There are various sources of information dealing with the Anti-Counterfeiting Trade Agreement (ACTA) online, but there is one point that seems to be covered less. Why is the Anti-Counterfeiting Trade Agreement (ACTA) being negotiated at all as a multilateral trade agreement? In other words, why is this not being negotiated at WIPO, or [...]]]>

Culprits or saviours?

There are various sources of information dealing with the Anti-Counterfeiting Trade Agreement (ACTA) online, but there is one point that seems to be covered less. Why is the Anti-Counterfeiting Trade Agreement (ACTA) being negotiated at all as a multilateral trade agreement? In other words, why is this not being negotiated at WIPO, or the WTO?

We need to make some political distinctions here. Any such questions need first to understand the current balance of power in the global IP scene, and also the motivations of the parties. It is easy sometimes to fall into manichean portrayals of intellectual property, maximalists are money-grabbing soulless enterprises, while those opposed to more protection are plucky romantic rebels fighting against the Evil Empire [insert Star Wars / Lord of the Rings reference here]. It is easy to see how such portrayal finds favour amongst geeks, we have grown up favouring the underdog, wanting to be Jedi fighting for the Rebel Alliance, or Frodo on his quest to destroy the One Ring. However, the IP scene is more nuanced, and I say this as a geek that is attracted to the romantic scoundrel notion.

There are two countries who are net IP exporters: The U.S. and the UK (which goes a long way in explaining the Digital Economy Act). If your IP balance sheet favours exports, then it is obvious that you will want to have a system in place that enhances your trade situation. The U.S. Trade Representative is not a mindless agency pushing for more IP protection to fulfil an evil agenda, it is doing so because it is in the best commercial interest of the U.S. We have to always keep that in mind. As such, the USTR has been engaged in the last decade in a clear strategy that tries to export stronger IP protection around the world, because at the moment anything that protects IP in a given territory will undoubtedly favour its balance sheet. TRIPS-plus agreements, and other bilateral efforts, have to be seen in that light.

During the 1990′s, the global maximalist agenda had the large international institutions on its side. The golden age of international maximalism saw the creation of the WTO, the TRIPS Agreement, and the WIPO Copyright treaties, followed by an unprecedented change in national laws to adopt such efforts. However, at the turn of the century, the international political pendulum swung in the other direction, the over-reach of the IP industries meant that policies were enacted that went against the best commercial interest of several developing countries. If you also take into account the access-to-medicines debacle, as well as the emergence of the Internet and widespread file-sharing, and you will see that maximalism did not have a good start of the new Millennium.

At the same time, the international institutional IP changed. The WTO and WIPO used to be places where large IP producing countries used to hold more sway, and it was easier to pass international agreements. However, as large developing countries started finding their voice, it became harder for IP owner countries to push their agendas. The culmination of this situation was the failure to approve the WIPO Broadcast Treaty in 2007, which was a big blow for the content industries. This Treaty was defeated by a combination of web activists, the tech industry and developing countries, and has to be taken as the final nail in the coffin for the quasi-unilateral control of IP owners of the international institutions.

Several other things have been happening at the international IP institutions. Policy-making at the WTO seems to have ground to a halt after the 2001 Doha Ministerial Conference. WIPO has also been seeing some structural and political changes. The institution has become more financially independent thanks to the success of the Patent Cooperation Treaty and the domain name dispute resolution procedure, which means that they do not have to take marching orders from content owners any more. Then there was the recent disputed election of the new Director General, where Brazil almost succeeded in winning the vote. It is precisely this balance between countries like India and Brazil on one side, and the U.S. and the EU at the other end, that has turned WIPO into a more balanced, but less functional institution.

This was made evident to me during last week’s 5th Session of the Committee on Development and Intellectual Property (CDIP). The institution seems to be completely stuck in political haggling between various groups, which is a result of the fact that all decisions have to be taken by consensus. In the current political climate, it seems unlikely that an international organisation such as WIPO can pass a maximalist treaty. So, if you are a country that wants to continue to protect its intellectual property at the international stage, what would you do? Enter ACTA.

Is ACTA needed? From an IP exporter perspective, the answer seems to be a resounding yes. The current system is not producing the desired results, namely to stop counterfeiting, and most importantly, the current international system seems not to be denting Internet file-sharing. So if you want to enhance protection in other trading countries, what you do is bypass the international institutions, and negotiate an agreement with chosen strategic partners. The list of countries negotiating ACTA is very indicative of where things are going. The U.S. is the obvious mover, the EU is interested in enhancing IP protection because as a whole it is close to being a net IP exporter, if it is not one already (I have to check the figures again). New Zealand seems to be an odd choice, but it is a country that has close links with Hollywood. Japan and South Korea are also countries that are on the verge of becoming IP exporters, if they are not already. Mexico and Canada are acting mostly in their role as NAFTA trading partners of the U.S. Singapore and the UAE are very conservative countries with strong IP protection and enforcement, so it seems like they would favour strong-hand approaches to IP. I have no idea about Morocco though, its presence sticks out a bit. Australia has been conducting a strongly pro-IP policy since the Howard government, even if one could argue that it has done so against its own interest.

So where does that leave us? The current ACTA draft has one interesting feature. It seems to export DMCA-level protection, so the one country to benefit the most will be the United States, but some of the other trading partners might benefit as well. We might see more efforts like this in the future if the current situation at the WTO and WIPO does not improve.

If you follow technology news services and blogs that are vaguely interested in digital rights issues, you must already have heard about ACTA, the Anti-Counterfeiting Trade Agreement. This is a multilateral trade agreement between the EU, the US, Mexico, Canada, Australia, South Korea, New Zealand and a few [...]]]>

"I find your lack of copyright enforcement disturbing"

If you follow technology news services and blogs that are vaguely interested in digital rights issues, you must already have heard about ACTA, the Anti-Counterfeiting Trade Agreement. This is a multilateral trade agreement between the EU, the US, Mexico, Canada, Australia, South Korea, New Zealand and a few others, currently negotiated in secret that is set to tackle copyright infringement issues. As the name indicates, the aim of the agreement is to tackle counterfeiting. However, the most controversial aspect is that various sources have disclosed that the agreement is set to export some of the worst maximalist legislation out there, particularly in an attempt to curb illegal file-sharing. For the most detailed in-depth analysis of what has been happening so far, Michael Geist’s blog is the place to be. Nonetheless, I have been meaning to take stock and write a synopsis of what has happened so far for my own benefit. If you are confused about the various claims and counter-claims, I hope you find this useful.

The main problem with ACTA is that the negotiations have been closed. Secrecy leads to fear, fear leads to hate, hate leads to anger, anger leads to the Dark Side. One problem that I have noticed, and which has already been picked up by some defenders of the agreement, is that some of the language attacking ACTA seems to be rather overboard. This is an agreement that will end Web 2.0 services, it will eradicate the Internet as we know it and replace it with an alien reptilian replicant. So I have decided to go through what we know about the agreement so far. It must be pointed out that this is the perfect time to take stock, the next round of negotiations is coming up in April, so if there is something to be worried about, we should make a fuss right now.

So what do we really know about the agreement? Relatively little. Because of the secret negotiations, we only have had some leaks here and there. I will not recount the history of the talks (for that, again, I refer you to Michael Geist), but I will only mention that the agreement has been in negotiation since 2008, and that, as mentioned, the process has been shrouded in secrecy. Had it not been for some whistleblowers like Geist, ACTA would now be in an almost final stage with little or no public oversight whatsoever. Whatever one may think about some of the more colourful and fanciful speculation out there, the spotlight cannot hurt, ad we will not be taken by surprise.

So, what does the text say? The most important leak so far came in mid-February, and it was precisely what we were hoping to see, namely Article 2.17: Enforcement procedures in the digital environment (pdf here). The text starts out in a seemingly innocuous manner:

“Each Party shall ensure that enforcement procedures, to the extent set forth in the civil and criminal enforcement sections of this Agreement, are available under its law so as to permit effective action against an act of, trademark, copyright or related rights infringement which takes place by means of the Internet, including expeditious remedies to prevent infringement and remedies which constitute a deterrent to further infringement.”

This is frustrating, as we do not have the current civil and criminal enforcement sections. There are some earlier proposals out there (here and here), and a European leak with country positions  regarding civil enforcement here, but we do not have a clear idea of what the final text will look like. Two things are worrying however. As EU representatives have mentioned, current European copyright obligations do not mention specifically criminal and civil liabilities, but “adequate legal protection…” Another worrying aspect from the existing civil liability section is that ACTA exports the DMCA’s infamous statutory damage provisions, as it asks other countries to calculate damages in the following manner:

“[I]n determining the amount of damages for infringement of intellectual property rights, its judicial authorities shall consider, inter alia, the value of the infringed good or service, measured by the market price, the suggested retail price, or other legitimate measure of value submitted by the right holder.”

This means that we might see some of the most outrageous American copyright enforcement damages, such as the Jammie Thomas-Rasset and Joel Tenenbaum cases, exported to jurisdictions where damages are nowhere near what is proposed. The other concern is that the civil enforcement section could contain a three-strikes clause. We just do not know yet.

Paragraph 2 is a bit odd. It requires the enactment of third party liability, but this is surely already part of most agreements, so why include it here? My guess is that this is setting up the stage for continuing the war against intermediaries that is being waged at the moment. The language is broad enough as to include almost anything.

Paragraph 3 creates rules that will allow service providers, intermediaries and third parties to operate despite what has been mentioned in paragraph 2. In other words, Paragraph 3 will export American safe harbours and notice and take-down regimes. What bothers me is that Paragraphs 2 and 3 create a noxious environment in which third party liability is the rule, not the exception. Intermediaries will be liable with two exceptions. The first one reads:

“[Each party shall] (a) provide limitations on the scope of civil remedies available against an online service provider for infringing activities that occur by:
(I) automatic technical processes and
(II) the actions of the provider’s users that are not directed or initiated by that provider when the provider does not select the material, and
(III) the provider referring or linking users to an online location when, in cases of subparagraphs (II) and (III), the provider does not have actual knowledge of the infringement and is not aware of the facts or circumstances from which infringing activity is apparent [...]“

So, if you are an intermediary, you have to make sure that all of your processes are automated, that you do not exercise any editorial and selection process whatsoever, and you make your best effort not to know anything that happens with your providers. Otherwise you might be liable. The second exception is:

“(b) condition the applicantion of the provisions of subparagraph (a) on meeting the following requirements:
(I) an online service provider adopting and reasonably implementing a policy to address the unauthorized storage or transmission of materials protected by copyright or related rights except that no Party may condition the limitations in subparagraph (a) on the online service provider’s monitoring its services or affirmatively seeking facts indicating that infringing activity is occurring; and
(II) an online service provider expeditiously removing or disabling access to material or activity, upon receipt of legally sufficient notice of alleged infringement, and in the absence of a legally sufficient response from the relevant subscriber of the online service provider indicating that the notice was the result of a mistake or misidentification. Except that the provisions of (II) shall not be applied to the extent that the online service provider is acting solely as a conduit for transmissions through its system or network.”

As stated, this pretty much exports DMCA notice-and take down. You must have a policy to take down content as soon as you’re told, and must make sure to take down the content ASAP.

Paragraphs 4-6 are also DMCA export provisions, as they make it an obligation to export the DMCA’s anti-circumvention provisions, particularly criminal liability for breaking DRMs. Paragraph 6 specifically talks about rights management information (mostly metadata integrity).

So, what’s the verdict? It’s too early to tell. I will reserve full comment until I get to see a reliable draft of the civil and criminal enforcement sections. So far, I do not particularly like what I have seen. I agree with people like Ben Sheffner and Nate Anderson who comment that what we have seen of ACTA does not affect the United States that much, they already have the mother of all maximalist copyright protection. However, their comments seem rather short-sighted, and tend to forget that there are lots of other countries who will sign the agreement. The provisions are already in US law, so don’t worry, they would come to you anyway in some shape or another.

The problem that I have with exporting DMCA-level of protection is that Americans have a huge counterbalance to those provisions in the shape of Fair Use dcotrine. We do not. We have fair dealing, an exhaustive list of exceptions and defences. We get the DMCA, but without any balance. Why is it that the American copyright system seems keen to export maximalism, but not fair use?

Hopefully, there seems to be some opposition building up this side of the Atlantic. Stay tuned.

Update: The European Parliament has voted in favour of opening up the ACTA negotiation 633-13. Things are getting interesting.

Anyone who has been paying attention to the War on Piracy will have noticed that the emphasis has shifted from the user to the internet service provider.  As content owners discovered that attempts to enforce their rights against users backfired and/or had no noticeable effect, [...]]]>

"They are getting closer, I can hear their lawsuits at night"

Anyone who has been paying attention to the War on Piracy will have noticed that the emphasis has shifted from the user to the internet service provider.  As content owners discovered that attempts to enforce their rights against users backfired and/or had no noticeable effect, they began returning to the strategy of trying to make the service providers liable for the infringement committed by their customers.

The first barrage in the war took place when content owners managed to get Irish ISP Eircom to promise that it would disconnect repeat offenders.  Then an Australian copyright conglomerate (representing several U.S. content giants) sued iiNet for copyright infringement incurred by its customers, and we should get a ruling next week.

These lawsuits however are only a small part of the global strategy.  As it has been repeatedly posted here and elsewhere, the end-game for the content providers is of course to make ISPs liable through the inclusion of three-strikes clauses into copyright law.  New Zealand and France have attempted to do just that with mixed results, and in the UK we are currently experiencing a similar threat through the Digital Economy Bill.  But it is in ACTA where the final battle will take place.  The inclusion of three-strikes provisions in a wide-ranging bilateral agreement between some of the most developed countries in the world will almost undoubtedly spell the end of intermediary indemnity, and more importantly, it might well spell the end of ISPs as we know them.

Update: And to complicate things even more, Virgin Media says that it will use deep-packet inspection software to monitor potential infringing material.

This has been some time coming. At some point in [...]]]> When the history of the Internet is written down (again), the annals of the years 2009 and 2010 will describe the consolidation of social media, the rise of Twitter, but more importantly, it will be known as the period when regulators and industry tried to tackle intermediaries.

This has been some time coming. At some point in the past three years, content owners discovered that suing their customers was not such a good idea after all, and while keeping up the pretence of conducting the War Against Piracy, their sights were set on another front, much like Hitler giving up on the Battle of Britain and looking at the Soviet border longingly (Godwin’s Law has been invoked, you may cease to read if you want). For the last ten years (give or take a couple), intermediaries have been exempt from liability for infringement undertaken by their customers. The consensus has been that intermediary liability exemption is a Good Thing, as it would be impossible for any internet service provider to monitor and filter every transaction by their customers.

Fast-forward some years, and the picture has changed immensely. Intermediaries used to be small and meagre operations that did not have enough money to pay back in case of litigation. But with the appearance of large aggregators and other powerful intermediary services such as Google, the possibility of making these providers liable became greater. The cluster of lawsuits against Google that we have witnessed in the last few years has been the result of this change in strategy. However, service providers are still protected by safe harbours and other liability dampeners. What to do?

The answer to this question has been to undertake a double-pronged approach. Why not turn internet service providers into policemen? Let them do the unpopular work of slowing down and disconnecting users if they engage in infringement, all you have to do as a rights-holder is to point them in the right direction, or at least point them towards an IP address that may or may not be accurate. Let the ISPs deal with the angry customer and the lengthy appeals process. This is in a nutshell the rationale behind three-strikes, be it HADOPI, ACTA or the Digital Economy Bill.

The second part of the strategy is to try to erode the power of the aggregators by erecting pay-walls and removing content from search engines, as has been proposed by Rupert Murdoch. This is a much trickier proposal. There is no doubt that newspapers and traditional media are struggling due to the Internet. How they respond in the next year may make or break entire companies. Nonetheless, the idea is compatible with the three-strikes one. At the heart of both suggestions there is the recognition that intermediaries have had a free ride for too long, and the time of reckoning is nigh.

While I empathise with the newspaper industry, I am afraid that many of the solutions offered will not work. There is a good reason why newspaper sales are down, and it has nothing to do with Google. People are getting their news in different places nowadays. It is quite indicative that the news of Michael Jackson’s death was first broken by the entertainment website TMZ. Many of us heard of the news first from Twitter or Facebook. Like it or not, the authoritative top-down approach can no longer keep up with people’s information consumption habits. Those who survive the next year will be the businesses that realise the changing nature of the market, and adapt accordingly.