Much digital piracy and online infringement takes place in foreign countries. Cyberlocker websites and stream-ripping websites make infringing content available to Internet users through downloading and streaming. Individuals access infringing content through illicit streaming devices. Digital piracy continues to cause copyright owners steep financial losses. A report by Frontier Economics found that "the global value of digital piracy in movies, music and software in 2015 was $213 Billion." The report forecasts that the global value of digital piracy in 2022 will range between $289-$644 billion for movies and $53-$117 billion for music. According to a 2017 Organization for Economic Cooperation and Development report, the global value of international and domestic trade in counterfeit and pirated goods in 2013 was between $710 billion and $917 billion.
Protection of intellectual property against piracy and theft is crucial to maintaining a healthy U.S. economy in our information-dependent Digital Age. Strong copyright protections are also a constitutional imperative. The Intellectual Property Clause, or Copyright Clause, contained in Article I, Section 8, declares that Congress shall have power "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."
The IP Clause is premised on the understanding that copyrights and patent rights are property rights grounded in the intellectual and physical labors of authors and inventors. As we explained in our
Perspectives from FSF Scholars
paper, "The Logic of International Intellectual Property Protection," the same natural law understandings regarding IP rights informed passage of the first U.S. law to secure overseas protections for Americans’ copyrighted works – the International Copyright Act of 1891. By the 1891 Act, the U.S. obtained copyright protections for American authors and creative artists from foreign nations in exchange for U.S. recognition of domestic copyright protections for works by foreign authors and creative artists.
Over the course of the 20th Century, the U.S. negotiated and implemented treaties and trade agreements to secure foreign copyright protections for Americans’ creative works. This includes the North American Free Trade Agreement of 1994 (NAFTA). But NAFTA pre-dates economy-transforming advancements in digital technology and Internet connectivity. Consequently, it fails to protect adequately Americans' creative works on a number of fronts.
The Trump Administration has negotiated a replacement for NAFTA, the United States-Mexico-Canada Agreement (USMCA). In several respects, the proposed USMCA modernizes and strengthens copyright protections and enforcement for Americans' creative works in Canada and Mexico. For instance, under USMCA, each member nation would secure:
- Full enjoyment of exclusive rights of reproduction, distribution, and public performance for copyright owners and public performers of sound recordings.
- Protection terms for creative works, performances, and sound recordings for the life of the author plus 70 years, aligning with current copyright law in the U.S.
- Contractual liberty and opportunity for copyright holders to reap full value for their creative works through voluntary transfers of their rights.
- Stronger remedies in civil copyright infringement cases, including injunctive relief, damage awards for lost profits, statutory damages, and attorney fees.
- Authorization for border officials to pursue, seize, and destroy pirated goods.
- Stronger criminal penalties for willful copyright infringement, such as fines or imprisonment, for "camcording" movies in theaters.
- Criminal penalties and civil remedies for manufacturing or distributing equipment used in receiving cable and satellite programming without authorization.
In short, these provisions in USMCA would better secure Americans' copyrighted works in North America, and they are worthy of support by the public and by Congress.
However, the proposed USMCA has room for improvement. The proposed USMCA incorporates provisions mirroring Section 512 of the Digital Millennium Copyright Act of 1998 that are problematic. Under Section 512, copyright holders are entitled to give notice to an online service provider when infringing content is posted on its website. A provider receives immunity if it "responds expeditiously to remove, or disable access to, the material that is claimed to be infringing." But Section 512 is outdated and ineffective in protecting digital music and video content from massive online infringement on today’s popular user-upload websites like YouTube.
Moreover, judicial interpretations of Section 512 have widened the circumstances in which online providers can claim lack of knowledge of infringing activity and thereby receive immunity. Also, court precedents make it burdensome to pursue takedowns when infringing uses of the same content take place across multiple web pages on the same website. Thus, Section 512 needs to be reformed and updated. As currently written, inclusion of Section 512-like language in international agreements such as USMCA is more likely to freeze in place an inadequate framework for combating online infringement than it is to secure protections for Americans' copyrighted works in the Digital Age. Similar language should be omitted from future treaties and trade agreements. Congress should be committed to reforming and updating Section 512 to combat online infringement.
It is imperative that the U.S. presses for meaningful protections for copyrighted goods and other IP in all future treaties and trade agreements. For instance, pro-copyright provisions should be an objective of upcoming U.S. bilateral trade negotiations with Japan, the European Union, and the United Kingdom. Further, the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) is outdated and needs to be replaced with modernized copyright provisions. The Trump Administration withdrew the U.S. from the Trans-Pacific Partnership (TPP) trade agreement that was intended to replace TRIPS. But the Administration now may be reviewing the proposed TPP, with an eye towards renegotiating its terms or entering into bilateral agreements with nations that negotiated TPP. Either diplomatic course provides the U.S. with an opportunity to better secure copyrights for American creative works.
Congress should also support efforts to modernize international protections for Americans' copyrighted goods by promptly approving pro-copyright trade agreements and passing implementing legislation. Trade Promotion Authority (TPA) procedures provide a "fast track" for Congressional approval and implementation of trade agreements submitted to it by the President. Pro-copyright implementing legislation subject to TPA should receive "fast track" passage by both chambers of Congress. The Senate, which is responsible for treaty ratification, must also be hospitable to future pro-copyright treaties with foreign nations.
For the Trump Administration and for Congress, the value of copyrighted goods to the U.S. economy and the Constitution's imperative to secure full copyright protections for Americans’ creative works should form the starting point for all efforts to modernize and strengthen protections accorded to copyrighted works in foreign nations.
When it comes to specific trade agreement or treaty terms, practical judgments by the Trump Administration regarding what is achievable are inevitable. But a bedrock goal of negotiations should be to ensure foreign nations provide the same copyright protections that the U.S. secures for creative works within its borders.
Further, in establishing future trade agreements and treaties, the Trump Administration and Congress should resist inclusion of over broad exemptions or carve-outs for certain types of copyrighted works. The Administration and Congress also should ensure that such agreements and treaties do not tie the hands of Congress regarding future domestic policy. The U.S. ought to retain freedom to undertake future reforms that modernize and bolster domestic protections for copyrighted works and enable creative artists to fully reap the proceeds for their creative labors.
The U.S. can curb harmful international piracy and infringement in foreign nations by pursuing trade agreements and treaties to modernize copyright protections for Americans' creative works. USMCA marks a step in the right direction. Additional international cooperative efforts to bolster copyrights should follow. By better securing American creative artists' rights to receive the financial returns for their creative labors from overseas, the Trump Administration – and successive administrations – and Congress not only would advance America's economic interests, but also fulfill copyright's constitutional mandate.
* Randolph J. May is President and Seth L. Cooper is a Senior Fellow of the Free State Foundation, an independent
nonpartisan free market-oriented think tank located in Rockville, Maryland.
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