The Trans-Pacific Partnership Agreement (TPPA) IP Chapter

May 6, 2011

By Melissa de Zwart

Nine countries are currently negotiating the Trans Pacific Partnership Agreement: US, Australia, New Zealand, Singapore, Chile, Malaysia, Brunei Darussalam, Vietnam and Peru. Under the terms of this agreement, signatories will be required to amend their domestic intellectual property laws to comply with the terms of the TPPA. The US draft of the intellectual property chapter of the trade agreement was leaked in February 2011 generating significant controversy regarding its draconian terms. The leaked chapter is available here at Michael Geist’s blog.

Some key aspects of the draft are as follows:

Geographical Indications

A party must provide that geographical indications (GIs) are eligible for protection as trademarks. For this purpose geographical indications are defined as ‘indications that identify a good as originating in the territory of a Party, or a region or locality in that territory, where a given quality, reputation, or other characteristic of the good is essentially attributable to its geographical origin. Any sign or combination of signs (such as words, including geographical and personal names, as well as letters, numerals, figurative elements, and colors, including single colors), in any form whatsoever’.

The TPPA provides for a registration of GIs if recognized by a member party. Of course, in Australia, GI protection currently extends only to wine and spirits, under the Wine Australia Corporation Act 1980 (Cth). This scheme was introduced to give effect to Australia’s obligations under TRIPS and, more specifically, the Australia-European Community Agreement on Trade in Wine 2008 (and it is predecessor signed in 1994). It is precisely this sort of agreement (reached in order to secure access to the European market for Australian winemakers) which would be prohibited by the TPPA.

Article 2 (which deals with trademarks and GIs) provides that no party shall (whether pursuant to an agreement with another government or otherwise):

  • Prohibit third parties from using translated versions of the geographical indications for goods other than wines or spirits;
  • Prohibit third parties from using a term that is ‘evoked by’ the geographical indication;
  • Prohibit third party uses of any component of a multi-component geographical indication protected by virtue of the agreement, even if such components are generic or use would not give rise to confusion (Clause 17).

For the purposes of the Agreement, a term is generic if it is customary in common language as the common name for the goods or services associated with the term or GI (Clause 18).

Clause 19 sets out a range of factors which may be taken into account in determining whether the terms is generic, such as whether:

  • persons other than the person claiming the rights use that term as the name for the product; and
  • the product is imported into the relevant country, in significant quantities, from outside the proposed protected region using the same name.

This is contrary to the current Australian regime, and particularly the Australia-EC Wine Agreement, which prohibits the use of certain traditional expressions and required the phasing out of local uses of specific GIs, despite their long-term use in Australia.

Clause 22 provides for the non-misleading use and/or registration of signs or indications that reference a geographical area that is not the true place of origin of the product of the product or services other than for wines or spirits, provided that:

a)     the sign or indication is used in a manner that does not mislead the public as to the geographical origin of the goods or services;

b)     the use does not constitute an act of unfair competition;

c)      use would not cause a likelihood of confusion with an earlier trade mark or GI; and

d)     the request for registration does not relate to a generic term.
This reflects the two tier system for GI protection provided for in Articles 22 and 23 of TRIPS, which recognize a higher level of protection for wine and spirits, extending to non-misleading and translated uses of GIs.


Article 4 extends the rights granted to authors, performers and producers of phonograms to all forms of reproduction of their works/ performances including temporary storage in electronic form.  The temporary reproduction right proved particularly controversial during the negotiations that resulted in the WIPO Copyright Treaty (WCT) and ultimately could not be resolved at that meeting. Rather, it was dealt with by way of the Agreed Statement to Article 8. (‘It is understood that the mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Treaty or the Berne Convention. It is further understood that nothing in Article 8 precludes a Contracting Party from applying Article 11bis(2)’). The inclusion of the temporary reproduction right here in the TPPA without further fanfare or disclosure is particularly tricksy on the part of the US and is likely to cause significant debate!

Other notable expansions of copyright include:

  • Prohibition on parallel importation, even of goods manufactured with authorization of the copyright owner outside of the relevant territory.
  • Copyright terms are extended to life plus 70 years for individuals (already the case in Australia) and between 95 and 120 years for corporate works.

The relevant exceptions and limitations are left blank with only a ‘placeholder’ marking their potential inclusion (an ominous lack of attention to detail, given the foreshadowed expansion of rights) although it is noted with respect to the above, one of the possible exceptions would relate to internet retransmission.

Technological protection measures

Technological protection measures are yet again the focus of strengthening efforts. Parties are required to provide that any act of circumvention or dealing in circumvention devices or services shall be subject to civil and criminal penalties. Criminal penalties apply to anyone other than a non-profit library, archive, educational institution or public noncommercial broadcasting entity, who engages in circumvention ‘for purposes of commercial advantage or private financial gain’. Circumvention gives rise to liability independent from any infringement of copyright.

Exceptions and limitations to the anti-circumvention provisions must be confined to the purposes defined in paragraphs (d) and (e).

The narrowness of these exceptions will require amendment of Australia’s TPM provisions which currently require that a TPM be an ‘access control technological protection measure’ which effectively excludes protection of TPMs which protect region coding and TPMs embodied in machines or devices, not directed primarily to protecting copyright.

ISP liability

Article 16 provides for ‘Special Measures Relating to Enforcement in the Digital Environment’. Notably, Clause 3(a) requires parties to provide ‘legal incentives for service providers to cooperate with copyright owners in deterring the unauthorized storage and transmission of copyrighted materials.’ Given the current global climate regarding ISP liability and the decision of the Full Federal Court in the iiNet decision, this would impose significant pressure on the Australian government to reform the law. This is subject to compliance with the US DMCA safe-harbor provisions.


As expressed in this leaked US draft, the provisions of the TPPA, particularly those relating to copyright, appear to be more restrictive than ACTA. Some commentators have hypothesized that the ambit claims made in the leaked document are so extreme that the US is playing a negotiating tactic that allows them to significantly back down from this position and still come out ahead in terms of outcomes. Whilst this remains to be seen, it has reminded us that the parameters of intellectual property rights remain contested and vulnerable to being traded away in the international trade environment.

Dr Melissa de Zwart is an Associate Professor in Law at the University of Adelaide.

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Patent, Trade Mark, Enforcement – the whole kit and caboodle, all in one exciting Bill…

April 7, 2011

By Kimberlee Weatherall

At an IP Academics’ conference in early February, I remember Professor Di Nicol asking, rhetorically, ‘where has all the patent reform gone?’ Di pointed out that we’d had any number of ACIP Reports, ALRC Reports (like that on Gene Patenting), and IP Australia Discussion Papers, all with no actual legislation resulting.

No more.

No doubt many are already aware of the Intellectual Property Laws Amendment (Raising the Bar) Bill. An exposure draft for this Bill was released by IP Australia on 3 March, with comments due last Monday, 4 April. The provisions of the Bill have been discussed at some length elsewhere, too, including some very interesting, thorough discussion of Schedule 1 on the Patentology blog.

In summary, the Bill has 6 Schedules, and mostly deals with patent, although it has some important Trade Mark bits too.

  • Schedule 1 is meant to be about ‘raising the quality of granted patents’, but, in short, it’s about standards for granting a valid patent. It covers everything from changing the way prior art is considered in assessing whether a patent has an inventive step, making the requirement of usefulness a bit more real by requiring a ‘specific, substantial, and credible use’ for the invention; to the effective abolition of ‘fair basis’ and its replacement with a concept of ‘support’ drawn from European law.
  • Schedule 2 proposes a new research exemption in patent, something that has been discussed for years now and is long overdue, to be honest.
  • Schedule 3 is meant to be about ‘reducing delays in resolution of patent and trade mark applications’, which seems to be mostly about finding ways to speed up patent and trade mark oppositions. I’m not entirely convinced the proposals will work, not least because I can’t see anything there that really deals with extensions of time in opposition proceedings that can really extend the time of an opposition. In any event, the proposed changes mostly create a framework within which more detailed regulations will be made. It is hard, therefore, to predict the ultimate outcome of these reforms.  Perhaps more important (and likely more effective) are the proposed amendments to divisional patent applications. ‘Divisionals’ happen (in general) when a patent application is ‘split’ into more than one application. The basic idea is fine, of course, but it can be used in all kinds of interesting strategic ways, including, at the moment, splitting an application off into a divisional when the main application is opposed by someone else – thus getting a patent through faster without the opposition applying to it. Under the proposed changes, applicants will only be able to file divisionals up to the date by which oppositions have to be filed. So, at least if an opposition is filed at the very end of the opposition period, it won’t be possible to split off a divisional patent to avoid the impact of a patent opposition. There are a few other strategic moves that are discussed in the Explanatory Memoranda which will be precluded by this change. The change seems fair to me.
  • Schedule 4 is about ‘assisting the operation of the IP profession’ – and deal with patent attorney privilege (like legal privilege, but for patent and Trade Mark attorneys) as well as some disciplinary stuff, and material about registering attorney firms. Potentially interesting stuff in there that tries to define what counts as giving ‘intellectual property advice’ – raises interesting questions about what bits of what attorneys do, don’t count as giving legal advice.
  • Schedule 5 is about enforcement. It makes some substantial changes to enforcement at the border, mostly by introducing a requirement that people whose goods are seized on the insistence of a trade mark or copyright owner will now have to positively claim their goods (rather than having them returned as a matter of course if legal proceedings aren’t commenced within 10 days by the IP owner). We also have a full re-write of the trade mark criminal offences (creating two levels, summary and indictable, like in the Copyright Act), and the addition of additional damages for ‘flagrancy’ in civil proceedings.
  • Schedule 6 is (allegedly) about ‘Simplifying the IP system’. It covers a miscellaneous collection of stuff, including (a) giving jurisdiction over design matters to the Federal Magistrates’ Court, (b) amending secret use in patent law, (c) ‘fixing up’ aspects of the grace period in patent; (d) a new system to allow the Commissioner to revoke acceptance of a patent prior to grant; and (e) repealing the requirement in s 45 for a patent applicant to inform the Commissioner of the results of certain searches,

With such a smorgasbord of issues, it’s hard to know what to comment on. Much of what I might otherwise have said about the patent stuff has already been said by Patentology: that attempting to raise the bar in inventive step is a good idea but the amendments probably don’t go far enough; that the change in the usefulness requirement is good for biological type inventions where patents have been granted for fairly speculative ‘uses’. (I disagree with Patentology about experimental use I have to say – I think we need the exception in there, although I dread it’s going to end up being narrowly read by our courts).

But here’s a couple of things that haven’t been discussed in the Patentology comments or by Warwick Rothnie:

First, we have a pretty complete re-write of the trade mark criminal offences here, using that awful, awful style of criminal drafting that seems to prevail at a Federal level these days (if you remember the new copyright criminal offences, introduced in 2006, you’ll get the picture – pages and pages of text and none of us any the wiser about what it means because you have to go to the Criminal Code to even begin making any sense of it). I suppose we should be grateful that there’s no proposal here to introduce Infringement Notices, as we had in copyright back in 2006 (then again, it would be hard to justify introducing infringement notices in trade mark when they haven’t even been used in copyright for years after coming into the legislation, wouldn’t it?). But two things are really interesting about the trade mark criminal offences. First, some of the offences apply a standard of ‘negligence’ to the mental element. Thus it will be a summary offence to apply a mark to goods, being negligent as to whether the mark is, or is substantially identical to, a registered trade mark. The first problem is – why would negligence be an appropriate standard here at all? Well, so I thought the Explanatory Memorandum might help here. So I went to look, and it says this:

‘It is appropriate to have a lower fault element of ‘negligence’ for the circumstance elements of the offences because of the unique nature of intellectual property rights. Despite the clear legal position that intellectual property is a form of personal property, evidence has shown that some people see the violation of intellectual property rights as trivial and a ‘victimless crime’. Such attitudes may extend to an unacceptable failure to ascertain the factual circumstances in which their conduct would be criminal. However, consistent with the general approach taken to other forms of personal property, and to copyright goods, a person who uses a registered Trade Mark (what could be another person’s property) should be under an objective obligation to check that the mark is not registered. Otherwise, the effectiveness of the deterrent is undermined, with the risk that intellectual property rights are less protected than tangible property rights. The introduction of an objective negligence standard will assist the effective administration of justice and perform an important educative role in ensuring that people take intellectual property crime seriously.’

OK – what? So hang on, failing to check the trade marks register when you’re applying a mark to goods could be a criminal offence, because one ought to check the register? And we want it to be criminal because that will ‘perform an important educative role’? Last theory on this kind of thing I read suggests over-criminalising behaviour that the average person does not think as criminal is not likely to increase respect for either trade mark law or criminal law.

And I still don’t even know what it means to be [criminally] ‘negligent’ about whether your mark is identical to a registered mark. Doesn’t ‘negligence’ import some kind of understanding of what would be considered appropriate standards of behaviour (you know, reasonable man/woman and all that?) And if that’s true, what is the standard of vigilance about branding activity that is considered socially acceptable these days? Is Woolworths criminally negligent for using ‘honest to goodness’, that being the trade mark of some organic supplier or other? Honestly, I wonder whether they really think these things through sometimes.

Something else that hasn’t got a lot of comment is this new customs scheme for requiring people whose goods are seized to actively claim their goods. I don’t know, and I’ve not thought it through sufficiently, but I wonder whether that is consistent with Article 55 of TRIPS, that says goods shall be returned if the IP owner doesn’t commence proceedings to continue the suspension. I mean, I know that you can have further customs procedures without breaching TRIPS (you can have payable duties and the like), but can you impose a further element (this claim scheme) that is clearly geared entirely towards assisting IP owners in enforcement and that leads to forfeiture, effectively on the grounds of claimed infringement, without legal proceedings? I’m not at all sure about that.

Here’s another interesting little beastie in the Bill. Proposed s 50A of the Patents Act. This would give the Patent Commissioner power to revoke an acceptance any time before grant. The explanatory memorandum says it will help with admin type problems, but it seems to me that it might be used like the equivalent Trade Mark Act provisions are being used – as a kind of opposition-lite, where a prospective opponent writes to the Commissioner asking them to exercise their discretion to revoke – without going through the full opposition process. I see the potential for more strategic game playing, even as the Bill has tried to remove other parts of the Act that have facilitated various interesting patenting and patent dispute strategies.

Overall, too, I wonder about some of the moves in patent. It feels like IP Australia has deliberately sought to shift Australian law closer to European patent law – for example, using European language in relation to support and other documentary requirements. Why Europe? Why European law in particular? Aren’t we meant, under our Free Trade Agreement with the US, to be ‘endeavour[ing] to reduce differences in law and practice between [Australia and the US], including in respect of differences in determining the rights to an invention, the prior art effect of applications for patents, and the division of an application containing multiple inventions’? (AUSFTA Article 17.9.14). I mean, I’m not a big AUSFTA fan, as you may know, but this does look quite a lurch in a different direction, which makes you wonder whether Article 17.9.14 has any relevance at all…

One more thing worthy of comment – Item 86 in Schedule 6 amends, and broadens, another copyright exception. This is the one found in the Patents Act s 226, and allows reproduction and other uses of documents open to public inspection. I’ve said it before, I’ll say it again. Every time the government decides it is going to create a new little copyright exception so it can do something it needs to do, it really ought to be asking itself: why do I have to do this? And wouldn’t it make more sense to introduce a general, fair-use type exception? Honestly???

Kimberlee Weatherall is a senior lecturer at the University of Queensland

This article was cross-posted here at LawFont

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ACTA – Brief Comments on the August 2010 (Leaked) Draft

September 9, 2010

by Kim Weatherall

Another round, another leaked text – this time with a lot less brackets. Yes, it really does look like, subject to a couple of mostly scope-related disagreements still to be resolved, the Anti-Counterfeiting Trade Agreement is nearly complete. Rumour has it that the next round – later this month – will be the final one, leading to the conclusion of a treaty directed entirely at raising standards of IP enforcement between the US, EU, Japan, New Zealand, Canada, Switzerland, Australia, Morocco and Mexico.

I’ve been over this ground so many times before, I’m at serious risk of sounding like a broken record. But, for the record, I thought I’d add a few more comments on this close-to-final draft, because there’s a couple of interesting developments in there.

The big news: a lot less digital stuff

The big news of the draft is the way the digital provisions have been deflated. If before we had a Zeppelin of a chapter on digital enforcement, now we have, if not quite a kid’s balloon, maybe a small bunch.

Let me explain. The original draft on digital enforcement was proposed by the US, like an American Diner meal, it had the works: a general obligation to have effective enforcement in the digital environment; secondary liability for intermediaries; detailed safe harbour provisions, detailed and restrictive anti-circumvention provisions, and provisions on rights management information. It was a slightly watered-down version of the US FTA provisions or the DMCA.

Anti-circumvention (or digital locks)

In the last leaked text, it seemed that the anti-circumvention provisions had been trimmed quite a lot. Early drafts had explicit protection for both access and copy controls; a prohibition on both the act of circumvention (in the case of copy controls) and manufacture, sale or distribution of circumvention devices; and both civil and criminal liability for violations of either prohibition. By July, the reference to criminal penalties had disappeared. Now, it looks like there’s a chance that the provision will be clawed back to something that looks a lot like the WIPO Copyright Treaty: a broad requirement to have effective protection against TPMs. The whole provision dealing with the specifics (prohibiting circumvention, prohibiting sales of devices or services to circumvent) is all in brackets. That is quite a step-down from the original proposals – and, of course, an appropriate one in a treaty that is meant to be about combating global counterfeiting…

ISPs, Secondary Liability, and Safe Harbours

Even more striking though is the removal of stuff about ISPs and filesharing: in particular, two provisions that were stirring up a lot of controversy. The first would have ‘required signatories to affirm’ that they recognized secondary liability. The second provision would have provided ‘safe harbours’ for online service providers like ISPs subject to the OSP complying with certain conditions. Here, too, the original draft was modeled on US law.

In its initial form it stirred immense controversy as it looked like it either would require, or was a stalking horse for, the implementation of ‘three strikes’ rules. ‘Three strikes’, or ‘graduated response’, is the set of rules – now found in countries like France, Korea, and to some extent the UK – that require ISPs to engage in an escalating series of actions – warnings, technical measures, termination of service – against infringers identified by copyright owners (usually file-sharers). The January ACTA draft had text that would have required ISPs to have a ‘policy addressing the unauthorized storage or transmission of materials protected by copyright’. A footnote gave, as an example of such a policy, a ‘policy providing for the termination in appropriate circumstances of subscriptions or accounts’. These provisions were reduced somewhat in the July 2010 text.

Now it’s all gone. The secondary liability provision, and the ISP safe harbours. There is a footnote reference to protecting OSPs, suggesting it might be a good idea. But the obligations are gone.

The consensus in the commentary I’ve seen so far, online and off, is that losing these two provisions is a setback for the US and a good thing for anyone who is concerned about the ACTA treaty and the push for ever-more-stringent enforcement. Some people are expressing concern about the remaining provisions – in particular, one that commits Parties to ‘endeavor[ing] to promote cooperate efforts within the business community to effectively address [copyright] infringement while preserving legitimate competition and consistent with each Party’s law, preserving principles relating to freedom of expression, fair process, and privacy’.

I would agree that removing secondary liability from the treaty is a good thing: the early text was diabolical and would, in Australia certainly, and elsewhere, could have required changes to law and hence have made things a whole lot more confusing for everyone. And to me, the very general commitment to ‘endeavour to promote cooperation’ isn’t too much of a worry. It wouldn’t require much concrete action on the part of a signatory.

I’m more concerned, however, about the implications of removing the safe harbours, and what the failure to agree on safe harbours tells us about international IP law-making.

First – is it really a good thing for the safe harbour provisions to be gone? Some would say yes, because the safe harbours come with obligations for ISPs – basic cooperation such as ‘notice and takedown’. It’s true that by removing the safe harbours those kinds of commitments are gone. This is particularly good for a country like Canada which has eschewed ‘notice and takedown’ in favour of ‘notice and notice’ in copyright.

But there’s a cost, and that is that there’s no guarantee of protection for OSPs in the new ACTA. That can’t be a good thing. As far as I can tell, the safe harbours found in the US DMCA (17 USC 512) have been very useful – YouTube has relied on them; Google has relied on them; so have others. Arguably the existence of Safe Harbours has facilitated Web 2.0. We’ve had a long battle in Australia to extend our safe harbours to provide more protection. This in the context of a treaty that has more extensive provisions on damages and injunctions than any other existing international IP treaty.

Second – what we see here is a complete failure on the part of these countries – all of which, bar Switzerland, seem to agree on the basic idea of protecting OSPs from liability – to reconcile their differences and agree to a limitation on copyright. To me, this should worry the many advocates who want countries to be talking about exceptions, and adding them into treaties. There are numerous people arguing for this at the moment. Most visible are the push for a Treaty for the Visually Impaired, the push in the WIPO Development Agenda to work on a broader agreement on exceptions, or academic treatment such as that of Hugenholtz and Okediji (watch it, big pdf) or Kur and Ruse-Khan. Agreement on exceptions could be important to balance out all the strong treaties we have on rights, and now, potentially enforcement. Failure to agree here is, I think, a really bad sign. They had trouble, people insisted on their own various conditions on the exception – and they gave up. This doesn’t bode well. Negotiators are going to need to loosen up and think about how they can agree exceptions, or copyright law internationally is only going to get more unbalanced (by the way, I’ve explored this in more detail in a longer paper – email me for a copy).

Other stuff, old and new

Other new stuff in the new ACTA draft include a preamble. It’s quite a read. I’m liking the various references to the importance of balancing interests and the need not to create barriers to trade. I’m not liking the bare assertion (by the US, EU and Japan) that counterfeiting ‘provides a source of revenue for organized crime’.

Other old stuff that is still there include a camcording provision (sigh) and the EU still wants to have injunctions against intermediaries that aren’t themselves infringing. I’d be worried if I was in the intermediary business.  A lot of provisions have become more qualified and hence less evil from a ‘balanced copyright advocate’s’ perspective. The text is better than previous ones, but there’s still a few nasties in there.

Remaining disagreements

Finally, the remaining disagreements. Here, it’s mostly about scope. First in terms of the IP rights covered. In short, the EU, Switzerland and Japan want a broader scope, extending to things like patents, designs, and (importantly for the EU) geographical indications. Australia, along with the US, NZ, Canada and Singapore want it largely confined to addressing copyright and trade mark infringement. This has been an issue from the start, and is all pure comparative advantage: the EU, Japan and Switzerland probably see their best hope of advantage in areas like patent or GIs; perhaps design rights. The US holds more advantage in copyright and trade mark. And there’s a number of other countries – Australia among them – who most likely believe they are better off the narrower the agreement can be drawn.

The other big scope issue is on the border measures. Here the issue is – do customs have to intercept only goods being imported? Or can a right holder call a halt on exports or even goods that are just in transit? Australia is definitely in the minority here: still holding out to require only measures on import (along with Canada, NZ and Singapore). Sincerely hope they hold out on this one. Seems to me that the Australia/NZ/Canada alternative to stopping exports – telling the receiving country the stuff is coming – is a reasonable alternative as it leaves the issues to the country whose market is most affected. Fingers crossed.

There’s plenty of other bits and pieces, which are important. But the agreement will succeed or fail on the scope question. The question is whether someone will blink, and who.

So where does that leave us? Waiting for them to finalise, which I suspect they’ll do soon. Hoping that Australia will, before ratifying, make sure it has a proper public consultation and debate about whether it is even worth signing this thing. And really, really wondering whether all the time and cost spent on negotiating this thing will ever be toted up so we can decide whether it was actually worthwhile. Wouldn’t that be an interesting calculation?

Kimberlee Weatherall is a Senior Lecturer at the University of Queensland

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ACTA: new (leaked) text, new issues…

July 15, 2010

By Kim Weatherall

What a surprise! Despite the best efforts of at least one negotiating party, the ACTA (Anti-Counterfeiting Trade Agreement) text has leaked, again.  This post looks at last night’s leak, and at the negotiations.  In short, though: the text is an improvement that continues to have significant problems.  The negotiations face some significant obstacles right now – but continue at break-neck speed, and I have this sinking feeling that ACTA could be spawning at least one evil little mini-me already…


For those of you who haven’t been following this particular obsession of mine (see my April 9 and April 23 posts), ACTA is the Anti-Counterfeiting Trade Agreement – a plurilateral agreement being negotiated between Australia, Canada, the EU (represented by the European Commission, and the EU President), Japan, the Republic of Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the United States.  The DFAT website on the agreement with background is here.  In theory, ACTA is meant to be targeted at establishing “a new standard of intellectual property (IP) enforcement to combat the high levels of commercial scale trade in counterfeit and pirated goods worldwide”.  In reality, it’s a comprehensive re-write of IP enforcement obligations at an international level, with something close to a rightsholders’ wishlist and little protection for end users or the rest of us.

The ninth round of ACTA negotiations took place in Lucerne, Switzerland on 28 June to 1 July 2010. You can basically ignore the press release: the latest one is here.  In April, the parties decided to release a draft text, which has been comprehensively analysed (and criticised).  If you’re interested, there’s a very long section-by-section analysis of the last draft text available online.

At the latest round, the parties decided not to release a text – but, surprise surprise, one has leaked already, this one dated 1 July.  This post analyses some of the changes.

So, what’s changed?

There are basically 4 big ticket, big controversy issues in ACTA that have been getting attention in international circles, and where we need to see whether anything has changed.

  1. Expansion of criminal liability in IP;
  2. statutory damages (that is, ‘fixed’ amounts for damages that in some cases have led to very significant awards, like the US$200,000+ award against one US woman for file-sharing around 25 songs;
  3. ISP liability and what ISPs have to do to get protection from liability (three strikes; notice and takedown; etc etc); and
  4. The possible impact on access to medicines and the trade in generic drugs

Internationally, ‘anti-circumvention’ (digital lock) provisions are also controversial, but I won’t go in to them because Australia already has (and, through AUSFTA, is committed to) very strong provisions in that area.

Criminal Liability (leaked text page 15)

The criminal provisions are quite different to what we saw in the last text.  The last text looked like the AUSFTA provisions – and would extend criminal liability to non-commercial acts of sufficient scale (read, file-sharing) and single acts of infringement for commercial gain.  These provisions are gone, replaced with a requirement that parties apply criminal liability to “acts carried out in the context of commercial activity for direct or indirect economic or commercial advantage”, with a provision that would allow countries to exclude end consumers from criminal liability. The exclusion is a notable improvement on the previous draft which would have required criminalising lots of end users (although it wouldn’t help in Australia, because of AUSFTA).

Liability under the new text is still very broad. The reference to ‘commercial activity for direct or indirect economic or commercial advantage’ could be interpreted as covering single acts (eg, a business is found using one unlicensed copy of software), and has plenty of scope to catch legitimate businesses acting in good faith, who might have published a book believing they have a fair use or fair dealing defences, but who are certainly engaging in ‘commercial activity’.

As Daniel Gervais notes in the third edition of his book on the TRIPS Agreement, the references in TRIPS Article 61 to ‘wilful’ acts ‘on a commercial scale’ is “not synonymous with commercial activity.  It requires that the activity have a demonstrable, significant commercial impact” (emphasis added).  In a footnote, Gervais also notes that the TRIPS expression “corresponds to what have been referred to as ‘professional infringers’”.  In my view, TRIPS is perfectly adequate; it should be left as is.

Statutory Damages (leaked text page 7)

The provision on damages has changed too.  The April ACTA draft seemed to have moved away from requiring countries to adopt statutory damages, and, in particular, it seemed to allow Australia to retain its system of ‘additional’ (effectively punitive) damages. There’s some flexibility there still. Statutory damages are not required, but a country is left with a choice: statutory damages or other ‘presumptions’, or additional damages (to what end is entirely unclear; there’s no requirement that the damages be punitive for example or deterrent).

ACTA will still restrict what a country can do to protect end-users (ie teenagers, grandparents and anyone else with an internet connection) from excessive damages awards should they be caught infringing and have the misfortune to be sued.  There is nothing in the text that limits the rules to exclude damages for ‘innocent infringers’. I’m a little unsure whether this means Australian law would have to change (it depends on whether the current Australian limit of additional damages to ‘flagrant’ infringement is ‘implicit’ in the reference to ‘additional’ damages).  In short, I can see the provision is pretty vague, but I don’t like it. I think it achieves very little if you’re serious about increasing enforcement, but it does restrict policy freedom in the cases that ACTA isn’t meant to be targeted at – end users and consumers.

ISP Liability, Safe Harbours, Three Strikes

ACTA has a strong focus on intermediary/secondary liability.  This is the big factor distinguishing ACTA from previous multilateral agreements that don’t touch on this at all. There seems to have been quite a bit of progress on ISP liability.  Not all of it good.

For one thing, third party liability is still in the text (Article 2.18.2 page 19).  This is bad, and takes ACTA well beyond its remit, which is supposed to be enforcement, not substantive law.  Not just that, but I think the provision (at least, if it includes the proposed footnote) is inconsistent with Australia’s present law of authorisation, certainly in copyright and probably in patent and trade mark too. A few thoughts:

  • Interestingly, the majority of countries (excluding Japan, EU and Switzerland) seem to want to confine the provision to copyright, excluding the question of third party liability for trade mark, patent, designs etc.  This is good.  At least in Australia, authorisation in IP outside the direct area of copyright is a less settled and almost certainly different;
  • The US and Mexico want a footnote that seeks to define third party liability. Define it, not just give examples of what might be covered. And define it in a way that doesn’t match Australian law. The footnote seems to require liability for ‘knowingly and materially aiding any act of copyright infringement’.  Under Australian law, you can ‘aid’ infringement and even know about it, but if you don’t have the power to actually prevent it, or if you’ve taken reasonable steps, say, to reduce infringement you won’t be liable;
  • Still, as before, the footnote also says that “the application of third party liability may include consideration of exceptions or limitations to exclusive rights that are confined to certain special cases…” (etc etc). I have no idea what this meaningless language is trying to say; and
  • There seems to be no requirement on the face of the text that the direct infringement occur. Australian law generally requires proof of actual direct infringement before there is third party liability (see eg WEA v Hanimex)

In addition, provisions on granting injunctions against intermediaries whose services are used for infringement are still in there. I’ve argued at some length this is a bad idea in a treaty.

Regarding safe harbours for ISPs, it looks like the EU has proposed a compromise position, and it has some improvements from last time (for a detailed consideration of the previous version, see Margot Kaminski on Balkinization).  Importantly, there is no longer any language anything akin to ‘three strikes’ language that might require ISPs to start sending letters followed by termination of internet service. There is no requirement, as was found in the previous draft, that the ISP have a policy “to address the unauthorized storage or transmission of materials protected by copyright or related rights”; no requirement to terminate repeat infringers or the like.

This of course won’t stop individual countries introducing three-strikes type laws – but it will mean ACTA doesn’t require it.  The closest the proposal comes to having such a requirement is the provision saying that Parties “shall endeavour to promote the development of mutually supportive relationships between online service providers and right holders to deal effectively with patent, industrial design, trademark and copyright or related rights infringement which takes place by means of the Internet…”. This is a Japanese proposal, and doesn’t look like much of an obligation, although no doubt it will be used rhetorically sometime. I don’t think it should be there, but I don’t think it goes near 3 strikes either.

Access to Medicines

The final ‘big ticket item is the question of the impact of ACTA on access to medicines and the trade in legitimate generic pharmaceuticals. This is something of a ‘hot button’ issue at the moment in international IP owing to Europe’s practice of halting shipments ‘in transit’ (ie going from one developing country to another) on the basis of infringement of EU IP rights (even though the goods never enter the EU market and even where there’s no infringement of rights in the exporting or importing country).  Brazil and India have initiated a dispute in the WTO about this practice.  Since earlier drafts of ACTA included provisions on applying border measures, to goods in-transit, to protect patents, and no reference to things like the WTO Declaration on Public Health, there have been legitimate concerns that access to medicines was going to be hindered by ACTA.

Where are we at now? Well, there is now reference to parties taking measures ‘necessary to protect public health and nutrition’ upfront in the text, so that’s an improvement.  And according to the press release the border measures will not be required to be applied to cases of suspected patent infringement.  On the other hand, several countries still want the provisions applied to ‘in transit goods’, and the text still allows a country to stop goods in-transit, on the basis that the goods infringe IP in the transit country, even where they do not infringe rights in either the exporting or importing country.  And several of the seized shipments in Europe were stopped on trade mark, not patent issues. So I don’t think the concerns have entirely gone away by any means.

In addition to these ‘big ticket’ areas, the other issue that’s been troubling critics has been the lack of balance in the earlier ACTA drafts and the agreement’s potential impact on fundamental rights and liberties.  To put it bluntly, there were all kinds of rights for right holders, and almost no acknowledgment that IP is about a balance of interests; that consumers and other users have rights too, and that right holders sometimes abuse their rights and that needs to be controlled. It was said in the last draft that there would be more provisions on the other side of the balance.

The new leaked text does have more detailed general principles upfront, including ‘public interest’ principles in draft.  The provision on protecting privacy has been expanded. ACTA raises a lot of privacy issues because it anticipates the release of information about individuals to right holders to facilitate enforcement: in litigation evidence-gathering, by ISPs, by police to their colleagues overseas.  Some of this information would be considered private: names, addresses…activities online… . So privacy is important. The text itself is pretty much what you’d expect: that is, it leaves it to individual countries to work out how they want to protect privacy. As I’ve said in my ACTA megapaper analysing the last public draft, this won’t help Australians all that much because our protection for private information isn’t all that strong and is based only in legislation (we have no higher constitutional or human rights principles to appeal to).  But it’s good to have it in there.

Finally, too, there is some text:

  • On the importance of ‘a balance of rights and obligations’, and to allow parties to adopt measures to protect public interests in health, nutrition, and socio-economic and technological development (Art 1.X.1-1.X.2 p3); and
  • Acknowledging that “appropriate measures … may be needed <strong>to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade</strong> or adversely affect the international transfer of technology” (Art 1.X.3 p3).

Bizarrely, this provision seems to be controversial: proposed by Australia, NZ, Singapore and Canada, there’s another bloc wanting it removed: Japan, Mexico, Korea and the US. Again, why? If ACTA is, as the negotiators keep saying, meant to be consistent with TRIPS and consistent with the WTO Declaration on TRIPS and Public Health, and will allow countries to respect fundamental rights and liberties, why protest these principles? Why even, as the EU wants to do, demote them to the level of ‘preambular statements’? (I will say though I’m pleased that Australia is on the side of the forces for good here – you go AG’s!). All I can say is that if this language, or something like it, isn’t included in the final agreement, it’s going to be embarrassing – and confirm a lot of suspicions about what the agreement is all about…

Where to from here? Hypocrisy, Red Lines, Racing Negotiations and the potential for ACTA-Spawn

So where to from here? The parties are still talking about concluding negotiations by the end of the year.  According to IP Watch, some of the negotiators have seen “a real acceleration” in the more recent rounds of negotiations, and Prof Geist has opined that we could in fact see conclusion of the negotiations this year. Perhaps this is why the tension between some of the negotiating parties is bursting out a little in public.

US negotiator Stan McCoy has said that “there was some progress on ACTA in Lucerne, but not as much the U.S. had hoped”, and the EU negotiators have been accusing the US of ‘hypocrisy’ and drawing ‘red lines’.  To an outsider, it looks like they’re getting to crunch time: and the question of exactly how far they’re willing to compromise has to be faced – but they will be faced, because everyone involved wants to move on after over 2.5 fairly intense negotiating years and more rounds in 2010 than one would care to count. Me? I think they’ll reach agreement, and soon, and they’ve all committed too much to see it fall over.

But regardless of what happens in the ACTA negotiations, I have a feeling that we’ll be seeing something very close to these provisions again real soon.  Because there is another set of negotiations going on at the moment: the Trans-Pacific Partnership negotiations. The TPP is supposed to be “a high-quality, comprehensive 21st century Free Trade Agreement (FTA) that increases economic integration in the Asia-Pacific region”.  That is trade-diplomat-code-speak for “it’s an FTA with everything, like the AUSFTA”. And that means IP will be in it.

The TPP involves Australia, Brunei, Chile, New Zealand, Singapore, Peru, the United States and Vietnam.  So looking at that, you have Australia, NZ, Singapore, and the US who are all in both.  Peru and Chile are already party to an FTA with the US, which means that it’s likely they can sign up to quite a lot of what you’d find in ACTA.  That leaves Brunei, and Vietnam… who I don’t imagine will be focusing strong efforts on the IP aspects.  And you can bet that at least some significant portion of the people doing the negotiating on behalf of the ACTA countries on IP issues is also in the TPP IP negotiations.  Sheer practicality I suspect means they’ll be starting with some bastardised evil-spawn combination of the US FTAs and ACTA. The mega-long IP chapter from hell, I’m predicting. I can feel that strange combination of glazed eyes and boiling blood starting already. Grrr.

Kimberlee Weatherall is a Senior Lecturer at the University of Queensland

(return to the top of this edition)

ACTA reaches a critical new stage

April 23, 2010

By Kim Weatherall

What a difference a fortnight can make!

Two weeks ago on this Review, I noted that we had no (official) access to the text of the Anti-Counterfeiting Trade Agreement, or ACTA.  As of Thursday this week, though, we do (available here), following a decision by the negotiators last week to meet the demands of civil society and politicians for transparency.

There has been a reasonable amount of commentary already from the likes of Michael Geist, Margot Kaminski at Yale, and Sean Flynn at American University.  In fact, Michael Geist has a useful blogpost with links to commentary across the web.

This official text is perhaps most interesting in showing where the negotiators have got to since January.  My summary?  There are some improvements: there seems to have been some attempt to respond to industry and civil society concerns; and so some (definitely not all) of the nastiest stuff has been taken out and new flexibilities are proposed, if not yet agreed.

The language that had been interpreted as potentially imposing ‘three strikes’ legislation (or graduated response) – that is, requiring ISPs to engage in a process of graduated responses to file-sharing by customers in response to copyright owner complaints culminating in suspension or termination of internet service – that’s kind of gone.  It was in a footnote to the text that now starts on page 19 of the official draft text, and it used to refer (back in January) to ISPs having a policy for the termination of repeat infringers. Now the text just says (on page 21) that at least “one delegation proposes to include language in this footnote to provide greater certainty that their existing national law complies with this requirement”.  In other words, I think that the US, and probably Australia, and maybe another country want confirmation that their domestic requirement for a termination policy complies with the language of ACTA. But they won’t tell us what that text is right now – maybe its not been drafted yet.

There are some general provisions at the front now (at least proposed) referring to important concepts like the protection of privacy and confidential information, proportionality, and that the agreement does not require countries to redistribute scarce enforcement resources to prioritise IP over everything else (my paraphrase).

The statutory damages provision now includes a proposal to allow additional damages instead.  As I’ve explained at length elsewhere additional damages are better than statutory damages, largely because they allow courts to decide who is an appropriate person to be punished (rather than the rightsholders): they put in place more discretion.  That said, they can be pretty darn arbitrary. But better.

There’s a proposal to allow countries to choose whether to apply border measures to patent and design infringements rather than mandating their coverage.  As I’ve noted before, inclusion of patents is problematic because of the potential impact on legitimate businesses including generic pharmaceutical manufacturers.

On the other hand, some of the material I described as concerning in the post a fortnight ago, and in a more lengthy paper that’s available online, is still there.

There is still a proposal to allow rightsholders (and, by the way, rightsholders includes representative groups like the RIAA or MPAA) to get injunctions against intermediaries whose services are used by third parties to infringe – even where the intermediary is not itself liable – thus potentially turning the ISP into the enforcement arm of the rightsholders and courts.

There is still a provision that seems to be proposing the creation or ‘confirmation’ of secondary liability – something not found in international treaties anywhere else and something that is entirely about substantive law, not enforcement, and so inappropriate here.

The draft still proposes an elaborate ACTA superstructure which, for reasons Geist has explained, is pretty darn concerning.  Let’s face it: bodies like this need to justify their own existence and will create work for themselves.  Including working groups for new and even more exciting enforcement provisions into the future.

There’s a nasty possibility that Kaminski points out: they’re debating criminalizing “[i]nciting, aiding and abetting” infringement.  These provisions are both up for debate, and should not be included in the final draft if ISPs don’t want to become subject to criminal investigations.

And there’s still plenty of provisions where the possibility of applying the provisions to patent is still on the table, albeit with border measures those measures are optional.

And there’s more.  This post can only touch on the kinds of detail we are seeing in this proposal.  There is much yet to work through. At least we now have something to go on.

Anti-Counterfeiting Trade Agreement Negotiations Enter the Next Round: but will this ACTA have a finale?

April 9, 2010

By Kim Weatherall

Next week in Wellington, negotiators from a select group of like-minded countries – US, the European Union, Japan, Switzerland, New Zealand, Canada, Mexico, Australia, South Korea, Morocco and Singapore – will meet in what will be the eighth round of negotiations aimed at producing an ‘Anti-Counterfeiting Trade Agreement’ (ACTA). These negotiations are both troubling, and troubled – and I’d like, in this post, to explain why.

The Goals

According to all the official documentation, the goals of the proposed ACTA are to establish an international framework for efforts to more effectively combat the proliferation of counterfeiting and piracy in three ways: by enhancing cooperation between the various agencies in the participating countries; by establishing ‘a set of enforcement best practices that are used by authorities’ (whatever that means) and by setting out a legal framework of enforcement measures. The underlying belief seems to be that existing international treaty provisions on IP enforcement are relatively general and weak. And while it might seem a bit strange to negotiate a treaty on combating counterfeiting without including the major source countries for counterfeit products, there are two good reasons for doing so. First, counterfeit-receiving countries can do quite a lot without cooperation: they can seize goods at the border, share intelligence, apply penalties and remedies to internal acts, and so on. Second, an ACTA could establish a ‘benchmark’ with other countries joining at a later point.

While ACTA is supposed to be about counterfeiting and piracy, and not about private, non-commercial activities of individuals or raising general IP standards, there has long been concern on the part of civil society groups that it would end up being much more extensive than that, and might make already strong IP laws even stronger, at the expense of individuals, consumers, and civil liberties generally.

There has been no official release of any proposed text for the ACTA: the negotiations, while not secret, are in substance being treated as confidential. But there have been leaks of various proposals, from which it is possible to get a picture of what is being proposed.


The picture that emerges from the various leaked documents (which can all be accessed at American University’s IP Enforcement website) is of a proposed Agreement that is wide-ranging and arguably over-inclusive, and which, in particular, extends its reach well beyond what most people would think of as ‘counterfeiting and piracy’. There are provisions on damages and how they should be assessed; the powers courts should have to issue injunctions or make orders for the collection of evidence, the process for customs to seize, retain, and perhaps destroy infringing goods and implements; and extensive provisions on IP in a digital context: provisions on online service provider liability and ‘safe harbours’; for prohibiting circumvention of technical measures, and institutional provisions to set up an ‘ACTA Oversight Council’ to supervise ACTA implementation, facilitate amendments, and establish working groups and generally monitor the application of the treaty provisions.

For Australia, many of the provisions that we see in the leaked texts are not particularly new: quite a few mirror more or less closely what we have already agreed to and implemented as a result of the Free Trade Agreement with the US back in 2004. So the anti-circumvention provisions (requiring countries to ban people from ‘circumventing’ technical measures used to protect copyright works) are nothing particularly new or exciting for us – in fact, they are positively generous and flexible compared to what we are already committed to.

However, a number of the proposals are troubling, if only because they would, if included in a final agreement, require changes to our law or at least muddy our legal waters:

  1. A proposal to introduce statutory damages: if compulsory, this could create a risk of oppressive damages awards and create a tool to hold infringers in terrorem by threatening large payouts if they do not settle early;
  2. A proposal to extend criminal liability to ‘ordinary’ trade mark infringement (in Australian law terms, in cases where there is deceptive similarity between the registered and the alleged infringing mark) – at the moment, we have criminal provisions for counterfeit trade mark use. This could create new uncertainties for legitimate businesses;
  3. A right to obtain information from infringers about others involved in the infringement that looks like it might encourage fishing expeditions;
  4. A provisional power to seize evidence – not, on the face of it, subject to the careful protections built in to the already rather stringent Anton Piller (search orders) process;
  5. A proposal to extend border seizures to patent infringements – which I imagine would be controversial; and
  6. A new criminal provision: to make ‘camcording in cinemas’ a criminal act

There’s more too. Most concerning are a few bits of language that can only be described as a hotch potch. One is a proposal to apply the Berne Convention ‘three step test’ – usually used to limit the exceptions to copyright a country can introduce – but maybe used here to limit the exceptions to damages or secondary liability. Oh, and a very ham-fisted attempt to ‘define’ the extent of the law of secondary liability (in Australian terms, authorisation liability) (which no doubt, just like the attempt to ‘codify’ authorisation law in the Digital Agenda Act, would cause another decade of uncertainty for Australian law).

Some of the ‘house of horrors’ fears about the ACTA are not borne out by the leaked texts. It seems like the governments don’t want to have customs start searching our iPods at the border, nor are they determined to seize them on the streets (good thing too). And the anti-circumvention provisions, as I mentioned, are positively gentle compared to what we’ve seen in other treaties. But there’s enough niggling little details, and little shifts, and troubling provisions, in there to make you wonder whether the whole thing is just a bad idea.


Something else, however, emerges from the various leaked texts which is interesting to observe: namely, the differences that exist as between the various negotiating parties. If the various comments on the text leaked in January are in any way accurate, Japan appears to be in fundamental disagreement in the digital area: they seem to want to be stricter on ISPs (requiring them to act on infringement unless it is technically impossible) but easier on people who want to circumvent technological protection measures (they don’t ban, and don’t want to ban, circumvention of access controls). Europe and the US seem to be fairly diametrically opposed on the role of damages: in the US, statutory damages are clearly punitive in nature; the EU does not see ‘punishment’ as a role of damages in IP. And no one, it seems, can agree on anti-camcording laws or what they should look like. In many, many cases, provisions that one country or group want to make mandatory, others want to be an optional extra (usually, because it doesn’t fit their law: like Australia with statutory damages). That goes for most of the provisions that I’ve outlined up there. For pretty much all of them, there’s someone who wants to strike it out or make it optional.

So we end up in this rather strange position. If all those provisions go in, we have something to be worried about and we’ve got a load of provisions that are going to create a chilling effect on individuals and legitimate businesses. Nasty stuff. But if all the qualifications go in, and ‘shall’ gets replaced en masse with ‘may’ – then we end up with … not much?

Why bother?

And this, in itself, raises a question. If these countries can’t agree; if there is this much contention, two and a half years or so since negotiations started – what, exactly, are we doing here? And if we smooth over all the disagreements, and ‘vague-up’ the language sufficiently that everyone can agree… will we have achieved anything concrete at all? I’m not so sure. I can’t help but feel we’re heading towards a whole lotta optional extras and not a lot of substance.

Now, the obvious response to this is – well, so what? That’s good, right? No nasty stuff that makes Australia change its laws (again)? So what if the negotiators get together and, in the end, have 40 pages or so of treaty with 3 provisions of compulsory simple stuff and 35 pages of optional extras?

Well, personally, I think there is a so what here. Because you know what that means? A whole lot of complication, a lot of hard to understand jargon, a lot of ill-will (because this stuff is controversial and it’s generating a lot of bad press for IP law generally) – and IP owners who don’t make a single dollar more, meaning we don’t get a single extra book, or movie, or innovative new product out of this treaty. And in the end, isn’t that what this is all meant to be about? Encouraging creativity and innovation?

And then there’s the secondary effect. That you set up a standard – ok, it’s optional, but it’s there – and when the trainers come to the developing countries – or, indeed, developed countries the next time someone gets their bee in a bonnet about something – to write their shiny new IP laws, this treaty is held up as the shining example of a perfect IP enforcement system. And the people are told – look, you want all the optional extras, right? They’re features, right? And more features are good???

I think, if I were a negotiator, I would be taking a long hard look at what is in the treaty, and I would be asking: is this really worth it? Is it worth the criticism and the ill-will and the conspiracy theories, and is it going to make creators any richer. Cause if not? I’d be spending the Wellington hotel bills on better arts grants and fund a few science projects.

ACTA. I’m not sure if it’s going to have a finale. And if it does, I’m not sure whether it’s going to be the 1812, or a fade-out. Watch this space.


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