For over three decades, a paramount goal of U.S. trade policy has been to ensure robust protection of intellectual property (IP) rights across national borders.1 Beginning with the Agreement on Trade-Related Aspects of Intellectual Property Rights2 (TRIPS) in 1994, the United States has repeatedly sought to “export” its own comparatively protective IP regime through multilateral and bilateral trade agreements.3 The currently pending Trans-Pacific Partnership4 (TPP) is arguably the culmination of this trend toward greater focus on the harmonization of IP policy.5 TPP’s architects aim to seize the initiative from China — a nation with notoriously lax IP protections — and set the rules of Pacific trade on American terms,6 with the hope that China will eventually accede to those rules in order to gain greater market access.7 In addition to its economic significance, the agreement’s IP provisions are a key part of a geopolitical strategy endorsed by presidential administrations from both parties.
But the project of exporting American IP law is built on a more brittle domestic foundation than most realize. The U.S. Trade Representative (USTR) is always negotiating some agreement or another and can promote new IP rules to settle issues that arise in the course of technological and economic change. Our domestic IP statutes, on the other hand, are updated only sporadically. As a result, the IP provisions in trade agreements often address issues that the federal patent, copyright, and trademark acts do not clearly resolve. On several important questions of IP policy, U.S. trade agreements clearly commit the nation to a rule internationally, while our courts continue to disagree, as a matter of statutory interpretation, on whether the rule is part of our domestic law.8
U.S. courts have long sought to avoid such conflicts between foreign and domestic commitments — and the negative foreign policy consequences that can follow — by applying the Charming Betsy9 canon, which counsels that “where fairly possible, a United States statute is to be construed so as not to conflict with international law or with an international agreement of the United States.”10 But in 1998, in Quality King Distributors, Inc. v. L’Anza Research International, Inc.,11 the Supreme Court departed from this principle without explanation and dismissed as “irrelevant”12 five trade agreements that ran counter to its interpretation of the Copyright Act of 197613 (Copyright Act). In the years since, the few lower courts to confront the issue have indicated that the Charming Betsy canon should apply to conflicts between domestic law and trade agreements. But the observance of the canon in IP cases has been irregular at best — and litigants often fail to even raise the issue.
This Note argues that courts and litigants should invoke the Charming Betsy canon more frequently to avoid inconsistencies between trade agreements and ambiguous provisions of domestic IP law. Part I briefly introduces and comments on the legal framework underlying trade agreements and the procedure by which Congress approves them. To give an example of the problems posed by nonobservance of the canon, Part II looks at the dispute in U.S. courts over the “making-available” right, which is secured by treaty but unsettled in domestic law. Part III examines the principles underlying the Charming Betsy canon, canvasses the case law on Charming Betsy and trade agreements, and argues that the separation of powers values that provide the strongest justification for the canon apply with particular force when courts are reviewing conflicts between domestic IP law and trade agreements. Finally, Part IV explores what the institutional implications are when courts apply a robust version of the Charming Betsy canon to conflicts between domestic IP law and trade agreements, and argues that the canon’s critics overstate the risk of executive branch overreach.
I. The Domestic Legal Basis for Trade Agreements
Trade agreements are negotiated by the Executive and are approved domestically as “congressional-executive agreements” that are enacted by an implementation statute passed by both houses of Congress.14 This differs from the process for approving a treaty, which requires a two-thirds vote of the Senate.15
Since 1974, nearly all trade agreements have been approved under “fast track” or “trade promotion authority” (TPA). This procedure expedites congressional consideration of the agreements and forbids amendments, preventing Congress from reopening issues settled in negotiation.16 Under TPA, the Executive must also submit to Congress a “statement of administrative action” that explains what statutory and regulatory changes will be necessary to comply with the agreement.17 Congress then passes an implementing bill explicitly approving the agreement and the statement of administrative action. Such bills also state that any provision inconsistent with any U.S. law will have no effect and that none of the language will be construed to modify or amend any U.S. law.18 These limiting provisions make clear that such trade agreements are non-self-executing, and forbid courts from invoking trade agreements to alter established domestic law.
But, as discussed more below, the provisions do not prevent courts from looking to trade agreements for guidance when a statute is ambiguous and the Supreme Court has not yet settled on the proper interpretation.19 In such cases, if a court invokes the Charming Betsy canon and chooses an interpretation consistent with the trade agreements, it is not “amending” or “modifying” domestic law — it is deciding, in the first instance, what the law is.
II. Conflicts Between Domestic IP Law and Trade Agreements: The “Making-Available” Right
Most of the conflicts between domestic IP law and trade agreements concern the scope of copyright protection. In large part, this is because more international copyright law has been made than patent or trademark law, and so there is more opportunity for conflict. Also, while patent offices delineate patent rights in the course of accepting and rejecting inventors’ applications, copyright protection emerges automatically upon production of an original work — which means that judges are the chief custodians of copyright, determining the scope of its protections and when those protections may be invoked. And as the Internet has revolutionized the capacity for transnational communication of copyrighted work,20 trade negotiators have in some respects gotten ahead of Congress in updating the copyright regime for a new technological era.
This Part introduces one particularly salient divergence between the U.S. courts’ interpretation of domestic copyright law and our international commitments: the existence of a “making-available” right. In 1996, the member states of the World Intellectual Property Organization (WIPO) signed the WIPO Copyright Treaty21 (WCT), which adapted the exclusive rights of copyright for the online environment. In particular, the treaty secured the prerogative of authors to authorize “the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them.”22 This right “covers all formats in which a work may be digitally communicated, including downloads [and] streams,”23 which ensures that a copyright owner can bring an infringement action against anyone who digitally disseminates an original work without authorization. Eighty of the ninety-four signatories to the WCT have codified a making-available right in their domestic copyright statutes.24 Even among the fourteen countries that have not explicitly provided for the right, the United States is the only one in which courts have refused to recognize the right’s core elements.25 It is particularly ironic that U.S. courts have been uniquely resistant to the making-available right given that, as the world leader in the software, music, and film industries, the United States stands to gain the most from strong antipiracy protections. The U.S. International Trade Commission has estimated that Chinese copyright infringement cost U.S. firms approximately $24 billion in 2009 alone.26
Congress directly incorporated some of the WCT’s provisions into the implementation statute after ratifying the treaty, but did not incorporate the making-available right.27 The United States has since reaffirmed its international commitment to the making-available right in eleven trade agreements, all of which have been approved by Congress under TPA. For each agreement, the USTR submitted a statement of administrative action, subsequently approved by Congress, concluding that no change to domestic law was needed to implement the agreement’s guarantee of a making-available right.28
According to the U.S. Copyright Office, there are two sine qua non elements of the making-available right: the right to control one-to-one transmission of works to members of the public through streaming and the right to control the offering of copyrighted works for download.29 The Copyright Office’s view has always been that a making-available right was created by section 106 of the Copyright Act, which gives rightholders “the exclusive rights . . . to perform the copyrighted work publicly” and “to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.”30 Only two interpretive moves are needed to reach this conclusion: streaming a work online is a “public performance,” just as broadcasting it on television would be, and uploading it to a website for download by other users constitutes “distribut[ion].”31 These are, at the very least, reasonable interpretations of the statute. They have been repeatedly endorsed by the USTR and Copyright Office,32 and avoid conflict with a rule to which ninety-four nations have committed. But the U.S. courts have nonetheless been resistant.
It was not until sixteen years after the adoption of the WCT that the U.S. courts definitively recognized the first element of the making-available right. In ABC, Inc. v. Aereo, Inc.,33 the Supreme Court held that 17 U.S.C. § 106(4), which grants the copyright owner an exclusive right in the public performance of the work, forbade Aereo from streaming live television to individual subscribers without authorization from the networks.34 Prior to Aereo, courts in the First and Second Circuits had refused to recognize the copyright owner’s exclusive right when a stream was sent only to an individual user on the grounds that such a targeted “performance” of the work was not “public.”35 Though three amicus briefs argued that the Court should apply the Charming Betsy canon36 (and one argued strenuously in opposition37), the Court’s opinion in Aereo rested on purely textual grounds.38
The second element of the making-available right is the subject of a split among the district courts. At least four have held, through a strict interpretation of the word “distribute,” that evidence of an actual download is needed to establish infringement.39 Distribution, they have reasoned, “requires an actual dissemination of either copies or phonorecords.”40 In reaching this conclusion, two district courts suggested that the Charming Betsy canon might apply generally to conflicts with trade agreements, but “inexplicably” held that interpreting “distribute” to embrace a making-available right was untenable.41 But it’s hard to see why that interpretation is unreasonable; in fact, the leading copyright treatise has concluded, based on exhaustive research of the history of the copyright statute, that “[n]o consummated act of actual distribution need be demonstrated in order to implicate the copyright owner’s distribution right.”42 No other court in any other WCT-signatory nation has burdened the making-available right with an actual-download requirement, which requires costly discovery and may force courts to issue subpoenas to Internet service providers to reveal the identity of downloaders.43
The reluctance of many U.S. courts to recognize the making-available right is perhaps the most obvious conflict between the interpretation of domestic law and our international obligations, but it is far from the only one. To briefly mention three other examples: The Second Circuit has held that some temporary copies of a file (such as those created in RAM when software runs on a computer) are not true “copies” under the Copyright Act and cannot give rise to an infringement claim,44 in contravention of several bilateral trade agreements.45 The Federal Circuit has held that 17 U.S.C. § 1201(a), which prohibits circumventing a technological measure designed to protect a copyrighted work,46 applies only when the circumventer goes on to actually infringe the work — a requirement that cannot be found in the text, but which the court inferred from policy considerations and statutory structure.47 This holding ran contrary to the U.S.-Singapore Free Trade Agreement at the time of decision and is now in tension with three more bilateral agreements.48 Finally, the Second Circuit has ruled that U.S. trademark law does not protect well-known foreign marks, relying on a general principle of territoriality rather than any statutory language,49 and despite explicit commitments to mutual recognition in two trade agreements.50
Decisions like these make the United States a laggard in the enforcement of the robust IP rules that it has promoted in international negotiations for decades, undermining the position of the United States in future negotiations and thwarting the strategic goals that have been pursued by Presidents and Congresses of both parties. Not one of these decisions has been dictated by the statutory text — courts have come out on both sides of every interpretive issue discussed above. Domestic law is, at a minimum, ambiguous on these issues. In some cases, it even seems explicitly to support the rule codified in trade agreements. As discussed at greater length in the next Part, it is in cases precisely like these, where courts are choosing between viable interpretations of domestic law, that the Charming Betsy canon directs courts to choose the interpretation that honors the United States’ international commitments.
III. Charming Betsy and Trade Agreements
The Charming Betsy canon has its origins in Chief Justice Marshall’s 1804 opinion in Murray v. Schooner Charming Betsy, which stated that “an act of Congress ought never to be construed to violate the law of nations if any other possible construction remains.”51 Chief Justice Marshall’s formulation of the canon would seem to create a clear statement rule,52 but the canon is now understood as a rebuttable presumption.53 Like many other substantive canons, it comes into play only when a statute is ambiguous — that is, when a court determines, after “employing traditional tools of statutory construction,” that Congress left the issue under consideration unresolved.54
Charming Betsy was first applied to avoid conflict with customary international law, but the canon evolved as international law became more positivist.55 The canon has been applied by the Court to avoid conflict both with treaties56 and executive agreements concluded without congressional approval.57
The Court has offered a number of mutually reinforcing rationales for the Charming Betsy canon: respect for international comity concerns,58 a desire to avoid adverse foreign policy implications,59 and an aversion to undermining the United States’ standing in international negotiations,60 among others. The basic insight underlying them all is that when sovereigns have bound themselves to an international rule, disavowing that rule may have negative consequences — from the diminishment of diplomatic standing to direct retaliation — that should, all things being equal, be avoided.61
Judges who are moved by these rationales and hold a generally favorable view of international law may be attracted to the expansive version of the Charming Betsy canon that Professor Curtis Bradley has dubbed the “internationalist conception.” On this view, the canon is a “means of supplementing U.S. law and conforming it to the contours of international law.”62 Courts are to act as “agents of the international order”63 rather than “agents of Congress,”64 and would be able to “essentially rewrit[e] a statute to conform it with international law.”65
This Note relies on a more limited version of the Charming Betsy canon: the separation of powers conception originally formulated by Bradley. As distinct from the internationalist view, the separation of powers conception of Charming Betsy “takes no view as to whether particular violations of international law are desirable or undesirable from the U.S. perspective,” and does not dispute Congress’s ability to ignore international law when it so desires.66 Instead, the canon “rests on the belief that . . . the political branches [and not the courts] should determine when and how the United States violates international law.”67 The executive branch and the legislature are jointly responsible for the foreign policy of our nation — the judiciary has no constitutional role in crafting foreign policy.
The Charming Betsy canon recognizes this constitutional division of labor and reinforces it by ensuring that the judiciary orders a violation of the country’s international legal obligations only when the political branches have required it.68 If a statute is ambiguous or does not speak to an issue that is otherwise settled by international agreement, the judiciary should not second-guess the foreign policy judgment of the political branches and manufacture a conflict with a binding obligation entered into by Congress and the President. This more limited conception of the canon is sufficient to avoid the needless conflicts discussed in Part II between ambiguous domestic law and the clear IP rules established by trade agreements. This conception also — as argued in section III.C below — avoids the criticisms that have been leveled against some of the more expansive uses of the canon.
Based on the principles underlying the Charming Betsy canon and its past application to treaties and executive agreements, there is no clear reason why it should not be invoked to resolve conflicts with trade agreements. Nonetheless, Justice Stevens’s opinion for the Court in Quality King dismissed the unified position of several trade agreements as “irrelevant” to the interpretation of domestic copyright law, a remark that continues to be cited by litigants to counter statutory arguments that invoke trade agreements.69
In Quality King the Court determined that the “first sale doctrine,” which entitles an owner of a particular copy of a work to resell it without the authorization of the copyright owner, applies to products manufactured in the United States but then sold abroad.70 This ruling meant that copyright owners could no longer prohibit the importation of works sold abroad, as long as they were initially manufactured in the United States. Quality King conflicted with several bilateral executive agreements that secured the right of copyright owners to prohibit the importation of works that are sold abroad, which, because sellers sometimes offer “concessionary pricing” to developing countries, are often sold at lower prices than are charged domestically.71 The Solicitor General mentioned the potential conflict with the agreements in his brief, but did not explicitly invoke Charming Betsy.72
The Court’s opinion dismissed the interpretive value of trade agreements in a three-sentence paragraph, without discussing the Charming Betsy canon or the damage the decision might do to the United States’ foreign policy goals and international negotiating position. Quality King’s chief argument for discounting trade agreements — that because the agreements were enacted after the passage of the Copyright Act they “shed no light on [its] proper interpretation”73 — is discussed and rebutted in the next section.
Appropriately, the lower courts have not treated this paragraph from Quality King as a direct holding that the Charming Betsy canon does not apply to conflicts with trade agreements. When they have confronted such conflicts, the lower courts have suggested that the canon should generally apply in such cases.74 The Federal Circuit — which hears appeals from the Court of International Trade, as well as all patent and many trademark appeals, and thus confronts conflicts with trade agreements more often than any other appellate court — has not been entirely consistent in applying Charming Betsy,75 but has nonetheless repeatedly held that the canon applies to conflicts with trade agreements, including in a recent trademark decision.76 Of the four district courts77 to have considered Charming Betsy’s application to trade agreements, one has squarely held that the canon does apply,78 and the other three decisions — two of which were “making-available” right cases — suggested that the canon applies in general but found the statutes at issue to be unambiguous.79
Most courts to address the issue have simply assumed that the Charming Betsy canon is applicable to conflicts with trade agreements. This is understandable given that the canon is generally understood to apply to obligations codified in treaties and international agreements. The burden of persuasion is on those who argue that Charming Betsy should not embrace trade agreements.
This section rebuts the arguments for narrowing the scope of the Charming Betsy canon to exclude trade agreements and defends the emerging consensus in the lower courts that the canon should apply with equal force to conflicts with trade agreements. The first argument, which was advanced in Quality King, is typically lodged in cases involving trade agreements, while the second and third arguments are more general attacks on the Charming Betsy canon developed in cases where plaintiffs relied on international human rights treaties.
1. Charming Betsy Applies when an International Obligation Was Created After the Passage of a Statute. — Quality King’s chief argument for discounting trade agreements80 was that the agreements were enacted after the passage of the Copyright Act and thus “shed no light on [its] proper interpretation.”81 This argument, which continues to be cited in briefs opposing the application of Charming Betsy to conflicts with trade agreements,82 rests on a “legislative intent conception” of the canon. On this view, the canon is grounded on a presumption that Congress avoids violating international law, legislates with background principles of international law in mind, and violates those principles only by clearly expressing its intent to do so. But if the relevant international law did not yet exist when Congress wrote the statute, then that law couldn’t possibly have influenced the drafting, and thus should not influence courts’ interpretation of the statute today.83
This is a perfectly coherent account of the Charming Betsy canon, but it relies on an outdated “pre-realist” conception of legislative intent. In the 1930s, legal realists cast doubt on the idea of a unitary legislative intent and argued that the canons rested on unfounded empirical assumptions about the drafting process.84 The canons survived the realist onslaught and are in good health today, but contemporary “post-realist” arguments in favor of the canons — particularly so-called “normative” canons such as Charming Betsy — have generally dispensed with legislative intent and rely instead on “substantive and institutional values.”85
The separation of powers conception of Charming Betsy is just such a post-realist justification, relying on a substantive view about the role of the judiciary rather than presumptions about congressional intent. From the separation of powers perspective, it is irrelevant whether an international obligation was created before or after the passage of the statute being interpreted. Either way, the judiciary is overstepping its institutional capacity by taking the United States out of compliance with an obligation approved by the President and Congress when a reading of the statute that is consistent with the obligation is available.86
Furthermore, applying Charming Betsy only to later-enacted treaties would render the canon superfluous with respect to treaties and agreements because the Supreme Court has developed a related canon against implied abrogation of international agreements.87 As the D.C. Circuit has held and as the weight of Supreme Court precedent indicates, this canon is stricter than Charming Betsy, requiring an express statement of intent to abrogate rather than just unambiguous language.88 The canon against implied abrogation is essentially a ratcheting up of the general Charming Betsy canon as applied to one particular source of binding international law89 — preexisting international agreements. So courts tend to give the same justifications for this clear statement rule that they give for Charming Betsy’s ambiguity rule: that the decision to violate an international agreement is a weighty one that may undermine the United States’ standing in negotiations,90 among other adverse foreign policy consequences,91 and that courts should order such a violation only when they are confident that the political branches have authorized it.92 Those same concerns apply with equal force when the international obligation is formed after the statute was passed, but a clear statement rule would be infeasible in such situations because Congress could not refer to an agreement that does not yet exist. In these cases, the Charming Betsy canon’s requirement of unambiguous language is the strictest possible safeguard of the political branches’ foreign policy prerogatives. To apply Charming Betsy only to later-enacted statutes, thereby folding it into the canon against implied abrogation, would undermine those prerogatives — and thus the institutional values that support both canons.
2. Charming Betsy Applies to Domestic Litigation. — The next two arguments against applying the Charming Betsy canon to trade agreements were developed by appellate judges in cases where plaintiffs’ claims were predicated on international human rights treaties. In rejecting these long-shot claims, both opinions advocate narrow readings of Charming Betsy that would severely constrain the canon’s application. Neither interpretation of Charming Betsy has a strong grounding in precedent or the principles underlying the canon. And to the extent that legitimate concerns about the use of the canon when vague provisions of human rights treaties are at issue motivated the decisions, those concerns are not implicated when courts look to trade agreements for interpretive guidance.
In Serra v. Lappin,93 a group of federal prisoners argued that the low wages they were paid by the government for work performed in prison violated the prohibition on “forced or compulsory labor” in the International Covenant on Civil and Political Rights.94 Writing for a unanimous Ninth Circuit panel, Judge Clifton reasoned that the Charming Betsy canon did not apply because the statute at issue unambiguously conferred complete discretion on the Attorney General to set the wages for federal prisoners.95 The court also made a more general argument about the Charming Betsy canon that would dramatically restrict its scope: because the canon’s chief purpose is to avoid the adverse foreign policy consequences of violating an international obligation, the canon has no application to disputes between American parties.96
This limitation on the Charming Betsy canon would inhibit litigation aimed at resolving conflicts between domestic IP law and trade agreements because many of these suits are between two domestic parties. But thinking through how this limited version of the canon would apply to the IP statutes makes clear that the Ninth Circuit’s international-diversity requirement is untenable. First, it would lead courts to interpret our IP statutes differently depending on the nationality of the litigants. Giving a single statute two meanings depending on who invokes its protection would be contrary to the rule of law,97 and would produce a highly unstable regulatory environment for the many U.S. companies that do IP-intensive business across the world — which is precisely what trade agreement IP provisions seek to avoid.
Second, the Ninth Circuit’s assumption that disputes between domestic parties can never have significant international consequences reflects an outdated conception of the scope of foreign policy that is inadequate in the era of globalization. As discussed in the introduction, the USTR’s promotion of robust IP protections in international trade agreements — particularly in the TPP — is a key part of a larger geopolitical campaign to entrench rules of global trade that are favorable to the United States before China uses its economic clout to create an alternative trade regime in the Pacific.98 By calling into question the very rules that the USTR promotes at the negotiation table, U.S. courts undermine one of the linchpins of American global strategy.
On the facts of Serra, it was reasonable for the court to suppose that the wages the U.S. government paid U.S. prisoners could not possibly trigger a foreign policy crisis. It might even be possible to use Charming Betsy to read in constraints on the Attorney General’s treatment of foreign nationals without doing so for U.S. citizens. But trade negotiators and litigants in IP cases are concerned not with individual exercises of executive discretion, but with system-wide rules. In this context, inconsistent constructions of IP statutes undermine the rule of law as well as U.S. foreign policy.
3. Charming Betsy Applies to Conflicts with Non-Self-Executing Agreements. — In another far-reaching attack on the canon, Judge Kavanaugh argued in a concurrence from denial of rehearing en banc in Al-Bihani v. Obama99 that Charming Betsy applies only to conflicts with self-executing treaties.100 Al-Bihani, a Guantanamo detainee who had been captured in Afghanistan, claimed he was a civilian under international law and invoked Charming Betsy to argue that his detention as a combatant exceeded the scope of the 2001 Authorization for Use of Military Force.101
Judge Kavanaugh argued that, after Erie’s102 rejection of expansive common law–making by the federal judiciary, courts “may not enforce law that lacks a domestic sovereign source.”103 Medellin v. Texas104 made clear that non-self-executing treaties lack any domestic legal status. Courts would contravene Erie and usurp Congress’s lawmaking power if they invoked Charming Betsy to alter the interpretation of a domestic statute to conform it with a treaty to which Congress has not given legal force.105
Limiting Charming Betsy to self-executing treaties would effectively nullify the canon. Because self-executing treaties have the same domestic legal force as statutes, Charming Betsy would be subsumed within the presumption against implied repeals, which requires courts to interpret domestic law to avoid contradictions when possible.106 This wholesale rejection of the Charming Betsy canon seems like strong medicine for the potential ailment that Judge Kavanaugh recognized in Al-Bihani — judges invoking the canon and the sweeping language of human rights treaties to constrain the Executive’s prosecution of war and foreign policy.
If judges are sensitive to the separation of powers underpinnings of the Charming Betsy canon, they will steer clear of the hazards Judge Kavanaugh and the Serra court identified in the human rights context, but will give the canon forceful application when confronted with conflicts between trade agreements and domestic IP statutes. Human rights treaties contain many vague provisions — recognizing, for instance, “the inherent right to life”107 and the right to be treated “with respect for the inherent dignity of the human person”108 — that judges could invoke to alter any number of statutes and to limit executive discretion in politically sensitive policy areas such as criminal punishment and war-making. The purpose of the Charming Betsy canon is to protect the prerogatives of the political branches in foreign policy and to avoid judicially created international disputes, but by invoking the canon in human rights cases courts risk overstepping their role. Human rights agreements, like any other treaties, are covered by Charming Betsy — but judges should tread very carefully when considering arguments that ask them to treat vague language as a license to upset well-settled domestic rules and practices.
The IP provisions of trade agreements, on the other hand, often establish clear rules on which domestic law is ambiguous. International law does not enable judicial policymaking in this context — it gives courts a ready-made solution, endorsed by Congress and the President, to what would otherwise be a difficult question of statutory interpretation. The opportunities for judicial aggrandizement that worried Judge Kavanaugh and the Serra court simply are not present in this context. When it comes to the IP agreements, the Charming Betsy canon does not invite courts to insert themselves in decisions that should be entrusted to more accountable actors — instead, it invites them to excuse themselves.
IV. Separation of Powers Implications
This Note has argued that robust application of the Charming Betsy canon to conflicts with trade agreements’ IP provisions would give the political branches greater rulemaking power at the expense of the courts. But critics counter that the real transfer of power here is from Congress to the Executive.109 The Executive has enjoyed great discretion in setting the trade agenda at least since the advent of TPA in 1974. Critics on the left argue this discretion has come at the expense of transparency and democratic accountability, enabling powerful economic interests to shape trade deals without public scrutiny.110 On this view, the Charming Betsy canon would exacerbate the problem by enabling the President to bypass Congress and introduce new, restrictive IP rules that might not be able to command majorities were they not packaged within fast-tracked trade deals.
Whatever concerns one might have with the USTR’s substantive agenda or the TPA procedures, there is no usurpation of the legislative function in the negotiation and enactment of trade agreements. Congress has repeatedly given the President trade-promotion authority, often after intense debate and with full awareness of the implications.111 That authority always comes with an expiration date, so Congress can periodically review the USTR’s record and determine whether fast track should be renewed for another round of negotiations.112 Furthermore, even if many of the customary procedural interventions are ruled out under fast track, both houses of Congress still have to approve each agreement by a majority vote, just like a standard piece of legislation. And many provisions sneak into the U.S. Code as low-profile parts of much larger bills — this arrangement is by no means unique to trade agreements.113 All of the IP provisions in trade agreements bear Congress’s imprimatur, and there is no reason why courts should be warier of applying the Charming Betsy canon to these provisions than to any other treaty or international agreement.
None of the preceding discussion of congressional approval through TPA implies that the Charming Betsy analysis would be any different if trade agreements were concluded as ex ante congressional-executive agreements — where the Executive enters into an international agreement pursuant to a congressional delegation, without seeking ex post congressional approval of the agreement itself.114 Under Weinberger v. Rossi,115 even obligations created by sole executive agreement are covered by the canon.116 Charming Betsy’s applicability to ex ante agreements is not just of theoretical importance. The Obama Administration has argued that Congress gave the Executive the authority to enter into international IP agreements in the Prioritizing Resources and Organization for Intellectual Property Act of 2008, which directed the Executive to “[w]ork with other countries to establish international standards and policies for the effective protection and enforcement of intellectual property rights.”117 The Administration planned to enact the Anti-Counterfeiting Trade Agreement — a controversial IP enforcement agreement signed in 2011 but not yet ratified — pursuant to this authority without submitting the final text to Congress.118
There are good reasons to think that aggressive use of ex ante congressional-executive agreements may be unwise,119 and there is a respectable argument that the President has no constitutional authority to enact an IP-focused agreement as a sole executive agreement.120 But once international obligations are created, by whatever means, the courts should eschew conflicts.
Regardless of how a trade agreement is enacted, applying the Charming Betsy canon to its terms poses no threat to Congress’s legislative prerogatives. The USTR cannot propose rules that are inconsistent with existing IP law and give them domestic force through the canon. Courts will always look first to the statute and will default to the rule of a trade agreement only if they find the text ambiguous. Congress retains the power to settle these issues definitively, whether by codifying the position of the trade agreements or by squarely rejecting it. In lieu of such decisive congressional action,121 courts should avoid manufacturing conflicts with trade agreements.
Though critics assume that the USTR is inclined to adopt tendentious interpretations of the IP statutes, the Executive has been a more faithful agent of Congress in this area than the courts. In fact, in departing from the trade agreements’ understanding of the Copyright Act in Quality King, the Supreme Court painted itself into a corner and is now stuck with an interpretation that at least two Justices acknowledge is inconsistent with the intent of Congress.122
The statutory question posed in Quality King was whether § 602(a) of the Copyright Act, which provides that unauthorized importation of a copyrighted work “is an infringement of the exclusive right to distribute copies . . . under section 106,”123 is limited by the “first-sale” doctrine, which permits the owner of a lawfully made copy to sell that copy “[n]otwithstanding the provisions of section 106(3).”124 The Court held that the author’s right to bar importation is, like the other exclusive rights, limited by the first-sale doctrine.125 The consequence of this holding is that once a copyrighted work has been sold abroad, it can be imported into the United States without the author’s permission. The Solicitor General pointed to international agreements that guaranteed authors’ rights to prohibit unauthorized importation of their works, and argued that applying the first-sale doctrine to § 602(a) would eviscerate the ban on unauthorized importation.126 The Quality King Court rejected this superfluity argument, pointing out that its holding only reached works that had been manufactured in the United States and then sold abroad.127 Works made abroad would, the Court presumed, still be subject to the importation bar.
But fifteen years later in Kirtsaeng v. John Wiley & Sons, Inc.,128 the Court judged that presumption untenable. In a wide-ranging opinion, Justice Breyer determined that the phrase “lawfully made under this title” in § 109(a) does not limit the first-sale doctrine to works made in the United States.129 After examining the statutory language and context, he considered the perverse effects that a geographically limited first-sale doctrine would have on international markets.130
Justice Kagan agreed with this interpretation of § 109(a), but in a concurrence joined by Justice Alito she noted that the holding rendered § 602(a) a dead letter, limiting it “to a fairly esoteric set of applications.”131 According to Justice Kagan, the fault lay with Quality King. Though Justice Kagan made no reference to the trade agreements that were dismissed in Quality King, she indicated agreement with the rule they endorsed: copyright owners should be able to control imports even when the first-sale doctrine applies. This rule would permit copyright owners to divide international markets and charge lower prices in poorer nations, as Congress likely intended, but without any of the “horribles” that would follow from a geographically limited first-sale doctrine.132 Justice Kagan ended by advising Congress that if it wants to restore § 602(a) to its original function, “a ready solution is at hand . . . the one the Court rejected in Quality King.”133
In his recent book The Court and the World, Justice Breyer uses Kirtsaeng as an example of a case in which “to interpret American statutes, the Court must be reasonably familiar with foreign legal and commercial practices.”134 The text alone could not resolve the question, and so the Court had to consider the consequences that would follow from either interpretation.135 Justice Breyer’s attention to the practical implications of the ruling is commendable, but one might question whether it is desirable for the federal courts to regularly engage in these analyses the dynamics of global trade while interpreting domestic law. When the President and Congress have weighed a multitude of commercial and geopolitical considerations and settled on a particular rule, the courts should be loath to second-guess that judgment. Indeed, if the Court had simply followed the lead of the trade agreements in Quality King, the Kirtsaeng litigation would have been unnecessary, and § 602(a) would still fulfill its intended purpose.
The Supreme Court does not lack for opportunities to correct course and endorse the application of Charming Betsy to conflicts with trade agreements. The Solicitor General has recommended that the Court take up Lexmark International, Inc. v. Impression Products, Inc.,136 which presents the issue of whether Kirtsaeng’s internationalization of the first-sale doctrine for copyright extends to patent — in direct contravention of several trade agreements.137 And two district courts have come to opposite conclusions regarding whether Aereo-like streaming services are “cable systems” entitled to compulsory licenses — with Judge Collyer of the District Court for the District of Columbia explicitly relying on the Charming Betsy canon in holding that they are not.138 Both decisions are being appealed. Unless Congress updates and adds specificity to the IP statutes, companies, inventors, and authors will continue to ask the courts what rules prevail. The question is whether, when faced with these disputes, courts will adopt rules endorsed by the political branches and woven into the international trade regime, or whether they will attempt to divine answers in vague statutory text drafted long before the relevant policy debates even began. This Note has argued that, as a matter of both doctrine and policy, the answer is obvious. At the earliest opportunity, the Supreme Court should disavow Quality King’s dicta and breathe new life into the Charming Betsy canon. There is no reason to tolerate contrived conflicts with the rules bargained for by our negotiators and approved by the political branches.