'Ancillary' Copyright Laws, Patent Protections Front and Center in USTR Special 301 Hearing

Additional intellectual property protections are needed -- including those involving "ancillary copyright laws," and patent and intermediary liability protections -- in certain countries, said Internet and communications trade groups during a public hearing Tuesday of the U.S. Trade Representative's Special 301 Subcommittee. The USTR each year identifies "countries that deny adequate and effective protection of intellectual property protection," and recently received written stakeholder comments on the issue (see 1602080061). The public hearing included testimony from representatives of four countries -- Bulgaria, the Czech Republic, Egypt and the Ukraine -- detailing their governments' recent efforts to improve IP protections and arguing they should be excluded from the USTR's watch list this year.

The Internet Association said the USTR report should include "substantive discussion of and attention to the limitation and exceptions central to the adequate and effective protection of" IP rights, and the agency should act on ancillary copyright laws and "distant" Internet intermediaries, in testimony closely following its previously submitted written comments. Ellen Schrantz, Internet Association government affairs director and counsel, asked the USTR to "immediately issue warnings to states that have enacted or are considering enacting ancillary copyright laws." Schrantz cited examples of the rules that "act as a tax on quotations or snippets," which have been enacted in Germany and Spain, and "directly contravene established international obligations under the TRIPS Agreement." The Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS, is an international IP agreement administered by the World Trade Organization.

The ancillary copyright laws enacted by Spain and Germany "have proven detrimental for U.S. companies seeking legal clarity and certainty for operations in those states," said Schrantz. The German and Spanish rules have caused "consequences" to businesses, and Schrantz said the European Commission is considering "more widespread attempts" at enacting ancillary copyright rules. "The Internet Association requests that the USTR immediately include countries with anti-competitive ancillary copyright laws on its [watch list], and special attention be given to this issue to deter our trade partners from taking similarly harmful action," she said. Schrantz also urged the USTR to ensure that "distant intermediaries, such as Internet domain name registrars," aren't reassigned IP enforcement responsibilities, which she said could have "detrimental consequences for management of the Internet ecosystem."

Leticia Lewis, BSA|The Software Alliance's policy director, said her organization places importance on "fair and equitable market access" for its members when doing business in foreign countries and said those members are having issues in India. Lewis said the recent establishment of a set of patent-related guidelines in India "may block patent protections on software" and thus hurt U.S. software businesses in that nation. BSA is "currently reevaluating" its position on India in its Special 301 report and will file additional comments with the USTR, said Lewis. She also cited the importance of cross-border data flows and the need for countries to ensure the flow of information is possible.

Matthew Schruers, Computer and Communications Industry Association (CCIA) vice president-law and policy, also told the USTR of the need for the removal of ancillary copyright rules in certain countries. He said the recent laws enacted by Spain and Germany have had adverse effects on news aggregators in those countries. Spain's ancillary copyright rule, which covered aggregated content, was the reason several Spanish and U.S. businesses exited the market, and there's "no reason why this shouldn’t be the basis for inclusion in an evaluation of whether Spain is in compliance of international IP law," said Schruers. It's "fairly clear" that these "snippet taxes" violate sections of the Bern Convention, which requires free use of works of news quotations, he said.

The Alliance for Fair Trade with India joined other groups during the hearing in detailing certain practices of India that are seen as negatively impacting U.S. businesses and industries, and said “encouraging rhetoric” between President Barack Obama and Indian officials “has not translated into concrete action.” Longstanding issues with India include “weaknesses in the Indian copyright system that harm U.S. and Indian creators, the use and threatened use of compulsory licensing” on certain technologies, and “measures in Indian law that add a legally questionable additional criterion” for patenting products. “Overall, very few improvements have been made to India’s intellectual property rights regime since the 2015 Special 301 report,” said the group in a news release Tuesday. The group recommended India remain on the Special 301 Priority Watch List and be subject to an out-of-cycle review. The National Association of Manufacturers (NAM) issued a news release Tuesday listing its “top five” countries to be looked at for IP-related issues -- Canada, China, Colombia, India and Russia -- and recommended a “more detailed out-of-cycle review” of IPR challenges in Canada, Colombia and India. NAM “urges the USTR and its fellow agencies to take full advantage of the Special 301 process and new enforcement tools to push for real progress on priority issues facing manufacturers in the United States in order to best protect American competitiveness and jobs,” said the release.