By Liza Porteus Viana for Intellectual Property Watch
The United States, European Union and other key trading partners on Tuesday announced their intention to negotiate an Anti-Counterfeiting Trade Agreement (ACTA) to encourage other countries to meet higher intellectual property rights enforcement standards.

“Global counterfeiting and piracy steal billions of dollars from workers, artists and entrepreneurs each year and jeopardise the health and safety of citizens across the world,” US Trade Representative Susan Schwab told reporters in Washington in announcing the negotiations. “Today launches our joint efforts to confront counterfeiters and pirates across the global marketplace.”

The United States is so far joined by Canada, the 27-member state European Union, Japan, Korea, Mexico, New Zealand and Switzerland. Participants will expand upon a vision developed within the past year for a new agreement addressing three main areas: cooperation, best practices and a strong legal framework for IPR enforcement.

“We are seeking to counter global piracy and counterfeiting more effectively, in an effort to foster an environment that allows for innovation, foreign investment and sustained economic growth,” said David Emerson, Canada’s Minister of International Trade.

“A new international anti-counterfeiting treaty will strengthen global cooperation and establish new international norms, helping to create a new global gold standard on IPR enforcement,” added EU Trade Commissioner Peter Mandelson, who said ACTA will help deal with the changing nature of intellectual property theft in the global economy, including the rise of easy-to-copy digital storage mediums and the increasing danger of health threats from counterfeit food and pharmaceuticals.

The EU has proposed transitional mechanisms and technical assistance to help advanced developing countries join the pact. Mandelson said the EU was pushing countries like China to enforce anti-counterfeiting legislation and to toughen the legal penalties for intellectual property theft.

Switzerland has been participating with the European Commission and Canada in the preliminary talks with the US and Japan about an agreement such as ACTA since mid-2006 to offset financial losses suffered by rights owners and original producers, as well as the risk to sustainable economic development and the security and health of consumers in both industrial and developing countries. They say their export-oriented economy is dependent on effective protection and efficient enforcement of its intellectual property rights in the international trade arena.

Schwab said the latest negotiations will expand upon the enforcement standards of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and countries would be encouraged to comply with other international IPR agreements. The goal is to set a new, higher benchmark for enforcement that countries can join voluntarily. The US and EU have been raising IP protection levels in bilateral trade negotiations, and recently, developing countries have been working to ensure the terms are best for them as well.

ACTA will build upon previous IPR efforts within the context of the US-EU Summit, the Group of 8, the Asia-Pacific Economic Cooperation (APEC) forum, the Organisation for Economic Cooperation and Development (OECD), and the Security and Prosperity Partnership of North America, which includes Canada, Mexico and the United States.

Schwab expects other trading partners to join the emerging consensus and said participants will work to complete ACTA as soon as possible. The Swiss Federal Institute of Intellectual Property said it expects formal negotiations to begin next year. Country participation in the ACTA would be voluntary.

“I assume that, having gone this far, it (USTR) got some ducks already lined up,” said Alan Drewsen, executive director of the International Trademark Association. “It doesn’t seem worthwhile to make this kind of announcement, then three years later, come out with an agreement … I expect them to be right on it.” Drewsen said criminals have become more sophisticated since the negotiation of the TRIPS agreement, raising risks and the need for a higher enforcement standard.

IP Supporters, Industry Hail Prospective Agreement

INTA has been trying to raise the issue of counterfeiting to governments worldwide. Drewsen said as things stand now, counterfeiters know what countries have more lax enforcement than others, and they choose those regions to operate in.

“I think they are recognising … that this is truly a trans-national crime,” Drewsen said. “We’ve got significant criminal organisations involved in it – they are moving goods from country to country to country, sometimes involving free-trade zones which were created to facilitate international commerce but also facilitate counterfeiting.”

US Representative Tom Feeney, a Florida Republican and co-chair of the Congressional Intellectual Property Caucus, highlighted profound economic losses and said, “This new trade agreement will help foster international cooperation in protecting intellectual property by strengthening and improving intellectual property laws in the countries party to this agreement.”

Feeney added, “It is my hope that the countries involved will quickly and fully adopt the principles announced today and that these words of commitment will be followed up with the actions necessary to implement them. This new agreement can also galvanize others to realise the benefits to stronger IP protections in their own countries.”

US Rep. Mary Bono (R-California), alleged that an estimated 1.2 billion fake CDs were sold in 2005, which means one out of every three CDs sold worldwide was a pirate copy. She also presented statistics on losses due to illegal downloads of music and film. “But it’s not only about entertainment,” she said, “it’s about books and software, manufactured goods and industrial designs, and any other industry or individual that relies on intellectual property to support a family.”

Bono told Intellectual Property Watch that “a lot more needs to be done” to help developing countries create legitimate products for their markets and to educate them on the dangers counterfeit products pose to their economies and their citizens. And, she added, “we need to do more to educate the consumers on what buying a fake or counterfeit product means.”

Michael Kirk, executive director of the American Intellectual Property Law Association, told Intellectual Property Watch that not only do developing countries need to create products and brand names of their own to reduce the number of shoddy or fake products they may be importing, but increased border inspections for all countries would help stop the flow of pirated goods, particularly from countries such as China and Russia.

At the start of 2007, a global gathering in Geneva of industry agreed on a strategy of emphasising the health and safety risks of counterfeiting (IPW, Enforcement, 31 January 2007).

The International Intellectual Property Alliance (IIPA), an influential coalition of the US copyright-based industries, also voiced support, citing the economic impact of counterfeiting.

“This initiative shows the growing recognition of the importance of strong standards embodied in the enforcement text of the TRIPS Agreement and, more recently, the US free trade agreements,” said the IIPA’s Eric Smith. “Moving enforcement standards from statutory law into practical and specific mechanisms to strengthen enforcement is a key next step in the process of improving IPR protection on a global basis. We hope and expect that an eventual agreement will contain strong, practical provisions that can then be adopted by other countries.”

The music industry said organised crime has played an increasing role in the manufacture and distribution of pirated discs, while new technologies make it even harder to guard against unauthorised uses. Industry groups like the Recording Industry Association of America, The Latin Recording Academy, National Music Publishers’ Association and others noted that ACTA also furthers one of the goals of the Council of Europe Cybercrime Convention, which recognised that Internet piracy should be a priority for law enforcement.

“If creators around the world are going to be able to continue to live from their craft,” said an industry statement, “then governments must step up their enforcement actions, and legal systems must demand greater accountability on the part of all parties involved in the transmission of infringing materials.”

Liza Porteus Viana may be reached at info@ip-watch.ch.