Israel Fights Back: A Purim Story

It is fitting that on today, the Jewish holiday of Purim I discuss the recent, heroic response of the Government of Israel to the bullying by the U.S. International Intellectual Property Alliance in its submission to the United States Trade Representative regarding the U.S. Special 301 Watch List. (See article in ars technica along with a link to the submission here).
More than one scholar and more than one government has wondered whether the Special 301 watch lists violate the TRIPs Agreement. Perhaps in the future the issue will be tested before a WTO panel and the issue will finally be decided. See here for a 1999 panel decision on Sections 305 and 306, and article by Professors Frederick Abbot and Jerome Reichman here). The result of the panel decision was a determination that article 23 of the WTO Dispute Settlement Understanding obliges WTO Members -- read the U.S. -- to seek redress for alleged violations of the WTO Agreement through multilateral, and not unilateral procedures. Because USTR stated it would apply Section 301 consistently with the WTO Agreement, the panel imposed
no sanctions. The argument still exists, though, that since the designated watch list countries are forced to spend large sums to defend themselves against designation each year, based solely charges made by the IIPA, there is a WTO violation.

But that issue aside, the sheer arrogance and affront to the sovereignty of foreign governments by the IIPA’s annual reports and effort to penalize those governments that do not toe the IIPA’s line is breathtaking. (See earlier post here). One needs to actually pore through the IIPA country reports to fully grasp what I mean: the nitpicking attacks on (translated versions) of foreign statutes which are held up to the light of U.S. law to decipher the slightest deviation – if only semantic – supports the view of the rest of the world that the IIPA is not only insensitive to the rest of the world, but has as its goal the remaking of the world in the U.S. image. This actually not quite right – it is a remaking of the world that contains only those parts of U.S. law that the corporate content owners who are members of the IIPA favor. For example, a little over a year ago I noted the amazing spectacle of the IIPA lobbying USTR to penalize Israel for adopting the U.S. fair use provision. (see here). It is one thing to try and get other countries to see things your way -- that's ordinary self-interest practiced by nations and individuals alike -- , and quite another to threaten those who don't do what you want with trade retaliation on the pretext that those countries are havens for piracy.

Israel is a very vulnerable nation for many reasons, some obvious, some not. One not so obvious reason is the threat that the U.S. will take retaliatory actions if Israel does not do X, Y, and Z. There is a misimpression in the popular press that the U.S. lets Israel do whatever it wants, but this is belied by reality. For example, in a prior Administration, an Administration official called into question general assistance to Israel if Israel didn’t go along with proposals for an international copyright treaty.

Of course, even large countries like Canada have been threatened: the U.S. is reported to have told Canada that the U.S. won’t do anything Canada wants in other areas unless Canada adheres to the WIPO treaties in the exact form that the U.S. has, and that such implementation is the highest priority in U.S.–Canada relations. That’s ridiculous bluster. I hope that the example of Israel, a much smaller and very vulnerable nation, standing up to the IIPA inspires the Canadians in drafting their anticipated copyright reform legislation. And one thing that might strengthen Canadian resolve is the experience of Israel with the migration of the watch list into an evolving wish list.

In 1999, USTR's primary focus with regard to Israel was with respect to lack of criminal enforcement and lenient criminal penalties. After Israel investigated the matter it became clear that better criminal enforcement (provided that the offenses would be narrowly defined and not as broad as desired by IIPA) made sense. Consequently, a lot of resources were directed to revision of the criminal sections of the copyright and trademark laws, as well as the establishment of special IP police units and training prosecutors. There were many successes and some lapses, but on the whole the system works well and has become institutionalized. By 2002 USTR even took note of Israel’s successes for which Israel was rewarded with occasional compliments and having its "rank" lowered to "watch list". However, no sooner was the "enforcement" problem solved than arose new problems. As soon as one problem was solved (enforcement), IIPA would raise new issues and very quickly it became apparent that the "watch list" is really a "wish list" from which there is no exit. Moreover, like with appeasement processes, the more concessions that are made the more concessions that are demanded. A review of Israeli’s February 2008 submission to USTR and a comparison with IIPA’s submission to USTR on Israel bears this out, and I invite readers to make their own comparison and judgments. Short of adopting U.S. law in toto there is no way for countries to ever escape continued criticism; appeasement is a road to nowhere.

One very significant issue raised in Israel’s latest submission that transcends Israel is this: Israel held fast against the prior Administration’s threats and did not join the WIPO treaties; those are the only treaties that obligate implementation of technological protection measures. Yet, IIPA has recommended that Israel be punished for not implementing TPMs. On what basis? Does it really violate Section 301 of the U.S. Trade Act if a country does not join the 1996 WIPO treaties? This question is highly relevant for countries like Canada that have become members but haven’t ratified the treaties or enacted implementing legislation: let’s say Canada doesn’t ratify the treaty, which would place it in the same position as Israel and the following very large list 12 years after conclusion of the treaties (go to this link on the WIPO site): Austria, Bolivia, Denmark, Estonia, the European Community, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Kenya, Luxembourg, Namibia, Netherlands, Nigeria, Norway, Portugal, Spain, Switzerland, United Kingdom, Uruguay, and Venezuela. Are all of these countries and the EC in violation of the U.S. Trade Act?

On what basis does the failure to ratify the WIPO treaties mean the failure to provide adequate and effective protection to U.S. works within the meaning of the Trade Act, and sufficient to justify the imposition of penalties under Section 301? Does adequate and effective protection really mean that all other countries have to ratify not only every treaty does, but also they must also implement those treaties the way the U.S. does? Is the U.S. joining a treaty, in others words, an invitation that other countries can’t refuse? (Let's recall here the U.S. refusal to join the Kyoto treaty). The U.S. Trade Act itself does not contain an obligation for other countries to adhere to the WIPO treaties on penalty of violating Section 301. Can it be said that the day before the U.S. joined those treaties, the U.S. did not provide adequate and effective to its own works and the works of other authors? If, as I believe is true, the Trade Act does not obligate other countries to adhere to the 1996 WIPO treaties, how can the failure to adhere violate Section 301 of that treaty?

As Israel asks in its latest submission, “can non-membership in a voluntary treaty be the basis for invocation of [Section 301] and placement on a watch list?” I am aware of no basis for that position, and if there is none, then those countries that are facing intense U.S. pressure to implement the DMCA should thank Israel for having the courage to stand-up for the rest of the world.

וַיְהִי, בִּימֵי אֲחַשְׁוֵרוֹשׁ: הוּא אֲחַשְׁוֵרוֹשׁ, הַמֹּלֵךְ מֵהֹדּוּ וְעַד-כּוּשׁ--שֶׁבַע וְעֶשְׂרִים וּמֵאָה, מְדִינָה.

Fair Use, Israel, and the IIPA

The February 12, 2007 International Intellectual Property Alliance 2007 Special 301 Report contains detailed discussions of which countries throughout the world have been naughty and which have been nice (excluding of course the U.S. which is the nicest of all). One country's treatment bears pointing out, Israel. The Knesset is in the process of passing a number of amendments to its copyright law - an amalgam of laws going back to the extension, in 1924, of the British Copyright Act of 1911 during the British Mandate over ארץ ישראל (The most recent amendment took effect on November 3, 2002). Israel is a member of the Universal Copyright Convention and the Berne Convention. The current effort is intended both to modernize aspects of Israeli copyright law and to implement other international obligations.

What caught my eye in the discussion of Israel (found here) is on pages 70-71, entitled "Proposed Application of U.S.-Type 'Fair Use' Factors." This refers to the Knesset's expected adoption of a provision modeled very closely on Section 107 of title 17. One might expect that an effort by a foreign government to adopt a rather singular aspect of U.S. copyright law would be met with praise. Not so, when it comes to the non-proprietary side of the constitutional ledger. Here are the IIPA's words in full:

At the outset, we note that Section 19(a) attempts to adopt the U.S. 'fair use' test by stating that 'fair dealing with the creation is allowed, among others, for the following purposes: self study, research...." Section 19(b) includes a list of factors that are similar to those in place in the United States and the explanatory notes clarify the intention to enact a non-exclusive list of purposes, which would allow enough flexibility to the courts in determining whether a particular use is 'fair.' We understand there may already be agreement to adopt the draft, and we register our concern that the result of this change could result in considerable case law interpretation in Israel on 'fair dealing' being thrown out in favor of as yet undeveloped factors in Section 19(b). By contrast, in markets like the U.S., which employs very similar factors to those set out in proposed Section 19(b), many years of jurisprudence have provided society with considerable clarity on the boundaries of 'fair use.' There is a significant risk that in Israel the adoption of these factors at this time might be viewed by the community as a free ticket to copy. This would have disastrous consequences, and thus we urge the Israeli government to re-examine the introduction of these factors, rather than relying on Section 19(a), which sets out the long-established 'fair dealing' principle, followed by specific exceptions dealing with certain special cases (Section 19-32, but see comments below). Finally, if the factors in Section 18(b) are to be ultimately adopted, Section 19(b)(1) especially needs to be amended to properly narrow the scope of the 'fair use' inquiry:

(b) In order to examine the fairness of a use of the creation for the purposes of this paragraph, the following shall be considered:
(1) The aim of the use and its type, including whether the use is of a commercial nature or is for non-profit educational purposes.

These remarks should lead to debate in U.S. circles: the concern that Israeli judges can't handle the doctrine or that the Israeli population will see adoption of fair use as a "free ticket to copy" is not borne out by any empirical evidence, nor by any references justifying such concerns (e.g., prior decisions of Israeli courts), nor of course by the proposed statutory language, which directs judges to look at the traditional four factors, including the effect of the use on the market for the copyrighted work.

The IIPA's preferences are for (1) the existing law, which contains a narrower set of enumerated exceptions or (2) the above amendment, which is designed to "properly narrow the scope of the 'fair use' inquiry." That proposed amendment (the bold portion) would add language taken from Section 107(1): "including whether the use is of a commercial nature or is for non-profit educational purposes."

That language, added at the 11th hour to Section 107 of title 17 as a sop to educators led to years of confusion in U.S. courts, ultimately to the Sony presumptions ("every commercial use is presumptively unfair;" "every commercial use presumptively results in harm to the market"), and years and years of rigid, mis-directed case law, corrected ultimately in the 2 Live Crew case. Adopting that language in the Israeli statute would result in the adoption of the one part of Section 107 that has failed miserably, and might lead plaintiffs in Israel to argue things like "commercial use bad," but "non-profit educational use maybe good, under some circumstances." It is unclear how the IIPA sees its amendment working in practice, but how could reference to commercial versus non-profit educational uses narrow anything by itself unless commercial uses are painted as the bad guys? That approach, it must be noted is strongly contrary to existing U.S. law, pace Justice Souter's quote from Samuel Johnson that "No man but a blockhead ever wrote, except for money."

The unusual aspect of all this of course, is a U.S. trade organization lobbying the Office of United States Trade Representative to lobby a foreign government not to adopt a critical part of U.S. copyright law.