The Anti-Counterfeiting Trade Agreement (ACTA) is open for interpretation, perhaps too much so, legal experts on both sides of the Atlantic are warning.

Reacting to a detailed answer [pdf] the European Trade Commissioner gave last week to a group of well-known intellectual property law experts, Axel Metzger from the Institute for Legal Informatics at the University of Hannover (Germany) said the European Commission is now opting for the most restrictive interpretation of the agreed text.

“Why then were the restrictions not reflected in the text in the first place?” he asked.

The Commission pointed out that while the academics’ opinion had shown that the rules of ACTA were not “entirely similar to the corresponding EU law, this does not imply that ACTA was incompatible with EU law.”

In fact, they said, it was understandable that an international agreement negotiated by parties with different legal traditions would be drafted in more general terms. Yet ACTA provides “the parties with the necessary flexibility to establish a balance which takes account of their economic, political and social objectives, as well as their legal traditions.”

A core criticism from the academics was that ACTA was drafted in general – or even vague – terms only in the area of exceptions and limitations, not for stricter enforcement measures. “It is symptomatic for the legal imbalance in DG [EU Directorate General] Trade that there was no push for harmonization of limitations and exceptions due to the different legal traditions, yet it was possible without much effort to get consensus of the ACTA parties on stricter enforcement.”

According to Metzger, sanctions without due process are imbalanced, and “such an approach is unacceptable.” Metzger also drew the conclusion that DG Trade’s answer confirmed that the opinion filed by the academics struck home. “Apparently the Commission meanwhile is concerned that ACTA might finally not be acceptable to the majority in Europe,” Metzger said.

Not only do EU member state governments and the European Parliament have to pass ACTA, but, depending on their constitutional systems, it will also have to get by the national parliaments of EU member states. Germany’s justice minister has already announced that ACTA would be tabled for agreement in Germany’s national parliament.

In the United States, ACTA is planned to be passed by executive order and without involvement of Congress, which is possible as long as there is no need to update national law in the US. Yet a study by Congressional Research Service of the Library of Congress done on request of Senator Ron Wyden (D-Oregon) and kept under the wraps until recently notes that “Depending on how broadly or narrowly several passages from the ACTA draft text are interpreted, it appears that certain provisions of federal intellectual property could be regarded as inconsistent with ACTA.”

So again, as in Europe, ACTA seems to be dependent on a restrictive interpretation. Expert Frederick Abbott said last week in a piece published in Intellectual Property Watch (IPW, Inside Views, 6 May 2011): “The apparent decision by the USTR not to submit it for congressional approval is very odd” and “fraught with issues.”

One issue is that even in the most restrictive interpretation, some academics still view parts of ACTA as not consistent with respective existing legislation. For the EU, the Commission in its answer to the academics acknowledges that “there is indeed no EU acquis on criminal measures,” meaning the Commission lacks competency in this area. ACTA indeed goes “beyond the existing acquis communataire,” the Commission wrote in answer to questions from Intellectual Property Watch.

But, the Commission source said: “the Commission was negotiating with the support of the member states. If the agreement goes beyond the scope of EU powers, then it will have to be ratified by the member states. Whether laws need to be changed is a separate question. No EU laws need to be changed. Whether member states’ laws will need to be changed is primarily a question for those member states concerned.”

Other examples of issues seen as game-changers in either the EU or the US are for example damages, which the EU academics (despite the Commission’s answer) see as potentially cumulative, and therefore higher. Statutory damages, according to legal experts, are also unknown to Australian law. The US Congressional Research Service warned that certain limitations from damages in the US Copyright Act would be overruled by ACTA.

With regard to the role of intermediaries, the digital chapter in ACTA was heavily redacted during the final ACTA sessions in what some IP law experts saw as a half-hearted attempt to keep the limited liability regime for providers depending on their respective offerings. And the footnote inferring three-strike-like systems was removed and exchanged with an “endeavor to promote cooperative efforts within the business community to effectively address trademark and copyright or related rights infringement while preserving legitimate competition and consistent with each Party’s law, preserving fundamental principles such as freedom of expression, fair process, and privacy.”

Intermediaries like the big EU associations of the cable (Cable Europe), internet service providers (EuroISPA), telecommunications (ETNO) and mobile network operator (GMSA) industries are still not at ease, according a recent press release on the IP policy in Europe. They warned that ACTA was an example “where the vested rights of the content industry were repeatedly defended to the detriment of consumers’ needs and the development of the internet.

The academics’ position seems to support such concerns in warning that some controversial issues in ACTA, though made optional, could still be read as ‘an international political incitement to implement such clauses’. The Commission criticised the academics’ position several times for what it declared as political instead of legal comments. Yet the academics might turn that argument around and ask whether “endeavor to promote cooperative efforts” is really a legal provision.

Finally, the legal experts in the EU and the US agree very much on the extension of TRIPS measures, by setting a broader definition of “commercial scale” infringement or by tightening the de minimis exception, defining what private persons can take or send across borders. Again the coordinator of the EU IP-law academics said he was not convinced by the EU Commission statement that legal safeguards from the TRIPS agreement would not be erased by ACTA.

“It is just not as clear as the Commission wants us to believe,” he said.

Meanwhile, ACTA has been open for ratification since 1 May, according to a press release from the Japanese Foreign Policy Ministry. The French and Spanish versions had to be cleaned up in further rounds of exchanges by the parties, Intellectual Property Watch was informed.

The European Commission now is “likely to adopt the proposals for signature and conclusion of ACTA in the course of the month of May. After the adoption by the College of Commissioners, the proposals will be sent to the Council for approval and subsequent signature of ACTA and to the European Parliament for the process of consent,” according to the Commission.

ACTA still could fail there. And it can still fail in other countries, for example, in Mexico, where two public hearings unravelled a lot of criticism about the nature and the procedure of the agreement.

Several ACTA parties approached by Intellectual Property Watch with questions on their ACTA ratification procedure preferred to keep silent.