The Anti-Counterfeiting Trade Agreement is close to finalisation after it was announced overnight that “successful” negotiations in Tokyo yielded a “predecisional” draft of the document.

The controversial agreement, which originally proposed that signatory states be required to establish legal frameworks to impose  US-style copyright restrictions and restrict free trade, has come under persistent fire from international experts for its draconian enforcement provisions and wholesale export of the notorious US Digital Millennium Copyright Act.

But the final draft has seen many of the most criticised provisions watered down from the most recent previous text, and while there remain some concerning provisions, it looks as though there have been a number of wins against efforts of rights holders to use the agreement to dramatically expand the legal options open to them to pursue customers and competitors. Particularly:

  • The ability of rights holders to obtain injunctions has been curtailed from previous drafts, which provided that injunction should be available “against [infringing] intermediaries whose services are used by a third party to infringe an intellectual property right”, which was plainly directed at enabling rights holders to take out injunctions against ISPs. This has now been omitted altogether, and “third party” injunctions are now limited to injunctions “to prevent infringing goods from entering into the channels of commerce”.
  • There was also concern about US attempts to require that rights holders be able to access “pre-established” damages rather than damages based on actual costs suffered as a result of a copyright infringement, which are usually far less than statutorily-mandated damages. “Pre-established damages” are permitted under the final draft but not mandated. A requirement that states enable rights holders to pursue damages against parties that “unknowingly” infringe copyright (which as one critic pointed out might well cover pretty much anyone who has ever used the internet) has also been dropped.
  • Another US push to curb peer-to-peer sharing of copyrighted materials beyond that used for commercial purposes also appears to have been defeated, with a requirement for criminal sanctions no longer extending to “rights infringements that have no direct or indirect motivation of financial gain”. Instead, they will only apply to “willful trademark counterfeiting or copyright or related rights piracy on a commercial scale … [including] at least those carried out as commercial activities for direct or indirect economic or commercial advantage”. As expected, there is no mandating of a French-style three-strikes-and-you’re-out policy, although it would be allowed under the agreement.
  • And what appeared to be a push by pharmaceutical transnationals to curb the sale of generic pharmaceuticals by requiring countries to establish processes for stopping “goods … suspected of infringing intellectual property rights” even if they were transiting to a third country seems to have failed. The ‘Border Measures’ section no longer refers to goods “suspected of infringing property rights”; signatories now only “may” establish regimes for goods transiting through their countries, whereas they “shall” establish such regimes for the import and export of goods, and the section requires that signatories do not establish border enforcement measures in a “manner that does not discriminate between intellectual property rights and that avoids the creation of barriers to legitimate trade”.

That’s the good news. The bad news is, there remain some draconian provisions aimed at enforcing corporate rights holders’ interests. The ‘Border Measures’ section was the most notorious section of previous drafts, and potentially required states to establish processes for searching the laptops, iPods, mobile phones and other electronic devices of travelers for copyrighted material that shouldn’t be there. This sort of search power will not be mandated by the agreement, and it specifically allows states to exclude “small quantities of goods of a non-commercial nature contained in travelers’ personal luggage” — but only if they wish to.

Even if the Australian government decides to take advantage of the exclusion and not start checking your laptop for downloaded movies or pirated music whenever you come back into the country, that’s not to say other countries won’t do exactly that when you travel abroad.

And as feared, the agreement specifically requires states to enable courts to order ISPs to provide rights holders with information about customers where copyright infringement is alleged.

And the final draft also retains a requirement that states ban any attempt to circumvent copyright protection technologies, or any attempt to distribute the means of doing so, or to remove digital rights management information from anything, or distribute such material. As a number of critics pointed out, this in effect imposed the Americans’ DMCA on the rest of the world without any of the basic exemptions that the American legislation provides, like fair use.

The only improvement is that previous drafts of the agreement allowed countries to provide exemptions only to the extent that they didn’t “significantly impair the adequacy of legal protection”; the final draft now provides wider scope for countries to provide exemptions without pre-emptively neutering them.

Peter Fray

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