Details of ACTA Agreement for Combating Counterfeit Goods

Negotiators Include U.S., EU, Japan, Etc., Does Not Include China, Russia

Participants in the ACTA negotiations include: Australia, Canada, the European Union, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the U.S.

(Note that only one country (Canada) of the eleven singled out by USTR for inclusion on the 2010 “Special 301” Priority Watch List of countries with significant intellectual property rights issues is taking part in the negotiations. The ten remaining countries are not participating: China, Russia, Algeria, Argentina, Chile, India, Indonesia, Pakistan, Thailand, and Venezuela. See ITT’s Online Archives or 05/07/10 news, 10050768, for BP summary of the 2010 Special 301 report.)

Highlights of the agreement are as follows:

Each Country Would Need Certain Judicial Authority for IPR Offenses

In civil judicial proceedings concerning the enforcement of intellectual property rights (IPR), each Party (country) would have to provide judicial authority to (partial list):

• Issue “stop distribution” orders -- issue an order against a party to prevent infringing goods from entering into the channels of commerce.
• Require payment to right holder - order an infringer who knowingly or with reasonable grounds to know, engaged in infringing IPR activity, to pay the right holder damages (and in copyright and trademark cases, profits) to compensate for the injury the right holder has suffered as a result of the infringement.
• Order destruction of goods - at least with respect to pirated copyright goods and counterfeit trademark goods and at the right holder’s request, order that such goods be destroyed, except in exceptional circumstances, without compensation of any sort.
• Order destruction of equipment - order that materials and implements used to manufacture or create infringing goods be destroyed or disposed of outside the channels of commerce to minimize the risks of further infringements.

Countries Would Need Border Procedures for Handling IPR Infringements

Each country would have to provide border procedures and measures to address possible IPR infringements such as (partial list):

• Suspended release, detention -- procedures by which customs authorities may act upon their own initiative or at the request of a right holder, where appropriate, to suspend the release of or to detain suspect goods.
• Bonds - authority to require a right holder requesting suspended release or detention of a suspected infringing good to provide a reasonable security or equivalent assurance (i.e. bond) sufficient to protect the defendant and the competent authorities and to prevent abuse.
• Destruction of goods - authority to order the destruction of goods following a determination that the goods are infringing. In cases where such goods are not destroyed, each country would ensure such goods are disposed of outside the channels of commerce in such a manner as to avoid any harm to the right holder, except in exceptional circumstances. In regard to counterfeit trademark goods, the simple removal of the trademark unlawfully affixed would not be sufficient, other than in exceptional cases, to permit the release of the goods into the channels of commerce.

Would Have to Ensure “Sufficiently High” Penalties, Allow Seizure of Assets

ACTA signatories would have to provide penalties for infringing goods that include imprisonment as well as monetary fines which are sufficiently high to provide a deterrent to future acts of infringement, consistent with the level of penalties applied for crimes of a corresponding gravity. In addition, each country would need judicial authority to order the seizure of assets corresponding to the value derived from or obtained directly or indirectly through the allegedly infringing activity.

Working to Finalize Text Soon, Digital Environment Section Is Least Finished

The agreement’s text states that some delegations have expressed reservation on specific parts of agreement, which are highlighted by underlines and italic letters. The section with the most highlights is the section on enforcement of IPR in the digital environment, which some report has weaker language than the U.S. had wanted.

According to USTR, the participants have agreed to work expeditiously to resolve these outstanding issues with a view to finalizing the text of the agreement as soon as possible. The Agreement will then undergo final legal review and relevant domestic processes before signature.

Two Year Period for Negotiators to Sign, Then Open to Rest of WTO Members

The Agreement will remain open for signature by negotiation participants for a two year period, after which any member of the World Trade Organization would be able to accede to the Agreement.

ACTA Would Take Effect 30 Days After Ratification by 6 Negotiating Countries

ACTA would enter into force 30 days after the sixth negotiating country deposits its instrument of ratification, acceptance, or approval for it. For each country thereafter, ACTA would enter into force 30 days after that country deposits its instrument of ratification.

Each Country Would Determine How to Implement ACTA

Each country woulddetermine the appropriate method of implementing ACTA’s provisions within its own legal system and practice. Countries would also be able implement more extensive enforcement of IPR than is required by ACTA, provided that it does not go against the provisions of the Agreement.

¹Some negotiators such as Japan refer to the text as an “agreement in principal,” while others, such as the U.S. refer to it as a draft text. (See ITT’s Online Archives or 10/05/10 news, 10100510, for BP summary of Japan’s discussion of ACTA.)

USTR press release, dated 10/06/10, available here.

USTR fact sheet, dated 10/06/10, available here.