Four weeks ago, I began a walk through the proposed Anti-Counterfeiting Trade Agreement, a plurilateral trade agreement currently in negotiations that has sparked a great deal of Fear, Uncertainty, and Doubt (FUD) online. Using the official draft text of the agreement released last April, I laid out each provision of the ACTA and compared it to provisions in US law that corresponded. You can see the previous entries in this series here:

The goal of this exercise was two-fold. First, I have not seen a similar examination of each provision of the ACTA. I have seen concerns that it will result in changes to existing US law. I thought a side-by-side comparison of provisions from both would be helpful in this regard.

More importantly, many of the more wild concerns seem to stem from those who simply did not understand the scope of the agreement nor understood the scope of existing copyright law. If you don’t know what is in the ACTA, it’s easy to buy into the FUD surrounding it. Even if you’ve read through the proposed provisions (either in the officially released draft text that I worked off of or one of the many leaked texts), it’s still easy to accept the scary stories being told if you can’t put it into the context of existing law. In other words, it’s easier to buy into apocalyptic tales that the ACTA will implement radical changes to the law if you aren’t aware that its provisions mirror already existing law.

What general observations can we make after looking at this side-by-side comparison? First, as far as copyright law goes, nothing in the ACTA jumps out that would require changes to US law. Second, the language of the treaty comports with Ambassador Ron Kirk’s responses in his letter to Senator Ron Wyden about concerns with the flexibility of the treaty and its effect on fundamental rights and civil liberties. Few, if any, of the provisions “require” a Party to enforce copyrights in a set way, while recognition of due process and privacy are reiterated in many provisions.

Limitations

This comparison of proposed ACTA provisions with corresponding US copyright law is only that. It does not show what, if any, differences exist between the ACTA and existing patent or trademark law, which will likely be covered under the agreement. It does not show how the laws of any country besides the US compare to the ACTA provisions. It also does not make any judgment about existing US law.

I also at no point implied that “ACTA will change US law” is the only criticism aimed at the proposed agreement. Certainly, as with any proposal of any sort – whether a trade agreement, legislation, policy directive, etc. – criticisms will exist. Indeed, one criticism is that it is too much like US law; the ACTA is an attempt by the US to “export” its framework of copyright law to other nations. Critics also label those negotiating the treaty as engaged in “policy laundering.” There are concerns that the treaty will “lock in” certain aspects of copyright law that should remain flexible to respond to rapidly changing technologies. You can find plenty of sites exploring these criticisms, so I’ll refrain from saying anything more about them, but I did want to take a quick look at one of the most common criticisms about the ACTA: the lack of transparency in the negotiating process.

Transparency

A bit about “transparency.” One of the biggest complaints about the agreement have concerned a supposed lack of transparency over the negotiating process. The proposed treaty is nearly always characterized as “secret.” It’s difficult seeing how this charge of “secrecy” holds up; the United States Trade Representative has an entire page devoted to the ACTA, with various documents available, including the draft text of the treaty that I have been working off of during this series of articles. As several commentators have pointed out, the USTR has made other information available to those outside the negotiating process – subject to a rather standard nondisclosure agreement – including Public Knowledge, Google, and the Center for Democracy and Technology.

Placing aside the hyperbolic criticism of the treaty’s “secrecy,” the question remains whether the negotiating process is sufficiently “transparent.” We accept that transparency plays an important role in democratic institutions. Noted philosopher and “patriarch of utilitarianism” Jeremy Bentham wrote, “Publicity should help constrain the members of the assembly to perform their duty; secure the confidence of the people; enable the assembly and the governors to know the wishes of the governed; enable the electors to act from knowledge; and generate the amusement that by itself increases the happiness of the people.”1 We want to know the language of bills introduced in Congress, how our representatives have voted in the past, how our tax dollars are being spent; knowing these things helps us on election day and keeps government officials in line.

Treaty negotiations, however, are a different kind of creature then the types of political transactions Bentham is referring to and what we generally want information about. Indeed, it has long been customary for trade negotiators to refrain from disclosing every proposal or early draft to the public, and the ACTA negotiators have simply acted in the same fashion. When you’re negotiating complex issues among a diverse group of parties, confidentiality allows a more free exchange of ideas and facilitates negotiation and compromise. The Founding Fathers recognized these benefits when they chose to draft the Constitution in private.

The “wrong” kind of transparency during treaty negotiations can be more detrimental than beneficial. Insisting on keeping the doors open at every stage of the process accomplishes little more than crippling the process. Those who are opposed to the entire process insist on this kind of transparency as a tactic – they want the negotiation process to fail. As stated above, the transparency of the ACTA negotiations is on par with other agreements; the draft text and other documents are publicly available. I doubt any level of transparency will satisfy the “secret treaty” critics, and I doubt any will say when negotiations are finished, “Well, I agree with the goals and provisions of the treaty, I just wish you would have kept us more in the loop.”

Footnotes

  1. “Of Publicity,” Public Culture (1791/1994). []

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The general consensus is that the Anti-Counterfeiting Trade Agreement (ACTA)1 is on track to be completed by the end of this year. Once completed, the treaty would still need to be implemented by each party through its own legislative process – a process that could easily take several years. If the past is any indication, we can expect plenty of Fear, Uncertainty, and Doubt over the treaty until then.

If you’re just joining us, be sure to check out ACTA: Thought for FUD, parts one, two, and three. If not, read on for part four of this series, where I’m comparing the provisions of the ACTA to existing US law to counter some of the FUD over what this treaty will do.

The FUD toward this section of the ACTA departs from the pattern it follows in the previous sections. Here, the fear is not based on a misunderstanding of existing US law; instead, the fear is that this section follows US law too closely. The provisions here – the majority of which had been passed as part of the Digital Millennium Copyright Act of 1998 (DMCA)2 have caused a great deal of consternation since they became a part of US law, and the complaint is that the US is attempting to “export” these much-derided laws to the rest of the world.

Since I’ve limited these articles so far to a side-by-side comparison between the ACTA provisions and US law, I won’t get into any substantive discussion of these criticisms, but I did want to point out one such criticism since it came out just this week.

On Monday, Boing Boing posted Latest leaked draft of secret copyright treaty: US trying to cram DRM rules down the world’s throats, illustrating precisely the criticism I noted above.

The article frames the state of the current law through a complete mischaracterization. The author states:

In the US version, breaking DRM is always illegal, even if you’re not committing any copyright violation — so breaking the DRM on your iPad to install software you bought from someone who hasn’t gone through the Apple approval process is illegal, even though the transaction involves no illicit copying.

But, the claim that under US law “breaking DRM is always illegal – even if you’re not committing any copyright violation” is followed in the very next sentence by links to a court case and regulations where breaking DRM is not illegal when there is no copyright violation!

The original characterization of laws regarding DRM is wrong. The “evidence” presented only shows the way laws typically work. Congress passes a new law. Someone brings a lawsuit based on an interpretation of the law outside of its scope. A court determines the interpretation is outside the scope of the law – based on the text of the statute Congress passed and any relevant legislative history of the law. The court denies the person’s claim. The only way you can call this an “erosion” of the law is if you claim that Congress and supporters of the law secretly wanted it to mean the same as the interpretation advanced by these unsuccessful lawsuit filers.

The idea that the law has been “eroded” by regulators is even more silly. The DMCA included a provision that charges the Librarian of Congress, through the Register of Copyrights, to examine and pass exemptions to the DMCA anti-circumvention provisions every three years. The Copyright Office completed the latest round of these proceedings just this past June. It’s difficult to see how such a provision built into a law counts as erosion of the law.

But enough about that. Let’s take a look at Section 4 of the ACTA.

Section 4: Special Measures Related to Technological Enforcement of Intellectual Property in the Digital Environment

Proposed ACTA Provision Corresponding US Law
ARTICLE 2.18 ENFORCEMENT PROCEDURES IN THE DIGITAL ENVIRONMENT

1. Each Party shall ensure that enforcement procedures, to the extent set forth in the civil and criminal enforcement sections of this Agreement, are available under its law so as to permit effective action against an act of copyright infringement which takes place in the digital environment, including expeditious remedies to prevent infringement and remedies which constitute a deterrent to further infringement.
2. Those measures, procedures and remedies shall also be fair and proportionate.
3. Without prejudice to the rights, limitations, exceptions, or defenses to copyright infringement available under its law, including with respect to the issue of exhaustion of rights, each Party shall provide for civil remedies as well as limitations, exceptions, or defenses with respect to the application of such remedies, are available in its legal system in cases of third party liability *

* For greater certainty, the Parties understand that third party liability means liability for any person who authorizes for a direct financial benefit, induces through or by conduct directed to promoting infringement, or knowingly and materially aids any act of copyright or related rights infringement by another. Further, the Parties also understand that the application of third party liability may include consideration of exceptions or limitations to exclusive rights that are confined to certain special cases that do not conflict with a normal exploitation of the work, performance or phonogram, and do not unreasonably prejudice the legitimate interests of the right holder, including fair use, fair dealing, or their equivalents. At least one delegation opposes this footnote.

Metro-Goldwyn-Mayer Studios v. Grokster, 545 US 913, 930 (2005)

One infringes contributorily by intentionally inducing or encouraging direct infringement, … and infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it … Although “[t]he Copyright Act does not expressly render anyone liable for infringement committed by another,” … these doctrines of secondary liability emerged from common law principles and are well established in the law.

I’ve discussed third party liability in detail previously on this site. This section begins with a provision establishing that Parties to the treaty recognize third party liability; I’ve included a footnote found in the text for clarity. Third party liability in copyright infringement is largely a creature of common law, so I’ve included language from the Supreme Court’s most recent third party infringement liability case, where the court restates the relevant principles.

Option 1
3. Each Party recognizes that some persons use the services of third parties, including online service providers, for engaging in copyright infringement. Each Party also recognizes that legal uncertainty with respect to application of copyright, limitations, exceptions, and defenses in the digital environment may present barriers to the economic growth of, and opportunities in, electronic commerce. Accordingly, in order to facilitate the continued development of an industry engaged in providing information services online while also ensuring that measures to take adequate and effective action against copyright or related rights infringement are available and reasonable each Party shall:
(a) provide limitations on the scope of civil remedies available against an
online service provider for infringing activities that occur by
(i) automatic technical processes, and
(ii) the actions of the provider’s users that are not directed or initiated by that provider and when the provider does not select the material, and
(iii) the provider referring or linking users to an online location,
when, in cases of subparagraphs (ii) and (iii) the provider does not have actual knowledge of the infringement and is not aware of facts or circumstances from which infringing activity is apparent; and
Option 2
Each Party recognizes that some persons use the services of third parties, including online service providers, for engaging in intellectual property rights infringements.
(a) In this respect, each Party shall provide limitation on the scope of civil remedies available against an on-line service provider for infringing activities that occur by
(i) automatic technical processes, or
(ii) the actions of the provider´s users that are not initiated nor modified by that provided and when the provider does not select the material or
(iii) the storage of information provided by the recipient of the service or at the request of the recipient of the service,
when exercising the activities as stipulated in paragraph 3(a)(ii) and/or (iii) the online service providers act expeditiously, in accordance with applicable law, to remove or disable access to infringing material or infringing activity upon obtaining actual knowledge of the infringement
the information at the initial source has been removed or disabled.

Option 1
(b) condition the application of the provisions of subparagraph (a) on meeting the following requirements:
(i) an online service provider adopting and reasonably implementing a policy to address the unauthorized storage or transmission of materials protected by copyright or related rights; and
(ii) an online service provider expeditiously removing or disabling access to material or alleged infringement, upon receipt of legally sufficient notice of alleged infringement, and in the absence of a legally sufficient response from the relevant subscriber of the online service provider indicating that the notice was the result of mistake or misidentification.
except that the provisions of (ii) shall not be applied to the extent that the online service provider is acting solely as a conduit for transmissions through its system or network.
Option 2:
Paragraph 3(a) shall not affect the possibility for a judicial or administrative authority, in accordance with the Parties legal system, requiring the service provider to terminate or prevent an infringement, nor does it affect the possibility of the parties establishing procedures governing the removal or disabling of access to information
The Parties shall not impose a general monitoring requirement on providers when acting in accordance with this paragraph 3.

3. Each Party shall enable right holders, who have given effective notification to an online service provider of materials that they claim with valid reasons to be infringing their copyright or related rights, to expeditiously obtain from that provider information on the identity of the relevant subscriber.

3. Each Party shall promote the development of mutually supportive relationships between online service providers and right holders to deal effectively with patent, industrial design, trademark and copyright or related rights infringement which takes place by means of the Internet, including the encouragement of establishing guidelines for the actions which should be taken.

17 USC § 512. Limitations on liability relating to material online

(a) Transitory Digital Network Communications.— A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the provider’s transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections, if—
(1) the transmission of the material was initiated by or at the direction of a person other than the service provider;
(2) the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider;
(3) the service provider does not select the recipients of the material except as an automatic response to the request of another person;
(4) no copy of the material made by the service provider in the course of such intermediate or transient storage is maintained on the system or network in a manner ordinarily accessible to anyone other than anticipated recipients, and no such copy is maintained on the system or network in a manner ordinarily accessible to such anticipated recipients for a longer period than is reasonably necessary for the transmission, routing, or provision of connections; and
(5) the material is transmitted through the system or network without modification of its content.

(b) System Caching.—
(1) Limitation on liability.— A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the intermediate and temporary storage of material on a system or network controlled or operated by or for the service provider in a case in which—
(A) the material is made available online by a person other than the service provider;
(B) the material is transmitted from the person described in subparagraph (A) through the system or network to a person other than the person described in subparagraph (A) at the direction of that other person; and
(C) the storage is carried out through an automatic technical process for the purpose of making the material available to users of the system or network who, after the material is transmitted as described in subparagraph (B), request access to the material from the person described in subparagraph (A),
if the conditions set forth in paragraph (2) are met.

[…]

(c) Information Residing on Systems or Networks At Direction of Users.—
(1) In general.— A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider—
(A)(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or
(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;
(B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and
(C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.

(2) Designated agent.— The limitations on liability established in this subsection apply to a service provider only if the service provider has designated an agent to receive notifications of claimed infringement described in paragraph (3), by making available through its service, including on its website in a location accessible to the public, and by providing to the Copyright Office, substantially the following information:
(A) the name, address, phone number, and electronic mail address of the agent.
(B) other contact information which the Register of Copyrights may deem appropriate.
The Register of Copyrights shall maintain a current directory of agents available to the public for inspection, including through the Internet, in both electronic and hard copy formats, and may require payment of a fee by service providers to cover the costs of maintaining the directory.

[…]

(d) Information Location Tools.— A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the provider referring or linking users to an online location containing infringing material or infringing activity, by using information location tools, including a directory, index, reference, pointer, or hypertext link, if the service provider—
(1)(A) does not have actual knowledge that the material or activity is infringing;
(B) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or
(C) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;
(2) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and
(3) upon notification of claimed infringement as described in subsection (c)(3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity, except that, for purposes of this paragraph, the information described in subsection (c)(3)(A)(iii) shall be identification of the reference or link, to material or activity claimed to be infringing, that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate that reference or link.

This provision largely mirrors the DMCA chapter on internet safe harbors. I’ve edited out large portions of the statute for space.

4.59 In order to provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors, the right holder of any copyright or related rights or owner of an exclusive license in connection with the exercise of their rights and that restrict unauthorized acts in respect of their works, or other subject matters specified under Article 14 of the TRIPS Agreement, each Party shall provide for civil remedies, or criminal penalties in appropriate cases of willful conduct , that apply to:
(a) the unauthorized circumvention of an effective technological measure that controls access to a protected work, performance, or phonogram; and
(b) the manufacture, importation, or circulation of a technology, service, device, product, component, or part thereof, that is: marketed or primarily designed or produced for the purpose of circumventing an effective technological measure; or that has only a limited commercially insignificant purpose or use other than circumventing an effective technological measure.

5. Each Party shall provide adequate legal protection against a violation of a measure implementing paragraph (4), independent of any infringement of copyright or related rights.

Option 1
Further, each Party may adopt exceptions and limitations to measures implementing paragraph 4 so long as they do not significantly impair the adequacy of legal protection of those measures or the effectiveness of legal remedies for violations of those measures.

Option 2
5. Each Party may provide for measures which would safeguard the benefit of certain exceptions and limitations to copyright and related rights, in accordance with its legislation.

17 USC § 1201. Circumvention of copyright protection systems

(a) Violations Regarding Circumvention of Technological Measures.—
(1)(A) No person shall circumvent a technological measure that effectively controls access to a work protected under this title. The prohibition contained in the preceding sentence shall take effect at the end of the 2-year period beginning on the date of the enactment of this chapter.

[…]

(2) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that—
(A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title;
(B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title; or
(C) is marketed by that person or another acting in concert with that person with that person’s knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title.

Also part of the DMCA, this provision creates separate liability for circumventing or manufacturing tools to circumvent technological protection measures.

6. Each Party shall provide adequate and effective legal remedies to protect electronic rights management information, each Party shall provide for civil remedies, or criminal penalties in appropriate cases of willful conduct, that apply to any person performing any of the following acts knowing or with respect to civil remedies having reasonable grounds to know that it will induce, enable, facilitate, or conceal an infringement of any copyright or related right:
(a) to remove or alter any electronic right management information. The obligations in paragraphs (4) and (5) are without prejudice to the rights, limitations, exceptions, or defenses to copyright or related rights infringement. Further, paragraph (4) does not imply any obligation to require that the design of, or the design and selection of parts and components for, a consumer electronics, telecommunications, or computing product provide for a response to any particular technological measure, so long as the product does not otherwise violate any measures implementing paragraph (4).
(b) to distribute, import for distribution, broadcast, communicate, or make available to the public copies of works, knowing that electronic rights management information has been removed or altered without authority.
6.2 Each Party may adopt limitations or exceptions to the requirements of subparagraphs (a) and (b).

17 USC § 1202. Integrity of copyright management information

(a) False Copyright Management Information.— No person shall knowingly and with the intent to induce, enable, facilitate, or conceal infringement—
(1) provide copyright management information that is false, or
(2) distribute or import for distribution copyright management information that is false.
(b) Removal or Alteration of Copyright Management Information.— No person shall, without the authority of the copyright owner or the law—
(1) intentionally remove or alter any copyright management information,
(2) distribute or import for distribution copyright management information knowing that the copyright management information has been removed or altered without authority of the copyright owner or the law, or
(3) distribute, import for distribution, or publicly perform works, copies of works, or phonorecords, knowing that copyright management information has been removed or altered without authority of the copyright owner or the law,
knowing, or, with respect to civil remedies under section 1203, having reasonable grounds to know, that it will induce, enable, facilitate, or conceal an infringement of any right under this title.

This is yet another part of the DMCA. There is not much to say about this provision – it hasn’t received a lot of attention in academic literature and there are very few published court opinions applying it.3

That actually takes care of the bulk of the substantive provisions of the ACTA. Next week, I’ll take a brief look at the remaining chapters, and then wrap up what lessons we can learn from this comparison, as well as make a few general observations about some of the other major criticisms of the treaty.

Footnotes

  1. I’ve been referring to the treaty in its acronym form as “the ACTA” rather than just “ACTA.” Maybe it’s just me, but while the former is technically correct, it still sounds weird to say. []
  2. Which itself was passed largely to implement WIPO treaties – which themselves were largely a result of the US’s National Information Infrastructure Initiative – which itself was turtles all the way down. []
  3. But check out IQ Group v. Wiesner Pub, 409 F.Supp.2d 587 (NJDC 2006) for a detailed discussion of the provision’s history and meaning. []

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September 03, 2010 · · Comments Off

Continuing with a look at the proposed Anti-Counterfeiting Trade Agreement (check out Part 1 and Part 2), we now turn to Section 3: Criminal Enforcement. It’s hard to say which section of the ACTA has sparked the most controversy, but this section is a good candidate. People are concerned whenever changes in the scope of criminal law and liability are discussed.

As well they should be.

While criminal and civil law operate in much the same way, the implications of classifying a wrong as criminal rather than civil are vast. The effects of a criminal conviction on a person are far more substantial than being held liable in a civil court. The conviction becomes part of one’s criminal record, and the penalties are often harsher, especially since the possibility of imprisonment is available in criminal cases. Criminal courts are under a significantly greater duty to “get it right” when it comes to prosecuting crimes.

When it comes to classifying wrongs as either criminal or civil, we still today largely follow the principle that William Blackstone described in the 1700s.

WRONGS are divisible into two sorts or species; private wrongs, and public wrongs. The former are an infringement or privation of the private or civil rights belonging to individuals, considered as individuals; and are thereupon frequently termed civil injuries: the latter are a breach and violation of public rights and duties, which affect the whole community, considered as a community; and are distinguished by the harsher appellation of crimes and misdemeanors.1

Criminal copyright infringement – especially the type of internet piracy prevalent today – gives rise to a particular problem in recognition by people as a public wrong. Piracy often doesn’t entail the types of egregious conduct associated with criminal behavior: for example, violence, fraud, or deceit. It can be difficult to see how the harms extend beyond the specific copyright owner. So it is only natural that the public is wary when the subject of criminal copyright infringement comes up.2

With that said, criticism of the criminal enforcement section in the ACTA still contains a fair deal of FUD. “Your kids could go to jail for noncommercial file sharing!” says Boing Boing. As with the previous sections, much of the FUD comes from not knowing what is in the ACTA provisions and what is currently US law.

Criminal Copyright Infringement in the US

Criminal penalties have been a part of copyright law in the US since 1897. Over the decades that followed, the scope and penalties of criminal copyright infringement have increased several times. In 1997, in an effort to address internet piracy, Congress passed the NET Act, which amended the definition of “commercial advantage or financial gain” to include large-scale noncommercial infringement.

What’s notable about the NET Act, and missing from cries of file sharing kids being locked up, is what didn’t happen since the law was passed. Our jails are not overflowing with torrent users. While enforcement of IP crimes has slowly been increasing by the US government, prosecution of all IP crimes – which includes “trafficking of goods with counterfeit trademarks or brands (such as clothing and consumer electronics), software piracy, the distribution of bootleg musical recordings and movies, selling company trade secrets, and derivative copyright violations of intercepting cable/satellite broadcasts” – still represents less than 1% of total crimes prosecuted.3 Most of the other ACTA negotiating party countries have had similar laws for nearly as long as the US. Fears of a pirate prison planet based on provisions which mirror laws that have been on the book for over a decade and haven’t resulted in locking up kids for file sharing are overstated.

One last thing to keep in mind: while it’s important that criminal laws are carefully crafted to only address actual, egregious public harms and imperative that constitutional and legal protections of alleged criminals are upheld, reality and practicality play just as much a role in keeping abuse of criminal provisions in check. Agencies which investigate and prosecute IP crimes have budgets, as well as far more common and harmful crimes to look at. Evidence must be gathered, and each element of the crime must be proven beyond a reasonable doubt – a burden that tends to weed out less certain cases and less culpable parties. David Goldstone, of the Computer Crime and Intellectual Property Section of the Department of Justice, explains other factors that may make US Attorneys less likely to prosecute IP crimes.

Let’s take a look now at Section 3 of the ACTA.

Section 3: Criminal Enforcement

Proposed ACTA Provision Corresponding US Law
ARTICLE 2.14: CRIMINAL OFFENSES

1. Each Party shall 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. Willful copyright or related rights piracy on a commercial scale includes:

(a) significant willful copyright or related rights infringements that have no direct or indirect motivation of financial gain; and
(b) willful copyright or related rights infringements for purposes of commercial advantage or financial gain.

17 USC § 506. Criminal offenses

(a) Criminal Infringement.—
(1) In general.— Any person who willfully infringes a copyright shall be punished as provided under section 2319 of title 18, if the infringement was committed—

(A) for purposes of commercial advantage or private financial gain;
(B) by the reproduction or distribution, including by electronic means, during any 180–day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $1,000; or
(C) by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public, if such person knew or should have known that the work was intended for commercial distribution.

3. Each Party shall provide for criminal procedures and penalties to be applied in accordance with its laws and regulations, against any person who, without authorization of the holder of copyright in a motion picture or other audiovisual work, knowingly uses an audiovisual recording device to transmit or make a copy of the motion picture or other audiovisual work, or any part thereof, from a performance of the motion picture or other audiovisual work in a motion picture exhibition facility open to the public.

17 USC § 506. Criminal offenses

(a) Criminal Infringement.—

[…]

(3) Definition.— In this subsection, the term “work being prepared for commercial distribution” means—

[…]

(B) a motion picture, if, at the time of unauthorized distribution, the motion picture—
(i) has been made available for viewing in a motion picture exhibition facility; and
(ii) has not been made available in copies for sale to the general public in the United States in a format intended to permit viewing outside a motion picture exhibition facility.

A separate provision specifically focused on “pre-release” infringement is relatively recent in the US, having been added in 2005 as part of the Artists’ Rights and Theft Prevention Act. Eric Goldman explains that before the Act, it was difficult to make a case against infringers of pre-released works because, in theory, pre-release works do not have any market value.

ARTICLE 2.15: CRIMINAL LIABILITY AND PENALTIES

1. Liability of Legal Persons
(a) Each Party shall adopt such measures as may be necessary, consistent with its legal principles, to establish the liability of legal persons for the offences referred to in Article 2.14.
(b) Subject to the legal principles of the Party, the liability of legal persons may be criminal or non-criminal.
(c) Such liability shall be without prejudice to the criminal liability of the natural persons who have committed the criminal offences.

2. Inciting, Aiding and Abetting
The provisions of this section shall apply to aiding and abetting the offences referred to in Article 2.14.

US Code Title 18, Federal Rules of Criminal Procedure

18 USC § 2. Principals

(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.

Liability of criminal defendants in US law is established primarily through common law. Title 18 of the US Code and the separately promulgated Federal Rules of Criminal Procedure also have provisions relating to establishing liability. 18 USC § 2 establishes that the same principles apply to those indirectly liable for infringement.

3. Penalties and Sanctions

(a) For the crimes referred to in Article 2.14, each Party shall provide effective, proportionate and dissuasive penalties that include imprisonment and monetary fines sufficiently high to provide a deterrent to future acts of infringement, with a view to removing the monetary incentive of the infringer.
(b) For legal persons held liable under Article 2.15.1, each Party shall provide for effective, proportionate and dissuasive sanctions, including monetary sanctions.

18 USC § 2319. Criminal infringement of a copyright

(a) Any person who violates section 506 (a) (relating to criminal offenses) of title 17 shall be punished as provided in subsections (b), (c), and (d) and such penalties shall be in addition to any other provisions of title 17 or any other law.

[Subsections specifying specific penalties edited for space. You can read them here.]

ARTICLE 2.16. SEIZURE, FORFEITURE/CONFISCATION AND DESTRUCTION

1. Seizure
(a) In case of an offence referred to in Article 2.14, each Party shall provide that its competent authorities shall have the authority to order the seizure of suspected counterfeit trademark goods or pirated copyright goods, any related materials and implements used in the commission of the alleged offence, documentary evidence relevant to the alleged offence and any assets derived from, or obtained directly or indirectly through the infringing activity.
(b) Each Party shall, if a prerequisite for such an order, according to its national law, is the identification of the items, ensure that the order need not determine the items that are subject to seizure in more detail than necessary to allow their identification for the purpose of the seizure.

2. Forfeiture/Confiscation and Destruction
(a) For the offences referred to in Article 2.14, each Party shall provide that its competent authorities shall have the authority to order confiscation/forfeiture or destruction where appropriate of all counterfeit trademark goods or pirated copyright goods, of materials and implements predominantly used in the creation of counterfeit trademark goods or pirated copyright goods, and of the assets derived from, or obtained directly or indirectly, through the infringing activity.
(b) Each Party shall provide that its competent authorities shall have the authority to ensure that the counterfeit trademark goods and pirated copyright goods that have been confiscated/forfeited under this subparagraph shall, if not destroyed, be disposed of outside the channels of commerce, in such a manner as to avoid any harm caused to the right holder.
(c) Each Party shall further ensure that confiscation/forfeiture and destruction under this subparagraph shall occur without compensation of any kind to the defendant.
(d) Each Party may provide that its judicial authorities have the authority to order the confiscation/forfeiture of assets the value of which corresponds to that of such assets derived from or obtained directly or indirectly through the infringing activity.

18 USC § 2323. Forfeiture, destruction, and restitution

(a) Civil Forfeiture.—
(1) Property subject to forfeiture.— The following property is subject to forfeiture to the United States Government:
(A) Any article, the making or trafficking of which is, prohibited under section 506 of title 17, or section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90, of this title.
(B) Any property used, or intended to be used, in any manner or part to commit or facilitate the commission of an offense referred to in subparagraph (A).
(C) Any property constituting or derived from any proceeds obtained directly or indirectly as a result of the commission of an offense referred to in subparagraph (A).

(2) Procedures.— The provisions of chapter 46 relating to civil forfeitures shall extend to any seizure or civil forfeiture under this section. For seizures made under this section, the court shall enter an appropriate protective order with respect to discovery and use of any records or information that has been seized. The protective order shall provide for appropriate procedures to ensure that confidential, private, proprietary, or privileged information contained in such records is not improperly disclosed or used. At the conclusion of the forfeiture proceedings, unless otherwise requested by an agency of the United States, the court shall order that any property forfeited under paragraph (1) be destroyed, or otherwise disposed of according to law.

(b) Criminal Forfeiture.—
(1) Property subject to forfeiture.— The court, in imposing sentence on a person convicted of an offense under section 506 of title 17, or section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90, of this title, shall order, in addition to any other sentence imposed, that the person forfeit to the United States Government any property subject to forfeiture under subsection (a) for that offense.

(2) Procedures.—
(A) In general.— The forfeiture of property under paragraph (1), including any seizure and disposition of the property and any related judicial or administrative proceeding, shall be governed by the procedures set forth in section 413 of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 853), other than subsection (d) of that section.
(B) Destruction.— At the conclusion of the forfeiture proceedings, the court, unless otherwise requested by an agency of the United States shall order that any—
(i) forfeited article or component of an article bearing or consisting of a counterfeit mark be destroyed or otherwise disposed of according to law; and
(ii) infringing items or other property described in subsection (a)(1)(A) and forfeited under paragraph (1) of this subsection be destroyed or otherwise disposed of according to law.

(c) Restitution.— When a person is convicted of an offense under section 506 of title 17 or section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90, of this title, the court, pursuant to sections 3556, 3663A, and 3664 of this title, shall order the person to pay restitution to any victim of the offense as an offense against property referred to in section 3663A (c)(1)(A)(ii) of this title.

ARTICLE 2.17: EX OFFICIO CRIMINAL ENFORCEMENT

Each Party shall provide that its competent authorities may act upon their own initiative to initiate investigation or legal action with respect to the criminal offenses described in Article 2.14.

28 USC § 547. Duties

Except as otherwise provided by law, each United States attorney, within his district, shall—
(1) prosecute for all offenses against the United States

Ultimately, it is the US attorneys who prosecute criminal copyright infringement cases. A broad array of federal agencies, however, are charged with investigating intellectual property offenses, including the FBI and ICE.

ARTICLE 2.X. RIGHTS OF THE DEFENDANT AND THIRD PARTIES

Each Party shall ensure that the rights of the defendants and third parties shall be duly protected and guaranteed.

US Constitution, Fourth, Fifth, Sixth, and Eighth Amendments; US Code Title 18, Federal Rules of Criminal Procedure

This section may seem obvious, but since the rights of criminal defendants are enshrined in the Constitution, we often don’t give much thought to them. As with criminal liability, additional rules and procedures protecting the rights of criminal defendants can be found in the US Code and Federal Rules of Criminal Procedure. Other nations recognize the rights of criminal defendants through their own written constitutions (which may have been enacted some time after the nation was founded), implied constitutions, or statute.

Footnotes

  1. 3 William Blackstone, Commentaries 2, available online at http://avalon.law.yale.edu/18th_century/blackstone_bk3ch1.asp. []
  2. Much of the discussion of the nature and history of criminal copyright infringement in the US was informed by I. Trotter Hardy’s excellent article Criminal Copyright Infringement, available at the William & Mary Law School Scholarship Repository. []
  3. Bureau of Justice Statistics, Intellectual Property Theft (2004). []

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August 27, 2010 · · Comments Off

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.1

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.2

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

Footnotes

  1. For example, the provision allowing Parties to seize infringing goods at the border. []
  2. India, for example, has regulations that mirror the proposed ACTA provision. []

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FUDFear, Uncertainty, and Doubt – was originally coined to describe a deliberate strategy of creating insecurity in customer’s minds to keep them from adopting competitors products. Since then, it has also been used to describe the outrage or fear that may build over a particular issue based on incomplete and erroneous information. In this sense, FUD arises organically out of naiveté or ignorance rather than being instigated (though it may often be fueled by third parties seeking an advantage).

Copyright law is not immune from FUD. Several years back, FUD swept across the internet over proposed orphan works legislation. Many were sure that this modest bill, which would have allowed libraries and archives to display older works where the copyright owner couldn’t be found without risking liability, would result in everybody losing all rights to everything they ever created.

So it’s not surprising to see a fresh round of FUD over the proposed Anti-Counterfeiting Trade Agreement (ACTA). Boing Boing’s Cory Doctorow has asserted that ACTA “will change the world’s internet laws,” that it’s a “screwjob for the world’s poor countries,” and that “your kids could go to jail for noncommercial music sharing.”  A Google attorney has called it “cultural imperialism” and describes the treaty as “something that has grown in the shadows, Gollum-like.”

Others claim it “could outlaw Google“; “create a culture of surveillance and suspicion“;  it is “unconstitutional, ineffective, inhumane, and unlawful.”

In short: “Be afraid. Be very afraid.”

If that’s all you had to go on, you might wonder who in their right mind is supporting this thing? As it turns out, ACTA does have supporters outside those negotiating it. Organizations and trade unions representing “actors, musicians, performers, composers, songwriters, music publishers, technicians and craftspeople, directors and their teams, and record and film companies (both large and small)” have written the US Administration to show their support for ACTA. You can find articles countering the FUD over ACTA by influential bloggers like Ben Sheffner and Barry Sookman.

Still, the FUD far outweighs any rational or informative discussion of ACTA. A multinational treaty is a big deal, and scare tactics only do a disservice to furthering our understanding of it. To provide some balance, let’s take a more dispassionate look at this treaty.

Treaty negotiations began in 2007. Like most trade agreements, the provisions evolved and morphed with each round of negotiations as parties made proposals and concessions. Also like most trade agreements, these preliminary discussions were not open to the public. However, concerns over the proposed treaty soon grew, and drafts of the agreement began to leak online. Each new leak brought a new round of criticism.

How Did All This Trouble Begin?

The Anti-Counterfeiting Trade Agreement is a proposed plurilateral treaty currently being negotiated between the US, the EU, Canada, Japan, Australia, Mexico, Morocco, New Zealand, the Republic of Korea and Singapore. According to the Office of the United States Trade Representative (USTR):

The objective of the ACTA negotiations is to negotiate a new, state-of-the art agreement to combat counterfeiting and piracy.

[…]

The ACTA is intended to assist in the efforts of governments around the world to more effectively combat the proliferation of counterfeit and pirated goods, which undermines legitimate trade and the sustainable development of the world economy, and in some cases contributes to organized crime and exposes American families to dangerous fake products.

The key to understanding ACTA is that its provisions are not substantive, but rather procedural. “Substantive rules of law define rights and duties, while procedural rules of law provide the machinery for enforcing those rights and duties.”1 ACTA does not affect the substance of copyright law – what works are covered, what rights are granted, what acts constitute infringement, what uses are allowed by third parties, or what defenses are available.2 Instead, it provides a framework for what procedures are available when infringement occurs.

Also key is understanding what ACTA doesn’t do. The treaty doesn’t “make new laws.” Take a look at Article 1.2: Nature and Scope of Obligations:

1. Members shall give effect to the provisions of this Agreement. A Party may implement in its domestic law more extensive protection and enforcement of intellectual property rights than is required by this Agreement, provided that such protection and enforcement does not contravene the provisions of this Agreement. Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.

2. Nothing in this Agreement creates any obligation with respect to the distribution of resources as between enforcement of intellectual property rights and enforcement of law in general.

In other words, once a nation adopts the treaty, any changes to its copyright laws must still go through the legislative process. The treaty provisions are broad and set the “floor” – the minimum standard for what is required from member nations. Each nation is free to decide how best to implement any changes needed to comply with ACTA’s obligations.

Comparing ACTA to US Copyright Law

Now that we know a bit more about where ACTA came from and where it’s going, let’s take a look at what it will do. There’s a lot of confusion about what’s in the treaty as well as concerns that it will radically alter the scope of US copyright law. With that in mind, I want to go through ACTA point by point and compare it to existing law.

Keep in mind the challenges of doing this before a final draft is adopted. Treaty negotiations began in 2007. Like all trade agreements, provisions have evolved and morphed over the years as parties make proposals and concessions. More provisions are bound to change by the time negotiations end later this year. I’m working off the official Consolidated Text Prepared for Public Release, provided by the USTR in April, 2010. The draft contains many bracketed sentences where the final language has not been settled or where additions have been proposed but not agreed upon. I’ve edited the text for cohesiveness, clarity, and readability. I’ve edited out specific references to patent, trademark, and other intellectual property rights for the same reasons.

Chapter 1 of the treaty includes administrative and housekeeping matters, like definitions and the above section on the nature and scope of obligations. Chapter 2 is titled “Legal Framework for Enforcement of Intellectual Property Rights” and is broken into several sections. In the first part of this series, we’ll take a look at Section 1: Civil Enforcement. Below is a side-by-side comparison between the proposed ACTA provision and corresponding US law. I’ve included a few notes under some of the provisions.

Section 1: Civil Enforcement

Proposed ACTA Provision Corresponding US Law
ARTICLE 2.1: AVAILABILITY OF CIVIL PROCEDURES

In the context of this section, each Party shall make available to right holders civil judicial procedures concerning the enforcement of any copyrights.

17 USC § 501. Infringement of copyright

(a) Anyone who violates any of the exclusive rights of the copyright owner as provided by sections 106 through 122 or of the author as provided in section106A (a), or who imports copies or phonorecords into the United States in violation of section 602, is an infringer of the copyright or right of the author, as the case may be […]
(b) The legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the requirements of section 411, to institute an action for any infringement of that particular right committed while he or she is the owner of it.

ARTICLE 2.X: INJUNCTIONS

1. In civil judicial proceedings concerning the enforcement of copyright, each Party shall provide that its judicial authorities shall have the authority subject to any statutory limitations under its domestic law to issue against the infringer an injunction aimed at prohibiting the continuation of the infringement, including an order to prevent infringing goods from entering into the channels of commerce and to prevent their exportation.

17 USC § 502. Remedies for infringement: Injunctions

(a) Any court having jurisdiction of a civil action arising under this title may, subject to the provisions of section 1498 of title 28, grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.

17 USC § 602(a). Infringing importation or exportation of copies or phonorecords

(2) Importation or exportation of infringing items.— Importation into the United States or exportation from the United States, without the authority of the owner of copyright under this title, of copies or phonorecords, the making of which either constituted an infringement of copyright, or which would have constituted an infringement of copyright if this title had been applicable, is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under sections 501 and 506.

Injunctions – court orders compelling or prohibiting a defendant to engage in specified conduct – have long been available as a remedy in copyright infringement cases. Importation of copyrighted goods is not a separate right; it is instead a specific example of the right to distribute that has existed in this country in some way even before the first copyright act.3

ARTICLE 2.2: DAMAGES

1. Each Party shall provide that:
(a) in civil judicial proceedings, its judicial authorities shall have the authority to order the infringer who knowingly or with reasonable grounds to know, engaged in infringing activity of copyright to pay the right holder
(i) damages adequate to compensate for the injury the right holder has suffered as a result of the infringement; or
(ii) at least in the case of copyright infringement, the profits of the infringer that are attributable to the infringement,
(b) in determining the amount of damages for copyright infringement, its judicial authorities shall consider, inter alia, any legitimate measure of value submitted by the right holder, which may include the lost profits, the value of the infringed good or service, measured by the market price, the suggested retail price, or the profits of the infringer that are attributable to the infringement.

17 USC § 504. Remedies for infringement: Damages and profits

(a) In General.— Except as otherwise provided by this title, an infringer of copyright is liable for […] —
(1) the copyright owner’s actual damages […]
(b) Actual Damages and Profits.— The copyright owner is entitled to recover the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages. In establishing the infringer’s profits, the copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.

Monetary damages are typically available in most types of lawsuits as a rough but efficient remedy for the wrong incurred. The measure and calculation of “actual damages” is more art than science, so courts need flexibility in computing damages on a case-by-case basis. The burden is on the copyright holder to “prove up” the amount of damages the court should order.

2. At least with respect to works, phonograms, and performances protected by copyright or related rights, in civil judicial proceedings, as an alternative to paragraph 1, each Party shall establish or maintain a system that provides:
(a) pre-established damages;
(b) presumptions for determining the amount of damages sufficient to compensate the right holder for the harm caused by the infringement; or
(c) additional damages
3. Where the infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity, each Party may authorize its judicial authorities to order the recovery of profits or the payment of damages, which may be pre-established.
4. Where a Party provides one of the options described in paragraph 2(a) or 2(b), that Party shall ensure that a right holder has the right to choose that option as an alternative to the remedies referred to in paragraph 1.

17 USC § 504. Remedies for infringement: Damages and profits

(a) In General.— Except as otherwise provided by this title, an infringer of copyright is liable for […]
(2) statutory damages, as provided by subsection (c).
[…]
(c) Statutory Damages.—
(1) Except as provided by clause (2) of this subsection, the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally.

In contrast to actual damages, statutory damages are damages set by law – either a set amount, or some sort of formula a court can apply. In cases where actual damages would be extremely difficult to determine – or where a plaintiff has suffered a non-financial harm – legislators may provide for statutory damages. Many times they also serve as a deterrent, especially in cases where the harm is diffuse and enforcement is costly.

5. Each Party shall provide that its judicial authorities, in appropriate cases, shall have the authority to order, at the conclusion of civil judicial proceedings that the prevailing party be awarded payment by the losing party of court costs or fees and reasonable attorney’s fees.

17 USC § 505. Remedies for infringement: Costs and attorney’s fees

In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.

Like soccer, the metric system, and techno music, the “loser pays” rule of litigation costs is followed by virtually every nation except the US. Instead, parties to a lawsuit in the US usually have to pay their own attorney fees and court costs, no matter who wins.4 However, the US rule has been abandoned by statute in a number of areas, including copyright law.

ARTICLE 2.3: OTHER REMEDIES

1. With respect to goods that have been found to be infringing an intellectual property right, each Party shall provide that in civil judicial proceedings, at the right holder’s request, its judicial authorities shall have the authority to order that such goods be recalled, definitively removed from the channel of commerce, or destroyed, except in exceptional circumstances, without compensation of any sort.
2. Each Party shall further provide that its judicial authorities shall have the authority to order that materials and implements the predominant use of which has been in the manufacture or creation of infringing goods be, without undue delay and without compensation of any sort, destroyed or disposed of outside the channels of commerce in such a manner as to minimize the risks of further infringements.
3. The judicial authorities shall order that those remedies be carried out at the expense of the infringer, unless particular reasons are invoked for not doing so.
4. In ordering those remedies, the judicial authorities shall take into account the need for proportionality between the seriousness of the infringement and the remedies ordered as well as the interest of third parties.

17 USC § 503. Remedies for infringement: Impounding and disposition of infringing articles

(a)(1) At any time while an action under this title is pending, the court may order the impounding, on such terms as it may deem reasonable—
(A) of all copies or phonorecords claimed to have been made or used in violation of the exclusive right of the copyright owner;
(B) of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies of phonorecords may be reproduced; and
(C) of records documenting the manufacture, sale, or receipt of things involved in any such violation, provided that any records seized under this subparagraph shall be taken into the custody of the court.
[…]
(b) As part of a final judgment or decree, the court may order the destruction or other reasonable disposition of all copies or phonorecords found to have been made or used in violation of the copyright owner’s exclusive rights, and of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies or phonorecords may be reproduced.

ARTICLE 2.4: INFORMATION RELATED TO INFRINGEMENT

Without prejudice to other statutory provisions which, in particular, govern the protection of confidentiality of information sources or the processing of personal data, each Party shall provide that in civil judicial proceedings concerning the enforcement of copyright, its judicial authorities shall have the authority upon a justified request of the right holder, to order the alleged infringer to provide, for the purpose of collecting evidence any relevant information on the origin and distribution network of the infringing goods or services that the infringer possesses or controls, where appropriate, to the right holder or to the judicial authorities. Such information may include information regarding any person or persons involved in any aspect of the infringement and regarding the means of production or distribution channel of such goods or services, including the identification of third persons involved in the production and distribution of the infringing goods or services or in their channels of distribution.

Federal Rules of Civil Procedure, Rule 37

(a) Motion for an Order Compelling Disclosure or Discovery.
(1) In General. – On notice to other parties and all affected persons, a party may move for an order compelling disclosure or discovery. The motion must include a certification that the movant has in good faith conferred or attempted to confer with the person or party failing to make disclosure or discovery in an effort to obtain it without court action.

17 USC § 512. Limitations on liability relating to material online
(h) Subpoena To Identify Infringer.—
(1) Request.— A copyright owner or a person authorized to act on the owner’s behalf may request the clerk of any United States district court to issue a subpoena to a service provider for identification of an alleged infringer in accordance with this subsection.

A court’s authority to compel a defendant to produce evidence during the pre-trial stage is established in the Federal Rules of Civil Procedure, which govern the procedure of all federal civil lawsuits. Additionally, Congress has specifically provided for copyright owners to subpoena online service providers for identification of alleged infringers.

ARTICLE 2.5: PROVISIONAL MEASURES

X. Each Party shall provide that its judicial authorities shall have the authority, at the request of the applicant, to issue an interlocutory injunction intended to prevent any imminent infringement of a copyright or related rights or trademark. An interlocutory injunction may also be issued, under the same conditions, against an infringing intermediary whose services are being used by a third party to infringe an intellectual property right. Each Party shall also provide that provisional measures may be issued, even before the commencement of proceedings on the merits, to preserve relevant evidence in respect of the alleged infringement. Such measures may include inter alia the detailed description, the taking of samples or the physical seizure of documents or of the infringing goods.
1. Each Party shall provide that its judicial authorities shall act expeditiously on requests for provisional measures inaudita altera parte, and shall endeavor to make a decision on such requests without undue delay, except in exceptional cases.

17 USC § 502. Remedies for infringement: Injunctions

(a) Any court having jurisdiction of a civil action arising under this title may, subject to the provisions of section 1498 of title 28, grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.

While this section may appear similar to Article 2.X above, note that 2.x refers to injunctions while this section refers to interlocutory injunctions – injunctions issued before a final decision by the court. In the US, these two are often referred to as permanent injunctions and preliminary injunctions. The second part of Article 2.5 refers to inaudita altera parte measures, a fancy way of saying requests made to a court by one party in the absence of the presence of the other party. US Courts have held that inaudita altera parte interlocutory injunctions, more commonly known as temporary restraining orders, are available to plaintiffs in copyright infringement lawsuits. For example, in Capitol Records v. Bluebeat, the Ninth Circuit issued a TRO after stating the following: “The standard for issuing a temporary restraining order (“TRO”) is identical to the standard for issuing a preliminary injunction. See Lockheed Missile & Space Co., Inc. v. Hughes Aircraft Co., 887 F. Supp. 1320, 1323 (N.D. Cal. 1995).

Also note that these measures extend to “infringing intermediaries.”5 US copyright law does not make a distinction between direct infringement and infringing intermediaries when it comes to what remedies are available. Just ask Napster, Aimster, Grokster, Isohunt, or Limewire – all of which had injunctions issued or sought against.

2. In civil judicial proceedings concerning copyright infringement, each Party shall provide that its judicial authorities shall have the authority to order the seizure or other taking into custody of suspected infringing goods, materials, and implements relevant to the act of infringement.

17 USC § 503. Remedies for infringement: Impounding and disposition of infringing articles

(a)(1) At any time while an action under this title is pending, the court may order the impounding, on such terms as it may deem reasonable—
(A) of all copies or phonorecords claimed to have been made or used in violation of the exclusive right of the copyright owner;
(B) of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies of phonorecords may be reproduced; and
(C) of records documenting the manufacture, sale, or receipt of things involved in any such violation, provided that any records seized under this subparagraph shall be taken into the custody of the court.
(2) For impoundments of records ordered under paragraph (1)(C), the court shall enter an appropriate protective order with respect to discovery and use of any records or information that has been impounded. The protective order shall provide for appropriate procedures to ensure that confidential, private, proprietary, or privileged information contained in such records is not improperly disclosed or used.
[…]
(3)(b) As part of a final judgment or decree, the court may order the destruction or other reasonable disposition of all copies or phonorecords found to have been made or used in violation of the copyright owner’s exclusive rights, and of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies or phonorecords may be reproduced.

3. Each Party shall provide that its judicial authorities have the authority to require the plaintiff, with respect to provisional measures, to provide any reasonably available evidence in order to satisfy themselves with a sufficient degree of certainty that the plaintiff’s right is being infringed or that such infringement is imminent, and to order the plaintiff to provide a reasonable security or equivalent assurance to protect the defendant, ensuring compensation for any prejudice suffered when the measure is revoked or lapses due to any reason, and to prevent abuse.

Federal Rules of Civil Procedure, Rule 65

(c) Security. The court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.

Injunction bonds serve as a check on overzealous lawsuits. Preliminary injunctions are granted before the court has heard the entire case and prevent a defendant from engaging in conduct that may eventually turn out to be entirely proper. In that event, an injunction bond compensates the defendant for any losses suffered as a result of the injunction.

Stay Tuned

So far, ACTA seems to hew very closely to existing US law. This should not be too surprising, as the idea behind the treaty is likely establishing a framework that is similar to the negotiating parties in order to “export” this framework to those nations not involved in the drafting.

Next week, we’ll dive into Section2: Border Measures.

Footnotes

  1. Substantive law. (2010, May 31). In Wikipedia, The Free Encyclopedia. Retrieved 06:45, August 18, 2010, from http://en.wikipedia.org/w/index.php?title=Substantive_law&oldid=365190840 []
  2. Substantive copyright law is guided largely by the Berne Convention for the Protection of Literary and Artistic Works, created in the 1880s and currently signed by 164 nations. []
  3. See Patry on Copyright § 13:40: “Of the 12 states in the immediate post-Revolutionary War era to pass copyright laws (only Delaware did not), nine had provisions barring the importation of books printed beyond the States’ borders.” []
  4. See “Loser Pays,” by Walter Olson, for more on this topic. []
  5. See Viacom Appeals Lawsuit Against YouTube for a discussion on direct infringement versus secondary liability. []

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