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In this file photo, participants take part in HTML500, a course which teaches computer coding skills, run by Lighthouse Labs in Vancouver, B.C., on Jan. 24, 2015. Former BlackBerry co-CEO Jim Balsillie argues that ‘the innovation part of TPP is 10 times more important than manufacturing and dairy combined.’ (JONATHAN HAYWARD/THE CANADIAN PRESS)
In this file photo, participants take part in HTML500, a course which teaches computer coding skills, run by Lighthouse Labs in Vancouver, B.C., on Jan. 24, 2015. Former BlackBerry co-CEO Jim Balsillie argues that ‘the innovation part of TPP is 10 times more important than manufacturing and dairy combined.’ (JONATHAN HAYWARD/THE CANADIAN PRESS)

Tech and the TPP: What’s at stake for Canada’s innovation sector Add to ...

While the final terms of the Trans-Pacific Partnership have yet to be released, former BlackBerry co-CEO Jim Balsillie is blunt in his assessment of how the deal affects the technology sector, arguing that Canada lost, and potentially lost big.

“I would argue that the innovation part of TPP is 10 times more important than manufacturing and dairy combined,” he says. “The U.S. intellectual-property economy is $3.5-trillion a year – their objective is to double that to $7-trillion through TPP. Traditional stuff is bits and bites for them, the real pony for the U.S. is selling their ideas. … Half their exports are IP [intellectual property]. Basically the U.S. wanted a bunch of rules to lock in their leadership.

“The devil’s in the details but I think I can say with 99-per-cent certainty that 99 per cent of the rules were taken from the U.S.”

They did it because they want to sell ideas. We did it because we want to sell beef and lumber and fish.”

Harmonization equals hegemony

The entire trade region, including Canada, will be changing and adapting to U.S. rules on intellectual property, sometimes with a phase-in.

“When you force harmonization when somebody’s in a dominant position, it means they spread their dominance; ostensibly it’s sold as efficiency. Free trade in an ideas economy with zero marginal cost – where ownership is everything – spreads global monopoly,” Mr. Balsillie says.

Mr. Balsillie recently met with all the startup CEOs that OMERS Ventures has invested in, some of the biggest and fastest-growing technology players in the country, and says not one of them had been consulted by the government on the way to negotiate this deal. He argues the groups that were consulted – the Canadian Chamber of Commerce or the Canadian Council of Chief Executives – are controlled by traditional economy folks from the banks and resource companies, or by the Canadian employees of U.S. multinationals.

“We were looking for anti-abusive behaviour for copyright and patent trolls; those were stripped out. You broaden more things you can patent, you get longer patent lives now, you get to add on to its life based on how long it takes to grant the patent. A decision in a foreign court can be enforced in Canada now.”

“Every industry is shaped by technology now. All these new enzymes for agriculture, new extraction sustainability technology for resources, value-added bio products from pulp and paper, everything is a technology game. So don’t put that in a narrow slice, think of it as oxygen for the whole cycle.”

Canada cedes ground on copyright extension

New Zealand’s primer on the TPP suggests the agreement will indeed extend copyright periods to 70 years across the board. Canada, which currently has a 50-year term of copyright protection, opposed that move but appears to have lost.

“This is something that we know is in there and that’s probably worse for Canada than for other countries because we resisted dramatically extending our terms for copyright,” says Tamir Israel, staff lawyer at the Canadian Internet Policy and Public Interest Clinic in Ottawa, adding it is not clear whether Canada negotiated a transition period.

Michael Geist, a law professor at the University of Ottawa, has argued that research shows extended copyright periods are costly for consumers and do not encourage creativity.

Whither ‘notice and notice’?

Based on previously leaked versions of the TPP, experts were concerned the deal would be incompatible with Canada’s copyright-infringement notification regime, a system the federal government spent years consulting numerous parties on and which came into force just this year.

The regime allows rights holders to contact Internet service providers (ISPs) about alleged copyright infringement and requires the ISP to pass that notice on to the customer. The rights holder is not given the customer’s identity, and if they want to pursue legal action, they must get a court order.

The Canadian summary of the TPP suggests it may protect the “notice-and-notice” system, which would be a good outcome, says Christopher Parsons, a researcher at the University of Toronto’s Citizen Lab. “Canada went through a decade or so of debate on what the nature of copyright protection and notice regimes should look like.”

“In many ways no one is perfectly happy with [the notice-and-notice regime], which probably suggests it’s a good political compromise,” he says, noting the system aims to discourage copyright infringement and change people’s behaviour while relatively low financial penalties avoid “a life-destroying impact.”

An end to mandated local data storage

The final agreement could also bar countries from requiring that data be stored on local servers. Many data localization initiatives evolved in response to heightened surveillance efforts by the United States in the post-9/11 era, Mr. Parsons says. But leaks from Edward Snowden revealed that the National Security Agency was able to access information stored outside U.S. borders through agreements with its counterpart agencies in allied countries. “I remain somewhat dubious that data localization – from a practical sense, not a legal sense – actually provided a significantly higher degree of privacy.”

In any case, two Canadian provinces – British Columbia and Nova Scotia – have legislation that mandates certain types of government information be stored locally, he says, adding that those requirements could be challenged under the terms of the TPP.

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