ACTA May Be More Favorable to IP Owners

Online Exclusive: International Anti-Counterfeiting Agreement Could Limit Internet Access

It began innocuously. The U.S., the European Commission, Switzerland and Japan announced in October 2007 they would negotiate a new international agreement to toughen enforcement measures against counterfeit goods.

This proposed agreement, however, has turned out to be far more ambitious--and controversial.

Over time, nine additional countries have joined the negotiations: Australia, Canada, Jordan, Mexico, Morocco, New Zealand, the Republic of Korea, Singapore and the United Arab Emirates. Leaks from the negotiations revealed that the

proposed Anti-Counterfeiting Trade Agreement (ACTA) would not merely address counterfeiting; it would establish tough new standards for copyright protection and establish a new international organization to implement this agreement. ACTA could replace existing global IP treaties with an international IP regime more favorable to IP owners, according to some experts.

"It could wind up being a workaround for WIPO [the World Intellectual Property Organization]. That's what we're worried about," says Sherwin Siy, deputy legal director of Public Knowledge, a non-profit dedicated to defending individuals' rights in the digital world.

Until recently, it has been difficult for outsiders to determine what ACTA might do because the agreement has been negotiated in secret. That veil of secrecy collapsed in February and March, when two leaked documents revealed the then-current draft of ACTA, including which countries had proposed which provisions. These leaks revealed, among other things, that ACTA would impose a tougher international stance against anyone seeking to circumvent technological protections on copyrighted works.

Narrow Flexibility

Existing international treaties already address circumvention. Article 12 of the WIPO Copyright Treaty (WCT) and Article 19 of the WIPO Performances and Phonograms Treaty (WPPT) require signatories to adopt anti-circumvention laws. These treaties, however, allow nations significant leeway in crafting their laws. ACTA would narrow this flexibility and require countries to adopt tougher provisions similar to America's Digital Millennium Copyright Act (DMCA).

For instance, the WCT and the WPPT allow signatories to prohibit circumvention if such behavior helps produce copyright infringement. The treaties also allow signatories to adopt a tougher standard under which a person can face penalties under an anti-circumvention law even though he is merely seeking to engage in fair- use copying that is perfectly legal. The DMCA adopts this tough stance against circumvention, outlawing it per se. ACTA would require all signatories to take the same stance, according to Siy.

The WCT's and WPPT's anti-circumvention provisions apply only to technological protections that restrict copying a copyrighted work. ACTA, like the DMCA, goes further, protecting technological measures that restrict copying or accessing a copyrighted work. Under current international law, a person could legally circumvent technological measures blocking access to a copyrighted work and thus enable a lawfully purchased music file designed to play only on iPods to play on a different digital audio player. The DMCA forbids such circumvention, and so would ACTA.

Neither the WCT nor the WPPT require signatories to outlaw the creation or distribution of anti-circumvention tools (items designed to circumvent technological protections on copyrighted works), but the DMCA does. ACTA would require all signatories to adopt such a prohibition.

Offenders Beware

There has been much controversy about whether ACTA would force Internet service providers (ISPs) to terminate the accounts of repeat infringers. A draft of the agreement leaked in March would have this effect, according to some observers. That draft contained a safe harbor provision, which protects any ISP against liability for copyright infringements committed by its users, provided the ISP implements "a policy to address the unauthorized storage or transmission of materials protected by copyright." A footnote added, "An example of such a policy is providing for the termination ... of subscriptions and accounts in the service provider's system or network of repeat infringers."

"The only example of an adequate policy is terminating repeat infringers, and that's what you're going to get," warns Michael Geist, who teaches Internet law at the University of Ottawa. If an ISP used a different policy, the company would risk being held liable for infringements committed by its users.

The latest version of ACTA, released April 21, drops the account termination language from its safe harbor provision. However, the agreement contains other vague provisions that push ISPs to act against online infringement. Proposed Article 2.18(3 quater), for instance, states that each signatory country "shall promote ... relationships between online service providers and right holders to deal effectively with ... infringement." Some fear that under this provision, governments will pressure ISPs into acceding to copyright owners' demands to terminate infringers' accounts.

"We want to make sure that the policy [of terminating infringers' accounts] doesn't get hidden inside private agreements with the encouragement of the government," Siy says.

IP Rules

ACTA would create a new administrative infrastructure to implement its IP rules. There would be standing committees, regular meetings of signatories, a secretariat and possibly a mechanism for resolving ACTA-related disputes.

All this resembles an international IP organization already in existence. "ACTA would clearly replicate WIPO in many important ways," Geist states.

But there's a good reason why those pushing for stronger IP rights want to avoid WIPO. Many of WIPO's members reject tougher IP protections. Developing countries such as India and Brazil have become increasingly assertive and often fight to maintain their citizens' freedom to use IP-protected works.

In response, the U.S. and other pro-IP entities may bypass WIPO and establish a new, more IP-friendly international system under ACTA. "The U.S. is finding it harder to get the consensus it wanted at WIPO, so it has decided it would pick up its ball and play elsewhere," Geist says. In a blog post, he puts it more explicitly: "Some might wonder whether ACTA is ultimately designed to replace WIPO as the primary source of international IP law and policy making."

ACTA has become quite controversial. Business groups support it, while many civil rights groups and European government officials excoriate it. Nevertheless, negotiators aim to finalize ACTA this year.

In an April 16 press release, the U.S. Trade Representative stated, "The agreement can be concluded soon if other participants make it a priority."

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