[Ip-health] Notes on the August 25, 2010 version of the ACTA consolidated text, Part 1

Malini Aisola malini.aisola at keionline.org
Tue Sep 7 13:41:55 PDT 2010

Source URL: http://keionline.org/node/930 

Notes on the August 25, 2010 version of the ACTA consolidated text, Part
By James Love
7 Sep 2010

KEI has obtained a copy of the August 25, 2010 version [1] of the ACTA
consolidated negotiating text. Here are some initial notes on the

The preamble in the August, 25, 2010 text includes 10 paragraphs, of
which only 3 do not have brackets. 

The United States, the EU and Japan do not support the first paragraph
in the preamble, which includes the text of Article 7 of the TRIPS, on
objectives. The bracketed text in the ACTA is:

        Noting that enforcement of {intellectual property rights} should
        contribute to the promotion of technological innovation and to
        the transfer and dissemination of technology, to the mutual
        advantage of producers and users of technological knowledge and
        in a manner conducive to the social and economic welfare, and to
        the balance of rights and obligations;

Instead, the U.S. wants to devalue this clause by including a general
reference in another paragraph of the preamble, that the parties are
"Determined to implement this Agreement in a manner consistent with the
objectives and principles set out in the TRIPS Agreement;"

Chapter One, Section A: Initial Provisions.
Article 1.4: Privacy and Disclosure of Information.

The US, Japan, Singapore, Korea, Swiss and Morocco do not support
paragraph 2, which would protect written information from being
disclosed or used "for a purpose other than that for which the
information was requested or required, except with the prior consent of
the Party providing the information."

Article 1.X safeguards

Europe wants to delete this entire article, which provides language
similar to Article 7, 8 and 40 of the TRIPS agreement. 

The EU, US, Mexico, Korea, and Japan want to delete this paragraph:

        Article 1X. 3 Appropriate measures, provided they are consistent
        with the provisions of this Agreement, may be needed to prevent
        the abuse of intellectual property rights by right holders or
        the resort to practices which unreasonably restrain trade or
        adversely affect the international transfer of technology.
Chapter One, Section B: Definitions.
Committee is defined as "the ACTA Committee established in Chapter

Intellectual property rights are still defined as all categories in
Sections 1 through 7 of Part II of the TRIPS.

Pirated copyright good means any good that are copies made without the
consent of the right holder or person duly authorized by the right
holder . . . where the making of that copy would have constituted an
infringement of a copyright or a related right under the law of the
country in which the procedures set out in [Sections X are invoked;]/6 

/fn6 Drafters note: Footnotes in other chapters to be deleted if
definitions are added to this Section.

KEI Comment: The text could be more explicit that this definition does
not extend to copies that are lawfully made, without the permission of
the right owners.

Chapter Two, General Obligations.
Article 2.X.2

Only supported in full by the EU, is this important text:

        [EU: Each party shall ensure that the rights of the [EU/CH:
        defendants and] third parties shall by duly protected and

KEI Comment: Why can't the Obama administration support this?

On the issue of the proportionality of enforcement measures and remedies
to the seriousness of the infringement, the EU/CH/Mor position is the
strongest. The Mexico, US, Japan, NZ, Canada, Australia position is
weaker. On the issue of the interests of third parties, this is

Chapter Two, General Obligations, paragraph 4, dealing with use by, for,
or authorized by a government.
In paragraph 4, the US and Australia, NZ, the US and Canada, and the EU
have made different proposals, as follows:

        4. [US/Aus: Notwithstanding the other provisions of this
        [J:Chapter][Agreement], the parties may limit the remedies
        available against a government's unauthorized use of
        intellectual property covered under this Agreement or against
        such unauthorized use by a third party that was authorized by a
        government, to payment of remuneration. The right holder shall
        be paid adequate remuneration in the circumstances of each case,
        taking into account the economic value of the authorization.] 
        [NZ: Notwithstanding the other provisions of this Chapter in
        relation to civil remedies and criminal penalties, the Parties
        (a) limit civil remedies available against a government's
        unauthorized use of intellectual property covered under this
        Agreement or against such unauthorized use by a third party that
        was authorized by a government to payment of remuneration. The
        right holder shall be paid adequate remuneration in the
        circumstances of each case, taking into account the economic
        value of the authorization; and
        (b) limit or exclude criminal penalties for such unauthorized
        use of intellectual property rights.]
        [Can/US: In other cases, the remedies under this Chapter shall
        apply or, where those remedies are inconsistent with a Party's
        law, declaratory judgments and adequate compensation shall be
        [EU suggests deleting this article.]

KEI Comment: This is a very important part of the ACTA. In the current
draft, the United States, NZ and Australia are moving to the TRIPS
norms, which allow the flexibility to use limits on remedies for
infringement to create liability rules in some areas. This is quite
encouraging. There is zero evidence that statutory exceptions on
injunctions or damages have contributed to counterfeiting, and many
country have some types of exception in their national laws, including
of course the United States, which currently makes use of these
flexibilities more than any other country. The EU opposition to the
proposals by the US, Canada and New Zealand are unfortunate, and are
counter to legal traditions in several EU member states. The EU has yet
to provide a public rationale for its opposition to the statutory
exceptions to remedies that have been proposed in paragraph 4.

Chapter Two, General Obligations, paragraph 5, dealing with scope of
The most fundamental issue in the ACTA is the scope of intellectual
property rights addressed in the agreement. The divisions between the
negotiating parties are set out in paragraph 5 of Chapter two, which now

        5. {MX/Aus/Sing/NZ/US/Can: define scope of the intellectual
        property rights covered in the Agreement} {EU/CH: the scope of
        intellectual property rights will be defined at the start of
        each chapter.}
        {Aus/US/NZ/Can/Sing: This agreement shall apply [NZ/Can/Sing:
        only] [Kor: at least] to trademark counterfeiting and copyright
        piracy unless otherwise specified. The Section on the Digital
        Environment shall apply only to copyright and related rights.}

KEI Comment: Here the EU/Swiss position is to decide the scope of IP
types in each chapter, while Australia, New Zealand, Canada and US want
to narrow the ACTA to only trademark counterfeiting and copyright

Chapter Two, Civil Enforcement, Availability of Civil Procedures 
Article 2.1.1 provides the first substantive example of the division
among the parties on the scope of the agreement, with Japan, Switzerland
and the EU holding out for including patents and other Part II TRIPS IP
in civil enforcement, and Singapore, Canada, New Zealand, Australia, the
US and Mexico seeking to limit the chapter to copyright and related
rights and trademarks. 

        Article 2.1 Availability of Civil Procedures
        1. [Can/US/NZ/Sing/AUS: In the context of this section, e][E]ach
        Party shall make available to right holders civil judicial
        procedures concerning the enforcement of any {J/CH/EU:
        intellectual property right} {Sing/Can/NZ/Aus/US/Mex: copyrights
        and related rights and trademarks}.
Chapter Two, Civil Enforcement, Injunctions 
The injunctions section continues to shrink. The EU and Switzerland want
two sentences. Canada, New Zealand, Australia, the US, Singapore and
Mexico want one sentence. The EU Switzerland second sentence would
extend the injunctions to "intermediaries whose services are used by a
third party to infringe an intellectual property right." Services like
ISPs, Google and eBay are among those most obviously impacted by the
EU/CH proposal on intermediaries. 

Within the core proposal there is weak support for the language on
"subject to statutory limitations under its domestic law" that has been
proposed by Canada, Australia and Singapore. This is surprising, given
the extensive efforts to change the US and the EU positions, and despite
evidence that the US and several countries in the EU make use of
extensive statutory exceptions in their own national laws, as detailed
here [2] and here [3].

        [EU/Sing: 1. ] In civil judicial proceedings concerning the
        enforcement of {Can/NZ/Aus/US/Sing/Mex: copyright or related
        rights and trademarks} {J/EU: intellectual property rights} each
        Party shall provide that its judicial authorities shall have the
        authority [Can/Aus/Sing: subject to statutory limitations under
        its domestic law] to issue an order to a party to desist from an
        infringement, including an order to prevent infringing goods
        from entering into the channels of commerce. 
        [EU/CH: 2 The Parties shall also ensure that right holders are
        in a position to apply for an injunction against intermediaries
        whose services are used by a third party to infringe an
        intellectual property right.]

One possible explanation for the US opposition to the statutory
exceptions proposal by Canada, Australia and Singapore is the US support
for more general exceptions in Article 2.x paragraph 4, discussed above,
which covers the same issues, and provides for broader exceptions. 

Chapter Two, Civil Enforcement, Damages 
The damages section of ACTA is considerably longer. In Article 2.2.1.,
the ACTA negotiators disagree on the types of intellectual property
rights covered, but they appear to have agreed on a standard for damages
that is considerably higher than found in the TRIPS, in this text:

        In determining the amount of damages {US/Can: for copyrights and
        related rights infringements and trademarks counterfeiting}, its
        judicial authorities shall have the authority to consider, inter
        alia, any legitimate measure of value submitted by the right
        holder, which may include the lost profits, the value of the
        infringed good or service, measured by the market price, the
        suggested retail price.

KEI Comment: By requiring the judicial authorities to consider "any
legitimate measure of value submitted by the right holder," including
specifically "the suggested retail price," this Article in ACTA would be
contrary to national statutes that provide for different standards, such
as limits on damages to reasonable royalties. The use of "the suggested
retail price" is an aggressive standard for liability, particularly for
some types of copyright infringement cases, and clearly inappropriate
for some cases. One obvious area where the standard will present
problems are the cases where governments seek to liberalize access to
orphaned copyrighted works. If applied to patent cases and other types
of intellectual property rights, it would be contrary to a number of
U.S. statutes, including the new health care reform bill provisions on
generic biologic medicines, and many other cases, including some cases
where zero remuneration is set out in the statute. If the standard is
applied to patent cases, it will also run directly contrary to the
proposals in the US Congress to limit the discretion of plaintiffs to
present certain methodologies in terms of damages. (See discussion here

Here, as elsewhere, the US opposition to paragraph 3 on page 4 is
significant, concerning the control of anticompetitive practices. In the
US, as in some other countries, there is no liability for infringement
in certain cases involving anticompetitive acts. This is not really
recognized in the ACTA text. How many of the ACTA parties have bothered
to include competition authorities in the negotiations? 

The US also continues to push for considerably higher global norms for
"at least" copyright and related rights and trademark counterfeiting,
including in particular on the issue of "pre-established" or "presumed"
damages, unrelated to actual harm. As Jonathan Band, CCIA and others
have pointed out, this is potentially a very costly change for countries
that do not provide for fair use defenses on infringement. 

The negotiators appear to have agreed that every country should provide
judicial authorities with the discretion to order losing parties to pay
for court costs, fees, subject to some minor qualifiers, such as "where
appropriate," or "as provided for under that Party's domestic law."

KEI Note: In the United States, under 28 USC 1498, the recover of such
fees is limited in some cases involving use by or for governments. 

        "compensation shall not include such costs and fees if the court
        finds that the position of the United States was substantially
        justified or that special circumstances make an award unjust."
Chapter Two, Civil Enforcement, Other Remedies
This section pretty much ignores the many national statutory exceptions
to the seize and destroy remedies, including those mandated by Article
37 of the TRIPS. See: http://www.keionline.org/node/890 [3]

[1] http://www.keionline.org/acta_washdc
[2] http://www.keionline.org/node/887
[3] http://www.keionline.org/node/890
[4] http://www.keionline.org/node/888

Malini Aisola
Knowledge Ecology International
1621 Connecticut Avenue NW, Suite 500, Washington DC 20009
malini.aisola at keionline.org|Tel: +1.202.332.2670|Fax: +1.202.332.2673

More information about the Ip-health mailing list