By Monika Ermert for Intellectual Property Watch
Representatives of industry and the public as well as intellectual property law experts are puzzled by the ongoing secrecy under which negotiations on the proposed Anti-Counterfeiting Trade Agreement (ACTA) are being held.

The ACTA negotiations, which could result in widely applicable escalated rules on piracy and counterfeiting, appeared to move ahead this week.

A European Commission spokesperson answered an inquiry from Intellectual Property Watch by saying that it was “not likely that negotiating texts themselves will be made public at this early stage,” referring to two rounds of negotiations so far.

Negotiations on border measures advanced, the spokesman said, but are not yet concluded. Cooperation between customs authorities was not yet discussed. Generally, cooperation among enforcement authorities should be discussed at a later stage in a negotiation, he said.

The European Commission did issue a press release on the week’s talks. According to the Commission release, discussions focussed “on civil remedies for infringements of intellectual property rights, including the availability of preliminary measures, preservation of evidence, damages, and legal fees and costs.”

The press release spoke vaguely of “steady progress” and plans for “another substantive meeting to be held at a mutually convenient time in the near future.” According to the spokesman, the date and location of the next round had not yet been confirmed, but most likely would take place in the first half of October. It was possible, he said, “that a first draft text dealing with internet IP infringements” would be produced and discussed. Proponents have previously set a target of year’s end for the deal.

Online IP infringement is one of the topics where US industry sources, consumer protection groups and civil rights organisations have a lot of concerns. Obligations for carriers and internet service providers to monitor or even police customers’ activities on the internet are on the legislative agenda of France, currently holding the European Union presidency.

EU Debates Affect ACTA

During the debates about the EU Electronic Communications Review Package (TK Review) such obligations have been put on the agenda, yet so far been they have been objected to by a majority of members of the European Parliament. The issue of the so-called “graduated response” that would allow cutting the internet access of copyright infringers, had not been discussed in ACTA negotiations so far, according to the Commission spokesperson. “The EU position on this issue should be based on EU law,” the spokesman wrote.

This again makes ongoing legislative debates in the EU – especially on the TK Review – of considerable importance for ACTA. A representative from the Transatlantic Consumer Dialogue told Intellectual Property Watch that European nongovernmental organisations were also afraid that the follow-up to the Intellectual Property Enforcement Directive, the so-called IPRED 2, that would harmonise criminal law sanctions, would be revived. IPRED 2 has not been discussed for over a year.

Harmonisation of criminal law sanctions against IP infringement could counter arguments put forward against ACTA by experts at the Foundation for a Free Information Infrastructure (FFII). “With regard to criminal measures, ACTA can only go so far as policy fields are harmonised,” FFII wrote in its analysis. FFII experts also pointed to the fact that possible extension of ACTA to non-commercial acts would be dependent on a unanimous vote in the European Council, assent of the European Parliament, and common accord of the member states.

That ACTA would bring no changes in US law was also a promise to participants of a briefing the US Trade Representative held for interested parties at the end of June, according to sources. Yet an US industry source told Intellectual Property Watch that “certainly there will be changes in US law.” Especially with regard to possible internet monitoring it “might integrate best practices into an international trade agreement where it just does not belong,” the source said. The agreement also might result in a situation where a judgement against eBay for the sale of Nazi memorabilia completely in accordance with US law might be turned against a US company.

A key issue for NGOs with regard to US law, according to Manon Ress of Knowledge Ecology International, is “that the treaty could interfere with our fair use of copyrighted materials.”

Another grave concern for NGOs concerned with easier access to medicine is the possible mixing of parallel imports and piracy. Ress said there were signs that there was an intention “to interfere with legitimate parallel trade in goods, including the resale of brand-name pharmaceutical products.”

ACTA “could impose liability on manufacturers of active pharmaceutical ingredients (APIs), if those APIs are used to make counterfeits – a liability system that may make API manufacturers reluctant to sell to legal generic drug makers, and thereby significantly damage the functioning of the legal generic pharmaceutical industry.”

The topic of possible criminalisation had led to sharp criticism of legal experts in the European Union against the provisions presented in the IPRED 2 draft text last year.

European Parliament Member Eva Lichtenberger, designated rapporteur in the Parliament Legal Committee, said that considering the complicated mix of ongoing different legislative projects in the Union, the pressure with regard to new IP enforcement measures, and ever more calls to make use of control options enabled by internet technology, “it is more important to take a very close look behind the curtain.” Benefit only for large multinational enterprises and no attention to small and medium-sized enterprises would mean harm for innovation, she said.

Suspiciously Closed Negotiations

Sources described the closed-door negotiations which continued this week in Washington, DC as “very special”, “unique in its secrecy” and the “first time that industry has been kept in the dark about an agreement of such importance.”

Disclosure of the text was of utmost importance, said Lichtenberger. “All ACTA texts have to be presented,” she demanded. When the Parliament prepares an opinion on ACTA after the summer, she expects to have more than summary reports of the Commission trade directorate experts who have been tasked with the negotiations.

Lichtenberger said that while it might be “difficult to force disclosure using legal means,” the effect of continued non-disclosure would be devastating for the Union. A European Union that excluded the public for such a process would further alienate EU sceptics, she warned. “It’s disclosure, disclosure, and disclosure, I would say,” she said.

Consulted parties in various countries so far are not happy with how this consultation is occurring. The national country-code top-level domain operator in New Zealand, Internet NZ, noted in a statement “that there is a dearth of official information on the proposed ACTA treaty and on specific terms being discussed by the parties involved. Without seeing a working draft of the treaty, it is difficult to make considered comment.”

The US industry source complained that there was an impression that consultations so far had been organised highly selectively and according to the “Animal Farm” [a George Orwell novel] motto that “all animals are equal, but some are more equal than others.” Statements like the one from the Business Action to Stop Counterfeiting and Piracy of the International Chamber of Commerce raised suspicion that they had more information about the draft texts discusses in Geneva and Washington so far.

Negotiators after conclusion of the meeting in Washington on 31 July underlined their intention to “continue consulting with stakeholders through domestic processes, to share the results of these consultations at their next meeting, and to continue exploring opportunities for stakeholder consultations in connection with future ACTA meetings.” Yet the Commission spokesman said the negotiating texts are not likely to be made public at this “early stage.”

”Regarding a final negotiated text, this will be presented publicly once it is prepared for signing,” the spokesman said. In Europe it would be presented to the Council and the European Parliament earlier, but with a ‘limited distribution’ status. Member states would present it to national parliaments.

While critics outside the closed doors concede that they certainly are against counterfeit goods that intend to deceive consumers as to who made them, they feared that an over broad or poorly drafted international instrument on counterfeiting could have harmful consequences.

One critic proposed “a narrow and focussed agreement” on “material goods” that did “not touch the internet in the first place.” But as long as there is no clarity, concerns will continue to rise about the mysterious ACTA.

Monika Ermert may be reached at info@ip-watch.ch.