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Arguments against ACTA - Anti-Counterfeiting Trade Agreement

Friday 29 August 2008, by mond

Recently a Draft Report for a "Motion for a Resolution" was introduced to the European Parliament that Discusses the Position towards the secret ACTA Treaty and the Position of the European Commission within this Treaty. Here are a few reasons what is wrong with this Draft Document and why.

Getting the Definitions right

The ACTA Treaty is supposed to deal with "counterfeiting", yet it mixes in a lot of different "Intellectual Property Rights" (IPR):

The term "counterfeiting" should only be used for the violation of Trademarks and not for the violation of other Rights like (Copyright or Patents). This is not the case with the language that ACTA uses and thus it is not really possible to lead a serious discussion about the topics at hand within the framework of the existing ACTA Documents.

Do we need ACTA?

The arguments we hear from the pro-ACTA side are:

  • There is a huge economic loss, due to "counterfeiting"
  • Counterfeited medicine with potentially dangerous substances in it are a threat to our health.

Counter Argument: No real threat to health.

If someone sells dangerous Products today and risks peoples health and life, each European country already has laws to deal with this. This is already covered by criminal law and there is no need to introduce new laws here. According to the study from Dr. Duncan Matthews [1] the level of counterfeit medicine in developed countries is below 1%. So we should assume, that if one does not buy drugs via dubious websites, there is no real danger for the people within the EU.

Counter Argument: IPR - Not the right tools to protect our health

It should be noted that copyright or patent violations never pose a danger at all. If at all, this is only a question of trademark violation. It must also be noted that a perfectly legal trademark on a product is no guarantee for safety neither. E.g.: The indian province of Kerala had to impose a ban an the sale of "Coca-Cola" and other soft drinks because of the high level of pesticides they contained.

Thus we have to conclude that one should be careful in equating health risks with trademark infringments: Not every trademark infringement is a health risk and not every health risk is a trademark infringement.

When the stated aim is to avoid health risk it does not make sense to also lump in copyright and patent violations and it is highly questionable to equate health risk and trademark infringement.

Maybe this is just a Red Herring after all.

Counter Argument: Zillions of Damage because of "piracy"

From the „Duncan Paper“ (see above)

„There are concerns that statements about levels of counterfeiting and piracy are based either on customs seizures, with the actual quantities of infringing goods in free circulation in any particular market largely unknown, or on estimated losses derived from industry surveys. Industry estimates of levels of counterfeit and piracy are considered to exhibit an upward bias, with the difficulty in estimating levels of actual counterfeiting and piracy exacerbated by the failure to use the definition of the terms as set down in the TRIPS Agreement. The high levels reported in most industry-based surveys has been identified as a problematic aspect of the recent expert reports used as the basis of the 2007 OECD report on counterfeiting and piracy. The OECD report has also been criticised for framing the problem of intellectual property- related crime exclusively through the lens of “piracy” and lost corporate revenue, in doing so overlooking the social costs of intellectual property enforcement that restricts access to knowledge, creates barriers to follow-on innovation, and encourages anti-competitive business practices“

We can conclude that the numbers that are shown are exaggerated and that we do not have any numbers of how much harm is done because of the restrictions to knowledge at all.

If we take a closer look at IPR (especially copyright ant patents) we see that they are laws that restrict access to knowledge and information. They do not provide any real value but they are a system of distributing income from those goods.

Eben Moglen, professor of law and legal history at Columbia University, commented about this:

„Society confronts the simple fact that when everyone can possess every intellectual work of beauty and utility—reaping all the human value of every increase of knowledge—at the same cost that any one person can possess them, it is no longer moral to exclude. If Rome possessed the power to feed everyone amply at no greater cost than that of Caesar’s own table, the people would sweep Caesar violently away if anyone were left to starve. But the bourgeois system of ownership demands that knowledge and culture be rationed by the ability to pay.“

So when someone talks about "damage" in the context of IPR this is actually a misleading term. When IPR is violated then we see a different distribution of income from these goods but we do not have any "damage" at all. The goods are still there for the consumers to use (unless the European Commission decides to forcefully destroy them). On the other hand there is a real damage done through IPR. Every IPR which excludes someone from the use of some work of art, some knowledge, some blueprint for a useful maschine, etc. there is real damage done: the maximum productivity that would be possible today is not archived.

We see: There is no damage done to society because of the violation of IPR but there is a lot of damge done through IPR. IPR are a system for the distribution of income. This system might be seen as fair or unfair. It might bee sen as beneficial to society because it is said to create an incentive for creativity but it might be seen as not so beneficial because it creates an incentive for the wrong kind of creativity (doing research on cosmetics instead of research on medicine to cure deseases in less developed parts of the world).

The numbers that are labelled as "damage" are not a measure of the volume of redistribution of income. e.g.: someone who downloads a few thousand songs for free from the internet would never buy that same amount of songs for the normal price.

Counter Argument: Zillions of Damage because of "counterfeiting".

Today we see the rise of big international corporations with budgets larger then the GNP of small countries. One of the reasons behind this rise is the possibility of running global marketing campaigns to establish global brand names.

This advertising is not useful to society. It does not create food, housing nor any other tangible useful good. What the marketing creates is "demand". It induces a desire into people to buy something that they might not have bought without the advertising. It leaves those who are not rich enough to buy the advertised goods unhappy. The advertising itself also eats up human and natural resources. While advertising is needed in the capitalist system that is based on ever lasting expansion it is not useful to society by itself. Today this expansion runs into a conflict with the limited resources on our planet and should be seen of one of the major problems for our society.

The forceful protection of trademarks builds the basis for this marketing. It would not make much sens to run a global advertising campaign for a brand name that is not globally protected.

We see: There is no damage done because of counterfeiting. As with the violation of copyright and patents there is only a different distribution of income. On the other hand the higher the protection of trademarks the better for the global corporations and the more wasted resources because of useless marketing.

Thus it might make sense to think about weather the protection of trademarks on an international (and national) level should not be reduced.

Enhancing this protection certainly makes things worse.

As mentioned above, the numbers here are exaggerated as well. If someone buys a fake Rolex on the beach for say 20 EUR he does not expect to buy a genuine brand. Maybe he does not care that it is a counterfeit at all but he just wants a shiny watch. In any case that person would never have bought a watch for 2000 EUR in his live. So there is certainly no damage or EUR 2000. There is not even a damage of EUR 20 since that is a fair price for a cheap watch. There might not even be any harm done to the integrity of the "Trademark" of Rolex since the person who bought it did not care or did expect a fake after all.

IPR, Neocolonial Exploitation and the Working People in Europe

IPR and ACTA are often argued with protecting jobs in Europe. We have already seen that it is not beneficial to society to enforce restrictions to access to information and knowledge and there are problems with the protection of trademarks as well.

Is this beneficial to the people working in Europe? Does it protect any jobs? With a strong regime of IPR-protection the incentives to off-shoring and outsourcing for corporations are even stronger. A lot of products with US and european products brand names are already being produced in countries with lower wages and lower environmental standards outside the EU. IPR is not a tool to protect jobs in Europe. What it protects are the profits of the gobal corporations.

With the WTO TRIPS the developed countries forced IPR onto developing countries. While there was a grace-period where these countries did not have to implement this legislation immediately, this period is now over and most of this countries have realized what huge problems this brings. This is one of the main reasons why the recent WTO negotiations have failed. The representatives of the countries which act on behalf of the interests of the global corporations tried to introduce even stronger IPR. (TRIPS-plus).

Most of the developing countries see that this is not in their interest. This is the main reason why the rich countries try to do it on their own now, in bilateral and multilateral treaties like ACTA.

About 10 Million people each year are starving or dieing because of hunger-related causes. This year, due to the worldwide increase of food prices probably more. The price of rat meat in Cambodia has quadrupled this year.

Given this fact it is a scandal that the EU, the US and Japan are trying to use means of economic warfare towards developing countries in order to force the IPR-restrictions onto them.

We have seen: IPR is bad for the people working in Europe and it is bad for the people working in developing countries. We have to ask what kind of reasoning there is behind the ambitions to tighten the IP-regime at all.

ACTA negotiations, Policy Laundering and Software Patents

We have seen that the strengthening of IPR is not beneficial to society. Thus it should not come as a surprise that those who try to pursue it do this within secrecy and try to avoid democratic control.

For month the public did not know about negotiations at all. Only after a document was posted to wikileaks did the public find out about ACTA. It seems a common trend that more and more international treaties are used to circumvent national or European law making processes. When the European Commission was pushing for the introduction of software patents in Europe the EC told us that Software Patents would be required by TRIPS. The European Parliament decided that this was not the case and rejected the directive. Now the EC is negotiating for TRIPS-plus and ACTA to further their IPR-agenda. With proposed ACTA there is the potential danger that European SMEs who can enjoy the freedom to be not restricted by Software Patents would need to comply with US or Japanese Software Patent law. This could bring Software Patents and other mischief to Europe through the backdoor.

We conclude: The ACTA negotiations (like other green-room negotiations of international treaties) are not just used to avoid democratic control but are potentially used against the democratic decisions made by the European Parliament.

The "Lisbon Treaty on the Functioning of the European Union" (TFEU) would give the European Parliament more control in the negotiations of such treaties (see the Duncan Paper). The hastiness of the ACTA process seems to be an indication that the EC wants to finish the negotiations before such control is in place.

Privacy Considerations

Under the guise of a "war against terror" we have seen a dramatic increase in surveillance in the last few years, that many would have thought is possible under totalitarian Regimes only. If ACTA is intended to introduce more control over digital content this could again be used to legitimize unprecedented surveillance.

Of course, the monitoring of physical goods and extensive searches at boarders and might pose a threat to privacy as well.

Suggestions for Alternatives

If one is interested in the damage done through IPR then it would make sense to have scientific studies that do some research in that field. How much labor and resources are wasted because of the artificial restrictions that different IPRs pose on the access to knowledge and information? How much within different branches of industry. We suggest that the EU finances research in this field. We would also need research in the field of alternative ways of distributing funding towards creativity and research.

If one is interesting in protecting jobs in Europe we should do some research into how global environmental and labor standards can be raised. We would suggest that guaranteed minimum wages, maximum working hours and environmental protection should be a central element of all trade treaty-negotiations.

If one is interested in protecting the health of consumers then it would make sense to introduce standards for consumer-protection clauses into all trade-treaty negotiations.

If one is interested in making global corporations more profitable we could just introduce a global tax and hand the money over to the Fortune-500. ;-)

No need to introduce ACTA because of any of this.

In any case we should demand:

  • That trademark-violations, copyright violations and patent violations are not intermixed and not dealt with in the same negotiations.
  • That there is a clear distinction made between material goods and the transport of data over the internet or other means. This should not be dealt in the same treaty and not be in the same negotiations.
  • That all negotiations of international treaties are performed in a comply transparent way. We need to know who demands what and why and when.

Franz Schäfer, August 2008

Update: 8. Sept. 2008 The EU-Council debates their own ACTA related Resolution

p.s: Analysis of ACTA @FFII, Another good Analysis of ACTA

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