The United States-Mexico-Canada Agreement (USMCA) was announced on October 1, 2018, representing a step forward towards a replacement for the North American Free Trade Agreement (NAFTA), which President Trump sought to begin renegotiating shortly after his election in 2016. Like NAFTA, the USMCA contains a chapter covering intellectual property, with some notable changes, especially as it relates to IP protections under Canadian law. These changes could have a lasting impact on U.S. businesses and individuals seeking IP protection in Canada, and Canadian businesses and individuals who operate in the U.S.
Committee on Intellectual Property Rights
Article 20.B.3 of the USMCA establishes a Committee on Intellectual Property Rights, composed of government representatives from each of the three nations. Among the committee’s listed goals are strengthening border enforcement of intellectual property rights, increased information sharing regarding trade secret-related matters, discussion of patent litigation fairness proposals, and implementing multilateral agreements, such as those administered by the World Intellectual Property Association, a specialized agency of the United Nations.
While the aims of the Committee on Intellectual Property Rights are quite general, related sections of the USMCA could increase the importance of the Committee moving forward. For example, Section 20.I supplies new provisions regarding trade secret protection and enforcement, including a provision prohibiting each country from impeding the voluntary transfer of trade secrets, and a provision requiring unlimited terms for the protection of trade secrets.
Notice and Takedown Provisions
Under the USMCA, Internet Service Providers (ISPs) are required to implement a notice and takedown system. Under this system, ISPs must “expeditiously remove or disable access to material residing on their networks” in the event the ISP obtains actual knowledge of infringement or becomes aware of apparent infringement. This requirement, however, does not apply to Canada, which is exempt under the USMCA’s Annex to Section J, which preserves Canada’s current notice and notice system, whereby ISPs are solely required to forward notice of infringement on to the alleged host of the material, rather than taking action to remove the material from the Internet.
Cultural Industries Exemption Maintained
Under NAFTA, Canada possessed an exception for cultural industries which is preserved in the USMCA. Under the USMCA, “cultural industries” includes broadcasting, and the publication, distribution or sale of books, magazines, film, video and music. The exception allows Canada to restrict U.S. ownership of companies in these areas, and to provide subsidies and special regulations for Canadian artists and producers without reciprocity for artists and producers in the U.S.
There is one interesting change to this exception under the USMCA, however, related to football broadcasts in Canada. Starting with Super Bowl LI in 2017, Canadian viewers were finally able to watch the same Super Bowl ads as American viewers due to a ruling from the Canadian Radio-television and Telecommunications Commission outlawing simultaneous substitution of advertisements. The USMCA reverses this ruling, increasing the value of those ad slots by allowing broadcasters to sell Canada-specific ads during one of the most expensive advertising events of the year. NFL Commissioner Roger Goodell expressed his support for the provision, thanking President Trump for “bringing about a resolution to our intellectual property issue in Canada.”
Changes to Copyright Protections
The USMCA requires that the parties provide a term of not less than 70 years after an author’s death for copyright protection, which provides an additional 20 years of protection compared to Canada’s current system. For copyright protections not based on the life of a natural person, the USMCA provides that the term shall be at least 75 years from the end of the year when the work was first published, or if not published within 25 years of creation, a minimum term of 70 years from the end of the year of creation of the work. The USMCA gives Canada 2.5 years to implement these changes to its copyright laws.
Patent Term Adjustments
The USMCA provides for adjustments to patent terms where issuance of a patent has been delayed for 3 years following an examination request, or 5 years following the initial filing. This addition to the USMCA is in line with the general goal stipulated in Article 20.F.9, which provides that each party to the USMCA “shall make best efforts to process patent applications in an efficient and timely manner, with a view to avoiding unreasonable or unnecessary delays.” Under Section K of the USMCA, Canada has 4.5 years to implement this provision.
Expanded Exclusivity for Biologic Drugs
Another notable change under the USMCA is provided in Article 20.F.14, which requires that the parties “provide effective market protection” for new biologics for a period of at least 10 years. Under existing legislation, Canada provided protections for a period of 8 years. Canada has 5 years to implement this change under Section K.