I am proud to announce that my article on Canada - South Korea Free Trade Agreement (CKFTA) has just been published by Intellectual Property Magazine. You can buy or subscribe to the magazine at http://www.intellectualpropertymagazine.com/.
The publisher generously agreed to its republication, so you can read my comments below.
MUCH ADO ABOUT CKFTA
On September 22, 2014, Canada’s Prime Minister Stephen Harper and Korean President Park Geun-hye celebrated the signing of Canada-Korea Free Trade Agreement (CKFTA). This article’s objective is to provide the context for and brief comments on IP-related provisions of CKFTA.
The official Canadian summary of the Agreement’s highlights states that the Agreement “will ensure that Canadian IP rights-holders can do business with confidence in the South Korean market”1..
This appears somewhat condescending given that Canada is not exactly known for being at the forefront of intellectual property protection. Just the opposite, since 1995, Canada has been on the U.S. Government’s Special “Watch List” as a country where IP protection is problematic2.. Canada’s position is that its failure to adequately protect IP is an attempt to find “an appropriate balance between the interests of IP rights-holders and the interests of users.” How using somebody else’s property without permission can ever be a right is being conveniently overlooked.
The author of this article is a Canadian lawyer and does not purport to know Korean law, but statistics for both countries’ participation in international treaties on intellectual property demonstrate that Korea takes IP more seriously. Canada is a party to 10 international treaties (of which two Canada joined in 2014)3., while Korea is a party to 184.:
|Treaty||In Force Since|
|Berne Convention||April 10, 1928||August 21, 1996|
|Brussels Convention||—||March 19, 2012|
|Budapest Treaty||September 21, 1996||March 28, 1988|
|Hague Agreement||—||July 1, 2014|
|Locarno Agreement||—||April 17, 2011|
|Madrid Protocol||—||April 10, 2003|
|Nice Agreement||—||January 8, 1999|
|Paris Convention||September 1, 1923||May 4, 1980|
|Patent Cooperation Treaty||January 2, 1990||August 10, 1984|
|Phonograms Convention||—||October 10, 1987|
|Rome Convention||June 4, 1998||March 18, 2009|
|Strasbourg Agreement||January 11, 1996||October 8, 1999|
|Trademark Law Treaty||—||February 25, 2003|
|UPOV Convention||March 4, 1991||January 7, 2002|
|Vienna Agreement||—||April 17, 2011|
|WIPO Convention||June 26, 1970||March 1, 1979|
|WIPO Copyright Treaty||August 13, 2014||June 24, 2004|
|WIPO Performances and Phonograms Treaty||August 13, 2014||March 18, 2009|
Many IP-related provisions of CKFTA merely reference other international treaties to which Canada and Korea are parties. This is important because Canada does not enforce international treaties directly. To have the force of law in Canada, provisions of all international conventions, treaties and agreements (including CKFTA) must be implemented in national Canadian legislation.
Add to this rather vague language of Canadian statutes on intellectual property and scarcity of precedent law—and you will see the problem. How would you know if a certain provision of an international treaty needs implementation into the national legislation if two lawyers can’t agree on what the national legislation actually is? Some Canadian lawyers, myself included, believe that extensive scope of exceptions from copyright conflicts with Canada’s obligations under the Berne Convention and TRIPS, while some others believe that it doesn’t. As a result, the parties are likely to have different assumptions about how these provisions should be interpreted.
One of the declared objectives of CKFTA is “to achieve a balance between the rights of IP right-holders and the legitimate interests of IP users.5.” Notice that the treaty does not use the controversial words “users’ rights”, however there still remains the question, what legitimate interests do IP users have regarding intellectual property of others. Who determines what interests are legitimate? Is using someone else’s music for your YouTube videos your legitimate interest? Is copying textbooks for the purposes of education a legitimate interest? What about using pictures on a blog by a non-profit?
CKFTA reaffirms both parties’ obligations under TRIPS as a minimal standard6., confirms the national treatment requirement7., and opens the door for a more extensive protection for and enforcement of intellectual property, as long as such extensive protection “does not contravene CKFTA.8.” Which, again, brings the question of users and their rights and legitimate interests. By definition, protection of exclusive rights comes at the expense of everyone other than the owner of that exclusive right. Logically, it is impossible to unilaterally offer more extensive protection to IP owners without disturbing the “balance of interest” that CKFTA purports to achieve.
The Treaty specifically opens the door for sound trademarks and forbids limiting registrable trademarks to those that are visually perceptible9.. This is in line with the law established in Canada after a 2012 Practice Notice by the Canadian Intellectual Property Office and the recent amendments to the Trade-Marks Act.
CKFTA requires the parties to protect collective marks (trademarks owned by an organization for the use by its members) and certification marks (trademarks for the use by anyone who meets a defined standard prescribed by the owner of the mark), whether such trademarks are protected as a separate category or not10.. While Canadian law protects certification marks, it does not (nor do the soon-to-be-in-force amendments to the Trade-Marks Act) refer collective marks.
The Agreement confirms the right (but not an obligation) of the parties to recognize unregistered, common-law, trademarks11..
CKFTA requires both parties to provide extra protection to well-known trademarks, whether or not such marks are registered, included on a list of well-known marks, or already recognized as well-known12.. Such protection must be conferred even if the goods and services are not identical or even similar, as long as using the well-known trademark in relation to non-similar goods or services “would indicate a connection between those goods or services and the owner of the trademark.” The interesting thing is that Canadian trademark regime is uncertain about the status of well-known marks. The leading case is the 2006 decision of the Supreme Court of Canada in Mattel Inc. v. 3894207 Canada Inc.13. that confirmed that difference in goods and services must be considered, however, in different cases such difference may carry greater or smaller weight. Whatever the interpretation, it is more narrow than what is commonly expected from protection conferred to well-known trademarks. Unfortunately, CKFTA does not provide more clarity whether Canada’s current standard is about to change or whether the countries would have two different standards for treating well-known marks.
The parties agreed that subject to any prior rights, Korea must protect the names “Canadian Whisky” and “Canadian Rye Whisky”, and Canada must protect the names “Goryeo Hongsam”, “Goryeo Baeksam”, “Goryeo Susam”, and “Icheon Ssal” and their translations, respectively, “Korean Red Ginseng”, “Korean White Ginseng”, “Korean Fresh Ginseng” and “Icheon Rice”14..
CKFTA establishes no new general rules for geographical indications, so its effect on Canadian laws will be rather limited.
The Agreement reaffirms that both parties shall comply with the Rome Convention, the Berne Convention, WCT and WPPT15.. Each party must provide that authors “have the right to authorize or prohibit all reproductions of their works.16.” Yet, there is no indication how this provision corresponds with massive expansion of circumstances where it is legal in Canada to use works without permission and despite prohibitions from the copyright owner.
CKFTA also sets forth that the parties must provide adequate legal protection and effective legal remedies against the circumvention of technological measures used by copyright owners to prevent unauthorized use of their IP17.. Unfortunately, however, this provision contains a qualification that a party may exclude from such protection instances where the measures are circumvented to do that which may be permitted through an applicable copyright exception. This is how the law stands in Canada, which completely defeats the idea behind the rules about technological measures. The point of these provisions is to give IP owners an effective way to deal with piracy by deeming that the very act of circumventing technological measures is an infringement. In Canada, only an act of circumventing technological measures for infringing purposes is deemed an infringement, so it is not enough to prove the fact of the circumvention.
This section affirms the standard requirements for patent protection—the invention must be new, involve an inventive step (be non-obvious), and be capable of industrial application (be useful)18.. The parties may exclude from patentability inventions related to cloning, methods of medical treatment of people and animals, and otherwise if providing patent protection to an invention would go against public order and morality19..
CKFTA contains provisions imposing an obligation on the parties to provide effective enforcement procedures against IP infringements and ensure that such procedures “are not unnecessarily complicated or costly” and that they do not “entail unreasonable time-limits or unwarranted delays.” It is open to a debate whether Canadian court system meets these requirements20..
The Agreement also prescribes that certain provisions must be implemented to ensure that adequate damages are available to an IP owner whose rights have been infringed, including award of “appropriate lawyer’s fees” to the party who prevailed in trial21..
CKFTA deals with several procedural matters. It contains a provision requiring both countries to have mechanisms to compel disclosure of information that may possess an alleged infringer that would be required for an IP owner to prove their case22.. It specifically addresses various preliminary orders and injunctions that may be available to IP owners.23.
The measures prescribed by the Agreement are in line with the Canada’s existing regime as proposed to be amended by the Combatting Counterfeit Products Act, which is due for its third hearing in parliament.
CRIMINAL PROCEDURES AND REMEDIES
CKFTA requires each party to provide for criminal procedures and penalties for the unauthorized copying of a cinematographic work from a performance in a movie theatre. Interestingly, this is the only infringement that the parties agree must be punishable criminally.
Unlike a more rigorous and effective “notice and takedown” approach, Canada has recently implemented what’s called a “notice and notice” system of dealing with internet infringements. In Canada, to avoid being held in violation of IP rights, ISPs must forward an IP owner’s notice to the subscriber (the actual infringer), but they are not required (without a court order) to disclose the subscriber’s personal information nor to ensure that the infringing materials are removed.
CKFTA does not require Canada to change this regime, but provides that a party may require that an ISP expeditiously disclose to an IP owner information sufficient to identify a subscriber whose account was allegedly used for infringement if the owner has filed a legally sufficient claim for copyright infringement24..
While the chapter on intellectual property is one of the more extensive in CKFTA it hardly adds much to the regime already established through other international treaties, such as TRIPS, WCT and WPPT.
While free trade between countries is certainly desirable, to present the IP-related chapter of CKFTA as a legal breakthrough for either Canada or South Korea would be a serious exaggeration.
5. CKFTA, Article 16.1
6. CKFTA, Article 16.3
7. CKFTA, Article 16.6
8. CKFTA, Section 16.4.1
9. CKFTA, Section 16.9.1
10. CKFTA, Section 16.9.2
11. CKFTA, Section 16.9.3
12. CKFTA, Section 16.9.5
14. CKFTA, Article 16.10
15. CKFTA, Section 16.11.1
16. CKFTA, Section 16.11.2
17. CKFTA, Sections 16.11.4—7
18. CKFTA, Section 16.12.1
19. CKFTA, Section 16.12.2
20. CKFTA, Sections 16.13.10—12
21. CKFTA, Section 16.13.14
22. CKFTA, Articles 16.18 and 16.19
23. CKFTA, Articles 16.20—16.24
24. CKFTA, Article 16.16
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