Nathan Fan is a JD Candidate at Osgoode Hall Law School.

The world’s leading countries gathered again this year in Seoul, Korea for the sixth negotiation meeting for the Anti-Counterfeiting Trade Agreement (ACTA). For those who do not yet know about ACTA, the negotiations are intended to culminate in a multi-lateral trade agreement that will assist governments to more effectively combat the proliferation of counterfeit and pirated goods. Born out of an invitation from the U.S. to participate in ACTA discussions in 2006, a handful of countries met in Geneva in June 2008 for their first meeting. Having just recently completed the sixth meeting in Seoul over November 4-6, the negotiating members have expanded to include Australia, Canada, the European Union, Japan, Mexico, Morocco, New Zealand, Singapore, South Korea, Switzerland and the United States. The consensus among commentators is that the ACTA text is still being negotiated, most likely to be concluded at the seventh meeting set to take place in Mexico in January 2010.

Like many free trade agreements (FTAs), negotiations have been extremely hushed, leaving many commentators flustered and concerned over the decisions being made behind closed doors.  Through the limited information released through press releases and the occasional leaked documents (see here for the most recent leaked memo), commentators around the world have speculated over the negotiations and have expressed their concerns over the potential content of ACTA.

Canada’s own Michael Geist has led the commentator charge on ACTA, vigorously writing articles, blogging, tweeting, and giving speeches and interviews. In his recent presentation in Washington, DC, Geist outlines what was potentially being considered at the ACTA negotiation table in Korea and expresses a few of his concerns. The agenda at the Seoul meeting focused primarily on the Enforcement of IP Rights chapter of ACTA, which include Border Measures, Civil Enforcement, Criminal Enforcement, and The Internet.

The intent of the Border Measures section is to increase the powers of border patrol to search and seize. On the table are provisions to provide authorities with the power to search and seize any IPR infringing goods or equipment used to make infringing goods. Customs officials would also have the discretion to levy penalties, block shipments, and to seize the goods based on prima facie claims of rights holders.

Regarding Civil Enforcement, there has been considerable debate over the scope as some countries want to limit ACTA to only copyright and trademarks (e.g. the U.S.) while others want to extend ACTA to include patents and geographical indications (e.g. the EU). There are also talks about the incorporation of statutory damages as a requirement. Geist states that while not a large concern for the U.S. and Canada which already have statutory damages incorporated into domestic law, it poses considerable issues for other countries (particularly Australia) that do not have such domestic policies and would require significant reform.

There is noticeable alarm regarding the Criminal Enforcement section, which is speculated to impose criminal liability for both commercial and non-commercial copyright and trademark infringement. Based on other American FTAs, liability would include infringements where no financial gain is required (some fear has rippled through the public as this is said to imply criminal liability on kids ripping CDs and movies for online sharing). Geist notes that criminal liability will expressly include unauthorized camcording (already domestic law in U.S. and Canada) and may go beyond content infringement and target fake packaging for movies or music.

The Internet section was discussed for the first time in Seoul, and the leaked document laid out five key provisions considered for ACTA. One of the provisions to be considered is establishing a baseline obligation based on Article 41 of TRIPs (general obligations for enforcing IPR). Also up for consideration is third party liability for content (i.e. intermediaries) and the limitations of safe harbours for intermediaries. Geist notes that the leak shows consideration of a “graduated response” or “three-strikes” approach requirement in order for intermediaries to qualify for safe harbour. This approach would entail ISPs providing customers with a three-strikes rule for infringement, followed by a subsequent disconnection of internet service for a year. Other approaches include a Notice and Takedown system for alleged infringing content being posted online by a customer. Geist also notes that anti-circumvention legislation, including ban of devices used for circumvention, are included and would necessarily imply “WIPO+” provisions.

Geist also laid out a few of his concerns that emanated from current ACTA negotiations. The first is the unprecedented level of secrecy. ACTA has been enshrouded in such a secretive veil (barring the leaks, to which Geist admits that he has been partially responsible for) that it poses serious concerns of a lack of government transparency and accountability. The Obama administration has refused to release any information regarding ACTA under Freedom of Information requests due to concerns characterized as national security.

Geist fears that ACTA will undermine the credibility of WIPO and other global IP forums. Geist purports that ACTA will increase the gridlock currently experienced at WIPO negotiations. Those countries who are seeking to advance a development agenda will be deadlocked against those who favour an enforcement agenda and will have little motivation to cooperate because of the provisions attained with ACTA.

Geist is also concerned with the loss of sovereignty as the combined effect of the ACTA provisions would dramatically reshape Canadian copyright law and eliminate any sovereign choice Canada has on its domestic copyright policy (which has just concluded its national copyright reform consultation). Geist believes that Canada’s agreement to ACTA terms would remove the flexibilities of WIPO implementation and Canada would lose the very notion of a ‘made-in-Canada’ approach to copyright.

There has also been considerable speculation activity from commentators ‘down-under’. Kimberlee Weatherall’s recent paper seconds many of the concerns raised by Geist, but goes further and describes other procedural and substantive concerns. Weatherall notes that in addition to a lack of transparency in the negotiations, there has also been a lack of balance in the interests of those who have been consulted. Most of the key advisory groups to the USTR’s consultation have concerned corporate IP-owning interests (i.e. the record and film industries, pharmaceutical industries). Only recently in September 2009 has the USTR expanded consultation to include technology companies (e.g. eBay, Google, Verizon), the Consumer Electronics Association, and a couple of other civil society groups. Weatherall argues that there are still many large players that have not been included in the consultations (most notably the Electronic Frontier Foundation and Knowledge Ecology International) and that there has been a similar lack of consultations from other countries participating in the ACTA negotiations.

Weatherall also points out that the “two-stage” negotiation process will prove to be problematic once ACTA is signed. She understands that confining the negotiations to a small number of like-minded countries may reach a more detailed agreement, but a more stringent ACTA may be difficult for other significant countries who are not party to the negotiations to accept (e.g. China, India, Brazil, Thailand). Furthermore, the countries that are left out of the debate constitute a large proportion of the countries responsible for the counterfeiting activities and their exclusion from the negotiation table will inevitably create headaches for the future expansion of ACTA membership.

From her Australian perspective, she notes that many of the Criminal and Civil Enforcement provisions go beyond any provisions in Australian history and may prove difficult for Parliament to enact. Statutory damages have yet to be considered by Australian Parliament and Weatherall expresses concerns of adopting an American FTA-style statutory damages provision, which has the potential to give awards of damages vastly in excess of any actual damage suffered that is attributable to the defendant’s act (i.e. disproportional damage awards).

The scope of criminal liability is also a concern for Weatherall. Past American FTAs have defined “commercial scale” to include private financial gain, irrespective of how low the number (i.e. single acts of infringement for private financial gain will be criminally caught). Further, “private” would imply that even purely personal (non-commercial) gain would be sufficient to give rise to criminal liability, which is a serious departure for many countries. For example, it is contrary to the Copyright Amendment Bill 2006 of the Australian Parliament; the EU Directive on Enforcement of IPR, which suggests that acts carried out by end-consumers acting in good faith be excluded from “commercial sale”; and the European Parliament’s amendment to the Directive on Criminal Measures Aimed at Ensuring the Enforcement of IPR, which defined “commercial scale” to exclude acts carried out by private users for personal and not-for-profit purposes.

Not all commentators have taken up such concern over the ACTA negotiations. Barry Sookman’s recent response to the insurgence of ACTA critique is that much of it is “fear mongering” and misinformation that has been used to generate opposition to ACTA. Directly in response to Michael Geist’s commentary, Sookman purports that Geist has incorrectly summarized the leaked memo and has used inflammatory examples for shock value, leading the public into a state of panic. Sookman believes Geist’s assertion that the ACTA would dramatically reshape Canadian copyright and eliminate Canada’s sovereignty on domestic copyright policy is unfounded. Canada is participating in the negotiations precisely so that is can influence the outcome and shape the international norms and standards that govern copyright. In the event that the ACTA text does not turn out the way Canada would like, it can always refuse to sign the agreement or implement the provisions. As an example, Sookman points out that Canada has still not fully implemented the WIPO treaties signed 12 years ago. Further, the concerns that Geist raises about sovereignty can be made about any international trade agreement that Canada decides to join. There is nothing particularly egregious about the current ACTA negotiations.

Similarly, Sookman argues that Geist’s concerns about the unprecedented lack of secrecy are no different than any other trade agreement. Sookman states that it is a commonly held practice that trade agreements and treaties be negotiated in secret and a high level of confidentiality is to be expected. The purpose of this well-established principle is to allow the negotiating parties to exchange views in confidence, facilitating the negotiation of complex issues. Geist’s concern of secrecy is creating a false impression that the secrecy associated with ACTA is improper or unusual.

Sookman also argues that Geist’s summary of the leaked document speculates too far beyond the actual content of the EU memo. Geist’s concerns regarding the requirement of a “three-strikes” rule regime based on unproven allegations of infringement and a mandatory 12 month disconnection go beyond the actual text of the memo. The memo only requires ISPs to “put into place policies to deter unauthorized storage and transmission of IP infringing context (ex: clauses in customers’ contracts allowing, inter alia, a graduated response).” ACTA would only require some form of self-regulation by ISPs and does not require the extent of measures that Geist has said is necessary.

Sookman also disagrees with Geist’s concerns that ACTA will establish a “WIPO+” model by requiring an implementation of technical protection measures and anti-circumvention legislation based on American FTAs. Sookman argues that there is already a clear consensus that WIPO treaties require protection against access control circumvention and against trafficking in circumvention tools, and nothing in the memo suggests that ACTA will be requiring provisions extending beyond the current WIPO requirements.

Christian Castle has also advanced similar criticism of the panic emanating from recent ACTA commentary (see his web post under “ACTA Misreporting: Anatomy of a Smear” on Saturday November 14, 2009). Like Sookman, Castle maintains that the recent interpretations of the leaked document go beyond what the text actually entails. Further, the document itself was not a definitive account of what is to be included in the ACTA text. According to Nate Anderson of Ars Technica (see post), the document was merely a “written account of an oral report on a draft document that was itself being altered”. The fluidity of the proposed provisions is supported by the fact that lawyers for groups like CCIA and Public Knowledge “were invited to see the draft, comment on it, and later see it again when some changes had been made”. As such, Castle argues that the speculations made by Geist and other commentators are based on a document that was “shakey” at best.

Castle also argues that the “unprecedented level of secrecy” behind the ACTA negotiations is really not that secretive. As already mentioned, key groups such as CCIA and Public Knowledge may have been involved in the consultation process in ACTA negotiations. Castle suggests that there is further evidence of their involvement found directly in the leaked memo, in which the USTR has commented that it kept discussions confidential “due to the different points of view regarding the internet chapter both within the Administration, with Congress and among stakeholders (content providers on one side, supporters of internet “freedom” on the other)” [emphasis added]. According to Castle, these “supporters of internet freedom” point to negotiations with at least Public Knowledge and CCIA, and negotiations may have even included the likes of Google. 

With all this being said, speculation on all sides can only go so far. Due to the extremely confidential nature of the negotiations, the world will not see the end product until the negotiating parties are ready to release it (barring a major leak). As Sookman pointed out, a country who has signed onto a multi-lateral agreement still has to incorporate it into the parliamentary process – and even then, the question of full or partial implementation remains to be answered. But for now, the speculative accounts of the negotiations are all we have to chew on until the final round next year.