What Is ACTA And Why Is It A Problem?

from the a-little-explainer dept

While it probably does not change US law (with some possible exceptions, especially in the realm of patents), it certainly does function to lock in US law, in a rapidly changing area of law, where specifics are far from settled. Supporters of ACTA continue to insist that not only does it not change US law, but that it cannot change US law, since it's an "executive agreement" rather than a treaty (more on that later). The reality, however, is that to be in compliance with this agreement, the US needs to retain certain parts of copyright law that many reformers believe should be changed. At the very least, it ties Congress' hands, if we want to be in compliance with our "international obligations."



An example of this is on the question of inducement theory for copyright law. Within copyright law there is direct infringement (you did the infringement) and indirect or secondary infringement (you had a hand in making someone else infringe). In general we should be wary of secondary liability issues, because they can create chilling effects for new innovations. It's why the Supreme Court allowed the VCR to exist, despite the fact that it enabled infringement. Contributory infringement (in which you're more actively involved) has been illegal, but there has been some question about inducing infringement (i.e., leading or pushing others into infringing). There was an attempt by Congress nearly a decade ago, under the INDUCE Act, to make inducement a violation of copyright law, but it failed to go anywhere in Congress. Of course, the Supreme Court then stepped in with its Grokster decision that made up (pretty much out of thin air) a standard for "inducement" to be a violation of the law.



Normally, if Congress decides the Supreme Court got something wrong, it can pass a law to clarify. However, under the terms of ACTA, countries need to consider inducement a violation of copyright law. There's no way to read this other than to tie Congress' hands on the question of inducement. That's a big issue because we're still sorting through the true impact of considering inducement as against the law. I know it's tough to believe Congress could ever push back on ever more draconian copyright law, but with the SOPA/PIPA backlash, there's at least a sliver of hope that some are aware that these issues impact innovation. Should Congress realize that greater liability through inducement is a mistake, under ACTA, their hands are mostly tied if they want to fix it. That's a problem.

does not change US law (with some possible exceptions, especially in the realm of patents), it certainly does function to lock in US law, in a rapidly changing area of law, where specifics are far from settled. Supporters of ACTA continue to insist that not only does it not change US law, but that it change US law, since it's an "executive agreement" rather than a treaty (more on that later). The reality, however, is that to be in compliance with this agreement, the US needs to retain certain parts of copyright law that many reformers believe should be changed. At the very least, it ties Congress' hands, if we want to be in compliance with our "international obligations." An example of this is on the question of inducement theory for copyright law. Within copyright law there is direct infringement (you did the infringement) and indirect or secondary infringement (you had a hand in making someone else infringe). In general we should be wary of secondary liability issues, because they can create chilling effects for new innovations. It's why the Supreme Court allowed the VCR to exist, despite the fact that it enabled infringement. Contributory infringement (in which you're more actively involved) has been illegal, but there has been some question about infringement (i.e., leading or pushing others into infringing). There was an attempt by Congress nearly a decade ago, under the INDUCE Act, to make inducement a violation of copyright law, but it failed to go anywhere in Congress. Of course, the Supreme Court then stepped in with its Grokster decision that made up (pretty much out of thin air) a standard for "inducement" to be a violation of the law. Normally, if Congress decides the Supreme Court got something wrong, it can pass a law to clarify. However, under the terms of ACTA, countries need to consider inducement a violation of copyright law. There's no way to read this other than to tie Congress' hands on the question of inducement. That's a big issue because we're still sorting through the true impact of considering inducement as against the law. I know it's tough to believe Congress could ever push back on ever more draconian copyright law, but with the SOPA/PIPA backlash, there's at least a sliver of hope that some are aware that these issues impact innovation. Should Congress realize that greater liability through inducement is a mistake, under ACTA, their hands are mostly tied if they want to fix it. That's a problem.

Beyond just locking in parts of copyright law, ACTA also expands it. First, it takes things that would normally be considered non-commercial file sharing (which is potentially against the law), and turns it into commercial scale criminal infringement. Similarly, it appears to broaden the definitions around inducement/secondary liability to make what had been a civil (between two private parties) issue into criminal aiding and abetting. Basically, there are parts of ACTA that effectively seek to take what would normally be civil infringements, dealt with between two private parties, and allow the entertainment industry to offload the policing to government law enforcement (paid for by tax payers) and leading to a higher likelihood of jail time.



Copyright law is, by its very nature, a bundle of forces -- some that incentivize good behavior, and some that are bad. There should be no question that copyright has some good effects and some bad effects. The real question is in weighing the good and the bad and making sure that that the bad don't outweigh the good. Often, copyright law has used exceptions (fair use, public domain, de minimus use, first sale, etc.) to act as a "safety valve" in an attempt to make sure the bad doesn't outweigh the good.



However, ACTA pretends that copyright is only good and there's no need to minimize the bad effects. That is, it only talks about the enforcement side, and completely ignores the necessary exceptions to copyright law that make it function. Basically, it exports the punishments from the US, but leaves out the safety valves. That's pretty scary. It may be (well, not really) okay in the US where fair use is clearly established, but most other countries don't have fair use at all (if they have anything, it's a much weaker system known as "fair dealing"). Exporting strict enforcement without exceptions is dangerous and will lead to unnecessary limitations on creativity and speech.

good effects and bad effects. The real question is in weighing the good and the bad and making sure that that the bad don't outweigh the good. Often, copyright law has used exceptions (fair use, public domain, de minimus use, first sale, etc.) to act as a "safety valve" in an attempt to make sure the bad doesn't outweigh the good. However, ACTA pretends that copyright is only good and there's no need to minimize the bad effects. That is, it talks about the enforcement side, and the necessary exceptions to copyright law that make it function. Basically, it exports the punishments from the US, but leaves out the safety valves. That's pretty scary. It may be (well, not really) okay in the US where fair use is clearly established, but most other countries don't have fair use at all (if they have anything, it's a much weaker system known as "fair dealing"). Exporting strict enforcement without exceptions is dangerous and will lead to unnecessary limitations on creativity and speech.

There are serious health risks associated with ACTA, especially in the developing world. In this case, Europe pushed strongly to include patents under ACTA (something the US actually preferred to leave out). This has complicated matters for some countries. Under existing international agreements, countries can ignore pharmaceutical patents to deal with health emergencies. That is, if you have an outbreak and need a drug that pharmaceutical companies are unwilling to supply at a reasonable price, governments can break the patent and produce their own. That becomes much more difficult under ACTA, which could be a real threat to health around the globe.



Similarly, there are very reasonable concerns that ACTA will be used to crack down, not on actual counterfeit medicines, but on "grey market" drugs -- generic, but legal, copies of medicines. Some European nations, for example, already have a history of seizing shipments of perfectly legal generic drugs in passage to somewhere else. For example, say that a pharmaceutical company in India is shipping drugs to Brazil that are legal in both countries. However, those drugs violate a patent in Europe. If, during transit, those drugs pass through Europe, customs agents may seize them. That's already been happening, but the fear is that there's greater power to do so under ACTA.

Similarly, there are very reasonable concerns that ACTA will be used to crack down, not on actual counterfeit medicines, but on "grey market" drugs -- generic, but legal, copies of medicines. Some European nations, for example, already have a history of seizing shipments of perfectly legal generic drugs in passage to somewhere else. For example, say that a pharmaceutical company in India is shipping drugs to Brazil that are legal in both countries. However, those drugs violate a patent in Europe. If, during transit, those drugs pass through Europe, customs agents may seize them. That's already been happening, but the fear is that there's greater power to do so under ACTA.

ACTA presents certain requirements for border patrol agents in determining what is and what is not infringing. This is a big issue for a variety of reasons. First, as we've seen in the US, ICE/border patrol isn't very good at figuring out what is and what is not infringing. Traditionally, there are significant questions of fact to be explored in determining if something is infringing, but under ACTA, border patrol often will be in a position to make a snap decision. Believe it or not, Homeland Security itself was worried about ACTA, because of fears that it would actually make it more difficult to be effective on intellectual property issues -- and might require them to spend more time trying to figure out if something is infringing, rather than if there's a terrorist trying to get into the country.



Again, while ACTA supporters insist that it won't require changes to US law, there are a few parts of ACTA that are so vague that you can definitely see how they could be interpreted to require changes to US law. One key example is where certain kinds of patent infringement cases protect against either injunctions or damages... whereas ACTA would require one or the other.



Even the signing parties don't agree on the purpose, scope and nature of ACTA. This may be the scariest part. Part of the debate in the US is over the USTR and President Obama's claim that ACTA is not a binding treaty, but rather a sole executive agreement that doesn't need Congressional approval. Many believe that this is unconstitutional, and Senator Ron Wyden has asked the President to explain what certainly appears to be a violation of the Constitution. However, over in Europe, they're insisting that it is a binding treaty. The US, on the other hand, has already said that it can ignore anything it doesn't like in ACTA. If you think that's a recipe for an international problem, you get a gold star.

a binding treaty, but rather a sole executive agreement that doesn't need Congressional approval. Many believe that this is unconstitutional, and Senator Ron Wyden has asked the President to explain what certainly appears to be a violation of the Constitution. However, over in Europe, they're insisting that it is a binding treaty. The US, on the other hand, has already said that it can ignore anything it doesn't like in ACTA. If you think that's a recipe for an international problem, you get a gold star.

Finally, international trade agreements are a favorite tool of the copyright maximalist. You see it all the time. If they can't pass legislation they want, they resort to getting these things put into international trade agreements, which get significantly less scrutiny. This also allows for two tricks: the first is leapfrogging, where you get each country to implement the laws required by these agreements in slightly different ways, and then push other countries to match (or better yet, exceed) the rules in the other countries to stay in compliance. Then you use those agreements to demand the same thing from other countries to "harmonize" international laws. It's already been admitted that ACTA was done outside of existing structures for IP-related international agreements (like WIPO and the WTO) because a few countries wanted to negotiate it without input from Brazil, Russia, India and China... but the plan has always been to get ACTA approved, and then pressure those other countries to join.



The sneaky part is that once you have some of these "international obligations," it's almost impossible to get out of them. Copyright maximalists love to shout about how we must absolutely respect our "international obligations" on these kinds of treaties, to limit the government's ability to fix copyright law.

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Yesterday I noted that the anti-SOPA/PIPA crowd seemed to have just discovered ACTA . And while I'm pleased that they're taking interest in something as problematic as ACTA, there was a lot of misinformation flowing around, so I figured that, similar to my "definitive" explainer posts on why SOPA/PIPA were bad bills (and the followup for the amended versions ), I thought I'd do a short post on ACTA to hopefully clarify some of what's been floating around.First off, ACTA, unlike SOPA/PIPA, is not "a law." It's a trade agreement, in which a variety of countries agree to deal with intellectual property infringement in a similar fashion. It does have some similarities to SOPA/PIPA -- such as the conflation of counterfeiting physical goods with digital copyright infringement. This is a very common tactic for folks trying to pass massively draconian, expansionary, copyright laws. You lump them in with physical counterfeiting for two key reasons: (1) If you include physical counterfeiting, even thought it's a relatively small issue, you can talk about fake drugs and military equipment that kill people -- so you can create a moral panic. (2) You can then use the (questionable) large numbers about digital copyright infringement, and then lump those two things together, so you can claim both "biga danger to health." Without counterfeiting, the "danger" part is missing. Without copyright, the "big" part is missing. The fact that these are two extremely different issues with extremely different possible solutions, becomes a minor fact that gets left on the side of the road.Unfortunately, much of the information and fear-mongering about ACTA is. People are asking me why the text of ACTA is hidden away as a state secret . Yes, during negotiations, there was an insane amount of secrecy -- much more than is standard. But the final text of ACTA has been public for quite some time now. We can complain about the process, but saying that the document is still secret is false.Unfortunately, so much of the focus on ACTA was about the secrecy of the process, and the lack of actual stakeholders being involved (entertainment industry and pharma lobbyists had full access... everyone else? Not so much.), that the actual problems with the agreement have been clouded over. It is worth noting that the final ACTA textvery much improved from what was leaked out early on. In fact, it seems clear that, despite the attempts at secrecy, the fact that the document kept leaking really did help pressure negotiators to temper some of the "worst of the worst" in ACTA.For example, ACTA initially tried to establish much stronger secondary liability for ISPs, including effectively requiring a "graduated response" or "three strikes" plan for ISPs, that would require them to kick people accused (not convicted) of infringement multiple times offline. One of the key problems with ACTA has been how broadly worded it is and how open to interpretation it is. For an agreement whose sole purpose is supposed to be to clarify processes, the fact that it's so wide open to interpretation (with some interpretations potentially causing significant legal problems) seems like a big issue. For example, while the original draft never directly required a three strikes program, it requiredform of secondary liability measures, and theexample of a program that would mitigate such liability was... a three strikes program. To put it more simply, it basically said all signers need toto help out the entertainment industry, and one example is a three strikes program. No other examples are listed. Then they could pretend that it doesn't mandate such a program, but leaves little choice for signing countries other than to implement such a thing. However, thankfully, that provision was struck out from the final copy.So why is ACTA problematic?All that said, for folks who have just discovered ACTA, it's important to note that this is pretty much done. Many of the countries involved, including the US, have already signed on , and ACTA will go into effect soon (even if the other countries don't sign on). It's a bad agreement, but it's pretty late in the ball game to step in. If the EU can be convinced not to sign, that would be a big deal, but at this late stage, that seems unlikely.In the meantime, for folks who are just getting up to speed on ACTA, you really should turn your attention to the Trans-Pacific Partnership agreement (TPP), which is basically ACTA on steroids . It's being kept even more secret than ACTA, and appears to have provisions that are significantly worse than ACTA -- in some cases, with ridiculous , purely protectionist ideas, that are quite dangerous.

Filed Under: acta, constitution, executive agreement, inducement, lobbyists, pipa, problems, secondary liability, sopa, treaty