Wednesday, April 21, 2010

The Anti-Counterfeiting Trade Agreement, Part II

Guest Blogger

Margot Kaminski

Yale Information Society Project

The official text of the Anti-Counterfeiting Trade Agreement was released today.

This post is a follow-up to my earlier post regarding the leaked draft of the Anti-Counterfeiting Trade Agreement (ACTA).

The big picture issues are unchanged: 1) ACTA establishes a new institution outside of existing international law; 2) ACTA pushes the international standard for IP law to an IP-maximalist’s dream; and 3) when you establish the information-sharing and investigative infrastructure, bad things (civil liberty violations) will follow.

I thought it might be most helpful to continue in the vein of my previous post and stay detailed and on-text. Where the released draft differs from the leaked draft, I have noted it with a “*”. I have not repeated all similarities, but tried to touch on the more important ones.

I also try to point out areas that appear most ripe for discussion.
In no particular order:

1) ACTA Creates a New International Institution. Chapter Five establishes the “ACTA Oversight Council”, which shall convene regularly and supervise implementation of the Agreement. The Committee’s resolution or avoidance of disputes must not conflict with the WTO dispute resolution mechanisms, per footnote Article 5.1(2)(c). The Committee is meant to issue best practice guidelines regarding IP adherence, and promote capacity building, something traditionally in the purview of WIPO. The Committee is to be conducted in English (open for debate) and to meet in Geneva (open for debate), perhaps lending it institutional legitimacy by geographic location.

2) ACTA Comes into Force after First Five Members Adopt it. ACTA enters into force after the first five members have “deposited their instruments of ratification, acceptance, approval or accession” Art 6.2(1).

3) Amendments happen through the Committee; new members cannot change the sign-on terms. New states become party to ACTA by signature or deposit of an instrument of accession. Amendments to ACTA happen only through Party-submitted proposals submitted to the Oversight Committee.

*4) The overall privacy provision is up for grabs. The draft notes in Article 1.4 that “A suitable provision needs to be drafted that would ensure nothing in the Agreement detracts from national legislation regarding protection of personal privacy”… and “disclosure of commercial information”.

*5) The scope of what kind of IP rights are affected is up for grabs. Will Article 2 (Section 1: Civil Enforcement) apply to any IP rights (including patents), or only copyrights and related rights and trademarks? Up for debate in Article 2.1. Also applies to Border Measures section.

*6) Injunctions. . Article 2.X mandates that right holders be in the position to apply for injunctions against intermediaries whose services are used by a third party to infringe IP rights. I admit to shallow knowledge in this field- but a cursory examination of US IP law highlights pretty significant limitations on the use of injunctions in IP cases (17 USC 512(j)). See also 2.5x re interlocutory injunctions to prevent imminent infringement. against intermediaries.

7) Statutory damages. It’s up for debate whether statutory damages “shall” or “may” apply. Article 2.2(2).

*8) Statutory damages for non-knowing infringers. Up for debate: Infringers who infringed unknowingly may be subject to statutory damages. But this is “may” and not “shall”, although complete exclusion from the agreement would be preferable. The comparable U.S. provision is 504(c)(2), providing for statutory damages for non-knowing infringers in the amount of “not less than $200”, but also including exceptions-- for nonprofits, educational institutions, and public broadcasting entities-- which are missing from ACTA.

9) Privacy: if subjected to an infringement suit, defendants must share info with plaintiffs. TRIPS allows but does not mandate. Appears potentially targeted at ISPs: mandating disclosure of info “regarding any person or persons involved in any aspect of the infringement and regarding the means of production or distribution channel of such goods or services, including the identification of third persons involved”. Art 2.4. This expands on TRIPS, which as mentioned allows but does not mandate such disclosure, includes proportionality language (“unless this would be out of proportion to the seriousness of the infringement”), and limits disclosure to the ID of “third persons involved in the production and distribution of the infringing goods or services and of their channels of distribution” rather than persons “involved in any aspect of the infringement” as ACTA dictates. See TRIPS Art. 47.

*10) De Minimis for Border Measures: Now consistent with the TRIPS standard. Would be great if they keep “sent in small consignments” to allow packages to go through without search, as well.

*11) Changes the definition of “pirated copyright goods.” It’s small but significant. TRIPs defines “pirated copyright goods” in Art. 51 ftnt 14 as “would have constituted an infringement…. Under the law of the country of importation”. ACTA defines as “under the law of the country in which the procedures set out in this Section are invoked.” So if a rights holder is able to choose a more favorable jurisdiction (say, its home country), it needn’t be stuck to the law of the country of importation. Will encourage forum-shopping by rights holders.

12) Debating whether a rights holder requesting border procedures needs to provide a prima facie case. This should be included, to be consistent with TRIPS.

13) Ex Officio Action by Customs Officials: Negotiating countries are debating whether ex officio action is required (“shall”) or permitted (“may”). As noted in my last post, ACTA changes the standard of the level of proof required from TRIPS. TRIPS permits ex officio action by customs officials when “they have acquired prima facie evidence that an IP right is being infringed” Art. 48. ACTA allows for ex officio action for “suspected” infringing goods.

*14) Privacy: Sharing information between Parties: when shipments are in transit, the originating Party “shall cooperate to provide all available information to the destination Party, upon request of the destination Party, to enable effective enforcement”. Art. 2.X.

*15) Securities are required from rights holders for border investigations. This is a good thing, requiring at least some financial obligation on the part of rights holders.

*16) Privacy: providing information to rights holders. Some improvements, but still problems. Where competent authorities “have seized or, in the alternative, made a determination under Article 2.10 that goods infringe rights covered by the section”, ACTA mandates that countries inform rights holders of identifying information for the consignors, importers, exporters, and manufacturers of the goods. This is a positive change because it allows countries to mandate informing rights holders only after a determination of infringement, which is consistent with TRIPs Art. 57 (“[w]here a positive determination has been made on the merits of a case”). But it still encourages such information sharing after seizure only, and seemingly places the infringement decision in the hands of “competent authorities” rather than judges as implied by the “merits of a case” language in Art. 57.

*17) Indemnifies authorities, and doesn’t include language re: rights holder liability. ACTA clarifies that competent authorities shall not be liable for any damages suffered because of those authorities’ intervention. This is noticeable because ACTA lacks TRIPS’ Art. 56 language, which requires applicants to pay for any injury caused to accused “infringers” through wrongful detention of goods.

*18) Criminal Enforcement. The debated language is as follows:
[(a) significant willful copyright or related rights infringements that have no direct or indirect motivation of financial gain; and
(b) willful copyright or related rights infringements for purposes of commercial advantage or financial gain.37]
Definitional footnote: “For purposes of this Section, financial gain includes the receipt or expectation of receipt of anything of value.”
Again, this pushes the boundaries of TRIPs’ requirement of criminal enforcement of violations on a commercial scale towards the U.S. standard of criminal enforcement for “private financial gain”, aka Internet piracy. Thankfully, this draft does not include “private” before “financial gain”, which would push to a full U.S. standard. The footnote definition of “financial gain”, however, does appear to allow for/encourage the U.S. interpretation of “private financial gain”.

*19) Exporting the Camcorder Act (the Family Entertainment and Copyright Act of 2005). This is U.S. law (18 U.S.C. 2319B) (similar law exists in Japan, evidently), and criminalizes filming movies in a movie theater. NOT a part of international law!

20) Provides for Imprisonment instead of just Fines. As in the leaked draft: TRIPs allowed for criminal penalties of fines alone; ACTA requires imprisonment.

*21) ISPs and OSPs watch out! They’re debating criminal liability for “legal persons”, ie companies and not just individuals (Art. 2.15(1)). Plus they’re debating criminalizing “[i]nciting, aiding and Abetting” infringement. These provisions are both up for debate, and should not be included in the final draft if ISPs don’t want to become subject to criminal investigations. Of particular note is the “up for debate” footnote: “[It is understood that there is no obligation to provide penalties of imprisonment against legal persons for the crimes set forth in Article 2.14.].” The fact that this is up for debate means there’s a chance companies will be specifically on the line for imprisonment for infringement on their networks.

22) Ex Officio Criminal Enforcement. This requires countries to allow law enforcement officials to initiate investigations without rights holder plaintiffs. Regulatory capture: employing government resources for private interests.

23) DMCA: There are three different possible versions of ISP liability, worth reading in greater detail. All at least vaguely resemble the DMCA’s “notice-and-takedown” provisions.

*24) Privacy: Language on ISP monitoring: Up for debate, and should be included: “no Party may condition the limitations in subparagraph (a) on the online service provider’s monitoring its services or affirmatively seeking facts indicating that infringing activity is occurring”.

*25) Privacy: Collaboration between ISPs and rights holders. This language MUST NOT BE INCLUDED. The first proposal requires OSPs to provide the identity of subscribers after “effective notification” from rights holders—not after court proceedings. The second option requires Parties to “promote the development of mutually supportive relationships between online service providers and right holders”.

26) Circumvention of DRM - “Willful” definition. The circumventor need not be willfully pursuing an IP infringement, only have “means actual knowledge or reasonable grounds to know that he or she is pursuing the objective of circumventing any effective technological measure.]” In other words, the willfulness for criminalization of circumvention applies to the hacking, not the copyright infringement. You could conceivably go to prison for deliberately hacking what you believed to be noninfringing material.

*27) Where is Fair Use/Exceptions and Limitations? Despite the otherwise rampant exportation of U.S. law, there is no indication that the U.S. wants to export its conception of fair use to either the agreement as a whole, or the DMCA provisions, where in US code it is scattered throughout. Instead, two debated sections indicate that “each Party may adopt exceptions and limitations” allowed under the Berne Convention, in the limited context of discussing the DMCA provisions. These “exceptions and limitations” provisions must occur prominently at the beginning of the agreement, and apply throughout.

28) Privacy: International criminal investigation cooperation and information-sharing. It is currently up for debate whether cooperation on criminal investigations is mandated cross-Parties. Mandatory information sharing in criminal investigations is highly problematic from a civil liberties standpoint across regimes with different criminal law processes and protections. For information sharing, the two debated provisions are as follows: Parties must “(b) exchang[e] available data with custom authorities of other Parties regarding significant seizures of [counterfeit and pirated] [infringing] goods by customs, wherever possible” VERSUS “(b)when appropriate, exchange data with border authorities of other Parties”. The second is preferable.

29) Another Privacy passage that should be included: up for debate right now:
[4. Nothing in this Chapter and Chapter 4 shall require any Party to disclose confidential information which would be contrary to its laws, regulations, policies, legal practices and applicable international agreements and arrangements, including laws protecting investigative techniques, right of privacy or confidential information for law enforcement, or otherwise be contrary to public interest, or would prejudice the legitimate commercial interests of particular enterprises, public or private.]

Margot Kaminski is a Student Fellow of the Yale Information Society Project. You can reach her at margot.kaminski at