Urgent ACTA Communique

Today a communique altering ACTA was released with an endorsement of over 600 public interest orgnisations and individuals. The communique concluded that ACTA is a deficient product of a deeply flawed process. The concerns expressed here cover seven areas: fundamental rights and freedoms; the Internet; access to medicines; scope and nature of IP laws; international trade; international law and institutions; and democratic process.

Unlike the negotiators' assertation [1], the public interest groups reached a conclusion that ACTA would undermine a full enjoyment of fundamental rights and liberties including domestic and internationally protected human rights to health, privacy and the protection of personal data, free expression, education, cultural participation, and right to a fair legal process, including fair trial and presumptions of innocence.

The full text of the communique with the list of endorsement is here.

[1] When the draft text of ACTA was made public, the USTR said that ACTA will not interfere with a signatory’s ability to respect its citizens' fundamental rights and liberties.

Liability of a Shipping Company That Delivers Patent Infringing Products

Injunctive remedy against intermediaries is one of the key elements of the ACTA proposals. The intermediaries under ACTA are defined as broadly as to encompass entities whose services are used by a third party to infringe an intellectual property rights (Articles 2.X and 2.5.X)). The language came from the European Directive on IPR  enforcement (Articles 8, 9 and 11 of Directive 2004/48/EC) and aims to go beyond Internet service providers and their liability of third party’s copyright infringement.

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.

Special Issue on Anti-Counterfeiting - Oxford J. IP Law and Practice

The Oxford Journal ofIntellectual Property Law and Practice published a special issue on Anti-Counterfeiting. Full texts of the aricles are only accessible by subscribers but the Jounal's blog provides some editorial notes.

It does not seem that the editors' main concerns are the potential harmful effects by the proposed Anti-Counterfeiting Trade Agreement. One of the editor said in the blog that "the secrecy around the negotiations and the draft text has nourished the partially unjustified fears not only of Pirate Party partisans and anti-ACTA-activists, but also from MEPs and policy makers across all parties, and the EU data protection supervisor."

The special issue contains seven articles:

• Stephan Engels,Counterfeiting and piracy: the industry perspective [Abstract]
• James L. Bikoff, Keri A.F. Johnston, David K. Heasley, Phillip V. Marano, and Andrea Long, Hauling in the middleman: contributory trade mark infringement in North America [Abstract]
• Marius Haman, Africa rising to the anti-counterfeiting challenge [Abstract]
• Lambert Pechan and Marius Schneider, Carriers and trade mark infringements: should carriers care? [Abstract]
• Olivier Vrins, The real story of a fiction: transit after Montex under Regulation (EC) 1383/2003 [Abstract]
• Joe Cohen and Annick Mottet Haugaard, Monetary compensation for trade mark infringement in the European Union [Abstract]
• Benoit Godart, IP crime: the new face of organized crime: From IP theft to IP crime [Abstract]

Draft Text of ACTA to be Made Public Next Week (April 21st)

The Joint Statement of the ACTA 8th round indicated that a draft text would be made public on April 21th. The Statement also confirmed no mandatory "graduate response" or "three strikes rule" to repeat copyright infringers. But no mandatory rule does not seem to mean no de facto three strikes rule.

In a press release, USTR showed a continued controversy on the scope of ACTA. The EU still wants criminal enforcement and border measure extended to cover patent and other forms of intellectual property and the US opposes this proposal.

It is noteworthy to see how the negotiators's affirmation that "ACTA will not interfere with a signatory's ability to respect its citizens' fundamental rights and liberties, and will be consistent with the TRIPS Agreement" is reflected in the actual text.

USTR - 2010 Trade Policy Agenda and 2009 Annual Report

The USTR submitted the Report to the US congress on March 5, 2010. In its Chapter III "Bilateral and Regional Negotiations and Agreements", the Report mentions the Asia-Pacific Economic Cooperation forum.

Concerning the US-Japan trade relation, it says a cooperative effort to strengthen the Japanese Copyright Law which was made throught the US-Japan Regulatory Reform and Competition Policy Initiative.

According to the Initiative's annual report to the Leaders of 2009, the effort includes: restriction to the private use exception (downloading a musical work or a motion picture from an infringing source with the knowledge that the source is infringing is no longer an exception by the revised Copyright Act which passed the Diet on June 12, 2009); and typical TRIPS-plus provisions such as technical protection measures (for access control), copyright term extension, and statutory damages.

As for Korea, "Korea has been an active participant in efforts to strengthen international IPR enforcement by joining the United States and others in negotiating the Anti-Counterfeiting Trade Agreement (ACTA)."

EC Event: ACTA Stakeholders’ Consultation Meeting

DG Trade of EC announced this event.

http://trade.ec.europa.eu/doclib/press/index.cfm?id=517&serie=318&langId=en

ACTA – Stakeholders' Consultation Meeting

The Directorate General for Trade of the European Commission is organising a meeting on 22 March 2010, to inform and consult interested parties about the negotiation of a plurilateral Anti-Counterfeiting Trade Agreement (ACTA).

The goal of ACTA is to provide an improved framework for countries committed to intellectual property protection, in view of effectively addressing the challenges of IPR infringement today.

The purposes of the meeting will be to:

1) Inform stakeholders about the ACTA goals and the negotiation process so far;

2) Receive comments from stakeholders about their views (expectations or concerns) regarding ACTA.

Relevant information about the ACTA negotiations can be found at the External Trade website. A detailed written state-of-play of the negotiation is available at the same location.

PRACTICAL DETAILS

Date: Monday 22nd March 2010
Time: 10.00 – 12:30
Location: Charlemagne Building, Room Alcide de Gaspieri - Rue de la Loi, 170 B-1049 Brussels

To register (pre-registration is required for security reasons)

- Please send an email with your name and the name of the represented organisation to TRADE-ACTA-MEETING@ec.europa.eu
- Due to the room capacity (approx. 350), participation will be on a first-come, first-serve basis. Presence of more than one person per participating organisation will also be conditioned to the total number of participants.
- Closing date for registration: 15 March 2010
- Please note: Admission is free. However, the European Commission is not able to cover travel or subsistence expenses for attendance at this meeting.
- Those unable to participate in the meeting and/or wishing to present their positions in writing may send their comments to TRADE-ACTA-MEETING@ec.europa.eu , no later than 22 March 2010.

Blogging ACTA Across The Globe: Lessons From Korea

For Korea, ACTA is the Anti-Commons Trade Agreement

http://www.eff.org/deeplinks/2010/01/acta-and-korea

In August 2008, our group, IPLeft, demanded that the Korean government disclose relevant information about its stance on the negotiation of ACTA. The disclosure was denied, as was our appeal. The reason for the denial was unconvincing: the disclosure, we were told, would result in "a harmful effect on a diplomatic relationship with foreign countries and severe damage to considerable national interests".

How does the participation in an international cooperation to combat the trade of "counterfeit and pirated goods" harmfully impact foreign relationships? Which national interests are to be damaged by open and transparent discussion? Unlike its attitude to civic society and the general public, it turned out that the Korean government already provided relevant information to, and sought opinions from, particular business groups from the earliest stages of the negotiation, at least from November 2007.

When it comes to ACTA, transparency and openness became principles that apply only to a small number of business interests. This is why the secrecy of ACTA is so bad: it mirrors a particular perspective that views the system of intellectual property as a means for maximizing commercial profit and which pays little attention to the broader social, cultural and economic implications of the IP system.

This imbalanced and biased approach is infused into the draft texts that we have seen. The draft chapters on civil enforcement, criminal enforcement, and border measures lack procedural justice and fairness. They improperly promote the interests of IP holders to the detriment of the other party in civil, criminal and administrative proceedings.

The provisions contained in the proposed Internet Chapter appear to impose undue obligations on ISPs. The extent to which ISPs are to be liable for copyright infringement by users is a matter of domestic cultural policy, not a trade issue. Careful balancing of interests and fine-tuning are necessary, including factors specific to local culture and environment which cannot be concluded in a closed room occupied by trade negotiators.

More significantly, the liability of ISPs is of great importance not merely for the protection of copyright: it is important for the protection and realization of everyone’s right to take part in cultural life as declared in legally binding international human rights instruments. One of our concerns about ACTA is the risk of undercutting the principle of the rule of law and the possible conflict with human rights, in particular with the right to a fair trial, the right to equality before courts and tribunals, the right to equality of arms, and the right to be presumed innocent. ACTA tries to introduce substantial changes in civil and criminal procedures. But the proposed changes give rise to issues of procedural justice and fairness, jeopardizing Korea’s obligations under the international human rights instruments, e.g., the International Covenant on Civil and Political Rights, and potentially weakening the democratic values recognized in our Constitution.

For instance, pursuant to the US-Japan joint proposal, any provisional measures such as a preliminary injunction may be rendered by judicial authorities without a prior hearing of the alleged infringer. Here, neither "irreparable harm to the right holder" nor "a demonstrable risk of evidence being destroyed" is explicitly required. Even the Customs office may take an ex-officio action to suspend the release of suspected copyright or trademark infringing goods. Moreover, right holders may be awarded a predetermined amount of damages without having a burden to show the amount of damage or even when the amount is greater than actual damage. An even more severe breach of principles of procedural justice is found in a so-called "camcorder provision" under which anyone who attempts to use an audiovisual recording device to make a copy of any part of an audiovisual work in a theater may be criminally punished. This out-of-proportion rule not only produces a direct conflict with the right to be presumed innocent but also undermines the principle of fair use or fair dealing.

National autonomy is vital in order to decide the proper level of local IP protection and enforcement. Korean IP law has undergone substantial revision due to the threat of trade sanctions from both the US and the EU since the early 1980s. This economic coercion has continued for about thirty years, and has led to an emergence of consistent domestic pressure for stronger IP protection.

Interestingly, the strongest advocates for these reforms in Korea are not the IP industries: they are the executive branches in government which claim competance over the administration of patent, trademark, and copyright. To them, stronger IP protection and enforcement is a chance to enhance their position. The unending economic pressure and the heavy reliance of our domestic economy upon exports have produced this environment. The problem is that these state actors are much more influential than other, emerging local businesses, because they possess institutional capacities and resources to promote a maximalist IP regulatory culture.

With this power, these government agencies have introduced new laws in Korea which may well be used to support controversial provisions currently being discussed in Guadalajara, Mexico. Examples include a filtering obligation imposed on certain online service providers, and a "graduated response" rule under which the Minister of Culture can suspend or terminate the Internet account of a repeat infringer or even shut down a website that the repeat infringer is using. Advocates claim that the shutting-down provision is incorporated in the US-Korea Free Trade Agreement (and Side Letters) (currently awaiting ratification), and may possibly be pushed by the US in modified form during the ACTA negotiations. If ACTA is concluded with an inspiration of such provisions and applied to Korea under the name of international harmony, our effort to reform the copyright system would be undermined, and opportunities for democratic policy discussion at local level would be lost.

Contrary to the beliefs of ACTA negotiators, stronger, criminal enforcement rules can create unintended consequences among the general public. In Korea, following the introduction of these new laws, reports of criminal copyright infringement skyrocketed from 14,838 to 90,979 between 2005 and 2008. Among these, juveniles victims occupied 24% in 2008, an increase from 1.9% in 2005.

This reported increase, however, does not represent a rapid rise of the unauthorized use of copyrighted material by juveniles. Rather, it shows how criminal sanctions can be misused. Under the Korean Copyright Act, any unauthorized acts of reproduction or distribution of copyrighted works can invoke a criminal liability. This wide coverage of criminal sanction paves the way to abuse or misuse of criminal enforcement. ACTA is no different in this sense. In order to be "willful copyright piracy" under ACTA, an infringing activity needs to be "on a commercial scale". But commercial scale is defined so broadly that it covers activities with "no direct or indirect motivation of financial gain". With this broad definition, the infringement on a commercial scale may include almost every unauthorized use of copyrighted work. So, for instance, those who download a single piece of music may risk criminal penalties. In other words, ACTA opens the door to the global misuse of criminal enforcement rules, beyond even what we've seen in Korea.

Here, criminal sanctions have become a sort of new business model for lawyers acting for copyright holders (mainly music and film industries). They monitor Internet users and send warning letters to suspected individuals threatening a criminal action. In exchange for not taking the criminal action, they ask for a cash settlement. Criminal enforcement procedures provide copyright holders with leverage; using the threat of criminal action as leverage for the settlement negotiation as the initiation of criminal procedure is triggered by a complaint by the right holder. Among the 90,979 complaints in 2008, 56% were settled out of court.

ACTA risks exporting Korea's criminal enforcement regime, while importing the worst of other countries' IP laws. But that's not the only reason to oppose it. A trade agreement that breaches procedural justice, fairness, transparency, and proportionality is not Anti-Counterfeiting: it's Anti-Commons.

EU Wants Patent Provisions In ACTA

According to Inside US Trade, "the European Union is insisting that the Anti-Counterfeiting Trade Agreement (ACTA) cover all intellectual property rights, including patents, and not focus exclusively on copyright and counterfeit items."

While the US-Japan joint proposals focus on trademark and copyright infringement (counterfeiting and piracy in ACTA's jargon), the EU "favors greater inclusion of patent protections in the talks." But it seems that the EU "is not pushing for patent infringements to be subject to ACTA criminal enforcement."

ACTA and Ladder

"ACTA is anther name of "kicking away the ladder" with which the industrialised nations climbed to the top.

During the debate of Patent Act of 1790, Richard Wells argued that Americans should not be deprived of the advantage of imitating any of the English invention. This argument prevailed in the US House, and patent on "imported technologies" became
prohibited. This policy objective was invigorated by discrimination of foreign inventors in the US statute lasted for about 70 years from 1793."