Final Draft of ACTA Published

The US trade office published the final draft of the Anti-Counterfeiting Trade Agreement (ACTA) on November 15, 2010.

The development of the controversial agreement aimed at combatting the proliferation of pirated and counterfeit goods allegedly included provisions for the enforcement of trademarks in the digital environment which appear to have been dropped from the final agreement which deals mainly with infringement of copyright or related rights over digital networks.

The negotiations surrounding the agreement were particularly contentious due to their secretive nature, the deliberations taking place behind close doors on the basis that technically the Treaty was a ‘Trade Treaty’.

The provisions of the Agreement revolve mainly around copyright and trademark infringement providing for civil, criminal and border control measures.

Any kind of commercial willful trademark or copyright infringement occurring on a commercial scale will be subject to criminal sanctions. Commercial scale includes acts carried out as commercial activities for direct or indirect economic or commercial advantage. The drafting implies a commercial motive test must be satisfied.

Willful importation and domestic use, in the course of trade, on a commercial scale of labels or packaging is to be subject to criminal sanctions by all members. Each Party to the Agreement must provide penalties which provide for both imprisonment in addition to monetary fines.

The Treaty says it will combat physical copyright theft through international co-operation and operation, whilst also aiming to promote co-operation between service providers and rights holders whenever it appears that there has been an infringement in the ‘digital environment'”.

This language implies that Internet Service Providers (ISPs) will be obliged, as they will be under the proposals enshrined in the Digital Economy Act UK, to hand subscribers’ information over to the media interests when requested. The required level of co-operation could mean police surveillance and collection of evidence and penalties could be meted out to private entities without judicial oversight.

In determining the amount of damages for infringement of intellectual property rights, the agreement provides that the Courts will have the authority to consider any legitimate measure of value submitted by the rights holder which might include lost profits, the value of the infringed good or service, or the suggested retail price. There is provision for a pre-approved measure of damages.

Criminal procedures and penalties are provided for in appropriate cases for the unauthorised copying of films from a performance cinemas. Criminal liability for aiding and abetting is also provided for in the ACTA.

Section 5 of the Agreement deals with the enforcement of intellectual property rights in the digital environment. The text of the Agreement refers to the unlawful use of means of widespread distribution for infringing purposes in the digital environment. One might interpret this language to be making a distinction between the role of an online intermediary and BitTorrent, which in the iiNet case, was found to be the means by which copyright infringement occurred. The “means of distribution” should therefore exclude the role of an intermediary.

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