The Politics of ACTA, the European Union and the strategy we need to win
My presentation will not be a very technical one but instead will be an analysis of where we are and where we are going. I will start by speaking of the economic and political context in which ACTA is being discussed. Then, I will give an overview of elements of EU IP enforcement legislation that is related to the ACTA text and that is at the centre of EU legislative debate. Finally, and most importantly, I will reflect upon the movement critical of ACTA and similar measures of IP enforcement the strategic options, coalition building, contradictions, strongpoints and pitfalls.
Is the medium is the message?
More alarming than the details of the published draft are the general goals behind the document and the political strategy used to achieve these goals. ACTA has a clear bias toward the interests of copyright, trademark, and patent owners and is driven by the old
belief that more and stronger protection of intellectual property is better, irrespective of the legitimate interests of users and developing countries. The draft is blind to the negative consequences of an ever-tightening intellectual property regime and ignores any mention of citizens rights or balancing safeguards.
Axel Metzger* Journal of Intellectual Property, Information Technology and E-Commerce Law
ACTA in context, in Europe and ideas for a broader strategy.
ACTA is a far-reaching exercise by the EU and the US that is economically protectionist and politically regressive in terms of global governance. In reaction to the lack of progress in trade liberalization in the Doha round and threatened by massive exports from middle range countries, Northern countries want to defend themselves and dig their heels in with a few existing business models. IP enforcement measures should be seen in this light. Obviously there are great contradictions between content holding companies, big pharma and IT service industries, between incumbent companies and challengers, between fixed capital businesses and labour intensive ones, between public administrations offering basic services and new venture capital firms. Nevertheless, the EU in its strategic EU 2020 plan has placed IP harmonization and enforcement at the centre of its programme for innovation and competitivity.
At stake is not only stronger or more flexible IP enforcement but the forging of new “plurilateral” or “coalition of the willing” international arrangements that bypass or out-manauever existing institutions such as the WTO or WIPO. This has profound political implications that go beyond IP enforcement regimes. The existing Geneva institutions are being considered generally innoperant and paralyzed by the EU and the US for being too slow, demanding almost consensus and increasingly dominated by emerging countries from the South that are flexing their muscles too much. The institutional arrangements discussed in ACTA could be even more important than the final content of the enforcement agreement. If an on-going, even embryonic plurilateral structure can be established for IP enforcement measures outside of the WTO and WIPO we will be facing a whole new horizon that places countries from the South and civil society organizations in a more desfavorable relationship of forces while incrementally creating an institutional body that coordinates and harmonizes Trips plus measures, criminal sanctions and heavy handed penalties in the exclusive interest of rights holders and without the annoying noise of civil society and other dissident voices.
Maybe it is no coincidence that the World Cup is being played in South Africa right now. The horns vuvuelzas represent the noise, the cacaphony, the participation of the South the EU and the US are trying to avoid. The ACTA debate should as well be seen as part of a growing conflict between the Northern economies and the growing political and economic power of BRICK. Recent development concerning the Iran nuclear crisis and the Middle East have shown a growing divergence between these middle range countries that are flexing their muscles in many fields, as they have concerning the IP agenda in the Geneva institutions. Here is how India sees ACTA as they stated in a statement at the WTO last week:
A fairly good summary of criticism of ACTA is from India:
*TRIPS plus enforcement measures can have a trade distorting effect.* The chapeau provisions of the enforcement section of TRIPS in Art 41.1 states that “These procedures shall be applied in such a manner as to *avoid the creation of barriers to legitimate trade* and to provide for safeguards against their abuse.” The TRIPS plus standards envisaged in RTAs and plurilateral initiatives like ACTA could short-change legal process, impede legitimate competition and shift the escalated costs of enforcing private commercial rights to governments, consumers and taxpayers. They also represent a systemic threat to the rights of legitimate traders and producers of goods, and fundamental rights of due process of individuals.
Problems and contradictions: Our citizens, especially in Europe are, in the throws of a financial crisis, are afraid of losing jobs to the BASIC countries, of the growing strength of emerging economies, of the flood of cheap products entering our markets. We cannot ignore these concerns. Counterfeiting is a legitimate concern and our credibility. We cannot just pose as the general “defenders of access to knowledge” without defining “what knowledge, in whose benefit, with what consequences?”
In the EU there are growing calls for some kind of protection of the the Eu market. French President Sarkozy had in the past often proposed using protectionism of “carbon leakage”, CO 2 emissions or even social norms. Instead he is the prime backer of ACTA in the EU with his content industry Vivendi sitting beside him.
The financing of culture is also a concern that needs to be addressed seriously with new proposals. We cannot just say that present file sharing is the best of all possible worlds without considering in the debate alternative means of financing different types of creative content while and the same time not undermining fundamental rights. There is a growing debate on a number of ideas across the EU. I believe the propagation of alternative models for culture and publishing can help us be seen as pushing a win-win situation and as moving out of the black and white IP rights versus civil rights dichotomy. We cannot pose ourselves simply as the defenders of the “developing world” when countries like China, Brazil and India are already becoming very powerful global players, with growing middle-classes in defense of interest that do not necessarily always coincide with those of northern consumers or citizens.
Can the financial crisis and state debt crisis be our possible allies?: Our public service and health systems are under special strain. Government debt is a serious problem that is compounded by the price of medicines. Countries like Spain and Greece have unilaterally reduced prices paid by State for patented medicines by over 25% which is an example of irreverence toward the IP med regime. Here we see an opportunity for commonality of interests between Northern and Southern consumers. An anti-monopoly, or “flex-security” strategy toward the production and pricing of essential medicines can be a key element for forging a coalition of northern citizens and the south. On one hand a global strengthening of enforcement regimes would mean higher walls defending he monopolies and higher potential costs and threats for challenging companies in the area of medical products while removing trade and commercial barriers in the way of generics, the creation of patent pools, opening up access to medical research and trial data. An anti-big pharma monopoly coalition for fair prices is a way of bridging the Gap between north and south. Again, our criticism needs to be accompanied by positive proposals in the fields of de-linkage of R and D and prices: innovation prize schemes, patent pools, open source med research compensated by funds, and even a possible global med fund tax or levy.
If we consider medical knowledge a basic and global public good, it is obvious the present system is failing in many respects, in fairness, in global access, in orienting R and D to need, in presenting fair prices, in preventing unreasonable monopolies. We must highlight this failure as we attack the proposed ACTA enforcement measures. This is one of our successful campaigns in the EU that has linked border measures leading to seizures of medicines in transit, Trips plus proposals in FTAs and the proposals in ACTA.
At the same time we should be conscious of the different interests between US and EU, on scope, ulterior motives, harmonization and politics.
Why is the EU pushing the inclusion of patents in ACTA while the US would prefer to see them excluded. Are the interests behind ACTA narrow?
MPAA, Vivendi, Chamber of Commerce, publishers, record companies…. They are not usually giant industrial interests, many of whom are not interested, but localized politically important due to their public visibility and economic contribution: actors, filmmakers, singers and collecting societies: opinion leaders, campaign contributors, cultural icons. Based on a mantra of job destruction, plagiarism, trademark falsification and outright piracy. No one doubts that concrete business are hurt but he economy as whole often benefits from more flexibility in IP enforcement (3 big companies). Until now we have not been able to illustrate massively our position as a “pro-innovation” slate while we are only seen as a “pro-rights” position. The pro-acta coalition has hijacked the innovation agenda and the defense of existing embattered business models at a time of crisis, while our support for experimenting with new models in unchartered territory is considered by many as a dive into the unknown.
What is the state of play in the European Parliament on ACTA:
There was an initial large majority in favour of transparency of the ACTA text and mainly concerned with the process and not the content. Now the position of MEPs is quite divided. For example, today a written declaration very critical of the content of ACTA including intermediary liability that needs 369 signatures to become the position of the EP. As of yesterday we had 237 signatures. It will be a tough effort to get over a hundred signatures more before the summer break. At the same time there is great concern of the data protection and privacy along the lines of the EU Data Protection Supervisor.
The politics of ACTA´s Internet chapter in the EU is caught in a double bind. The ACTA text seems to condition the “safe harbour” of Internet Service Providers to these intermediaries playing a role in policing content and cooperating with content-owners. On page 20 at the bottom, when referring to ISPs liability, it is mentioned that “the online service providers act [takes appropriate measures] expeditiously, in accordance with applicable law [s], [such as those] to remove or disable access to infringing material or infringing activity upon obtaining actual knowledge of the infringement [or the fact that the information at the initial source has been removed or disabled.] [or having reasonable grounds to know that the infringement is occurring]]”.
On page 22 the text affirms: “Each Party shall enable right holders, who have given effective notification to an online service provider of materials that they claim with valid reasons to be infringing their copyright or related rights, to expeditiously obtain from that provider information on the identity of the relevant subscriber”.
This could be understood as contradicting the safeguards in EU law, namely the e-commerce Directive that clearly protects personal, privacy and freedom of expression on the Net. Again, there is no clear mention of fundamental rights safeguards in the released text. There is great discomfort in EU public opinion and within the political sphere with the idea of assigning a policing and/or filtering role to Internet service providers. Not only is there public pressure against moves that could limit net neutrality and place into doubt privacy and data protection but these concerns have been reflected in a strong report by the EU Supervisor of Data Protection against a number of the measures in this respect in the proposed ACTA text. Nevertheless, this criticism is seriously by simultaneous and contradictory political majority that is also in favour of greater protection of IP rights (Gallo) and the rights of children as a reason for blocking, notice and take down and other strong measures.
Axel Metzger states that: The Information Society Directive 2001/29, Recital 59, allows explicitly for injunctions against non-infringing ISPs. It has been argued that for the sake of coherence, this approach should also apply to Art. 11sentence 3 Enforcement Directive.21 ACTA would support this point of view if the sq uare brackets were finally deleted.
The politics of the internet chapter of ACTA has provoked strong criticism on issues of fundamental rights on the part of citizen and consumer organizations but on the other side at the same time there is quite a successful offensive on the part of content holders and the entertainment industry that is able to win majority positions in the EP in favour of stronger criminal measures of IP enforcement, such as the Gallo Report, that will soon come to plenary in Strasbourg. Some of the same politicians who reject ACTA on fundamental rights grounds are supporting tough enforcement measures that are the core of ACTA. It is not yet clear whether the right hand will realize what the left hand is doing but it reflects a the strength and weakness of our strategy.
Does ACTA Force a change in EU Law? Maybe not, but introduces new measures regarding injunctions against intermediaries, strict liability for damages and ex-parte measures (participation of content holders) in preliminary proceedings.
Axel Metzger*
The European Commission recently published the first official draft of the Anti-Counterfeiting Trade Agreement (ACTA). The article describes the institutional background of the negotiations on ACTA and its relationship to the existing legal framework. The civil enforcement provisions and the Internet chapter are compared with the international and European instruments in the field. For the most part, ACTA will not oblige member states to enact rules that go beyond the already established European standards. But stricter rules could be implemented regarding injunctions against non-infringing intermediaries, strict liability rules for damages, and ex parte measures in preliminary proceedings. According to the published draft, the termination of user accounts in the case of repeated intellectual property infringement will not be mandatory for member ACTA states.
Forthcoming in:
Journal of Intellectual Property, Information Technology and E-Commerce Law