ACTA Text Is Released, but Many Questions Remain : Bowing to public pressure, the eleven proponents of the potentially far-reaching Anti-counterfeiting Trade Agreement have at long last released the draft negotiating text they are working on. The goal is

7 May 2010

The countries involved in the negotiations are Australia, Canada, the EU, Japan, Mexico, Morocco, New Zealand, Singapore, South Korea, Switzerland and the US. At first glance, the draft appears to bear out their claims that ACTA would not require participants to change their intellectual property laws. They will have no obligation to take measures with regard to intellectual property rights that are not protected under their laws, and remain "free to determine the appropriate method of implementing the agreement's provisions."

However, the text is littered with bracketed options (indicating lack of consensus) that would require, or at least permit, counties to take far-reaching action, particularly with regard to border measures and penalties for intellectual property rights violations.

Border Measures and Legal Framework

The avowed goal of ACTA is to stem large-scale illegal trade in fake trademarked products and pirated copyrighted goods. At the request of the right holder, customs authorities would be obliged to suspend the release of imports suspected of being counterfeit or pirated, but officials could also be permitted, or even required, to take action upon their own initiative.

A de minimis provision allows countries to exclude from confiscation and sanctions ‘small quantities of goods of a non-commercial nature' contained in travellers' personal luggage. This is not an obligation, however, and the text explicitly states that parties may implement more extensive IPR protection and enforcement than is required by ACTA.

Countries must provide for criminal procedures and penalties at least for "wilful trademark counterfeiting or copyright or related rights piracy on a commercial scale." This would include ‘significant' infringements that have no direct or indirect motivation of financial gain.

Furthermore, bracketed text would substitute the words ‘counterfeit' and ‘pirated' with "goods suspected of infringing an intellectual property right," which would bring products suspected of violating patents within the treaty's scope. Brackets also show that parties disagree on whether customs officials could suspend the entry of suspect goods (i.e. confiscate a shipment) even if the goods are in transit or destined for export. These provisions, pushed by the European Union in particular, worry public health advocates.

Threat to Trade in Generics

Health Action International (HAI) has raised concern that ACTA's focus on counterfeiting would contribute to a "damaging confusion between crucial generic medicines and counterfeit medicines." The organisation acknowledges that counterfeit drugs, deliberately labelled and packaged so as to deceive the customer, pose serious health risks. But generics are another matter: they have the same active ingredient(s) as the innovator product, and their names, shapes, or packaging differ from the trademarked/patented original.

HAI cautions that the application of border measures poses a particular threat to generic competition when patent rights are enforced on shipments of generic medicines while in transit. In the past year, customs authorities in various EU countries have seized several shipments of generics on their way through European ports/airports. The action was ostensibly taken to prevent the spread of counterfeits, but many think that safeguarding patent holders' interests was a more likely motivation. In the coming weeks, India and Brazil are expected to initiate a WTO dispute on the confiscation of a shipment of losartan, a generic blood pressure treatment, transiting through Amsterdam in December 2008. Although losartan is not under patent in either India (where the shipment originated) or in Brazil (the intended destination), the consignment was seized upon request by Merck, Sharp & Dohme, which holds Dutch patents on the drug (Bridges Year 13 No.1, page 13.)

Internet Downloads Targeted

Prior to release of the draft text, critics had expressed concern that ACTA would require sweeping border searches of laptops and iPods that could result in confiscation/destruction if found to house illegal down-loads of copyrighted material. There is no such requirement, but nothing prevents countries from taking such action either.

Several bracketed options are under discussion on the liability of on-line service providers when their clients download copyrighted material illegally. Although the text would not oblige service providers to monitor customers' activities, or punish them for infringements they are not aware of, countries could require service providers to ‘terminate or prevent' piracy once they have been alerted to such activity. This could, for instance, mean the termination of the client's internet account or subscription.

Another bracketed paragraph, tabled by the EU, would require ACTA parties to enable right holders to ‘expeditiously obtain' information on the identity of relevant subscribers when the right holder has notified the service provider of copyright or related rights infringement.

ACTA would also require ‘effective legal remedies', possibly including criminal penalties, against circumvention of technical protection measures intended to prevent piracy of copyrighted material.

Box Text

Last year, international trade in counterfeit and pirated goods amounted to US$250 billion, or nearly 2 percent of world trade, up from US$200 billion reported in 2007.

Illicit downloads of movies, TV shows, music and software cost European creative industries 185,000 jobs and 10 billion in revenue in 2008. More than 40 percent of software used worldwide is pirated, and 10-30 percent of medicines sold in developing countries are counterfeit.

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