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ACTA: Facts, misconceptions and questions

It's good to see that the Anti-Counterfeiting Trade Agreement, otherwise known as ACTA, is at last getting the attention it deserves.I suspect this is due to people becoming increasingly invigorated and educated after the SOPA and PIPA defeats, as well as the Megaupload takedown, in the last couple of weeks.
Written by David Meyer, Contributor

It's good to see that the Anti-Counterfeiting Trade Agreement, otherwise known as ACTA, is at last getting the attention it deserves.

I suspect this is due to people becoming increasingly invigorated and educated after the SOPA and PIPA defeats, as well as the Megaupload takedown, in the last couple of weeks. However, this very welcome explosion of interest has also resulted in inaccurate, out-of-date and misinterpreted information flying around like so much shrapnel.

I'm not a legal expert, but I have been covering ACTA for a long time now. Reading some of the stuff out there, I thought it would be worthwhile to reread the text of the finalised treaty, just to make sure I was certain what was correct and what was not.

It's a good time to take stock, so here are some key points about the contents and process of the treaty and about the next steps. If I'm wrong on any of these points, please comment to let me know.

ACTA is not law anywhere yet

ACTA has been signed by: Australia, Canada, Japan, South Korea, Morocco, New Zealand, Singapore, the US, the EU, Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, Romania, Slovenia, Spain, Sweden and the United Kingdom.

But, despite the fact that everyone in that list up to "the US" signed last October, none of these signing 'parties' have ratified it yet. Signing is separate from (and often a precursor to) ratification. Signing essentially means the government will try to get the treaty ratified.

Ratifying treaties is usually the job of the national legislature (in the case of the EU, it is the European Parliament). There's probably an interesting story to be told about each country's ratification process (and this is certainly where anti-ACTA activists should focus their attention), but until that process is completed, the treaty is meaningless.

By the way, these are the countries that took part in the ACTA negotiations but have not yet even signed the treaty: Cyprus, Estonia, Germany, Mexico, the Netherlands, Slovakia and Switzerland.

ACTA's formulation was secretive and it focuses entirely on the rights of the content industry

This is the best-known bit, so I'll be brief. ACTA is a trade treaty even though its subject matter is civil and criminal enforcement, and its odd classification meant that it could be negotiated behind closed doors. It was only through leaks that the wider public got to see what was going on, and the resulting pressure probably helped get rid of some of the nastier bits in the early drafts (more on which later).

The language of the treaty also seems to suggest a certain one-sidedness. From Article 28, here's what looks to me like the biggest reference to anyone who isn't a rights-holder, a government, a judge or a criminal:

Each Party shall endeavour to promote, where appropriate, the establishment and maintenance of formal or informal mechanisms, such as advisory groups, whereby its competent authorities may receive the views of right holders and other relevant stakeholders.

"Other relevant stakeholders" is about it, I'm afraid.

ACTA demands the criminalisation of 'commercial-scale' copyright infringement

Each signatory (that has ratified ACTA at a national or union level, but let's take that as a given from now on) has to make "copyright or related rights piracy on a commercial scale" a civil and criminal offence. Now, remember that ACTA deals a lot with knock-off physical goods, but this applies to digital infringement too.

The penalties must include "imprisonment as well as monetary fines", although the two do not need to be imposed in tandem. Aiding and abetting has to be a crime too.

So, what's 'commercial scale'? In the section on criminal penalties, we have this: "Acts carried out on a commercial scale include at least those carried out as commercial activities for direct or indirect economic or commercial advantage."

Then, in Article 27, which deals specifically with digital infringement (my emphasis):

Each Party's enforcement procedures shall apply to infringement of copyright or related rights over digital networks, which may include the unlawful use of means of widespread distribution for infringing purposes. These procedures shall be implemented in a manner that avoids the creation of barriers to legitimate activity, including electronic commerce, and, consistent with that Party's law, preserves fundamental principles such as freedom of expression, fair process, and privacy.

"Widespread distribution" is a fundamental characteristic of the internet, so read that as you will.

ACTA criminalises DRM circumvention

Also a crime: breaking digital rights management and decrypting material that's been scrambled for copyright protection purposes.

Ratification of ACTA means not only that breaking these measures must be illegal, but also that it must be a crime to distribute technology or services that are "primarily designed or produced for the purpose of circumventing an effective technological measure; or [have] only a limited commercially significant purpose other than circumventing an effective technological measure".

Oh, and stripping rights management information, such as the embedded data identifying the author or artist? Crime.

ACTA does not force ISPs to snoop

This treaty has gone through many revisions and is a big improvement over earlier drafts. By way of example, ACTA used to compel signatories to introduce three-strikes laws. For these revisions you can thank some of the negotiators, but also whoever leaked those earlier drafts so the rest of the world could see what was going on and apply some pressure.

Many if not most instances of the word "may" in the finalised ACTA once read "shall". There's a big difference between these two words. Section 4 of Article 27 reads (my emphasis):

A Party may provide, in accordance with its laws and regulations, its competent authorities with the authority to order an online service provider to disclose expeditiously to a right holder information sufficient to identify a subscriber whose account was allegedly used for infringement, where that right holder has filed a legally sufficient claim of trademark or copyright or related rights infringement, and where such information is being sought for the purpose of protecting or enforcing those rights.

That's not compulsion. It's saying the signatory's courts can, if they want, force ISPs to snoop, but it's not saying this has to happen. In other words, this bit's meaningless. It makes no difference. See also: the section that says countries may criminalise filming the screen in a cinema.

ACTA probably means signatories have to block or take down infringing websites

In Article 8, which deals with injunctions and civil enforcement, ACTA says that every signatory's courts must be able to order an infringer to desist, and must be able to force a third party under its jurisdiction to "prevent goods that involve the infringement of an intellectual property right from entering into the channels of commerce".

However, the same article also includes this follow-on. I confess I don't completely understand it, but it looks to me like it may allow governments to stick to damages instead:

Notwithstanding the other provisions of this Section, a Party may limit the remedies available against use by governments, or by third parties authorised by a government, without the authorisation of the right holder, to the payment of remuneration, provided that the Party complies with the provisions of Part II of the TRIPS Agreement specifically addressing such use. In other cases, the remedies under this Section shall apply or, where these remedies are inconsistent with a Party's law, declaratory judgments and adequate compensation shall be available.

As I say, I could use some clarification on this bit. Help me out and I'll update.

ACTA's guide to damages calculation is questionable

The civil enforcement penalties for copyright infringement in ACTA include damages, to be paid by the wrongdoer to the plaintiff. Now, calculating the actual cost of so-called piracy has always been a tricky business. Rights-holders have occasionally come up with some ludicrous estimates of the damage, that usually involve lots of multipliers.

Part of the problem in estimating the real cost is that an unlawful download does not necessarily mean a lost sale. The person downloading an album, for example, may like it so much that they then go and buy it. Equally, it may be that they were never going to buy it whether they downloaded it unlawfully or not.

Over to Article 9 of ACTA:

In determining the amount of damages for infringement of intellectual property rights, a Party's judicial authorities shall have the authority to consider, inter alia, any legitimate measure of value the right holder submits, which may include lost profits, the value of the infringed goods or services measured by the market price, or the suggested retail price.

You see the problem.

ACTA demands 'provisional measures' with no immediate right of reply

A tricky one, this. From Article 12:

Each Party shall provide that its judicial authorities have the authority to adopt provisional measures inaudita altera parte [without the other party being heard] where appropriate, in particular where any delay is likely to cause irreparable harm to the right holder, or where there is a demonstrable risk of evidence being destroyed.

That looks bad on the surface, but it goes on to say that the applicant must provide "any reasonably available evidence" to get the provisional measure (probably an injunction) and is also liable to compensate the subject of the measure if it turns out an infringement didn't take place.

The drug question

One of the big criticisms of ACTA is that its definition of 'intellectual property' could be taken to apply to medicines. Critics say this means the treaty represents a huge, pro-Big Pharma crackdown on the manufacturing of generic drugs.

That may be the case. I'm not an expert on this, but I can call out those who have said ACTA doesn't define intellectual property at all. It does, by referring back to the TRIPS agreement that was ACTA's predecessor. And TRIPS pretty much includes medicines in its remit.

[EDIT, 31 Jan: Looking at the drug question again, I'm fairly sure ACTA doesn't actually have much of an impact here. The biggest worries were to do with border measures, and ACTA specifically excludes patent protection, which is where generic drugs may otherwise fall foul. That said, a recent tweet from digital agenda commissioner Neelie Kroes appears to suggest otherwise...]

Next steps?

As I say, I'm an observer not an activist, but those fighting against ACTA haven't yet run out of time.

Influencing ACTA during its formulation was always going to be difficult at best, given its designation as a treaty. However, now that it's finalised, activists have to remember that they cannot influence the contents of the document anymore. It's now a "yes or no" question.

Those who want to fight ACTA need to go to their elected representatives or whoever it is that ratifies treaties in their country (or union, thinking of the EU) and say it's too flawed to accept. As I say, time hasn't run out for them yet, but there's not much of it left.

As the European Commission has said, failure to ratify will mean it's "back to the drawing board".

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