TPP Article 14.17 & Free Software: No Harm, No Foul By Software Freedom Law Center | November 23, 2015

The first official public release of the text of the Trans-Pacific Partnership Trade Agreement (known universally as the TPP) on November 5, 2015 generated much heated speculation. The ideal of “open agreements, openly arrived at” remains regrettably unattainable in international affairs. “Fast track” trade negotiating authority in the US means that parties excluded from the negotiating process have a short time in which to mobilize for or against the treaty as a whole in light of their specific concerns. The premium on speed of response to a very lengthy and complex legal document—and the presence of intense public attention—guarantees that hasty judgment and occasional self-promotion will always outrun professional analysis; this is one of the inherent defects of secret legislation.

In this context, early commentary on the TPP draft included much speculation that one provision in the draft’s chapter on electronic commerce might have serious negative consequences for free software and open source licensing, distribution, or government acquisition. Some lay readers marched immediately to the conclusion that, in less than 200 words ostensibly about something else, the negotiators had (a) abolished free licensing; (b) prohibited governments from acquiring, supporting or preferring free software; or (c) had interfered with the enforcement of free licenses. Other non-professional readers invented complex demonstrations that one or more of these catastrophes had not occurred.

Some of SFLC’s clients came to us for advice concerning this energetic public debate. Having provided that advice, it seems to us desirable to publish a version for the benefit of general readers.

TPP Article 14.17

We begin, of course, with the text of the provision to be construed. Chapter 14 of the TPP draft is entitled “Electronic Commerce.” Article 14.17 says:

Article 14.17: Source Code

No Party shall require the transfer of, or access to, source code of software owned by a person of another Party, as a condition for the import, distribution, sale or use of such software, or of products containing such software, in its territory. For the purposes of this Article, software subject to paragraph 1 is limited to mass-market software or products containing such software and does not include software used for critical infrastructure. Nothing in this Article shall preclude: the inclusion or implementation of terms and conditions related to the provision of source code in commercially negotiated contracts; or a Party from requiring the modification of source code of software necessary for that software to comply with laws or regulations which are not inconsistent with this Agreement. This Article shall not be construed to affect requirements that relate to patent applications or granted patents, including any orders made by a judicial authority in relation to patent disputes, subject to safeguards against unauthorised disclosure under the law or practice of a Party.

Relevant definitions, provided in Article 1.3, state that “Party” means: “any State or separate customs territory for which this Agreement is in force,” and “person of a Party” means “a national or an enterprise of a Party.” So the plain meaning of ¶ 1, before the additional exclusions and qualifications following, is that no State may require foreign persons or businesses to disclose the source code of programs in mass market devices, or software distributions, as a condition of being imported into or sold or used on that State’s territory. Everything else that follows in ¶¶ 2-4 narrows the effect of this provision further, as (we shall see) do other provisions of the treaty draft. Even at its most expansive, however, it is clear that this provision has no relation whatever to free software.

Article 14.17 is an odd thing to find in a chapter about electronic commerce, having nothing whatever to do with e-commerce. This provision is a product-trade measure preserving trade secret protection for mass-market hardware and software products, prohibiting governments from requiring disclosure of trade secret proprietary software as a condition of importation and sale. It might logically have been expected to appear in Chapter 18, the treaty’s chapter on “Intellectual Property,” which was long and actively negotiated. Chapter 18’s development was scrutinized, as well as leaks would permit, by the large civil society community interested in all aspects of copyright and patent policy in international trade. So far as we know, no leaks of Chapter 14 occurred during the negotiation process, or at least were not commented upon by any of the civil society groups following the negotiation process from outside.

This provision’s placement in the unrelated context of Article 14 suggests that it is a late arrival, outside the scope of the lengthy discussion of Article 18, thrown in at the last minute in an obscure location. Other intrinsic textual evidence, as we shall see, also indicates that the provision is a late addition.

An origin for the provision can be speculatively assigned with some confidence. The same text, attributed to the Japanese government, was leaked as part of a draft of the ongoing Trade in Services Agreement (TiSA) negotiations.

A WikiLeaks release of the draft TiSA Annex on Electronic Commerce, dated February 20, 2015, contained the following provision:

Article 6: [JP propose; CO oppose: Transfer or Access to Source Code No Party may require the transfer of, or access to, source code of software owned by a person of another Party, as a condition of providing services related to such software in its territory. For purposes of this Article, software subject to paragraph 1 is limited to mass-market software, and does not include software used for critical infrastructure.] Concern about disclosure of trade secret software in Japanese-made consumer electronics has a long history on the Japanese trade agenda, but it is no longer—given contemporary market and technology conditions—a subject of much interest to anybody else. The TiSA leak cited above showed that only the government of Colombia had noted objection to the Japanese proposal of this language in TiSA. No one really expects any country to assault the global trade in proprietary embedded software, or Microsoft Windows and other vestigial unfree software for general purpose computers, by trade regulations conditioning national market access on source code disclosure.

Thus the language of Article 14.17, its placement in the existing treaty text, and the available information about the history of the language used consiliently suggest that this is a late-arriving provision offered by the Japanese government, largely considered uncontroversial in substance by other States because about a non-occurring, non-foreseeable problem. The effort, then, has been to incorporate its principle while severly inhibiting its effects, through direct exclusion and limiting rules of construction.

Exclusions

Article 14.17 itself says that the supposed general principle against state-required disclosure of software source code does not apply to: critical infrastructure software, software not in mass market products, software involved in patent litigation as required by domestic patent law, or software disclosure required to meet existing legal or regulatory compliance rules. It also says, in ¶ 3(a), that this supposed general rule with so many exceptions in no way precludes “inclusion or implementation of terms and conditions related to the provision of source code in commercially negotiated contracts.” In other words, the terms and enforcement of copyright licences that require provision of source code are not covered.

These rule-swallowing exclusions already present in Article 14.17 are merely the beginning of the limitations eroding the scope of ¶ 1. All of Article 14’s terms on e-commerce, including this rule not about e-commerce, are specifically inapplicable to government procurement. See Article 14.2(3)(a). Because under Article 14.2(2) the provisions of Chapter 14 apply only to “measures adopted or maintained by a Party that affect trade by electronic means,” there is a strong argument that Article 14.17(1) applies only to its intended subject matter when the products involved are sold in electronic commerce.

Article 14.2(5)(a) specifically states that Article 14.17 applies only

subject to the relevant provisions, exceptions, and non-conforming measures of Chapter 9 (Investment), Chapter 10 (Cross-Border Trade in Services), and Chapter 11 (Financial Services).

which means, for example, that the requirement to disclose proprietary source code to government in order to enter a State’s electronic card payment services market, as allowed in Chapter 11, Annex 11-B, footnote 34, is not prevented by Article 14.17.

Article 14.2(5)(b) further states that “for greater certainty, the obligations contained in … Article 14.17 are … to be read in conjunction with any other relevant provisions of the agreement,” a residual rule of construction further limiting the reach of the provision anytime it conflicts even implicitly with anything else in the treaty. That would include, for example, Article 18.80 on “Government Use of Software,” which provides that:

Each Party recognises the importance of promoting the adoption of measures to enhance government awareness of respect for intellectual property rights and of the detrimental effects of the infringement of intellectual property rights. Each Party shall adopt or maintain appropriate laws, regulations, policies, orders, government issued guidelines, or administrative or executive decrees that provide that its central government agencies use only non-infringing computer software protected by copyright and related rights, and, if applicable, only use that computer software in a manner authorised by the relevant licence. These measures shall apply to the acquisition and management of the software for government use. (For greater certainty, paragraph 2 should not be interpreted as encouraging regional government agencies to use infringing computer software or, if applicable, to use computer software in a manner which is not authorised by the relevant licence)

This last provision should remind readers that the TPP’s problematic copyright maximalism extends to maximalism on behalf of free software copyright holders and free licensors just as it does to proprietary licensors in, e.g., the movie industry.

Conclusion

Reading the TPP draft as professionals read it shows that there is no ground to apprehend conflict between Article 14.17 and any aspect of the free software and open source licensing systems. It can have no adverse impact on private market licensing, distribution and use of free software, nor can it adversely affect government software acquisition policy.

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