MEMORANDUM

To All IFRRO Members From General Counsel Re Anti-Counterfeiting Trade Agreement (ACTA) Negotiations Date 05 March 2010

Negotiations on an Anti-Counterfeiting Trade Agreement (ACTA) have been ongoing behind closed doors over the past two years. The talks, in which the US, the EU, Canada, Mexico, Australia, New Zealand, South Korea, Singapore, Jordan, Morocco and the United Arab Emirates are involved, are intended to establish agreed standards for the enforcement of intellectual property rights that address today’s challenges.

The 8th round of the negotiations is scheduled to take place in Wellington, New Zealand on 12-16 April 2010. Further discussions should be monitored, as far as possible, closely.

The European Commission’s Directorate General for Trade (DG Trade) is organising a meeting on 22 March 2010 to inform and consult interested parties about the negotiation of a plurilateral ACTA.

Aims of the ACTA negotiations According to the European Commission’s summary of the key elements under discussion in the on-going ACTA negotiations1, jointly issued by the ACTA negotiating partners, the ACTA initiative aims to establish international standards for enforcing intellectual property rights in order to fight more efficiently the growing problem of counterfeiting and piracy; more specifically: by increasing international cooperation, strengthening the framework of practices that contribute to effective enforcement of intellectual property rights, strengthening the framework of practices that contribute to effective enforcement of intellectual property rights and strengthening relevant enforcement measures. The intended focus is on counterfeiting and piracy activities that significantly affect commercial interests, rather than on the activities of ordinary citizens. ACTA builds on existing international rules in the area of intellectual property, in particular on the TRIPS Agreement, and is intended to address a number of enforcement issues where participants have identified that an international legal framework does not exist or needs to be strengthened.2

Countries involved in the ACTA negotiations ACTA talks have been going on since two years between the US, the EU, Canada, Mexico, Australia, New Zealand, South Korea, Singapore, Jordan, Morocco and the United Arab Emirates.

1 http://trade.ec.europa.eu/doclib/docs/2009/november/tradoc_145271.pdf (page 2) 2 In a Commission Q&A document it is stated that the EU fully supports the important work of G8, WTO and WIPO, but that the “membership and priorities simply are not the most conducive to this kind of path breaking project” (http://trade.ec.europa.eu/doclib/docs/2009/january/tradoc_142040.pdf, page 3).

1

Confidentiality of the ACTA negotiations So far, the talks, which are supposed to be finalised by the end of 2010, have been held under strict confidentiality (even though some documents have leaked to the public). Many stakeholders have shown their interest in receiving further information and have requested that the draft text should be disclosed. The parties have argued that it is accepted practice during trade negotiations among sovereign states to not share negotiating texts with the public at large, particularly at earlier stages of the negotiation.3

After the latest round in Mexico, the participants issued only a bland communiqué saying, among other things, that: “The discussions at the meeting were productive and focused on civil enforcement, border enforcement and enforcement of rights in the digital environment. Recalling their shared view of the importance of providing opportunities for meaningful public input, the participants reaffirmed their commitment to intensify their respective efforts to provide such opportunities and collectively enhance transparency.” 4

Draft structure of the ACTA agreement The draft structure of the agreement has been provided on the European Commission’s website, including a few further details5:

1. Chapter one: initial provisions and definitions 2. Chapter two: legal framework for enforcement of intellectual property rights i. Civil enforcement ii. Border measures iii. Criminal enforcement iv. Intellectual property rights enforcement in the digital environment6 3. Chapter three: international cooperation 4. Chapter four: enforcement practices 5. Chapter five: institutional arrangements 6. Chapter six: final provisions

The European Commission has also drafted a factsheet, updated in November 2008.7

The European Commission’s viewpoint European Commission officials involved in negotiating ACTA on behalf of the EU insist that the text being discussed does not contradict existing EU laws, claiming that the EU does not want to make a “three strikes” rule obligatory through the ACTA treaty.

The preparedness to regulate enforcement issues more than previously has also been addressed by Commissioner for DG Internal Market, Michel Barnier, during his hearing vis-à-vis the European Parliament on 13 January 2010, when he stated that he

3 http://trade.ec.europa.eu/doclib/docs/2009/november/tradoc_145271.pdf (page 1) 4 http://www.international.gc.ca/trade-agreements-accords-commerciaux/fo/7-negotiation-7- negociation.aspx 5 http://trade.ec.europa.eu/doclib/docs/2009/november/tradoc_145271.pdf (pages 2-6) 6 http://ec.europa.eu/trade/creating-opportunities/trade-topics/intellectual-property/anti-counterfeiting/ 7 See also http://trade.ec.europa.eu/doclib/docs/2008/october/tradoc_140836.11.08.pdf.

2

would like to engage in talks on the proposed plurilateral ACTA in order to combine efforts against counterfeiting and piracy.

The European Commission’s DG Trade is organising a meeting on 22 March 2010 to inform and consult interested parties about the negotiations regarding ACTA.

The European Parliament’s viewpoint The European Parliament is preparing to assume its newly increased role in ACTA negotiations with several requests to the EU Commission underway. In its Resolution of 9 February 2010 on a Framework Agreement with the Commission8, Parliament demands immediate and full information at every stage of negotiations on international agreements, in particular on trade matters and other negotiations involving the consent procedure, to give full effect to Article 218 TFEU. Parliament has on various occasions called on the European Commission and Council to ensure the widest possible access to ACTA documents, notably in its reports of 18 December 2008 (Susta Report9) and 11 March 2009 (Cashman Report10). According to the new Lisbon Treaty, Parliament has to agree to ACTA. However, the Parliament will not have full co-legislative powers over ACTA, as it would for draft EU legislation on IPR enforcement. Instead, it will only be able to approve or reject what has been agreed.

In the Q&A document prepared by the European Commission11, it is highlighted that ACTA will not go further than the current Community acquis on IPR enforcement, which does not limit fundamental rights and freedoms or civil liberties, such as the protection of personal data.12 Swedish MEP Christian Engström asked whether the cut-offs are still part of the EU acquis. Apart from that, German Liberal Democrat MEP Alexander Alvaro’s request is pending before the Commission. Alvaro asked why issues other than counterfeiting were addressed at all, and why – if substantive changes of IP law were intended – this was not discussed at the WIPO, and what the benefit of an agreement would be that would bring no changed responsibilities to the negotiating partners.13 Against this background, the Parliament (Committee on Internal Trade) held a hearing on ACTA on 23 February 201014, albeit without any clear answers from the European Commission’s side15. Also, on 9 March 2010, the European Parliament will hold a debate, which may be closed with a resolution, on oral questions16 to the Commission on the ACTA.17

8 http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-2009- 0009&language=EN 9 http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P6-TA-2008- 0634&language=EN, paragraphs 14 and 28 10 http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P6-TA-2009- 0114&language=EN , paragraph 26 11 http://trade.ec.europa.eu/doclib/docs/2009/january/tradoc_142040.pdf 12 http://trade.ec.europa.eu/doclib/docs/2009/january/tradoc_142040.pdf (page 1) 13 http://www.ip-watch.org/weblog/2010/02/18/acta-negotiators-maximal-protection-proposals- unlikely-in-final-text/. 14 http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+COMPARL+INTA-OJ- 20100223-1+01+DOC+XML+V0//EN&language=FR 15 http://www.iptegrity.com/index.php?option=com_content&task=view&id=472&Itemid=9 16 http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+OQ+O-2010- 0026+0+DOC+XML+V0//EN&language=EN 17 http://www.europarl.europa.eu/oeil/file.jsp?id=5843502&language=en&mailer=true

3

Leaks from the negotiations on ACTA In a series of leaks of confidential information from the negotiations, the parties are, reportedly, also drawing up rules designed to go ahead against copyright abuse on the Internet, in part by making ISPs liable for illegal content, according to a copy of a part of the confidential draft agreement seen by IDG News Service18.

According to this information, to avoid being sued, the ISP would have to prove that it took action to prevent the copyright abuse. In a footnote19, the draft text gives an example of the sort of policy ISPs would need to adopt to avoid being sued by content owners: “An example of such a policy is providing for the termination in appropriate circumstances of subscriptions and accounts in the service provider’s system or network of repeat offenders”. Another leaked EU document states in this regard: “EU understands that footnote 6 provides for an example of a reasonable policy to address the unauthorized storage or transmission of protected materials. However, the issue of termination of subscriptions and accounts has been subject to much debate in several Member States. Furthermore, the issue of whether a subscription or an account may be terminated without prior court decision is still subject to negotiations between the European Parliament and the Council of Telecoms Ministers regarding the Telecoms Package.”20

In a separate leak21 that first appeared on blogs, the European Commission updated members of the European Parliament on the most recent face-to-face meeting between the signatory countries, which took place in Guadalajara, Mexico, at the end of January 2010. According to a report on IP Watch22, negotiators coming back from the last ACTA negotiations in Mexico said that the chapter on copyright protection in the digital environment under negotiation is still in an embryonic state.

A confidential two-page report from Pedro Velasco-Martins, a negotiator from the European Commission’s DG Trade, was written about by University of Ottawa law professor Michael Geist23. The report indicates that the next (8th) negotiating round will be held in Wellington, New Zealand on 12-16 April, and will cover a detailed discussion of Internet, civil, customs and penal measures.24

In addition, a letter from the United States government, addressed to Senator Ron Wyden (Democrat, Oregon) from US Trade Representative Ron Kirk, answering a variety of questions about the ACTA, has been released online.25 According to the

18 http://computerworld.co.nz/news.nsf/news/leaked-acta-draft-treaty-reveals-plans-for-Internet- clampdown 19 http://1037461200264021837-a-1802744773732722657-s- sites.googlegroups.com/site/actadigitalchapter/acta_digital_chapter.pdf?attachauth=ANoY7cqNbjZYw 9YStH0hF3-t-HKvkgyuyaY- INpMnW0ojCMhEPDWYtKPRolgKwV9YCfYiLXZ4EpQoTKmkkZD6xjpn3jZaqvIujpDCn6g9qRk1 kYVJTy6lwzF4wYKJiVG62- IkpWphGLCNeiizBRpx9eEwmzyzsh08SGrnaomy4pBxwBpAfoGobb19W81Hc_GzDejUbXwEHyER BAFR6r4i46jEFolJ4HrrA%3D%3D&attredirects=0 (page 2, footnote 6) 20 http://www.michaelgeist.ca/content/view/4725/125/ 21 http://www.publicknowledge.org/pdf/acta-leak-20100212.pdf 22 http://www.ip-watch.org/weblog/2010/02/18/acta-negotiators-maximal-protection-proposals- unlikely-in-final-text/ 23 http://www.circleid.com/posts/european_acta_document_leak_new_details_on_mexico_talks/ 24 http://www.pcinpact.com/actu/news/55418-apport-acta-mexique-europe-commission.htm 25 http://www.ustr.gov/webfm_send/1700 and http://www.ustr.gov/webfm_send/1701

4

website of the Office of the United States Trade Representative (USTR), USTR is taking several steps to increase the transparency of ACTA negotiations, including releasing meeting agendas, providing links to related past agreements, and getting advice from relevant stakeholders. On the type of intellectual property rights the ACTA will address, it states that it will be similar to earlier free trade agreements.26

Critics of ACTA Despite the declared commitment to the EU acquis communautaire, there is one issue where the negotiators do seem inclined to stretch their mandate. Even though criminal law sanctions were rejected during the legislative process for the IP Enforcement Directive (IPRED)27 in 2004 (due to the controversy about the meaning of “copyright violation on a commercial scale” as the threshold for criminal sanctions), these are part of ACTA. An IPRED2 that will harmonise nations’ criminal sanctions against copyright infringement is still underway. The European Commission is pointing to minimum standards for criminal sanctions in TRIPS. Also, EU negotiators have avoided a clear definition of “commercial scale” in the EU-Korea Free Trade Agreement (FTA).28 Critical voices also state that having said yes to TRIPS does not settle questions around the range of answers given in EU Member States with regard to who should be the target of criminal sanctions.

Opponents of ACTA say that the Commission's promise not to go beyond existing EU law is of limited worth because the acquis is confusing and open to interpretation. Germany, for instance, replying to several German Parliamentarians in December 200929, stated that Germany’s policy as regards copyrights and related rights aims at not being impeded by ACTA. However, this does not, per se, exclude the amendments of laws on a national level, parallel to the ACTA negotiations.30

Moreover, confusion over ISPs’ obligations led to a dispute between the Spanish telecoms company Telefónica and Promusicae, a Spanish association representing music and film rightholders, being referred to the European Court of Justice in 2006. In the Promusicae v. Telefonica decision (case C-275/06), issued in January 2008, the court ruled that EU Member States, at least in civil cases, have discretion to decide when ISPs should be forced to release information31. Some stakeholders now fear that the verdict could be overturned through ACTA. Critics of the negotiations also argue that if protecting industrialised countries’ economies is the goal, the talks should include developing countries like China, India and Indonesia, where intellectual property laws or enforcement are sometimes weaker.32 The Commission says that its “ultimate objective” is that China will also join the ACTA negotiations. So far, however, this goal remains unrealised.33

26 http://www.ustr.gov/acta 27 Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights (also known as “(IPR) Enforcement Directive” or “IPRED”), http://eur-lex.europa.eu/pri/en/oj/dat/2004/l_195/l_19520040602en00160025.pdf 28 http://www.ip-watch.org/weblog/2010/02/18/acta-negotiators-maximal-protection-proposals- unlikely-in-final-text/ 29 http://dip21.bundestag.de/dip21/btd/17/001/1700186.pdf 30 http://dip21.bundestag.de/dip21/btd/17/001/1700186.pdf 31 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62006J0275:EN:HTML 32 http://www.nytimes.com/2010/02/08/technology/08piracy.html?scp=1 33 http://www.europeanvoice.com/article/imported/stemming-the-tide-of-cheap-fake-goods/63302.aspx

5

Recommendation

Further discussions of the draft ACTA, including the 8th round of the negotiations in New Zealand in April 2010, should be monitored closely.

Details as regards the ACTA Stakeholders Consultation Meeting in Brussels

The Directorate General for Trade of the European Commission is organising a meeting on 22 March 2010, to inform and consult interested parties about the 34 negotiation of a plurilateral Anti-Counterfeiting Trade Agreement (ACTA).

Date: Monday, 22nd March 2010 Time: 10.00 – 12:30 am Location: Charlemagne Building, Room Alcide de Gaspieri - Rue de la Loi, 170 B- 1049 Brussels

To register (pre-registration is required for security reasons): - Please send an email with your name and the name of the represented organisation by 15 March 2010 to [email protected] - Those wishing to present their positions in writing may send their comments to [email protected] , no later than 22 March 2010.

- END -

34 http://trade.ec.europa.eu/doclib/press/index.cfm?id=517&serie=318&langId=en

6