptional abuses – such as commercial-level export of dangerous counterfeit goods – are fair game and reasonable subject for the expression of diplomatic concern, the activities of USTR seem to me to have passed the bounds of reasonableness and gained a life of their own. Like the broomstick in the Sorcerer’s Apprentice, they are now under the control of unseen powers who will sweep away things of value in the name of keeping the house clean. It has to be time for a review of that activity.

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