TPP at odds with Australian copyright law: Law Council

New submissions from Open Source Industry Australia (OSIA) and Law Council of Australia's Business Law Section Intellectual Property Committee (IPC) on the Trans-Pacific Partnership (TPP) have recommended that the international treaty not be ratified until the problems of complexity and inconsistency are addressed.

The Australian government on Monday published several more submissions on the TPP, with OSIA and the IPC addressing both Chapter 18 on Intellectual Property [PDF] and Chapter 14 on Electronic Commerce [PDF].

The TPP, signed by all 12 member states in February, will regulate trade between Australia, the United States, New Zealand, Canada, Singapore, Vietnam, Malaysia, Japan, Mexico, Peru, Brunei, and Chile.

The IPC concerned its submission with issues of complexity in Chapter 18 of the TPP; its consistency with existing laws; and the interaction between Chapters 9 [PDF] and 18 of the TPP.

On the first of those concerns, the IPC said the complexity inherent in the TPP's intellectual property chapter raises three issues.

"A first problem with this complexity is that it is becoming increasingly difficult to ascertain exactly what Australia's international IP obligations are," the IPC's submission said.

"A second problem with detailed and complex rules is that they can tend to limit reform options.

"A third problem is that in a context where countries appear to have been concerned in negotiations to ensure they do not need to change IP law, the overall goal that would most benefit IP stakeholders (both users and owners) -- namely, consistency in at least basic IP rules -- is not being achieved. In fact, it is notable that in the case of the TPP, the IP chapter does not in fact create a 'common set of rules' for IP law."

For instance, the chapter allows for at least four separate regimes for online intermediary liability for different TPP parties, the IPC said.

On the issue of consistency, the IPC said the chapter could require amendments to be made to Australian intellectual property law in order to comply with the TPP.

"The provisions on online service provider liability (Section J) reflect the provisions in the Australia-US Free Trade Agreement. As the IPC has noted in previous submissions, Australia's copyright law does not currently comply with these provisions. Thus as Australian copyright law presently stands, the TPP does require a change," it said.

For example, the legal definitions of "access control technological protection measure" and "technological protection measure" in Section 10(1) of the Australian Copyright Act are consistent with TPP Article 18.68; the definition of "rights holders" under Article 18.74 may require amendment to the definition of exclusive licensee under the Patents Act and the Designs Act; and there are "significant differences" between Article 18.51 of the TPP and Article 17.10.4 of the Australia-United States Free Trade Agreement.

On the interaction between Chapters 9 and 18, the IPC said it could have impacts on the decision-making abilities of the court system.

"The IPC has some concerns about the potential for disputes brought by private parties regarding amendments to or affecting IP law and IP rights being subject to resolution by bodies other than Australian courts," the IPC's submission said.

"It is clear that there is at least some potential for parties unhappy with the result in a court decision rendered by Australian courts to initiate proceedings in investor-state dispute settlement ... The IPC therefore wishes to register its concern about this development and its potential impacts on IP law reform, and Australian court decision making, in the future.

"The potential for such action to be brought could undermine the finality of Australian court decisions on IP law, and increase legal uncertainty. The IPC notes that Chapter 9 of the TPP differs from NAFTA [the North American Free Trade Agreement]."

OSIA, meanwhile, raised problems with the ecommerce chapter, saying it could "block future domestic copyright reforms, and may also hinder copyright enforcement actions in relation to open-source software".

OSIA also blasted Chapter 18 as a whole.

"Most disturbing of all for OSIA is the Intellectual Property chapter, which lacks balance, is internally contradictory, seeks to reverse the presumption of innocence, and seeks to pre-empt the findings of at least one current inquiry and to gazump the recommendations of several others," OSIA argued in its submission.

"If implemented, it will serve to stymie progress (both domestically and on the world stage), to legitimise anti-competitive behaviour and to facilitate automated misrepresentation."

Criminal law should not be used to enforce the breach of copyright, as required under the TPP, with OSIA pointing out that even Attorney-General George Brandis has said copyright infringement is "only a civil wrong". The use of notices to get an ISP to remove or disable access to online copyright-infringing materials also reverses the presumption of innocence, OSIA argued.

"Article 18.82(3)(a) requires that ISPs expeditiously remove or disable access to the disputed materials in a variety of circumstances, including on receiving 'a notice of alleged infringement from the right holder'. The presumption of innocence, even in civil matters, has long been a fundamental principle of Australian law: The burden of proof lies with the party making the allegation," OSIA said.

"A mere allegation giving rise to a presumption of guilt (as dictated by Article 18.82(3)(a) and Footnote 154(c)) should be regarded as repugnant to natural justice, and therefore rejected outright."

Software under the TPP is also facing double regulation under both copyright and patent provisions, which will have a "detrimental effect on progress", OSIA concluded.

The submissions from OSIA and the IPC followed the Australian Digital Alliance (ADA) and Copyright Advisory Group arguing last month at the Joint Standing Committee on Treaties: Trans-Pacific Partnership Agreement hearing that without the more extensive safe harbour provisions under the proposed Copyright Act amendments, Australia will be in breach of its TPP obligations.

Section H of the Intellectual Property chapter of the TPP mandates that member states implement both fair use and safe harbour provisions.

"Each party shall ensure that legal remedies are available for right holders to address such copyright infringement, and shall establish or maintain appropriate safe harbours in respect of online services that are internet service providers," Article 18.82 says.

Articles 18.68, 18.69, and 18.74 also provide that criminal and civil penalties do not apply to "a non-profit library, museum, archive, educational institution, or public non-commercial broadcasting entity".

The ADA said that since Australia's current safe harbour scheme applies only to commercial ISPs, the nation's startups are at a disadvantage internationally.

"Libraries, schools, universities, and Australian startups like Redbubble and Umberto all provide exactly the same services -- the services that are described by the provision -- and yet are not covered by our current safe harbour provisions," the ADA said.

"This puts our startups, in particular, at a commercial disadvantage to their international counterparts, creating a substantial disincentive for tech companies to set up hosting services and other new technology services in Australia, and raising their risk compared to international groups that are working in the same area."

The amendments proposed to the Copyright Act were designed to ensure that libraries, archives, educational facilities, cultural institutions, and the disability sector have "reasonable access" to copyrighted content, with usage of a copyright material not constituting infringement.

The proposed amendments also acceded to Article 18.81 of the TPP by pushing broader safe harbour provisions to cover online copyright access.

The technology sector would in particular have benefited from the addition of the non-commercial private use and technical use exemptions, as they would cover data caches, cloud computing, digital recording, and transferring of content.