The AntiCounterfeiting Agreement – by Tom Walsh

The first issue I will pass upon regarding the recently released ACTA text is the definition of “willful trademark counterfeiting or related rights piracy on a commercial scale.” This concept is defined in Section 3, Article 2.14 of Chapter 2. The definition is quite broad in scope and encapsulates “(a) significant willful copyright or related rights infringements that have no direct or indirect motivation of financial gain; and (b) willful copyright or related rights infringements for purposes of commercial advantage or financial gain.”

Even though Subsection (b) generally conforms to traditional views of counterfeiting, Subsection (a) has been the subject of much controversy and merits further examination. At first glance, there appears to be a conflict between the concept’s requirement that the infringement or piracy be on a “commercial scale” and the definition’s clear statement that the infringement or piracy need not have any financial motivation. However, it is clear that Subsection (a) targets large-scale, anti-copyright file sharing networks such as The Pirate Bay.

The drafters are correct to permit rights holders to press claims against anti-copyright groups who distribute protected content. When a tangible product is counterfeited, supply of the actual product is increased. An increase in the supply of the aggregate market for the product should create undesired downward pressure on the price of the actual product. Conversely, in cases of file-sharing, the counterfeit product is digital in nature and supply is virtually unlimited. Each time a file is shared, demand decreases while the supply of that file remains unchanged. Rights holders therefore require tools to control supply of their digital assets in order to preserve equity.

However, while I commend the drafters of ACTA for providing rights holders with addressing piracy by anti-copyright persons and organizations, Subsection (a) is ripe for abuse, or at the least heavy-handedness, on two fronts as a result of its present vagueness. First, the released ACTA text does not define the term “significant”. The lack of precision in drafting this term may lead to the unintended prosecution of smaller-scale infringers as member states struggle to quantify “significant” piracy. In the United States, we have seen this in prosecution of commercial claims by the RIAA against music piracy. In an effort to publicize the issue and deter future piracy, the RIAA initiated lawsuits against individual infringers. While the lawsuits were effective at deterrence, it was by no means popular.

A second concern for individuals under Subsection (a) is the use of conspiracy laws to target P2P networks. Under this legal theory, even a legitimate user of a P2P network could face criminal liability if other users of that same network engaged in illegal file sharing. While large-scale infringers would be subject to criminal prosecution, such prosecution may also envelope small-scale or “insignificant” infringers, contrary to the intentions of the drafters.

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