[Random-bits] KEI Comments on the ACTA (Anti-Counterfeiting agreement) request
for comment by USTR
James Love
james.love@keionline.org
Thu Mar 20 06:33:44 2008
These are the KEI comments on the recent USTR request for comment on the
proposed Anti-Counterfeiting Trade Agreement.
[Note that submissions must be received on or before 5 p.m. on Friday,
March 21, 2008. All comments should be sent (i) electronically, to the
following e-mail address: ACTA@ustr.eop.gov, with ``Anti-Counterfeiting
Trade Agreement (ACTA): Request for Public Comments'' in the subject
line, or (ii) by fax, to Rachel Bae, at (202) 395-3891.]
http://www.keionline.org/index.php?option=com_content&task=view&id=169
Comments of Knowledge Ecology International on the Proposal for
Anti-Counterfeiting Trade Agreement (ACTA)
Submitted to United States Trade Representative
Request for Public Comments, via email: ACTA@USTR.eop.gov
March 20, 2008
Knowledge Ecology International (KEI) offers the following comments on a
proposal for a new Anti-Counterfeiting Trade Agreement (ACTA) with
future provisions on international cooperation, enforcement practices,
and the legal framework for IPR enforcement.
Table of Contents
The Lack of Transparency is Not Encouraging
Definitions
Counterfeiting
Piracy
Infringement
Priorities for Law Enforcement
Low quality counterfeits
High quality counterfeits
Remedies
Other Solutions
The Lack of Transparency is Not Encouraging
The Request for Comment in the February 15, 2008 Federal Register
(Volume 73, Number 32), contains very little information about the
proposal. The "Fact Sheet" on the USTR website has very little real
information. We have, in fact, located an undated "Discussion Paper on
a Possible Anti-Counterfeiting Trade Agreement," that has apparently
been circulated to lobbyists for some businesses, but not to civil
society groups, which contains far more detail than one can obtain from
the Federal Register Notice or the USTR web page. KEI suggests USTR be
more open about this project.
Definitions
Based upon the documents now available, the ACTA is placed in the
context of "counterfeiting and piracy," but there is no definition of
either.
Counterfeiting
The term "counterfeiting" should not be over-used, and, in particular,
it should not become a propaganda term. It should be understood to
relate to cases where a product is deceptively represented as a product
that is produced and legitimately owned by another. For example, a
watch that contains a Rolex name, but is not made by Rolex, a copy of
Microsoft Office software that is in fact not manufactured or
legitimately licensed by Microsoft, or a copy of a drug that is falsely
presented as having been legitimately manufactured by Pfizer, could be
said to be a counterfeit.
A copyrighted work that is copied and redistributed is not a
counterfeit, unless it is redistributed deceptively as legitimately
being offered for sale by the rights-owner.
There are countless cases of counterfeit goods being placed in commerce,
and it is useful and important to address the appropriate measures to
curb such activity. The term "counterfeit" should not be used to
describe all activities that may constitute an infringement of a patent,
copyright or trademark, however.
Items which are similar to other goods, including goods of inferior
quality which are sold for a lower price, should not be considered
counterfeits, unless there an intent to deceptively represent the
content or origins.
Generic drugs, car parts or other products that do not use a brand name
are not counterfeits. Unauthorized uses of a product that are allowed
by law, such as personal copies of copyrighted works made under
legitimate exceptions to copyrights, or generic medicines that are
off-patent or legitimately licensed under voluntary or non-voluntary
licenses, are not counterfeit products. Not all infringements of
patents or copyrighted goods can be usefully described as counterfeits,
and often the issue of what constitutes infringement is a matter of
controversy, particularly, but not only, in the area of patents, where
issues concerning patent validity and relevance are quite difficult, or
in the area of copyright, where the relationship between rights and
exceptions to rights are complex.
It is important, however, to differentiate between counterfeiting (i.e
fake goods) and the importation of legitimate stock at a lower price, as
"grey market" parallel traded goods that are acquired legitimately in
one market, and resold legally under under the exhaustion of rights
doctrine in another market. There is a tendency by some to conflate the
two issues in order to stigmatize the practice and ignore the benefits
of parallel trade. Restrictions on parallel trade can lead to
anti-competitive behavior, and by facilitating market segmentation and
price discrimination, lead to higher prices for consumers in markets
that have a lack of competition.
Piracy
According to the federal register notice, the proposed agreement will
focus on both piracy and infringement. Although there is not an agreed
upon definition of piracy, the terms piracy and infringement should not
be considered as synonyms. Piracy is a colorful and emotive term that
does not elevate or inform debates about enforcement in areas where the
intent or the appropriateness of infringing activities are subject to
nuance or legitimate policy debate. For example, in the recent U.S.
Supreme Court decisions involving eBay and KRS, the Court addressed
cases where the exclusive rights of a patent should not be enforced, and
a court should permit infringement under a court authorized royalty
payment (eBay), or where government agencies and lower court judges make
errors in their evaluations of the validity of patent claims (KSR). Do
these cases involving disputes over infringement merit or benefit from
the phrase "piracy?" Is Microsoft a "pirate" for insisting on the right
to continue to infringe the z4 patents in order to use an infringing DRM
technology to protect Microsoft software itself from infringement by
unauthorized uses? Is the maker of the popular computer game Guitiar
Hero a pirate because it faces an assertion of patent claim? The
International Trade Commission (ITC) endorsing piracy by refusing to
prevent the importation of all mobile phone that use infringing semi
conductor chips? Is Abbott Laboratories a "pirate" for seeking a
compulsory license for its infringing use of patents on a Hepatitis C
virus (HCV) genotyping test kit? Does the USTR engage in "piracy" when
its employees copy and share copyrighted articles about counterfeit
products, an activity allowed under 28 USC 1498? Are the owners of
MySpace, Facebook or YouTube pirates because of the extensive evidence
of unauthorized use of copyrighted works on those services?
Infringement
Governments can and should make distinctions between a brazen and
criminal enterprise to steal protected works and inventions, including
deliberate deception about the content or origin of works
(counterfeits), and the increasingly common disputes involving
infringement that raise questions about the validity of the intellectual
property claim, the extent to which a use is truly protected, and the
appropriateness of remedies to address infringement.
It is important for governments to address the enforcement of
intellectual property rights, including policies that address
infringement. But in real life, disputes over infringement are highly
heterogeneous and sometimes involve complex disputes over facts and
public policy.
Efforts to fashion a treaty that deals with counterfeits, brazen acts of
piracy, and routine disputes involving infringement, covers a lot of
territory. The title of the treaty or trade agreement should not
casually mix everything together under a single banner of the word
counterfeit, unless the purpose is to use an emotive and misleading term
to demonize users, justify economically disproportionate remedies and
prejudice defenses based upon assertions of legitimate or tolerated
uses.
Priorities for Law Enforcement
Low quality counterfeits
Counterfeit products that are of a low quality are always a concern to
consumers, and particularly when the products present risks to
consumers, such as drugs with poor quality or the wrong active
pharmaceutical ingredients, or car parts that are prone to failure. The
highest priorities for law enforcement should be in areas of risk to
health and safety.
High quality counterfeits
High-quality counterfeit products present different issues. Examples of
high quality counterfeits are (deceptively marketed) copies of digital
software, recorded music or audiovisual works, manufactured goods that
are made in the same factories as the brand name goods, or
pharmaceutical drugs that are medically the same as the legitimate
products.
It important for governments to provide a minimum level of protection to
trademark owners, and in the long run, this will benefit consumers even
in cases where the counterfeit products are of a high quality.
Governments should protect trademark, patent and copyright owners from
competition from high-quality counterfeit products, and consumers
benefit from the greater incentives to develop new products, and to
maintain high quality.
That said, governments have priorities in terms of law enforcement, and
consumers have many problems, including a lack of enforcement of
consumer protection laws that go far beyond counterfeit products. How
much money and time should governments devote to enforcement of high
quality counterfeit items? Here some sensible distinctions need to be
made. For example, clearly a global failure to enforce laws against the
counterfeiting of software, movies and recorded music could destroy
livelihoods. However, the impact of low enforcement is less important
to livelihoods in some industries if it occurs in economies or
communities of users that are marginal to the primary commercial market
for the good. For example, countries with very low household incomes
that use copies of software products that have a global market are
unlikely to have a significant impact on the global market, but may
expand access to the goods in the developing country. In those
circumstances, it may be difficult to justify large outlays of scarce
enforcement resources, given competing priorities law enforcement.
Remedies
Methods and sanctions that are designed to prevent counterfeiting should
be carefully considered by policy-makers to ensure that they are
properly targeted and do not have adverse effects on competition,
innovation, consumer protection or privacy rights. For example, right
holders are increasingly using technical means such as digital rights
management tools to prevent unauthorized copying of works, but these
technologies also have adverse effects on legitimate usages of products.
Increased regulatory requirements on the packaging of goods and other
preventive measures can be used to raise the cost of entry into the
market for competitors. Criminal sanctions in particular must be
carefully targeted. There is a tendency to confuse the effects of
commercial scale counterfeiting, and non-commercial scale copying or
infringement by consumers and to apply the same criminal sanctions to
both. There should be a distinction between organized commercial
counterfeiting, and the ‘infringement’ activity of consumers.
Other Solutions
Before investing enormous public sector resources to enforce private
intellectual property rights, policy makers should at least consider the
reasons why infringement flourishes today, and some alternative
solutions to some of the more important problems.
The widespread infringement of patented inventions in software and
information technology sectors is based upon deep flaws in the patent
system itself. The issues recently addressed by the US Supreme Court in
the KSR and eBay decisions illustrate the concerns of many that the
USPTO standards for inventive step are too low, and it is highly
problematic to enforce exclusive rights in products that use complex
technologies where it has become impossible to avoid infringement.
Likewise, the entire rise of user generated content illustrates the
widely share belief by the public that they should enjoy some freedom to
remix copyrighted content for personal use. Excessive pricing of
copyrighted works in developing countries has created a huge market for
infringing works. High prices for pharmaceutical products in the US and
Europe attracts criminal counterfeits, who can make greater profits
manufacturing fake copies of Pfizer's Lipitor or Viagra, than
distributing cocaine or heroin.
In many of these case, a combination of reforms in the intellectual
property systems, curbs on excessive pricing, and the development of new
systems of rewards for creative and inventive communities may be more
fruitful avenues for addressing the twin concerns of enforcing private
intellectual property rights, and providing sustainable incomes for our
workforce.
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_____________________________
James Love, Knowledge Ecology International (KEI)
http://www.keionline.org, mailto:james.love@keionline.org
voice +1.202.332.2670, fax +1.202.332.2673, US mobile +1.202.361.3040,
Geneva mobile +41.76.413.6584
When everyone thinks the same, no one thinks. Bill Walton remix of
Walter Lippmann