TPP: Welcome to the global war on intermediaries

Don't shoot the messenger

SOPA and PIPA are knocked-out. ACTA is on the ropes… time to relax? Not yet, meet the Trans-Pacific Partnership (TPP), the new front in the War on Piracy™. While there is already a trade agreement under this name, the TPP has been enhanced and in November last year the leaders of  Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States announced a new proposed agreement. Much like ACTA, the TPP will operate as a multilateral trade agreement between the United States and selected trading partners. As such, it contains several provisions on aspects related to international trade, including its own chapter on IP rights.

There is much to talk about this chapter, it contains everything that seems to frustrate the US Trade Representative (USTR) at this time. It creates a broadcasting right, it erodes the first-sale doctrine, it enhances anti-circumvention of technological protection measures, and it improves criminal liability for infringement, amongst other things. However, the section that intrigued me the most is Art 13.3 (b), which to my mind seems to completely change the regime for limitation of intermediary liability that exists in large number of legislations. Allow me to elaborate.

Intermediaries, such as ISPs, search engines, e-commerce vendors, social networks, content aggregators, and similar online services, have limited liability for the content posted by their customers if they have take-down procedures in place, such as the DMCA’s process. This limitation allows online businesses to operate without fear of constant interruption and/or crippling lawsuits that would not allow them to function properly. While the current system of take-down notices is problematic (see Chilling Effects), it still is better than the alternative.

Why this attack on intermediaries? It seems like the new enemy of content is Google with its search engines linking to infringing materials and user-generated content. As three-strikes models seem to have failed, suing customers has been a PR disaster, and even arresting and suing providers of torrent tracker sites and digital lockers has not dented piracy, the copyright industries have decided to go against the intermediaries that allow some of this content to get to you, namely, Google. However, those intermediaries are protected by the law at present, specifically laws that create safe harbors against indiscriminate liability. What to do? Well, change the law of course! Enter TPP.

TPP comes with a large number of caveats that cripple intermediary immunity. From the start it makes it clear that it is attempting to erode existing practices when it narrows down the definition of the types of services that are exempt from liability for infringement. These are:

“(A) transmitting, routing, or providing connections for material without modification of its content, or the intermediate and transient storage of such material in the course thereof;
(B) caching carried out through an automatic process;
(C) storage, at the direction of a user, of material residing on a system or network controlled or operated by or for the service provider;
and
(D) referring or linking users to an online location by using information location tools, including hyperlinks and directories.”

This seems reasonable, but for two things. Firstly, it is evidently an exhaustive list, so it must be assumed that any function that is not mentioned will be liable. Secondly, the article further specifies that even if the above services are not to be considered liable, to achieve this status the intermediaries must comply with several conditions. In other words, it imposes a specific type of behaviour from providers, and if they do not follow such guidelines, then they can be sued for secondary infringement.

What are these conditions? For caching services, the access can only be limited to approved users, refreshing of information must comply with “industry standards”, it cannot interfere with technical standards (it cannot circumvent any TPMs), and access to the cache must be removed upon notice of the owner. In other words, we will have a take-down system for cached information. This may seem arcane, but lots of sites now use cache services (including this blog), so we would be affected. But where the attack on intermediaries really comes in force is with regards to storage services (e.g. cloud and digital lockers), and linking and/or referring services (search engines, and in theory, any site with a link to infringing material, namely, torrent sites like TPB). These services will have to comply with the following list of conditions:

• The service provider must not receive “a financial benefit directly attributable to the infringing activity”. In other words, Megaupload.
• The provider must expeditiously remove content upon receipt of notification. So, remove first, ask questions later.
• The site must have a representative to receive such notifications. This really bothers me, all providers, no matter how big or small, must have a removal officer or a similar employee. This will really affect SMEs!
• The service provider must have “a policy that provides for termination in appropriate circumstances of the accounts of repeat infringers”. So TPP contains a three-strikes provision after all, but it is a very sneaky manner to carry out three-strikes. It creates an obligation on intermediaries to adopt disconnection regimes, or else.

Even worse, the TPP will still allow a court to order the disconnection and/or termination for any operator of the above services. Similarly, a court has the power to order specific content to be removed from any service, even if the provider fulfills all of the conditions specified above. This truly would mean an end to limitation of liability for all practical purposes. I cannot begin to say how damaging this would be for the Internet in the countries that would adopt TPP. SOPA did not have anything as toxic as this.

I realised recently that the traditional copyright industries are out to get intermediaries when I read this year’s Special 301 submission by the International Intellectual Property’s Alliance (IIPA) to the USTR. They are recommending to name Costa Rica as one of the top IP offending countries. What sin have we committed? Back in December, the government passed a decree that enacts a system of limitation of liability for intermediaries. Good stuff actually. However, apparently we left too many openings for those leeches:

“Nevertheless, the decree sets forth overly long time periods by which ISPs are to forward notifications sent by right holders, and in practical terms creates a serious obstacle for the enforcement of rights in the digital environment. As a matter of example, the decree allows an ISP up to 45 days just to forward a single notification to its subscriber. In the modern market for copyrighted works, the critical time for rights holders to recoup their considerable investment can be a matter of weeks before consumer interest begins to wane. If copyright owners must compete with free unauthorized copies that can remain online for over a month, that opportunity is lost.”

So, heaven forbid that an intermediary service provider will be given time to ascertain if the claim is valid. Allegedly infringing content must be removed ASAP.

So it is time to prepare strong opposition to the TPP, even in countries that are not directly affected. If we know anything about IP maximalism, is that it propagates. Once these provisions have been adopted somewhere, there will be pressure to have them implemented everywhere.

Sound the alarm, this one really is important.