Bridges Weekly Trade News Digest • Volume 12 • Number 33 • 9th October 2008

Secretive ACTA Negotiations under Scrutiny

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Have you ever downloaded music off the internet for free? If so, do you feel like a criminal?

Digital rights activists are concerned that an intellectual property rights enforcement treaty being negotiated in secretive talks by a handful of mostly industrialised countries could criminalise file sharing over the internet even if it was not done for commercial purposes.

The prospective Anti-Counterfeiting Trade Agreement (ACTA), they warn, could cause travellers’ laptop computers and iPods to be subject to border searches for illicit music or movies. The fair use of copyrighted materials could be threatened, impeding innovation, and internet service providers could be required to monitor customers’ use, at the expense of privacy. Internet company Google “believes strongly” that the treaty should not address internet issues at all.

Generic drug manufacturers and public health groups warn that if improperly structured, the ACTA could conflate dangerous counterfeit drugs with medicines that have been controversial for separate reasons related to intellectual property, thus impeding access to low-cost copies of patented drugs produced under compulsory licence, or drugs obtained by ‘parallel importation’ from countries where they are cheaper.

Strong support for the ACTA comes from the movie and recording industries, which cite major losses due to piracy and counterfeiting.

Governments involved in the talks insist that the accord’s main target would be commercial-scale activities, on the grounds that existing rules on intellectual property enforcement do not suffice. Australia, Canada, the EU, Japan, Jordan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland, the United Arab Emirates, and the US are involved in the discussions.

Each of the developing countries participating in the negotiations has already signed a bilateral free trade agreement with Washington, typically including intellectual property protections that go beyond what is provided for in WTO rules. China, which the US has repeatedly fingered for counterfeiting and piracy, is not part of the talks.

The negotiations started in earnest earlier this year, with a focus on developing a legal framework as well as provisions for cooperation on intellectual property rights enforcement. The Group of Eight leading industrialised nations’ summit in July urged negotiators to reach a deal by the end of 2008.

Critics of the ACTA negotiation process openly acknowledge that their concerns could well be unjustified; it’s just that the secrecy of the talks makes it impossible to find out.

“Because the text of the treaty and relevant discussion documents remain secret, the public has no way of assessing whether and to what extent these and related concerns are merited,” said a letter to the ministers of the participating countries signed by dozens of individuals and civil society groups from all over the world, including Essential Action, the Electronic Frontier Foundation, Knowledge Ecology International, Médecins Sans Frontières, and Third World Network.

The letter, dated 15 September, said that “public review of the texts and a meaningful ability to comment would, among other benefits, help prevent unanticipated pernicious problems arising from the treaty. Such unforeseen outcomes are not unlikely, given the complexity of the issues involved.” In addition to criticising the lack of transparency in the negotiations as “fundamentally undemocratic,” the letter points to a “public perception that lobbyists from the music, film, software, video games, luxury goods and pharmaceutical industries have had ready access to the ACTA text and pre-text discussion documents through long-standing communication channels.”

A few days later, two of the organisations, Electronic Frontier Foundation (EFF) and Public Knowledge, filed a lawsuit against the US trade representative’s office demanding information about the ACTA negotiations, including records about the USTR’s discussions with other governments and pro-ACTA business groups.

In their complaint to the US district court for the District of Columbia, EFF and Public Knowledge said that they had not received any response from the USTR’s office to their June and July requests for such information under the Freedom of Information Act. Neither group has received a response to the lawsuit thus far.

Even the US Senate’s influential Judiciary Committee has expressed some qualms about the ACTA negotiations, though applauding the move to strengthen intellectual property protections. In a 2 October letter to USTR Susan Schwab signed by Democratic Chair Patrick Leahy and Arlen Specter, the ranking Republican, the committee expressed an “institutional” concern that ACTA, “if not drafted with sufficient flexibility, could limit Congress’s ability to make appropriate refinements to intellectual property law in the future.” This concern was “compounded… by the lack of transparency inherent in trade negotiations and the speed with which the process is moving.”

While government officials almost invariably negotiate trade agreements behind closed doors, based on the logic that negotiators need the privacy to make trade-offs that hurt some sectors but are beneficial overall, the degree of secrecy varies. For instance, draft negotiating texts at the WTO are now made public almost immediately upon release. This is not the case for most bilateral free trade agreements.

USTR officials say that there is no comprehensive draft ACTA text yet, since it is still in the middle of negotiations.

Asked about the absence of publicly available negotiating documents from the ACTA talks, Scott Elmore, a spokesperson for the US trade representative’s office, told Bridges that “we are treating these negotiations similarly to FTA processes.” In those negotiations, he explained, future treaty language is only made public “after the parties have agreed to the actual text.”

As for the information requested by EFF and Public Knowledge, Elmore said that the USTR’s office had received no less than nine intellectual property-related Freedom of Information Act requests in June, and was working “diligently” to respond to all of them.

Elmore said that the USTR had been working closely with lawmakers on the ACTA negotiations. “We are confident we can find ways to build vital disciplines for combating intellectual property theft while fully respecting existing US law and legislative prerogatives,” he said. “The IP enforcement provisions of our FTAs have succeeded in this regard, and so will the ACTA.”

Many of the concerns about the contents of a potential ACTA were voiced at a public hearing held by the USTR’s office on 22 September. The concerns were spurred by copyright-owning industry submissions to the USTR, as well as one of relatively few documents on the negotiating framework to come to light: a four-page “discussion paper” posted in May on Wikileaks, an online repository of leaked sensitive documents.

The measures suggested in that paper include authorising governments and border officials to take action against intellectual property right infringers without a prior complaint by the right holders, or to seize and destroy IPR-infringing goods and their components. Also proposed was a legal regime “to encourage internet service providers to cooperate with right holders in the removal of infringing material,” albeit with safeguards from liability.

In its submission to the public hearing, EFF warned that one proposal from a “major copyright owner industry group” to require internet services providers to adopt “technical measures” such as filters and network monitoring would “directly threaten citizens’ privacy rights.” And since such filters could be defeated by encryption technology, it said that they may not even be effective at curbing copyright violations. Furthermore, it said that adopting such measures would make it more likely that internet service providers would be “deemed to have constructive knowledge” of copyright violations taking place on their networks, thus disqualifying them from protective ’safe harbours’ in US law. Google said that safe harbours should be outside the scope of the ACTA talks, and that if included, “passive carriers” such as search engines and blogs should remain covered.

The Senate Judiciary Committee letter had specifically urged Schwab “not to permit the agreement to address issues of liability for [internet] services providers or technological protection measures.”

Knowledge Ecology International warned that the ACTA could effectively curb a type of compulsory licensing ordinarily permissible under WTO intellectual property enforcement rules (TRIPS Agreement Part III). In response to patent holders seeking court injunctions to get others to stop using their intellectual property, courts in the US and elsewhere have in certain cases awarded them royalty payments - but nothing more. This is tantamount to a compulsory licence - but could be prohibited if ACTA rules on injunctions turn out to be more restrictive than WTO law (as the EU has sought in other trade agreements).

The International Trademark Association and BASCAP, the International Chamber of Commerce’s anti-counterfeiting and piracy initiative, expressed “continued support” for the US’ involvement in the ACTA talks. In a June submission to the USTR, the groups called for expanded power for law enforcement and customs authorities to initiate criminal actions on their own initiative as well as at rights holders’ behest. (Criminal offences can carry jail time; civil offences typically involve fines.)

Quite aside from the content of the prospective treaty, IP Justice, a San Francisco-based civil liberties group, has called ACTA “imperialistic,” criticising the fact that it is being negotiated primarily among industrialised nations. The organisation, whose stated purpose is to promote balanced intellectual property law and freedom of expression, claims that ACTA “attempts to regulate global IPR enforcement from the perspective of the world’s wealthiest and to the detriment of the needs of developing nations and the global public interest.” It said that developing countries “will be expected to abide” by ACTA’s terms.

IP Justice said that ACTA would require governments to spend billions of dollars’ worth of taxpayers’ money on local and national law enforcement, border agencies, customs controls, and local courts, with the benefits accruing to a relatively narrow number of intellectual property holders.

A “fact sheet” on the USTR website says that the ACTA would be a “leadership agreement,” anticipating future participation by countries “that aspire to strengthen IPR enforcement.” It said that ACTA would strengthen “the international fight against pirates and counterfeiters who steal from businesses and workers, discourage innovation and creativity, threaten health and safety, provide an easy source of revenue, and cause loss of tax revenue.”

The next round of talks on the ACTA is set to take place in Tokyo from 8-10 October.

ICTSD reporting; “Transparency needed on ACTA,” TORONTO STAR, 9 June 2008; “Anti-Counterfeiting Trade Agreement: Fact or Fiction,” WIRED.COM, 15 September 2008.