U.S. Seeks Industry Input on Standards that Create Trade Barriers When Exporting to India

On December 14, 2015, the U.S. Department of Commerce ("USDOC"), on behalf of the Administration, published a Federal Register ("FRN") notice, seeking public input to identify priority sectors in which the United States and India will pursue cooperative dialogues under the U.S.-India Strategic and Commercial Dialogue ("S&CD") to address standards-related trade barriers. The aim of the cooperative dialogues is for the private sector to produce concrete recommendations for the U.S. and Indian governments on breaking down barriers related to standards, regulatory, and conformity assessment practices to increase bilateral trade. Stakeholder input will be used by the USDOC, in consultation with its interagency partners, to identify those sectors where cooperative work will yield the most benefits for bilateral trade from a U.S. perspective. The USDOC will also use stakeholder input to seek agreement from its Indian government counterparts on the sectors in which to begin cooperative work.

Criteria for selection include: The nature of the existing standards-related barriers in the sector (medical devices, ICT products, oil and gas, etc.), including whether the standards related measures that are affecting bilateral trade are subject to regulatory discretion or have limited potential for adjustment due to legislated mandates; the relative estimated trade impact of eliminating the standards-related barriers in the sector; and whether private sector representatives from the sector—both U.S. and Indian—are committed to leading a cooperative dialogue to produce concrete recommendations for the U.S. and Indian governments on breaking down barriers in the sector. Selection will also take into account the willingness of U.S. and Indian regulators to become involved in this targeted work, as well as if another bilateral forum relevant to the suggested issue already exists.

Advisory Committee on Commercial Operations to U.S. Customs and Border Protection to Meet January 13th

The Advisory Committee on Commercial Operations to U.S. Customs and Border Protection (COAC) will meet on January 13, 2016, in New Orleans, LA. The meeting will be open to the public.

Agenda

The Advisory Committee on Commercial Operations to U.S. Customs and Border Protection (COAC) will discuss the Trade Efficiency Survey and hear from the following subcommittees on the topics listed below and then will review, deliberate, provide observations, and formulate recommendations on how to proceed on those topics:

1. The Trade Modernization Subcommittee will discuss the progress of the Centers of Excellence and Expertise Uniformity (``Centers'') Working Group. The subcommittee will provide an update on their review of the original COAC recommendations for Centers and what areas they have identified for Centers to develop uniform policies, processes and strategies, with consideration of an industry-focused and account-based approach. The subcommittee will also discuss the progress of the International Engagement and Trade Facilitation Working Group which is identifying examples of best practices in the U.S. and abroad that facilitate trade and could be applied globally. Additionally, the subcommittee will also discuss the formation of a Role of the Broker 2016 working group to provide updated recommendations for revising 19 CFR 111.

2. The Exports Subcommittee Manifest Working Group will discuss the upcoming Air Manifest Pilot and the refocusing/renewal of the Post Departure Filing Working Group (formally Option 4 workgroup).

3. The One U.S. Government Subcommittee will discuss progress of the Automated Commercial Environment (ACE) Single Window effort and the previous COAC recommendations related to this matter. The subcommittee will provide input on trade readiness and partner government agencies' readiness for the upcoming February 28, 2016, ACE implementation of the Single Window. There will also be an update from the North American Single Window Vision Working Group.

4. The Trade Enforcement and Revenue Collection Subcommittee will discuss the progress made on the Intellectual Property Rights Working Group and the Antidumping and Countervailing Duty Working Group, and outline the plans for the Bond Working Group.

5. The Global Supply Chain Subcommittee will review and discuss recommendations related to the Pipeline Working Group and also provide an update on pilot discussions with industry.

6. The Trusted Trader Subcommittee will report on the status of the Trusted Trader Pilot, the next steps for implementation, and the vision of an enhanced Trusted Trader concept that includes engagement with CBP to include relevant partner government agencies with a potential for international interoperability.

Air Force Boot Contract Awarded

Belleville Shoe Co., Belleville, Illinois, has been awarded a maximum $29,871,013 firm-fixed-price contract for men's and women's temperate weather sage boots. This was a competitive acquisition with two responses received. This is a one-year base contract with four option periods. Locations of performance are Illinois and Arkansas, with a Dec. 24, 2020, performance completion date. Using military service is Air Force. Type of appropriation is fiscal 2016 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPEIC1-16-D-1023).

Request for Public Comments on Review of Employment Impact of the Trans-Pacific Partnership

SUMMARY: The Office of the United States Trade Representative ("USTR") and the Department of Labor ("DOL"), through the Trade Policy Staff Committee ("TPSC"), are initiating an employment impact review of the Trans-Pacific Partnership ("TPP") Agreement. USTR is seeking public comments on the impact of the TPP Agreement on U.S. employment, including labor markets.

DATES: Written comments are due by Wednesday, January 13, 2016.

Coleman FTZ Hearing Postponed to Until February 24th

On December 23, 2015, the Foreign Trade Zone Board published in the Federal Register (80 FR 79820) Application for Additional Production Authority; The Coleman Company, Inc., Subzone 119I (Textile-Based Personal Flotation Devices); Notice of Public Hearing and Extension of Comment Period

The public hearing on the application for additional production authority submitted by The Coleman Company, Inc., for activity within Subzone 119I in Sauk Rapids, Minnesota (see 80 FR 49986, August 18, 2015) that was previously postponed (see 80 FR 74754, November 30, 2015) has been rescheduled. The Commerce examiner will hold the public hearing on February 24, 2016, 9:30 a.m., at the U.S. Department of Commerce, Hoover Building, Room 3407, 1401 Constitution Avenue NW., Washington, DC 20230. Interested parties should indicate their intent to participate in the hearing and provide a summary of their remarks (submitted to ftz@trade.gov or the address indicated below) no later than February 19, 2016.

The comment period for the case referenced above will be extended through March 11, 2016. Rebuttal comments may be submitted during the subsequent 15-day period, until March 28, 2016. Submissions (signed original and one electronic copy) shall be addressed to the FTZ Board's Executive Secretary at: Foreign-Trade Zones Board, U.S. Department of Commerce, Room 21013, 1401 Constitution Avenue NW., Washington, DC 20230-0002.

For further information, contact Pierre Duy at Pierre.Duy@trade.gov or (202) 482-1378.

BACKGROUND.

On August 18, 2015, the Foreign Trade Zone Board published in the Federal Register (80 FR 49986) Application for Additional Production Authority; The Coleman Company, Inc.; Subzone 119I; (Textile-Based Personal Flotation Devices) Sauk Rapids, Minnesota.

An application has been submitted to the Foreign-Trade Zones ("FTZ") Board by The Coleman Company, Inc. The Coleman facility (252 employees) is located at 1100 Stearns Drive, Sauk Rapids, Minnesota. The facility is used for the production of personal flotation devices and cushions constructed with textile fabrics. In May 2014 Coleman requested FTZ production authority in a notification proceeding). A notification proceeding is a streamlined application well-suited to applications that can be expected to have no domestic manufacturer opposition. It is unclear why Coleman, at that time, chose to use procedures that were unlikely to result in approval. The 2014 application was opposed by Milliken and Company and a coalition of three textile trade associations (AFMA, NCTO, and USIFI). The 2014 application was supported by U.S. Representative Michele Bachmann, Continental Press, Duro Textiles, LLC, Henderson Sewing Machine Company, M-Associates, Mitsubishi Electric Automation, Outdoor Industry Association, U.S. Representative Ed Perlmutter, U.S. Representative Mike Pompeo, Pregis Corporation, SPSI Inc., and T.J. Elias Sales and Service. After an initial review, the requested production authority was approved subject to a restriction that precludes inverted tariff benefits on foreign textile fabrics and cases/bags of textile materials used in production of personal flotation devices and cushions for U.S. consumption. In other words, Coleman got tariff relief comparable to duty drawback and exports and, in the case of goods entering the U.S. market, a deferral of duty during manufacturing a warehousing (with full duty payable when the articles enter U.S. commerce.

This new 2015 pending application seeks to remove the above-mentioned restriction and to add several new components to Coleman's scope of authority by requesting authority for Coleman to choose the duty rate during customs entry procedures that applies to personal flotation devices (4.5%, 7.0%) and flotation cushions (6.0%) for the foreign status inputs noted below. This application was submitted under different procedures than the 2014 application, procedures which require Coleman to make a much fuller and stronger case than under the streamlined procedures. The request indicates that the savings from FTZ procedures would help improve the plant's international competitiveness.

Components and materials sourced from abroad (representing 16% of the value of the finished products) include: Water soluble sensing elements; plastic carry bags; nylon and polyester woven fabrics; webbing of man-made fibers; neoprene fabrics; and, knit polyester fleece fabrics (duty rate ranges from 5 to 20%).

Customs Proposed Change to Tariff Classification of Certain Flock Heat Transfers

In ruling letters NY J81335, of February 21, 2003, and ruling NY J80560, of February 13, 2003, both to Vanity Fair Intimates, L.P., Customs and Border Protection ("CBP" classified certain plastic flocked heat transfers in subheading 5601.30.00, Harmonized Tariff Schedule of the United States ("HTSUS"), which provides for “Wadding of textile materials and articles thereof; textile fibers, not exceeding 5 mm in length (flock), textile dust and mill neps: Textile flock and mill neps.” At the time the rate of duty was 0.5% In ruling letter NY E85712, of August 19, 1999, to Explan International Trade Inc, CBP classified certain textile/PVC material used to heat transfer images to fabric or other surfaces in subheading 5903.10.25, HTSUS, which provides for “Textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902: With poly(vinyl chloride): Of manmade fibers: Other: Other.” At the time the rate of duty was 8%.

CBP proposes to revoke NY J81335, NY J80560 and NY E85712, as well as any other ruling not specifically identified, to reflect the proper classification of the merchandise. CBP now holds that the subject merchandise is classified in subheading 4908.90.00, HTSUS, which provides for “Transfers (decalcomanias): Other.” The 2015 column one, general rate of duty is free.

Comments must be received on or before January 22, 2016.

The notice of proposed revocation is in Customs Bulletin Vol. 49 No. 51, beginning on page 50.

Customs Proposed Change to Tariff Classification of Certain Cotton Pillowcases

In ruling letter, NY N239270, of March 26, 2013, to Welspun USA Inc, Customs and Border Protection ("CBP") determined that certain pillowcases were classified under subheading 6302.31.90, Harmonized Tariff Schedule of the United States ("HTSUS"), which provides for “Bed linen, table linen, toilet linen and kitchen linen: Other bed linen: Of cotton: Other: Not napped.” The rate of duty was 6.7%.

It is now CBP’s position that the subject merchandise is properly classified under subheading 6302.31.70, HTSUS, which provides for “Bed linen, table linen, toilet linen and kitchen linen: Other bed linen: Of cotton: Other: Napped.” The rate of duty is 3.8%.

Comments must be received on or before January 22, 2016.

The notice of proposed revocation is in Customs Bulletin Vol. 49 No. 51, beginning on page 11.

Two Free TPP Webinars

The U.S. Department of Commerce Office of Textiles and Apparel is offing two free webinars on the Trans-Pacific Partnership free trade agreement--

• Trans-Pacific Partnership (TPP) Agreement Textile and Apparel Rules of Origin, Tuesday, January 19, 2016 at 2:30 pm EST

• Trans-Pacific Partnership (TPP) Agreement Textile and Apparel Market Access Commitments, Tuesday, January 26, 2016 at 2:30 pm EST

There is no cost to participate, but advance registration is required.

For more information, please contact Maria D’Andrea at (202) 482-1550 or Richard Stetson at (202) 482-2582.

USITC Institute Investigation of Certain Cotton and Polyester Sheets

The U.S. International Trade Commission ("USITC") has voted to institute an investigation of certain woven textile fabrics and products containing same. The products at issue in the investigation are high thread count cotton and polyester sheets and bedding products.

The investigation is based on a complaint filed by AAVN, Inc., of Richardson, Texas. The complaint alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain woven textile fabrics and products containing same that infringe a patent asserted by AAVN or are the subject of false and misleading advertising. The complainant requests that the USITC issue a general exclusion order, or, alternatively, a limited exclusion order, and a cease and desist order.

The USITC has identified the following as respondents in this investigation:

• AQ Textiles, LLC, of Greensboro, NC;
• Creative Textile Mills Pvt. Ltd. of Mumbai, Maharashtra, India;
• Indo Count Industries Ltd. of Mumbai, Maharashtra, India;
• Indo Count Global, Inc., of New York, NY;
• GHCL Ltd. of Pradesh, India;
• Grace Home Fashions LLC of New York, NY;
• E & E Company, Ltd., of Thane, Maharashtra, India;
• E & E Company, Ltd., d/b/a JLA Home, of Fremont, CA;
• Welspun Global Brands Ltd. of Gujarat, India;
• Welspun USA Inc. of New York, NY;
• Elite Home Products, Inc., of Saddle Brook, NJ;
• Pradip Overseas Ltd. of Ahmedabad, India;
• Pacific Coast Textiles, Inc., of Garden Grove, CA;
• Amrapur Overseas, Inc., of Garden Grove, CA; and
• Westport Linens, Inc., of New York, NY.

Watch Textiles and Trade for a more detailed analysis of this action in the coming days.

Defense Textile and Footwear Contracts Awarded

Wolverine World Wide, Inc. Rockford, Michigan, has been awarded a maximum $15,291,717 firm-fixed-price contract for temperate weather tan boots. This was a competitive acquisition with three responses received. This is a one-year contract with no option periods. Location of performance is Michigan, with an Oct. 22, 2016, performance completion date. Using military service is Army, and Afghan army and police. Type of appropriation is fiscal 2016 through fiscal 2017 foreign military sales program. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania, (SPE1C1-16-C-0007).

UPDATE: Federal-Fabrics-Fibers Inc., Lowell, Massachusetts (SPE1C1-16-D-1018), has been added as an awardee to the multiple award contract issued against solicitation SPM1C1-12-R-0031 announced March 12, 2012.

Federal Offices to Close Early on Christmas Eve

President Barack Obama has directed federal offices to close early on December 24, making it a half-day.

Textilización Program - Textiles Sciences

Anyone who has tried to use the free trade agreements the U.S. has with our Spanish-speaking neighbors in the Western Hemisphere knows that one great difficultly is the lack of a good source for Spanish-language technical terms and information relating to textiles and apparel. In a recent trip to Bogata, Colombia, I had the pleasure of meeting Francisco Mejia-A, a graduate of Philadelphia University and textile designer. His blog, Textilización Program, is an online, and ever growing, course on textile sciences in Spanish. Gracias!

Army and Air Force Flame Resistant Uniform Contract Awarded

Aurora Industries LLC, Camuy, Puerto Rico, has been awarded a maximum $12,118,776 modification (P00021) exercising the third one-year option period of a one-year base contract (SPE1C1-14-D-1068) with three one-year option periods for flame resistant uniforms. This is a firm-fixed-price contract. Location of performance is Puerto Rico, with a Dec. 28, 2016, performance completion date. Using military services are Army and Air Force. Type of appropriation is fiscal 2016 through fiscal 2017 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

The Hotel Monaco

The Hotel Monaco is a boutique hotel located in an up and coming area of Washington DC on F Street between the International Spy Museum and the National Shakespeare Company.  The building the Hotel Monaco is housed in was originally built in 1793 and was known as Blodgett’s Hotel.  The building was part of a lottery scheme conceived of by Mr. Blodgett in the hopes of staying out of debtor’s prison.  The plan worked about as you would expect.  Despite its name, Blodgett’s Hotel did not operate as a hotel.  The United States Theater, the first theater company in Washington DC, occupied the building in 1800.  During the War of 1812, Blodgett’s Hotel was the only building left standing after Washington was burned.  It is said that the British spared the building at the request of Dr. William Thornton who was building a musical instrument in the building.  

So what does all this have to do with patents? 

In 1836, the US Patent Office and the US Post Office were both housed in Blodgett’s Hotel.  At the time, the US Post Office was under investigation for corruption regarding awarded contracts.  On December 15^th, 1836, a fire of mysterious origin broke out in Blodgett’s Hotel destroying all the contents.  While suspicions regarding the cause of the fire immediately fell upon the employees of the US Post Office, these accusations turned out to be unfounded – the incriminating records had previously been removed from the building and were later found by the authorities.  Eventually it was determined that ashes/embers stored too closely to stored firewood was the cause of the fire.

All patent office records were lost in the fire.  This included records for 9957 patents, 7000 models, and approximately 9,000 drawings.  The records for only 2845 patents were recovered.  Items lost in the fire included a folio of color patent drawings that were hand drawn by Robert Fulton and the first known patent for an internal combustion engine. 

After the fire, it was decided that the US Patent Office would be moved to a fire proof building across the street from Blodgett’s hotel (now known as the Smithsonian Museum’s Reynolds Center).  In a dazzling display of government efficiency, construction on the building was started in 1836 but wasn’t completed until 1867. 

Ten years later, the new building was destroyed by fire. 

Jim Carson is a principal of RB Consulting, Inc and a registered patent agent.  He has over 30 years of experience across multiple industries including the biotechnology, textile, computer, telecommunications, and energy sectors.  RB Consulting, Inc specializes in providing management, prototyping, and IP services to small and start-up businesses.  He can be reached via email at jim@rbconsulting.us or by phone at (803) 792-2183.

Major Retailers Hit with $1.3 Million Fee for False Claims of "Bamboo" Fiber

The Federal Trade Commission announced complaints and proposed court orders barring four national retailers from mislabeling and advertising rayon textiles as made of “bamboo,” and requiring them to pay civil penalties totaling $1.3 million.

Under the court orders settling the FTC’s charges, Bed Bath & Beyond Inc. will pay $500,000; Nordstrom, Inc. will pay $360,000; J.C. Penney Company, Inc. will pay $290,000; and Backcountry.com LLC will pay $150,000 for allegedly violating the FTC Act and the agency’s Textile Rules.

“It’s misleading to call bamboo that has been chemically processed into rayon simply ‘bamboo,’” said Jessica Rich, Director of the Bureau of Consumer Protection. “With consumers in the midst of their holiday shopping, it’s important for them to know that textiles marketed as environmentally friendly alternatives may not be as ‘green’ as they were led to believe.”

The complaints announced today allege the four companies broke the law by continuing to misrepresent or mislabel rayon products as “bamboo” despite receiving warning letters from the FTC in 2010 and a synopsis of previous litigated cases against marketers for deceptively labeling rayon products as bamboo. The Commission charged the companies with violating the Textile Act and the Textile Rules and with violating Section 5(m)(1)(B) of the FTC Act by falsely and deceptively selling the mislabeled products, despite knowing that doing so was illegal and could subject them to civil penalties.

Specifically, Bed Bath & Beyond’s mislabeled items, also sold through its subsidiary buybuy BABY, included dozens of “bamboo” textiles, including “Aden + Anais Bamboo 3-Pack Muslin Swaddles” and “Bamboo Blend Napkins.”

Nordstrom sold similar products online and in its stores, including a “Gypsy 05 Bamboo Racerback Hi-Lo Dress” and “Degree Six Clothing The Bamboo Long Sleeve Tee.”

J.C. Penney sold numerous “bamboo” products in its stores and online, including “Muk Luks 4-pk Men’s Bamboo Socks.” It also falsely claimed “bamboo” gave the products antimicrobial properties.

Similarly, Backcountry.com sold “bamboo” textiles, such as “Bridgedale Bamboo Crew Sock – Men’s.” Backcountry also made anti-microbial claims for its “bamboo” products.

The proposed orders settling the FTC’s charges are identical, aside from the civil penalty amounts. They prohibit the companies from violating the FTC’s Textile Act and Rules by failing to properly identify the fiber content when labeling and advertising any textiles containing manufactured fibers.

The FTC press release is available at https://www.ftc.gov/news-events/press-releases/2015/12/nordstrom-bed-bath-beyond-backcountrycom-jc-penny-pay-penalties?utm_source=govdelivery

Short Supply Requests Filed Relating to Woven Fabric of Rayon and Warp Knit Fabric for Swimwear

1. A request from American Eagle Outfitters ("AEO") that the United States and Morocco consider revising the rules of origin for women’s and girls’ woven garments to address availability of supply of 100% rayon woven fabric of Harmonized Tariff Schedule of the United States ("HTSUS") subheading 5408, which AEO alleges cannot be supplied by the U.S. and Moroccan industries in commercial quantities in a timely manner; and

2. A request from the Swimsuit Commission Corporation ("SCC"), that the United States and Morocco consider revising the rules of origin for certain women’s and girls’ swimwear to address availability of supply of certain printed and piece-dyed warp knit fabrics of polyester or nylon fibers classified under HTSUS subheading 6004.10 containing between 3 percent and 41 percent elastomeric yarns, in which the elastomeric yarns were engineered for chlorine resistance, which the SCC alleges cannot be supplied by the U.S. and Moroccan industries in commercial quantities in a timely manner.

Comments must be received by January 6, 2016.

Twenty Years Ago Friday

Twenty years ago this Friday, December 11th, fire broke out at Malden Mills Industries, Inc. The cause was a boiler explosion, which knocked out the sprinkler system. The fire continued well into the next day. About 30 people were injured. Malden's commitment to safety issues and evacuation training yielded excellent results, as there were no fatalities in the huge conflagration.

I had just started my second year working for a trade association that represented American textile mills. Malden Mills was one of our members. Malden Mills employed more than 1,500 workers at the 2 million square foot facility, which straddled the Methuen-Lawrence city line in the Merrimac Valley region of Massachusetts. Everyone assumed that Malden's president, Aaron Feuerstein, would take the insurance money and that would be the end of the company, at least as a manufacturer in Massachusetts. If he rebuilt at all, it was assumed it would be elsewhere, perhaps in China.

Feuerstein shocked the business world by declaring, immediately after the fire that he would rebuild, rebuild in Lawrence, and that he would use the insurance money to pay the workers while rebuilding and that they would have jobs. For this he became known as the "Mensch of Malden Mills."

He kept his word. A new Malden Mills, with the latest in new technology, rose on the site where the 19th century mill had stood. The workers were paid. And, to the extent that he could, their jobs were waiting for them when the new plant opened (not all 1,500 jobs, as he was forced to recognize that the only way the company could survive was as a smaller operation).

In an interview on CBS's 60 Minutes program, Feuerstein explained that in doing what he did he was simply following the teachings of the Torah --

"You are not permitted to oppress the working man, because he's poor and he's needy, amongst your brethren and amongst the non-Jew in your community."

Aaron Feuerstein did all he could to save the business and those jobs. Unfortunately, he couldn't do it all. By 2001 the company was bankrupt and he was forced out. The company survived, now re-named Polartec, after its best-known product.

Later this month Feuerstein will turn 90 years of age. He said recently to a Boston Glove reporter: "I go on living with gratitude and humility. I'm happy with my life. I do the best I can."

IWTO is currently recruiting for a new Secretary General.

The International Wool Textile Organisation ("IWTO") Secretary General is responsible for the general administration and daily management of the organisation, the organisation’s functions and managing its professional staff members and consultants. The Secretary General reports to the IWTO President and the Executive Committee. View the full job profile and apply by clicking here.

The deadline for applications is 4 January 2016.

The selected candidate will be expected to take up the position in May 2016, or as soon as possible thereafter. It is expected that the Secretary General will live in Brussels and will work full-time for IWTO. If not a national of the EU/EEA, candidates must be eligible to work in Belgium and hold a valid work permit.

Opportunities for U.S. Textiles and Apparel in TPP

The U.S. Department of Commerce has published a report on export opportunities for the U.S. textile and apparel sectors in the Trans-Pacific Partnership free trade agreement.

The Report Cites Key Market Access Benefits--

• Japan will eliminate import taxes on 99.2% of U.S. textiles and apparel products exports immediately
• Vietnam will eliminate import taxes on 98.4% of U.S. textiles and apparel exports immediately and 100% within 4 years
• Malaysia will eliminate import taxes on 79.2% of U.S. textiles and apparel exports immediately
• New Zealand will eliminate import taxes on 50.0% of U.S. textiles and apparel exports immediately and 100% within 7 years

Read the full report at http://www.trade.gov/fta/tpp/industries/textile.asp

It Was All So Different Before Nothing Changed

Well I was confused.  The Intellectual Property protections of the Trans-Pacific Partnership had been published and these radical new agreements were going to: 1) disrupt commerce and end innovation throughout the world; and 2) strip nations of their sovereignty and deprive millions of people of access to their basic necessities.  Apparently, it depends on whether you listen to Fox News or MSNBC. 

And so, in one of the worst personal decisions I had made since I traded a Land Rover for a dog and a cat, I decided to actually read Chapter 18 of the TPP to see what was going on. 

The short version:  not much.   

The longer version is provided below. 

Administrative Process  

The parties agree to:  1) respond to requests for IP protection with written decisions that include legal justifications and reasoning for these decisions; 2) provide the applicant with the opportunity to respond to a decision; 3) provide a written response to the applicant’s response that includes legal justifications and reasoning for the decisions provided in the written response; 4) provide an opportunity to appeal decisions described in point 3); and, 5) provide a written decision regarding the appeal that includes legal justifications and reasoning for the decisions provided in the appeal decision. 

Trade Secrets 

The parties will put in place legal remedies to protect against the loss of trade secrets through fraudulent action, unauthorized access, or misappropriation.

Trademarks and Geographic Indications 

The parties will recognize Geographic Indications and treat them like trademarks.

Internet Service Providers

Each party will establish laws that require internet service providers to cooperate with right holders to remove protected materials from the internet.  Each party will also establish laws that provide internet service providers with safe harbor protections if they unknowingly or inadvertently distribute protected materials.

Patents 

The standards for determining the patent eligibility of an invention will follow reasonably closely to USPTO practices with the exceptions that:  1) diagnostic, surgical, and therapeutic methods do not have to be patentable; 2) plants do not have to be patentable; and, 3) biological processes do not have to be patentable. 

The parties agree to make publically available information about patents and patent applications the maps fairly closely the practices of the USPTO.  This is a fairly consistent practice across most countries.

Protection of Proprietary Data by Regulatory Agencies

When seeking marketing approval for an Agricultural Chemical, Pharmaceutical or Biologic product, each party will not permit the use of undisclosed or proprietary data that was used for the marketing approval of a previously submitted Agricultural Chemical, Pharmaceutical or Biologic product that is the same or a similar product unless the same right holder owns both products.  Each party also agrees not to use such undisclosed or proprietary data received from other countries or other entities whether or not the other country or other entity is a part of the TPP agreement. 

For Agricultural Chemicals, this protection will expire ten years after the marketing approval of the Agricultural Chemical product. 

For Pharmaceuticals, this protection will expire five years after the marketing approval of the Pharmaceutical product.  Clinical trial data for pharmaceuticals is protected for three years. 

For Biologics, this protection will expire eight years after the marketing approval of the Biologic.  There is a provision within the biologics to reduce this protection to five years if the reducing party compensates the right holder in a manner that creates a comparable market outcome.  I think the intent is clearly that a party can force a right holder of Biologic products to accept a buy out for the last three years.  This is a pretty fuzzy section of the chapter and, unfortunately, the devil will be in the implementation details. 

The definition of a pharmaceutical product is a product that does not contain a chemical entity that has been previously approved.  I am assuming that the definition of an agricultural chemical product is similar.  The definition of a biologic product is a protein made using biotechnology methods that is intended for use in humans.  If these definitions are not met by a product seeking marketing approval, the above protections will not apply.

The above protections will be provided by a party to Agricultural Chemical products, Pharmaceutical products or Biologic products whether or not the products have patent protections from the party. 

The Australia and Chile “Exemption” Claim

There has been some noise made that Australia and Chile are claiming that the five year biologic rule means they do not have to change their laws.  This sounds worse than it actually is because Australia and Chile have already changed their laws.  Australia and Chile already have trade agreements with the US that are considered to be generally consistent with Chapter 18.  In addition, the US has already reached agreements with both Chile and Australia that work out which sections of Chapter 18 will replace the existing agreements. 

Patent Term Extension

The parties agreed to patent term adjustment if the approval process for a patent application takes longer than five years.  The parties also agreed to extend the patent term for Pharmaceutical products that faced unreasonable or unnecessary delays in the market approval process.  This extension does not appear to apply to Agricultural Chemical products or Biologic products which is a little surprising to me.  The language of this section is a little vague. 

Copyrights

The actual copyright section was fairly straight forward.  It is the enforcement section where things got interesting in this area. 

In general, the normal copyright protections apply.  In addition, the parties agree to legally protect the use of Technology Protection Measures and Rights Management Information techniques and technologies.  There will be civil and criminal legal remedies for people and entities who knowingly bypass these techniques and technologies.  The parties also agreed to make it illegal to make or sell equipment to get around Technology Protection Measures, Rights Management Information, or satellite decryption technologies involving programmed content. 

Libraries, museums, archives, educational institutions, and non-commercial broadcasting entities can be exempted from criminal penalties. 

Enforcement

Each party agrees to put in place the laws and enforcement mechanisms to enforce the agreements in this chapter.  This includes judicial procedures that provide the judicial system with the authority to order injunctive relief, restitution, and damage payments.  In addition, the judicial system will be given the authority to order payment of bonds or to suspend the release of counterfeit, misleadingly labeled, or pirated goods based on prima facie evidence of an intellectual property rights violation.  The chapter goes into a lot of detail about what this means and what appropriate relief measures should be.  The chapter also goes into a lot of detail regarding what constitutes criminal activity and the appropriate criminal remedies.   

Final Observations

In interpreting all of this, I am going to avoid addressing the argument that the US could have cut a better deal because I can’t speak to that point. 

What I would point out is that in many respects, this section of the TPP is pretty consistent with, if somewhat less generous than, existing United States laws and procedures in most of the major intellectual property protection areas.  In trademarks we got protection of geographic indicators.  While the copyright section is updated to accommodate new technologies and the internet, the basic copy right protections are essentially the same as they have been since the 1950s.  From what I can see, no changes in US law will be required to accommodate the patent protections and industrial design protections called for in the TPP.  I was surprised to see that trade secrets were even addressed because, by definition, trade secrets are secret and will not generally be registered with a government. 

Even the differences between US law and the TPP were predictable.  For example, within the patent community opinions are divided regarding the appropriateness of patenting medical methods and biological processes and practices vary by country.  The result that the agreement does not require patents for these sorts of innovations should not have been unexpected. 

In reading the popular press, one seemingly controversial point that I hear coming from the mainstream media is the idea that the administrative process described in the TPP will infringe on the national sovereignty of the parties.  This seems misguided to me.  The administrative processes described in Chapter 18 seem reasonable and are consistent with the standard procedures of many, if not most, countries.  Unless you hold the opinion that disagreeing with the administrative decisions of a government is an infringement of national sovereignty, I don’t really see an issue here. 

I would point out is that the proprietary data protections and the patent term extensions that were agreed to are unusual.  These types of protections are rare especially beyond the first world countries.  In my mind, these are not valueless concessions for the protection of Agricultural Chemical products, Pharmaceutical products or Biologic products.  Even if these protections are flawed, if I were betting I would think these industries would rather have these weaker protections than to not have the protections at all.

At David’s request, I have published an article by article summary of the intellectual property agreements that were made in Chapter 18 of the Trans-Pacific Partnership.  This summary has been put up on the Agathon Associates website. 

And yes – I still have the dog and the cat J

Jim Carson is a principal of RB Consulting, Inc and a registered patent agent.  He has over 30 years of experience across multiple industries including the biotechnology, textile, computer, telecommunications, and energy sectors.  RB Consulting, Inc specializes in providing management, prototyping, and IP services to small and start-up businesses.  He can be reached via email at jim@rbconsulting.us or by phone at (803) 792-2183.