KEI notes on the EU leak of the ACTA text

On 12 February 2010, the Council of the European Union distributed a table drawn up by the Commission Services, outlining the positions of various counties regarding civil enforcement and the special requirements relating to the Internet. A copy of this 44 page document was leaked on March 1, 2010, and is attached to this blog. A text version of the table is available from

Michael Geist (here and here), Cory Doctorow, Nat Torkington and others have blogged on this as well.

The following are KEI comments on some parts of the EU document.

Types of IP covered

On page 2, the EU insists that “All IPR” should be included in the civil enforcement section. This is also said to be the US/Japan position. The USTR has been telling NGOs and Congressional staff that it only wanted copyright and trademarks included, so the EU report of the US position will surprise some persons. The EU reports that Singapore, Canada and New Zealand only want to include copyright and trademarks.

ACTA as an attack on liability rules

A “liability rule” regime for intellectual property rights is one where an infringement is deliberately allowed, in cases where some type of “reasonable” or “adequate” compensation or remuneration is available. This is explicitly allowed in Article 44.2 of the TRIPS. One important example of such a liability rule regime in U.S. law is 28 USC 1498, concerning uses of patents, copyrights or plant breeder rights by or for the federal government. Another example involves infringements of architectural plans in buildings under construction in Canada. Liability rules are mandated for certain infringements of layout-designs (topographies) of integrated circuits, in Article 37 of the TRIPS. Liability rules have also been considered for other cases, such as access to orphaned copyrighted works. Many academic writers, including for example Jerome Reichman or Mark Lemley, have argued that liability rules should be implemented more extensively as part of broader reforms in the area of intellectual property right policy.

In many actual or proposed implementations of liability regimes for copyrighted works or patented inventions, the “infringer” would have to be shielded from injunctions, and the liability for using works or inventions would be limited to some reasonable amount. The ACTA, however, seems to be targeting liability rules, as follows.

First, the ACTA would reduce the current flexibility regarding injunctions. On page 2, the EU says that measures, procedures and remedies should be “effective, proportionate and deterrent.” On page 3, the EU/US and Japan are reported to want to require the possibility of injunctions in all cases of infringement. The injunctive relief would include

“an order to a party to desist from an infringement, including an order to prevent infringing goods from entering into the challenges of commerce and to prevent their exportation.”

While this is often if not normally the case for copyright, trademark or patent cases, there are important exceptions (as noted above) as is now allowed for in Article 44.2 of the TRIPS. The possibility of eliminating injunctions in certain cases does not appear in the leaked versions of the ACTA text on injunctions.

The EU wants “added value” language that would extend injunctions against intermediaries. All of these measures and others undermine the possibility of liability rule regimes, and create all sorts of new risks for businesses and consumers.

Article 2.2 of ACTA concerns damages in cases of infringements. The EU table entries for Article 2.2 run six pages (pp 4-9). This section is quite important, and includes proposals that go far beyond existing national laws and global norms. The EU and other countries are pushing for language requiring judicial authorities to consider “lost profits.” There is also a proposal to require judicial authorities to consider:

the value of the infringed good or service, measured by the market price, the suggested retail price, or other legitimate measures of value submitted by the right owner.”

The US and Japan propose that judicial authorities be required to consider

“any legitimate measure of value that may be submitted by the right owner.”

In cases involving an alternative of statutory damages, the US proposes that “right owners shall have the right to choose the . . . alternative” they want.

Taken together, ACTA will dramatically change global norms for damages, and change national laws in several countries.

For an earlier discussion of these issues, with several examples, see ACTA and changes in global norms for damages and injunctions.

EU opposes protections of fair use or fair dealings

In the Internet section of ACTA, there is a provision concerning “third party liability” and recognizes:

“considerations of exceptions or limitations to exclusive rights that are confined to certain special cases that do not conflict with a normal exploitation of the work, performance or phonograph, and do not unreasonably prejudice the legitimate interests of the right owner, {US: including fair use, fair dealing, or their equivalents.}”

The EU proposal is to delete the fair use/fair dealing language: {EU: including fair use, fair dealing, or their equivalents.”]

ACTA and the three step test.

Under the Berne and Rome Conventions and the TRIPS agreement, the current flexibility to have exceptions and limitations to exclusive rights in fact go beyond those included in the three step test. For example, areas where limitations and exceptions to exclusive rights do not depend upon the 3-step test include the following:

  • Article 6 of the TRIPS (the first sale doctrine)
  • Article 40 of the TRIPS (Control of anticompetitive practices)
  • the Appendix to the Berne Convention
  • Articles 10, 10bis, 11bis, and 13 of the Berne Convention
  • Article 15 of the Rome Convention.

These flexibilities are not recognized in the leaked ACTA language. ACTA would thus appear to narrow the grounds for limitations and exceptions in the area of copyright, by implying that all exceptions would be subject to the 3-Step test.

If the European Union’s February 12, 2010 analysis of the ACTA negotiations is accurate, and one assumes it is, it provides more evidence that the secrecy of the ACTA negotiations is designed to shield from public scrutiny and domestic accountability a reckless assault on balance and safeguards in the enforcement of intellectual property laws.