TPP could block copyright fair use

The recent leak of the intellectual property chapter of the Trans Pacific Partnership Agreement, currently entering its seventh year of negotiation, shows that New Zealand's negotiators are doing a good job holding the line against more restrictive copyright laws. Things like allowing rightsholders to veto parallel imports, mandatory statutory damages and requiring consent for transient automatic copying of files as they transfer across the internet, which would have taken an axe to our copyright law, now all appear to be off the table. Unfortunately, longer copyright terms and criminalisation of technological protection measures are still there, so not all is won.

I've written before though about some of the things that aren't even in TPP and which are needed to level the playing field, particularly with the US. One of those things is fair use, a US law defence, which creates a broad and flexible exception to the exclusive rights a rightsholder would otherwise have. So, for example, US cases have held 2 Live Crew's parody of Roy Orbison's Oh, Pretty Woman, even though it was for commercial gain, was fair use. Links and thumbnails created by search engines have also been held to be fair use. Google also claims that its scanning of tens of millions of books without permission, is fair use. Timeshifting TV programmes for later viewing is fair use. The US Supreme Court has sent Google and Oracle back to the Federal Court in San Francisco to decide if Google's use of Oracle-owned java APIs is fair use. The list goes on. Of course, for a rightsholder, a successful fair use defence can put a big hole in its exclusive rights – that's why Oracle is fighting so hard in its API case. 

Fair use is a big deal.

In New Zealand we have some narrow fair dealing exceptions to copyright for specific activities (not parody and satire by the way) but we do not have a broader fair use exception. The discussion about whether we should is scheduled to take place as part of our review of the Copyright Act, which has been postponed pending agreement on TPP. The theory is that, once TPP is completed, we will then be free to make any changes required by that plus any other changes we consider necessary.

There are two issues with that.

Firstly, no one should think that, if we reach agreement on TPP, it will mean US rightsholders are satisfied. They play a long game and they play it on multiple fronts. There will undoubtedly be lobbying from organisations such as the Motion Picture Association of America (or its representative in New Zealand, now called the NZ Screen Association) and the Business Software Alliance, when we start to review our own Copyright Act. Despite the fact that the US has fair use, expect US rightsholders to lobby against it, just as the MPAA did when the UK started to consider introduction of a fair use defence.

The arbitration weapon
Secondly, rightsholders will have a large lobbying tool at their disposal as a result of TPP in its current form. That is Investor State Dispute Settlement (ISDS). ISDS allows an overseas company to lay a complaint against the New Zealand government, which is then heard by private arbitrators, in an overseas tribunal, under international law. The system was designed in part to enable companies whose investments were lost when banana republics nationalised their assets, to later seek compensation. It was a forgotten backwater of hundreds of international treaties until the last decade when mainly US corporations realised they could use it to argue for compensation for any law change that adversely affected their investments. Close to home, this type of provision has enabled tobacco companies to sue Australia for introducing its plain paper packaging legislation. They argue that that destroys many years of investment in their brands.

You see where I'm going with this, right. Whether you agree with fair use or not, it clearly reduces the scope of a rightsholder's copyright. Rightsholders invest significant sums in New Zealand promoting and protecting copyright works and might well argue that those investments and the copyright works in question would be damaged significantly by the introduction of a fair use exception in New Zealand. You may consider that as spurious an argument as the plain paper packaging one in Australia but that hasn't stopped the Australian government having to spend a projected $A50 million to defend that claim.

Imagine that – we negotiate away copyright concessions to the US in TPP, only to find that the same lobbyists sitting in behind those negotiations then use the ISDS provisions of the same agreement to argue against us introducing fair use, or to lodge a claim against the New Zealand government if we do.

Rick Shera is a partner at Lowndes Jordan. This post originally appeared on Lojo.co.nz