The new spin on the latest ACTA text after DC round

Notes from closed-door debriefing in European Parliament on secret text.

“We worked 16 hours a day for eight long days in DC to produce a readable text that we all agree on”, modestly stated EU negotiator Luc Devigne. He makes you wish he wouldn’t work so hard for the good of all of us.

What is clear is that the EU representative wants to show that he is being responsive to the concerns being expressed about ACTA and that the new “unidentified, undisclosed and flying” ACTA will be lighter, more vague and a happy medium for all. Though he gave us a large serving of political marketing and double speak, it is evident that the anti-ACTA campaign is having a deep impact on the parties involved.

Today in the European Parliament in Brussels Luc Devigne from DG Trade briefed the International Trade Commission in a closed door meeting on the latest round of the ACTA negotiations. He gave the impression that thanks to the EU many things were being “scaled back” to calm the worries of citizens and certain industries such as Internet Service providers or generic medicine producers.

He insisted that lots of progress was made in DC on most topics and that now the text was “less complicated”. At the same time he stated that there was a still a “long way to go” to bridge the gap between the US and the EU on issues of scope of rights covered in border measures (EU broader, US narrower), geographical indications, industrial design and border measures concerning not only import but affecting goods being exported and in transit. The US only wants trademarks, and copyright in border measures that will be limited to imports (as established in TRIPS), while the EU wants this extended At the same time he repeated that all patents were out of border measures and criminal sanctions and that nothing in ACTA would affect “access to medicine.”

The EU wants criminal enforcement measures on the use of Internet to spread fake medicines counterfeit industrial designs or trademarks, while the US does not agree.

According to Devigne the good news is that the clear references to ISP liability, along the lines of the US DMCA, in previous texts have been removed from the present text thanks to the EU. Now all enforcement measures proposed in the Internet will be “voluntary”. This “will please some, not others”, according to Devigne.

He spoke of a totally new “preamble” that includes “safeguards” with reference to the principles of TRIPs, the Doha Declaration on public health and the insistence that no enforcement measure in ACTA should threaten “privacy, freedom of expression or fundamental rights.” Devigne insisted that the checks and balances of TRIP concerning cooperation, technology transfer and harmonization of different interests were now part of ACTA.

On “commercial scale” the EU will only accept a vague, non defined term that will be left up to the courts of member states because EU law has no competence over this.

He blasted the US for opposing the publication of the present text and regretted not being able to have more public participation. He promised there would be a public release of the text before the final agreement is signed (How nice of them!). The next round will be  in Tokyo at the end of the month.

The novelty of the new text seems to be the “preamble” and the elimination of references to compulsory secondary liability. Of course, the whole discussion today was over an obscure object of desire of the content industry called the unpublished DC ACTA text. It was easy for Devigne to please everyone without his audience being able to peruse the small print. Today was yet another surrealistic exercise produced by the progressive Obama Administration´s transparency policy.

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Inside U.S. Trade – 7/30/2010

The United States and European Union are scheduled to meet Aug. 16 in Washington to try reach agreement on contentious issues that have emerged between the two governments within the Anticounterfeiting Trade Agreement (ACTA) negotiations, according to informed sources.

The two governments will attempt to come to an agreement on whether the ACTA should address protection of geographic indications (GIs), patents and industrial design, and if end users would fall under the definition for commercial scale infringement, an informed source said.

The Office of the U.S. Trade Representative confirmed there will be a bilateral ACTA meeting the week of Aug. 16, but a spokeswoman did not say what will be on the agenda.

The scope of the agreement is expected to be a main issue of discussion since both governments have reached a deadlock on whether products with geographic indications (GIs) should be included in the agreement, sources said. The EU wants the infringement of GIs to be protected and enforced the same as infringements of trademarks and copyrights.

For example, in the ACTA border measure section, the EU wants the ACTA to require signatories to empower customs officials in each country to be able to seize goods suspected of infringing GIs protected by that country. The U.S. is opposed to this for fear of U.S. exports being seized abroad at the border in third countries. The EU-proposed text would not require countries to recognize specific GIs, however.

An industry source said other ACTA countries at the end of the June 28 to July 1 round of negotiations in Lucerne, Switzerland called for the EU and U.S. to work on resolving their disagreement over the scope of the agreement. These countries feared that a continued stalemate on the issue could lead to a failed agreement or a much less influential one if either government were not a signatory, this source said.

This source said other countries party to the agreement have indicated that they do not want the ACTA to become a forum for the EU and U.S. to fight over broader recognition of GIs within bilateral trade agreements.

EU Trade Commissioner Karel De Gucht called GIs a “redline” issue when addressing the EU Parliament Committee on Civil Liberties, Justice and Home Affairs (LIBE) on July 13. He questioned the benefit of the ACTA if GIs were not included in the agreement.

Another informed source said Australia, New Zealand and Canada have sided with the U.S. on the GI issue because the EU is attempting to claw back the use of old world terms for meats and cheeses that are produced in these countries under the same term. All three countries have sizable dairy industries that produce cheeses with the same names, sometimes in even greater quantities, as those produced in Europe, this source said.

A Swiss negotiator said parties to the agreement are continuing with the goal of finalizing the agreement by the end of 2010 and was aware of bilateral meetings between the EU and the U.S. in the past.

He said Switzerland is on the side of the EU on GIs but that it was not indicated in the last round of negotiations that such an issue would be a “deal breaker” for the entire agreement.

Negotiators are also debating whether patents should be completely removed from the agreement, although they have already come to a consensus on removing patents from the section on border measures. This was done to avoid situations where customs officials in ACTA signatories would be empowered to seize shipments that contain suspected patent violations, and negotiators in Lucerne admitted this was done to avoid having medications seized in transit.

While it agreed to having patents reomoved from the section on border measures, the EU wants to keep patents in other areas of the agreement because it would bolster efforts currently underway to create a unified patent law within the EU, according to a source in the EU.

The U.S. wants to take patents out of the agreement because enforcement of patent infringement could be detrimental to industrial interests by increasing costs and chilling innovation because many companies enter a “gray area” when developing new products based on other patents, this source said.

In the most recent leaked copy of the ACTA, Japan is pushing for the inclusion of patent infringement in the Internet chapter, while the U.S. supports only the inclusion of infringement of copyright or related rights, and the EU wants the infringement of all intellectual property rights to be included in this section. The inclusion of patents in this section would mean that Internet companies could be held liable when individual Internet users violate patents.

The U.S. and EU are also at odds over whether the definition of commercial scale piracy under the criminal enforcement section of the ACTA should apply to end users. The EU wants to exclude end users within this section while the U.S. wants to allow a country to be able to determine whether acts carried out by end users can be included, according to a leaked copy of the text.

There had been apparent agreement, based on a negotiating text leaked after the Lucerne round, to remove a definition that had been proposed in a previous text by the U.S. This definition from the April draft of the agreement was taken from U.S. free trade agreements, which included “significant willful” infringements that do not have direct or indirect motivation or financial gain and willful infringement for the purposes of financial gain. U.S. right holders favored this definition because it allows criminal enforcement to apply to a range of non-profit activities.

De Gucht had told the EU LIBE Parliament committee that commercial scale would not be defined in the agreement. He said that the national governments of separate member states would be able to apply their own definition of commercial scale because it is not currently defined under EU law.

The ACTA is being negotiated by the U.S., Australia, Canada, the EU, Japan, Mexico, Morocco, New Zealand, Singapore, South Korea and Switzerland. –

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This Working Party was set up under Article 29 of Directive 95/46/EC. It is an independent European advisory body on data
protection and privacy. Its tasks are described in Article 30 of Directive 95/46/EC and Article 15 of Directive 2002/58/EC.

The secretariat is provided by Directorate D (Fundamental Rights and Citizenship) of the European Commission, Directorate General
Justice, Freedom and Security, B-1049 Brussels, Belgium, Office No LX-46 01/190.

Website: http://ec.europa.eu/justice_home/fsj/privacy/index_en.htm

Brussels, 15.07.2010
D(2010) 11185
Mr. Karel de Gucht
Member of the European Commission
B – 1049 BRUSSELS
Belgium
Dear Commissioner,

At its plenary meeting on 12 and 13 July 2010, the European Data Protection Authorities (the
Article 29 Working Party [WP29]) discussed the data protection and privacy implications of
the Anti-Counterfeiting Trade Agreement (ACTA). For many years the negotiations on this
new multilateral instrument were conducted behind closed doors. WP29 therefore welcomes
the recent publication by the negotiators of a consolidated version of the current draft
agreement. This enabled the members of WP29 to verify the earlier rumours on the content of
the agreement and the possible implications for privacy and data protection that it may have.
Since the negotiations are still ongoing, we are of course unable to give a full assessment as
yet of whether or not ACTA will comply with European privacy and data protection
legislation.

Based on our initial assessment, WP29 finds several provisions that are to be regarded as
positive as far as data protection is concerned, for example the requirement of
“proportionality between the seriousness of the infringement and the remedies or penalties
ordered” (article 2.X(2) General obligations with respect to enforcement) as well as the place
holder in article 1.4 for a specific privacy and disclosure of information provision. We do on
the other hand have several concerns as well, which I would like to draw to your attention.

As you are aware, data protection and the protection of privacy is one of the fundamental
rights of the European Union. The protection of personal data and privacy is enshrined in the
Treaty on European Union, in the Treaty on the Functioning of the European Union and in the
Charter of Fundamental Rights of the European Union. Although no treaty such as ACTA is
capable of diluting this protection, the WP29 nevertheless stresses the need for any new
agreement to fully comply with EU safeguards of data protection and privacy and urges you
and your negotiating team to keep this principle in mind at all times. Special attention is
required for the rights of the data subject, retention periods once the personal data of the
individual is obtained as well as possibilities for judicial redress.

2
Three Strikes Out Schemes
WP29 understands from the draft agreement that ACTA is not only supposed to facilitate
action against the trade, on an industrial scale, in counterfeited products. Very obviously it is
also intended to address alleged copyright infringements carried out by individuals in the
framework of using online peer-to-peer file sharing sites.

To mitigate minor alleged copyright infringement carried out by individuals, the current text
would stimulate the signatory states to oblige Internet providers in case of copyright
infringements to “terminate or to prevent the infringing act” or “to determine procedures in
order to prevent access to information or in order to remove them”. We recognize that these
wordings may not explicitly provide for Internet access blocking.  The do not provide either
for the monitoring of the Internet to enable the identification of alleged infringers.
Nevertheless, they indicate that the states parties to ACTA shall at least be encouraged to
voluntarily include Internet access blocking and to some extend the monitoring of the Internet
to enable identification of alleged infringers as an answer to copyright infringements into
national legislation.

In the Joint Statement of 16 April 2010 the negotiating parties emphasized that they do not
propose to require the introduction at national level of the controversial “Three Strikes Out
Principle”, according to which the Internet access has to be blocked after three alleged
violations of copyright. The agreement should rather contain minimum standards for the
enforcement of the copyright holders’ rights, in compliance with EU law. WP29 emphasizes
that any form of large scale monitoring or systematic recording of data of EU citizens would
be contrary to the provisions of Directive 95/46/EC since that would affect millions of
individuals, regardless of whether or not they are under any suspicion. A full analysis of the
objections against the “Three Strikes Out Principle” and similar systems is given in the
Opinion of the European Data Protection Supervisor (EDPS) of 22 February 2010. WP29
fully subscribes to the arguments given in this Opinion.

Notice and Take Down Procedures
WP 29 notes that it is also proposed to oblige all signatories to introduce a notice-and-take-
down-procedure according to the US model. As a consequence, providers of online services
would have to block access to content uploaded by users in case a third party claims that
his/her rights are violated by making the content available. Moreover, the right holder could
be granted the entitlement to ask a provider of online services for information about the
identity of a user who is suspected of a copyright violation.

WP29 is concerned about this proposal. Not only can it be used to interfere with the freedom
of expression of individuals, as has happened in the US, but it also raises concerns about the
disclosure of individuals’ data to third parties.  The WP 29 reminds that under Article 15.1 of
Directive 202/58 Member States may provide that providers of electronic communication
service providers can only communicate personal data of their subscribers following a legal
obligation to hand over the data; thus, excluding such communication in civil cases, much less
to private parties.  Accordingly, at a minimum, any final text should remind of the limitations
applying to the transfer of personal data held by providers of electronic communication
services to third parties, and also make sure that retention periods of those data at the service
provider are fixed to a strict maximum under applicable data protection legislation.

3
Without doubt copyright holders are entitled to protect their rights. However, WP29 deems it
necessary that at all times a right balance is struck between the rights of all parties involved.
This balance clearly depends on the circumstances of the situation. It can therefore not be
determined as a general matter, whether in an agreement like ACTA or in any other
instrument, that the rights of copyright holder trump the right to privacy of the individual. As
copyright issues are not black and white judicial evaluation is required.

Searches by customs authorities and criminalisation
ACTA critics have repeatedly expressed their worries that in future private persons’ electronic
storage devices could be searched regularly at borders by customs authorities for content
violating copyright. The draft agreement does not provide any binding provision for this
purpose. Instead, there is a so-called “de-minimis” provision allowing the signatory states to
exclude from the application of ACTA provisions for measures at the border “small quantities
of goods of a non-commercial nature contained in travellers’ personal luggage”. But the
possibility for customs authorities to perform searches on private person’s equipment is not
excluded.

In addition, the negotiating partners explicitly intend to proceed against file sharers. Thus,
they intend to stipulate that parties to the agreement shall provide for criminal procedures in
their countries as to “(a) significant wilful copyright or related rights infringements that have
no direct or indirect motivation of financial gain; and (b) wilful copyright or related rights
infringements for purposes of commercial advantage or financial gain. (article 2.14)” File
sharing would also be covered, if and to the extent it is found to involve copyright
infringement. Even if the file sharers’ Internet access were not to be cut of, due to ACTA they
could be subject to criminal convictions.

Again, these two proposed measures may have serious breaches of the individuals
fundamental rights as a consequence. Regular searches are likely to be carried out randomly,
instead of following a specific suspicion of copyright violation. WP29 reiterates that any
infringement of fundamental freedoms of individuals is only acceptable when it fulfills the
conditions of subsidiarity and proportionality. As to the criminalisation, this could mean the
introduction of a slippery slope. The agreement does not specify the meaning of significant,
nor does it identify who is allowed to specify this meaning. That could mean that what is seen
as significant in one country, may not all be significant in another. Thus, no harmonisation of
legislation on this point would be achieved.

Conclusion
The European Data Protection Authorities have no reason to doubt that the intentions of the
parties negotiating ACTA are good. Copyright infringement needs to be dealt with on a global
scale and requires international cooperation. However the way things stand now, several of
the proposed measures are in the end bound to interfere with the private life of many citizens.
In the EU, any such interference is subject to EU fundamental rights and must be
proportional. Given the aspects of ACTA currently under negotiation and outlined above, the
WP29 remains to be convinced that this will be the case.

To have a final agreement which is wholly or partly unenforceable due to conflicts with
fundamental rights is in the interest of no one. The European Data Protection Authorities
therefore count on your continued commitment to provide for adequate safeguards for all
individuals and to ensure the final agreement will be fully in line with European Union’s
privacy and data protection legislation.
Yours sincerely,
Jacob Kohnstamm
Chairman

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ACTA DEBATE IN THE EUROPEAN PARLIAMENT

WHITE SMOKE AND RED LINES On ACTA

“If we don’t include geographical indicators and industrial design in
ACTA, what is the whole point to an agreement? These are really red
lines for us.” This is what EU Trade Commissioner De Gucht said
yesterday in the European Parliament. I doubt that Parma ham or French
Champagne are the real motivations behind the a global IP enforcement
Treaty despite that they can be used as juicy populist rhetoric in some
local regions to justify the utility of the ACTA exercise. Or maybe Mr
de Gucht is just trying to show he is being a tough negotiator with his
US counterparts in front of a critical European Parliament while these
issues might have already been settled at the negotiating table. In any
case these issues will probably not delay the conclusion of the
negotiations later this year as promised today by the Belgian Presidency
of the EU.

According to EU Commissioner Karel De Gucht the ACTA agreement is about
saving EU jobs and innovative industries from unfair competition from
piracy and counterfeit products. It is not about new legislation but
only about “procedures”, not about IP law but about its enforcement – as
if you could draw a clear line between them. Since according the the
European Commission there is no contradiction with EU law, there is no
need for impact studies on the economic and political consequences of
its application! At the same time Fundamental Rights Commissioner
Redding has stated that we need a civil rights impact evaluation of
ACTA. But the dominant mantra of the EC is like this: “ACTA is a way of
showing EU citizens that we shall protect our economy in a cut-throat
world full of piracy that is threatening our innovative industries and
weakening our incentive to create.”

De Gucht insists time and again that ACTA will make no “new demands” on
Internet Service Providers.

Nevertheless, what he surely hides is how the Commission is now
liberally interpreting the E-Commerce Directive that speaks of
“cooperation of ISPs” in its code of conduct as a benchmark for
preserving “safe harbour” from liability. The threat of ACTA pushing
dangerous self-regulation that invades privacy and sharing looms.

The Commission representative also was drilled on the difficult question
of “commercial scale” and its problematic definition. To avoid
contradicting present EU law where there is no clear definition (as
opposed to the “willful commercial intent” of the US) the solution is to
leave “commercial scale” totally out of ACTA and to “allow the courts or
national laws to decide”. This leads one to ask what the meaning is of
an international criminal enforcement regime if the parties cannot even
agree as to when criminal enforcement should be applied. It also raises
serious human rights concerns about the international legal
justification of criminal measures on copyright a la carte, especially
in authoritarian countries.

De Gucht skirted around the questions posed on fundamental rights and
due process in the proposed “procedures” while insisting that the final
agreement would include safeguards and references to the exceptions in
international laws in TRIPS.

What he did not mention was the possible negative impact on businesses
small and big, of the proposed damages and injunctions proposed in ACTA.
More attention is needed on the proposed minimum statutory damages and
the injunctions that could have a very chilling effect on innovative
companies and trade. The introduction of criminal measures on copyright
infringement is sparking rejection across the board both from public and
private interests. The majority of the business community is either
quite cool or not really interested in ACTA. A serious debate on IP,
business costs and innovation is sorely needed to be able to further
weaken the hard-line enforcement agenda.

At the end of the day the political and institutional significance of
ACTA, both internationally and nationally, can possibly supersede its IP
impact in the short term. On an EU policy level ACTA is maybe the
flagship of a flotilla of bad enforcement and IT proposals: IPRED on new
criminal sanctions, the Gallo Report, a review of the data protection
directive, legislation in favour of Internet blocking and
new”stakeholder” proposals on illegal downloading.

The good news is that the first week of September might see the European
Parliament adopt written declaration 12 – WD12 – if we succeed in
getting just a few dozen signatures more to reach a majority of the
Members of the Parliament (now around 350 have signed and 370 are
needed). This declaration criticizes the opaque process, Internet Server
liability, barriers to access to medicine, the impact of criminal
measures and the threat to fundamental rights. If we achieve the
majority WD 12 will become the official position of the EP and a victory
for the NGO community campaigning on ACTA. This declaration does not
have concrete legal consequences but it needs to be responded to by the
European Commission and will mean another push on the negotiators.

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Both Greece and Spain have taken unilateral measures to try to bring down the price of patented medicines purchased by public health systems that are now under special stress due to the public debt crisis of these countries.  A conservative Greek member of the European Parliament has requested the establishment of a European Observatory on the price of medicines.
Dods EU Alert

Source: European parliament register

Subject: Written question on European observatory on the price of medicines

Date published: June 25 2010

Please note that answers will be given in written form during the next 6 weeks.

Question for written answer E-4712/2010 to the Commission Rule 117 Konstantinos Poupakis (PPE)
Subject: European observatory on the price of medicines

The economic recession, the demographic problem, which has serious implications for the sustainability of social security schemes, and the sharp cuts in the income of the average European citizen as a result of measures to ensure the sustainability of public finances have given rise to a serious public health issue – the ever rising prices of medicines, which differ markedly among the Member States.

In the light of the above, will the Commission say whether there are any plans to set up a European observatory on the price of medicines in order to curb profiteering?

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