Department of Foreign Affairs and Trade Discussion Paper
An International Proposal for a Plurilateral Anti‑Counterfeiting Trade Agreement (ACTA)
13 November 2007
This discussion paper provides information on a new treaty being proposed by Japan, the EC, the US and Switzerland, provisionally called the Anti‑Counterfeiting Trade Agreement (ACTA). The paper is divided into three parts, firstly setting out details of the proposed instrument, then addressing the place of Australia and the proposed ACTA in the present international intellectual property (IP) system, and finally addressing the likely provisions of the ACTA in an Australian context. The discussion paper is being released in response to a new international proposal, and does not pre-judge any Government policy on whether Australia should, or should not, become involved in negotiations or membership of the ACTA.
The Department of Foreign Affairs and Trade (DFAT) welcomes submissions from individuals and groups with views on Australia entering into negotiations on ACTA. Participation in such negotiations would be without prejudice to a final decision as to whether Australia would join any future treaty.
Submissions need not be lengthy. Authors of submissions should advise whether they wish to keep their name and/or the text of their submission confidential. Submissions may be lodged electronically to IP@dfat.gov.au by 15 December 2007.
Proposed Instrument Details
A proposal has been made by Japan, the EC, the US and Switzerland for a new plurilateral Anti-Counterfeiting Trade Agreement (ACTA). The ACTA is proposed to establish a new standard of intellectual property rights (IPR) enforcement to combat global counterfeiting and piracy. Some of these countries have been vocal in a range of international forums — such as the G8 — for a new treaty addressing trade in IPR infringing products.
The ACTA is at a very early stage, with a first round of pre-negotiation technical discussions held on 4 October 2007. Australia, Japan, the Republic of Korea, Mexico, New Zealand, the EC, the US, Switzerland and others attended these discussions in Switzerland. A second round of technical discussions is scheduled for the first week of December. No date has yet been set for beginning formal negotiations, although this is likely to occur in early 2008. No draft text has yet been prepared. Early negotiations are likely to include the same countries as above, with more countries likely to participate as negotiations continue.
Suggested reasons for the proposed ACTA
The impacts of IPR infringement
Intellectual property rights (IPR) infringement is recognised as a problem in all economies to a varying extent. A recent OECD report[1] indicates that negative impacts of IPR infringement are wide-ranging, creating significant costs for governments, international trade and economies. These costs have direct negative impacts on individual businesses, employees and consumers.
The possible scope and magnitude of counterfeiting and piracy are illustrated by the report which estimates that the value of international trade in physical counterfeit and pirated products may have been up to USD200 billion in 2005. If domestic production and trade in infringing goods and digital piracy via the Internet were also to be included, the OECD report estimates the total value would be increased by several hundred billion US dollars. Counterfeit and pirated goods are being produced and consumed in virtually all economies, with a concentration of infringements occurring in Asia. Australia needs to consider carefully what further part it might play in addressing this important issue, including whether it should join negotiations on a new standard of IPR enforcement through the ACTA.
Socio-economic impacts of counterfeiting and piracy identified by the OECD report are:
- negative impacts on innovation and growth as IPR holders have a decreased ability to capture the benefits of their innovation that would enable them to reinvest profits in research and development activities;
- criminal activities encouraged by the relatively high margin / low risk profile of IPR infringement, including association with organised crime and funding of terrorist activities;
- environmental damage by counterfeiting and piracy through the significant waste produced through destroying infringing items. Environmental harm is also caused when substandard products are made that do not comply with environmental standards – eg unsafe counterfeit fertilizers;
- reduced employment in legitimate industries which are undermined by decreased demand for their products, and poor employment conditions in the illegitimate market;
- decreased foreign direct investment where infringing products have a strong presence in the market; and
- undermining of legitimate trade by trade in illegitimate goods.
Negative impacts on IPR holders identified by the OECD report include decreased:
- sales volumes, prices and royalties;
- brand values and firm reputation;
- ability of firms to invest in research and development; and
- ability of firms to decrease costs and expand the scope of their operations.
Impacts on consumers identified by the OECD report include:
- health and safety risks (eg, counterfeit medicines, car and aeroplane parts); and
- impaired fitness of products for their purpose.
Impacts on governments identified by the OECD report include:
- decreased tax revenues;
- increased expenditure on preventing and dealing with IPR crimes; and
- corruption encouraged by IPR crimes.
International IPR enforcement
In addition to tackling IPR infringement at the national / domestic level, the level of international trade in counterfeit and pirated goods also requires effective measures. A number of existing international organizations have a role to play in IPR enforcement.
Amongst the most important of these is the World Trade Organization (WTO). Part III of the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) provides for minimum standards for IPR enforcement by WTO Members. The WTO TRIPS Council monitors implementation of TRIPS, and members who are parties to TRIPS are subject to the WTO dispute settlement mechanisms.
The World Intellectual Property Organization (WIPO) provides a non-binding forum for discussion of enforcement issues through its Advisory Committee on Enforcement.
Other multilateral organisations also produce guidelines on anti-counterfeiting and piracy. For example, the World Customs Organization (WCO) developed in 1995, and subsequently updated, a non-binding instrument to guide national border measures for the protection of IPR. Interpol adopted its first non-binding resolution on intellectual property crimes in 1994, and reiterated it in 2000, providing guidance to stakeholders, industries and member countries concerned with IP crime. The Asia-Pacific Economic Cooperation (APEC) forum’s Intellectual Property Experts Group (IPEG) has also developed guidelines on enforcement.
A new proposed standard of IPR enforcement
In 2004, WIPO, the WCO and Interpol coordinated to host the first Global Congress on Combating Counterfeiting (GCCC). The Congress has now met three times, and is due to meet again in February 2008 in Dubai. At the 2nd and 3rd Congresses Japan proposed the establishment of a new international treaty on IPR enforcement. In the Lyon Declaration from the 2005 Congress, and in 2006 follow-up, the Congress recommended consideration of Japan’s suggestion to develop an international treaty on IPR enforcement.
Since then, Japan has raised the concept of a plurilateral Anti-Counterfeiting Trade Agreement (ACTA) at the 2005 Gleneagles G8 Summit. This led to the adoption of the G8 document ‘Reducing IPR Piracy and Counterfeiting through more Effective Enforcement.’ The GCCC recommended strengthening IPR enforcement by enhancing cooperation and coordination, promoting better legislation and enforcement, raising public awareness of IPR infringement issues, and capacity building. The G8 also recommended strengthening enforcement laws, improving coordination between agencies industries and countries and raising awareness of the damage caused by IPR infringements amongst government officials and the public. Building on the GCCC and G8 recommendations, the focus in the proposed ACTA is on international cooperation, enforcement and legislation.
Potential Australian participation in ACTA negotiations
The OECD recognises Australia as a country where counterfeit and pirated goods do not have a significant market share. Australia’s participation in negotiations on the ACTA could be useful to promote higher standards and provide an opportunity for Australia to reduce trade in a range of IPR-infringing products on a regional and global level. However, the extent to which the ACTA attracts support from countries where counterfeiting and piracy is more problematic would be critical in determining the real value of ACTA.
Possible impact on Australia of likely ACTA elements
International cooperation
Cooperation among the future parties to the ACTA is considered a key component of the proposed agreement, especially sharing of information and cooperation between law enforcement authorities, including Customs and other relevant agencies. Major areas of possible provisions include:
- international cooperation among enforcement agencies
- capacity building and technical assistance in improving enforcement
At this time, the Australian Customs Service cooperates with other international Customs organisations, including the WCO to help prevent trade in IPR-infringing products. Similarly, the Australian Federal Police (AFP) shares information on best practices and specific investigations with international police forces including Interpol. Australia also has a history of providing technical assistance to developing countries to assist their ability to enforce IPR. If the ACTA would require increased efforts from Australia in these areas, the resource implications vis-à-vis the likely benefits for Australia would need to be carefully considered.
Enforcement practices
The proponents of the ACTA consider it is necessary to establish enforcement practices that promote strong intellectual property protection in coordination with right holders and trading partners. Such ‘best practices’ would support the application of the relevant legal tools as outlined by the Legal Framework below. Areas of possible provisions include:
- formal or informal public/private advisory groups;
- fostering of specialised IP property expertise within law enforcement structures to ensure effective handling of IPR cases; and
- measures for raising consumer public awareness about the importance of IPR protection and the detrimental effects of IPR infringements.
Presently, Australian federal government departments and agencies meet to coordinate joint responses to IPR enforcement. Australian federal government law enforcement, departments and agencies also meet with IPR holders on formal and informal levels to discuss coordinated responses to IP challenges, including through the IP Enforcement Consultative Group, chaired by the AFP. Specialised IP expertise exists in each of the relevant departments represented at the consultative group.
Agencies administering copyright and trade mark laws in Australia provide information to the public on IPR enforcement in Australia. As part of paperwork provided to all travellers passing through Australian Customs desks, Customs provides brochures designed to educate travellers about the illegality of copyright and trade mark infringements.
If the ACTA were to require increased efforts from Australia in these areas, the resource implications vis-à-vis the likely benefits for Australia would need to be carefully considered
Legal framework
ACTA proponents consider it is critical to have a strong and modern legal framework so that law enforcement agencies, the judiciary and private citizens have appropriate tools to deal effectively with counterfeiters. Areas for possible provisions include:
- criminal enforcement
- border measures
- civil enforcement
- CD and DVD disc piracy
- internet distribution and information technology
Australia has legislation criminalising copyright piracy and trade mark counterfeiting. Penalties (including imprisonment) can be combined with confiscation of proceeds of crime as well as confiscation of the infringing goods and the equipment used to make those goods. Any measures in the ACTA requiring criminalisation of IPR infringements that go beyond current Australian standards would require extensive consideration.
Presently, the Australian Notice of Objection Scheme provides Customs with the power to seize imported goods which infringe notified trade marks and copyright. IPR owners can also prevent the importation and exportation of infringing products through court injunctions. Consideration would be required if the ACTA were to expand the range of IPR to which these rules apply. Currently the ACTA proposal covers only trade marks and copyright.
Other issues which may be included in the ACTA are civil enforcement, digital piracy and measures to control CD and DVD piracy. Australia's copyright laws target general trade / commercial activity involving infringing copies of copyright material. Again, possible implications of the proposed ACTA in this area would need to be carefully considered.
Commonwealth Agency Contacts
Caroline McCarthy Ph: 02) 6261 2039 |
Evan Johns Ph: 02) 6261 2347 |
Relevant websites
As more information becomes available, details will be updated on www.dfat.gov.au for the period of pre-negotiation consultation.
Other useful information on the existing global IPR architecture, and the problems caused by IPR infringements can be obtained from the following websites.
- Interpol
- Organisation for Economic Cooperation and Development (OECD) (pdf)
- World Customs Organization (WCO)
- World Intellectual Property Organization (WIPO)
- World Trade Organization (WTO)
- Global Congress Combating Counterfeiting and Piracy (GCCC)
[1] The Economic Impact of Counterfeiting and Piracy, OECD, 4 June 2007, DSTI/IND(2007)9/PART4/REV1.