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Captured U.S. Trade Agency Resorts to Bullying Again in 2016 Special 301 Report

Every year at around this time the United States Trade Representative (USTR) issues a Special 301 Report in which it chastises other countries for not submitting to its unilateral demands (often lacking any legal basis) as to how they should be enforcing copyrights, patents, trademarks and trade secrets in their countries. And just like last year, this gives us the opportunity again to point out how unbalanced these demands are, missing the real harms of strict copyright and patent enforcement and failing to acknowledge the benefits of a more flexible, user-centered approach.

It would be unfair to say that the USTR just doesn't get this; after so many submissions pointing this out the agency surely gets it just fine. Rather, it just doesn't care, because its priorities lie with appeasing the special interest groups who pre-write most of the demands that end up in the report; major entertainment companies and the pharmaceutical industry [PDF]. In the USTR's calculus, the concerns of other stakeholders—such as technology users, cultural institutions, remixers, fans, patients, people with disabilities, libraries and archives, independent creators and innovators—scarcely figure at all. After all, it's Hollywood and the pharmaceutical industry who offer former USTR staff a much more lucrative career path.

This year's report [PDF], released today, illustrates the USTR's institutional bias just as well as ever. The report praises Canada and Jamaica for their senseless copyright term extensions of 2015, but gives no recognition to changes that have benefited users, such as the overdue adoption of new copyright flexibilities in Slovakia, and new protections for Internet intermediaries in Thailand (in fact these are criticized as creating a "a lack of clarity in the operation of the notice-and-takedown procedures"). Conversely, the report calls out numerous countries for a range of perfectly lawful practices:

  • China is slammed as a center for the production of media boxes—essentially just small form-factor computers—which "enable the users to stream and download infringing online music and audiovisual content," just as, er, a computer would allow users to do. The USTR "urges appropriate action against the manufacturers  of media boxes in the appropriate venue."
  • The USTR finds it curious that in Thailand, a country struggling with a surge in property crime and violent crime since the country's 2014 military coup, "IPR enforcement does not seem to be a top priority for Thai law enforcement."
  • India comes under fire for failing to pass Hollywood's special-interest laws to criminalize camcording in movie theatres—laws that typically include no fair use or other exceptions, and that are unnecessary given the powers that the studios already have under copyright law to prevent the unauthorized copying of their works.
  • "Russia remains home to many ... sites (such as vKontakte) that facilitate online piracy," declares the USTR. In fact, vKontakte is the largest European social networking site, the closest equivalent to Facebook in Russia; it is the second-most visited site in Russia, and has 363 million users, most of whom depend upon the network to communicate with friends and family.
  • The USTR urges Chile "to amend its ISP liability regime to permit effective action against piracy over the Internet," even as the ink is barely dry on the Trans-Pacific Partnership, in which Chile firmly reserved the right to maintain its existing system that requires content takedown orders to be affirmed by a court.
  • A new lawless backwater cited in the report's Watch List this year is that notorious failed state, Switzerland. The USTR cites "difficulties in Switzerland’s system of online copyright protection and enforcement," referring to a decision of the Swiss Federal Supreme Court that prohibits rightsholders from spying on users through the BitTorrent network, because this infringes those users' right to privacy.
  • The USTR expresses concern over Ecuador's revolutionary draft Code of the Social Economy of Knowledge, Creativity, and Innovation, which reimagines what an intellectual property law should look like, and includes amongst its eleven principles the right to share knowledge, Internet as a basic service, support and enhancement of research, and promotion of free software.

Given its manifest flaws and shortcomings, what is the legal status of this report? Officially, none at all. The only international legal mechanisms for trade disputes between countries are those provided by the World Trade Organization (WTO) and by bilateral and plurilateral trade agreements. None of these give any recognition to the Special 301 Report. Yet the USTR acts as if its proclamations are law. This year, following a new mandate from the 2015 Fast Track legislation that EFF fought against, the USTR steps up the pressure still further, establishing action plans to "hold countries accountable" (in Trade Representative Michael Froman's words) once they have appeared twice on the Priority Watch List.

But although the Special 301 Report may not be worth the bits that it's delivered on, the impact of the report is still very real. In particular, the foreign press often wrongly reports on the Special 301 as if it were more than just a unilateral wish-list from certain U.S. industries. The result is foreign governments coming under unfair pressure to amend their laws and to divert enforcement resources, without any international obligation for them to do so. It's not legal, not fair, and EFF will continue to call it out.

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