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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A few thoughts on iiNet FFC decision

March 17, 2011

On 24 February the iiNet decision generated significant buzz in the media, academy and anyone with an interest in cyber-regulation or copyright. Kimberlee Weatherall first posted the article below on her blog LawFont, and we are reposting it here to provide our audience with her expert exposition. As mentioned in Kimberlee’s article, Fortnightly Review author David Brennan also wrote a piece for The Age, and hopefully the conversation between these analyses will generate some excellent discussion and commentary within our community of readers and authors.

A few thoughts on iiNet FFC decision

By Kimberlee Weatherall

By now, all the copyright nerds in the world know the headlines: the Full Federal Court has handed down its decision in the iiNet case; that the appeal was dismissed in a 2:1 decision (Emmett and Nicholas JJ; Jagot J dissenting). Most people also will know that the reasoning is very, very different from the Trial Judge’s decision, and certainly contemplates, in a way that the Trial Judge didn’t, that in different factual circumstances an ISP could be liable for authorising infringement by its BitTorrenting users. The various major law firms have issued their summaries, I refer you there for an overview. Assoc Prof David Brennan from Melbourne Uni has expressed his succinct, and compelling view.

The decision is really long: it half looks like all three judges wrote as if theirs was to be the main decision (with others concurring or dissenting more briefly). A close reading reveals why. Although it is fair to say that the majority judges reach broadly the same conclusion on broadly similar grounds (namely, that the AFACT notices did not contain enough information to require action on the part of iiNet), they conceptualise the facts quite differently, and demonstrate important differences of approach. My early thoughts are below the fold. This one’s for people generally familiar with the case and Australian copyright law though – beginners need to start, at least, with the law firm case notes.

Conceptualising the facts

Emmett J’s judgment reads like a borderline one to me: it’s almost like he came within a hair trigger of finding authorisation. He emphasises iiNet’s ‘contumelious disregard’ for the rights of the copyright owners, suggests that iiNet ‘tacitly approved’ of the infringements, and highlights the facts that appear to have come quite close to constituting authorisation. Ultimately, Emmett J is not satisfied that sufficient information was provided by AFACT to trigger authorisation. Emmett J also seems concerned that iiNet ought not be required to bear the whole cost of any system.

Nicholas J seems to view iiNet’s behaviour as far less egregious: it is Nicholas J, for example, who emphasises that iiNet’s apparent ‘indifference’ could not simply be characterised as wrongful, based as it apparently was on a belief that iiNet was not legally obliged to act. One has the sense, however, that insofar as Nicholas J was concerned that iiNet not be held liable for taking a position on the law that was not entirely judicially unsupported, his Honour would be less sympathetic in a future case, where an ISP would no longer be able to take that attitude in light of the decisions in iiNet. It is Nicholas J who seems most concerned with the possibility that ISPs will be incentivized to suspend or terminate users all too readily to avoid future litigation.

Jagot J, the dissenting judge, roundly condemns iiNet’s attitude. Her Honour emphasises iiNet’s refusals to cooperate, in effect holding iiNet responsible for any results of its failure to cooperate – including the fact that it had insufficient information to be, perhaps, fully confident that infringement was occurring. ‘Be it on iiNet’s head’, as Jagot J would have it.

Authorisation: Reaffirming the existing case law

The three judges affirm a more traditional conception of authorisation in copyright than that we saw in the Trial Judgment. They confirm that Moorhouse’s phrase, stating that to authorise is to ‘sanction, countenance or approve’ infringement is to be read disjunctively – one is sufficient. The Judges also reject the apparent attempt by the Trial Judge to revive the Justice Jacob reasoning in Moorhouse from the first instance decision: rejecting the idea that there needed to be some ‘sense of official approval or favour’ in order to show authorisation.

On the meaning of authorisation, Emmett J’s judgment is the most wide-ranging, in that it adopts, perhaps affirms, much of the language from cases like Cooper in a series of phrases drawn from earlier cases. I really wish judges would not repeat a series of phrases about the law in this decontextualised way. It seems practically designed to give comfort to the prospective plaintiff in an authorisation case: you can always find a phrase that suits.

On the meaning of authorisation, I recommend the judgment of Justice Nicholas, which is I think, the easier judgment to read and understand, having ‘synthesised’ the precedent more.

‘Means of Infringement’
The three judges – implicitly or explicitly – reject Justice Cowdroy’s threshold test. Under Justice Cowdroy’s approach at trial, iiNet did not provide the ‘means of infringement, in the relevant sense used in Moorhouse, in that it did not extend an invitation to the iiNet users to use its facilities to do acts comprised in the copyright of the Copyright Owners’ and consequently did not authorise infringement. In other words, this question of whether the party provided the ‘means of infringement’ operates as a threshold test, without which authorisation will not be found.

Justice Emmett almost seems determined to politely pass over this approach by the Trial Judge like a polite host ignoring the uncouth table manners of an ill-assorted guest. Emmett J notes the reasoning of the Trial Judge, using the mild epithet of ‘unconventional’ to describe the structure of the reasons. But once Emmett J has described the primary judge’s approach, this phrase never appears again in the judgment. Both Justice Nicholas and Justice Jagot more explicitly reject the Trial Judge’s approach: Jagot J more fulsomely.

The crux of the case: knowledge
Both Emmett J and Nicholas J were dissatisfied with the information provided in AFACT’s notices: this finding lies at the heart of their rejection of AFACT’s case on authorisation. More or less, the notices provided by AFACT gave rise to ‘reason to suspect’ infringements on the part of iiNet’s users, but not knowledge of specific acts of infringement sufficient to warrant iiNet acting to suspend or terminate internet accounts.

Emmett J thought that AFACT’s notices would have to have included:

  1. Information in writing of particulars of specific primary acts of infringement of copyright of the Copyright Owners, by use of particular IP Addresses of iiNet customers; and
  2. Unequivocal and cogent evidence of the alleged primary acts of infringement by use of the iiNet service in question; at least information as to the way in which the material supporting the allegations was derived, that was adequate to enable iiNet to verify the accuracy of the allegations.

Justice Jagot takes a very different view here: stating that the AFACT notices ‘contained prima facie credible evidence of widespread and repeated infringements of the appellant’s copyright by iiNet customers and users’, rising above the level of ‘mere unsubstantiated or unreliable allegations’. What is more, if iiNet did not have sufficient information to judge the accuracy of the notices, that was iiNet’s own fault: having refused to engage with AFACT, it could not then plead its own ignorance.

Did iiNet have the ‘power to prevent’ the infringements?
All three judges consider that iiNet had the technical and contractual power to terminate or suspend its services to subscribers on the basis of copyright infringement; this was relevant, albeit not determinative (cf the Trial Judge who seemed to say that a power to suspend or terminate could not be reasonable and so wasn’t really relevant). On this question, again I think Justice Nicholas’ judgment is the more interesting one: his Honour talks about the difference between ‘direct’ powers to prevent infringement (ie, to stop that particular act) and indirect powers (like taking away internet access so they can’t do anything, let alone infringe, online).

The judges also talk about another statutory factor, the ‘relationship with the infringer’, but it’s not that interesting. I never really know what to make of this factor anyway. There was a contractual relationship – so? Really, most of the action is in the next of the statutory factors in authorisation: whether iiNet took reasonable steps to prevent the infringement.

Reasonable steps

All three judges accept that sending warnings to users ought to be considered a reasonable step. None of the judges was wiling to accept that people when notified of copyright infringement would simply ignore the notice: not all would be aware that such activities infringe copyright; not all would be aware they can be detected.

Worryingly for many, I suspect, is the fact that all three judges also contemplate that suspension or termination of internet service is also a reasonable step. In this respect, a really important consideration that the various judges point to is the Safe Harbours: specifically, the provision that requires parties wanting to take advantage of the Safe Harbours to have, and reasonably implement, a policy for the termination of the accounts of repeat infringers in appropriate circumstances. This is evidence, to the judges, that termination is contemplated as a reasonable step.

iiNet’s protestations concerning the expense, difficulty, and complication of having a system for sending warnings and following up with suspension or termination fell on deaf ears of two judges. Justice Emmett, of the three judges, seems the most ready to count this as an issue, noting the ‘difficult judgments’ involved, the number of notices received, the many, many issues of design choice in such a system (see paragraphs 206-207). Perhaps for this reason, Justice Emmett is the most explicit in practically setting out his own version of a graduated response system. The key paragraph here is paragraph 210. It’s kind of too long to quote here, but go have a look. In summary, it says that ‘before it would be reasonable for iiNet to take steps to suspend or terminate a customer’s account’, AFACT would need to send notices providing ‘unequivocal and cogent evidence’, and undertake to reimburse iiNet for its reasonable costs. But most extraordinary is the way that the Judges say that AFACT’s notices should set out a series of specific steps that it requests. According to the Judge, AFACT should request the following steps:

  1. iiNet should inform its customer of the particulars of the allegations of primary infringement involving the use of that customer’s iiNet account
  2. iiNet should invite the customer to indicate whether the service has been used for acts of infringement as alleged;
  3. iiNet should request the customer either to refute the allegations or to give appropriate assurances that there will be no repetition of the acts of infringement;
  4. iiNet should warn the customer that, if no satisfactory response is received within a reasonable time, perhaps 7 days, the iiNet service will be suspended until such time as a reasonable response is received;
  5. iiNet should warn the customer that if there are continued acts of infringement by use of the service, the service will be terminated;
  6. iiNet should terminate the service in the event of further infringements.

OK, strictly, Justice Emmett is not saying that iiNet would have to follow this procedure: it’s what AFACT should request. But the suggestion is strong that this is what Emmett J thinks a reasonable set of steps looks like.

Um, judicial legislation anyone?

It’s kind of extraordinary that his Honour would set out a system in such detail. These weren’t, after all, the facts before the court. It’s also kind of extraordinary that this is his version of reasonable steps, when this set of conditions doesn’t look anything like what has been legislated in other countries, like France, the UK, South Korea, or New Zealand. Justice Emmett’s ‘reasonable steps’, if that is what these are (and as I said, it’s not entirely clear) have none of the procedural protections found in other places – and specifically contemplate termination of Internet service – something the UK wouldn’t even do without a further order from Parliament and which requires independent decision-makers in France, South Korea, and New Zealand. So, like, wow.

Justice Nicholas, on the other hand, is only prepared to say that ‘an ISP should be given considerable latitude when working out the detail of such a system. It is always possible to argue that a system for the issue of warnings and termination could be tougher than it is. But it would be difficult to criticise an ISP on that account if it acted in good faith to devise and implement a system that involved taking such steps against subscribers who the ISP was satisfied had used (or permitted others to use) its facilities for the purpose of committing flagrant acts of copyright infringement’ (at para 750).

Other interesting stuff

There’s so much more, but this post is already too long. Look out for:

  1. The various judges’ views on whether iiNet ‘encouraged’ infringement, and Justice Nicholas’ discussion of iiNet’s alleged ‘indifference’;
  2. The discussion of the Safe Harbours (no judge thought iiNet could use it);
  3. The judges’ struggles to give s 112E some meaning;
  4. The issue of who bears the cost. Emmett J is explicit: AFACT should offer to reimburse. Justice Jagot thinks that this could have been part of a conversation that should have occurred. I didn’t really see much from Nicholas J on this question (but the judgment is long, maybe I’ve missed something).

Oh, and here’s something interesting. You will look in vain for references to much overseas case law or any of the mound of academic writing on the issues involved. If anything, this suggests to me the continuing isolation of the Australian law of authorisation from the law in other jurisdictions. Too close an examination of overseas case law might reveal the differences too starkly? Of course, it would also have made the judgment even longer than it already is. I suppose we should be grateful for small mercies.

Where to from here?

Interesting question. We’ll have to see if there’s going to be an appeal to the High Court (or rather, application for special leave). Failing that, it’s back to the negotiations. Questions of cost (who bears it) are unresolved. It’s not clear to me whether there is enough guidance here to lead to a ready deal, despite Emmett J’s attempts to write a Code of Conduct for the industry. Termination of service is something I can’t imagine the internet industry is all that keen on, but AFACT’s hand to demand more than the mere passing on of warnings may have been strengthened by the frequent references to the reasonableness of termination as a response. So, much to think about. I suppose I should be pleased…

Kimberlee Weatherall is a senior lecturer at the University of Queensland

This article was cross-posted here at LawFont

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The Slender Reeds of Originality and Authorship: Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd [2010] FCA 984

September 23, 2010

by Kim Weatherall

So you have some kind of maybe-copyright-protected-work. It’s, say, a magazine or a newspaper or something. Someone copies bits. You want to sue, because you want to stop them. You go to a lawyer. And they tell you:

  • That where you might have thought you have a newspaper, all of the bits of which are valuable for their own reasons, but, you know, it’s a newspaper, in fact the lawyers will have to play a kind of Russian-doll game to work out what ‘copyright-protected works’ exist: everything from, perhaps, individual headlines to a compilation – that no one ever sees of course – of the articles abstracted from all the advertising and photographic material; and
  • Oh, by the way, to prove your copyright you must have lawyers and experts traipsing through your office watching every move of your editors, sub-editors, journalists and tea-ladies (or tea-blokes) so that the intellectual efforts of their activities can be traced, described, and set out in affidavits. (Oh, and then, when you’ve done all that, the other side will argue that the evidence isn’t representative and doesn’t prove anything because of the lawyers being there, how’s that for cute?)
  • Oh, and you’ll need to pick an edition, articles, and headlines where the actual human beings who wrote them can depose to the process they went through in putting together that particular edition and those particular headlines.

Counter-intuitive? Maybe? No bones about it, actually. We’re in a bit of a mess. We meaning ‘the copyright-erati’ of Australia. There’s a lot that I think is right about the decision in Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd [2010] FCA 984. But it is worthwhile taking a little step back and asking yourself: does this process of proof, and this process of reasoning, make any sense at all? If not, how did we end up here? Hold those thoughts.

The case

I don’t need to summarise the case here. Google the case name and you’ll find several very good and succinct summaries produced by various law firms. In short, we have a company (Reed) that is making money by (as part of a larger news type service) providing to subscribers the Australian Financial Review headlines and short abstracts of the articles (well, 40-60% of them anyway). Fairfax not happy. Fairfax sue. They claim copyright in:

1. Each individual headline;

2. Each Article including its headline;

3. The compilation of Articles in each edition (sans advertising and photograph materials – that is, just the article texts with headlines); and

4. The compilation being the whole of each Edition.

So they have to show copyright in each of these, and, if there is subsistence, infringement.

Copyright in headlines: is a headline a copyright work?

Here is where I think it is fair to say that the court clearly got the answer right. Headlines are not copyright works, and so the court concluded (actually, the court was a little more cagey than that. At paragraph 50 her Honour Justice Bennett notes that ‘this does not exclude the possibility of establishing a basis for copyright protection of an individual headline’. The courts always make that statement in these cases and as a result, people will keep arguing that their particular title, headline, or whatever is so very original it should be protected. It’s a shame really).

Her Honour’s finding here is clearly consistent with a very long line of authority in which common law courts have consistently refused to recognise copyright in single words, titles, and short phrases: think Dick v Yates (1881); Francis Day & Hunter v Twentieth Century Fox (1940), or, more recently, State of Victoria v Pacific Technologies (Australia). Like the judgments in those various cases, Justice Bennett’s judgement shows perhaps a little discomfort in finding a reason to exclude the headlines (well, either that or just wants to be very comprehensive) – and so throws every possible argument at it. So we know that the headlines in the case were not copyright works because:

  1. There are very good public policy reasons dictating otherwise. Not least, newspaper headlines are titles and every Tom, Dick and Harry (and every reference or bibliographic resource) who wants to refer to the newspaper article needs, as a matter of course, to reproduce the headline. It would be really inconvenient if that turned into copyright infringement. Um, yes, yes it would.
  2. The headlines were not sufficiently ‘original’.  Adding clever puns isn’t enough.
  3. The expression embodied in the headlines was, a bit like the phrases in State of Victoria, a bit too close to the ‘idea’ in the headlines;
  4. They are just too insubstantial and too short to qualify for copyright protection. Not every piece of printing or writing that conveys information can be subject to copyright.

Number 4 seems to be the reason on which her Honour puts the most emphasis, followed by the sheer inconvenience of finding otherwise. That’s helpful, I think, and correct. “Too insubstantial” is the kind of reason that is hard to overcome with ever-more-extensive evidence about the amount of work/work/inventiveness that goes into generating a phrase/title/headline. And relying on the merger of idea and expression, as per State of Victoria, is also a little tricky beyond the facts of that particular case. You can (outside those special facts) usually find other words to express something.

So, all in all, this is a good bit of judgment.

Is the compilation of articles (without ads and without photographs) a literary work?

Justice Bennett says yes, rejecting Reed’s argument that it is a ‘hypothetical work’ since it never actually exists or is sold to the public like that. It’s kind of hard to argue with this assertion. We don’t have a lot of well-established principles for working out whether there is ‘a work’ or not or finding the parameters of a work in copyright (if you’re interested, one of the better discussions of this I’ve seen was Mike Handler’s article on Broadcast copyright in the Sydney Law Review). But again, like the failure to simply ‘rule out’ headlines as ever being works, this kind of reasoning has the unfortunate result of encouraging a Russian-Dolls type dissection of a product into ever-smaller-and-less-coherent ‘bits’. This has to lengthen pleadings and complicate copyright arguments. It’s a shame. But by the same token I don’t see a clear way to avoid this (note to self – think about that sometime).

Is an article together with its headline a copyright work?

Here’s where it all gets a bit more dicey. The question here is whether it’s right to see an ‘article together with its headline’ as a copyright work.  In a post-IceTV world, you have to be able to identify authorship to find copyright. So the article with headline has to either be a work of authorship, or a work of joint authorship. Problem: mostly, it seems, journalists don’t write headlines (headline-writing being a special skill, as quite extensive evidence sought to prove). So ‘headline plus article’ isn’t a work of authorship.

Anyway: is it joint authorship? Well, that’s kinda awkward too, because for one thing, the journalist’s name is on the by-line (which is a bit weird if they’re only a joint author, perhaps).

But at a more fundamental level, you have a problem that editors edit, and the practice has been to see editing as a distinct function not conferring joint authorship. This may or may not be fair: there’s been plenty of recognition that there are cases where the existence of a good editor has made great writing, in particular, possible – taken undigested genius and turned into something that the rest of us can hold sufficiently in our head to enjoy. But despite whatever evidence might be thrown at the question, I suspect it would be quite hard for a court to turn around and hold an unattributed editor as a joint author. Thus Justice Bennett states affirmatively (paragraph 94) that “straightforward editing of articles for the purpose of inclusion on a page, which may or may not involve substantial changes to the article, is not enough to attract joint authorship for copyright purposes.” Later (paragraph 97) she says that ‘sub-editors edit in the traditional sense, in a manner insufficient to make them joint authors’.

This is interesting when you think about it. First, her Honour clearly has in her mind a picture (a ‘traditional’ one, a ‘straightforward’ one) where editing is not joint authorship. I wonder though. Does this depend on job title? A separation of tasks in time? Would it be different if, say, the sub-editor had come up with the story idea in the first place (so had some more intellectual input into forming the article, if not its text?) In short, I don’t know if I know what ‘straightforward’ editing is, really. I have to say, too, that this reasoning, while logical, and consistent with what we’ve seen emerge post-IceTV as copyright’s unrelenting focus on human authorship, is going to cause plenty of headaches for people involved in collaborative creation. Think about it. IceTV (at least the Gummow et al judgment) seemed to put a great deal of focus on the author needing to be the person putting ‘pen to paper’ (or fingers to keyboard, so to speak). This looked like a shift away from the Cala Homes reasoning which allows for significant intellectual contributors to be authors. Now Justice Bennett tells us that fingers to keyboard isn’t always going to be enough – even if you’re taking out or putting back in large amounts of text while preserving the gist of the story (which I would have thought was reasonably intellectual). And of course Phone Directories has already told us that fingers to keyboard isn’t enough if you’re too rule-bound. I don’t know about you, but I’m having more and more trouble working out who is an author, unless it’s in the truly traditional kinds of literary and artistic creation.

In a sense, her Honour avoids getting into the guts of these questions by saying there isn’t the evidence of the actual collaboration process on the actual articles in question in the case: about, say, the extent of re-writing of those articles, or the level of involvement by a given editor (did the same person re-write and contribute the headline?). But that just brings me back to what I started with in this comment: where are we at, in copyright, when you have to try to get that kind of evidence? How realistic is it to expect that journalists who work on different articles every day will remember the particular process of collaboration leading to a particular article?

I would not want to be litigating these issues now. Can’t wait to see what the Full Federal Court makes of it all.

Infringement

But wait! There’s more! Having found no copyright in headlines, or in Articles including headlines, Reed’s abstracting service raises some really interesting questions about whether they have taken a ‘substantial part’ of the overall Article or Edition compilation. Her Honour found the answer to that was no, and a key part of the thinking here seems to be that compiling is compiling, and headline-writing is headline-writing, and if you’re claiming copyright for your compiling, you can’t claim for your headlines. This ensures that you can’t get ‘greater protection for an element of the compilation’ via compilation copyright than you get for the thing (the headline) on its own.

I can see the argument. But I wonder if it’s right to separate out the writing and the compiling here, and what the implications are for future legal arguments.

Can you really separate the two? If the headlines are written and re-written in the course of putting the whole thing together, and are written so as to work in sympathy with all the other headlines and content, is it right to say the writing of the headlines is a separate act? Could be regarded as artificial, I think. I’ll have to think about that some more.

Also, if you adopt this line, how, as a lawyer, would you plead the next case? Well, you’re going to have to do what Fairfax has done here, aren’t you? Identify a series of ever-more-specific works capturing the particular creativity that you say the other side has taken, because looking at the whole (compilation) won’t help you.

I’m going to have to think about this substantial part analysis more. But there is something about it that is making me uncomfortable. It’s logical. But, in a preliminary way, I think what is bothering me is that it is a kind of twisted, torturous copyright logic, not a real human being logic (and yes, I know, this is a case. But when logic strays too far from lay sense, you should be asking yourself why). On this analysis, the headlines just … disappear. They’re not works. They’re not part of articles. They’re not part of the compilation. They’re … invisible to copyright altogether. I wonder about that.

The final section of the judgment addresses fair dealing – finding this is fair dealing for the reporting of news. This post is already too long, so I’ll just say: how far have we come, that competition and substitution was so important in The Panel and so unimportant in this case.

Conclusion

This is a wonderfully interesting, mind-bending kind of judgment to read. I’m sure I’ll have more to say at some point. I should emphasise, perhaps, that I think the outcome is probably correct. Headlines shouldn’t be protected. News should be able to be reported. But aside from those ‘headline points’ (sorry), there remains… much to ponder.

Kimberlee Weatherall is a Senior Lecturer at the University of Queensland

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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…

Background

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

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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.

Troubling?

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.

Troubled…

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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