The October 2010 version of the ACTA text is inconsistent with several areas of U.S. law, and proposals for new laws in the areas of the reform of patent damages and access to orphaned copyrighted works. In particular, the obligations in the ACTA text do not incorporate many of the areas of limitations and exceptions to remedies found in U.S. law, and in the statutes of some other countries.
USTR, and its defenders in and outside of the government, claim that this is not important, because the U.S. can ignore the plain language of the ACTA agreement, and make exceptions, under the flexibility of Article 1.2.1 of the ACTA, which reads:
ACTA ARTICLE 1.2: NATURE AND SCOPE OF OBLIGATIONS
1. Each Party shall give effect to the provisions of this Agreement. A Party may implement in its domestic law more extensive enforcement of intellectual property rights than is required by this Agreement, provided that such enforcement does not contravene the provisions of this Agreement. Each Party shall be free to determine the appropriate method of implementing the provisions of this Agreement within its own legal system and practice.
The key sentence the USTR refers to is: “Each Party shall be free to determine the appropriate method of implementing the provisions of this Agreement within its own legal system and practice.”
This language is taken from Article 1.1 of the TRIPS Agreement.
TRIPS Article 1
Nature and Scope of Obligations
1. Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement. Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.
To be very blunt about things, no one seriously argues that Article 1 of the TRIPS agreement is a catch-all get of jail free card for the specific obligations in the TRIPS Agreement. If USTR wants to argue that Article 1.2.1 of the ACTA is an all purpose exception for ACTA, what is USTR saying about Article 1 of the TRIPS agreement? Anything goes?
While Article 1.1 of the TRIPS does provide important flexibility in both agreements, it is a vast overstatement and intellectually dishonest to suggest that it does what USTR claims.
In the context of the WTO disputes involving TRIPS, every country that has been sued for a TRIPS violation has used the exact same language in Article 1.1 of the TRIPS as a defense. No one would argue that Article 1.1 of TRIPS has trumped a clear obligation of the TRIPS agreement. This includes two cases where the United States was directly involved, once as a plaintiff, and once as a defendant.
In a 19 December 1997 Appellate Body Report in a dispute involving the United States and India,, India used this defense, but still was found in violation of obligations in the TRIPS. The Appellate Body found that:
(a) India has not complied with its obligations under Article 70.8(a) to establish “a means” that adequately preserves novelty and priority in respect of applications for product patents in respect of pharmaceutical and agricultural chemical inventions during the transitional periods provided for in Article 65 of the TRIPS Agreement; and
(b) India has not complied with its obligations under Article 70.9 of the TRIPS Agreement;
In a dispute where the United States was sued by the European Union over overly broad exceptions to copyright law, the U.S. also raised this defense, but lost. The panel in the copyright case dismissed the U.S. defense as follows:
We note that while the WTO Members are free to choose the method of implementation, the minimum standards of protection are the same for all of them./fn167/
fn 167.I n this regard, the United States refers to Article 1.1 of the TRIPS Agreement, which provides that Members “shall be free to determine the appropriate method of implementing the provisions of this Agreement”.
In a dispute involving a complaint by the European Union against exceptions in the patent law of Canada, Canada also raised as a defense Article 1.1 of the TRIPS. This defense was discussed at some length in the panel report, and while it undoubtedly was helpful in Canada prevailing on some important elements of the case, it lost others, with the panel deciding:
(1) Section 55.2(1) of Canada’s Patent Act is not inconsistent with Canada’s obligations under Article 27.1 and Article 28.1 of the TRIPS Agreement.
(2) Section 55.2(2) of Canada’s Patent Act is not consistent with the requirements of Article 28.1 of the TRIPS Agreement.
It is in general a very poor strategy to rely upon an unwritten understanding about the flexibility in trade agreements, particularly when that understanding is not shared by other parties to the agreement. USTR surely appreciates the limits of the general statements in the ACTA, when contrasted to the more precise and plain language of the obligations in the civil enforcement chapter. Arguments that the U.S. is not signing an agreement with clear obligations are not very persuasive. A more likely explanation is that U.S. government officials are comfortable with signing ACTA because they do not believe it will ever be enforced against the United States, and only against weaker trading partners, including in particular those in developing countries. I don’t see how the Obama Administration can be proud of lying to the public about the nature of the agreement it is about to sign, or about designing a regime that will create an unfair double standard to the disadvantage of poor people living in developing countries.
There is a further possibility, for not only the United States, but for the European Union and other parties to ACTA. That is, the new ACTA norms may well be taken seriously, even in the United States and in other high income countries, by judges as well as by legislators. In an effort to extract higher rents from developing countries, the parties to ACTA will have created a new restrictive regime that reduces the policy space now available to create exceptions through limits on remedies, and to shape norms and standards for damages and injunctions in ways that solve some of the obvious flaws in the intellectual property systems it will regulate. One of the first tests for ACTA will be the resolution of the orphan copyrighted works problem, an area where ACTA will do real damage, if taken seriously. Another future area of policy making, on the horizon, will be limitations on remedies for undisclosed patents involving standards, following the precedent set by the US health care reform legislation on undisclosed patents on biologic drugs. Here too ACTA will limit sensible policy options, if taken seriously.
4. As well as the purposes and objectives of the TRIPS agreement, defenses also raised in the other WTO TRIPS cases.
The following analysis is provided by a WTO web page on interpretation and application of Article 1 of the TRIPS.
B. Interpretation and Application of Article 1
1. Article 1.1
(a) “free to determine the appropriate method of implementing”
2. In India — Patents (US), the Appellate Body reviewed the Panel’s decision that India did not meet its obligations under the TRIPS Agreement in that it failed to provide “a sound legal basis to preserve novelty and priority” of certain patent applications:
“[W]hat constitutes such a sound legal basis in Indian law? To answer this question, we must recall first an important general rule in the TRIPS Agreement. Article 1.1 of the TRIPS Agreement states, in pertinent part:
‘Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.’
Members, therefore, are free to determine how best to meet their obligations under the TRIPS Agreement within the context of their own legal systems. And, as a Member, India is ‘free to determine the appropriate method of implementing’ its obligations under the TRIPS Agreement within the context of its own legal system.”(2)
3. In Canada — Patent Term, the Panel examined Canada’s argument that Article 1.1 permitted it to maintain a term for patent protection of 17 years counting from the date of grant of a patent, in spite of the minimum requirement, under Articles 33 and 70, of granting patent protection for a period expiring 20 years from the date of filing of such application. The Panel noted the discretion of Members, under Article 1.1, to determine the appropriate method of implementing their obligations under the TRIPS Agreement, but emphasized that such discretion did not extend to choosing which obligation to comply with:
“… Article 33 contains an obligation concerning the earliest available date of expiry of patents, and Article 62.2 contains a separate obligation prohibiting acquisition procedures which lead to unwarranted curtailment of the period of protection. We recognize that some curtailment is permitted by the text of these two provisions. However, Article 1.1 gives Members the freedom to determine the appropriate method of implementing those two specific requirements, but not to ignore either requirement in order to implement another putative obligation concerning the length of effective protection.”(3)
fn 2. Appellate Body Report on India — Patents (US), para. 59.
fn 3. Panel Report on Canada — Patent Term, para. 6.94.
Blogs and press reports
- Erik Josefsson, Is the US going to get a free pass in ACTA?, October 23, 2010.
- Mike Masnick, US Basically Says It’ll Ignore Anything In ACTA That It Doesn’t Like… So How About Everyone Else? from the ignore-away dept, TechDirt, October 25, 2010
- USTR positions in China WTO TRIPS dispute at odds with talking points on ACTA flexibility