Appearance before European Parliament INTA Workshop on ACTA

March 1, 2012

Good afternoon. My name is Michael Geist. I am a law professor at the University of Ottawa, Faculty of Law, where I hold the Canada Research Chair in Internet and E-commerce Law.

I am grateful for the opportunity to submit a report assessing ACTA to you and for the chance to comment at today’s workshop. My comments have been posted at michaelgeist.ca and I understand the report will be published shortly.

Let me start with the conclusion and then take you through my analysis. My conclusion:

This report concludes that ACTA’s harm greatly exceeds its potential benefits. Given ACTA’s corrosive effect on transparency in international negotiations, the damage to international intellectual property institutions, the exclusion of the majority of the developing world from the ambit of the agreement, the potentially dangerous substantive provisions, and the uncertain benefits in countering counterfeiting, there are ample reasons for the public and politicians to reject the agreement in its current form. In doing so, governments would help restore confidence in the global intellectual property system and open the door to a new round of negotiations premised on transparency, inclusion, and evidence-based policy-making.â€

Allow me to explain. The report is divided into three parts.

Part one analyzes the process-related problems including the lack of transparency, the exclusion of many developing countries from the negotiation process, and the harm caused by ACTA to the effectiveness of multilateral organizations such as the WTO and WIPO.

Part two highlights some of the major substantive concerns with ACTA. I identify four broad areas of concern: the expansion of intellectual property law, the likelihood that permissive provisions will gradually be interpreted as mandatory, the renegotiation of international intellectual property rights agreements, and the absence of balancing provisions and procedural safeguards.

Part three examines the likely effectiveness of ACTA in its current form.

I should note that while compatibility with fundamental rights and freedoms is obviously a pre-requisite for any agreement, it is not a sufficient criteria for approval. There is a need to examine process, substance, and effectiveness.

I would like to quickly expand on each issue.

1. Process

Transparency

As you will be well aware, ACTA’s lack of transparency was a consistent source of concern throughout the negotiation process. It is important to emphasize that ACTA’s opaque approach was not an accepted practice, but was rather out-of-step with many other global norm-setting exercises. The WTO, WIPO, WHO, UNCITRAL, UNIDROIT, UNCTAD, OECD, Hague Conference on Private International Law, and an assortment of other conventions were all far more open than ACTA.

The damage created by the lack of transparency extends beyond public distrust of ACTA. The failure to include experts throughout the negotiation process has caused significant damage to the substance of the agreement with numerous legal concerns as a result. For example, in May 2008, media around the world reported that the agreement “which was at the very early stages of negotiation” could lead to border guard searches of the contents of iPods and other personal devices. As the furor grew, ACTA participants countered the criticism by including a de minimis provision (now Article 14) to exempt small consignments and personal luggage. A similar situation arose in the context of three strikes rules.

While the public concern over these provisions appears to have resulted in changes to the ACTA text, the lack of transparency associated the negotiations meant that these cases constituted the rare instance of public feedback having an impact on the final text. Had the negotiations followed more conventional global norms, it is much more likely that the final text would better account for the remaining substantive concerns.

Harm to International Organizations

All countries and stakeholders benefit from a well-functioning international intellectual property governance model led by WIPO and the WTO. Ratification of ACTA will undermine the authority of those institutions, causing immeasurable harm to the development of global IP norms. ACTA countries avoided WIPO due to gridlock concerns, but ratifying ACTA would perversely increase the likelihood of gridlock. For those countries participating in ACTA, the successful completion of the plurilateral model will only increase the incentives to by-pass WIPO as a forum for challenging, global issues. For those countries outside of ACTA, the relevance of WIPO will gradually diminish, as achieving consensus on their concerns may prove increasingly difficult.

Harm to the Developing World

The decision to exclude the developing world will cause enormous harm. In the short term, developing countries may find that progress on WIPO Development Agenda issues stall as ACTA partners focus on ratifying their treaty and currying support for additional signatories. In the longer term, developing countries will face increasing pressure to implement an agreement on which they had no input.

Substance



The Expansion of Intellectual Property Law

ACTA raises several concerns with respect to the expansion of international intellectual property laws. The emphasis on secondary liability, which potentially holds third parties liable for the infringing actions of others, represents a significant shift in international intellectual property law. While many countries have codified secondary liability principles within their domestic laws, there are relatively few provisions aimed at secondary liability at international law. Within ACTA, Articles 8 and 12 apply in the civil enforcement context, Articles 23 and 24 add aiding and abetting to criminal offences, and Article 27 targets third parties in the online environment.

There is also expansion of criminal provisions and border measures.

Mandatory vs. Permissive Provisions

In an attempt to resolve ongoing conflicts over several substantive areas, the ACTA negotiators agreed to make many provisions permissive rather than mandatory. Supporters frequently point to the non-mandatory nature of several contentious provisions as evidence that there is little reason for concern with the substantive elements of ACTA. The experience with other treaties indicates that flexible, permissive language is gradually transformed into mandatory, best-practice language.

ACTA has permissive language “often as in provisions” at Article 9 on Damages, Article 10 on Other Remedies, Article 14 on Small Consignments, Article 16 on Border Measures, Article 22 on Disclosure of Information, Article 23 on Criminal Offences, and Article 27 on Internet enforcement.

The net effect of these provisions is to open the door to statutory damages, detain in-transit goods, disclose information to rights holders, create criminal provisions for unauthorized camcording, and require Internet providers to disclose information about their subscribers.

While it is true that ACTA parties will not be required to implement these provisions in order to be compliant with the agreement, there will be considerable pressure to reinterpret these provisions as mandatory rather than permissive. Indeed, it is already happening as the IIPA, a rights holder lobby group, has recommended placing ACTA countries such as Greece, Spain, Romania, Latvia, Switzerland, Canada, and Mexico on the USTR piracy watch list for failing to include optional ACTA provisions in their domestic laws.



Re-negotiating International Intellectual Property Agreements

The exclusion of WIPO, the WTO and developing countries is particularly problematic given that ACTA features many provisions that alter international agreements developed at those organizations. This includes changes to TRIPS on in-transit goods, damages, and right to information. For the WIPO Internet treaties, it includes changes to the anti-circumvention rules.



Absence of Balancing Provisions and Procedural Safeguards

Unlike comparable international intellectual property agreements that have identified the need for balance and proportionality, ACTA is almost single-minded in its focus on increasing enforcement powers. ACTA Article 9 removes safeguards ACTA Article 11 removes the proportionality provision found in the TRIPS equivalent, and ACTA Article 18 does not include rules for compensation in cases of wrongful detentions.

Likely Effectiveness of ACTA

A Counterfeiting Agreement Without the Counterfeiters

ACTA supporters may have believed that an agreement could best be achieved by bringing together a coalition of the willing, but by limiting ACTA to predominantly developed world countries that are not typically associated with being major sources of counterfeit product, the agreement is seemingly designed to fail. Addressing ongoing global counterfeiting concerns necessitates an inclusive dialogue that brings together developed and developing world countries.



An Agreement Without Change?

There is ongoing disagreement over ACTA’s impact on domestic law “ some argue that it will not change existing rules, while others believe that ACTA could require domestic changes” but both interpretations hurt the case for ratification. If ACTA does not change domestic rules, it is far less likely to contribute positively to the battle against counterfeiting. If it does require domestic change, ratification of the agreement raises constitutional and procedural questions as well as substantive concerns about the likely changes.

Thank you for your attention. I would be pleased to answer your questions.