• The ACTA Negotiations and Its Consequences for ISPs: An Update
  • November 1, 2010 | Author: Anke De Boeck
  • Law Firm: Crowell & Moring - Brussels Office
  • The negotiations for the establishment of the Anti-Counterfeiting Trade Agreement (ACTA) have been ongoing for three years, but at this stage have yet to lead to an agreed text. The European Commission leads the negotiations on behalf of the European Union, but drafts of the agreement have given rise to concerns from industry and the European Parliament.

    The Anti-Counterfeiting Trade Agreement

    The Anti-Counterfeiting Trade Agreement (ACTA) is a proposed multilateral trade agreement to establish international standards regarding intellectual property right enforcement. Negotiations were launched in. The goal is not to create new intellectual property rights, but to improve international standards regarding actions against large-scale infringements of intellectual property rights.

    The current parties to the ACTA negotiations are Australia, Canada, the European Union, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the United States, but it is hoped that large emerging economies, such as China or Russia, will also sign up. The European Commission leads the negotiations on behalf of the European Union, but is obliged to comply with confidentiality obligations  regarding the negotiations.

    European Parliament resolution of 10 March 2010 on the transparency and state of play of the ACTA negotiations

    ACTA is still under negotiation (the last round of negotiations took place in Washington D.C. from 16 to 20 August 2010), but it has already given rise to a great deal of controversy within the European Union.

    On 10 March 2010, the European Parliament voted a resolution criticizing this proposed Agreement. In this resolution, the European Parliament expressed its concern over the lack of a transparent process in the conduct of the ACTA negotiations, the fact that no legal basis was established before the start of the ACTA negotiations and that parliamentary approval for the Commission’s mandate had not been sought.

    The Parliament also argued that the proposed agreement flouts existing EU legislation on online piracy. Leaked drafts of the ACTA agreement have shown that the proposed agreement would include a so-called “three-strikes regime”, requiring Internet Service Providers (ISP’s) to suspend internet connections of customers caught downloading copyrighted works after three warnings. ISPs would also be obliged to disclose the identity of infringers, without prior authorization by a Court. In addition, the agreement would provide for warrantless searches and the confiscation of information storage devices such as laptops, cell phones and MP3 players by border and customs authorities.

    The European Parliament firmly condemned those provisions and urged the Commission to ensure that the enforcement of ACTA provisions - especially those on copyright enforcement procedures in the digital environment - are fully in line with the acquis communautaire.

    Reassuring messages from the European Commission

    The leaked of drafts of the Agreement also gave rise to concerns expressed by industry, especially ISPs who under the proposed agreement would supposedly be liable for copyright infringements by their customers.  In order to avoid or limit their liability, ISPs would, according to these drafts, be obliged to adopt the three-strikes disconnection policies.

    However, according to a press release issued at the end of September, the European Commission responded to a question by Larry Stone, president of BT, that “[ACTA] must not in any way imply that liability via infringement is possible by telecoms or broadband or internet service providers in performing their roles insofar as their hosting or ‘mere conduit’ roles are concerned”.

    In an attempt to meet the concerns raised by industry and Members of the European Parliament (MEP’s), the European Commission has also published a consolidated and largely finalized text of the proposed agreement on its website at the beginning of October. Most experts agree that this text is a substantial improvement, in terms of consistency with EU legislation, compared to what was understood to be on the cards earlier in the negotiations from leaked documents. For example, it seems that the provisions that could be interpreted as meaning that ISPs had to implement a 'three strikes' policy , have been deleted.

    However, the role of ISPs in intellectual property right enforcement still remains ambiguous. The preamble of the proposed text states for example that ACTA seeks “to promote cooperation between service providers and rights holders”. Article 2.18.3 goes on stating, “each party shall endeavour to promote cooperative efforts within the business community to effectively copyright infringements. This implies extra-judicial measures and challenges the division of power”. Article 2.18.4 states that the competent authority, not necessarily judicial, should have the power “to order an online provider to disclose expeditiously to a rights holder information sufficient to identify a subscriber whose account was allegedly used for infringement”.

    On 20 October 2010, the European Parliament interpellated the European Commissioner for trade, Karel De Gucht, about this. The Commissioner stated that the proposed text remains fully in line with the EU acquis, but failed to provide a clear answer to the questions of MEPs with regard to the role of ISPs in intellectual property right enforcement.