The Proposed Anti-Counterfeiting Trade
Agreement: Background and Key Issues
Shayerah Ilias
Analyst in International Trade and Finance
March 1, 2012
Congressional Research Service
7-5700
www.crs.gov
R41107
CRS Report for Congress
Pr
epared for Members and Committees of Congress
The Proposed Anti-Counterfeiting Trade Agreement: Background and Key Issues
Summary
The proposed Anti-Counterfeiting Trade Agreement (ACTA) is a new agreement for combating
intellectual property rights (IPR) infringement. The ACTA negotiation concluded in October
2010, nearly three years after it began, and negotiating parties released a final text of the
agreement in May 2011. Negotiated by the United States, Australia, Canada, the European Union
and its 27 member states, Japan, South Korea, Mexico, Morocco, New Zealand, Singapore, and
Switzerland, the ACTA is intended to build on the IPR protection and enforcement obligations set
forth in the 1995 World Trade Organization (WTO) Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS Agreement). It also is intended to address emerging IPR
issues believed to be not addressed adequately in the TRIPS Agreement, such as IPR
infringement in the digital environment. The ACTA, which was negotiated outside of the WTO,
focuses primarily on trademark and copyright enforcement. It establishes a legal framework for
IPR enforcement, which contains provisions on civil enforcement, border measures, criminal
enforcement in cases of willful trademark counterfeiting or copyright piracy on a commercial
scale, and enforcement in the digital environment for infringement of copyrights or related rights.
It also provides for enhanced enforcement best practices and increased international cooperation.
The ratification (“formal approval”) of the ACTA is in a state of uncertainty, despite the fact that
most negotiating parties (Australia, Canada, the EU and 22 member states, Japan, South Korea,
Morocco, New Zealand, Singapore, and the United States) have signed the proposed agreement.
In recent months, controversy over the ACTA has escalated in the EU. Amid opposition by
Internet free speech advocates, several EU member states (including some that had previously
signed the agreement) have decided to suspend or not initiate their domestic adoption of the
ACTA. In addition, the European Commission has placed the EU ratification process on hold and
submitted the ACTA to the European Court of Justice to determine its compatibility with EU law.
The agreement would enter into force after the sixth instrument of ratification, acceptance, or
approval is deposited by ACTA negotiating parties. No party has submitted a formal instrument of
approval to date.
The Bush Administration began, and the Obama Administration continued, negotiation of the
ACTA as an executive agreement, meaning that the ACTA would not be subject to congressional
approval, unless it were to require statutory changes to U.S. law. The U.S. Trade Representative
maintains that the ACTA is consistent with existing U.S. law and does not require the enactment
of implementing legislation. Congress could play an oversight role in the implementation of the
agreement. Some Members and other groups have debated whether implementation of the ACTA
without congressional approval would raise constitutionality issues.
The U.S. government has made the enforcement of IPR a top priority in its trade policy, due to
the importance of IPR to the U.S. economy and the potentially negative commercial, health and
safety, and security consequences associated with counterfeiting and piracy. Policymakers face a
challenge of finding an appropriate balance between protecting private rights and promoting
broader economic and social welfare. The ACTA negotiation has spurred various policy debates.
While governments involved in the negotiation and IPR-based industries have voiced strong
support for the ACTA, other groups have expressed concern about the ACTA’s potential impact
on trade in legitimate goods, consumer privacy, the free flow of information, and public health.
There also have been concerns about the negotiation’s scope, transparency, and inclusiveness.
Some have questioned the rationale behind creating a new IPR agreement and have advocated,
instead, for better enforcement of existing agreements, such as the WTO TRIPS Agreement.
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The Proposed Anti-Counterfeiting Trade Agreement: Background and Key Issues
Contents
Recent Developments ...................................................................................................................... 1
Overview of the ACTA .................................................................................................................... 2
Evolution of ACTA Negotiations............................................................................................... 2
Entry-into-Force of the ACTA................................................................................................... 4
Characteristics of Participants in the ACTA Negotiation .......................................................... 5
Summary of Key Provisions of the ACTA ................................................................................ 6
Initial Provisions ................................................................................................................. 6
Legal Framework for Enforcement ..................................................................................... 7
Enforcement Practices......................................................................................................... 9
International Cooperation.................................................................................................... 9
Institutional Arrangements ................................................................................................ 10
Final Provisions................................................................................................................. 10
U.S. Involvement and Objectives .................................................................................................. 10
Involvement of Administration and Congress ......................................................................... 10
U.S. Motivations for Negotiating the ACTA........................................................................... 11
Economic Rationale .......................................................................................................... 12
Health and Safety Rationale.............................................................................................. 13
Security Rationale ............................................................................................................. 13
U.S. Trade Policy and Building Blocks for the ACTA .................................................................. 13
WTO TRIPS Agreement.......................................................................................................... 13
Regional and Bilateral Free Trade Agreements....................................................................... 14
Points of Debate: Issues for U.S. Policy........................................................................................ 15
Scope of the Proposed Agreement........................................................................................... 15
Transparency of and Stakeholder Input in Negotiation ........................................................... 16
Range of Participants............................................................................................................... 17
Impact on Legitimate Trade and Consumer Activity............................................................... 19
Negotiation of ACTA as Stand-Alone Agreement................................................................... 21
Effectiveness of a New Agreement on IPR ............................................................................. 22
Congressional Outlook .................................................................................................................. 22
Tables
Table 1. Formal Rounds of Negotiation of Proposed ACTA ........................................................... 3
Table 2. Status of ACTA Negotiating Parties in Selected Other Trade Agreements ........................ 5
Contacts
Author Contact Information........................................................................................................... 23
Acknowledgments ......................................................................................................................... 23
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The Proposed Anti-Counterfeiting Trade Agreement: Background and Key Issues
Recent Developments
• Negotiating parties of the proposed Anti-Counterfeiting Trade Agreement
(ACTA) have from May 1, 2011, until May 1, 2013, to sign the agreement.
Subsequently, the ACTA would enter into force after the sixth instrument of
ratification, acceptance, or approval (“formal approval”) is deposited by the
ACTA participants.1 Participants to the ACTA negotiation are submitting the
treaty to their respective domestic authorities to undertake relevant domestic
processes for ratification, acceptance, or approval. To date, no negotiating party,
including the United States, has submitted a formal instrument of approval.2
• On February 22, 2012, the European Commission placed the ACTA ratification
process on hold and submitted the agreement to the European Court of Justice to
determine if the ACTA is compatible with EU law.3 In recent months, amid
widespread protests by advocates of Internet free speech, several EU member
states have decided to suspend or not initiate their domestic adoption of the
ACTA, including Bulgaria, the Czech Republic, Germany, Latvia, Poland, and
Slovakia.4
• On January 25, 2012, the European Union and 22 EU member states signed the
ACTA.5 At that time, five EU member states (Cyprus, Germany, Estonia, the
Netherlands, and Slovakia) did not sign the agreement, reportedly due to
procedural issues.
• On October 1, 2011, the governments of Australia, Canada, Japan, Korea,
Morocco, New Zealand, Singapore, and the United States signed the ACTA. At
that time, representatives from the European Union, Mexico, and Switzerland
“confirmed their continuing support for and preparations to sign the Agreement
as soon as practicable.” In addition, all participants affirmed their goal “to work
cooperatively to achieve the Agreement’s prompt entry into force, and to actively
support its goals.”6
• In May 2011, ACTA negotiating parties publicly released a final version of the
agreement text.7
1 Office of the U.S. Trade Representative (USTR), Anti-Counterfeiting Trade Agreement (ACTA) webpage,
http://www.ustr.gov/acta.
2 Telephone conversation with USTR official, January 19, 2012.
3 "European Commission Puts ACTA Ratification on Hold; Requests EU High Court Review," BNA Bloomberg Patent,
Trademark & Copyright Law Daily, February 23, 2012.
4 EU Observer, "Poland Suspends Ratification of ACTA Bill," EU Observer, February 6, 2012. Nikolaj Nielsen,
"Czech Republic Stops Ratification of Anti-Counterfeit Treaty," EU Observer, February 7, 2012."German Government
Suspends ACTA Ratification," EU Observer, February 10, 2011. David Meyer, "ACTA to be Examined by Top EU
Court," ZDNet UK, February 22, 2010.
5 Japan Ministry of Economy, Trade and Industry, "EU and EU Member States sign the Anti-Counterfeiting Trade
Agreement (ACTA)," press release, January 26, 2012, http://www.meti.go.jp/english/press/2012/0126_01.html.
6 USTR, "Joint Press Statement of the Anti-Counterfeiting Trade Agreement Negotiating Parties ," press release,
October 2011, http://www.ustr.gov/about-us/press-office/press-releases/2011/october/joint-press-statement-anti-
counterfeiting-trade-ag.
7 The final text of the ACTA is available at: http://www.mofa.go.jp/policy/economy/i_property/pdfs/acta1105_en.pdf.
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• In October 2010, the 11th and final round of negotiation for the ACTA concluded,
nearly three years after the negotiation began.8
Overview of the ACTA
The proposed Anti-Counterfeiting Trade Agreement (ACTA) is a new agreement for combating
intellectual property rights (IPR) infringement.9 Negotiated by the United States, Australia,
Canada, the European Union and its 27 member states, Japan, South Korea, Mexico, Morocco,
New Zealand, Singapore, and Switzerland, the ACTA is intended to build on the standards of IPR
protection and enforcement set forth in the 1995 World Trade Organization (WTO) Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) and to address
emerging IPR issues believed to be not addressed adequately in the TRIPS Agreement, such as
IPR infringement in the digital environment.
The ACTA, which was negotiated outside of the WTO, focuses primarily on enforcement of
trademarks and copyrights; enforcement of patents generally is outside of the agreement’s scope.
The ACTA establishes a legal framework for IPR enforcement, which contains provisions on civil
enforcement, border measures, criminal enforcement in cases of willful trademark counterfeiting
or copyright piracy on a commercial scale, and enforcement for the infringement of copyrights or
related rights over digital networks. It also provides for enhanced enforcement best practices and
increased international cooperation.10
The ACTA negotiation concluded in October 2010, nearly three years after it began. Countries
have from May 1, 2011, until May 1, 2013, to sign the agreement. All negotiating parties, except
Mexico and Switzerland, have signed the agreement. ACTA signatories are to proceed with
domestic ratification procedures.11 The ACTA would enter into force after the sixth instrument of
ratification, acceptance, or approval (“formal approval”) is deposited. No negotiating party has
submitted a formal instrument of approval to date.
Evolution of ACTA Negotiations
The idea of negotiating the ACTA was conceived in 2006 by the United States and Japan as a new
tool for combating counterfeiting and piracy.12 During 2006 and 2007, a group of interested
parties—Canada, the European Union, Japan, Switzerland, and the United States—held
8 USTR, “USTR Releases Statement of ACTA Negotiating Partners on Recent ACTA Negotiations,” press release,
October 2011, http://www.ustr.gov/about-us/press-office/press-releases/2010/october/ustr-releases-statement-acta-
negotiating-partners.
9 IPR are legal rights granted by governments to encourage innovation and creative output. They ensure that creators
reap the benefits of their inventions or works and may take the form of patents, trade secrets, copyrights, trademarks, or
geographical indications. Through IPR, governments grant a temporary legal monopoly to innovators by giving them
the right to limit or control the use of their creations by others. IPR may be traded or licensed to others, usually in
return for fees and or royalty payments.
10 The final text of the ACTA is available at: http://www.mofa.go.jp/policy/economy/i_property/pdfs/acta1105_en.pdf.
11 Japan Ministry of Economy, Trade and Industry, "EU and EU Member States sign the Anti-Counterfeiting Trade
Agreement (ACTA)," press release, January 26, 2012, http://www.meti.go.jp/english/press/2012/0126_01.html.
12 In general, counterfeiting refers to violations of trademarks, while piracy refers to violations of copyrights. However,
the terms are often used interchangeably in literature on IPR.
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preliminary talks about the proposed ACTA. In October 2007, this group of participants,
perceived as “like-minded” by the Office of the U.S. Trade Representative (USTR), announced
their intention to begin negotiating this new agreement. By the time that formal negotiations were
launched in June 2008, the number of parties involved in the ACTA negotiation had grown to also
include Australia, Canada, South Korea, Mexico, Morocco, New Zealand, and Singapore.13
Formal negotiation of the ACTA began in June 2008. At that time, the United States sought to
conclude the agreement by the end of that year.14 However, participants to the ACTA held 11
rounds of negotiation, discussing various aspects of the agreement (see Table 1). The final round
was held in Japan in October 2010, during which ACTA participants resolved nearly all
substantive issues, and produced a consolidated and largely finalized text of the proposed
agreement, which was to be submitted “ad referendum” to their respective authorities.15
Table 1. Formal Rounds of Negotiation of Proposed ACTA
Round Date
Location
Key Topics of Discussion
1
June 3-4, 2008
Geneva, Switzerland
Border measures
2
July 29-31, 2008
Washington, D.C.
Civil remedies for infringement, border measures
3 October
8-9,
Tokyo, Japan
Criminal enforcement, scope of agreement
2008
4
December 15-
Paris, France
International cooperation, enforcement practices, institutional
18, 2008
issues, transparency
5
July 16-17, 2009
Rabat, Morocco
International cooperation, enforcement practices, institutional
issues, transparency
6 November
4-6,
Seoul, Korea
Enforcement in digital environment, criminal enforcement,
2009
transparency
7
January 26-29,
Guadalajara, Mexico
Civil enforcement, border measures, internet provisions,
2010
transparency
8 April
12-16, Wellington, New
Civil enforcement, border measures, criminal enforcement, special
2010
Zealand
measures for digital environment, scope of IPR
9 June
28-July
21,
Lucerne, Switzerland
Initial provisions, general objectives, civil enforcement, border
2010
measures, criminal enforcement, enforcement measures in digital
environment, international cooperation, institutional arrangements
10 August
16-20,
Washington, D.C.
Advanced discussions on all sections of the agreement
2010
11 September
23-
Tokyo, Japan
Resolution of nearly al substantive issues
October 2, 2010
Source: Office of the United States Trade Representative, various press releases.
13 The United Arab Emirates (UAE) participated in the first round of negotiations, but it has not attended subsequent
rounds of negotiations.
14 USTR, “Trade Facts: Anti-Counterfeiting Trade Agreement (ACTA),” August 4, 2008.
15 USTR, “USTR Releases Statement of ACTA Negotiating Partners on Recent ACTA Negotiations,” press release,
October 2011, http://www.ustr.gov/about-us/press-office/press-releases/2010/october/ustr-releases-statement-acta-
negotiating-partners.
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Entry-into-Force of the ACTA
On October 1, 2011, the governments of Australia, Canada, Japan, Korea, Morocco, New
Zealand, Singapore, and the United States signed the ACTA. Representatives from the European
Union, Mexico, and Switzerland “confirmed their continuing support for and preparations to sign
the Agreement as soon as practicable.” In addition, all participants affirmed their goal “to work
cooperatively to achieve the Agreement’s prompt entry into force, and to actively support its
goals.”16 Subsequently, on January 25, 2012, the European Union and its 22 member states signed
the ACTA. The signatories to the agreement announced that they "will proceed with domestic
ratification procedures and strive to put the Agreement into effect at an early date."17
The agreement would enter into force after the sixth instrument of ratification, acceptance, or
approval is deposited by the ACTA participants.18 To date, no country has deposited an instrument
of approval. Negotiating parties are now submitting the ACTA through their domestic approval
processes, which differ across countries. For example:
• The Office of the United States Trade Representative (USTR), which conducted
the ACTA negotiation on behalf of the U.S. government, negotiated the ACTA as
an executive agreement. Accordingly, the ACTA would not be subject to
congressional approval, unless it were to require statutory changes to U.S. law.
The USTR maintains that the ACTA is consistent with existing U.S. law and does
not require the enactment of implementing legislation. It is not clear if the United
States has a timetable for submitting a formal instrument of approval for the
ACTA.
• The European Commission negotiated the ACTA on behalf of EU member states.
In contrast to the United States, in order for ACTA to enter into force in the EU,
the European Parliament and all 27 member states must sign and ratify the
ACTA. Members of the European Parliament are to vote on the ACTA in late
summer 2012 through an up-or-down, no amendments vote.19 Member states also
are undertaking national ratification processes, and the EU’s Council of Ministers
must adopt a final decision as well in order to conclude the agreement. In recent
months, amid widespread protests by advocates of Internet free speech, several
EU member states have decided to suspend or not initiate their domestic adoption
of the ACTA, including Bulgaria, the Czech Republic, Germany, Latvia, Poland,
and Slovakia.20 On February 22, 2012, the European Commission placed the
16 USTR, "Joint Press Statement of the Anti-Counterfeiting Trade Agreement Negotiating Parties ," press release,
October 2011, http://www.ustr.gov/about-us/press-office/press-releases/2011/october/joint-press-statement-anti-
counterfeiting-trade-ag.
17 Japan Ministry of Economy, Trade and Industry, "EU and EU Member States sign the Anti-Counterfeiting Trade
Agreement (ACTA)," press release, January 26, 2012, http://www.meti.go.jp/english/press/2012/0126_01.html.
18 USTR, "Joint Press Statement of the Anti-Counterfeiting Trade Agreement Negotiating Parties," press release,
October 1, 2011, http://www.ustr.gov/about-us/press-office/press-releases/2011/october/joint-press-statement-anti-
counterfeiting-trade-ag.
19 European Commission, Anti-Counterfeiting Trade Agreement, last updated February 10, 2012,
http://ec.europa.eu/trade/creating-opportunities/trade-topics/intellectual-property/anti-counterfeiting/.
20 EU Observer, "Poland Suspends Ratification of ACTA Bill," EU Observer, February 6, 2012. Nikolaj Nielsen,
"Czech Republic Stops Ratification of Anti-Counterfeit Treaty," EU Observer, February 7, 2012."German Government
Suspends ACTA Ratification," EU Observer, February 10, 2011. David Meyer, "ACTA to be Examined by Top EU
Court," ZDNet UK, February 22, 2010.
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ACTA ratification process on hold and submitted the agreement to the European
Court of Justice to determine if the ACTA is compatible with EU law.21
Certain ACTA participants, such as the United States, EU, and Switzerland, claim that
implementation of the ACTA will not require changes to their domestic legal systems. However,
other countries, such as Canada, may have to pass new laws in order to implement the
enforcement standards of the ACTA, including granting ex-officio authority to customs officials
to initiate criminal investigations in cases of trademark infringement and copyright piracy and
providing legal remedies for circumventing technological protection measures (TPM). Some of
the digital enforcement standards of the ACTA are contained in the World Intellectual Property
Organization (WIPO) Copyright Treaty and Performance and Phonograms Treaty (“WIPO
Internet treaties”). Canada has signed the WIPO Internet Treaties, but has not entered the treaties
into force. Canada currently is considering a copyright bill, C-11, which would amend its
copyright laws to, among other things, incorporate the WIPO Internet treaties into Canadian
domestic law. Previous copyright reform bills have failed to advance before prior dissolutions of
Parliament.22
Characteristics of Participants in the ACTA Negotiation
Most countries that were involved in the ACTA negotiation are economically advanced countries.
They generally consider IPR-based industries to be important to their economies. Together, these
countries constitute roughly half of total world merchandise exports. Participants to the ACTA
negotiation generally have been part of major international trade liberalization efforts (see Table
2). All of the countries have acceded to the WTO TRIPS Agreement, most have implemented the
WIPO Internet treaties, and several have implemented or are negotiating free trade agreements
(FTAs) with the United States.
Table 2. Status of ACTA Negotiating Parties in Selected Other Trade Agreements
ACTA
WTO TRIPS
WIPO Internet
Regional FTA
Bilateral FTA
Participant Agreement
Treatiesa
with the United
with the
States
United States
Australia
√ In-Force TPPb (Under
U.S.-Australia
Negotiation)
FTA (In-Force)
Canada
√ Signature NAFTAc (In-Force) U.S.-Canada
FTAd
European
√ Signature ---
---
Union
Japan
√ In-Force ---
---
Mexico
√ In-Force NAFTAc (In-Force) ---
Morocco
√
Not a member
---
U.S.-Morocco
FTA (In-Force)
21 "European Commission Puts ACTA Ratification on Hold; Requests EU High Court Review," BNA Bloomberg
Patent, Trademark & Copyright Law Daily, February 23, 2012.
22 "Implementing the ACTA Text Will Require Legal Changes in Some Countries," World Trade Online, October 24,
2010.
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ACTA
WTO TRIPS
WIPO Internet
Regional FTA
Bilateral FTA
Participant Agreement
Treatiesa
with the United
with the
States
United States
New
√
Not a member
TPPb (Under
TPP (Under
Zealand
Negotiation)
Negotiation)
Korea
√ In-Force ---
U.S.-Korea
FTA
(Approved)
Singapore
√ In-Force TPPb (Under
U.S.-Singapore
Negotiation)
FTA (In-Force)
Switzerland
√ In-Force ---
---
United
√ In-Force N/A
N/A
States
Source: CRS analysis, drawing from information provided by the WTO, WIPO, USTR.
Notes:
a. WIPO Internet Treaties refer to the WIPO Copyright Treaty and the WIPO Performances and
Phonograms Treaty.
b. The TPP is the prospective Trans-Pacific Partnership agreement, a high-standard FTA being negotiated
among Singapore, Chile, New Zealand, Brunei Darussalam, Australia, Malaysia, Peru, Vietnam, and the
United States.
c. The NAFTA is the North American Free Trade Agreement, negotiated among the Canada, Mexico, and the
United States.
d. The U.S.-Canada FTA was expanded into the NAFTA.
Summary of Key Provisions of the ACTA
The ACTA establishes a legal framework for IPR enforcement, increased international
cooperation, and enhanced enforcement measures. What follows is a summary of key provisions
of the ACTA.
Initial Provisions
The initial provisions chapter of the ACTA discusses the nature and scope of the agreement, its
relationship to existing agreements (including the TRIPS Agreement) and domestic laws,
provisions on privacy and disclosure of information, and definitions of terms used in the
agreement. Among other things, the chapter:
• states the ACTA shall not derogate from each Party’s obligations under existing
agreements;
• provides for the flexibility of each Party to implement more extensive IPR
enforcement than is required by the ACTA;
• provides for the flexibility of each Party to determine the appropriate method of
implementing provisions of the ACTA within its own legal system and practice;
• notes that the objectives and principles set forth in Part 1 of the TRIPS
Agreement, in particular Articles 7 (technology transfer) and 8 (public health),
apply to the ACTA; and
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• stipulates that the Agreement does not require each Party to apply the obligations
under the ACTA to an intellectual property that is not protected under its
domestic laws and regulations.
Legal Framework for Enforcement
The legal framework chapter includes general obligations for enforcement, civil enforcement,
border measures, criminal enforcement, and enforcement of IPR in the digital environment.
General Obligations
The general obligations section commits ACTA Parties to effective IPR enforcement action that
provides expeditious and deterrent remedies, avoids creating barriers to legitimate trade, and
provides for fair and equitable treatment for participants subject to enforcement procedures. The
section also requires that, in implementing the enforcement provisions, the Parties take into
account the proportionality of the seriousness of the infringement, the infringement of third
parties, and the applicable measures, remedies, and penalties.
Civil Enforcement
The civil enforcement section requires each Party to make civil judicial procedures concerning
IPR enforcement available. Among other provisions, this section requires each Party to provide
its judicial authorities with the authority to
• issue injunctions against a party to desist from an infringement and to prevent the
entry of infringing goods into the channels of commerce;
• order the infringer to pay the right holder damages adequate to compensate the
right holder for losses from infringement (section includes formulas for
calculating damages);
• order recovery of costs and attorneys’ fees at the conclusion of civil judicial
proceedings concerning IPR infringement;
• order the infringer, or alleged infringer, to provide information related to the
infringement to the right holder or judicial authorities;
• destroy infringing goods, as well as the materials used to manufacture or create
the infringing goods; and
• order provisional measures, such as seizures, to prevent an infringement from
occurring.
A footnote to the civil enforcement section states that Parties may exclude patents and protection
of undisclosed information from the scope of this section.
Border Measures
The border measures section concerns effective border enforcement of IPR in a manner that does
not discriminate among different forms of IPR and avoids creating barriers to legitimate trade.
Under this section, among other provisions, each Party:
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• shall adopt or maintain procedures with respect to import and export shipments,
under which customs authorities may act upon their own initiative to suspend the
release of suspect goods and, where appropriate, a right holder may request its
customs authorities to suspend the release of suspect goods;
• may adopt or maintain procedures with respect to suspect in-transit goods or in
other situations where the goods are under customs control, under which customs
authorities may act upon their own initiative to suspend the release of, or to
detain, suspect goods, and, where appropriate, a right holder may requests its
competent authorities to suspend the release of, or to detain, suspect goods;
• shall adopt or maintain procedures by which its competent authorities may
determine IPR infringement in a reasonable period of time;
• shall provide its competent authorities with the authority to order the destruction
of infringing goods and to impose administrative penalties; and
• may authorize its competent authorities to provide a right holder with
information about specific shipments of goods to assist in detecting infringing
goods.
Criminal Enforcement
The criminal enforcement section requires that each Party provide for criminal procedures and
penalties to be applied at least in cases of willful trademark counterfeiting or copyright (or related
rights) piracy on a commercial scale (including the willful importation or exportation of such
goods). This section requires each Party to
• provide penalties, including imprisonment and monetary fines, that serve as
deterrents to future acts of infringement;
• provide its competent authorities with the authority to order the seizure of
suspected counterfeit trademark or pirated copyright goods, as well as related
materials;
• provide its competent authorities with the authority to order the forfeiture or
destruction of counterfeit trademark and pirated copyright goods, as well as of
the materials used to create the goods and the assets derived from the infringing
activity;
• provide its judicial authorities with the right to order the seizure and forfeiture of
equivalent assets derived from, or obtained directly or indirectly through, the
infringing activity; and
• provide that, in appropriate cases, its competent authorities may act upon their
own initiative to initiate investigation or legal action with respect to the criminal
offenses for which the Party provides criminal procedures and penalties.
Enforcement of IPR in the Digital Environment
The digital enforcement section discusses obligations for enforcement of copyrights and related
rights over digital networks. Among other provisions, this section provides that
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• each Party shall ensure that enforcement procedures, to the extent set forth in the
civil and criminal enforcement sections of the agreement, permit effective
enforcement action against IPR infringement in the digital environment,
including for infringement of copyright or related rights over digital networks;
• the enforcement procedures shall be enacted in a manner that avoids the creation
of barriers to legitimate activity and preserves the fundamental principles of
freedom of expression, fair process, and privacy;
• a Party may provide, in accordance to its laws and regulations, its competent
authority with the authority to order an online service provider to disclose to a
right holder identifying information related to a subscriber whose account was
allegedly used for infringement; and
• each Party shall provide adequate legal protection and effective legal remedies
against the circumvention of effective technological measures (used by right
owners to prevent the use of their copyrighted works in unwanted ways) and to
protect electronic rights management information, and also may adopt limitations
and exceptions in implementing these remedies.
Enforcement Practices
The enforcement practices chapter focuses on the methods used by Parties to apply IPR
enforcement laws. This chapter provides that
• each Party shall promote the development of enforcement expertise within its
competent authorities, the collection and analysis of statistical data and other
information concerning IPR infringement and best practices for
preventing/combating infringement, and the development of formal and informal
mechanisms whereby competent authorities may receive input from right holders
and other relevant stakeholders;
• the competent authorities of each Party may consult with relevant stakeholders
and the competent authorities of other Parties to manage IPR infringement risks
at the border and share information with the competent authorities of other
Parties on border enforcement of IPR (including relevant information to better
identify and target shipments);
• each Party shall take appropriate measures to promote transparency in its
administration of its IPR enforcement system;
• each Party shall, as appropriate, promote public awareness of the importance of
respecting IPR and the negative effects of IPR infringement; and
• in the destruction of infringing goods, each Party shall take environmental
considerations into account.
International Cooperation
The international cooperation chapter discusses how Parties may work together to address
challenges in cross-border trade in counterfeit and pirated products. The chapter provides that
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• the Parties shall promote cooperation, where appropriate, among their competent
authorities responsible for IPR enforcement;
• each Party shall endeavor to exchange information, including statistical data and
information, best practices, information on IPR-related legislative and regulatory
measures, with other Parties;
• each Party shall endeavor to assist in capacity building and technical assistance to
other Parties in enhancing IPR enforcement; and
• each Party shall strive to avoid unnecessary duplication in international
cooperation activities.
Institutional Arrangements
The institutional arrangement chapter establishes an ACTA Committee to review the
implementation and operation of the agreement, proposed amendments to the agreement, and the
terms of accession to the ACTA of any WTO Member. Among other provisions, the Committee
shall take decisions by consensus (except as decided by the ACTA Committee by consensus) and
shall establish a mechanism for consultations on any matter affecting the implementation of the
ACTA.
Final Provisions
The ACTA shall remain open for signature by participants in its negotiations and by any other
WTO Members the participants may agree to by consensus from May 1, 2011, until May 1, 2013.
The agreement shall enter into force 30 days after the date of deposit of the sixth instrument of
ratification, acceptance, or approval by participants. WTO Members may apply to join the
agreement after May 1, 2013.
U.S. Involvement and Objectives
Involvement of Administration and Congress
The United States conducted the ACTA negotiation through the Office of the United States Trade
Representative (USTR), which is located in the Executive Office of the President (EOP). The
USTR has the lead on negotiating U.S. trade agreements in international forums. It crafts U.S.
trade policy through an interagency process that includes the Departments of Commerce, Justice,
State, and the Treasury, among other agencies. The USTR also consults its formal trade advisory
groups, key congressional committees, and various private sector, non-governmental, and civil
society stakeholder groups.
The Bush Administration began, and the Obama Administration continued, negotiation of the
ACTA as an executive agreement, meaning that the agreement would not be subject to
congressional approval, unless it were to require statutory changes to U.S. law. According to the
USTR, the United States negotiated the ACTA under a premise of consistency with U.S. law.23
23 Meeting with USTR official, January 22, 2010.
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The USTR further states that the ACTA is consistent with existing U.S. law—including U.S.
copyright, patent, and trademark laws—and does not require a change to U.S. law for its
implementation in the United States.24 As such, the USTR maintains that ACTA does not require
the enactment of implementing legislation from Congress, and contends that the United States
may enter into and carry out the requirements of the ACTA under existing legal authority, as it has
done with other trade agreements.25
The congressional role in the ACTA is rooted in the U.S. Constitution. ACTA concerns both the
regulation of foreign commerce and IPR, which are subject to congressional power under the
Constitution. Article 1, Section 8 of the Constitution provides Congress with the power to “to
regulate Commerce with foreign Nations” and to “promote the Progress of Science and useful
Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their
respective Writings and Discoveries.” In addition, it empowers Congress to “make all Laws
which shall be necessary and proper for carrying into Execution the foregoing Powers, and all
other Powers vested by this Constitution in the Government of the United States, or in any
Department or Officer thereof.” Although Congress has established a consultative role for itself in
statute with regard to certain trade agreements in the past,26 it has not done so with the ACTA.
However, Congress has played an oversight and consultative role during the ACTA negotiation
process, and also can engage in oversight of the implementation of the ACTA.
The use of an executive agreement to conduct the ACTA negotiations may be considered a
departure from the way that the United States has pursued IPR goals in other international trade
negotiations. In general, the United States has advanced IPR goals internationally as part of
congressional-executive trade agreements or treaties, subject to congressional approval.27
U.S. Motivations for Negotiating the ACTA
The United States has had long-standing concerns about the rise in global IPR infringement,
which can impose substantial costs to U.S. firms and pose risks to U.S. consumers. The costs of
research and development are high for many IPR-based industries. In contrast, IPR infringement
is characterized by low risks, little initial capital investment, and a high profit margin. The
development of technologies and products which can be easily duplicated, such as digital media,
has led to an increase in piracy. Growing Internet usage also has contributed to the distribution of
counterfeit and pirated products. Additionally, in some countries, civil and criminal penalties
often are not sufficient deterrents for counterfeiting and piracy.
The protection and enforcement of IPR internationally is a major component of U.S. trade policy,
due to the importance of IPR to the U.S. economy and the potentially negative commercial, health
and safety, and security consequences associated with counterfeiting and piracy. What follows is a
24 USTR, ACTA: Meeting U.S. Objectives, October 2011, http://www.ustr.gov/about-us/press-office/fact-
sheets/2011/september/acta-meeting-us-objectives.
25 The USTR points to agreements such as “both broad trade pacts like the 1947 General Agreement on Tariffs and
Trade, and agreements specifically addressing trade-related intellectual property rights, including those concluded with
Ecuador, Hungary, Jamaica, and Latvia.”
26 See, for example, the Bipartisan Trade Promotion Authority Act (BTPAA) of 2002.
27 CRS Report 97-896, Why Certain Trade Agreements Are Approved as Congressional-Executive Agreements Rather
Than as Treaties, by Jeanne J. Grimmett.
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survey of some of these key rationales—economic, health and safety, and security—cited by the
United States as motivations for negotiating the ACTA.
Economic Rationale
One major rationale for U.S. participation in the ACTA negotiations is the economic importance
of IPR in the U.S. economy and the adverse impact of counterfeiting and piracy on the U.S.
economy. Adequate protection and enforcement of IPR are considered to play a key role in
promoting innovation, which is viewed as an important source of the competitiveness of many
industries in the United States and the other knowledge-based economies involved in the ACTA
negotiations. Advocates of a strong international IPR regime claim that counterfeiting and piracy
inflict billions of dollars of revenue and trade losses annually on legitimate IPR-based
industries.28
While the United States and other participants to the ACTA claim that the magnitude of trade in
counterfeit and pirated goods and the associated economic losses are substantial, it is difficult to
quantify these assertions. The very nature of IPR infringement—secretive and illicit—makes it
difficult to track production and trade in counterfeit and pirated goods. Compared to infringement
of “tangible” goods, infringement of digital media may be even more difficult to track, as such
goods increasingly are disseminated by the Internet, further complicating data collection efforts.
In some cases, companies may be reluctant to release information about IPR infringement
problems that they face with their branded products, out of concern that such public information
may affect the marketing of their products.29
On the opposing side, some question the commercial rationale for the ACTA. Some observers
point out that many of the estimates for losses associated with IPR infringement are generated by
industry groups, which may have self-interested motivations.30 Some analysts question the
proposition that sales of pirated goods translate directly into revenue losses for legitimate firms.
For example, some consumers who purchase an IPR-infringing product may not be able or
willing to purchase the legitimate version of the product at the market price offered absent IPR
infringement. In addition, some advocates of civil liberties assert that government discussions
about ACTA may not be fully evaluating the economic and commercial benefits of exceptions and
limitations to exclusive rights, such as “fair use” exceptions in U.S. copyright law.
Moreover, some public interest groups argue that IPR protection and enforcement have tilted
disproportionately in favor of private rights at the expense of broader economic and social
welfare. Some critics assert, for example, that while IPR protection and enforcement may
promote innovation, unbalanced IPR rules may stifle the free flow of information.31
28 USTR, "Ambassador Ron Kirk Announces Plan to Move Forward with the Negotiation of the Anti-Counterfeiting
Trade Agreement (ACTA)," press release, June 22, 2009, http://www.ustr.gov/about-us/press-office/press-
releases/2009/june/ambassador-ron-kirk-announces-plan-move-forward-negot. USTR, "Remarks by Ambassador Ron
Kirk at the Global Intellectual Property Center Annual Summit," press release, September 30, 2009.
29 Kevin Outterson and Ryan Smith, "Counterfeit Drugs: The Good, the Bad, and the Ugly," Albany Law Journal of
Science and Technology, vol. 525 (2006).
30 Monika Ermert, "Speculation Persists on ACTA as First Official Meeting Concludes," Intellectual Property Watch,
June 5, 2008. Robin Gross, IP Justice White Paper on the Proposed Anti-Counterfeiting Trade Agreement (ACTA), IP
Justice, March 25, 2008, p. 6.
31 For example, see Electronic Frontier Foundation (EFF), https://www.eff.org/issues/acta.
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Health and Safety Rationale
A second major rationale of U.S. participation in the ACTA negotiation is health and safety
concerns stemming from counterfeiting and piracy. Advocates of the ACTA argue that counterfeit
products, such as fake medicines or auto parts, may be substandard and pose threats to the health
and safety of consumers. In contrast, some public health advocates maintain that there has been a
conflation of counterfeiting of goods with the health threats posed by those goods. It is
conceivable that a medicine can be legitimate, not be infringing on an IPR, and still pose health
and safety threats if it is substandard. Conversely, it also is conceivable that a medicine can be
counterfeit—for instance, violating a trademark—and not pose health and safety threats. In
addition, some express concern that increasing IPR protection and enforcement, while providing
long-term incentives for innovation and research and development in new medicines, may pose
challenges for public health, such as access to affordable medicines.
Security Rationale
A third rationale for the U.S. involvement in the ACTA centers on security concerns.
Counterfeiting and piracy may be associated with broader forms of criminal activity.32 Organized
crime syndicates may find the immense profits derived from copyright infringement to be highly
attractive. Some have linked copyright piracy to other illicit activities conducted by organized
crime syndicates, such as drug smuggling, trade in illegal arms, and money laundering.33 Others
argue that such claims are tenuous and based more on anecdotal information than quantifiable
data. They also argue that, while there may be isolated incidences of IPR tied to organized
criminal syndicates, this is not a widespread problem.34
U.S. Trade Policy and Building Blocks for the ACTA
The United States pursues IPR objectives using a range of trade policy mechanisms, including
multilaterally through the WTO; regionally and bilaterally through the negotiation of FTAs; and
domestically through U.S. trade laws.35 What follows is a discussion of some of the building
blocks for the ACTA found in U.S. trade policy.
WTO TRIPS Agreement
The ACTA is intended to build on the commitments set forth by the WTO Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRIPS Agreement), the prevailing multilateral
framework for creating international rules on protection and enforcement of IPR. The United
32 USTR, 2009 Special 301 Report, April 30, 2009.
33 Gregory F. Treverton et al., Film Piracy, Organized Crime, and Terrorism, RAND Corporation, 2009. Organization
for Economic Cooperation and Development, The Economic Impact of Counterfeiting and Piracy, June 2008,
http://www.oecd.org/document/4/0,3746,en_2649_34173_40876868_1_1_1_1,00.html.
34 Carsten Fink and Carlos M. Correa, The Global Debate on the Enforcement of Intellectual Property Rights and
Developing Countries, International Centre for Trade and Sustainable Development, February 2009,
http://www.iprsonline.org/New%202009/fink-correa_feb2009.pdf.
35 For additional information on U.S. trade policy mechanisms used to advance IPR protection and enforcement, see
CRS Report RL34292, Intellectual Property Rights and International Trade, by Shayerah Ilias and Ian F. Fergusson.
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States has posited that the negotiation of a new agreement, that is, the ACTA, could fill in gaps in
the TRIPS Agreement for addressing IPR challenges.36 For example, some contend that the 1995
TRIPS Agreement does not adequately address IPR infringement issues associated with new and
emerging technologies or provide effective tools for combating the proliferation of piracy in
digital media.
The TRIPS Agreement seeks a balance of rights and obligations between private rights and the
public obligation “to secure social and cultural development that benefits all.”37 Although the
TRIPS Agreement has been in existence for more than a decade, there remain a number of
ongoing debates about the legitimacy and fairness of the agreement in balancing these rights.
Regional and Bilateral Free Trade Agreements
The United States pursues international IPR protection through regional and bilateral FTAs. In
negotiating recent FTAs, the USTR frequently has sought levels of protection that exceed the
TRIPS Agreement, in areas such as patents and copyrights. The pursuit of these so-called
“TRIPS-plus” provisions has generated an ongoing debate about the appropriate balance of rights
and obligations under an IPR regime. Following the May 10, 2007, Bipartisan Trade Agreement
between congressional leadership and the Bush Administration, some IPR provisions in the U.S.
FTAs with Peru, Panama, and Colombia were revised, particularly for pharmaceutical-related IPR
provisions.
U.S. FTAs have served as models for the ACTA. The United States has stated its interest in
modeling the ACTA on the IPR enforcement provisions found in the U.S. FTAs with Australia,
Morocco, Singapore, and South Korea. These agreements include provisions on “criminal
penalties and procedures in cases of willful trademark counterfeiting or copyright piracy on a
commercial scale; border measures in cases involving trademarks and copyrights; and civil
remedies for all intellectual property rights (e.g., patent, trademark, copyright), with appropriate
limitations that ensure consistency with U.S. law.”38 For the United States, the ACTA represents
an opportunity to expand the stronger IPR commitments found in these bilateral agreements to a
broader set of countries.39
While the title of the proposed agreement denotes it as a “trade agreement,” the ACTA differs in
nature from U.S. regional and bilateral FTAs, which aim to comprehensively eliminate and
reduce barriers to trade. In contrast, the ACTA is a plurilateral agreement that is narrowly focused
on IPR and has been portrayed by the USTR as a leadership and standard-setting agreement.
36 USTR, The Anti-Counterfeiting Trade Agreement – Summary of Key Elements Under Discussion, updated November
6, 2009.
37 Pascal Lamy, “Trade-Related Aspects of Intellectual Property Rights – Ten Years Later,” Journal of World Trade,
October 2004, p. 925.
38 Letter from The Honorable Ron Kirk, U.S. Trade Representative, to The Honorable Ron Wyden, U.S. Senator,
January 28, 2009.
39 Meeting with USTR official, January 22, 2010.
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Points of Debate: Issues for U.S. Policy
The ACTA negotiation has spurred debates among various stakeholder groups within and among
the various countries on both process and substance. Certain stakeholders have voiced concerns
about the negotiation’s scope, transparency, and inclusiveness. Members of the U.S. business
community, such as the entertainment, pharmaceutical, luxury goods, and high technology
industries, largely have been supportive of the ACTA. They assert that stronger international IPR
protection and enforcement through the ACTA are critical for their competitiveness. Other
business groups, including Internet service providers, have expressed concerns about the digital
enforcement provisions of the proposed agreement. In addition, various civil society groups, such
as public health and consumer rights advocates, have voiced concerns about the implications of
the ACTA for trade in legitimate goods, consumer privacy, and free flow of information. With the
existence of the WTO TRIPS Agreement and other international agreements on IPR, some
question the rationale behind creating a new agreement to combat counterfeiting and piracy. The
following section discusses in greater detail some of these key points of debate.
Scope of the Proposed Agreement
As titled, the ACTA would suggest a focus exclusively on combating counterfeit goods. While
definitions of “counterfeiting” vary, the term tends to refer to trademark infringement of physical
goods. For example, in the WTO TRIPS Agreement, the term “counterfeiting” is used in
conjunction with trademark infringement. As a result, when the agreement was proposed initially,
many observers believed that it would focus primarily on combating trade of fake medicines,
toys, auto parts, computer parts, and the like. However, as ACTA negotiations progressed, the
scope of IPR in the agreement broadened from beyond traditional notions of “counterfeiting,” to
also include piracy. While definitions of “piracy” vary, the term generally refers to infringement
of copyrights.
According to press reports, ACTA negotiating parties differed on the range of intellectual
property that should be covered in the various provisions of the agreement. For example, the
European Union reportedly advocated for the inclusion of patents in the civil enforcement
section. The EU argued that exclusion of patents from civil remedies would limit the extent to
which certain industries, such as the automotive, machinery, pharmaceutical, and agro-chemical
industries, may be able to take advantage of the ACTA. The United States opposed the inclusion
of patents in the civil enforcement section; some have speculated that the opposition was due to a
concern that the inclusion would contradict U.S. patent law.40 The final ACTA text includes a
footnote to the civil enforcement section which states, “A Party may exclude patents and
protection of undisclosed information from the scope of this Section.” Given this exemption, it
remains to be seen which countries exclude patents from the scope of their civil enforcement. The
United States has said that its implementation of the ACTA would exclude patents.
As another example, the EU and the United States also took differing positions regarding the
inclusion of trademarks in the digital enforcement section of the ACTA. The EU supported the
inclusion of trademarks, along with copyrights, in the scope of the digital enforcement section,
expressing concern about the volume of Internet sales of goods infringing on European
40 "De Gucht Stands Firm on ACTA Scope, No Compromise Yet Seen With U.S.," World Trade Online, October 22,
2010.
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trademarks. In contrast, the United States opposed the inclusion of trademarks in this section;
some have speculated that the opposition was due to a concern that the inclusion would contradict
U.S. law. For instance, some U.S. stakeholders argued that inclusion of trademarks in this section
would go beyond the U.S. Digital Millennium Copyright Act (DMCA), which focuses only on
copyright piracy.41 The digital enforcement section of the final ACTA text largely excludes
trademark counterfeiting, focusing primarily instead on infringement of copyright or related
rights over digital networks. However, it does include a provision stating that a Party may provide
its competent authorities with the authority to order an online service provider to disclose
information to a right holder sufficient to identify a subscriber whose account was allegedly used
for trademark or copyright infringement and where such information is being sought to protect or
enforce those IPR.
Transparency of and Stakeholder Input in Negotiation
The ACTA negotiation has spurred debates about the transparency of the negotiation process.
Among some groups, there is a perception that the ACTA negotiation lacked sufficient public
transparency and meaningful public input.42 Some critics assert that the negotiating governments
engaged in close consultation with right holders, including representatives of the entertainment,
software, apparel, and pharmaceutical industries, but did not engage in extensive consultations
with consumer and public interest groups.43 Some observers have commented that the level of
secrecy in the ACTA negotiations was unprecedented, compared to other international trade
negotiations. They point out that draft texts for other international trade treaties, such as the WTO
TRIPS Agreement, were released during their respective negotiation. Some Members of Congress
and a range of stakeholders have called on USTR to enhance the transparency of the ACTA
negotiations.44 For instance, in a letter addressed to USTR, Senators Bernard Sanders and Sherrod
Brown called on USTR to allow the public to review and comment on substantive proposals for
the proposed ACTA.45
During the early negotiating rounds, USTR refrained from publicly circulating draft text of the
ACTA, citing security reasons. U.S. Trade Representative Kirk has defended the ACTA
negotiation process, maintaining:
As is customary during negotiations among representatives of sovereign states, the
negotiators agreed that they would not disclose proposals or negotiating texts to the public at
large, particularly at earlier stages of the negotiation. This is done to allow participants to
41 Ibid.
42 For example, see letter from The Honorable Ron Wyden, U.S. Senator, to The Honorable Ron Kirk, U.S. Trade
Representative, January 6, 2010.
43 "Numerous Firms Reviewed Draft Treaty Proposal on IP," CongressDaily/A.M., October 16, 2009.
44 The transparency issue has surfaced for other negotiating parties as well. For instance, in the EU, such criticisms
came to a head on January 26, 2012, when the European Parliament’s rapporteur on the ACTA, MEP Kader Arif of the
center-left Socialists and Democrats (S&D) parliamentary group, resigned his position, charging that the negotiations
lacked transparency and sufficient consultations with civil society. Fellow S&D MEP David Martin has since been
appointed as the EP’s rapporteur on the ACTA.
45 Letter from The Honorable Bernard Sanders, U.S. Senator, and The Honorable Sherrod Brown, U.S. Senator, to The
Honorable Ron Kirk, U.S. Trade Representative, November 23, 2009.
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exchange views in confidence, facilitating the negotiation and compromise that are necessary
to reach agreement on complex issues.46
USTR reportedly shared a draft of the digital enforcement chapter with cleared advisors in the
USTR formal trade advisory system and selected industry and public interest groups, who were
required to sign non-disclosure agreements in order to view the negotiating text.47 Moreover, the
ACTA negotiation process became more transparent as the negotiation advanced. USTR publicly
released a summary of key elements under discussion in November 2009, following the 6th round
of negotiations; a draft text in April 2010, following the 8th round of negotiations; a consolidated
text in October 2010, following the 11th and final round of negotiations; a finalized text on
November 15, 2010, subject to legal verification; and a final text in May 2011. As additional
examples of increasing transparency, USTR pointed to a number of steps it took in 2009,
including establishing a dedicated ACTA web page on the USTR website; releasing a public
summary of issues under negotiation; and releasing public agendas on the ACTA web page prior
to each negotiating round.48
USTR also contends that it consulted sufficiently with Congress and outside stakeholders. It has
stated that the ACTA is the “product of close collaboration between the Administration and
Congress as well as intensive consultations with U.S. industry and nongovernmental
organizations.”49 In terms of congressional consultation, USTR has pointed to ACTA-related
meetings and conference calls it has held with congressional staff and Members to provide
updates on ACTA developments and to solicit views to ensure that the ACTA reflects
congressional perspectives.50 In terms of consulting with other stakeholders, USTR has noted it
solicited advice from a broad range of experts, including representatives of right holders, Internet
intermediaries, and non-government organizations.51 Additionally, it issued a Federal Registrar
notice in February 2008 requesting public comments on the ACTA and subsequently invited
stakeholders to a public meeting that it would hold, in conjunction with the Department of
Commerce, to discuss the ACTA.52
Range of Participants
The range of participants included in the ACTA negotiation was subject to controversy. One
element of debate was the absence of developing country participation. Some groups are critical
46 USTR, "Ask the Ambassador," question on the ACTA negotiation process, September 23, 2009.
47 "Numerous Firms Reviewed Draft Treaty Proposal on IP," CongressDaily, October 14, 2009.
48 Letter from The Honorable Ron Kirk, U.S. Trade Representative, to The Honorable Ron Wyden, U.S. Senator,
January 28, 2010, http://www.ustr.gov/webfm_send/1700. For access to ACTA texts, see Office of the U.S. Trade
Representative, "Previous ACTA Texts," http://www.ustr.gov/trade-topics/intellectual-property/anti-counterfeiting-
trade-agreement-acta/previous-acta-texts.
49 Letter from The Honorable Ron Kirk, U.S. Trade Representative, to The Honorable Ron Wyden, U.S. Senator,
December 7, 2011.
50 Ibid.
51 Letter from The Honorable Ron Kirk, U.S. Trade Representative, to The Honorable Ron Wyden, U.S. Senator,
January 28, 2010, http://www.ustr.gov/webfm_send/1700. For access to ACTA texts, see Office of the U.S. Trade
Representative, "Previous ACTA Texts," http://www.ustr.gov/trade-topics/intellectual-property/anti-counterfeiting-
trade-agreement-acta/previous-acta-texts.
52 USTR, "Anti-Counterfeiting Trade Agreement (ACTA): Request for Public Comments," 73 Federal Register 8910-
8911, February 17, 2008. USTR, "Anti-Counterfeiting Trade Agreement (ACTA): Notice of Public Meeting," 73
Federal Register 51860-51861, September 5, 2008.
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that the ACTA was negotiated as a plurilateral agreement primarily among largely advanced
industrialized countries.53 Some developing country advocates express concern that the ACTA
negotiation did not sufficiently take into account the interests, views, and needs of developing
countries. For instance, during WTO TRIPS Council meetings, China and India have stated that
the ACTA, among other things, could weaken the balance of rights, obligations, and flexibilities
that have been negotiated in WTO agreements; create barriers to trade; constrain flexibilities in
the TRIPS Agreement, such as for public health and trade in generic medicines; limit
government’s freedom to allocate resources for IPR by compelling them to focus on enforcement;
and lead to the incorporation of ACTA standards in future regional and other agreements. Other
developing countries not party to the ACTA negotiation also have espoused similar views.54
The selection of certain countries as participants in the ACTA has been another element of debate.
Some observers have questioned why countries designated in the USTR’s Special 301 report for
having inadequate IPR protection and environment are involved in the ACTA. The 2011 Special
301 Report included Canada on the Priority Watch List, and Mexico and several European Union
members (Finland, Romania, and Spain) on the Watch List.55 According to the USTR,
participation in the ACTA may help countries identified in the Special 301 report to attain their
goals of enhancing IPR enforcement.56 At the same, some observers also have questioned the
effectiveness of an agreement that does not include countries like China and Russia (both
designated in the Special 301 Report), which are considered to be major sources of counterfeiting
and piracy.
ACTA negotiation parties have discussed expanding the ACTA to include other interested
countries in the future.57 The final text of the agreement includes accession terms, stating that
after the May 1, 2011-May 1, 2013, signatory period for parties to the ACTA negotiation, any
member of the WTO may apply to accede to the agreement. The ACTA Committee, which
oversees the agreement and accession of new members, is to decide upon the terms of accession
for each applicant. USTR has expressed hope that other countries will join the ACTA over time,
“reflecting the growing international consensus on the need for strong IPR enforcement.”
However, some critics speculate that developing countries would be invited to join the ACTA at a
point when the agreement has largely been “locked-in” and when significant changes could not be
introduced. Some groups voice concern that developing countries will feel pressured to adhere to
the ACTA in order to obtain trade benefits from ACTA participants.58
53 Monika Ermert, "Embattled ACTA Negotiations Next Week in Geneva; US Sees Signing This Year," Intellectual
Property Watch, May 2009.
54 World Trade Organization (WTO), "Council Debates Anti-Counterfeiting Talks, Patents o Life," press release, June
8 and 9, 2010, http://www.wto.org/english/news_e/news10_e/trip_08jun10_e.htm."China Slams Nearly Completed
ACTA, Questions Its WTO Compatibility," World Trade Online, November 4, 2010.
55 The “Priority Watch List” and “Watch List” are administrative categories created by the USTR for country
identification in the Special 301 report. USTR, 2011 Special 301 Report, April 2011.
56 USTR, Trade Facts: Anti-Counterfeiting Trade Agreement (ACTA), August 4, 2008, p. 3,
http://www.ustr.gov/sites/default/files/uploads/factsheets/2008/asset_upload_file760_15084.pdf.Ibid..
57 USTR, The Anti-Counterfeiting Trade Agreement – Summary of Key Elements Under Discussion, April 6, 2009.
58 Robin Gross, IP Justice White Paper on the Proposed Anti-Counterfeiting Trade Agreement (ACTA), IP Justice,
March 25, 2008.
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Impact on Legitimate Trade and Consumer Activity
The ACTA negotiation has generated debate about the potential impact of increasing IPR
protection and enforcement standards on legitimate trade and consumer activities. This speaks to
a long-standing broader debate about the perceived trade-off between the protection of IPR and
the facilitation of trade. IPR-based industries have voiced strong support for the ACTA,
contending that its enhanced standards will contribute to greater economic growth and
employment. Other stakeholders, including some consumer rights, public health, and civil liberty
groups, contend that ACTA provisions may interfere with trade in legitimate goods and consumer
activity. Negotiating parties maintain that the ACTA respects the WTO Doha Declaration on
Public Health, is not intended to interfere with citizens’ fundamental rights or undermine civil
liberties, and contains safeguards to protect against creating barriers to legitimate trade.
Following the 9th round of negotiation, USTR released a statement saying:
ACTA will not interfere with a signatory’s ability to respect fundamental rights and liberties.
ACTA will be consistent with the WTO Agreement on Trade Related Aspects of Intellectual
Property Rights (TRIPS Agreement) and the Declaration on TRIPS and Public Health.
Participants reiterated that ACTA will not hinder the cross-border transit of legitimate
generic medicines, and reaffirmed that patents will not be covered in the Section on Border
Measures. ACTA will not oblige border authorities to search travelers’ baggage or their
personal electronic devices for infringing materials.59
One flashpoint in the debate has been the ACTA’s potential impact on consumer privacy and the
free flow of information. For example, some critics charge that digital enforcement provisions of
the ACTA would require Internet Service Providers (ISPs) to terminate customers’ Internet
accounts after repeated allegations of copyright infringement, a provision akin to a “three-strikes”
law introduced by the French government. Such provisions reportedly have been controversial in
the European Union, where some members of Parliament consider Internet access to be a
fundamental human right that should only be terminated by judges.60 While many IPR-based
industries argue that increasing ISP involvement in IPR enforcement is critical to combating
online piracy, critics contend that requiring ISPs to filter communication places undue burdens on
ISPs. Some civil liberties groups have expressed concern about what they perceive as a low
threshold for terminating consumers’ Internet access; they assert that proof of online piracy, not
allegations, should be the requirement for termination of Internet accounts.
In recent months, the debate about ISP obligations related to IPR infringement has been
heightened by legislation introduced in the 112th Congress—the Prevent Real Online Threats to
Economic Creativity and Theft of Intellectual Property Act (PROTECT IP Act, S. 968) and the
Stop Online Piracy Act (SOPA, H.R. 3261)— to address online piracy, which include some
provisions similar to the ACTA.61 Following opposition by civil society groups and several
Internet-based companies, congressional consideration of these bills has been postponed.
59 USTR, "The Office of the U.S. Trade Representative Releases Statement of ACTA Negotiating Partners on Recent
ACTA Negotiations," press release, July 2010, http://www.ustr.gov/about-us/press-office/press-
releases/2010/june/office-us-trade-representative-releases-statement-act.
60 Erik Wasson, "EU ACTA Document Reveals Little Agreement At Seventh Round of Talks," Inside U.S. Trade,
February 19, 2010.
61 See CRS Report R42112, Online Copyright Infringement and Counterfeiting: Legislation in the 112th Congress, by
Brian T. Yeh.
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In addition, some commentators have been concerned with the extent to which U.S. “fair use”
practices would be maintained under an agreement. There has been speculation about potential
ACTA provisions on providing remedies against circumvention of technological protection
measures (TPM) used by right owners to prevent the use of their copyrighted works in unwanted
ways. Such provisions may have implications for the free flow of information.
The final ACTA text does not include provisions similar to a “three-strikes” rule, or similar
“notice-and-takedown” rules. Rather, the final text requires ACTA participants to give their
competent authorities to order ISPs to disclose expeditiously to a right holder sufficient
information to identify a subscriber whose account was allegedly used for infringement. The
ACTA does contain provisions on TPM. However, the ACTA text broadly states that the digital
enforcement procedures “shall be implemented in a manner that avoids the creation of barriers to
legitimate activity, including electronic commerce, and consistent with that Party’s law, preserves
fundamental principals such as freedom of express, fair process, and privacy.”
Another flashpoint has been concerns that the ACTA could undermine trade in legitimate goods.
One prominent aspect of this debate are border enforcement provisions in the ACTA under which
governments may give customs officials ex-officio authority to seize and detain goods suspected
of infringing IPR. Some countries that are participants to the ACTA negotiation currently do not
empower their customs officials with such ex-officio authority. Others grant this authority in
limited cases. In the United States, the U.S. Customs and Border Protection (CBP) is authorized
to make determinations that goods violate copyrights and trademarks and seize such goods.
However, the CBP is not authorized to make determinations of patent violations.62 In the case of
patents, CBP enforces exclusion and cease-and-desist orders issued by the U.S. International
Trade Commission (ITC) against patent-infringing goods.
Many business groups assert that granting customs officials ex-officio authority is critical to
preventing the flow of counterfeit and pirated goods across borders. This would ensure that
customs officials can engage in more proactive efforts to combat trademark counterfeiting and
copyright piracy, without having to wait for a formal complaint from a private party or right
holder. Some critics, such as public interest and civil liberties groups, assert that such measures
would impose unnecessary or burdensome delays on the movement of goods across borders, raise
the costs of trade, and result in unduly impediments of personal travel.63
The ACTA negotiation included discussion of whether or not to include patents in the border
enforcement section, which especially lead to concerns that the ACTA could undermine legitimate
trade in generic medicines and public health. As patent inclusion was debated, some public health
advocates expressed concern that empowering customs authorities to make determinations about
patent violations could lead to the prevention or delay of exports and imports of legitimate
generic drugs.64 For instance, some groups contended that the ACTA may “interfere with
legitimate parallel trade in goods, including the resale of brand-name pharmaceutical products.”65
62 See CRS Report RS22880, Intellectual Property Rights Protection and Enforcement: Section 337 of the Tariff Act of
1930, by Shayerah Ilias.
63 USTR, The Anti-Counterfeiting Trade Agreement – Summary of Key Elements Under Discussion, updated November
13, 2009.
64 Meeting with Oxfam representative, October 27, 2009.
65 Letter from Essential Action et al. to Ambassador Susan C. Schwab, USTR, September 15, 2008.
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They point to recent seizures in Europe of legitimate generic medicines in-transit based on
industry concerns of counterfeiting.
In the end, the border enforcement section of the ACTA’s final text specifically states in a
footnote that patents and the protection of undisclosed information are excluded from the scope of
that section. Thus, the border enforcement section applies to other forms of IPR, such as
trademarks and copyrights. The applicability of trademarks to the border enforcement section has
continued to raise concerns among some public health advocates about access to medicines, such
as generic medicines.
Negotiation of ACTA as Stand-Alone Agreement
The ACTA was negotiated as a stand-alone agreement outside of the WTO, WIPO, and other
multilateral institutions involved in international IPR protection and enforcement. This approach
to the ACTA has generated debate. On the one hand, advocates suggest that negotiating the ACTA
outside of existing multilateral frameworks allowed the United States and other like-minded
countries to advance global IPR protection more efficiently and with greater flexibility. The
advancement of trade negotiations in multilateral venues has stalled in recent years. For example,
the WTO Doha Round of multilateral trade negotiation is at a standstill over country differences
on agricultural, industrial tariffs, and services. Meanwhile, WIPO members have not been able to
reach an agreement on potential new elements for discussion on the WIPO global patent agenda.66
ACTA negotiating parties also assert that the ACTA is an innovative agreement that would not
have fit under current multilateral frameworks.67 A fact sheet released by the USTR stated: “We
feel that having an agreement independent of a particular organization is an appropriate way to
pursue this project among interested countries. We fully support the important work of the G8,
WTO, and WIPO, all of which touch on IPR enforcement.”68 On the other hand, some critics
charge that the decision by ACTA participants to hold these negotiation outside of existing
multilateral frameworks was intended to bypass the concerns of developing countries or other
stakeholders representing various public interests.
Some observers question the status of the ACTA in the long term: Would the ACTA continue to
exist as a stand-alone agreement, or would the WTO or other international bodies incorporate the
ACTA? Negotiating parties have expressed hope that the WTO may incorporate ACTA standards
in the future. For example, Japanese trade officials have stated, “We very much want to make
ACTA a model for forming international rules within the WTO framework.”69 Some speculate
that if the ACTA becomes a part of the WTO, signing on to the ACTA could become a
requirement for WTO accession.
66 Daniel Pruzin, "No Agreement at WIPO on Patent Agenda; Developing Countries Push for Exceptions,"
International Trade Daily, February 9, 2010.
67 European Commission, "Q&As on the Anti-Counterfeiting Trade Agreement," January 2009,
http://trade.ec.europa.eu/doclib/docs/2009/january/tradoc_142040.pdf.
68 USTR, "Trade Facts: Anti-Counterfeiting Trade Agreement (ACTA)," August 4, 2008,
http://www.ustr.gov/sites/default/files/uploads/factsheets/2008/asset_upload_file760_15084.pdf.
69 Rick Mitchell, "Japan Trade Official Says ACTA Should Serve as Model for WTO Rules," Bloomberg BNA
Intellectual Property Law Resource Center, April 8, 2011.
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Effectiveness of a New Agreement on IPR
In light of the numerous existing international trade agreements and economic forums that
address global protection and enforcement of IPR, there are some questions about the “value-
added” of creating a new IPR agreement. Supporters point out that the ACTA builds on the WTO
TRIPS Agreement to establish enhanced standards of IPR protection and enforcement. They also
maintain that the ACTA is intended to fill in the gaps between current legal frameworks and
enforcement practices and emerging IPR infringement concerns, particularly in the case of IPR
infringement in the digital environment. In addition, they argue that establishing a contingency of
a sizeable group of countries that support stronger efforts to combat counterfeiting and piracy
could send a clear, powerful signal to the rest of the world about the importance of global IPR
protection and apply pressure on countries where counterfeiting and piracy continue to be serious
problems.70 A larger group of countries also may dispel the perception that the global
advancement of IPR efforts is primarily a unilateral U.S. initiative. Since the advent of the TRIPS
Agreement, the United States often has been perceived as a key champion of IPR.
Critics view the ACTA as potentially duplicative, arguing that the proposed elements of the ACTA
suggest significant overlap with the WIPO Internet treaties and the WTO TRIPS Agreement.
Some observers note that some countries have not fulfilled their obligations under these
international frameworks completely. From this perspective, they question the effectiveness of
pursuing new trade agreements and potentially directing greater financial or staff resources when
mechanisms currently exist to address the issues, but are not being utilized effectively.71
Still others question how much “teeth” an executive government-to-government agreement on
IPR protection and enforcement can have if it does not increase legal protections. Some counter
that, for many countries, IPR laws “on the books” are adequate, but shortcomings arise in
enforcement of those laws. The ACTA, they argue, can play a critical role in addressing these
gaps. Others point out that while the ACTA may not result in a statutory change in U.S. law, it
could have a significant impact on the global protection of intellectual property by resulting in the
need for other countries to change or enforce their laws. For instance, adhering to ACTA
provisions may result in Canada’s enforcement of IPR in the digital environment, a long-standing
issue between the United States and Canada.
Congressional Outlook
The 112th Congress may examine role of the Congress in the ACTA approval process beyond
oversight. Congress may choose to examine whether implementation of the ACTA without
congressional approval could raise constitutional issues, given that U.S. approval of international
agreements concerning foreign commerce and intellectual property rights fall under Article 1,
Section 8 powers of Congress in the U.S. Constitution.72 Possible U.S. entry-into-force of the
ACTA may raise a range of questions for Congress:
70 Delegation of the European Commission, "EU/NR 75/08: Anti-Counterfeiting: E.U., U.S. and Other Meet in
Washington to Advance ACTA," press release, July 31, 2008,
http://www.eurunion.org/eu/index.php?option=com_content&task=view&id=2418&Itemid=58.
71 IP Justice, "IP Justice Comments to USTR on the proposed Anti-Counterfeiting Trade Agreement," March 21, 2008.
72 For example, see letter from The Honorable Ron Wyden, U.S. Senator, to President Barack Obama, October 12,
2011, and letter from The Honorable Ron Wyden, U.S. Senator, to Mr. Harold Koh, Legal Advisor, U.S. Department of
(continued...)
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• What is the role of Congress in the ACTA approval process? Will congressional
activity regarding the ACTA extend beyond oversight? How would the ACTA
affect congressional action in areas covered by the agreement?73
• How does protection and enforcement of IPR rank among other national
priorities? Within the realm of combating counterfeiting and piracy, there also are
questions about what forms of IPR infringements should be given priority in
addressing. Rationales cited for the ACTA include the commercial losses
sustained by legitimate businesses from IPR infringement, as well as health and
safety concerns associated with counterfeit and pirated products. Among these
numerous concerns, what forms of infringement should be given priority if
resources are limited?
• What implications does the proposed ACTA have for the allocation of federal
funds? Would implementation of the ACTA require the appropriation of federal
funds, even though changes in federal laws are not necessarily required?
• What implications does the proposed ACTA have for the future of U.S. trade
policy? Does the ACTA set a precedent for conducting future efforts on IPR
protection and enforcement primarily or increasingly outside of multilateral
frameworks? How might provisions in the ACTA coincide or conflict with
negotiating objectives set by Congress in any future trade promotion authority
given to the President? Would accession to the ACTA be a requirement for
signatories to future U.S. regional and bilateral FTAs? And would a country’s
fulfillment of ACTA commitments affect USTR determinations for its Special
301 watch lists?
Author Contact Information
Shayerah Ilias
Analyst in International Trade and Finance
silias@crs.loc.gov, 7-9253
Acknowledgments
Raymond J. Ahearn, William H. Cooper, Ian F. Fergusson, Jeanne J. Grimmett, Mary Irace,
Wayne M. Morrison, and Brian Yeh provided input in the formulation of this report.
(...continued)
State, January 5, 2012.
73 It should be noted that Congress may enact legislation that is inconsistent or in conflict with a U.S. international
agreement and, if the legislation is signed by the President, the new statute would prevail as domestic law. At the same
time, the U.S. international obligation would remain and the United States might need to address concerns raised by
other agreement parties regarding the consistency of U.S. law with the agreement. See generally Restatement (Third) of
the Foreign Relations Law of the United States §115(a) (1987).
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