Written declaration on the lack of a transparent process for the Anti-Counterfeiting Trade Agreement (ACTA) and potentially objectionable content

The European Parliament,

– having regard to Rule 123 of its Rules of Procedure,

A. whereas negotiations concerning the Anti-Counterfeiting Trade Agreement (ACTA) are ongoing,

B. whereas Parliament’s co-decision role in commercial matters and its access to negotiation documents are guaranteed by the Lisbon Treaty,

1. Takes the view that the proposed agreement should not indirectly impose harmonisation of EU copyright, patent or trademark law, and that the principle of subsidiarity should be respected;

2. Declares that the Commission should immediately make all documents related to the ongoing negotiations publicly available;

3. Takes the view that the proposed agreement should not force limitations upon judicial due process or weaken fundamental rights such as freedom of expression and the right to privacy;

4. Stresses that economic and innovation risks must be evaluated prior to introducing criminal sanctions where civil measures are already in place;

5. Takes the view that internet service providers should not bear liability for the data they transmit or host through their services to an extent that would necessitate prior surveillance or filtering of such data;

6. Points out that any measure aimed at strengthening powers of cross-border inspection and seizure of goods should not harm global access to legal, affordable and safe medicines;

7. Instructs its President to forward this declaration, together with the names of the signatories, to the Commission, the Council and the parliaments of the Member States.

The concerns with ACTA continued in the European Parliament this morning, where hearings on the treaty led one observer to note that 95 percent of the Parliament seems opposed to the treaty. Meanwhile, in Mexico politician Salvador Caro plans to call on the government to withdraw from the ACTA negotiations. 

Chapter Three - Enforcement Practices

This chapter is nearly finalized with only one article on environmental matters still the source of some disagreement.  The finalized articles focus on enforcement expertise and domestic coordination, management of risk at the border, and transparency/publication of enforcement procedures and practices.  The enforcement expertise article involves a commitment to promote enforcement expertise with loose references to "endeavour to promote, where appropriate, the establishment of formal or informal mechanisms, such as advisory groups, whereby its competent authorities may hear the views of right holders and other relevant stakeholders." Not exactly an iron-clad obligation.

More interesting is the U.S. decision to cave on border issues.  The U.S. had sought a provision requiring that each party shall adopt and maintain appropriate measures that facilitate activities of custom authorities for better identifying and targeting for inspection at its border shipments that could contain pirated goods.  The article then specified a range of activities including consultation, information exchange, and a mandatory audit power.  Moreover, there was an additional article on information exchange between customs authorities. All of that has been dropped, leaving only a provision where a party may consult with stakeholders or share information.

The transparency/publication of enforcement procedures and practices also included more detailed requirements, including a U.S. request to require publication of "applications for the suspension by the competent authorities of the release of goods suspected counterfeit and pirated goods as a border measure."  That has also been dropped in favour of a streamlined provision on publication of procedures, laws, rulings, and efforts to ensure effective enforcement.

Finally, there is a streamlined provision on public awareness that calls on parties to promote, as appropriate, measures to enhance public awareness.

Chapter Four - International Cooperation

The International Cooperation chapter was nearly finished after the Lucerne round in July so required only minor tinkering in Washington.  The chapter is nearly finished after the removal of one contentious information sharing requirement requested by the U.S.  The following paragraph has been dropped:

"Each party [shall ensure], as appropriate and mutually agreed, that its competent authorites have the authority to provide the competent authorities of any other Party, either on request or on their own initiative, with information on the enforcement of intellectual property rights."

With this requirement now removed, the information sharing requirements now require each Party to "endeavour to exchange" information on best practices and legislative initiatives. Parties will also endeavour to provide capacity building and technical assistance.

Chapter Five - Institutional Arrangements

The Institutional Arrangements chapter was also nearly complete after the Lucerne round in July.  The chapter describes the establishment of the ACTA Committee, which will meet at least once per year to review the implementation and operation of the agreement, proposed amendments, and new members.  The earlier references to dispute resolution mechanisms are gone, replaced by a non-binding consultation system which may arise where one Party believes another is not in compliance with ACTA.  Moreover, there are provisions stipulating that the Committee shall not oversee domestic or international enforcement of specific cases and shall strive to avoid unnecessary duplication of other international efforts.

Chapter Six - Final Provisions

The final provisions, which set the conditions for the agreement to take effect, is now nearly final as well.  The agreement will be open for signature for two years from when it is finalized. It will take effect 30 days after the sixth country has ratified it (earlier drafts called for five countries).  Countries can withdraw with 180 days notice.  The agreement can be amended if all agree.  New countries can become parties to the agreement on terms set by the ACTA Committee.  There is some disagreement on language - most countries want English, Canada wants French and English, Mexico wants Spanish if Canada gets French.

I'll follow soon with a final post on the rest of ACTA - the new preamble (which includes questionable claims about counterfeiting) and the enforcement provisions that are still the subject of considerable disagreement on scope.

The latest report is based on survey data from 2008 which finds that the total IP income (primarily from licencing) at reporting Canadian universities was $53.2 million. The cost of generating this income?  The reporting institutions employed 321 full-time employees in IP management for a cost of $51.1 million.  In other words, after these direct costs, the total surplus for all Canadian universities was $2.1 million.  The average income per university from IP was only $425,000.  Patent applications and patents issued were actually down in the reporting institutions and there were less than two-dozen spin-off companies reported by the universities.

While few would suggest that there is no value in the IP commercialization strategy for universities - there is surely a role for it - the emphasis on this approach as the optimal method of benefiting from billions in public funding for research has consistently failed.  Rather, an effective commercialization strategy might recognize that the commercialization is better suited outside the university with funded research the engine for new innovation that is openly available to entrepreneurs without licencing barriers.  The public pays for the basic research and might ultimately enjoy far more benefits than the current break-even approach by having more open access to research results.

Linkages between defamation and jurisdictional questions are not unusual, however, a novel issue before the court was how to treat content posted on the Internet that is accessible to a global audience.  The starting point for jurisdictional analysis in Canada is the real and substantial connection test in which courts consider whether the connection is sufficient to merit asserting jurisdiction over the dispute.

In this case, the court was urged to base its analysis on a "targeting test" (the defendants relied in part on a law review article I wrote in 2001 advocating the adoption of a targeting-based analysis) that would involve considering whether the postings targeted the forum rather than looking at where they were downloaded and read.

The targeting test posits that courts should not assert jurisdiction over online content merely because it is accessible. Rather, there should be evidence that the site actively targeted an audience within the jurisdiction. The criteria for determining targeting remains elusive, but courts have referred to the language and content of the site, terms and conditions posted on the site, as well as awareness that the site's content may have an effect within the jurisdiction. 

While the court concluded that it did not need to formally decide whether to adopt the targeting test, it was satisfied that the statements were in fact targeted at Ontario.  It noted that the press releases posted on the Internet specifically provided contact information for Canadian media and that the company "clearly anticipated that the statements would be read by a Canadian audience and invited Canadian media to respond."

Interestingly, the defendants also raised an alternate argument, asking the court to establish a new exception to the real and substantial connection test for the Internet.  They argued that downloading the offending content was effectively the ‘completion' of the defamation.  Given the possibility of downloads in multiple jurisdictions, the defendants argued that many places could theoretically assert jurisdiction, leading to widespread legal uncertainty.

The court rejected the argument, concluding that judges were perfectly capable of sorting through the issues and ensuring fairness for both sides.  In doing so, it allowed the Black defamation suit to proceed while also providing Internet users and the legal community with greater insight into when Canadian courts will assert jurisdiction over defamation that occurs online.

First, there is no need for greater guidance on the meaning of "education" and, even if there was, the guidance would be unlikely to change the groups' concern with its inclusion in fair dealing. By using the word alone, the government has sent the signal that it means education in the broad sense.  In fact, this is consistent with the Supreme Court of Canada, which ruled in Vancouver Society of Immigrant and Visible Minority Women v, M.N.R.:

There seems no logical or principled reason why the advancement of education should not be interpreted to include more informal training initiatives, aimed at teaching necessary life skills or providing information toward a practical end, so long as these are truly geared at the training of the mind and not just the promotion of a particular point of view...there is no good reason why non-traditional activities such as workshops, seminars, self-study, and the like should not be included alongside traditional, classroom-type instruction in a modern definition of “education."

The groups could hope that legislative guidance would limit the scope of who qualifies under "education", but given their aversion to some fair dealing uses within traditional education venues such as universities, colleges, and secondary schools, this can't be what the writers groups have in mind. Any limitations on the scope of education would surely not exclude those institutions, yet they are precisely the institutions that seem to matter the most to the writers groups.  If the scope is designed to include those educational institutions, legislative guidance might mean dropping the reform altogether, but that isn't guidance - it's gutting the reform.

If legislative guidance is not about the scope of education, what is it about?  I think the answer lies in an attempt to codify into law the fairness criteria established by the Canadian courts to determine whether a particular use meets the fair dealing standard.  As I have repeatedly noted, the mere fact that education would be a recognized fair dealing category does not mean that all educational uses qualify as fair dealing.  Rather, any use must still meet the fairness test.  It is this test - which is not even part of Bill C-32 - that the writers groups likely want to target.  Given recent comments about the need to pay for any commercial use, the groups likely want to rewrite the fairness test to specifically exclude any commercial use from meeting the fairness criteria. That would mean rolling back the CCH decision so that fair dealing would actually become far more restrictive in Canada than is currently the case (and much more restrictive than the U.S. fair use provision which has no limits on categories and does allow for the possibility of commercial fair use).

This strategy is actually even more dangerous than it appears at first blush. While the writers groups are focused on the new education exception in C-32, codifying the fairness criteria would apply to all fair dealing categories.  This would mean restricting the use of fair dealing for research, private study, news reporting, criticism, and review (as well as parody and satire, which are also included in C-32).  To take one recent example, the decision to treat song previews as consumer research for fair dealing purposes would be overturned since it involves a commercial use. I fear the call for legislative guidance is not about clarifying the meaning of "education" but rather code for overturning the CCH decision and leaving in its wake a fair dealing provision that may have additional categories, but faces far more restrictions once the fairness test is applied.

There is no real uncertainty about how the addition of education will work in conjunction other exceptions such as research and private study.  The courts have ruled that the exceptions should be interpreted broadly, so that education - like research and private study - will be broadly defined. 

However, the courts have also ruled that the assessment of fair dealing is a two-part test.  First, does the dealing qualify under one of the categories of the fair dealing?  With the C-32 reform, the few remaining educational activities currently outside of the scope of fair dealing will almost certainly qualify as a potential fair dealings. But that alone is not enough.  The second part of the test is whether the dealing itself is fair.  This involves a fairness inquiry with a six part analysis identified by the courts.  The reforms in C-32 do not affect this part of the test.  This was recently confirmed by the Federal Court of Appeal, which, in discussing C-32, concluded that the education fair dealing reform "serves only to create additional allowable purposes; it does not affect the fairness analysis."

So there is no real uncertainty or likelihood of serious damage here. The reforms will expand the scope of fair dealing categories such that some additional educational uses will qualify for a fairness analysis. The fairness analysis does not change with this bill, however.  It is always possible that there will be litigation on fair dealing - Access Copyright just won a major case on the issue - but the norms will not change with C-32 and there is no reason to believe that the bill will open fair dealing litigation floodgates (unlike the digital lock provisions, which are likely to face a constitutional challenge). 

Opposition to the inclusion of education is therefore based on fears that there are currently educational uses that fall outside the current list of categories that a fairness analysis would determine are fair uses. A balanced copyright approach - not to mention the Supreme Court of Canada - dictate that these uses should not require prior permission or compensation.  If the writers groups are against fairness and balance in copyright, they should say so, rather than trumpeting misleading claims about the effects of the fair dealing reforms.