I’ve been remiss, as the VC’s (sort-of) copyright/Internet law guy, in not commenting previously about a truly outrageous bit of executive branch over-reaching on Hollywood’s behalf. I am referring to the ongoing negotiations about ACTA, the multilateral “Anti-Counterfeiting Trade Agreement.” [See Jonathan Adler’s posting earlier today about ACTA here] The US Trade Representative’s office has been conducting these negotiations entirely in secret (on some ridiculous trumped-up ‘national security’ rationale) for several years now on this Agreement; a current draft was recently leaked to the press, and it confirms many peoples’ worst fears. Here’s my attempt at a summary of what’s going on — if you’re interested in more details (and I hope you are), I’ve listed at the end of this posting some excellent sources of further information.

ACTA’s goal is to tighten up global intellectual property enforcement. Though it’s labeled an “anti-counterfeiting” agreement, which might make you think that it’s about international trade in counterfeit goods (fake Louis Vuitton handbags, unauthorized Viagra tablets, and the like), it covers much, much more than this; what it is really about is the tighter enforcement of copyright law on the Net. It is outrageous in substance, and in process.

Process first. There are many divergent views, of course, about what should be done about international copyright law and copyright enforcement in the Internet age. Some reasonable people believe that copyright needs strengthening; other reasonable people (like me) disagree. But that’s just the normal give-and-take of debate over a contentious issue, and it can only (and should only) be resolved the way such debates are always resolved in a democratic society — i.e., openly and with full public comment and discussion. It’s hard to know, then, which is more appalling: the fact that the Obama Administration has conducted the ACTA negotiations in secret, or that it has indicated that it plans to adopt the final Agreement as an “Executive Order,” one that does not require submission to or ratification by the Senate (or any Congressional action whatsoever) to become effective.

I cannot imagine what justifications the Administration might proffer for this affront to our constitutional law-making schemes. [Larry Lessig and Jack Goldsmith have an op-ed in today’s Washington Post about this, which was the subject of Jonathan’s earlier posting]. Those of us who follow copyright law have been here before, and we know what’s coming: the President signs the Agreement, and then changes to US Copyright law are introduced into the Congress and supporters will say something to the effect that the changes are required in order to bring our law into harmony with international norms and with our international obligations. It happened during the run-up to the 1998 Digital Millennium Copyright Act, and it will, I promise you, happen again here. It amounts, in effect, to presidential law-making, and if it isn’t (as Lessig and Goldsmith argue) unconstitutional, it damn well should be.

None of this would be of too much concern were the Agreement — as far as we can tell, given the veil of secrecy the Administration has thrown around it — full of substantively bad ideas and lousy law. Margot Kaminsky, over on Balkinization, has a good summary of the major points of the Agreement. Among them:

1) Paragraphs 2 and 3 mandate a statutory damages provision in civil copyright law, as under US law — so that copyright holders, even without the need to demonstrate any measurable harm whatsoever, can recover awards thousands of times greater than any possible damage they may have suffered.

2) ACTA Art. 2.5 mandates an especially swift response from courts in copyright infringement cases — nice for Hollywood, not so nice for everyone else.

3) IP Enforcement at the Border. The current draft contains a number of provisions that will allow – and in some cases mandate — more vigorous searching (of laptops, iPods, etc.) and seizing of devices containing copyright infringing material. The de minimis threshold for the quantity of goods that can be seized at the border, as set forthin the the TRIPS Agreement (the “Trade-Related Intellectual Property” treaty that became part of the GATT Trade Agreement) will be lowered; a potentially injured party may apply for the suspension of the release of potentially infringing goods for one year from the date of application; the Agreement also permits Ex Officio action at border crossing (i.e., seizure of goods by customs officials without any complaint being filed); mandating the release of “personally identifying information” of suspected infringers to copyright holders, even without any finding of actual infringement.

4) Expanding the definition of Criminal Copyright Infringement. ACTA expands the international definition of criminal copyright infringement to explicitly include Internet “piracy” done for personal benefit alone. Under TRIPS, countries must hold a person to have committed an act of criminal copyright infringement if he or she has willfully infringed on a “commercial scale”, which was understood to mean involving sale to others. ACTA expands the international definition of “commercial scale” to include “private financial gain,” and explicitly includes “significant willful infringements that have no direct or indirect motivation of financial gain.” Insofar as it is VIRTUALLY IMPOSSIBLE TO DO ANYTHING ON THE INTERNET WITHOUT INFRINGING SOMEONE’S COPYRIGHT, this will play serious havoc with the international legal system. Oh yes — and it mandates that “penalties that include actual sentences of imprisonment as well as monetary fines.”

5) ACTA member countries will be required to provide for third-party (Internet Intermediary) liability. This is not required by any of the major international IP treaties – not by TRIPS, nor the WIPO Copyright and WIPO Performances and Phonograms Treaty. However, US copyright owners have long sought this. (For instance, see page 19 of the Industry Functional Advisory Committee report on the 2003 US- Singapore Free Trade Agreement noting the need for introducing a system of ISP liability). (Previously available at http://www.ustr.gov/new/fta/Singapore/advisor_reports.htm.)

Second and more importantly, ACTA will include some limitations on Internet Intermediary liability. Many ACTA negotiating countries already have these regimes in place: the US, EU, Australia, Japan, South Korea. To get the benefit of the ACTA safe harbors, Internet intermediaries will need to follow notice and takedown regimes, and put in place policies to deter unauthorized storage and transmission of allegedly copyright infringing content. However, contrary to current US law and practice, the US text apparently conditions the safe harbors on Internet intermediaries adopting a Graduated Response or Three Strikes policy — disabling Internet access for anyone found to have been infringing three times (whether or not that was a judicial finding or merely in an administrative proceeding)

There’s more (see below). But even this summary makes it clear that, once again (see Clinton Administration) the Democratic Party has caved in to Hollywood’s demands regarding intellectual property enforcement. As David Fewer of the Canadian Internet Policy and Public Interest Clinic and the University of Ottawa noted, “if Hollywood could order intellectual property laws for Christmas what would they look like? This is pretty close.”

It’s time to fight back. There are some wonderful resources out there coordinating what one hopes will become a global effort to beat this monster back. Here are some of the better sites I’ve found:

AU’s Program on Information Justice and Intellectual Property has a major collection of papers, reports, and other ACTA-related items here

Michael Geist, up in Canada, has been following the ACTA debates for some time and has a number of useful contributions on his blog, e.g. here and here

Public Knowledge’s ACTA Page

Electronic Frontier Foundation’s ACTA page