TPP treaty: potential changes to Canadian copyright and trade secret laws

Negotiations on the much-anticipated Trans-Pacific Partnership Agreement (TPP) were concluded on October 5 2015. After seven years of negotiation and much speculation, the official terms of the multi-national trade agreement were made available by the government on November 5 2015. Canada is one of 12 signatories to the TPP, which must be ratified by Parliament before it can take effect in Canada.

If ratified, the IP Chapter of the TPP will bring changes to Canadian copyright and trade secret laws. The two most noteworthy changes to copyright laws are to the term of copyright protection and the way in which internet intermediaries can deal with allegations of online copyright infringement. The noteworthy change to the trade secret laws is the introduction of criminal procedures and penalties related to theft of trade secrets. Changes related to patents and data protection for pharmaceuticals are also on the way (for further details please see "TPP: new rights for pharmaceutical patent holders").

Potential changes to copyright laws
Extended protection for copyright holders
Under the current Copyright Act, the term of protection for copyright is the life of the author plus 50 years. Under the TPP, protection for works created by individuals will be extended to the life of the author plus 70 years.

For corporations, works will be protected for 70 years from year of the first authorised publication. If there is no authorised publication within 25 years of the work’s creation, copyright will extend for 70 years from the year that the work was created. 

Internet intermediary liability
Canada currently operates under a notice-and-notice regime for online copyright infringement. This regime came into force on January 2 2015 under the Copyright Modernisation Act. Under the notice-and-notice regime, a copyright owner can notify an internet intermediary (eg, an internet service provider (ISP) or web hosting service) of alleged infringement by one of its subscribers. The intermediary must then forward the notice of infringement to the subscriber and monitor the subscriber’s activity for a minimum of six months. The intermediary must notify the rights holder once the notice has been forwarded or explain why it could not forward the notice.

The TPP includes provisions for a notice-and-takedown regime. Under such regime, ISPs must forward notices of alleged copyright infringement to the allegedly infringing subscriber and immediately remove or disable access to the allegedly infringing material on their networks. Internet intermediaries which remove or disable access to material in good faith will be exempt from liability as long as reasonable steps were taken to notify the alleged infringer that the material was removed or disabled. If a notice-and-takedown regime is adopted, this would mark a stark contrast to the more passive notice-and-notice regime that Canada operates under at present. There is an exception to the notice-and-takedown provisions if a country already has laws in place that meet certain criteria. In this regard, Canada’s current notice-and-notice regime may be sufficient for meeting the requirements of the TPP.

Increasing copyright protection of Canadians worldwide
While each signatory is free to determine how it will implement the TPP, the provisions represent the minimum level of copyright protection with which each state is expected to conform its laws. Many of the TPP provisions will work to bring other signatory countries in line with protections already found under Canada’s copyright laws, such as prohibiting the circumvention of digital locks and criminal penalties for copyright piracy.

Potential changes to trade secret laws
At present, trade secret law in Canada is not governed by statute. This is unlike other forms of intellectual property (eg, patents, copyrights and trademarks), which are the subject of federal statutes. As a result, laws related to the protection and enforcement of trade secret rights are based on the common law and cases are decided in provincial courts.

In the event that a person misappropriates or misuses the trade secret of another, a court action may be brought against that person. Depending on the circumstances of the case, the action may involve allegations of breach of contract (eg, breach of a non-disclosure agreement), breach of confidence and/or other allegations that may be applicable (eg, breach of fiduciary duty). In this regard, the court action is a civil dispute that would be brought in a provincial court responsible for deciding civil disputes. 

At present, there are no criminal processes or penalties for trade secret misappropriation, as the Canadian courts have held that trade secrets (or confidential information) are not a type of property that can be the subject of theft (since the owner of the information, with limited exceptions, is not deprived of his or her property when it is misused by another). Otherwise, while the Security of Information Act provides certain criminal remedies for the misuse of trade secrets, they are limited to instances involving the communication of trade secrets to a foreign economic entity (ie, a foreign state or an entity owned or controlled by a foreign state).

The TPP may result in a change to the existing state of the law. In particular, the TPP requires that criminal procedures and penalties be provided for the unauthorised and wilful access, misappropriation and/or disclosure of a trade secret. That said, under the TPP, these criminal procedures and penalties may be limited to specific situations. While some of the specific situations are broad in nature, others are more narrow and resemble protection available under the Security of Information Act. These situations include where the acts are:  

• for the purposes of commercial advantage or financial gain;
• related to a product or service in national or international commerce;
• intended to injure the owner of such trade secret;
• directed by or for the benefit of or in association with a foreign economic entity; or
• detrimental to Canada’s economic interests, international relations or national defence or national security.

Since the newly elected government of Canada has indicated that it is reviewing the TPP in detail, and since ratification and implementation will take time in any event, it remains to be seen precisely how any new Canadian trade secret laws will ultimately look. In this regard, Canada may limit application of the TPP trade secret provisions to one or more of the situations outlined above.