ACTA Faces Criticism at WTO and in the United States

3 November 2010

A nearly concluded multi-country agreement on counterfeiting came under fire at the WTO last week, as some members accused the deal, negotiated among a group of mostly industrialised country governments, of undermining multilateral cooperation and global rules on intellectual property.

The prospective Anti-Counterfeiting Trade Agreement (ACTA) is also facing questions within one of its leading proponents, the United States, surrounding uncertainty about whether clauses in the draft deal would contradict US law.

During the 26-27 October session of the WTO Council for Trade-related Aspects of Intellectual Property Rights (TRIPS), developing countries such as China and India expressed concerns about ACTA's consistency with WTO intellectual property rules, raising the possibility of trade disputes if non-parties to ACTA end up affected by the future agreement's provisions.

According to countries taking part in the ACTA negotiations, a final accord is only weeks away; most major differences were resolved during a round of talks in Tokyo a month ago (see BRIDGES Weekly, 7 October 2010, http://www.ictsd.org/bridges-news/bridges/issue-archive/anti-counterfeiting-trade-pact-‘99-percent’-complete).

In the TRIPS Council, China called for scrutiny about the consistency and compatibility between ACTA and the WTO legal framework, particularly about whether it risked creating additional trade-restricting obligations for WTO members. China also criticised the lack of transparency that characterised much of the ACTA negotiations.

The Indian delegate warned that ACTA risked "completely upset[ting] the balance of rights and obligations of the TRIPS Agreement," and could "potentially undermine seriously decisions taken multilaterally such as the Doha Declaration on Public Health in the WTO and the Development Agenda in [the World Intellectual Property Organization]." He expressed concern that  depending on what ACTA parties finally agree to, they might end up subjecting non-parties to higher levels of intellectual property enforcement than those demanded under the TRIPS, distorting the legitimate movement of traded goods in transit, and weakening the institutional status of the WTO and WIPO.

Sources report that countries participating in the ACTA process rejected these allegations, arguing that the prospective agreement did not affect TRIPS and was necessary to tackle counterfeiting, particularly for dangerous counterfeit medicines and spare parts.

ACTA is also facing challenges from within key parties - namely, the United States. Inside US Trade, a Washington-based trade news publication, reported last week that US patent officials are unsure whether ACTA would contradict provisions in the new healthcare reform law, as well as in other US patent-related rules.

At issue are provisions in the US healthcare reform and in other US patent laws that limit damages and injunctions for patent infringement in certain cases, such as in the context of developing generic drugs or performing surgery. ACTA provisions contain no such cap on compensation.

Members of European Parliament have also raised questions about how ACTA might interact with the domestic laws of EU member states.

ICTSD reporting; "U.S. Patent Office Unsure If ACTA Conflicts With Health Care Reform," INSIDE US TRADE, 29 October 2010; "L'impact de l'ACTA en Europe inquiète une eurodéputée," NUMERAMA, 30 October 2010.

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