Old Problems Remain in New ACTA Text
Old Problems Remain in New ACTA Text
Old Problems Remain in New ACTA Text

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    The United States Trade Representative (USTR) today released the text of the Anti-Counterfeiting Trade Agreement (ACTA). The text closely follows the recently leaked consolidated text, with only some minor differences. While today’s released document doesn’t indicate which proposals were made by which countries, both the leaked document and today’s release indicate that there are differences about whether ACTA’s provisions would cover all intellectual property (IP) rights or would be limited to trademark and copyright infringement. While a lot of initial stories have concentrated on the Internet provisions, there’s a lot to find throughout the document. Here are some of the significant provisions we’ve found in ACTA’s current draft:

    Key definitions missing

    Despite claims that ACTA would focus predominantly on counterfeiting and piracy, these terms are not defined. This lack of definition would allow countries to easily blur the boundaries between ordinary acts of infringement on the one hand and counterfeiting and piracy on the other if ACTA were implemented. Copyright infringement can be any act of infringement, whether willful or inadvertent. 

    Statutory damages

    ACTA would require signatory countries to institute a statutory damages regime as one option in dealing with copyright infringement. As the operation of statutory damages in the U.S. indicates, such a regime can result in draconian damages awards that bear no relation to the offense. Exposure to this regime hinders the introduction of innovative products and services. In view of these problems, legislation has been introduced in Congress, in the past, to reform the statutory damages regime. ACTA’s effort to export a similar regime to other countries could easily prevent future Congressional efforts at reform.

    What is worse, ACTA fails to incorporate the few balancing provisions contained in the U.S. statutory damages regime. For instance, U.S. law provides for a reduction in statutory damages in cases of innocent infringement. ACTA does not contain similar safeguards. 

    Individual copyright infringements may be subjected to criminal measures

    ACTA would require member countries to subject “significant willful” copyright infringements that have no “direct or indirect motivation of financial gain” to criminal penalties. Even if it is intended to combat large scale infringements, this provision can subject individual users to criminal penalties. While this provision is similar to provisions contained in U.S. law, there seems to be little reason to subject more individuals to criminal penalties out of proportion to the infringement at issue. More importantly, it does not square well with the professed intention of ACTA to deal with large scale commercial counterfeiting and piracy. 

    Civil and Criminal seizure and forfeiture

    ACTA would require its signatories to provide for destruction of infringing goods as part of their civil and criminal penalties. ACTA would also require the destruction or disposal outside channels of commerce of implements used in infringement. We cautioned against overbroad application of such provisions when Congress was considering the Prioritizing Resources and Organizations for Intellectual Property (PRO IP) Act. These provisions from the recently-passed PRO IP Act are now being promoted internationally through ACTA, before their effects have been fully examined in the U.S. This not only spreads potentially problematic provisions, it also may hinder Congress from amending any of the newly-passed provisions if necessary. 

    Border measures

    The released text seems to address the problem of the iPod searching border guards. It provides for the possibility of an exception from border searches for personal baggage. However, like the few other beneficial provisions of ACTA, this one is only permissive. That means that a country is not required to have this exception. It is merely permitted to have one.

    Third Party Liability

    Perhaps some of the most problematic provisions of ACTA deal with third party liability. These provisions would require signatories to adopt a system of secondary liability similar to the U.S. and provide online service providers (OSPs) with a system of safe harbors from such liability. First, the definition of secondary liability contained in ACTA differs in important respects from U.S. law contrary to USTR’s claim that they would “color within the lines of U.S. law.” Second, the so-called safe harbor provisions do not offer any real safe harbor from liability to online service providers. Unlike U.S. law, which eliminates the possibility of damages against OSPs and limits the nature of injunctions against them, ACTA merely provides for unspecified limitations on civil remedies. Even a small limitation on remedies, such as a small reduction in the amount of damages could be called a “safe harbor” under this definition.

    Three Strikes

    Many were concerned that ACTA would require countries to adopt a three strikes mandatory termination of Internet access policy. Although not mandating such a policy, the released text contains language supporting the “development of mutually supportive relationships between online service providers and rights holders” to deal with infringement. A three strikes provision could easily be part of such a mechanism. 

    Anti-circumvention provisions

    ACTA would require signatories to institute in their laws civil and criminal penalties against circumvention of digital locks that control access to works. In addition, it would require countries to prevent trafficking in devices that permit such circumvention. These provisions are present in current U.S. law and their ill-effects are well-documented. However, U.S. law also contains certain mandatory exceptions to these provisions and the possibility that the Librarian of Congress can grant even more exceptions via the Copyright Office’s triennial rulemaking process. ACTA, does not contain any of these limitations.

    These are just a few provisions that stand out on a first look at the released text. With time, more analysis of the released text is sure to be forthcoming. The greatest concern with respect to ACTA is that it purports to ratchet up protections for IP rights holders without even the barest measures to preserve either the balance in IP law or due process rights of citizens.

    The release of the text was a first step in the right direction. In order to be a meaningful step, the USTR has to follow up this release with a period of public comment. What is more, input gathered from public comment must be able to influence the final text.