Since the first official draft of the Anticounterfeiting Trade Agreement (ACTA) was released to the public in April 2010, much attention has been paid to what could become the next significant international treaty affecting trademark rights.
Background on ACTA
Preliminary talks about a trade agreement that would target counterfeiting took place throughout 2006 and 2007 among Canada, the European Union, Japan, Switzerland and the United States. On October 23, 2007, U.S. Trade Representative Susan C. Schwab publicly announced that the U.S. government was seeking to negotiate ACTA, an effort aimed at providing a framework for countries committed to strong intellectual property rights (IPR) protection to more effectively combat the challenges of IPR infringement, particularly in the context of piracy and counterfeiting. While the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement represents an international minimum standard for IPR protection, the U.S. Trade Representative envisioned ACTA as a “leadership agreement, setting a positive example for nations that aspire to strengthen IPR enforcement.” She also envisioned that participation in ACTA would grow over time, reflecting the growing international consensus on the need for strong IPR enforcement.
ACTA participants aimed to reach agreement in three main areas: (1) international cooperation, including capacity building and technical assistance in improving enforcement, and international cooperation among enforcement agencies; (2) enforcement practices, including public/private advisory groups, specialized intellectual property expertise within law enforcement to ensure effective handling of IPR cases, and measures for raising consumer public awareness; and (3) legal framework, including criminal enforcement, border measures, civil enforcement, optical disc piracy, and IPR enforcement issues relating to Internet distribution.
On February 15, 2008, the U.S. Trade Representative sought public comments on these topics, and it has held stakeholder dialogues to brief various stakeholders on the status of the ACTA negotiations. Other ACTA negotiators such as the European Union, Australia and New Zealand have also held stakeholder dialogues and called for comments from stakeholders. The first round of negotiations took place in June 2008. The participants in this round included Australia, Canada, the European Union, Japan, Jordan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland, the United Arab Emirates and the United States.
The first official draft of ACTA was released to the public in April 2010. At the meeting of the WTO’s Council for TRIPS in Geneva on June 8 9, 2010, China and India began to voice their concerns over the potential impact of the proposed agreement.
Since then, the negotiators have conducted their tenth round of negotiations, on August 16 – 20, 2010 in Washington, D.C., USA.
Key Provisions of the Draft of ACTA
The April 2010 draft of ACTA is very general in many respects with much of the language in brackets, which means that those sections are still under negotiation. As currently formulated, ACTA would require each participating country to make available to rights holders procedures for enforcement of IPR. Under one formulation, the scope of such rights would be limited to trademark rights and copyrights; under another formulation, it would be interpreted more broadly, to include all IPR.
In civil proceedings, judicial authorities would have the authority to (1) issue injunctions or orders against infringers, including preventing goods from entering the stream of commerce and potentially preventing exportation; (2) award damages sufficient to compensate the rights holder for the infringement and the profits of the infringer attributable to the infringement; (3) award costs, and possibly attorney’s fees, to the prevailing party in some circumstances; (4) order destruction of goods as well as the materials and implements predominantly used in the manufacture of pirated or counterfeit goods, to minimize risks of further infringement; and (5) provide certain information that the infringer possesses to the rights holder or the judicial authorities. The draft also includes provisional remedies to prevent any imminent infringement, including remedies against an “intermediary whose services are being used by a third party to infringe an intellectual property right” and the taking of samples or seizures of infringing goods or documents.
In addition, the draft provides for remedies when goods are suspected of infringing IPRs when they are “imported, exported, in-transit or in other situations where the goods are under customs supervision.” These remedies may apply to imports, exports and potentially “in-transit” goods (including when goods are under “customs transit” from one customs office to another and “transshipment” when goods are shifted under customs control from importing means to exporting means). Under one option in the draft, customs may suspend the release of “suspected” counterfeit goods, including in free trade zones and for in-transit goods.
The draft also contains special measures addressing infringement that takes place in the “digital environment” or on the Internet and liability of third parties for infringement, including online service providers.
Finally, the draft contains provisions on criminal enforcement, international cooperation and enforcement procedures.
A full text of the draft is available on the website of the U.S. Trade Representative, at www.ustr.gov, the EU Commission’s website at http://trade.ec.europa.eu/, as well as the websites of most of the negotiating countries.
INTA has been in full support of an ACTA that 1) limits its focus to trademark counterfeiting and copyright piracy; and 2) does not disrupt the flow of trade or a country’s access to goods such as medicines, but that stops harmful counterfeits from reaching unsuspecting consumers.
NTA has identified a number of concerns and recommendations in the draft text of ACTA, which it has communicated to ACTA negotiators. Key issues and recommendations included:
- Maintaining the original, narrow scope of ACTA to cover trademark counterfeiting and copyright piracy, for ACTA’s effective implementation in different countries. Currently, the scope of draft text of the agreement includes a wide range of intellectual property rights, which risks diluting the focus and overall strength of the trade agreement.
- Ensuring that customs authorities are expressly given the authority to seize goods in transit that are suspected of being counterfeit and pirated, whatever their final destination.
- Removing the de minimis provision, which excludes small quantities of counterfeits of non-commercial nature contained in personal luggage or in small consignments from customs seizures. While INTA supports the stated objective of ACTA with regard to targeting counterfeiting and piracy activities that significantly affect commercial interests rather than the activities of ordinary citizens, the Association believes that making an explicit exception that permits travelers to bring in goods for personal use sends a wrong message to consumers that buying counterfeits is accepted by the government.
The full text of INTA’s comments can be found on www.inta.org or by contacting Candice Li, External Relations Manager for Anti-Counterfeiting at INTA (firstname.lastname@example.org).
Opposition to ACTA
Now that a draft of ACTA has been released, some countries that are not included in the negotiations, most notably India and China, have expressed concern about the treaty. They complain that ACTA would far exceed the TRIPS Agreement.
Specifically, India has expressed concern that ACTA would tilt the balance that TRIPS and other IP treaties maintain between rights of IP owners and the larger public interest. India contends that ACTA would disregard the different stages of development of countries and establish higher and stricter enforcement than that established under TRIPS and other IP treaties. In India’s view, the ACTA text “shows a general shift in the locus of enforcement which enhances the power of IPR holders beyond reasonable measure.” Further, “[the] ACTA option would mandate that each party provides enforcement for the full range of IPR infringement actions ‘at the border’ of an importing country. This would permit IPR holders to assert infringement and demand seizure of goods before customs administrative authorities, instead of initiating their claims in domestic courts.” According to India, if an Indian drug manufacturer ships pharmaceuticals to Central American countries and the goods stop at a U.S. port, they could be subject to seizure if they allegedly infringe a U.S. patent.
China’s concerns are reflected in the statement by Zhao Hong, a senior Chinese trade diplomat, that ACTA “might be a loophole for competitors to use to disrupt trade.”
Industry associations have also expressed concerns with ACTA, though these concerns have mainly been on copyright issues. Recently, the Consumer Electronics Association, TechAmerica and the Computer & Communications Industry Association expressed opposition to ACTA to the extent that it does not contain a fair use exemption for copyright infringement.
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