How will ACTA affect UK copyright law?

Thanks to La Quadrature Du Net we now have a leak of the consolidated text for the Anti-Counterfeiting Trade Agreement (ACTA) after the Luzern round of negotiations. It is always difficult to analyse texts that are in the drafting process, but we can now get a better idea of possible changes to national legislation. If the most restrictive aspects of the text were passed tomorrow, what would it change in UK law? This is a wide-ranging agreement, so I will try to concentrate on the copyright aspects. When there are different options in the text, I will choose the one that seems more restrictive, so this analysis is a worst-case scenario. I am also going not going to go in detail into the changes brought about by the Digital Economy Act, as some of the most substantive issues are under consultation.

TRIPS

The first issue I wanted to comment on is not strictly copyright related, but it may be an indication that some moderating voices are having some sway in the negotiations. Article 1.1 has been changed to include a specific mention to the TRIPS agreement. The new text reads:

“Nothing in this Agreement shall derogate from any obligation of a Party with respect to any other Party under existing agreements, including the WTO Agreement of Trade-Related Aspects of Intellectual Property Rights.”

This is a very telling change, and it may pre-empt potential challenges to the agreement under the WTO’s Dispute Settlement Understanding. It would be possible that the obligations under ACTA could have contravened directly TRIPS provisions, and would have left the multi-lateral agreement open to lengthy and expensive international disputes. By adding this paragraph, all of the obligations under ACTA will have to be interpreted in light of existing TRIPS obligations. This is a good thing, as it narrows the scope of potential nasty surprises springing up at a later date.

Civil enforcement

The main substantive copyright-related section is the one on civil enforcement. The good news is that UK copyright law already fulfils many of the suggested changes. The bad news is that where there are divergences, the changes would be quite substantial.

With regards to injunctions, Art. 2.1.1 of the leaked text reads:

“1. In civil judicial proceedings concerning the enforcement of intellectual property rights, each Party shall provide that its judicial authorities shall have the authority to issue an order to a party to desist from an infringement, including an order to prevent infringing goods from entering into the channels of commerce. “

In my opinion, this is mostly covered already under the Copyright, Designs and Patents Act (CDPA), particularly ss.96, 99 and 111. What worries me is Article 2.1.2:

“2. The Parties shall also ensure that right holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right.”

This to me is one of the most wide-ranging changes that might be brought about by ACTA. This paragraph would completely change the balance of limitation of intermediary liability that we have in place at the moment. For example, currently s.97A of the CDPA allows injunctions against intermediaries who have “actual knowledge of another person using their service to infringe copyright”, and it lists several circumstances that constitute actual knowledge of infringement taking place. The ACTA text, if this paragraph is included, does not allow for “actual knowledge”. Does this mean that ISPs can receive an injunction even if they have no knowledge of the infringement? Talk about chilling effects on speed!

Another change to UK copyright law might also come through the section on Damages. Art. 2.2.1 on damages reads:

“1. Each Party shall provide that in civil judicial proceedings, its judicial authorities shall have the authority to order the infringer who knowingly or with reasonable grounds to know, engaged in infringing activity of intellectual property rights to pay the right holder damages adequate to compensate for the injury the right holder has suffered as a result of the infringement.
In determining the amount of damages for infringement of intellectual property rights, its judicial authorities shall consider, inter alia, any legitimate measure of value submitted by the right holder, which may include the lost profits, the value of the infringed good or service, measured by the market price, the suggested retail price.”

The first paragraph is covered by UK law, but the problem arises in the second paragraph. Currently, s97(2) of the CDPA only asks that the courts consider all circumstances in determining damages, paying special attention to:

“(a) the flagrancy of the infringement, and
(b) any benefit accruing to the defendant by reason of the infringement, award such additional damages as the justice of the case may require.”

Similarly, Art. 2.2.2 also requires the infringer to pay for profits lost that are attributable to the infringer. In my opinion, this means that ACTA would require further additions to this section. Most worryingly, it seems like the courts will be forced to take into consideration what the owners think are the damages, including lost profits. Will this mean that we can expect mega-infringement awards for copyright infringement in the UK?

To make matters worse with regards to damages, Art. 2.2.3 of ACTA will also import statutory or pre-established damages. It also establishes additional damages for copyright (read here punitive damages probably). This would therefore mean a major overhaul of the civil damage system present in the CDPA. It mostly exports the American system of damages to jurisdictions that do not have statutory and punitive damages.

Article 2.4 of ACTA creates an obligation of ISPs to provide information to copyright owners in order to collect evidence of infringement. This will not result in a substantive change to UK law thanks to the Digital Economy Act, specifically s4 of the DEAct already creates an “Obligation to provide copyright infringement lists to copyright owners”.

Criminal enforcement

ACTA sets out strong criminal offences for infringing practices. Art. 2.14.1 reads (again, this is the “worst-case text”):

“Each Party shall provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright or related rights piracy on a commercial scale. Infringement acts carried out on a commercial scale are those carried out in the context of commercial activity or indirect economic or commercial advantage; however, a Party may exclude such acts carried out by end consumers.”

This would certainly mean a strengthening of the existing language for criminal offences under the CDPA. Currently, s.107 only allows for criminal liability for wilful copyright infringement conducted “in the course of a business”. ACTA would result in a change of this language to a much wider interpretation, so commercial activities, or even any action that results in “indirect economic or commercial advantage” would be covered.

The most draconian copyright-related criminal offence that could arise from ACTA are contained in Art. 2.14.3. The worst version of the text reads:

“Each Party shall provide for criminal procedures and penalties to be applied against any person who, without authorization of the holder of copyright or related rights in an audiovisual work, including a cinematographic work uses an audiovisual recording device to transmit or make a copy of the cinematographic or other audiovisual work, or any part thereof, from a performance of the cinematographic or other audiovisual work in a motion picture exhibition facility open to the public.”

So, any recording, even a partial recording for any purpose, of a cinematographic work would become a criminal offence. Really. This of course, does not exist in UK copyright law, so it can be classed as a major change.

Should we be worried?

Yes. Be afraid. Be very afraid. I know that these changes may seem like minor technical issues, but it is important that we try to find a way to convey to the public that we might be faced with some substantial changes to UK copyright law. During GikII, Hugh Hancock gave an excellent presentation about how the debate against the Digital Economy Bill was lost. It is difficult to get people worked up about changes in statutory damages, but we need to act on ACTA now.