Manon Ress
Consumer Project on Technology
PO Box 19367
Washington, DC 20036 USA
+1.202.387.8030
fax: 1.202.234.5176
manon.ress@cptech.org
www.cptech.org

Comments Prepared by the Consumer Project on Technology (CPTech) on the Second Draft FTAA Text - Chapter on Intellectual Property Rights

February 28, 2003

The Consumer Project on Technology (CPTech) is submitting these comments in response to the USTR request, 67 Fed. Reg. 249 (December 27, 2002) for written comments on the second Free Trade Area of the Americas (FTAA) Draft Agreement.

CPTech is non profit organization based in Washington, D.C., advocating for consumer interests in matters involving intellectual property rights. CPTech has reviewed the second Draft of the FTAA Chapter on Intellectual Property Rights and is pleased to have the opportunity to contribute at this stage of the negotiations.

Our comments are limited to those aspects of the FTAA Chapter on Intellectual Property Rights relevant to consumers and users of intellectual property products worldwide. The comments reflect some but not all of our concerns. We will be providing more detailed comments to the Civil Society Committee's Open and Ongoing Invitation to the Public in the near future.

Specific concerns include provisions relating to 1) database protection, 2) trademarks, 3) copyrights and 4) patents.

1)Treaty on Database Protection: Article 5 [(m) of the General Provisions and Basic Principles] requires all FTAA countries to "give effect" to a non-existing treaty on database that has been opposed in the US for years in the Supreme Court (Feist Publication Inc v. Rural Tel. Service Co., 499 U.S. 340 (1991) and in Congress.

2)Trademarks and Free Speech: [Article 13.1] mandates that FTAA countries rely on a private and unaccountable body, the Internet Corporation for Assigned Names and Numbers (ICANN) to resolve domain name disputes, including disputes with free speech implications.

3)Copyright Term and Technological Measures

A general concern is the absence of language that would reflect our current domestic standards of "fair use" and the general lack of balance between provisions that expand right holders' rights while not ensuring the public and users' access privileges.

Article [10.1 a) and b)] extends the term of copyrights. Recently argued at the US Supreme Court, the extension of the copyright term is still extremely controversial in the US. The United States may decide to shorten the term and this treaty would lock us in a mistaken policy.

Obligations concerning technological measures, Article 21, incorporates prohibitions consistent with Title I of the Digital Millennium Copyright Act (DMCA) which implements in U.S. law the circumvention provisions of the WIPO Copyright treaty and WIPO Performances and Phonograms Treaty. However, the exceptions to the circumvention prohibitions consistent with 17 U.S.C. Sections 1201(c)-(k) are not included explicitly in the Draft.

With regard to copyright and obligations concerning technological measures, we think it's important to explore new ways of thinking about copyright exceptions. In particular, the internet raises important questions regarding cross border uses of copyrighted materials. The treaty should guarantee that every country provides minimum rights to the public to use materials, including for fair use. We draw your attention to the current request by internet users who are blind to the standing committee on copyrights at WIPO to provide for minimum exceptions in copyright laws for materials for the blind. Furthermore, it is important to ensure that those products and materials can be exported across borders, including via the internet. This is needed in order to ensure that societies that protect the interest of the blind can obtain special versions of copyrighted materials for the blind in an economically efficient manner. The request by groups representing the blind relates to the fact that copyrights are territorial and exceptions are voluntary by country.

In addition, the Draft does not include language that would create safe haven from copyright liability for Internet Service Providers (ISPs) as in Title II Section 512 of the Copyright Act, 17 U.S.C =A7512. We are concerned that the impact of increased liability for ISPs will be a threat on users' privacy and freedom of speech.

4)Patents

The Section 5 on Patents for inventions raises several issues:

The draft text of the FTAA permits patents on genetically modified organisms, incorporating various aspects of the text of paragraph 27.3(b) of the TRIPS that states that a government can deny patents on plants and animals that are not microorganisms, and on fundamental biological processes to produce plants and animals that are not microorganisms. However, paragraph 27.3(b) of TRIPS is itself subject to a debate within the WTO and subject to change.

The draft text of the FTAA would give greater protection to pharmaceutical companies than the TRIPS itself at the expense of public health by:

• limiting the use of compulsory licenses "only for public non-commercial ends or in situations of a declared national emergency or other situations of extreme urgency"
• banning the export of compulsory licensed goods
• extending the effective patent term in some cases beyond the 20 years granted under the TRIPS
• proposing that information relative to the safety and effectiveness of a pharmaceutical or agricultural product be the exclusive property of the patent holder for five years. It will therefore be much more difficult for generic producers to produce copies because they will have to replicate all of the tests performed by the patent holder instead of demonstrating the "bioequivalency" of their product.

The treaty proposes that governments link drug registration to patent status. However, in the United States this provision has been subject to well-documented abuses. Companies obtain questionable or weak patent claims to extend their monopolies inappropriately.

In addition to provisions on medicine, we have concerns about the impact of the patent provisions on information technologies, standard settings, environmental technologies, agriculture and other areas of the economy. For example, proposed restrictions on compulsory licensing provisions in the treaty are inconsistent with compulsory licensing provisions in the US related to clean air and civilian nuclear energy.

We have recently asked the United States Patent and Trademark Office and the Federal Trade Commission to address issues relating to global cooperation on disclosure of patent claims relating to standards settings. The FTAA could be an area where such cooperation could be implemented.

On November 18, 2002, we asked the Office of Management and Budget for a cost-benefit analysis of the scope of patent protection to determine if the costs outweigh the benefits in areas such as software and business methods. The Federal Trade Commission and Department of Justice recently held hearings on competition and antitrust policies addressing the same issues. Considering that these issues are under examination in the United States, the FTAA should not force countries to embrace a broad scope of what can be patented. Negotiators should embrace the language of Section 5 Article 1.5 [e and g] which excludes business methods and software from patentability.

We ask the Office of the United States Trade Representative to recognize the importance of free and open source software development models. The treaty should facilitate and not stifle the development of free and open-source software. In fact, the US Department of Defense and the Office of Management and Budget have both expressed interest in expanding the use of free software for mid-tier server, saving taxpayers millions of dollars and providing better security.

In conclusion, we appreciate the opportunity to comment on the Draft and hope that our comments raise issues that will be addressed in future negotiations. We look forward to reading language that ensures a balance between the rights and the interests of intellectual property owners and consumers.

Sincerely,
Manon Ress