October 29, 2015 4:36PM

First Thoughts on the TPP’s IP Chapter

Technically, even though the negotiations are over, the TPP isn’t finished being drafted.  Lawyers are currently going over every inch of the agreement to make sure the negotiators’ intent is reflected effectively and accurately in the final text, which will presumably be released in the coming weeks.  However, Wikileaks has published what appears to be the fully negotiated, pre-scrub TPP chapter on intellectual property.  While the final text may have somewhat different language, the leaked version gives a clear picture of what the parties agreed to on a number of contentious IP issues.

I have been critical of the inclusion of IP rules in trade agreements generally and in the TPP in particular.  Trying to resolve contentious policy differences that are not strictly trade-related impedes the important and valuable work of trade agreements in lowering trade barriers and reducing harmful protectionism.  Moreover, trade negotiations are not the proper forum for devising complex patent and copyright systems, which if done poorly can have negative impacts on the rights of consumers and even hinder innovation. 

It would have been best if the TPP did not impose any obligations related to IP, but it will, so the task at hand is to evaluate the individual provisions.  While it's tempting to judge TPP provisions as being good or bad policy on their face, it's important to remember that the agreement does not exist in a vacuum.  What matters is whether and to what extent the TPP is going to impact national IP laws---that includes not only changes to the law but also restrictions on a legislature's ability to change the law later. 

I offer three standards for judging individual IP provisions in the TPP.  These standards are U.S.-focused, but you could do the same analysis for any other country.

  1. Does the provision require a change in U.S. law?
  2. Does the provision impose a greater obligation than past U.S. trade agreements?
  3. Is the provision more strict than current global rules at the World Trade Organization?

The original negotiating position of the United States in the TPP included provisions that went beyond current U.S. law.  For example, U.S. negotiators wanted the TPP to require governments to limit copyright exhaustion to domestic sales, a rule that contradicts U.S. law’s global first sale doctrine.  U.S. negotiators were also pushing for rules that secured more protections than previous U.S. trade agreements to match recent changes in U.S. law, the most prominent example being 12 years of market exclusivity for biologic medicines.

The latest leak reveals, however, that the United States failed to secure any of these ambitious proposals.  In fact, the TPP’s IP chapter is by and large less onerous than the U.S.–Korea Free Trade Agreement, the most recent agreement negotiated by the United States before the TPP.  Many provisions are less detailed and more flexible than their counterparts in the last agreement.  I suspect this outcome is due in large part to the fact that the TPP has 12 members, many of whom do not want to reform their IP regimes.

But while the TPP’s IP chapter is apparently not going to impose any new international obligations on the United States, many of its provisions go beyond what is required under the rules of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and so other TPP members will have to change their laws.  The most notable example of a TRIPS-plus requirement in the TPP is the provision mandating that copyrights last for 70 years after the author’s death.  That is twenty years longer than the TRIPS requirement, so a number of TPP members—including Canada, Japan, and New Zealand—will have to extend copyright duration retroactively, keeping many very old works from entering the public domain for another two decades. 

The IP chapter is just one of many components of the TPP that will need to be evaluated to determine whether the entire agreement is net liberalizing and therefore worth doing.  Everyone should wait until the final text of the entire deal is available before making that determination.