Copyright, Intellectual Property

What Does NAFTA Renegotiation Have to Do With Netflix, Lions (Witches And Wardrobes), And Textbooks?

A new NAFTA deal could have important ramifications for copyright law.

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On Wednesday, the United States began the first round of renegotiations of the North American Free Trade Agreement (NAFTA), which will include a chapter on intellectual property. Trade agreements today are comprehensive agreements that cover a wide range of issues, including intellectual property, often with highly prescriptive provisions.

Aside from the issue of whether intellectual property belongs in a trade agreement—a question that has been raised by a number of organizations—there is a serious procedural defect in the way the United States engages in negotiations: a complete lack of transparency for binding provisions that could ultimately impact domestic law. The European Union has acknowledged the flaws of secret policymaking, and in negotiations with the United States in the Trans-Atlantic Trade and Investment Partnership (TTIP), it pledged to release its own textual proposals. Thus far, the United States has not followed suit and continues to shroud its proposals in secrecy.

Some have raised concerns that the U.S. proposals in NAFTA will resurrect the intellectual property provisions sought in the Trans-Pacific Partnership Agreement (TPP), which were highly controversial. Even if the United States doesn’t release negotiating texts, we still have some ideas of what may be proposed based on the leaked proposals the United States put forward during negotiations of the Trans-Pacific Partnership Agreement (TPP), prior free trade agreements, and comments submitted by companies to the U.S. Trade Representative (USTR) in the context of the NAFTA renegotiations. Here are a few things that could be at stake in NAFTA with respect to copyright:

Temporary Reproductions: What Will It Cost to Stream Netflix?

What does copyright protection extend to? Certainly it makes sense to prohibit users from photocopying a complete novel, for example. But should copyright cover temporary reproductions, which are constantly made by your computer to read e-mails, store documents and access content? For example, every time you watch Netflix, your computer buffers the video to ensure that the content can play smoothly; it can only do this through the technical process of creating a temporary copy in the computer’s random access memory (RAM).

The United States sought to ban such temporary reproductions in the TPP (allowing a rightholder to authorize or prohibit all reproductions “including temporary storage in electronic form”), and successfully included similar language in prior bilateral trade agreements, such as with Korea. The Motion Picture Association of America (MPAA) recently submitted comments seeking the inclusion of a provision on temporary reproductions in the renegotiation of NAFTA.

A provision giving copyright holders control over temporary reproductions could threaten all of our online communication and uses. It might impact the costs of accessing licensed content, since rightholders could increase the price of its deals with Netflix or Hulu, by claiming a fee for every temporary reproduction. A blogger could claim licensing fees every time you visit his website since your computer makes temporary copies to access his page. Inclusion of a provision on temporary reproduction could drastically change the way we interact and communicate online.

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Copyright Term: When Will C.S. Lewis’s Works Enter the Public Domain?

The United States has a copyright term that goes well beyond the international standard and is highly controversial. The current U.S. copyright term is the life of the author plus 70 years or 95 years for corporate works. The international standard is life plus 50 years, which itself is a long period. Study after study has shown that the copyright term does not need to be as long as current terms to incentivize creation. For example, according to an independent commission in Australia, very few works have any economic value beyond the first six years and “While hard to pinpoint an optimal copyright term, a more reasonable estimate would be closer to 15 to 25 years after creation, considerably less than 70 years after death.” Such lengths can also lead to problems like “orphan works,” where it is difficult, if not impossible, to find the rightholder of a work to seek a license to use the work. When works are kept out of the public domain, costs for education and discovery are increased and new, derivative works may be delayed.

Back in 2014, in Canada all of C.S. Lewis’ works—including the famous Chronicles of Narnia series—entered into the public domain 50 years after his death. In the United States, however, none of his works entered in the public domain in 2014. In fact, no published work has entered the public domain in the United States since the enactment of the Copyright Term Extension Act in 1998, and nothing will until January 1, 2019, because term extension essentially froze the public domain.

For (most) countries with a term of life plus 70 years, like those in the European Union, the Chronicles of Narnia, first published between 1950 and 1956, won’t go into the public domain until 2034 (the United States has a complicated calculation for works created prior to 2002 that depends on a number of factors; this chart helps with the determination, but under this system, The Lion, the Witch and the Wardrobe will enter the public domain before other books in the series, but not until 2045). C.S. Lewis had no children, but if he did, they would almost certainly die before ever seeing his works enter the public domain.

The U.S. copyright term extensions have been exported to several countries through the use of bilateral free trade agreements. During the TPP negotiations, Mexico was the most aggressive advocate for rightholders, proposing current copyright terms of life of the author plus 100 years and could make a similar proposal under NAFTA. Under a life-plus-100 regime, the works of C.S. Lewis would not enter the public domain until 2064. What Canada, Mexico and the United States agree on with respect to copyright term could potentially pull C.S. Lewis’s works out of the public domain in Canada or change when those in the United States will be free to use the work without seeking a license.

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Parallel importation: Can You Buy A Textbook in Another Country and Resell It Here?

The issue of parallel importation—whether a rightholder can control the importation and resale of copyrighted goods purchased abroad—may not come up in the NAFTA negotiations. After all, the Supreme Court of the United States already ruled in Kirtsaeng v. John Wiley & Sons—a case involving textbooks purchased in Thailand and resold in the United States—that under United States copyright law, the first sale of a copyrighted item anywhere in the world exhausts a copyright holder’s rights. This means that if you purchase a book in Canada on your summer vacation or a textbook while studying abroad in Australia, you can bring it back to the United States and resell it on eBay without having to get the copyright holder’s permission.

Even though it is now settled law, the United States may still seek to institute a ban on parallel importation. During the TPP negotiations, the United States put forward such a proposal, even though the issue was controversial. Then, despite the fact that the Supreme Court issued the Kirtsaeng decision in March 2013 and that all other negotiating parties opposed this provision, leaked texts and reports from negotiators reveal that the United States maintained its position on parallel importation at least until October of that year, several negotiating rounds later. The United States might try again to institute a ban on parallel importation through its negotiations in NAFTA, as a type of “backdoor policymaking,” where proponents of certain provisions get these rules in trade agreements, which are negotiated in secret, forcing changes to domestic law. It also would not be the first time that the United States proposed intellectual property provisions that are inconsistent with current law; there were numerous proposals by the United States in the TPP that were controversial or conflicted with domestic law.

Ultimately, only one of these three U.S. proposals survived the negotiating process in the TPP: copyright term. While Canada and Mexico were both TPP negotiating parties and it may be reasonable to assume the intellectual property chapter will end up in the same place, the dynamics of a three-country trade agreement look much different than a twelve-country one. Hopefully a final agreement from NAFTA doesn’t force changes on the United States that will raise the cost of Netflix, delay C.S. Lewis’s works from entering the public domain, or harm the secondary book market.

Krista L. Cox is a policy attorney who has spent her career working for non-profit organizations and associations. She has expertise in copyright, patent, and intellectual property enforcement law, as well as international trade. She currently works for a non-profit member association advocating for balanced copyright. You can reach her at kristay@gmail.com.

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