PublishedOctober 5, 2010

European Parliament Demands ACTA Draft After EC Says Language Nearly Final

Members of the European Parliament are angered the European Commission has announced agreement on final language for the Anti-Counterfeiting Trade Agreement – without revealing what’s in the latest draft of the secret, controversial document. Several members released a joint statement demanding the EC release the text of the international agreement that would add new policing measures on the Internet.

The European Parliament statement Tuesday comes days after the European Commission and other nations negotiating on ACTA issued a statement saying they have reached an agreement in principle, according to news reports.

Though the details of the latest draft are still secret, the agreement among the European Union, Japan, Australia and other nations would export many of the enforcement measures of United States’ digital copyright laws — only without the protections like fair use that legitimate businesses like news media outlets and U.S. tech companies rely on. Many are concerned the draconian measures to police for illegal copyright infringement will infringe on legitimate free speech and privacy on the Internet.The announcement comes after talks in Tokyo last week. U.S. Trade Representative Ron Kirk told reporters that they’ve found solutions even on some of the most difficult issues, but European officials say key gaps remain that could undo the agreement.

Europeans are among those troubled that the treaty adopts new laws that have not and will not be reviewed by the various nations’ legislative bodies. Countries with more extensive copyright infringement problems like China are not part of ACTA.

CCIA has expressed concerns about specific aspects of ACTA, rather than the entire agreement.  Large portions of ACTA will be beneficial or at least innocuous from the perspective of many in the technology industry.

Problems arose from the interjection of complex and controversial copyright issues into the anti-counterfeiting accord, which in fact had little to do with toxic toothpaste, counterfeiting routers, and bad brakepads – example commonly used to establish the urgency of the project.  Undoubtedly, a narrower agreement would have been less controversial in the U.S. business community.

Several issues have been somewhat ameliorated in the agreement over time.  Initial drafts of ACTA might have induced foreign governments to institute high, fixed, statutory damages – as are found in the United States – but without the balancing aspects of copyright limitations and exceptions that also characterize much of U.S. copyright law.  These damages quite likely could have been deployed in litigation in overseas courts against U.S. businesses (who are frequently the target  of foreign IP claims by domestic constituencies).  Later drafts of ACTA have moderated how such remedies must be implemented, and offers some helpful – if vague – language requiring proportionality in remedies.

At one point, ACTA stood to be the first international IP agreement mandating secondary liability, but negotiators wisely moved away from this posture.

One major aspect of ACTA that had not been addressed in any manner bears noting, however.  The agreement mandates various IP protections that some industries depend upon, but it fails entirely to mandate the robust limitations and exceptions to copyright that Internet and technology companies depend upon to add trillions of dollars in value to the U.S. economy with innovative new products and services.  The dubious rationale for this omission is that ACTA is not a substantive agreement (a proposition difficult to reconcile with the continued presence of other substantive provisions in ACTA, like anticircumvention).

The upshot is that foreign markets may develop stronger IP law – a generally positive development – but that this IP law will then be invoked against U.S. businesses attempting to enter markets, which lack the exceptions that they depend upon.  Because businesses invest in countries where legal regimes are hospitable, the absence of such exceptions will limit U.S. Internet and technology businesses’ penetration into foreign markets.

Whether the version of ACTA reportedly agreed to addresses this issue remains to be seen, but the issue must be viewed as an indicator as to how serious negotiators are about promoting the trade in digital goods and services in the Internet and technology sectors.

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