On April 26, 2011, Senator Wyden released a redacted version of the Congressional Research Service (CRS) report on ACTA that has been the subject to an ongoing Freedom of Information ACT (FOIA) dispute with USTR.
(More context here, here and here).
This is a link to the report that USTR claimed they could not release because of restrictions on its use by Senator Wyden.
/wp-content/uploads/RedactedACTACRSMemotoSenWyden.pdf
The report was first released to by Mike Masnick of TechDirt, who has written this article:
- April 26, 2011, Mike Masnick, CRS Report Withheld By USTR Confirms That ACTA Language Is Quite Questionable: from the revealed dept, TechDirt.Com
Why was the document released now?
KEI has been preparing to file a FOIA appeal with the US District Court, at which point, USTR would be required to demonstrate it does not have control over the document. KEI, MSF and others have repeatedly asked Wyden’s office to release the report. Until now, Senator Wyden has been reluctant to release a report embarrassing to USTR, but also has not done anything to prevent USTR from releasing it under FOIA. For its part, USTR sees the report as problematic in terms of the EU Parliament vote on ACTA. KEI speculates the combination of the expected court appeal of the FOIA request, the interest by journalists in the report, and the deteriorating relationship between the Obama White House and some members of the Senate over the recent budget reconciliation negotiations may have collectively contributed to the decision by Senator Wyden to release the report. KEI has yet to decide if it will pursue the FOIA appeal to obtain the redacted information.
Based upon a quick read of the report, KEI offers the following comments:
The October 29, 2010 report was written by Brian T. Yeh, Legislative Attorney for the American Law Division of the Congressional Research Service (CRS), and titled: Potential Implications for Federal Law Raised by the October 2010 Draft of the Anti-Counterfeiting Trade Agreement (ACTA).
As the ACTA text was subsequently revised, the CRS report addresses some issues that were later resolved. In particular, the October 29, 2010 report addresses inconsistencies between US law and ACTA obligations regarding patents, and the European Union subsequently agreed to a footnote making it optional to include patents in the civil enforcement sections of ACTA. In releasing the report to TechDirt and others, Senator Wyden unfortunately redacted sections that addressed the inconsistencies between US patent law and the ACTA norms. This is particularly important because KEI believes the CRS report covers the exact or similar language that exists in other agreements, including the KOREA/US trade agreement, and the U.S. proposals for the TPP IP Chapter, both of which apply to broader categories of intellectual property rights, including patents.
Overall, the report is a damning indictment of USTR and the Obama Administration inter-agency review process for trade agreements, and a study in the failures of Congressional oversight of trade policy. (Senator Wyden has been one of the few members of Congress to press USTR to protect consumer interests). The USTR was negotiating ACTA under limited authority as an executive agreement, which in theory prevents USTR from signing an agreement that requires changes in U.S. law. Collectively, USTR, the USPTO, the Library of Congress, the Department of State and the Department of Justice signed off on positions in the ACTA that were plainly inconsistent with a number of U.S. statutes. The CRS report also makes it clear that ACTA provisions are in conflict with proposed legislation on orphaned copyrighted works.
USTR’s more aggressive arguments that exceptions to specific ACTA obligation are allowed weakens the agreement.
The report begins by reviewing the assertions by the United States Trade Representative that the ACTA includes provisions that allow member states to ignore what appear to be plain obligation of the ACTA.
The CRS report notes on page two:
Depending on how broadly or narrowly several passages from the ACTA draft text are interpreted, it appears that certain provisions of federal intellectual property law could be regarded as inconsistent with ACTA, as identified below. However, the ACTA draft text also includes several caveats and language that appear to provide Parties with a certain degree of discretion and flexibility in the meeting the obligations set forth in the agreement–therefore, it is debatable whether these apparent inconsistencies are significant or whether they would require changes to federal law in order for the U.S. to be considered in compliance with ACTA’s general obligations.
The CRS then discusses three areas where USTR claims the text permits the U.S. to ignore specific ACTA norms. These include a very liberal and aggressive interpretation of the language in Article 1.2.1 that says:
CHAPTER TWO, LEGAL FRAMEWORK FOR ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS Section 1: General Obligations
“Each Party shall be free to determine the appropriate method of implementing the provisions of this Agreement within its own legal system and practice.”
KEI has twice written about this assertion:
- USTR’s implausible claim that ACTA Article 1.2 is an all purpose loophole, and the ramifications if true
- USTR positions in China WTO TRIPS dispute at odds with talking points on ACTA flexibility
In the CRS Report, Yeh points out that the interpretation of this language will take place in the ACTA Committee, and the U.S. could seek to block a restrictive or advocate a liberal interpretation of the provision. What Yeh does not dwell on are the consequences of the US succeeding in establishing that the ACTA parties can ignore provisions of the text when they find them inconvenient. This effectively makes the ACTA agreement much weaker — a result the U.S. could have avoided if it bothered to address the inconsistencies in U.S. law before the text was finalized. In essence, the incompetence and/or indifference of USTR, USPTO, DOJ, State and the Library of Congress to known problems with the ACTA text have presented the U.S. with no option but to argue that the text is really not that binding on the parties.
Even more important is the potential impact of such an interpretation on the WTO TRIPS agreement, which deals with both rights and remedies for the core intellectual property rights obligations in the WTO. In an effort to soften the consequences of non-compliance with ACTA, the US has ironically taken the same position as was taken by China in a WTO dispute over the enforcement of intellectual property. (See: USTR positions in China WTO TRIPS dispute at odds with talking points on ACTA flexibility).
Second, Yeh suggests it may be possible in some cases to claim that exceptions to remedies can be considered permissible exceptions to rights. Again, an aggressive interpretation in this regard has the same result as an aggressive interpretation of Article 1.2.1 — it weakens the overall importance of the ACTA text, particularly since there are no restrictions in ACTA on exceptions to rights.
Third, Yeh suggests that another clause in ACTA can be interpreted as broad exception from ACTA enforcement obligations in cases of infringement of intellectual property by state or federal government employees:
4. No provision of this Chapter shall be construed to require a Party to provide for liability of officials for acts undertaken in the performance of their official duties.
Yeh cites his own CRS report on the Infringement of Intellectual Property Rights and State Sovereign Immunity (CRS Report RL 34593), and also makes reference to a federal statute limiting the liability of NARA officials for copyright infringement. An interpretation as broad as Yeh has suggested would eliminate from the ACTA a wide range of activities that are now considered infringement, including the infringement of software or copyrighted educational materials by schools and universities — a result that would be surprising given U.S. trade objectives.
Injunctive Relief
Yeh is not impressed with USTR’s contention that there is no conflict between the ACTA obligation that “judicial authorities shall have the authority” or order injunctions, with specific provisions in U.S. law that “prohibits injunctive relief in a particular instance,” such as the one specific Lanham case cited by Yeh. Yeh recognizes the concerns of ISPs about the DMCA safe harbor protections, an issue frequently raise by Verizon and others during the negotiations.
Not discussed in the redacted version of the report are the several cases in patent law where injunctions are not available, since most of the CRS analysis was based upon an assumption that USTR would remove patents from the Civil Enforcement Section of ACTA. However, as noted above, readers should keep in mind that patents are included in the injunction sections of the Korea/US FTA and the proposed text of the TPP.
Yeh discusses the language in the ACTA that parallels Article 44.2 of the TRIPS agreement, allowing governments to eliminate injunctions in cases where remuneration or compensation is available under various compulsory licensing or liability rules. This is an important flexibility in the ACTA that was added quite late, after more than a year of raising the issue with USTR and other federal agencies.
Unfortunately, and not addressed specifically by Yeh, there is remaining an ambiguity between these provisions and the damages sections of the ACTA — an issue that turns out to be quite important.
Yeh notes the inconsistency between ACTA’s requirement that “Each Party shall provide . . . its judicial authorities shall have the authority to order the infringer. . . to pay the right holder damages adequate to compensation for the injury . . . ” and the Copyright Act exception to the availability of damages for certain willful infringement for Satellite carriers to television signals.
Orphan Works
On pages 8 and 9, Yeh’s memorandum concludes with a discussion of orphan works. KEI was written about this topic in:
Access to Orphan Works, and ACTA provisions on damages, October 20, 2010.
Here Yeh makes the following observations
Congress could continue to consider legislation in the area of reform to damages in patent litigation or access to orphaned copyrighted works that resemble approaches in the 110th and 111th Congresses. Such approaches specify methods of calculating monetary damages in patent cases36 and call for limitations on damages and injunctive relief in cases involving orphan works.37 ACTA, as an executive agreement that reportedly will not be submitted to Congress for approval,38 does not reduce, constrain , or otherwise impact the authority and prerogative of Congress to enact such measures that change federal law.39. Further, Congress may not be compelled to take into account the requirements of an agreement that it had no formal role in approving. On the other hand, it may well be that Members of Congress might be reluctant to consider legislative approaches that would alter federal law in a manner that might make the United States in default of its ACTA obligations. The seriousness of such a concern may turn on the extent to which the United States may be held accountable for ignoring its ACTA obligations, or how successful the United States is in convincing other ACTA Parties of its compliance with the ACTA commitments even with such legislation. [footnotes omitted]
Here Yeh acknowledges that ACTA is not consistent with the proposals to deal with orphaned copyrighted works, an issue of high importance, particularly following the rejection by the District Court of the Google Book Settlement (GBS). How did this happen? KEI and other communicated with USTR about the orphan works issue for more than two years of the negotiations. In the Spring of 2010, Stephen Tepp from the Library of Congress Copyright Office meet with TACD at the US Department of State, and said that the ACTA text was consistent with the orphan works legislation. A few weeks later, Tepp left the Copyright Office to take a job with the Chamber of Commerce, working on IP enforcement issues. Even after Tepp left the Copyright Office for the Chamber of Commerce, KEI communicated with high level persons in the Copyright Office, the USTR, the USPTO and the Department of Commerce about this issue. In the end, USTR was either too incompetent to appreciate the consequences of the text on orphan works, or was indifferent to the consequences. Other federal agencies, and the several U.S. Senators contacted about this issue never fixed the problem.
The mistakes in ACTA are amplified in the TPP negotiation and in other trade agreements
As noted by Yeh, there is, somewhat ironically, no real enforceability of ACTA, and to some extent, the inconsistencies with U.S. may or may not matter much, since the U.S. clearly does not feel bound by the specific problems in ACTA. However, many of the very same flaws in the ACTA have been proposed in the KOREA/US FTA and the proposed Trans Pacific Partnership Agreement — agreements that designed with dispute resolution to give them more teeth. Even more important is the fact that the Korea/FTA and the TPP both include patents. The CRS report would have been much longer if it did not assume that ACTA would eventually eliminate mandatory application to patents in the civil enforcement section. There are a number of areas in U.S. law where both injunctions and damages for patent infringement are limited by statute, including several in the areas of medical and nuclear technology.
Concluding thoughts
ACTA and several of the recent trade agreements agreements are designed to impose tough intellectual property obligations on our trading partners. USTR does not approach the negotiations as if the agreements are to be taken seriously by U.S. lawmakers or judges. This is a risky and ethically troubling approach. Global trade agreements are increasingly important, but also are often nontransparent and industry captured forms of global lawmaking, not subject to the same types of democratic processes as national law making. Morally, it is offensive for the United States to use its economic power to impose norms on its trading partners that it does not intend to seriously honor itself. It may also be short sighted, as these norms may in the longer run be more binding than the Congress and the USTR appreciate or acknowledge.