ACTA reaches a critical new stage

April 23, 2010

By Kim Weatherall

What a difference a fortnight can make!

Two weeks ago on this Review, I noted that we had no (official) access to the text of the Anti-Counterfeiting Trade Agreement, or ACTA.  As of Thursday this week, though, we do (available here), following a decision by the negotiators last week to meet the demands of civil society and politicians for transparency.

There has been a reasonable amount of commentary already from the likes of Michael Geist, Margot Kaminski at Yale, and Sean Flynn at American University.  In fact, Michael Geist has a useful blogpost with links to commentary across the web.

This official text is perhaps most interesting in showing where the negotiators have got to since January.  My summary?  There are some improvements: there seems to have been some attempt to respond to industry and civil society concerns; and so some (definitely not all) of the nastiest stuff has been taken out and new flexibilities are proposed, if not yet agreed.

The language that had been interpreted as potentially imposing ‘three strikes’ legislation (or graduated response) – that is, requiring ISPs to engage in a process of graduated responses to file-sharing by customers in response to copyright owner complaints culminating in suspension or termination of internet service – that’s kind of gone.  It was in a footnote to the text that now starts on page 19 of the official draft text, and it used to refer (back in January) to ISPs having a policy for the termination of repeat infringers. Now the text just says (on page 21) that at least “one delegation proposes to include language in this footnote to provide greater certainty that their existing national law complies with this requirement”.  In other words, I think that the US, and probably Australia, and maybe another country want confirmation that their domestic requirement for a termination policy complies with the language of ACTA. But they won’t tell us what that text is right now – maybe its not been drafted yet.

There are some general provisions at the front now (at least proposed) referring to important concepts like the protection of privacy and confidential information, proportionality, and that the agreement does not require countries to redistribute scarce enforcement resources to prioritise IP over everything else (my paraphrase).

The statutory damages provision now includes a proposal to allow additional damages instead.  As I’ve explained at length elsewhere additional damages are better than statutory damages, largely because they allow courts to decide who is an appropriate person to be punished (rather than the rightsholders): they put in place more discretion.  That said, they can be pretty darn arbitrary. But better.

There’s a proposal to allow countries to choose whether to apply border measures to patent and design infringements rather than mandating their coverage.  As I’ve noted before, inclusion of patents is problematic because of the potential impact on legitimate businesses including generic pharmaceutical manufacturers.

On the other hand, some of the material I described as concerning in the post a fortnight ago, and in a more lengthy paper that’s available online, is still there.

There is still a proposal to allow rightsholders (and, by the way, rightsholders includes representative groups like the RIAA or MPAA) to get injunctions against intermediaries whose services are used by third parties to infringe – even where the intermediary is not itself liable – thus potentially turning the ISP into the enforcement arm of the rightsholders and courts.

There is still a provision that seems to be proposing the creation or ‘confirmation’ of secondary liability – something not found in international treaties anywhere else and something that is entirely about substantive law, not enforcement, and so inappropriate here.

The draft still proposes an elaborate ACTA superstructure which, for reasons Geist has explained, is pretty darn concerning.  Let’s face it: bodies like this need to justify their own existence and will create work for themselves.  Including working groups for new and even more exciting enforcement provisions into the future.

There’s a nasty possibility that Kaminski points out: they’re debating criminalizing “[i]nciting, aiding and abetting” infringement.  These provisions are both up for debate, and should not be included in the final draft if ISPs don’t want to become subject to criminal investigations.

And there’s still plenty of provisions where the possibility of applying the provisions to patent is still on the table, albeit with border measures those measures are optional.

And there’s more.  This post can only touch on the kinds of detail we are seeing in this proposal.  There is much yet to work through. At least we now have something to go on.

2 Comments | ACTA, Copyright, counterfeit, piracy, Uncategorized | Tagged: , , , , , , , , , | Permalink
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The Digital Economy Act (UK) – preview for Down Under?

April 23, 2010

By Melissa de Zwart and Vicki Huang

The Digital Economy Act 2010 (the Act) was given Royal Assent on April 8th, 2010.  The Act regulates digital media and contains many of the suggestions from the Digital Britain Report of June 2009.  The Act is controversial for many reasons.  First, the lack of debate surrounding the Bill left many commentators reeling.  The first reading of the bill was presented to the House of Commons on March 16th 2010, was not debated at length in the Commons and pushed through in the dissolution of Parliament.  Second, whilst the Act touches on many areas of a digital economy such as the regulation of Channel Four, the most contentious parts of the bill are those centred on shutting down online piracy.  The spirit of these provisions is to use Internet Service Providers (ISPs) to police individual users and their use of peer-to-peer file sharing websites.

Under the Act, copyright holders can send a “copyright infringement report” to an ISP with evidence of a copyright infringement.  The ISP has the burden of notifying its subscriber of the alleged infringement (cl.4).  In addition, ISPs must provide copyright holders, upon request, with a “copyright infringement list” outlining each infringement by an individual anonymised user (cl.5).

The Secretary of State may tell OFCOM (the UK communication regulator) to order ISPs to shut down sites, suspend accounts or enforce other limits upon an ISP customer (cl.10).  ISPs that fail to apply technical measures against infringing subscribers can be fined up to £250,000 (cl.14).  The maximum criminal penalty for making copyright-infringing works is raised to £50,000 (cl.42).

Under cl.17, the Secretary of State may make provisions concerning the granting by a court of an injunction forcing ISPs to block access to “a location on the internet which the court is satisfied has been, is being or is likely to be used for or in connection with an activity that infringes copyright”.  In other words, government sanctioned website blocking.

Why the Uproar?

When the Bill was originally touted, there seemed to be widespread panic.  Claims of shutting down You-Tube and restrictions on freedom of speech were widely reported.  Some of the more vocally opposed proposals such as the “three strikes and you’re out” policy for recalcitrant users seem to have been withdrawn but the Act still has many in the UK concerned.  The fears seem based on the prospect of shutting down of sites that host a combination of legitimate and illegal material and the shutting down of sites that may use copyrighted work but in a reportage capacity eg wikileaks.org.  At the extreme, some argue that, the inclusion of the phrase “likely to be used” in cl.17, may mean a site like Google may be blocked based on its assumed intentions rather than its actions.

The concerns from the ISPs seem to relate to their duty to send infringement notices to users and their potential obligation to shut down access.  The problem with the Act from an ISP’s perspective is that whilst copyright holders can link piracy with an IP address, and these may be linked to a household’s internet account, there is no guarantee that the infringer will be identified.  An IP address can be used by many people at once, for example by legitimate users, neighbours, visitors or hijackers.  For cafes and public places with wi-fi, the identification of a user is almost impossible.  This has led to a fear that many innocent account holders will be sent infringement notices.

Proponents say the current procedure of getting a court order before an ISP will identify the infringing user is inefficient and costly.  By making it clear that an ISP is obliged to identify the user and by imposing a penalty of disconnecting the user, the cost of enforcing copyright laws will lessen as owners are not forced to go the court for orders or seek a remedy through the courts.

Piracy in Australia

The legislative approach in the UK is an interesting contrast to the current position in Australia which relies upon ISPs adopting a voluntary repeat infringer policy. The ‘safe-harbour’ provisions, which were introduced into the Copyright Act 1968 as a consequence of the AUSFTA, were considered in the recent case of Roadshow Films Pty Ltd v iiNet  Limited (No. 3) [2010] FCA 24, reviewed in the Fortnightly Review in February and March. In that case the Federal Court held an ISP to be not liable for its user’s peer-to-peer distribution of copyright works.  The case is scheduled for appeal but the approach of the Court to the safe harbour provisions is interesting in the context of the Digital Economy Act.

Three key aspects of the iiNet decision are important in this context:

1. The meaning of the ‘power to prevent’ infringement under section 101(1A) with respect to authorisation liability.

    • Whilst iiNet had the power to suspend or terminate users’ accounts under its customer contract, the Court held that this did not equate to an obligation to suspend or terminate accounts for copyright infringement. The Court observed [at 430] that ‘copyright infringement is not a straight “yes” or “no” question’. Therefore, the concept of who would constitute a repeat infringer was not self-evident, raising the same interpretation issues as outlined above with respect to the Digital Economy Act.

    2. The operation of s112E.

    • Although this section of the judgment is obiter, the Court interpreted this section to have little or no practical effect. The only circumstance in which s112E could have effect is where the person merely provides facilities for the making of the infringement and does nothing more. However, of course, if this is all the person is doing, it would be unlikely they would fall within the concept of authorisation. Any knowledge of infringement would mean that the section is no longer applicable.

    3. The safe harbour provisions.

    • Again, this section of the judgment is obiter as the sections only apply once a finding has been made that the ISP is liable for infringement. The Court confirmed that as compliance with the provisions is voluntary, failure to adopt a repeat infringer policy cannot be evidence that goes to a finding that an ISP is liable for copyright infringement. In order to fall within the limitation of liability provided by the safe harbour provisions, ISPs are required to adopt and reasonably implement a policy that provides for termination in appropriate circumstances of the accounts of repeat infringers.
    • Interestingly, the Court held that iiNet had a repeat infringer policy even if it had not been fully written down nor described to its subscribers: [at 593] ‘It is impossible to fail to notice the complete vacuum of legislative guidance in relation to any category A requirements when compared to the highly prescriptive requirements in relation to categories B-D found in s 116AH(1) and the Regulations. Neither the legislation, the Regulations nor extrinsic materials provide any guidance to the Court as to what the ‘appropriate circumstances’ for termination are, what ‘repeat infringement’ means or what the ‘accounts of repeat infringers’ means. The assumption must be that Parliament left latitude with the CSP to determine the policy, and left the meaning of those words to be determined by the courts.’

    The approach of the Court in this case demonstrates the difficulty of interpreting and applying such concepts, and it is likely that similar confusion may apply in the context of interpretation and application of the Digital Economy Act (UK).

    Outcomes

    Clearly, ISPs make much easier targets for copyright infringement actions than end users, but as a matter of public policy, the question needs to be asked regarding how much accountability and responsibility we wish to place on ISPs for monitoring and enforcing access to certain content. This broader policy question also arises in the context of content regulation and the Australian Government’s proposed introduction of mandatory internet filtering. Whether this is an issue for the courts or rather one for the legislature has to be questioned. The impact of the UK Digital Economy Act will certainly be closely watched by interested parties in Australia.

    Leave a Comment » | Copyright, iiNet, piracy, Uncategorized | Tagged: , , , , , , , , , | Permalink
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    Anti-Counterfeiting Trade Agreement Negotiations Enter the Next Round: but will this ACTA have a finale?

    April 9, 2010

    By Kim Weatherall

    Next week in Wellington, negotiators from a select group of like-minded countries – US, the European Union, Japan, Switzerland, New Zealand, Canada, Mexico, Australia, South Korea, Morocco and Singapore – will meet in what will be the eighth round of negotiations aimed at producing an ‘Anti-Counterfeiting Trade Agreement’ (ACTA). These negotiations are both troubling, and troubled – and I’d like, in this post, to explain why.

    The Goals

    According to all the official documentation, the goals of the proposed ACTA are to establish an international framework for efforts to more effectively combat the proliferation of counterfeiting and piracy in three ways: by enhancing cooperation between the various agencies in the participating countries; by establishing ‘a set of enforcement best practices that are used by authorities’ (whatever that means) and by setting out a legal framework of enforcement measures. The underlying belief seems to be that existing international treaty provisions on IP enforcement are relatively general and weak. And while it might seem a bit strange to negotiate a treaty on combating counterfeiting without including the major source countries for counterfeit products, there are two good reasons for doing so. First, counterfeit-receiving countries can do quite a lot without cooperation: they can seize goods at the border, share intelligence, apply penalties and remedies to internal acts, and so on. Second, an ACTA could establish a ‘benchmark’ with other countries joining at a later point.

    While ACTA is supposed to be about counterfeiting and piracy, and not about private, non-commercial activities of individuals or raising general IP standards, there has long been concern on the part of civil society groups that it would end up being much more extensive than that, and might make already strong IP laws even stronger, at the expense of individuals, consumers, and civil liberties generally.

    There has been no official release of any proposed text for the ACTA: the negotiations, while not secret, are in substance being treated as confidential. But there have been leaks of various proposals, from which it is possible to get a picture of what is being proposed.

    Troubling?

    The picture that emerges from the various leaked documents (which can all be accessed at American University’s IP Enforcement website) is of a proposed Agreement that is wide-ranging and arguably over-inclusive, and which, in particular, extends its reach well beyond what most people would think of as ‘counterfeiting and piracy’. There are provisions on damages and how they should be assessed; the powers courts should have to issue injunctions or make orders for the collection of evidence, the process for customs to seize, retain, and perhaps destroy infringing goods and implements; and extensive provisions on IP in a digital context: provisions on online service provider liability and ‘safe harbours’; for prohibiting circumvention of technical measures, and institutional provisions to set up an ‘ACTA Oversight Council’ to supervise ACTA implementation, facilitate amendments, and establish working groups and generally monitor the application of the treaty provisions.

    For Australia, many of the provisions that we see in the leaked texts are not particularly new: quite a few mirror more or less closely what we have already agreed to and implemented as a result of the Free Trade Agreement with the US back in 2004. So the anti-circumvention provisions (requiring countries to ban people from ‘circumventing’ technical measures used to protect copyright works) are nothing particularly new or exciting for us – in fact, they are positively generous and flexible compared to what we are already committed to.

    However, a number of the proposals are troubling, if only because they would, if included in a final agreement, require changes to our law or at least muddy our legal waters:

    1. A proposal to introduce statutory damages: if compulsory, this could create a risk of oppressive damages awards and create a tool to hold infringers in terrorem by threatening large payouts if they do not settle early;
    2. A proposal to extend criminal liability to ‘ordinary’ trade mark infringement (in Australian law terms, in cases where there is deceptive similarity between the registered and the alleged infringing mark) – at the moment, we have criminal provisions for counterfeit trade mark use. This could create new uncertainties for legitimate businesses;
    3. A right to obtain information from infringers about others involved in the infringement that looks like it might encourage fishing expeditions;
    4. A provisional power to seize evidence – not, on the face of it, subject to the careful protections built in to the already rather stringent Anton Piller (search orders) process;
    5. A proposal to extend border seizures to patent infringements – which I imagine would be controversial; and
    6. A new criminal provision: to make ‘camcording in cinemas’ a criminal act

    There’s more too. Most concerning are a few bits of language that can only be described as a hotch potch. One is a proposal to apply the Berne Convention ‘three step test’ – usually used to limit the exceptions to copyright a country can introduce – but maybe used here to limit the exceptions to damages or secondary liability. Oh, and a very ham-fisted attempt to ‘define’ the extent of the law of secondary liability (in Australian terms, authorisation liability) (which no doubt, just like the attempt to ‘codify’ authorisation law in the Digital Agenda Act, would cause another decade of uncertainty for Australian law).

    Some of the ‘house of horrors’ fears about the ACTA are not borne out by the leaked texts. It seems like the governments don’t want to have customs start searching our iPods at the border, nor are they determined to seize them on the streets (good thing too). And the anti-circumvention provisions, as I mentioned, are positively gentle compared to what we’ve seen in other treaties. But there’s enough niggling little details, and little shifts, and troubling provisions, in there to make you wonder whether the whole thing is just a bad idea.

    Troubled…

    Something else, however, emerges from the various leaked texts which is interesting to observe: namely, the differences that exist as between the various negotiating parties. If the various comments on the text leaked in January are in any way accurate, Japan appears to be in fundamental disagreement in the digital area: they seem to want to be stricter on ISPs (requiring them to act on infringement unless it is technically impossible) but easier on people who want to circumvent technological protection measures (they don’t ban, and don’t want to ban, circumvention of access controls). Europe and the US seem to be fairly diametrically opposed on the role of damages: in the US, statutory damages are clearly punitive in nature; the EU does not see ‘punishment’ as a role of damages in IP. And no one, it seems, can agree on anti-camcording laws or what they should look like. In many, many cases, provisions that one country or group want to make mandatory, others want to be an optional extra (usually, because it doesn’t fit their law: like Australia with statutory damages). That goes for most of the provisions that I’ve outlined up there. For pretty much all of them, there’s someone who wants to strike it out or make it optional.

    So we end up in this rather strange position. If all those provisions go in, we have something to be worried about and we’ve got a load of provisions that are going to create a chilling effect on individuals and legitimate businesses. Nasty stuff. But if all the qualifications go in, and ‘shall’ gets replaced en masse with ‘may’ – then we end up with … not much?

    Why bother?

    And this, in itself, raises a question. If these countries can’t agree; if there is this much contention, two and a half years or so since negotiations started – what, exactly, are we doing here? And if we smooth over all the disagreements, and ‘vague-up’ the language sufficiently that everyone can agree… will we have achieved anything concrete at all? I’m not so sure. I can’t help but feel we’re heading towards a whole lotta optional extras and not a lot of substance.

    Now, the obvious response to this is – well, so what? That’s good, right? No nasty stuff that makes Australia change its laws (again)? So what if the negotiators get together and, in the end, have 40 pages or so of treaty with 3 provisions of compulsory simple stuff and 35 pages of optional extras?

    Well, personally, I think there is a so what here. Because you know what that means? A whole lot of complication, a lot of hard to understand jargon, a lot of ill-will (because this stuff is controversial and it’s generating a lot of bad press for IP law generally) – and IP owners who don’t make a single dollar more, meaning we don’t get a single extra book, or movie, or innovative new product out of this treaty. And in the end, isn’t that what this is all meant to be about? Encouraging creativity and innovation?

    And then there’s the secondary effect. That you set up a standard – ok, it’s optional, but it’s there – and when the trainers come to the developing countries – or, indeed, developed countries the next time someone gets their bee in a bonnet about something – to write their shiny new IP laws, this treaty is held up as the shining example of a perfect IP enforcement system. And the people are told – look, you want all the optional extras, right? They’re features, right? And more features are good???

    I think, if I were a negotiator, I would be taking a long hard look at what is in the treaty, and I would be asking: is this really worth it? Is it worth the criticism and the ill-will and the conspiracy theories, and is it going to make creators any richer. Cause if not? I’d be spending the Wellington hotel bills on better arts grants and fund a few science projects.

    ACTA. I’m not sure if it’s going to have a finale. And if it does, I’m not sure whether it’s going to be the 1812, or a fade-out. Watch this space.

    3 Comments | ACTA, Copyright, counterfeit, Internet, piracy, Trade Mark, Uncategorized | Tagged: , , , | Permalink
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