The 2018 GIPC Index: Ranking 50 Countries by their IP (and Copyright) Standards

For the sixth year in a row, the US Chamber of Commerce’s Global Innovation Policy Center, or GIPC (relabelled from its previous title of Global Intellectual Property Center) has published its annual International IP index measuring how countries around the world stack up when it comes to innovation and intellectual property (IP). This year the report covers more countries (50, up from 45) and is more comprehensive than ever. The Index benchmarks 40 indicators across the full range of IP issues, encompassing patent, copyright, trademark, trade secrets, commercialization of IP assets, enforcement, systemic efficiency and membership in and ratification of international treaties. As I commented last year, the Index makes a significant contribution to the measurement of standards and performance across a range of intellectual property indicators.

Overall Results

In the overall ranking, as was the case last year, the US just barely nudges out the UK for top place (37.98 to 37.97 out of 40), although for all intents and purposes the two countries are on a par when it comes to strong IP frameworks. With respect to copyright, the US also just noses out Britain, followed by Germany, Singapore, Sweden (surprise), South Korea, France, Australia, the Netherlands and Ireland to round out the “top ten”. A new category evaluated in the copyright section this year was “expeditious injunctive-style relief and disabling of infringing content online”, aka “site blocking”. Highlighted in the executive summary of the report was the fact that;

“Throughout 2017, courts utilized recent legislative changes to bolster protection for copyrighted content online. In Australia, the Federal Court applied the 2015 Copyright Act in five landmark cases…A number of EU economies—including Ireland, Italy and Sweden—and the UK also applied existing legislation and judicial precedents to block access to pirate websites, marking a significant step forward in anti-piracy efforts across the continent.”

This demonstrates how the Index has evolved as the nature of piracy and IP theft has changed, with the addition of site blocking being a good example.

Progress or Backsliding?

Overall, while the focus of the report is to encourage the improvement of international IP frameworks, it expresses some disappointment that both the US and EU are drifting in the wrong direction when it comes to patent protection, with declines in the efficacy of the patent system in both jurisdictions year over year. This has the potential to send the wrong message to IP laggards. In fact the standard indicator for patent protection has declined by 1.4% from the second to the current edition of the Index. Another area where there has been a steady erosion of IP standards is in the area of trade secrets and market access, where the overall indicator has declined by 8.85%, largely owing to the growing tendency in some countries to require transfer of IP in return for market access. Copyright standards, on the other hand, have improved by 5.5% over the same period. (Trademarks by 4.12% and Enforcement by 6.65%). In the 2018 Index, the decline in patent standards is offset by more effective copyright protection in a number of countries, in particular with respect to implementation of blocking offshore content-theft websites. The report still sounds a warning though, commenting that overall “for the vast majority of economies the IP environment has either weakened or stood still”.

Examining the copyright scores, the Index looks at (in addition to the new category of injunctive relief for site blocking purposes), the period of copyright term protection, legal measures that provide the necessary exclusive rights to prevent the infringement of copyright, availability of frameworks that promote cooperation against piracy, scope of limitations and exceptions to copyright (fair use or fair dealing), digital rights management legislation, and government use of legal software.

Canada’s Copyright Score

Being Canadian, and closely following copyright issues in Canada, I was naturally interested to see how Canada was rated compared to last year–with regard to copyright. Canada does not exactly shine in this category, tying with Israel for 17^th place, following Hungary and just a touch ahead of Morocco. Is this a fair assessment? Setting aside the new indicator of injunctive relief (where Canada was awarded a 0.25 out of 1.0), the scores were the same for each indicator[i] except for digital rights management where the score increased from 0.75 to 1.0. This increase is explained in a note regarding the decision of the Federal Court in Nintendo of America Inc v Jeramie Douglas King and Go Cyber Shopping Inc. where the court found the defendant had wilfully sold circumvention devices, and awarded Nintendo $12 million in damages. The GIPC report notes that “this judgment marks an important victory for rights holders in Canada and will act as real deterrent to future infringing activities”.

Since court decisions are a factor in determining the score (the scoring for “scope of limitations and exceptions” to copyright is evenly divided between legislation and application in the court system), I would have thought that the 2017 Federal Court victory for Access Copyright over York University (now on appeal), which restored some balance to copyright exceptions in Canada, might also have had an impact and nudged Canada’s 0.25 score in this category up a notch or two. It didn’t but perhaps if the appeal is dismissed and the court’s decision restraining the unbridled application of the educational fair dealing exception is upheld, Canada will get appropriate recognition.

The other area where Canada could see a jump in its score in future would be in the new category of “expeditious injunctive-style relief and disabling of infringing content online” if the new FairPlay Canada coalition’s current proposal to the CRTC to institute a site blocking regime in Canada is adopted. It is too early to say with certainty whether the proposal will be adopted. A broad coalition of ISPs, broadcasters, sports entertainment companies, content industry unions and cinema exhibitors has been formed to push forward the proposal. Whether it will be adopted remains to be seen as there has been the predictable outcry from the “usual suspects” complaining that the proposal will undermine internet freedoms, arguing that piracy is not that big a problem anyway, site blocking is ineffective etc. This has been effectively rebutted by copyright lawyer Barry Sookman, and as one commentator has noted, just because the majority of intervenors to date have been opposed to the Coalition proposal (drummed up through an online petition driven by Canada’s EFF-clone OpenMedia, complete with wording that avoids the intervenors having to think for themselves), it doesn’t mean they are well-informed or correct.

Scoring Copyright Term: Hard to Iron out Anomalies

But let’s go back to the GIPC Index and its assessment of copyright scores. To assess IP attributes across 40 indicators into a numerical index producing objective comparisons is no easy task, and distortions can creep in. I will use just one of the copyright indicators to illustrate the challenge of arriving at results that measure completely objectively. One of the indicators is “copyright (and related rights) term of protection”. The maximum score that can be obtained is 1.0. The US, which has a copyright term of 70 years beyond the death of the author (for most works) if published after January 1, 1978, but a minimum of 95 years in cases where publication occurred prior to that date, gets the full score of 1.0. No other country gets that score, not even Mexico (0.79) where the term of copyright is 100 years after the death of the author (known as post mortum auctoris, or pma) for works published since 2003. Yet despite the US being the only country that gets a full 1.0 in this category, works are often better protected in jurisdictions outside the US simply by applying the pma plus term rule. For example, even though Canada provides only the Berne Convention minimum of pma plus 50 years, as I noted in a recent blog some works are protected for a longer period in Canada than in the US owing to the peculiarities of US copyright law.

A recent German case illustrates this fact well. Here the German publishing house S. Fischer Verlag GmbH sued the US-based Project Gutenberg Foundation for copyright infringement in Germany because Gutenberg made available on its website several books that were in the public domain in the US but not in Germany. Fischer was the publisher of these books, notably the works of Thomas Mann, which do not fall into the public domain in Germany until 2025. Gutenberg relied on a general disclaimer informing users to check whether the work was in the public domain in their country of residence, but did not geo-block. The court found in favour of Fischer. The point here is the obvious one that copyright law is applied where the infringement takes place, not where the content is made available. However the key point for the purposes of this blog post is that Germany, which on the GIPC index only gets a score of .63 for copyright term protection, “out-protects” the US in many instances.

Another anomaly is that if we look at the Index scores for the UK, Australia and Canada under the copyright term indicator, each country is awarded a .63, yet Canada has a term of pma plus 50 years whereas both the UK and Australia have longer terms of pma plus 70 years (i.e. the same as the US for current works). The explanation I was given is that Canada’s terms of 70 years of protection for sound recordings (after fixation) was factored into the mix to arrive at this score. However Canada generally provides a lesser degree of copyright protection in terms of length than either of the two comparators, yet receives the same score.

The argument for setting the baseline at 95 years is that it is very difficult to find an objective standard given that using the “author’s life plus term formula” produces uneven results. For example, some authors live for a short period of time and some longer, yet each gets a set period of protection beyond the date of their passing. Some produce a work early in their career and some later, thus lengthening or shortening the period of protection. All this is true, yet it seems to me that “pma plus years” is a more valid “apples for apples” comparison than selecting a standard used only by the US, and, to boot, one where the length of protection in the US can result in a shorter term of protection than that offered by other countries.

Nit-picking or Helpful Suggestion?

Some will say that I am nit-picking (I am) and that it is only one indicator out of many (true). Perhaps this falls into the category of an “inside baseball” issue. However, if the UK had been given fuller credit for the equal or better protection it arguably offers in terms of the length of copyright protection, the Brits would have topped the overall Index, as well as the Copyright section. But perhaps it is not realistic to expect the US Chamber of Commerce to produce an IP Index where the United States is not at the top of the chart (despite its criticisms of US patent policy). We have to live in the real world.

Last year the UK missed out on being Number 1 because it was given a flat zero under the indicator of “limitations on use of brands” in the trademark category. This was because of its plain-packaging laws for tobacco products. I commented at the time that I thought this was more of a public health than an IP issue, and that a score of zero implied a level of trademark protection far below that which actually existed in Britain. I am glad to see that this indicator has been dropped from the Index this year. Perhaps next year, a more representative indicator for measuring the length of copyright term will be adopted.

Conclusion

Nit-picking aside, the GIPC Index provides a very useful compendium of strengths, weaknesses, trends and comparisons with respect to most of the major economies where IP plays a role in innovation and industrial policy. It makes a useful contribution by compiling and comparing many indicators covering the full range of intellectual policy, from enforcement to legislation to international commitments, and is a welcome addition to ongoing research on IP and copyright issues. If it encourages policy-makers to reflect on their performance and to strive to improve their IP–including copyright–frameworks, so much the better.

© Hugh Stephens 2018. All Rights Reserved.

[i] the period of copyright term protection (0.63), legal measures that provide the necessary exclusive rights to prevent the infringement of copyright (0.50), availability of frameworks that promote cooperation against piracy (0.25), scope of limitations and exceptions to copyright (.25), digital rights management legislation (1.00), and government use of legal software (1.00).