ACTA - Preliminary Comments

Official release of text is found here. Collections of negotiating text and leaked documents are provided by Program on Information Justice and Intellectual Property (PIJIP) at here.

This is my preliminary comments on the released ACTA text.

Procedural Justice

Civil, criminal and administrative proceedings should be based on the principles of equality before courts and tribunals. Everyone’s right to fair trial is a key element of human rights to safeguard the rule of law. ACTA negotiators have failed to pay due attention to this human rights aspect of procedural justice. The draft text of ACTA is full of provisions biased for one party, IP right holders. Procedural justice is merely expressed in vague, declaratory languages without workable provisions which guarantee fair and equitable procedures between IP right holders and alleged infringers.

Scope of Agreement

Some negotiators, mainly the EU, try to extend ACTA to all forms of IP at least in civil enforcement and border measures. In contrast to copyright and trademark, patent requires fundamentally different approaches. First, patent infringement occurs even when an alleged infringer is not a free rider. For instance, in the US, patent infringements by the free riders are only 1.76% (Cotropia & Lemley, 2008) or about 4% (Bessen & Meurer, 2008). Second, validity of patent is highly dubious. About 46% of US patents have been held invalid at trial (Allison & Lemley, 2008). According to the Korea Patent Office, from 1984 to 2005, 45.2% of registered patents have been found invalid at the first instance trial. In Japan, the invalidation rate at the first trial is 46.7% on average from 2000 to 2006 (Ono, 2008). In Europe, patents attacked under the European opposition procedure were
either revoked completely or narrowed in about 70% of all cases (Graham & Harhoff, 2006). Finally, determination of patent infringement is very difficult even for patent court judges. The difficulty arises from the patent protection conferred upon more abstract or conceptual information than copyrightable expression and trademark’s symbolic information. These three factors suggest that the ACTA proposals for the civil enforcement (especially injunction and provisional measures) and border measures are hardly applied to patent.

Injunctions against Intermediaries

The draft text proposes a mandatory extension of injunction to intermediaries. This is highly problematic in that the intermediaries are too broad. Under the overly broad definition of the intermediary, anyone can be the intermediary whenever its service is used by a third party to infringe an IP right (Article 2.X: Injunctions (2)). This is well beyond the issue of online service providers’ liability. For example, a drug approval authority can be the intermediary because it provides a service for the marketing approval of a patent infringing pharmaceutical product. Any website that puts a third party’s advertisement can be the intermediary when the ad contains a trademark infringing sign. An ISP can be a target of an injunctive litigation when its user conducts an unauthorised filing sharing. What kind of injunctive relief is to be given against the intermediary? Traditional remedy of injunction is a court order to stop infringing activity. But this order cannot be issued against the intermediary because the intermediary did nothing to stop. Then the injunctive relief intended by the ACTA proposal is to order the intermediary to stop providing the service used by an infringer.

Other Civil Remedies

Even when materials and implements the predominant use of which have been in the manufacture or creation of infringing goods, such materials and implements cannot be destroyed so far as they are possessed by a third party rather than an infringer.

Provisional Measure

The proposal lacks procedural justice because it makes a principle the provisional measures inaudita altera parte (Art. 2.5(X)(1). Provisional measures without prior hearing of the other side should be allowed in exceptional case where any delay is likely to cause irreparable harm to the right holder, or where there is a demonstrable risk of evidence being destroyed. ACTA proposes the reversal of principle and exception.

Border Measures

Border measures are sort of provisional measures taken by administrative bodies. They have little capacity to render a decision on IP infringement, which requires a highly sophisticated legal analysis. Therefore, the border measures should be limited to cases where the IP infringement is objectively clear. Furthermore, the procedural fairness needs to be more firmly obeyed in the process of border measures. However ACTA proposals completely ignore such preconditions. They are lack of procedures to hear importer’s opinion and appeal process and the administrative bodies can make a decision of destruction of goods.