HONEST COPYING PRACTICES.

• Author: Fishman, Joseph P.

INTRODUCTION

One of intellectual property theory's operating assumptions is that creating is hard while copying is easy. But it's not always so. Say you would like to reproduce a drawing. You might photocopy it in a matter of seconds or instead recreate it by hand in a matter of days. Or perhaps you would like a copy of your favorite photograph. You could copy and paste a digital file on a computer or instead stage the entire subject matter anew in front of a camera. Copies, though outwardly identical, can come from different processes.

Policymakers around the world face a choice whether such distinctions should affect a copyist's liability. The two branches of intellectual property that condition liability on copying, trade secrecy and copyright, take different views. (1) Both in the United States and elsewhere, trade secrecy regimes distinguish between copying methods deemed illegitimate and those deemed legitimate. Appropriation is only actionable if it is done through means that the law deems, in the language of international treaties, "contrary to honest commercial practices." (2) Copyright regimes, by contrast, are largely indifferent. They focus on the end product, not the process of its production.

Trade secrecy and copyright aren't often seen as a natural pair, but on this issue--whether the law should care how copies are made--the former has much to offer the latter. I have argued elsewhere that an ideal copyright infringement standard would focus not just on a defendant's end product but also, as trade secrecy does, on its process. (3) The gist of that argument is that differences in process matter to several traditional constituencies of copyright policy. For rights-holders, costly imitation poses less risk of market usurpation than cheap imitation. For consumers, a work remade from scratch may satisfy a different demand than would a digital duplication. For authors, deliberately tracing an expert's creative steps can teach technical skills that automated processes cannot. Because the question of how copies are made can matter to copyright policy's intended beneficiaries, it should also matter to copyright policy's crafters.

Before copyright infringement standards can become sensitive to process, however, a significant practical issue is whether such sensitivity would be feasible under existing international law. Those already familiar with this area might suppose that it forecloses the possibility entirely. The Berne Convention--the foundational multilateral treaty governing copyright law--guarantees owners a broad and seemingly process-agnostic right of "authorizing the reproduction of... [protected] works, in any manner or form." (4) Changing the treaty requirements, which bind the United States along with 168 other nations, is not a particularly realistic option. Because any such changes would require unanimous support of member states, any proposed revision is commonly dismissed as a political nonstarter. (5)

Yet despite Berne's seemingly strict provision, a closer inspection of existing state practices reveals potential for greater flexibility. The inclination to treat laborious copying differently than cheap, digital copying is already reflected in scattered pockets of several jurisdictions' domestic laws, though typically confined to a limited context like private use. The problem is that the normative rationale underlying these limited exceptions is understudied and, as a result, unsystematically implemented in practice. Establishing a process-sensitive copyright infringement standard would pose less of a sea change than it might seem at first blush.

This Article examines how a defendant's means of copying could function as a policy lever within international copyright law. My goal here is to make the case that a process-sensitive infringement standard is both normatively desirable and legally achievable. Notwithstanding the capacious definition of the reproduction right, the same flexibilities within the Berne Convention that have already allowed states to make targeted exceptions also allow them to consider the defendant's method of copying as a structural feature of the reproduction right itself. Under the standard I propose here, the resulting regime would look something like trade secrecy's tolerance for honest commercial practices--what I dub here "honest copying practices." Copyright and trade secrecy are, in this sense, two branches of the same tree, each recognizing that copying's impact on social welfare depends not only on what is copied and why it is copied (as courts routinely acknowledge already) but also how.

The Article proceeds in three parts. Part I surveys the existing law in several representative jurisdictions along with the international treaties that constrain those jurisdictions' decisionmaking. This Part contrasts copying methods' central role in trade secrecy on the one hand with their perceived irrelevance in copyright on the other. In Part II, I explain why changing the method of copying can often change the copying's impact on social welfare. I argue that copyright law would function better if it began identifying honest copying practices that, as in trade secrecy law, were exempt from liability. Part III turns to questions of implementation. I conclude that international copyright law is equipped to distinguish between proper and improper processes through Berne's Article 9(2), the same mechanism it already uses to distinguish between proper and improper products and purposes. As a matter of international commitments, a state could begin discriminating between honest and dishonest copying practices today. It simply needs the will to do so.

1. COPYING METHODS IN INTELLECTUAL PROPERTY LAW

   When scrutinizing a defendant's conduct, trade secrecy's liability standard filters out certain processes of appropriation. Some methods of copying protected information, "honest commercial practices" in the parlance of major international agreements (or "proper means" in the equivalent U.S. common-law terminology), remain perfectly lawful. By contrast, copyright law for the most part lacks such a filter. As this Part discusses, however, traces of one can be found in various provisions if one squints just hard enough.

   1. Trade Secrecy

      Trade secrecy law's distinction between lawful and unlawful means of copying is virtually as old as the cause of action itself. (6) The doctrine, developed extensively under U.S. common law and a major influence on the international agreements that would later follow, (7) requires courts to consider not only what the defendant copied but also how. (8)

      Policing the boundary between proper and improper means of acquiring protected secrets is a matter of interpretation. That a given process might be otherwise legal outside of trade secrecy law is not dispositive. It could violate no independent rule and still constitute misappropriation. (9) Judges have endeavored to preserve some flexibility over what's in and what's out, rejecting the possibility of an exhaustive catalogue and instead promoting a standard that tracks the relevant industry's accepted norms of "commercial morality and reasonable conduct." (10) Predictably, with such an open-ended standard, there remain certain means of appropriation whose legal status is open to reasonable disagreement. (11) Nevertheless, some significant consensuses have emerged over time. U.S. law has long identified some processes, such as reverse engineering, as acceptable. (12) Others, such as acquisition through trespass or fraud, have been deemed categorically unacceptable. (13) A plaintiff in a trade secret case will always need to devote some attention to the defendant's methods. Even if a defendant can be shown to have appropriated the plaintiff s secret, the plaintiff must also show that the defendant's particular process of appropriation falls in the wrong bucket. (14)

      This distinction between proper and improper means emerged on the world stage relatively recently. Historically, trade secrets had not been included among the forms of intellectual property governed by international treaties. (15) That gap began to be filled in the late 1980s during the early negotiations over what a few years later would become the Trade-Related Aspects of Intellectual Property Rights ("TRIPS") Agreement. (16) The final text of the treaty requires member states to protect against appropriating trade secrets "in a manner contrary to honest commercial practices." (17) The same language had appeared less than a year earlier in the North American Free Trade Agreement, the first multilateral treaty to provide for trade secret protection. (18)

      The concept of "honest commercial practices" under TRIPS, like the U.S. version that preceded it, is flexible by design. TRIPS gives little guidance on which commercial practices ought to be considered dishonest. A footnote to the main text specifies only that such practices would mean "at least practices such as breach of contract, breach of confidence and inducement to breach." (19) Indeed, TRIPS affords arguably even more flexibility than domestic U.S. law, which provides a longer (though still nonexhaustive) list of paradigmatically improper means. (20) As others have observed, these skeletal requirements allow member states to determine what constitutes dishonest commercial practices according to their individual cultural and industrial norms. (21) In Germany, for instance, one court held that a competitor may not gain access to secret information by pretending to be a customer. (22)

      The European Union has recently followed the United States' lead in designating reverse engineering as an acceptable means of copying. (23) The 2016 E.U. Trade Secret Directive instructs that "[i]n the interest of innovation and to foster competition,... [r]everse engineering of a lawfully acquired product should be considered as a lawful means of acquiring information, except when...