Can you copyright a tweet?

Gabriel J. Michael / gmichael at gwu dot edu

Back in January, I had a brief exchange on Twitter prompted by this news story. The gist is that A. O. Scott, film critic for The New York Times, posted a tweet about the film Inside Llewyn Davis. The film’s promoters took out a full page ad in the Times displaying the tweet (or more accurately, the last two sentences of the tweet).

The linked article’s discussion assumes that Scott “own[s] the copyright to his tweets,” but notes that by tweeting, Scott could be presumed to be granting an implied license for reuse of the tweet elsewhere.

But can you even copyright a tweet? I did some research and was unable to come up with a clear answer. There was some academic discussion of the issue, and occasional instances in which Twitter users claimed others were infringing their tweets, but I could not find a clear instance in which someone had actually registered a copyright in a tweet.

So, 7 months and $35 later, I have my answer: no, you cannot copyright a tweet.

That, at least, is what the registration specialist at the Copyright Office decided to send me in response to my attempt to register this tweet as a literary work entitled “Tweet #452″:

Monkey bar fallacy: a bad person using something makes it bad. E.g., users of monkey bars include: children, TERRORISTS #tor

Of course, the rejection of this particular tweet does not imply that no tweet can be copyrighted. Perhaps the registration specialist did not feel my tweet was valuable or creative enough, and thus did not pass the (very low) threshold of originality.

This makes me wonder whether short poems like haikus are eligible for copyright protection. Browsing the Copyright Office’s registration database, I can find a number of registered literary works labeled “haikus” that are no longer than one page. Perhaps I would have had more luck if I had instead tweeted a haiku:

Monkey bar fallacy:
A bad person using something
Makes it bad.

(For sticklers, yes, I know it’s not 5-7-5, but it is 17 syllables.)

Ultimately, I wonder if the Copyright Office applies more scrutiny to short literary works than it does to photographs. In the U.S., we work under the assumption that every photograph taken by a human being is copyrighted. But I take a lot of photos, and many of them take far less time, effort, and creativity to compose than a tweet. Here’s an example:

Greek YogurtOther countries have found that some photographs simply aren’t creative enough to warrant copyright protection. Wikipedia has a brief summary and link to the German text of a Swiss case in which a reporter’s photograph of a man holding record books was ruled ineligible for copyright.

It would be a fun, albeit expensive, experiment to try and register a variety of liminal works: handfuls of sentences, short quines, run of the mill photographs, “sculptures” made of a few Lego pieces, etc. I would contest the office’s decision about my tweet, but I don’t want to pay $250 out of pocket to do so, and I also don’t really want to write a funding proposal to try and convince someone else to give me the money.

To wrap up this little experiment, the Copyright Office’s online registration process allows registrants to submit comments with their registrations. I submitted the following text, although I have no way of knowing whether it was ever read:

In Ashleigh Brilliant v. W.B. Productions, Inc. (Civ. No. 79-1893-MBM, S.D. Cal Oct. 22, 1979), a U.S. District Court found that Brilliant’s copyrights on three epigrams were valid and enforceable. The epigrams were 12, 15, and 10 words respectively. Each was a single sentence, lacking rhyme or meter; rather, their originality consists of their pithiness. Tweet #452’s originality is similar: using 20 words and two sentences, it exposes the logical fallacy inherent in blaming tools, using humor and topical examples to communicate the point.

Circular 34 states that “copyright law does not protect names, titles, or short phrases or expressions.” Tweet #452 is clearly not a name or title, leaving only the question of whether it is a short phrase or short expression. The Oxford English Dictionary defines a phrase as “a small group or collocation of words expressing a single notion, or entering with some degree of unity into the structure of a sentence; a common or idiomatic expression.” Expression is similarly defined as “A word, phrase, or form of speech.”

Tweet #452 cannot be classified as either a “phrase” or “expression,” since it contain two complete sentences (i.e., two subject-verb pairs). Thus, Tweet #452 does not fall within the scope of Circular 34. Even if Tweet #452 were considered a phrase or expression, phrases or expressions as such are not necessarily ineligible for copyright, since Circular 34 specifies that only “short phrases or expressions” are ineligible for copyright, thereby suggesting that longer phrases or expressions are eligible.

Update (August 4): I’ve had a few requests to post the correspondence I received from the Copyright Office, so here it is.

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Visualizing TISA Negotiations

Gabriel J. Michael / gmichael at gwu dot edu

Yesterday, Wikileaks released a draft text of the financial services chapter from the Trade in Services Agreement. I’m not going to get into the substance of the treaty or chapter, but as with previous leaks, this one contains information about country positions.

As I’ve done before, I extracted information about country positions using Perl/regular expressions, then graphed the resulted information in R using the igraph package, resulting in the following network graph:

TISA Network GraphThis graph excludes many TISA negotiating parties, as many parties did not appear in the draft text. As you can see, there is a strong link between the United States and the European Union, and both also have proposed a significant number of provisions not joined by any other party. Panama, a major financial hub of the Americas, also makes a large number of proposals not supported by others.

The following table reports the frequency of country dyads (instances in which two countries both support the same bracketed text) in the leaked draft. It includes identities (i.e., dyads between a country and itself), which represent the number of times a country makes a proposal not supported by any other country.

The country codes should be fairly obvious, but just in case:

PA = Panama, US = United States, EU = European Union, KR = South Korea, AU = Australia, NO = Norway, TR = Turkey, CH = Switzerland, HKC = Hong Kong, CA = Canada

Country 1 Country 2 Frequency
PA PA 16
US US 15
US EU 14
EU EU 8
KR KR 6
AU AU 5
PA EU 5
NO NO 4
TR TR 3
CH US 2
PA US 2
NO EU 2
HKC HKC 1
TR EU 1
NO US 1
NO PA 1
CA US 1
CA CH 1

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GIPC guest post on Fair Use fails Copyright Law 101

Gabriel J. Michael / gmichael at gwu dot edu

In another instance of the U.S. Chamber of Commerce’s Global IP Center (GIPC) posting factually incorrect information, on June 11, the GIPC cross-posted a blog post from Plagiarism Today purporting to clarify the meanings of “5 Copyright Terms We Need to Stop Using Incorrectly.”

I ran across this post because of the following GIPC tweet (screenshot posted here in case it mysteriously disappears):

GIPC Fair Use TweetUnfortunately, the linked post gets basic facts about copyright law wrong. On fair use, it reads:

What it Means: A fair use of a work is an infringement of a work where the court has determined that the infringer is not liable due to the nature of the infringement being within the bounds of the law.

I’m honestly not sure how much more wrong one can get. 17 U.S.C. § 107 plainly states:

the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.

To say a fair use is an infringement is to fundamentally misunderstand the nature of U.S. copyright law. It’s also nonsensical. By definition, an “infringement” means going beyond what is permitted by law. An “infringement being within the bounds of the law” is no infringement at all.

The author’s confusion probably stems from the fact that in lawsuits, fair use is raised as an “affirmative defense.” Many people wrongly interpret this to mean that fair use is a kind of acceptable copyright infringement. This is incorrect. Wikipedia explains it nicely:

“Affirmative defense” is simply a term of art from litigation reflecting the timing in which the defense is raised. It does not distinguish between “rights” and “defenses”, and so it does not characterize the substance of the defendant’s actions as “not a right but a defense”.

In other words, an affirmative defense is an admission that you committed the alleged acts, but that other circumstances make these acts lawful.

GIPC blog contributors might want to take an introductory copyright law class before trying to educate others on the meaning of fair use.

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GIPC’s misinformation on plain packaging

Gabriel J. Michael / gmichael at gwu dot edu

Protip for the U.S. Chamber of Commerce: it’s generally not a good idea to support your policy positions by pointing to the hardships of one of the most reviled industries on the planet.

The Chamber’s Global Intellectual Property Center (GIPC) recently published a blog post entitled “Plain Packaging: Keep Your Hands Off My Doritos,” but a more accurate title would have been “Keep Your Hands Off My Cigarettes.”

The blog post warns that plain packaging—a health and regulatory policy applied to tobacco products, designed to render them less attractive to buyers—would turn “grocery store shelves into an unnerving art gallery of morbid graphic images, or even the opposite—a brandless Orwellian muddle of boxes and bottles.” Given that plain packaging currently only exists in one country (Australia) for one type of product (tobacco), this warning has no basis in reality.

The author purports to be concerned about “recent reports coming out of New Zealand (and to some extent, California) about potential new restrictions on the use of trademarks for many of our favorite snacks and sodas due to health concerns.” Oddly, as of the time of writing, the New Zealand link provided was broken, and the California link makes no mention of trademarks, instead discussing warning labels.

It’s also hard to understand how “plain packaging takes away choice from consumers.” Consumers generally buy products for their content, not for the packaging (unless it’s Tiffany!). Packaging may drive interest or demand for a particular product, but regulating packaging doesn’t actually prevent anyone from purchasing the product.

The author dismisses Australia’s ground-breaking plain packaging law as having produced “mixed, if not skeptical results.” She includes a link to an article reporting that cigarette sales actually increased in the wake of plain packaging.

It’s tough to expect objectivity from a Rupert Murdoch property whose first sentence begins “Labor’s nanny state push…” as the linked article does. What follows is a hack job full of misinformation and fallacies. It turns out the “increase” in cigarette sales was just 0.3%. The article then engages in numerical deception, comparing this figure to a 15.6% decrease—over the previous four years.

In fact, an “increase” in sales of 0.3%, when compared to Australia’s population growth of 1 to 2% in recent years, actually results in a per capita decline in sales. Furthermore, the linked article provides no information about changes in the sales of other tobacco products, such as cigars, snuff, or chew, even though the plain packaging law also applies to these. The article makes much of the fact that in the wake of the law, consumers have shifted to lower priced products, but this is precisely the effect prior research on plain packaging predicted.

Furthermore, upon closer examination, it appears the linked article, published in The Australian, is simply false. Stephen Koukoulas explains:

The figures from the ABS show that total consumption of tobacco and cigarettes in the March quarter 2014 is the lowest ever recorded – and this with the series starting in 1959… Making this record low consumption of tobacco all the more fantastic is that the fact that the consumption numbers are not adjusted for population growth which, by definition, means per capita consumption of tobacco and cigarettes is also at a record low.

Making a mockery of The Australian’s story is the fact that, in seasonally adjusted volume terms, consumption of tobacco is 5.3 per cent lower in the March quarter 2014 than in the December quarter 2012 when the plain packaging laws were introduced.

The Chamber’s blog post references the “theory… that plain packaging… can deter consumers from consuming ‘unhealthy’ products.” First, cigarettes are not “unhealthy,” in scare quotes, they are unhealthy, period. Second, this “theory” is backed up by dozens of peer-reviewed studies and controlled experiments. Here’s one open-access article published in Tobacco Control that anyone can read. The GIPC, like many intellectual property lobbies, probably isn’t interested in evidence-based policymaking, but it’s never too late to start.

By the way, businesses don’t really need government help in turning “grocery store shelves into an unnerving art gallery of morbid graphic images.” They’re doing a great job by themselves.

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Special 301: The Politics of Listings

Gabriel J. Michael / gmichael at gwu dot edu

As I mentioned in a previous post, decisions about which countries get listed on each year’s Special 301 Report are highly politicized.

To begin with, and somewhat at odds with its statutory basis, Special 301 reports only selectively identify countries that “deny adequate and effective protection of intellectual property rights.” There are a large number of countries that very clearly do not offer adequate and effective protection, yet are never identified in Special 301 reports because USTR and industry stakeholders do not consider these countries politically or economically important enough to warrant mention.

In fact, by some measures, the mean level of IP protection in cited countries is actually higher than the mean level of IP protection in countries that do not appear on the list. For example, the following figure plots the mean Park-Ginarte index in cited and non-cited countries for the years 1990, 1995, 2000, and 2005 (the years the index is available).

Special 301 and IP ProtectionNo one can fault USTR for focusing its efforts on political or economically important countries, but this means that listings should not necessarily be taken as indications of countries that have weak intellectual property rights, a point which I made in a previous post by noting that USTR has in the past placed the European Union on the Watch List.

Along the same lines, USTR placed Canada on the Priority Watch List every year from 2009 to 2012, alongside countries like India, Indonesia, Pakistan, and Russia. Israel has called USTR citations of the country “confusing” given the level of protection in Israel compared to most other Priority Watch List countries.

Clearly, what gets a country listed can vary tremendously. Often, though, deciding whether and where to place a country in the Special 301 report is driven primarily by political considerations rather than objective assessments of the level of IP protection in a country. Wikileaks cables demonstrate this quite clearly. Recall that in addition to input from stakeholders, USTR collects input from embassies around the world when preparing the Special 301 report. Among the quarter-million leaked Wikileaks cables, over 300 cables originating from more than 90 U.S. embassies and consulates deal primarily with Special 301. These cables are concentrated early in each year, since they tend to provide input to USTR prior to the April publication of the report, or alternatively provide reactions immediately following the publication of the report:

Wikileaks Cables and Special 301The contents of these cables are telling. Embassies frequently recommend that countries’ Special 301 status be raised, lowered, or stay the same based on political considerations. In some cases, embassy staff mention how non-IP issues affect countries’ Special 301 status. Recommendations for listing make references to exerting “pressure” and concerns about maintaining the “credibility” of the process. In the following sections, I briefly discuss cables from Taiwan, Saudi Arabia, Bolivia, and Norway.

Taiwan

In a cable from the American Institute in Taiwan, dated December 13, 2004, the author argues that downgrading Taiwan from the Priority Watch List to the Watch List will have important “public relations” effects, and notes that although pharmaceutical data exclusivity is an outstanding IP issue, Special 301 will have no effect on the Taiwanese government’s position; thus, the author cautions against conditioning Taiwan’s Special 301 listing on this issue:

AIT/T [American Institute in Taiwan/Taipei] supports downgrading Taiwan from the Priority Watch List to the Watch List in the current out of cycle review. Doing so will reinforce Taiwan’s reorientation towards protecting intellectual property and provide a timely public relations victory for advocates of strong IPR protection within the government. Failure to move Taiwan from the PWL to the WL will devalue the 301 process in the eyes of Taiwan officials and will not lead to improved protection of intellectual property, including pharmaceutical data…

Taiwan’s Special 301 status will not significantly influence the government in its decision whether to lobby strongly for early passage of the DE [data exclusivity] bill…  The DOH [Department of Health] is not motivated by international perceptions of Taiwan’s intellectual property regime… Conditioning Taiwan’s 301 status on the passage of the DE bill by the date of the regular cycle review is unlikely to prove a successful strategy.

A second cable from Taiwan, dated January 12, 2009, reveals that unspecified members of a U.S. Trade Policy Review Group wanted to make Taiwan’s Special 301 listing contingent on other issues unrelated to intellectual property:

I am disappointed that factors unrelated to IPR protection have delayed completion of the review.  With the review poised for final interagency review, I would like to stress the critical importance of maintaining the integrity of the Special 301 IPR process.  Allowing issues unrelated to IPR to affect the Special 301 review would, in my view, threaten the efficacy of what has thus far proved our most potent means of advancing a major bilateral trade priority… In view of this reality, we must ensure that the Special 301 mechanism remains a viable tool for advancing our interests.  Linking 301 to unrelated issues, however important, risks  undermining our credibility while limiting our future options for achieving progress on this and other priorities.  I hope every member of the TPRG [Trade Policy Review Group] will put the decision on the pending out-of-cycle review within this broader context, and remove Taiwan now from the Special 301 Watch List.

Saudi Arabia

On January 6, 2009, the U.S. Embassy in Riyadh sent a cable reporting on discussions between embassy staff and an industry trade group. Each year, several trade groups provide detailed recommendations to USTR about where they believe countries should be placed in the Special 301 report. As this cable shows, even these recommendations can be finagled. The trade group was concerned that too severe a designation would backfire. As a result, the group discusses a quid pro quo: if the Saudi Arabian government engages in specified actions, the group will offer a less severe recommendation:

Although the International Intellectual Property Alliance (IIPA) is preparing to recommend that Saudi Arabia be placed on the Special 301 Priority Watchlist, representatives in Riyadh said they feel “handcuffed” into this  recommendation, and would prefer to recommend a more favorable rating… However, as the SAG [Saudi Arabian Government] has gained momentum and motivation to combat IPR violations in recent months, IIPA fears that a negative recommendation, while “required” under their methodology, will do more harm than good…

Butler said IIPA is looking for ways to positively reinforce SAG efforts while still maintaining its institutionalized standards.  To that end, he described to Econoff [the embassy's economic section] an action plan that, in IIPA’s view, might result in a better ranking for Saudi Arabia.  According to Butler, if the SAG took action against street vendors and fully populated the website of ongoing cases maintained by the Ministry of Culture and Information (MOCI) (ref B), the IIPA would be prepared to offer a recommendation that Saudi Arabia remain on the Watchlist.

Bolivia

In this cable from April 30, 2007, the U.S. Embassy in La Paz recommends against placing Bolivia on the Priority Watch List because of the “damage” such an action might cause. The author notes that a more severe listing would not have any positive effect:

Piracy and counterfeiting are serious problems, existing intellectual property rights (IPR) legislation is weak, and enforcement is inadequate. Post believes prospects for improvement are slim, especially given the Morales’s administration’s inattention to IPR. Post does not recommend any stronger steps against Bolivia at this time, however, as such an action could encourage anti-American actions and damage ongoing efforts to educate the Bolivian public on IPR…

While the IPR situation in Bolivia merits continued standing on the Watch List, Post recommends against any stronger action at this time.  Placement of Bolivia on the Priority Watch List would have no positive practical result, and the effectiveness of any future IPR education and outreach would be damaged by Bolivian government outrage at a change in Special 301 status.  For these reasons, Post recommends no change to Bolivia’s Special 301 Watch List status.

Norway

In a cable from the U.S. Embassy in Oslo, dated March 17, 2009, the author makes references to discussions of “relabeling” IP deficiencies in Norway as market access issues. The author also notes that a Special 301 listing provides U.S. negotiators with “leverage,” and indicates that the loss of such leverage is a good reason to keep Norway listed:

Post understands that there is consideration of delisting Norway, relabeling the pharma situation as “market access issues” rather than deficiencies (Ref B).  Doing so would produce real, unintended negative consequences for the USG [U.S. government]…

We believe that the increased leverage we have seen with the GON [Government of  Norway] as a result of the listing will immediately disappear if Norway is delisted.  Quite simply, re-characterizing the listing as an issue affecting market access carries much less influence, and clout, and Norway will take it as a sign we no longer really care about the matter.

I’ve only touched on a few of the hundreds of cables dealing with Special 301, but by now it should be quite clear that designations are far from an objective, technical process. Rather, USTR and U.S. embassies around the world consider listing, removing, upgrading, and downgrading countries for a variety of political reasons: public relations, linkage to unrelated non-IP issues, bargaining leverage, concern about whether listings will be effective or backfire, etc. Even whether an IP issue is considered a “deficiency” or a “market access” issue is a political decision.

The other major point to take away from these cables is the significant influence that key stakeholders, like industry trade groups, have on both embassy recommendations and USTR decisions. Embassy staff regularly speak with representatives of the IIPA, MPAA, IFPI, PhRMA, and BSA. These trade groups do not represent the full spectrum of views about appropriate intellectual property policy; to the extent that they wield a disproportionate amount of influence on the Special 301 process, that process is necessarily biased.

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Special 301: Replicating Riker (2012)

Gabriel J. Michael / gmichael at gwu dot edu

A previous post discussed Riker’s 2012 article, “Special 301 and Royalty Receipts from U.S. Trade Partners,” published in the International Trade Journal. I mentioned that I was trying to replicate his results. Apart from the problems I discussed before (choice of dependent variable, endogeneity, and limited data coverage), my attempt at replication uncovered additional problems.

First, the article incorrectly claims that Hong Kong was designated a Special 301 priority in every year between 2001 and 2007. In fact, Hong Kong has never been designated a Priority Foreign Country, has never appeared on the Priority Watch List, and has never been subject to Section 306 monitoring. Indeed, Hong Kong is only rarely mentioned in Special 301 reports throughout the years. It appeared on the Watch List in 1997 and 1998, and underwent an out-of-cycle review in 1999.

This error does affect the coefficient estimates in the article, although not significantly. On the other hand, it causes Riker to overstate his estimated dollar value impact of Special 301 designations by $650 million.

Riker uses three sources of data to construct his econometric models: GDP, BEA data on IP royalties, and Special 301 designations. GDP data is widely available from sources such as the World Bank and International Monetary Fund. Both sources yield comparable results. The article does not clearly indicate that the models used inflation adjusted data, but I assumed that they did, although using nominal GDP yields comparable results. The BEA data can be obtained online, although it required some piecing together to get all 33 countries over the time period used in the models. The BEA data appear to report nominal values, so I adjusted them for inflation, though as before, using nominal values yields comparable results. I already had a Special 301 dataset which I have used in other research. Apart from the Hong Kong error in Riker’s article (described above), my Special 301 dataset appears to match the one used in the article.

Riker’s article reports the results of three different models. Each model uses the year-over-year change in logged IP royalty receipts as the dependent variable. Models 1 and 2 use “priority designation” (defined as either being a Priority Foreign Country, being on the Priority Watch List, or being under Section 306 monitoring) as the key explanatory variable. Model 3 separates countries designated in every year from countries designated only in some years. All three models include year fixed effects, and Model 1 also includes country fixed effects. Based on F tests, Riker concludes Model 1 is the most appropriate. For reference, I have included the original regression results reported in the article:

Riker RegressionsThe following table presents the results of my regressions, which attempt to replicate the regressions in the article as closely as possible. As you can see, I use the same panel structure of 33 countries and 7 years, producing 231 observations. My estimates of the effects of changes in GDP were larger than in article, but my estimates of the effects of priority designation closely match the article. Given the errors in the original dataset, updated GDP data, and differing implementations used by various statistical software packages, some discrepancies are expected. Overall, though, I was largely able to replicate Riker’s original findings:

Michael Replicated RegressionsBeyond simply replicating these results, I also wanted to modify the models and see how these modifications affected the results. Importantly, Riker excludes Watch List designations, but does not explain why. Watch List designations might have a less pronounced effect than the more severe Priority Foreign Country and Priority Watch List designations, but if one believes that Special 301 is effective at all, there is little reason to draw the line at the Watch List. Thus, I wanted to include Watch List designations.

Furthermore, two years have elapsed since Riker’s article was published, so I have the benefit of additional data. I wanted to include additional years of data to see if Riker’s original results still held.

The following table presents three modifications of Riker’s original Model 1. In each case, the statistical significance of the Special 301 explanatory variable disappears. Model 1.1 retains the original 231 observation dataset, but redefines the designation variable to include Watch List designations. In doing so, the designation variable becomes insignificant—its effect is indistinguishable from zero. Model 1.2 retains Riker’s original Special 301 variable, but expands the dataset by six years (covering 2000-2012, rather than 2002-2008). Thus, Model 1.2 is identical to Model 1 in the previous two tables; the only difference is that it includes more data. As you can see, the Priority Designation variable is no longer significant. Model 1.3 uses the redefined designation variable of Model 1.1 in conjunction with the expanded dataset; again, the Special 301 variable is insignificant.

Michael Extended RegressionsTo summarize, while I was able to replicate Riker’s results, simply including additional years of data causes his findings of significance to disappear. Likewise, even in his original dataset and models, if Watch List designations are included, the findings of significance disappear.

Ultimately, these results lead me to conclude that Riker’s 2012 article is both theoretically and empirically flawed. It cannot support the conclusion that Special 301 designations are correlated with increased IP royalties from designated countries in subsequent years. Even if it did, this would be an inappropriate measure of Special 301’s effectiveness. In a future post, I plan to test Special 301’s effectiveness using a more appropriate measure: changes in an index of IP rights.

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Special 301: Is it Effective?

Gabriel J. Michael / gmichael at gwu dot edu

My previous post discussed how Special 301’s enforcement mechanism has rarely been used, and is even less likely to be used in the future. But the frequency with which an enforcement mechanism is used is not a measure of effectiveness. We don’t measure the effectiveness of criminal justice systems by the number of people in jail (at least, we shouldn’t). Perhaps Special 301 is effective in accomplishing its goals even without resort to its enforcement mechanism.

What are Special 301’s goals? According to USTR’s discussion of its statutory mandate, there are two different motivating concerns: Special 301 must 1) identify countries “that deny adequate and effective protection of intellectual property rights,” and 2) identify countries that “deny fair and equitable market access to United States persons that rely upon intellectual property protection.”

These two goals are very different. A country with very high standards of protection for intellectual property might nonetheless be considered to deny market access to U.S. persons. For example, by any reasonably objective standard, the European Union offers very high levels of IP protection. Yet as recently as 2006, Special 301 listed the European Union on its watch list, citing “concerns” about the EU’s geographical indication (GI) regime. Given that GIs are a form of intellectual property, USTR essentially placed the EU on its watch list for offering too much IP—or, if you prefer, the wrong kind of IP. Interestingly, this is a tacit admission by the U.S. that at least some kinds of IP can act as trade barriers.

Special 301 reports tend to focus more on the first issue than the second; that is, countries are more often cited for their failure to offer U.S.-approved levels of IP protection rather than for market access issues. Furthermore, most of the academic literature on Special 301 tends to focus on the “adequate and effective protection” part. Thus, this is where I’ll focus my attention as well. That said, it would be worth trying to evaluate whether Special 301 is effective in improving market access at some point.

Obviously Special 301’s goal isn’t just to identify countries, but also to increase the level of protection these countries offer. As a result, it’s possible to evaluate the performance of Special 301 by measuring the degree to which cited countries’ IP protections increase.

Of course, it’s not quite that simple—one needs to control for other factors that might be responsible for increasing levels of IP protection. After all, the general level of IP protection around the world has been creeping upwards for a long time. In the graph below, I plot the Park-Ginarte index of patent rights (Ginarte & Park, 1997; Park, 2008) for all available countries and years, along with the mean world value (the black dots). Obviously patents aren’t the only IP at issue, but given the upward trend in copyright terms, accessions to the WIPO Internet Treaties, and implementation of TRIPS, it would be tough to argue that worldwide levels of copyright protection haven’t also been increasing in a similar fashion.

Increasing Levels of IP Protection WorldwideThus, in order to determine if Special 301 is effective, one would have to compare the increase in IP protection of cited countries against the increase in IP protection of non-cited countries while controlling for other factors associated with increasing IP protection, such as the level of economic development or whether a country has joined the WTO and implemented TRIPS.

A lot of the research on Special 301’s effectiveness uses single case studies and is rather dated, focusing on the early years of the process. I’ve only been able to identify one recent study that tries to take the approach I’ve outlined above: Riker (2012) published an article entitled “Special 301 and Royalty Receipts from U.S. Trade Partners” in the International Trade Journal. He concludes that “priority designations between 2001 and 2007 are associated with a cumulative $5.4 billion increase in annual U.S. royalty receipts.” Riker speaks of the “economic consequences” of Special 301 designations, implying that a causal relationship exists between designation and increases in U.S. IP royalties.

I’m working on trying to replicate his results, but there are a number of problems with the article. First is the selection of the dependent variable: Riker chooses to use BEA data on IP royalties received by the U.S. from other countries. However, the stated goal of Special 301 isn’t to increase the level of royalties received by the U.S., but to increase the level of IP protection foreign countries offer. Riker chooses to treat the level of IP protection as a latent variable, and rejects using the Park-Ginarte index since it is only available in five-year increments. This strikes me as odd; first, since the Park-Ginarte index is available for 1990, 1995, 2000, and 2005, one could test to see whether Special 301 designations have any effect on the measure in these years. Second, the Park-Ginarte index isn’t the only measure of IP protection with wide coverage. The World Economic Forum produces a measure of IP protection, currently available for the years 2006-2013. (Though to be fair, the WEF data probably wasn’t available when Riker was writing the paper). Third, the World Bank produces data on royalty receipts and payments with wider coverage than the BEA data; this data might capture increased royalties that flow to countries besides the U.S. as a result of Special 301 designations. After all, there’s no logical reason to expect the benefits of increased IP protection in foreign countries to accrue solely to the U.S.

In fact, using BEA’s royalty data as a dependent variable would probably be a far better choice for evaluating Special 301’s progress towards its other goal—increasing market access for U.S. persons. But Riker’s models don’t include any measure of market access.

The next big problem with Riker’s article is its relatively limited data coverage. Special 301 has been around since 1989, yet he examines only the period between 2001 and 2008. Furthermore, because of his choice of dependent variable, he is forced to limit his analysis to the 33 countries for which the BEA provides IP royalty receipt data. Of these 33 countries, only 14 were designated as Special 301 priorities. In contrast, by 2007, Special 301 had over its lifetime designated a total of 87 countries.

Part of the problem is that Riker limits what he counts as Special 301 “designations” to Priority Foreign Countries, Priority Watch List members, and countries undergoing Section 306 monitoring. There is no logical reason to exclude countries on the Watch List, yet Riker ignores these designations. Perhaps he assumes simple Watch List designations will not have any effect on royalties; if so, that assumption should have been tested, as the answer would have been illuminating. Still, between 2001 and 2007 (Riker’s range of Special 301 data) there were 30 countries that meet his criteria for designation, but his dependent variable only allows him to include less than half that number in the analysis. There is no way to know if his results would hold when extended beyond his minority of selected countries.

Finally, Riker assumes “that the Special 301 priority designations are exogenous determinants of U.S. royalty receipts from the prioritized countries.” That is, Riker assumes that there is no way priority designations could be affected by royalty receipts. This is an unjustified assumption. In fact, one could reasonably assume endogeneity here: priority designations might be focused on countries with increasing royalty receipts, since these are precisely the countries that matter most to USTR and private stakeholders.

To wrap up, the only large-N quantitative study assessing the effectiveness of Special 301 suffers from a less-than-ideal choice of dependent variable, very limited data, and implausible assumptions about how Special 301 works. It cannot be used to conclude that Special 301 is generally effective in increasing the level of IP protection in cited countries.

Contrary to Riker’s description of Special 301 designations as a “technical assessment,” Special 301 is a highly politicized process. As Flynn (2010) notes, most of the recommendations made by powerful private stakeholders find their way into the final report. My next post will address the politicization of Special 301; for now, it suffices to say that there is very strong evidence that Special 301 designations are anything but “technical assessments.”

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