ACTA: Selectively Exporting US Law

Last week’s leak of the Internet section of the proposed Anti-Counterfeiting Trade Agreement (ACTA) prompted a new round of debate over the controversial multilateral agreement. In addition to renewed calls for transparency, attention turned to the substance of the agreement and its (dis)agreement with US and other countries’ law.  With respect to US law in particular, some analysis sought to quiet ACTA critics by pointing out—and rightly so—that the leaked text would not require changes to existing law.

But while the leaked language is consistent with parts of the DMCA (as well as the Korea-US Free Trade Agreement), the real threat may come from what the agreement leaves out. The picture of US copyright policy ACTA would export is heavily skewed towards enforcement, and indeed could result in much stronger protections that we have here. One anonymous commenter to the above post noted as much: “ACTA is not co-extensive with the requirements of US law. Specifically, it includes all the enforcement, but only some of the exceptions.” Exporting secondary liability and other strong US copyright enforcement provisions without counterbalancing exceptions and limitations could be disastrous for online free expression.

The DMCA strikes a careful balance with respect to the appropriate role of intermediaries.  It provides rightsholders with an expedited mechanism for the removal of unauthorized content while at the same time immunizing intermediaries from liability for content posted by others. This immunity, though, is not absolute; the statute lays out certain prerequisites, including responding to takedown notices and reasonably implementing a policy to terminate repeat infringers.  On the other hand, the statute also puts some burden on rightsholders, laying out the requirements for takedown notices and establishing penalties for misrepresentation.

The leaked portion of ACTA is consistent with parts the DMCA, but it doesn’t reflect this balance.  First, while the DMCA clearly states that intermediaries receiving safe harbor “shall not be liable” for third-party infringement, the ACTA draft merely calls for “limitations on the scope of civil remedies.” This is a major difference. A signatory could be compliant without enacting a total safe harbor.

In addition, the paragraph requiring that copyright remedies be available in cases of third-party liability briefly mentions “limitations, exceptions, or defenses,” but offers no guidance on what these might be. In contrast, the prerequisites for safe harbor for third parties are laid out in detail. Third, the draft provides no guidance on what should constitute a lawful takedown notice—stating only that intermediaries must take action on receipt of a “legally sufficient notice of alleged infringement.” What’s legally sufficient in the US is defined in part by the portions of the DMCA that are absent here, and this standard will vary greatly among potential signatories. Finally, there is no mention whatsoever of penalties for abusing the takedown process, which could lead to frivolous takedown demands.

In fact, the problem is broader than just the DMCA. Secondary liability in the US is primarily judge-made law, and the doctrine includes some key limitations on when liability applies. The key Betamax and Grokster holdings mean that intermediaries whose products are capable of significant non-infringing use cannot be held secondarily liable, as long as they do not take steps to induce infringement. This limitation is nowhere to be found in the ACTA leak. The only reference to any limitations on secondary liability is elaborated on in footnote 1: “. . . third-party liability may include consideration of exceptions or limitations . . .” In other words, parties may  have exceptions, but they must have enforcement.

All these missing pieces mean that signatories to ACTA might enact policies that, while consistent with portions of the DMCA, will be much harsher in their effect. This risk is magnified in light of the lack of consideration of copyright exceptions more broadly. US copyright law strikes a careful balance between exclusive rights and exceptions and limitations to those rights. The most familiar of these limitations is the fair use doctrine, which provides critical breathing room for technological innovation and new artistic creation.

The US needs to be extremely careful as it considers exporting copyright policy. If a country without similar accommodations were to adopt the secondary liability and enforcement provisions of ACTA—their consistency with the DMCA notwithstanding—the result could very well be a copyright secondary liability regime with overbroad and excessive enforcement, to the detriment of online innovation and legitimate speech.

If there’s any doubt just how wrong other countries might get it as they interpret such a one-sided view of US intermediary liability policy, one need only look at France’s 3-strikes law, Italy’s conviction of Google executives over the contents of a YouTube video, and Australia’s filtering plans. Increasingly, countries are enacting policies that threaten the very freedom and openness to innovation that define the Internet. Secretary of State Hillary Clinton recently launched an initiative to advance global Internet freedom; the US ACTA negotiators should not undercut that vital goal.