Much Ado About ACTA

There have been protests in the streets of Europe, a resignation of a European Union Rapporteur and petitions by the public all over the world in an attempt to stop the progress of Anti-Counterfeiting Trade Agreement (ACTA)… but what is all the fuss about?

Over the course of two blogs we look at the potential impact of ACTA from both sides of the Atlantic. The US perspective is provided by Tim Bukher of New York lawyers Handal & Morofsky, LLC.

So what is ACTA…?   ACTA is a multinational treaty with the purpose of establishing an international legal framework for targeting counterfeit goods, generic medicines and copyright infringement on the Internet. If ratified, member states would create a new supranational governing body (like the UN, WPO or EU).

Large businesses that rely on Intellectual Property to generate revenue have been lobbying for ACTA (or something like it) for years. In their view, ACTA would respond to increases in the global trade of counterfeit goods and pirated copyright protected works.

On the other hand, opponents of ACTA say that it adversely affects fundamental rights including freedom of expression and privacy. Opponents also argue that the secret nature of the negotiations has excluded those who would be most adversely affected by an introduction of ACTA from giving their view point on it. Opponents, including many legal scholars, in the United States have even questioned the constitutionality of the United States Trade Representative’s (USTR) authority to sign ACTA on behalf of the US.

Who’s in on the ACTA? 

It has been signed by the United States, Australia, Canada, Japan, Morocco, New Zealand, Singapore, South Korea, the European Union and the vast majority of its member states.

It therefore covers some major brand owning nations and some known more for manufacturing but notably none of the BRIC countries.

The agreement will only come into force after ratification by 6 countries. After entry into force, the treaty would only apply in those countries that ratified it.

What is all the fuss about?

Google “ACTA” and it will soon become clear that this is a hugely contentious treaty which none of its signatories have yet worked out how to implement.

We look at just 4 key provisions and the reactions on both sides of the Atlantic to ask why it is so controversial and why some see it as so necessary.

1. Provisions to order infringers to provide information on the goods it “controls” and damages as a result of an infringement. The EU Perspective – The issue of damages has become a contentious issue as the current frame work provides for a measure of value in relation to the damages suffered, including lost profits, the value of infringed property at market price, or a suggested retail price. Opponents of ACTA say that the principle does not reflect the economic loss suffered by the rights holder and would lead to the excessive valuation of damages in any infringement action.

The US Perspective – ACTA’s damage measurement mechanism is in fact one of the less contentious provisions from the US perspective. Specifically, the provision which allows damages to be calculated as “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 is an existing damage theory mechanism under the US legal scheme.

2. Border officials to be able to act against suspect goods on their own initiative or upon request from a rights holder.

The EU Perspective – ACTA proposes for officials at border controls to be able to act against suspect goods on their own initiative or upon request of a rights holder. This would include consignments for commercial use but thankfully not goods of a non-commercial nature such as travellers’ personal luggage. This sounds much like what the EU already has under the Border Measures Directive and therefore, at present, the impact may not be felt.

The US Perspective – Likewise, the ACTA’s border control provisions are nearly identical to the already-existing import protection mechanisms under the US Anti-Counterfeiting Consumer Protection Act of 1996 (ACPA). The ACPA is currently used to combat the import of counterfeit goods which infringe on trademark rights (e.g., Lanham Act violations), but can arguably be expanded to include copyright infringing goods. In any case, this particular provision of ACTA would not significantly alter existing US law.

More to come in Part 2…