New International IP Treaty on the Horizon as Final Draft of Anti-Counterfeiting Trade Agreement Released

Last week, the parties negotiating the multi-lateral Anti-Counterfeiting Trade Agreement, or more commonly known as ACTA, finalized their draft document in what has been a long, tedious, and often controversial process. ACTA began in October 2007 in a combined international attempt to address counterfeiting and piracy of goods. If ratified and enacted into law, ACTA may have profound global implications on international copyright and trademark issues.

As a product of negotiations between countries and involving various other governmental and non-governmental organizations, ACTA becomes part of a growing body of international intellectual property treaties. The agreement, however, has a number of nuances that make it exceptional among these treaties, and includes several notable provisions that may conflict with existing laws in many jurisdictions. Scholars and commentators are just beginning to weigh in, and now that the final text has been released, expect to see extensive debate on its implications.

One aspect of ACTA that makes it exceptional is that it was negotiated outside the framework of existing and accepted international intellectual property protocols, notably WIPO and the WTO’s 1994 TRIPS agreement. Initially, the United States, the European Union, Switzerland, and Japan announced that they would begin negotiating what would become ACTA, and were soon joined by a number of other countries. The parties clearly acknowledge and recognize the role of such international protocols and existing intellectual property agreements – yet conducting their negotiations outside of traditional bodies such as WIPO and TRIPS means that they need not listen to the views or voices of anyone outside of their negotiating circle.

ACTA’s stated objective is to strengthen existing intellectual property enforcement. The text of the final draft reveals a strong slant in favor of IP rights holders, which is not unexpected in view of the countries invited to participate. With provisions strengthening civil enforcement, enhancing damages, and increasing border vigilance of intellectual property infringement, ACTA clearly intends to tighten the global framework for protecting the rights of IP owners.

One example of this is an entire section entitled “Criminal Enforcement” which explicitly mandates that parties provide for criminal penalties for intellectual property rights violations. While criminal liability already exists in many countries, one persistent problem is uneven and inconsistent international enforcement. ACTA appears to elevate priority for criminal enforcement of intellectual property rights violations with some broad and sweeping provisions.

One such provision explicitly requires parties to provide criminal penalties and procedures for willful trademark counterfeiting or copyright or related rights piracy on a commercial scale – which means, broadly, acts carried out as commercial activities for direct or indirect economic or commercial advantage.  Other specific examples of where criminal procedures and penalties apply include willful importation and domestic use of labels or packaging using an unauthorized trademark, and unauthorized copying of cinematographic works from a performance in a movie theater. Penalties are specifically meant to include imprisonment and heavy fines.

The language of ACTA also invites questions of whether information privacy is being adequately considered. For example, ACTA includes an entire section acknowledging how quickly and easily intellectual property rights infringement can occur in the digital age. The agreement’s section on Enforcement in the Digital Environment empowers parties to order an online service provider to disclose information sufficient to identify a subscriber whose account was allegedly used for infringement. ACTA also includes detail on how parties should cooperate internationally, encouraging cross-border information sharing and coordination of criminal and border enforcement of violations. Yet another issue with ACTA is the mechanism for domestic ratification – in the United States, for example, it is possible that ACTA may be ratified by executive action rather than by the legislature, circumventing any public debate about the implications of its provisions.

ACTA seeks to enhance protections available to IP rights holders to address increasing counterfeiting and piracy around the globe, noting that effective enforcement of intellectual property rights is critical to sustaining and promoting global economic growth. It remains to be determined, however, whether the real effect of ACTA will simply be to enable an erosion of privacy protections and an increase in criminal penalties without any actual impact on reducing global IP violations.