March 17, 2017 | By Jeremy Malcolm

Brazil Proposes New Digital Copyright Rules for the WTO

Copyright rules don't belong in trade agreements—so where do they belong? For the most part, the World Intellectual Property Organization (WIPO) is probably the right place; it's a fully multilateral body that devotes its entire attention to copyright, patent, and other so-called intellectual property (IP) rules, rather than including them as an afterthought in agreements that also deal with things like dairy products and rules of origin for yarn. Although we don't always like the rules that come out of WIPO, at least we can be heard there—and sometimes our participation makes a tangible difference. The landmark Marrakesh Treaty for blind, visually impaired and print disabled users provides a good example.

But there's another multilateral international body that can also lay claim to authority over international intellectual property rules—the World Trade Organization (WTO). When the WTO first covered copyright and patent rules in a dedicated agreement called TRIPS, it was decried by activists as being far too strict. Today, ironically, those same activists (even EFF) often tout TRIPS as a more appropriate baseline standard for global IP rules, in contrast to the stricter (or "TRIPS-plus") rules demanded for inclusion in preferential trade agreements such as the Anti-Counterfeiting Trade Agreement (ACTA) and the Trans-Pacific Partnership (TPP).

For those who believe in linking copyright and trade, the WTO is an obvious candidate to fill the vacuum left by the TPP's recent demise. At the most recent session of the WTO's TRIPS Council on March 1 and 2, Brazil circulated a paper [PDF] titled "Electronic Commerce and Copyright" to address issues around trade in copyright works in the digital age. This document didn't come out of the blue; it draws strongly upon an earlier discussion paper, also addressing the challenges of copyright in the digital environment, that Brazil and others in its GRULAC (Group of Latin American and Caribbean Countries) group introduced at WIPO in 2015.

Brazil's latest paper highlights three issues around electronic commerce and copyright that it believes belong on the WTO's agenda; not as the basis for a binding treaty, but for discussion and informal coordinated action by member states. These are:

  1. Transparency While copyright holder groups complain that Internet platforms don't pay enough for streaming copyright content (a so-called "value gap"), a big part of the perceived problem is that it's difficult for the creators of that content to know where the money is going. The music industry, in particular, is notorious for the opacity of the payment arrangements between intermediaries and creators such as songwriters and performers. Brazil identifies the need to improve the transparency of these payments, although it doesn't go into detail about how this should be accomplished. When EFF brought musician and entrepreneur Imogen Heap to WIPO, she explained the potential for blockchain technology to provide this much-needed transparency. But rather than invest in exploring this or other transparency initiatives, big media has continued to devote most of its attention to a failing war on piracy.
  2. Balance of rights and obligations The paper correctly identifies the need to maintain balance between the interests of copyright holders and those of users of copyright works, as technologies change and new ways of using such works emerge. But the paper goes off the rails when it suggests that it may be unlawful under the WTO's three-step test for countries to allow users to bypass DRM on copyright works, on the grounds that DRM is "essential for the normal exploitation of works in e-trade." Although we support the paper's bottom-line conclusion that "WTO Members should unequivocally assert the principle that exceptions and limitations available in physical formats should also be made available in the digital environment," we don't think this precludes rolling back penalties for the circumvention of DRM. On the contrary, circumvention is often the only way for users to gain access to content on the devices of their choice, and is imperative for preservation, archival, and reuse of such content.
  3. Territoriality of copyright The final issue addressed in Brazil's paper is the most fundamental one: the disconnect between the global nature of the Internet, and the territorial status of national copyright systems. The problem that Brazil identifies is that by using international credit cards, users can gain access to content through overseas content platforms, and thereby circumvent services based in their own home countries, which are subject to that country's copyright rules. It proposes that "Member states should make their best efforts to make their national copyright legislation applicable to trade relations where content is accessed from within their national borders." But if this means blocking or banning users from accessing overseas content services, we have serious concerns. Such measures are entirely unnecessary anyway, as the world already has a common set of copyright rules as standards for global trade—that's exactly what the WTO TRIPS agreement provides. Brazil hasn't made out a case for more.

So far, other WTO members have shown little appetite for the WTO to undertake new work on copyright rules, with the knowledge that such negotiations would be highly contentious. (This is also why Brazil has chosen to describe it as an "electronic commerce" proposal rather than as an "intellectual property" proposal.) However, the promulgation of "soft law" standards on copyright protection under the aegis of the WTO is a more tenable proposition, and Brazil's aim with this paper is to seed that process. That's why it's important to keep a watchful eye even on non-normative documents such as these, to ensure that if the WTO does take any new measures on global copyright rules, users' rights are preserved.


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