Bridges Weekly Trade News Digest
The veil of official secrecy that has shrouded talks on an “Anti-Counterfeiting Trade Agreement” for the past two years was finally lifted last week, with the release of a comprehensive draft negotiating text.

Digital rights activists, academics, and sections of the computer industry had long decried the lack of transparency surrounding the negotiations. Participating governments – from a few dozen mostly industrialised countries – had been refusing to make public draft texts or individual proposals, as has become common at the WTO.

Chinks had already begun to appear in the wall erected around the ACTA process. Most significantly, a draft annotated with countries’ different negotiating positions was leaked in March. That followed a number of smaller leaks. And it had become clear that some participating governments, including a number of European countries, New Zealand, and Australia, wanted to disclose details about the ACTA process, but were prevented by doing so by opposition from others.

The release of the official text opens the ACTA negotiations up to the closest public scrutiny yet.

Some critics are not impressed with the 39-page draft, nearly every paragraph of which contains sections of text within square brackets that denote disagreement among participants.

“This proposed agreement is what I thought it was: an intellectual-property land grab that would cement some of the uglier aspects of American law, export those provisions to other countries, possibly import even worse provisions back into the US and, in the bargain, spawn a new and largely redundant international bureaucracy,” wrote Rob Pegoraro, a technology writer for The Washington Post, on his blog on the newspaper’s website.

An opposite view came from Mark Esper, executive vice president of the US Chamber of Commerce’s intellectual property centre and a strong proponent of ACTA. He told Bridges that while the sheer number of brackets made it hard to determine what exactly might come out of an agreement, his preliminary assessment was that “many of the red herrings that anti-ACTA critics were claiming are just not in this text. For instance, this idea that was out there — iPods seized at the border, CDs taken out of people’s jackets — is not in the text.”

Unlike the leaked draft from March, the official draft does not attribute sections of bracketed text to the countries that proposed them.

The simple fact that governments released the text represents a significant achievement, according to Michael Geist, a law professor at the University of Ottawa who is an expert on internet and e-commerce issues. “Today’s release marks an important development that highlights the value of public pressure,” he wrote on his blog. “As politicians and the public demanded greater transparency, the negotiating countries presumably concluded that the issue was becoming a major impediment to concluding an agreement and decided to make it available.”

Public pressure had already borne modest fruit, Geist said. As an example, he pointed to “near-consensus” on a “de minimis” provision that would exclude from the treaty’s border measures small quantities of non-commercial goods in travellers’ luggage, something that had been omitted from the initial proposals.

In perhaps another bid to soothe civil society, the official draft states that a “suitable provision needs to be drafted that would ensure nothing in the Agreement detracts from national legislation regarding protection of personal privacy.” That line was not included in the leaked text.

Nevertheless, Geist argued that “the release of text confirms many of the fears regarding the substance of the treaty.”  The agreement would require “dramatic changes” to many of the participants’ domestic laws, with new rules against circumventing technological protections, or on ‘safe harbours’ for internet service providers.

The nitty gritty

The overall objective of ACTA is to strengthen the “legal framework” for enforcement of intellectual property rights (IPRs) in a manner that would go significantly beyond the enforcement standards set out in the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights.

Norm-setting areas in ACTA’s scope include civil enforcement, criminal enforcement, border measures and IPRs enforcement in the digital environment. Government enforcement practices – methods used by authorities to apply legal norms – also  figure in the draft agreement, as do measures concerning international cooperation, technical assistance and institutional arrangements.

While ACTA’s scope would extend to all IPRs, a critical question is whether key civil enforcement provisions, border measures and digital enforcement measures should apply to infringements of all IPRs or solely in cases of copyright piracy or trademark counterfeiting. The manner in which this question will be resolved will have significant implications on the effects of the future agreement.

For instance, provisions on border measures would apply, according to the draft text, to goods suspected of infringing intellectual property rights when they are imported, exported or in transit. This could imply that such measures would extend to patents and thus could lead to the kind of detentions of generic medicines in transit that have taken place in the past two years.

A footnote to the section on border measure states that: “No Party shall be obliged to apply this section to any goods that do not infringe an intellectual property right held within the territory of that Party.” According to Henning Große Ruse-Khan, a research fellow at the Max Planck Institute, this would make the final fate of allegedly infringing goods in transit dependent upon the question of whether IP protections in the transit country actually include the mere transit as an infringing act.

On other controversial ACTA provisions – notably the so-called “three strikes” or “graduated response” rules that would cut off internet access for serial infringers – the released text seems to try to accommodate different national stances as well as consumer concerns, which have been particularly strong on this subject.

However, while the text no longer compels internet service providers (ISPs) to adopt a “graduated-response” enforcement mechanism, the text does not forbid such an approach. According to Michael Geist, if the text were adopted, “it will clearly keep three strikes on the table and could be used in other ACTA member countries to encourage its adoption.”

In relation to technological protection measures (TPMs), which allow rights holders to control access to protected works in the digital environment, the text appears more decisively tilted towards US legislation, specifically the Digital Millennium Copyright Act (DMCA). While the WIPO Internet Treaties of 1996 include a general provision requiring countries to provide remedies against the circumvention of TPMs, the DMCA, and some options under the present ACTA text, go much further by requiring criminal penalties not only against the circumvention of TPMs but also against devices that can be used to this purpose.

Many of the key provisions – including the ones analysed above as well as those on civil enforcement – remain heavily bracketed. Thus, it is still difficult to predict exactly how an ACTA deal, if implemented, would actually impact internet users.

The next round of negotiations, which will take place in June in Geneva, should give a clear signal as to whether the negotiations are to be concluded this year as the parties hope.