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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.

ACTA Negotiations Continue In Mexico, But Secrecy Remains A Concern

January 25, 2010 Leave a comment

The United States is among more than a dozen countries meeting this week in Mexico for the next round of negotiations for the Anti-Counterfeiting Trade Agreement (ACTA) a proposed treaty to crack down on copyright and other IP theft, but discussions remain shrouded in secrecy.

Internet industry figures fear that ACTA will force participating countries to introduce tough penalties for copyright breaches to bring them into line with US laws. But the impact on many countries might be limited because the governments have already adopted many US measures as part of an earlier trade agreements between the nations.

Negotiations, which have gone for more than two years, continue with four days of meetings in Guadalajara, Mexico, starting today.

The agenda has set aside several hours for discussion of civil enforcement, border measures and enforcement procedures but has scheduled just an hour for discussion of transparency, adding to fears of secrecy among critics of the agreement.

The accord is intended to upgrade laws surrounding copyright protection for digital content following an explosion in piracy and a booming trade in counterfeit goods.

The treaty is expected to empower copyright holders, including major music and film studios, and put extra responsibility on the shoulders of internet service providers to assist with enforcement.

Participating countries – mostly developed nations, including the US, Japan, Australia and the members of the European Union – have agreed not to release detail of discussions beyond a broad overview at the start of discussions. In fact, all the governments participating in the negotiations are bound by confidentiality agreements.