Comparing ACTA Texts – April 2010 v. July 2010

Jimmy Koo
August 12, 2010

The United States and the European Union are scheduled to meet on August 16th in Washington, DC for bilateral discussions over contentious issues arising out of the text of the Anti-Counterfeiting Trade Agreement.  A close comparison of the April 2010 text and the July 2010 text reveals various progresses made by the negotiating parties between June 28th and July 1st in Lucerne, Switzerland.  It also reveals the dividing line between the Parties over certain contentious provisions.  The following are some of the major inclusions, changes, and contentions:

  1. The newly included Article 1.X in the July text includes a verbatim copy of TRIPS Articles 7, 8.1, and 8.2, promoting transfer of technology, protecting public health and nutrition, and preventing abuse of intellectual property rights.
  2. The U.S. proposes limiting the scope of ACTA to “copyrights, related rights, and trademarks” while the EU wishes to expand the scope to include all “intellectual property right”.
  3. Various “Options” concerning the Enforcement Procedures in the Digital Environment have been consolidated and the Parties have agreed not to require online service providers to actively monitor its services or to actively seek infringing activities.
  4. The U.S. and the EU disagree over whether to include or exclude end users from being criminally liable for commercial scale piracy under Section 3.
  5. The rights and duties of the “ACTA Committee” are further defined and formulated.

1)  The newly included Article 1.X in the July text includes a verbatim copy of TRIPS Articles 7, 8.1, and 8.2, promoting transfer of technology, protecting public health and nutrition, and preventing abuse of intellectual property rights.

First, the most visually noticeable addition to the July 2010 text is the inclusion of Article 1.X on p. 3.  The three subsections of Article 1.X concern the promotion of technological transfer and dissemination of technology, the protection of public health and nutrition, and the prevention of the abuse of intellectual property rights by right holders.  The three subsections are verbatim copies of Articles 7, 8.1, and 8.2 of the TRIPS Agreement, listing the Objectives and the Principles of TRIPS. 

The inclusion of this article is supported by Australia, New Zealand, Singapore, and Canada but not by the U.S., the EU, Japan, Mexico, Morocco, South Korea, and Switzerland.  Specifically, the inclusion of subsection 3, dealing with the prevention of the abuse of intellectual property rights, is expressly opposed by Japan, Mexico, South Korea and the U.S. while the EU suggests the inclusion of the principle in the Preamble instead. 

The introduction of this Article suggests the negotiating parties are aware of the public policy needs to promote technological transfers and to protect public health and nutrition, sometimes over the interests of the right holders.  Nonetheless, ACTA Article 1.X utilizes the permissive language of TRIPS including, “should” and “may”, and does not create any mandatory obligations of the Parties.  Accordingly, it is merely an aspirational declaration of the negotiating Parties to promote these public policy goals while enforcing various intellectual property rights.  With the exception of TRIPS Articles 7, 8.1, and 8.2, ACTA fails to fully protect and incorporate key protections against abuse (e.g. TRIPS Articles 41.1, 48.1, 48.2, 50.3, 53.1, 56), flexibilities to promote public interests (e.g. TRIPS Articles 44.2), requirements for the proportionality of enforcement measures (e.g. TRIPS Articles 46, 47), and provisions providing for balance between the interests of proprietors, consumers and the greater society (e.g. TRIPS Articles 1, 7, 8, 40, 41.2, 41.5, 54, 55, 58). [FN1]

2)  The U.S. proposes limiting the scope of ACTA to “copyrights, related rights, and trademarks” while the EU wishes to expand the scope to include all “intellectual property right”.

Second, the most noticeably consistent disagreement between the negotiating parties is the determination of the scope of the IP rights covered by the Agreement.  The scope of the IP rights covered is a contentious issue for various provisions throughout the Agreement including Article 2.1: Availability of Civil Procedures, Article 2.3: Other Remedies, Article 2.4: Information Related to Infringement, Article 2.X.2: Scope of the Border Measures, Article 2.6: Application by Right Holder, and Article 2.18: Enforcement Procedures in the Digital Environment.  The U.S., Australia, New Zealand, Singapore, Canada, and Mexico consistently suggest limiting the scope to “copyrights, related rights, and trademarks” while the EU and Switzerland consistently insist on expanding the scope to “intellectual property right”.  Other negotiating parties like Morocco and South Korea have abstained from presenting clear opinions on most of the provisions of concern. 

As noted by Inside U.S. Trade on July 30, the “scope of the agreement is expected to be a main issue of discussion since both [the U.S. and the EU] . . . have reached a deadlock on whether products with geographic indications (GIs) should be included in the agreement.” [FN2]  Under the limitations presented by the U.S., ACTA will apply only to copyrights, related rights, and trademarks and will exclude GIs from the protected class of IP rights.  However, under the EU’s proposal, ACTA will protect all intellectual property rights including GIs.  Countries with sizable dairy industries including, Australia, New Zealand, and Canada have sided with the U.S. because the language proposed by the EU will essentially “claw back the use of old world terms for meats and cheeses that are produced in these countries under the same term[s]” that are protected as GIs. [FN3]  

Despite such disagreements, the negotiating Parties have agreed to allow parties to remove patents from the protected class of IP rights, if they choose to do so.  Art. 2.X.2: Scope of the Border Measures which provides that “Parties may decide to exclude from the scope of this section, certain rights other than trademarks, copyrights, and GIs”.  Although patents are protected under the EU’s proposed language in other sections, the Parties have agreed to allow exclusion of patents from the reach of border measures to avoid having medicines seized in transit by customs officials of ACTA signatories.  Nonetheless, it is pretty clear that the EU wishes to protect patents in other areas of the agreement to “bolster [current] efforts . . . to create a unified patent law within the EU.” [FN4]  Conversely, the U.S. wishes to take patents out of the scope of the protected IP rights under the Agreement to avoid increasing costs and chilling of innovations caused by the inevitable “gray area” that many companies enter “when developing new products based on other patents”. [FN5] 

3) Various “Options” concerning the Enforcement Procedures in the Digital Environment have been consolidated and the Parties have agreed not to require online service providers to actively monitor its services or to actively seek infringing activities.

As is the case throughout various provisions of the July 2010 version of the Agreement, the EU argues that under Article 2.18: Enforcement Procedures in the Digital Environment, civil and criminal enforcement should be available against infringements of “intellectual property rights” while the US argues that it should only apply to “trademark, copyright, or related rights”.  Overall, Section 4 under the July 2010 version of ACTA shows the fruits of extensive negotiations as many provisional “Options” that existed under the April 2010 version have been merged into a single provision with less bracketed language.  One of the most noticeable additions to this section is the inclusion of Article 3bis on pg. 21.  Previously under Option 2 on pg. 21 of the April 2010 version, Article 3bis expressly notes that no Party’s legislation may compel online service providers to monitor its services to actively seek infringing activities.

Nonetheless, even with the introduction of Article 3bis and Article 2.18.3, which enumerates the limitations to third party liability, online service providers are nonetheless required to remove or disable access to infringing material and to provide “adequate legal protection and effective legal remedies against the circumvention of effective technological measures.” [FN6]

4) The U.S. and the EU disagree over whether to include or exclude end users from being criminally liable for commercial scale piracy under Section 3.

It is also apparent that the U.S. and the EU disagree over whether to include or exclude end users from being liable for commercial scale piracy under Section 3 of the Agreement, dealing with Criminal Enforcement.  Specifically, the bracketed language of Article 2.14 shows that the U.S., Japan, and Switzerland wish to leave it up to the discretion of each Party to exclude or include end users within the scope of this section, while the EU wishes to affirmatively exclude them.  Under Article 2.14 of the July 2010 version, infringement/piracy “carried out on a commercial scale”, is defined as acts “carried out in the context of commercial activity for direct or indirect economic or commercial advantage” and unlike the April 2010 version, no longer includes “significant willful infringements that do not have direct or indirect motivation or financial gain and willful infringement for the purposes of financial gain”. [FN7]

5) The rights and duties of the “ACTA Committee” are further defined and formulated.

Finally, the July 2010 version of the Agreement further formulates the rights and duties of the newly named “ACTA Committee”.  Article 5.1.2 of the July 2010 version adds five mandatory duties of the ACTA Committee in addition to the previously enumerated permissive actions of the Committee.  The mandatory actions include reviewing, implementing, and developing the operation of ACTA, considering amendments to ACTA, approving terms of accession into ACTA for WTO-Members, and considering any other matter that may affect the implementation and operation of ACTA.  Article 5.1.1 suggests that the ACTA Committee will be comprised of representatives from each of the Parties but does not list the minimum or the maximum number of delegates that each Party may send.  

Overall, the upcoming bilateral negotiation between the U.S. and the EU promises to be heated and contentious.  The ACTA is being negotiated by the U.S., Australia, Canada, the EU, Japan, Mexico, Morocco, New Zealand, Singapore, South Korea and Switzerland.

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FOOTNOTES:

1. http://www.wcl.american.edu/pijip/go/acta-communique

2. http://www.tacd-ip.org/blog/2010/08/11/eu-u-s-to-discuss-differences-over-acta-scope-in-bilateral-meeting/

3. http://www.tacd-ip.org/blog/2010/08/11/eu-u-s-to-discuss-differences-over-acta-scope-in-bilateral-meeting/ 

4. http://www.tacd-ip.org/blog/2010/08/11/eu-u-s-to-discuss-differences-over-acta-scope-in-bilateral-meeting/

5. http://www.tacd-ip.org/blog/2010/08/11/eu-u-s-to-discuss-differences-over-acta-scope-in-bilateral-meeting/  

6. July 2010 ACTA, Article 2.18.4.

7. http://www.tacd-ip.org/blog/2010/08/11/eu-u-s-to-discuss-differences-over-acta-scope-in-bilateral-meeting/

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