ACTA on life support: why the Anti-Counterfeiting Trade Agreement is failing and how future intellectual property treaties might avoid a similar fate.

• Published date: 22 September 2013
• Author: Shepard, Alex
• Date: 22 September 2013

INTRODUCTION

The Anti-Counterfeiting Trade Agreement ("ACTA" or "Agreement") is an international intellectual property treaty that provides for new international minimum standards for criminal and civil enforcement of intellectual property rights. (1) The categories of subject matter protected by the agreement are borrowed from the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS"), (2) and ACTA expands upon the limited criminal enforcement standards present in TRIPS. (3)

ACTA is an agreement created outside the auspices of multilateral organizations (4) and has been fraught with controversy since its initial talks in 2006, with criticism ranging from its negotiations lacking transparency to its very existence merely being an initiative by rights holders to increase the international power of their intellectual property rights. (5) Events in 2012 have created significant uncertainty as to the likelihood of the agreement coming into effect; the European Union parliament affirmatively declined to ratify it, (6) and several European nations have refused to ratify ACTA in the wake of large protests. (7)

This Note is concerned with one particular criticism of ACTA: that despite its title and provisions for counterfeit goods, it is primarily a copyright treaty designed to respond to growing concerns of rights holders with respect to digital copyright infringement. (8) Whether or not this criticism is valid, ACTA does contain several provisions relating to copyright infringement and piracy, both physical and digital, which are not present in prior IP treaties. (9) And although the future of ACTA is far from certain (and likely far from bright), its goals within this sphere of intellectual property will not be interred along with it. Though the agreement may die, an autopsy could provide valuable information on trends in the development of IP treaties and how future treaties might avoid a similar fate.

This Note argues that the digital infringement provisions of ACTA are the result of a progression of international IP treaties, (10) and that its specific provisions regarding Digital Rights Management ("DRM") (11) and digital infringement are both strongly influenced by the U.S. Digital Millennium Copyright Act ("DMCA") (12) and a reaction to legal battles involving new technology used to facilitate digital copyright infringement. This Note further argues that, despite the continuing rise in this infringement, ACTA's provisions go too far in protecting the interests of rights holders at the expense of internet service providers ("ISPs"), (13) Internet content providers ("ICPs"), (14) and internet users. Specifically, the Agreement should either have reduced standards of liability for these groups or, in the alternative, the Agreement should provide explicit defenses and exceptions for liability, and should provide specific guidelines on implementing concepts of secondary liability for countries that do not have well-established legal doctrine regarding secondary liability.

Part I begins with a comparison between ACTA and multiple IP treaties and statutes that predated its creation in regards to digital copyright infringement. Part I examines the current state of the legal issues regarding digital piracy with which ACTA is concerned, specifically by discussing court cases concerning liability for ISPs of their users' copyright infringement. Part II continues with a discussion of why ACTA is the logical outgrowth of the treaties and DMCA. Part III then posits the argument that the Agreement is too harsh in its minimum international enforcement standards. To support this latter contention, this Note will focus on the lack of exceptions and defenses to infringement in ACTA and how its provisions may allow for states to enact draconian anti-pirating laws that might cut off alleged infringers from the internet. Finally, in Part IV, this Note will discuss what a better and more equitable version of ACTA might look like and the types of limitations that future ACTA-Iike treaties should incorporate to strike a better balance between IP holders and users.

I. THE LEGAL BACKGROUND OF ACTA

A. International Treaties and the DMCA

There are four aspects of ACTA that are relevant to the enforcement of intellectual property rights in the digital environment: digital copyright infringement, DRM circumvention, minimum standards for liability, (15) and disclosure of personal information. (16) It is interesting, then, that TRIPS spends very little time on these issues.

Being a product of the mid-90s, TRIPS was not concerned with many of the technological innovations that would form the basis for modern digital copyright infringement. It does, however, offer the groundwork for a discussion of privacy rights in cases of copyright infringement. TRIPS allows member states to require an infringer to disclose the identity of third persons related to instances of infringement. (17) In the realm of civil enforcement, TRIPS provides for provisional measures that can be adopted inaudita altera parte (without the other party present), so long as notice is given to the other party. (18) TRIPS also provides for exceptions to the exclusive rights of rights holders, but only in broad language that favors the authors of copyrighted works. (19)

The World Intellectual Property Organization Copyright Treaty ("WIPO Treaty" or "Treaty"), created two years after TRIPS, fills some of the holes in the latter Agreement concerning computers and the internet. Specifically, the WIPO Treaty introduces provisions obligating member states to create legal remedies for DRM circumvention (20) and defining actionable circumstances of circumvention. (21) It also introduces an explicit right of communication to the public, which could be of legal relevance to Internet streaming sites, even if the WIPO Treaty may not have contemplated streaming technology. (22) Unfortunately, the Treaty's text offers little in the way of enforcement guidelines (23) or limitations on the new rights it creates. (24)

As the U.S. statutory enactment of the WIPO Treaty, the DMCA is concerned with much the same subject matter as the Treaty. Its provisions on DRM circumvention are not considerably more expansive than those in the Treaty; they make it illegal to circumvent DRM (25) or, borrowing the "staple article of commerce" doctrine in patent law, (26) to traffic in devices that primarily contribute to circumvention. (27) This section of the DMCA also provides for fair use and other exceptions to a claim of infringement via circumvention. (28)

The more important section of the DMCA, insofar as it relates to how ACTA changes international IP law, is § 512, which deals with limitations of liability for ISPs and subpoena powers to obtain the identities of alleged infringers. Section 512 strikes a bargain with ISPs in which they are given "safe harbor," in certain circumstances, from liability for infringement claims that stem from certain conduct. (29) In exchange for this protection, ISPs agree to, when possible, remove infringing content and disclose identifying information of alleged infringers (30) when a right holder has provided a legally sufficient claim of infringement. (31)

B. Litigation Relevant to ACTA's Provisions

To see ACTA's provisions in context, especially those regarding liability of ISPs, it is important to understand how secondary liability for digital copyright infringement has played out in litigation. Courts, both in the U.S. and abroad, have limited liability for ISPs and ICPs to instances in which they have contributed to or induced the infringing activities of users to impose liability, though precisely what conduct leads to this liability can be uncertain.

Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd. (32) provides a template for secondary liability of ISPs and ICPs under U.S. law. Defendants were two companies that distributed software which allowed users to engage in P2P file sharing. (33) Billions of files were shared amongst users on a monthly basis, the majority of which defendants knew were copyrighted works. (34) The defendants' involvement went beyond mere knowledge of infringement, however. Both companies actively sought to distribute their software to prior users of the notorious file-sharing website Napster after it had been found liable for its users' copyright infringement, (35) and advertised the availability of copyrighted works through their services. (36) While the general rule for secondary liability for copyright infringement precludes fault if a distributed product is capable of significant lawful purposes, (37) the affirmative steps taken by Grokster and Streamcast were sufficient for a finding of liability under the theory of inducing copyright infringement. (38)

The Swedish litigation against the owners of the infamous file-sharing site The Pirate Bay (39) illustrates that the rationale for finding secondary copyright infringement liability for ICPs in Europe is similar to that in the U.S. (40) The Pirate Bay is a website that hosts "torrents," which facilitate the downloading of files over a P2P network. (41) Individual users of The Pirate Bay had used the website to infringe copyright in multiple works, (42) and the Swedish government brought a criminal action against the owners of The Pirate Bay. (43) Like in Grokster, the defendants were aware that a large number of their users were engaged in the unlawful distribution of copyrighted material, (44) and the court found that the actions of the website aided and abetted the principal offences of copyright infringement under Swedish law. (45)

The advent of bittorrent, the modem version of P2P software, has made imposing liability for individual infringers difficult. In the U.S., right holders can file "John Doe" lawsuits to compel an ISP to reveal the identity of individual users, but the way that bittorrents operate can make identifying individuals difficult. (46)...