DFAT briefing on the current state of ACTA
Today I attended a briefing session on ACTA hosted by the Australian Department of Foreign Affairs and Trade (DFAT). I felt it was a good meeting, and I really got the sense that DFAT were interested in public participation. There was a good deal of frustration on both sides of the fence – participants expressed serious concerns about the lack of transparency in the negotiating process, and DFAT consistently repeated that they were bound by confidentiality agreements and could not divulge details of the draft text of the agreement. Participants in the Tokyo round of negotiations agreed that the full text of the agreement will only be made available after negotiations have been concluded and the text finalised. Understandably, there were a number of members of the audience who were hesitant to accept any of DFAT's assurances as to the content of the agreement without access to the negotiation documents.
Overall, whilst I think that the process is far too secretive, DFAT appear to have gone a long way to make available what they can, and they seem genuinely interested in hearing from interested parties in Australia. Unfortunately, input will be limited (blind) until negotiations are complete and the text finalised, but DFAT assures us that they are considering the issues thoroughly and there will be genuine opportunity to debate whether or not to sign at the end of the process.
The big points I would take away from the meeting are:
- Negotiations will go 'well into 2009';
- The Commonwealth Government is not seeking to drive domestic changes through ACTA. Overall, there do not appear to be any great changes to Australia's enforcement regime – it appears to be more focused on affecting other states;
- The Government intends to limit the effect of any treaty to trademark infringement and commercial scale copyright infringement;
- However, statutory damages for copyright infringement are on the table;
- Next meeting, in December, will consider internet distribution;
- Camcording is likely to be criminalised;
- There's still time to make relevant submissions to DFAT – indeed, they release a substantial amount of information once they receive the draft proposals before every negotiation round;
- DFAT has a copy of the Cutler report.
When pressed about the secretive process, Dr Nicholas Rodgers from DFAT noted that “the procedure is not an unusual one in trade negotiations, although it is more generally applied to free trade agreements and sub-multilateral groups.” I asked Dr Rodgers what the justifications could be for keeping the negotiations confidential in an intellectual property agreement, as opposed to a trade agreement. Dr Rodgers responded that Australia was not an original proponent of the process, and did not support the secretive manner in which negotiations are taking place. However, Dr Rodgers noted that in order for Australia to 'be in the tent' – to be involved in the negotiations – we had to abide by the ground rules set down for initial participation. The rules allow for a limited consultative group to be established, but DFAT do not like to make text available to some interest groups and not the wider Australian population. This, at least, we can be thankful for, given that rights owners typically dominate these smaller focus groups in other countries.
It seems that DFAT are genuinely interested in hearing submissions from the public, and have tried, within the bounds of the confidentiality agreement, to seek input from the public about the negotiations. Dr Rodgers repeatedly stressed that, without disclosing the draft text, we could ascertain the boundaries of the agreement by 'reading between the lines' of the calls for comments posted on the DFAT website in preparation of each round. Proposed draft text is circulated to DFAT several weeks before the negotiation rounds, and DFAT appear to make a thorough effort to extract the contentious issues in their calls for submissions. It seems, then, that the list of issues so far released by DFAT would appear to cover the main points of the agreement.
Dr Rodgers told us that he expected negotiations to continue 'well into 2009', although he did expect that each of the draft proposals would have been tabled and discussed at least once by the end of 2008. There are still proposals that DFAT has not seen. Once the text is finalised, DFAT will hold comprehensive public discussions, giving opportunity for public and parliamentary comment on the text of the agreement before Australia signs. It was repeatedly stressed that Australia was not bound to sign – we negotiate 'without prejudice' – and that the decision whether to sign or not will not be made until after the text has been released. It was noted from the floor, however, that it is sometimes extremely difficult for parties who have been heavily involved in the negotiation process to refrain from signing after negotiations have been concluded, which implies that public consultation after negotiation will be too late to be effective.
This brings us to a consideration of the substance of the agreement. Peter Treyde, from the Attorney-General's Department, insisted that Australia was “not seeking to drive domestic changes” through the ACTA process. Dr Rodgers insisted that it was not the intent of the government to include copyright infringement which is not on a commercial scale – explicitly saying that there will be no ipod searches at the border. The treaty is geared to be 'TRIPS Plus', and as Australia is already 'TRIPS Plus', DFAT and AGD are not considering many substantial changes to our domestic law. The point of the treaty, from Australia's perspective, would be to seek adoption by our neighbours of the same type of enforcement regime that we have. Representatives from Customs and the Australian Federal Police agreed that Australia's enforcement and border protection measures are effective, and that there was no real need to change; rather, they would influence the discussions in order to endorse the measures we already have. There was some mention of increased data sharing between enforcement agencies.
Dr Rodgers outlined the three rounds of negotiation that have already taken place. The first round considered extending customs application for suspension scheme beyond that required by TRIPS, and DFAT considered that TRIPS is 'broadly appropriate' in this regard. Ex officio customs searches – without notification from the rights holder – have been raised, and the point was made that Customs already has such a right in certain circumstances. There was a particular focus on targeting materials exported from Australia, or in-transit. TRIPS requires focus on the prevention of imports, but Australian Customs has some powers that go beyond TRIPS. The aim of the first round appeared to be strengthening border measures to reduce international trade in infringing material, and DFAT seemed to suggest that Australian Customs currently already does a good job in this regard ('Customs currently intercepts hundreds of thousands of pirated items each year').
The second round, in Washington, considered pre-established or statutory damages for infringement. Proponents are seeking a statutory formula or presumption for both the calculation of damages and for an account of profits. There was significant discussion on this point, as Australia does not currently prescribe statutory damages for copyright infringement. Dr Rodgers noted that statutory damages “are indeed controversial measures in the United States”, and that despite the fact that Australia is a small country, we may have allies in other countries and have more influence than we could expect in negotiations with the US. Mr Treyde noted that the practice in the US has led US copyright owners to threaten 'housewives' with highly inflated statutory damages in order to force settlements, and noted that the “US has that in its legislation, but as far as that issue has been discussed, there is certainly no agreement as to whether or not that is the way to go. For Australia, it would cause problems at a fundamental level as to the powers of the judiciary to assess and award damages, and it would be difficult to carve out IP” from the general scheme for damages.
When pressed on whether statutory damages would be in the final text of the agreement, we were told, rather ominously, that “given that the main countries that do the drafting are the US and Japan, it would be informative to look at the legislation from those countries.”
Dr Rodgers said that the issue of statutory damages is one of the key issues that DFAT are interested in hearing submissions on. He noted that DFAT considered that Australia's proceeds of crime provisions are an important tool of deterrence “and quite an apt one”. This is hopefully an indication that Australia will oppose the inclusions of statutory damages in the negotiation process.
This is probably the most significant piece of information to come out of the meeting today. It appears likely that the US will seek to have other countries adopt statutory damages regimes. We have seen these used in the US to provide extremely inflated damage awards against routine copyright infringement. The idea is obviously to discourage infringement, but it hasn't been effective at doing this, and merely results in manifestly unjust damage awards against those individuals copyright owners decide to target. DFAT appear yet to make up their mind whether they will oppose such measures in ACTA, and this would seem to be an important point on which submissions should be lodged.
The third round, held earlier this month in Tokyo, discussed criminal measures applied to copyright 'piracy' and trademark counterfeiting. Dr Rodgers informed us that DFAT considers Australia's criminal measures to be sufficient, and that there is not likely to be substantial change to these. He did note, however, that there is pressure to introduce criminal sanctions for recording of performances at public events, and in particular, the recording of films – 'camcording'. Any such criminalisation would be limited to profit making or commercial scale infringement.
Peter Coroneos, from the Internet Industry Association, asked whether there would be an effort to redefine the meaning of the notoriously loose 'commercial scale' provision in Australia's Copyright Act – specifically, whether we would be criminalising file-sharing. Peter Treyde responded that “there isn't a proposed draft text on these provisions. But I think that the main drafters seem to be that the agreement should be TRIPS plus. Australia's legislation is pretty much TRIPS plus already (as a result of AUSFTA). There is not really any suggestion that we should change this.” The Attorney-General's Department seed 'largely comfortable' with the negotiations so far on this point, as 'Australia already has those standards'. As for whether ACTA would be used to drive change in local laws, Mr Treyde noted that the Australian Government's position is that it is “not keen to adopt any measures which require substantial change” to our existing laws.
The representative from the Australian Federal Police noted that confiscation of proceeds of crimes was an important disincentive for commercial scale infringement, and that existing legislation is just about adequate. Where proceedings under the Australian Copyright Act are started by indictment, proceeds of crime can be confiscated, but not where proceedings are commenced summarily. He also noted that the Trade Mark Act was currently being reviewed to see whether offences could be brought up to the standard required for proceeds of crimes legislation to have effect.
The next negotiation round is scheduled for the first week of December in Brussels, and will address internet distribution and IT issues, enforcement best practice, international cooperation, institutional issues and opening provisions (including, importantly, the definition of 'counterfeiting'). DFAT noted that they will again seek comment on relevant issues once they have access to the proposals being put forward.
I asked whether in the next round, when internet distribution is addressed, Australia is considering making any changes to intermediary liability, or requirements for ISPs to implement graduated responses, filtering, or mandatory disclosure of subscriber information? Dr Rodgers responded that the text has not yet been released, and that we won't know until it is. We were to be “guided by our general approach to negotiations in considering our current regimes being broadly suitable.” Apparently, this is an indication that we won't be seeing wholesale changes, but it remains a very vague commitment. Mr Treyde added that Australian measures were currently approximately appropriate, and that it would be 'interesting' to see what draft text will be presented, but we'll have to wait and see.
Finally, on a personal note, a representative from the Australian Copyright Council pointedly reminded me why I continue to volunteer for Electronic Frontiers Australia. She raised the point that consumer and users are extremely under-represented at public discussions such as this one. We looked around the room, and when participants were asked to raise their hands if they claimed to represent individual users or consumers, to the best that I could see, I was suddenly alone in the room. These international trade agreements have a great potential to alter the copyright balance, affecting the way that individuals engage with copyright expression in all their activities – not just consuming, but learning, researching, remixing, sharing, critiquing and reshaping. It is extremely important that we continue to work to ensure that users and reusers of copyright expression have a voice at the international level.
Edit: I didn't mention that there was a lot of discussion about the scope of the ACTA as it applies to patents. DFAT attempted to reassure audience members that ACTA would be limited to trademark and copyright infringement, and that the border control and criminal measures discussed so far contained no reference to patent infringement. With regards to pharmaceuticals, DFAT and the AGD noted that the purpose of the border control measures were to catch 'counterfeit' pharmaceuticals - used, in this sense, to mean infringing trademarks - and not generics or patent infringing drugs. There was also significant concern from the agricultural lobby that ACTA would have spillover effects on importers of patented seed crops, and DFAT stressed that they had not seen and did not expect to see any patent issues in the negotiation. At the next meeting the preliminary provisions will be discussed, and it is expected that they will limit 'counterfeiting' to trademark and copyright infringement.
- Bookmark at
Discussion
DFAT should be made aware of the term “Telesync”. The use of “Camcording” here indicates a generational cavity.
Those who create and those who consume really want the same thing - their art to mean something. I think royalties are definitely required when that art is used for commercial purposes and even the initial consumption.
I have always been of the opinion that persecuting soccer mums for spreading music or movies goes against the original ideals and goals of the creator of the works.
What do you think of subscription based services to new music and movies? Perhaps serviced by a conglomerate of movie studios or record companies, or even individual ones? (eg, a Sony Music subscription, if you like several artists on Sony).
Hey mate; did you get my email in relation to this one? Would still be keen to post here if we are on the right track.
Hi Nic: Thanks for sparking the interest, I did a five-minute Lightning Presentation discussing emerging IP Policy in Australia and implications for Consumers and Creators this week in my Consumer Behaviour class. It is an interesting case-study on how consumer behaviour theory and models could provide useful insight into regulating new-tech - or even amending for old-good based markets.
Anyway, a few dot points that shaped the presentation, and a bit more extensive background / discussion. Pretty lucid, but might be of some interest.
Cheers - BN
• Introduction and overview of discussion. • Outline that government needs to utilise a Service-Dominant Logic. • Emerging technologies require new “market” based views of regulation. • Provide an overview of Intellectual Property Right policy framework, including Cutler and ACTA. • Overview of the Discussion – reviews the policy framework and implications; provide an example of how different regulations will affect emerging technology (game creator) in terms of their behavioural decisions and those of their consumers. • Discuss the rationale of the above in regard to co-creation and innovation diffusion. • Outline how an appeal to the Theory of Planned Behaviour could be a useful tool for regulators to consider before changing policy that will impact new technology development.
Background
Introduction
“Regulations are essential for the proper functioning of society and the economy. They include any laws or other government-endorsed ‘rules’ where there is an expectation of compliance. The challenge for government is to deliver effective and efficient regulation — regulation that is effective in addressing an identified problem and efficient in terms of maximising the benefits to the community, taking account of the costs” .
Intellectual Property (IP) represents the property of your mind or intellect. In business terms, this also means your proprietary knowledge . The Minister for Innovation, Industry, Science and Research, Senator the Hon. Kim Carr recently stated that a “well thought out IP strategy is the backbone of innovation” and that it is a “significant business asset which often is worth more to a business than all the tangible assets”.
It could equally be said that a well thought out IP policy and regulatory environment is the backbone of a government’s macroeconomic agenda.
Recent developments in the IP policy framework in Australia are worth of further discussion. IP plays a central role in the way in which people can consume (it affects choice) and the way in which they create (it affects the body of ‘usable’ knowledge). Regulation always has an impact on business, but seldom is this impact so transferable to the consumer / creator than through IPR. It is on this basis that IP policy and regulation poses an interesting opportunity to apply consumer behaviour theory.
This discussion paper firstly provides a short overview of trends in IP policy in Australia. It outlines the implications of this policy, and goes onto discusses likely regulatory responses. Finally, it provides an overview of consumer behaviour theory that should be applied to determine the effect of new IP policy and regulation in Australia.
This paper is designed to support the delivery of a lighting presentation (5-minute) exploring the potential benefit of consumer behaviour theory in exploring the effects of new IP policy and regulation. It does not apply these theories to provide a definitive outcome.
Recent development in IP policy
A 2007 OECD report states that counterfeit items are often substandard and can even be dangerous, posing health and safety risks that range from mild to life-threatening. Economy-wide, counterfeiting and piracy undermine innovation, which is key to economic growth.
It suggests counterfeit goods and services have negative impacts on: o innovation and growth (socio-economic); o reducing - sales volumes; prices and royalties; brand values and firm reputation (impacts on IPR holders); o health and safety risks (consumers); and o tax revenues, increased expenditure on preventing and dealing with IPR crimes; and corruption encouraged by IPR crimes (government).
The costs of counterfeiting are estimated to be over $US 200 billion in 2005 .
Likely driven by this cost-burden on government, in 2006 a proposal was made by the G8 group of countries to establish a plurilateral Anti-Counterfeiting Trade Agreement – or ACTA . The ACTA - the Kyoto protocol of the IP world - will establish a standard of intellectual property rights (IPR) enforcement to combat global counterfeiting and piracy. Australia is likely to be a signatory to these developments as they form part of broader and ongoing multi-later trade considerations.
The implications of ACTA on existing Australian regulation, (Trademark Act, Copyright Act, Trade Practices Act) are expected to be minimal, with two main exceptions.
Firstly, there is some concern about non-appealable provisions relating to Statutory damages for infringement of copyright or trademark, and it is important to note - this “practice in the US has led US copyright owners to threaten 'housewives' with highly inflated statutory damages in order to force settlements”.
There is also a more broad concern relating to how these developments, along with other changes to the regulatory policy framework for IP, will be addressed.
As an example there must be some level of concern about expanding the ability of companies to maintain a competitive advantage through the provision of expanded IP regulation that might arise from ACTA. Moreover, how the judicial system, and markets for that matter, will interpret this in relation to section 46 of the Trade Practices Act – relating to the misuse of market power – is an area that will continue to be of concern.
On a domestic level, and relating to trade mark and copyright, the Cutler Report on innovation released in August, 2008 suggests that the award of a patent should not be simple.
The report makes reference to the importance of allowing individuals to be innovative and to build on the work of others. It also suggests that IP rights have a critical impact on economics and should be treated in the same way as competition policy is treated.
What Cutler stops short of doing, and perhaps this is outside the terms of reference, is suggesting that we should restrict our international IP obligations, and be very wary of any new regulations that might come from our engagement in the ACTA.
The report on innovation makes some pertinent points about the synergies between competition policy in the 1990’s and its transition to a macroeconomic instrument as this relates to IP in the new millennium. Implications of developments in IP policy
There are obvious synergy between IP policy implementation, driven at a regulatory level, and wider macroeconomic policy, including competition policy .
Professor Allan Fels AO, former head of the ACCC, is famous for saying “so long as there are markets there will be the challenge of competition for market players, and so long as human nature remains unchanged, some participants will be tempted to act in anti-competitive or misleading and deceptive ways” .
These are often referred to as “Fels’ Fears” .
While “Fels’ Fears” can and should be moderated through effective regulation, this regulation should only be implemented with regard for the cost and benefit of the regulation on the nation as a whole. Australia’s Competition Principles Agreement covers this thoroughly, and should be referred to directly .
This agreement predicates regard for “social welfare and equity considerations, including community service obligations” and for Fels’ sake the “competitiveness of Australian businesses” a little further down the list . It is possible then to perceive similarities between implementing IP policy and
However, Australia’s IP policy is constrained and influenced by a range of international agreements such as World Trade Organisation TRIPS treaty and the treaties administered by WIPO . Indeed, Customs and other enforcement agencies already have significant powers to restrict the trade in counterfeit goods. While domestically, there are
Drahos and Maher support this view by elucidating the particular challenge for regulation in relation to IP in the modern technological age. Specifically digital technology, for example, lowers the cost of reproduction and enables new forms of transmission. This poses threats to copyright industries and market structures that have evolved on the basis of older technologies and definitions of property rights linked to those older technologies.
The emerging trends in IP policy are likely to impact directly on digital technology – file sharing for example.
Therefore regulators must be very careful how they proceed in relation to any additional IP enforcement regulation. Particularly considering the significant social implications this could have on new and emerging sub-cultures and peer-led reference groups. Of particular concern would be the impact on the emerging Generation Z – who are typically innovative, wired to new-technology and well networked.
Changes to IPR regulation
The ACTA and the Cutler report are pre-emptive of an emerging review of IP regulation in Australia. While domestic IPR regulation will likely be relaxed (to the benefit of consumers and creators), trade obligations are likely to see enforcement of IPR regulations enhances and tightened (possibly to the consumer and creators detriment, and to the benefit of large commercial organisations).
Indeed, the Cutler report suggest that intellectual property is cumulative. The current policy framework in Australia is thus a confused one. On the one had we are looking at possibly making it more complex to bring new ideas into Australia, or to exchange ideas, yet on the other hand the framework is pointing towards a requirement for greater inventiveness to acquire an IPR.
This will certainly have an effect on the way Australians consume and create. It is not possible to detail the effect on the market place in this discussion paper – as this is a body of work that is the responsibility of a comprehensive regulatory impact statement, however it will cause a change never-the-less. The later part of this discussion paper provides a range of preliminary concepts that could help to evaluate this change.
Application of Consumer Behaviour Theory
The World Trade Organization (WTO) TRIPS Agreement in 1995 transformed the international IP system . The harmonisation of basic IP standards has operated to protect investment in innovation, limiting risks from unjustified 'free riding'. Yet these same harmonised IP standards sharply curtailed the traditional capacity of suppliers of public goods, such as health care and nutrition, to address priority needs .
At the same time, IPR have not been restrictive of technology growth on the internet. Indeed past decade has delivered significant growth in non-commercial innovation. The evolution, not limited to, but certainly led by YouTube, Google, Facebook, MySpace and Wikipedia has not been restricted nor aided by any regulatory regime build on IPR. Rather this evolution has been driven by co-creation and innovation diffusion of technology, as is supported by Cutlers concept of cumulative IP .
It is clear that the IPR regulatory framework that is to be imposed must be imagined very carefully. As McCalman overall, it appears that while some recognition of IPR may encourage innovation diffusion, very strong IPR may retard the speed of diffusion. This is not inconsistent with the views of the OECD views about effective and efficient IPR regulation, however there seems to be a danger in a bullish approach to formulating these regulations based on protectionism and self-interested lobbying from major commercial companies.
There is a major research gap in relation to the effect of regulation on consumer (and in this case it can be applied to business structures also) behaviour and regulatory change. Moreover, there is a complete lack of literature on the effects on consumer behaviour of the implementation of IPR regimes.
An important consumer behaviour theory, Ajzen’s Theory of Planned Behaviour, is a useful concept in imagining what effect implementing changes to IP regulations may have on the level of innovation in the economy. As the Minister for Innovation and more recently the Cutler Report have suggested, IP regulation should be designed to enhance business confidence to build a stronger and more robust economy.
It is on this basis that the Theory of Planned Behaviour is very useful in determining how the regulatory system in relation to IP should be altered.
Ajzen’s theory suggests that a consumer or a creator’s (individuals) intention to innovate is the fundamental driver of their final behaviour. Whether that behaviour from a microeconomic perspective should be risky or otherwise must be driven by a regulatory system that has regard for the following: 1. Individual Attitude is Absolute: The individuals belief about innovation must be that it is positive, and that there is positive reward in being innovative. This supports the fact that some IP regulation must exist, to drive individuals towards a reward for their work. This fits the traditional view about IP regulation, and is consistent with the TRIPS agreement. 2. Acceptance by the Reference Group is critical: However, there must be a critical-mass (or subjective-norm) that a particular innovative action is considered among the reference group (including peers and competitors) as appropriate and acceptable. This concept supports Cutlers views that IPR should be available, but the level of innovation required to receive them must be significant. 3. Access to IP must be non-restrictive: This is the conundrum. If IP is truly cumulative then access to IP must not unduly restrict the individuals ability to act. That is to say, an individual must have a certainty about their perceived behaviour control over the innovation process to undertake innovation. As such, restrictions on building upon IP should be limited.
The important point to note here is there is a role for considering consumer behaviour theory when implementing any new regulatory framework that might have an impact on both consumers and creators. This role is often shadowed by a more rigid application of economic theory, based on the maximisation of utility, and that individuals will make decisions based on market signals, in a regulatory framework that promotes economic efficiency.
Conclusion
This discussion paper firstly provided a short overview of trends in IP policy in Australia. It then outlined the implications of this policy, and went to provide discussion on the likely regulatory responses. Finally, it provided a brief overview of consumer behaviour theory that should be applied to determine the effect of new IP policy and regulation in Australia.
It does not discuss this last point in detail, as this is a discussion intended to be had among classmates, following a lightning presentation on how this consumer behaviour theory could or ought to be applied.
Reference List and Further Reading
Nice one Brendan, good points and an interesting take. Sorry my site ate your formatting!