This is the second installment of a point-by-point look at the proposed Anti-Counterfeiting Trade Agreement. Check out ACTA: Thought for FUD, Part 1 for more details and a comparison of Section 1 of ACTA (civil enforcement) to existing US law.

I’d like to reiterate that the purpose of this is to get a better grasp on what is in the ACTA, since there is a large amount of FUD being circulated online. The comparison to existing US law is only meant to put the scope of the treaty in context. Whether the existing law is good or bad is another discussion entirely, and the same is true about whether or not including similar provisions in an international treaty is good or bad. Indeed, in some situations, US negotiators are actually opposed to specific proposals that would mirror existing US law. 1For example, the provision allowing Parties to seize infringing goods at the border.

Comparing this section to US law is challenging for several reasons. First, I’m not as familiar with border enforcement of copyrighted works as I am with other areas of copyright law. Second, intellectual property border measures are governed by a framework involving international treaties (most notably TRIPS); chapters 6 (domestic security), 17 (copyrights), and 19 (customs duties) of the US Code; and numerous regulatory provisions. Within such an interconnected regulatory framework like this, it can be difficult to pinpoint one specific statute or regulation.

Section 2: Border Measures

The Consolidated Text Prepared for Public Release begins section 2 by laying out the scope of the border measures:

ARTICLE 2.X: SCOPE OF THE BORDER MEASURES

1. This section sets out the conditions for action by the competent authorities when goods are suspected of infringing intellectual property rights, within the meaning of this agreement, when they are imported, exported, in-transit or in other situations where the goods are under customs supervision.

2. For the purposes of this section, “goods infringing an intellectual property right” means goods infringing any of the intellectual property rights covered by TRIPS. However, Parties may decide to exclude from the scope of this section, certain rights other than trade marks, copyrights and GIs when not protected exclusively by copyright and trade mark systems and protected by sui generis systems.

3. Parties shall provide for the provisions related to border measures to be applied at least in cases of trade mark counterfeiting and copyright piracy. Parties may provide for such provisions to be applied in other cases of infringement of intellectual property rights.

Now, let’s take a look at the individual provisions.

ACTA Provision Corresponding US Law
ARTICLE 2.X: DE MINIMIS PROVISION

Parties may exclude from the application of this Section small quantities of goods of a non-commercial nature contained in travelers’ personal luggage or sent in small consignments.

19 USC § 1321. Administrative exemptions

(a) Disregard of minor discrepancies in collection of taxes and duties; admission of articles free of duty or tax; limit on amount of exemption
The Secretary of the Treasury, in order to avoid expense and inconvenience to the Government disproportionate to the amount of revenue that would otherwise be collected, is authorized, under such regulations as he shall prescribe, to—
[…]
(2) admit articles free of duty and of any tax imposed on or by reason of importation, but the aggregate fair retail value in the country of shipment of articles imported by one person on one day and exempted from the payment of duty shall not exceed an amount specified by the Secretary by regulation, but not less than—
(A) $100 in the case of articles sent as bona fide gifts from persons in foreign countries to persons in the United States ($200 in the case of articles sent as bona fide gifts from persons in the Virgin Islands, Guam, and American Samoa), or
(B) $200 in the case of articles accompanying, and for the personal or household use of, persons arriving in the United States […] or
(C) $200 in any other case.

17 USC § 602: Infringing importation or exportation of copies or photocopiers

(3) Exceptions.— This subsection does not apply to—
[…]
(B) importation or exportation, for the private use of the importer or exporter and not for distribution, by any person with respect to no more than one copy or phonorecord of any one work at any one time, or by any person arriving from outside the United States or departing from the United States with respect to copies or phonorecords forming part of such person’s personal baggage;
(3) Exceptions.— This subsection does not apply to—
[…]
(B) importation or exportation, for the private use of the importer or exporter and not for distribution, by any person with respect to no more than one copy or phonorecord of any one work at any one time, or by any person arriving from outside the United States or departing from the United States with respect to copies or phonorecords forming part of such person’s personal baggage

One of the biggest fears when people heard “intellectual property” and “border measures” was that Customs officials would begin searching iPods for pirated materials.

ARTICLE 2.X: PROVISION OF INFORMATION FROM THE RIGHT HOLDER

Each Party shall permit the competent authorities to request a right holder to supply relevant information to assist the competent authorities in taking border measures provided for under this Section. Each Party may also allow a right holder to supply relevant information to the competent authorities.

19 CFR § 133.32. Application to record copyright.

An application to record a copyright to secure customs protection against the importation of infringing copies or phonorecords shall be in writing addressed to the IPR & Restricted Merchandise Branch, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue, Washington, DC 20229, and shall include the following information:
(a) The name and complete address of the copyright owner or owners;
(b) If the applicant is a person claiming actual or potential injury by reason of actual or contemplated importations of copies or phonorecords of the eligible work, a statement setting forth the circumstances of such actual or potential injury;
(c) The country of manufacture of genuine copies or phonorecords of the protected work;
(d) The name and principal address of any foreign person or business entity authorized or licensed to use the protected work, and a statement as to the exclusive rights authorized;
(e) The foreign title of the work, if different from the U.S. title; and
(f) In the case of an application to record a copyright in a sound recording, a statement setting forth the name(s) of the performing artist(s), and any other identifying names appearing on the surface of reproduction of the sound recording, or its label or container.

ARTICLE 2.6: APPLICATION BY RIGHT HOLDER

Option 1
1. Each Party shall provide procedures for import and in-transit shipments and may provide procedures for export shipments, by which right holders may request the competent authorities to suspend release 24 of suspected counterfeit trademark goods and suspected pirated copyright goods into free circulation.

Option 2
1. Each Party shall provide procedures by which right holders may request the competent authorities to suspend the release of goods suspected of infringing intellectual property rights.
2. The competent authorities shall require a right holder requesting the procedures described in paragraph 1 to provide adequate evidence to satisfy themselves that, under the laws of the Party providing the procedures, there is prima facie an infringement of the right holder’s intellectual property right and to supply sufficient information that may reasonably be expected to be within the right holder’s knowledge to make the suspected infringing goods reasonably recognizable by the competent authorities. The requirement to provide sufficient information shall not unreasonably deter recourse to the procedures described in paragraph 1.
3. Each Party shall provide for applications to suspend the release of suspected infringing goods that apply to all goods under customs control in its territory and remain applicable to multiple shipments. Each Party may provide that, at the request of the right holder, the application to suspend the release of goods may apply to selected points of entry and exit under customs control. These applications for suspension shall remain applicable for a period of not less than one year from the date of application, or the period of protection of the relevant intellectual property rights under the laws of the Party providing border measures under this Section, whichever is shorter. Each Party may permit a right holder to specify that an application to suspend remain applicable for a period of less than one year.
4. The competent authorities shall inform the applicant within a reasonable period whether they have accepted the application. Where the competent authorities have accepted the application, they shall also make known to the applicant the period of validity of the application.
5. Each Party may provide, where the applicant has abused the process, or where there is due cause, that an application may be denied, suspended, or voided.

17 USC § 603. Importation prohibitions: Enforcement and disposition of excluded articles

(a) The Secretary of the Treasury and the United States Postal Service shall separately or jointly make regulations for the enforcement of the provisions of this title prohibiting importation.
(b) These regulations may require, as a condition for the exclusion of articles under section 602—
(1) that the person seeking exclusion obtain a court order enjoining importation of the articles; or
(2) that the person seeking exclusion furnish proof, of a specified nature and in accordance with prescribed procedures, that the copyright in which such person claims an interest is valid and that the importation would violate the prohibition in section 602; the person seeking exclusion may also be required to post a surety bond for any injury that may result if the detention or exclusion of the articles proves to be unjustified.
(c) Articles imported in violation of the importation prohibitions of this title are subject to seizure and forfeiture in the same manner as property imported in violation of the customs revenue laws. Forfeited articles shall be destroyed as directed by the Secretary of the Treasury or the court, as the case may be.

ARTICLE 2.7: EX-OFFICIO ACTION

Option 1
1. Each Party may provide that its customs authorities may act upon their own initiative, to suspend the release of suspected counterfeit trademark goods or suspected pirated copyright goods with respect to imported, exported, or in-transit goods including suspected counterfeit trademark goods or suspected pirated copyright goods admitted to, withdrawn from, or located in free trade zones.

Option 2
1. Each Party shall provide that its competent authorities may act upon their own initiative, to suspend the release of goods suspected of infringing an intellectual property right.
2. Each Party may also provide that its customs authorities may act, upon their own initiative, to suspend the release of goods suspected of infringing other intellectual property rights

19 CFR § 133.42. Infringing copies or phonorecords.

(a) Definition. Infringing copies or phonorecords are “piratical” articles, i.e., copies or phonorecords which are unlawfully made (without the authorization of the copyright owner).
(b) Importation prohibited. The importation of infringing copies or phonorecords of works copyrighted in the U.S. is prohibited by Customs. The importation of lawfully made copies is not a Customs violation.
(c) Seizure and forfeiture. The port director shall seize any imported article which he determines is an infringing copy or phonorecord of a copyrighted work protected by Customs. The port director also shall seize an imported article if the importer does not deny a representation that the article is an infringing copy or phonorecord as provided in §133.43(a). In either case, the port director also shall institute forfeiture proceedings in accordance with part 162 of this chapter. Lawfully made copies are not subject to seizure and forfeiture by Customs.

ARTICLE 2.9: SECURITY OR EQUIVALENT ASSURANCE

Each Party shall provide that its competent authorities shall have the authority to require a right holder requesting procedures described under Article 2.6 to provide a reasonable security or equivalent assurance sufficient to protect the defendant and the competent authorities and to prevent abuse. Each Party shall provide that such security or equivalent assurance shall not unreasonably deter recourse to these procedures. Each Party may provide that such security may be in the form of a bond conditioned to hold the defendant harmless from any loss or damage resulting from any suspension of the release of the goods in the event the competent authorities determine that the good is not a counterfeit trademark good or a pirated copyright good. Only in exceptional circumstances or pursuant to a judicial order may a Party permit a defendant to post a bond or other security to obtain possession of suspected counterfeit trademark goods or suspected pirated copyright goods.

19 CFR § 133.43. Procedure on suspicion of infringing copies.

(b) Notice to copyright owner. If the importer of suspected infringing copies or phonorecords files a denial as provided in paragraph (a) of this section, the port director shall furnish to the copyright owner the following information, if available, within 30 days, excluding weekends and holidays, of the receipt of the importer’s denial:
[…]
(6) Notice that the imported article will be released to the importer unless, within 30 days from the date of the notice, the copyright owner files with the port director:
[…]
(ii) A bond, in the form and amount specified by the port director, conditioned to hold the importer or owner of the imported article harmless from any loss or damage resulting from Customs detention in the event the Commissioner or his designee determines that the article is not an infringing copy prohibited importation under section 602 of the Copyright Act of 1976 (17 U.S.C. 602) (See part 113 of this chapter).

ARTICLE 2.10: DETERMINATION AS TO INFRINGEMENT

Each Party shall adopt or maintain a procedure by which competent authorities may determine, within a reasonable period of time after the initiation of the procedures described under Article 2.X or 2.X, whether the suspected infringing goods infringe an intellectual property right.

19 CFR § 133.43. Procedure on suspicion of infringing copies.

(a) Notice to the importer. If the port director has any reason to believe that an imported article may be an infringing copy or phonorecord of a recorded copyrighted work, he shall withhold delivery, notify the importer of his action, and advise him that if the facts so warrant he may file a statement denying that the article is in fact an infringing copy and alleging that the detention of the article will result in a material depreciation of its value, or a loss or damage to him. The port director also shall advise the importer that in the absence of receipt within 30 days of a denial by the importer that the article constitutes an infringing copy or phonorecord, it shall be considered to be such a copy and shall be subject to seizure and forfeiture.

ARTICLE 2.11: REMEDIES

1. Each Party shall provide its competent authorities with the authority to order the destruction of goods following a determination under Article 2.10 that the goods are infringing. In cases where such goods are not destroyed, each Party shall ensure such goods are disposed of outside the channels of commerce in such a manner as to avoid any harm to the right holder.
2. In regard to counterfeit trademark goods, the simple removal of the trademark unlawfully affixed shall not be sufficient, other than in exceptional cases, to permit the release of goods into the channels of commerce.
3. Each Party may provide its competent authorities with the authority to impose administrative penalties following a determination under Article 2.10 that the goods are infringing.

19 CFR § 133.43. Procedure on suspicion of infringing copies.

(a) Notice to the importer. If the port director has any reason to believe that an imported article may be an infringing copy or phonorecord of a recorded copyrighted work, he shall withhold delivery, notify the importer of his action, and advise him that if the facts so warrant he may file a statement denying that the article is in fact an infringing copy and alleging that the detention of the article will result in a material depreciation of its value, or a loss or damage to him. The port director also shall advise the importer that in the absence of receipt within 30 days of a denial by the importer that the article constitutes an infringing copy or phonorecord, it shall be considered to be such a copy and shall be subject to seizure and forfeiture.

ARTICLE 2.12: FEES

1. Each Party shall provide that any application fee, storage fee, or destruction fee to be assessed by competent authorities in connection with procedures described in this Section shall not be used to unreasonably deter recourse to these procedures.

Fees for registering with Customs are set by regulation. While I couldn’t find any explicit provision governing the reasonableness of fees, the US Customs and Border Protection agency generally considers what burden fees have when setting them. See, for example, Notice and request for comments on Agency Information Collection Activities: Regulations Relating to Recordation and Enforcement of Trademarks and Copyrights.

ARTICLE 2.13: DISCLOSURE OF INFORMATION

Without prejudice to a Party’s laws pertaining to the privacy or confidentiality of information:
(a) Each Party may authorize its competent authorities to provide right holders with information about specific shipments of goods, including the description and quantity, to assist in the detection of infringing goods;
(b) Each Party may authorize its competent authorities to provide right holders with information about goods including, but not limited to, the description and quantity of the goods and the name and address of the consignor, importer, exporter or consignee, and, if known, the country of origin and name and address of the manufacturer of the goods to assist in the determination under Article 2.10 of whether goods infringe rights covered by this Section;
(c) Unless a Party has granted authority under subparagraph (b), at least in the case of imported goods, where competent authorities have seized or, in the alternative, made a determination under Article 2.10 that goods infringe rights covered by the section, each Party shall authorize its competent authorities to provide right holders within 30 days of seizure or determination, with information about goods including, but not limited to, the description and quantity of the goods and the name and address of the consignor, importer, exporter, or consignee, and, if known, the country of origin and name and address of the manufacturer of the goods.

19 CFR § 133.43. Procedure on suspicion of infringing copies.

(a) Notice to the importer. If the port director has any reason to believe that an imported article may be an infringing copy or phonorecord of a recorded copyrighted work, he shall withhold delivery, notify the importer of his action, and advise him that if the facts so warrant he may file a statement denying that the article is in fact an infringing copy and alleging that the detention of the article will result in a material depreciation of its value, or a loss or damage to him. The port director also shall advise the importer that in the absence of receipt within 30 days of a denial by the importer that the article constitutes an infringing copy or phonorecord, it shall be considered to be such a copy and shall be subject to seizure and forfeiture.
(b) Notice to copyright owner. If the importer of suspected infringing copies or phonorecords files a denial as provided in paragraph (a) of this section, the port director shall furnish to the copyright owner the following information, if available, within 30 days, excluding weekends and holidays, of the receipt of the importer’s denial:
(1) The date of importation;
(2) The port of entry;
(3) A description of the merchandise;
(4) The quantity involved;
(5) The country of origin of the merchandise; and
(6) Notice that the imported article will be released to the importer unless, within 30 days from the date of the notice, the copyright owner files with the port director:
(i) A written demand for the exclusion from entry of the detained imported article; and
(ii) A bond, in the form and amount specified by the port director, conditioned to hold the importer or owner of the imported article harmless from any loss or damage resulting from Customs detention in the event the Commissioner or his designee determines that the article is not an infringing copy prohibited importation under section 602 of the Copyright Act of 1976 (17 U.S.C. 602) (See part 113 of this chapter).
(c) Samples available to the copyright owner. At any time following presentation of the merchandise for Customs examination, but prior to seizure, Customs may provide a sample of the suspect merchandise to the owner of the copyright for examination or testing to assist in determining whether the article imported is a piratical copy. To obtain a sample under this section, the copyright owner must furnish Customs a bond in the form and amount specified by the port director, conditioned to hold the United States, its officers and employees, and the importer or owner of the imported article harmless from any loss or damage resulting from the furnishing of a sample by Customs to the copyright owner. Customs may demand the return of the sample at any time. The owner must return the sample to Customs upon demand or at the conclusion of the examination or testing. In the event that the sample is damaged, destroyed, or lost while in the possession of the copyright owner, the owner shall, in lieu of return of the sample, certify to Customs that: “The sample described as [insert description] provided pursuant to 19 CFR 133.43(c) was (damaged/destroyed/lost) during examination or testing for copyright infringement.

Article 2.X: LIABILITY OF THE COMPETENT AUTHORITIES

1. With respect to the border measures covered by this Section, each Party shall provide measures concerning the liability of competent authorities in the execution of their duties.

Option 1
2. The acceptance of an application on its own shall not entitle the right-holder to compensation in the event that goods infringing an intellectual property right are not detected by a customs office and are released or no action is taken to detain them.

Option 2
2. Each Party may limit remedies sought by a right holder or other persons against a Party’s competent authorities as a result of mere acceptance of an application under Article 2.6, where the competent authorities release, or fail to detect, detain, or take action against or in connection with, goods that may infringe IPR covered by this Section.
3. The competent authorities shall not be liable towards the persons involved in the situations referred to in Article 2.6 for damages suffered by them as a result of the authority’s intervention, except where provided for by the law of the Party in which the application is made or in which the loss or damage is incurred.

19 USC § 1513. Customs officer’s immunity

No customs officer shall be liable in any way to any person for or on account of—
(1) any ruling or decision regarding the appraisement or the classification of any imported merchandise or regarding the duties, fees, and taxes charged thereon,
(2) the collection of any dues, charges, duties, fees, and taxes on or on account of any imported merchandise, or
(3) any other matter or thing as to which any person might under this chapter be entitled to protest or appeal from the decision of such officer.

Generally, federal government officials are not liable for actions arising out of their duties unless Congress has provided an exception by law. I was unable to find any such exception for failure to detect infringing goods by US customs officials. I’ve included the above provision which seems most on point. Other nations may not follow the doctrine of sovereign immunity, so this provision would ensure that customs officials are exempted from liability in these cases. 2India, for example, has regulations that mirror the proposed ACTA provision.

Next week, we’ll take a look at Section 3: Criminal Enforcement.

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