ACTA Update X

As far as we can tell, ACTA has been put on hold for months, maybe even a year, while the European Court of Justice (ECJ) considers its compatibility or otherwise with European laws. But that doesn't mean everything has stopped. The European...

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As far as we can tell, ACTA has been put on hold for months, maybe even a year, while the European Court of Justice (ECJ) considers its compatibility or otherwise with European laws. But that doesn't mean everything has stopped. The European Parliament has begun examining ACTA from various viewpoints through its committees.

The first such meeting took place last week, and had a typical performance from the EU Commissioner responsible for ACTA, which I've analysed elsewhere. It also had an absolutely brilliant ten-minute evisceration of ACTA by the Canadian expert on intellectual monopolies, Michael Geist – do watch the video of it if you can.

But what strikes me is the almost total absence of any pro-ACTA activity at the moment. It's as if even its supporters are ashamed of it. That's what makes a recently-released document entitled "ACTA in the EU: A Practical Analysis" so interesting. [.pdf].

It's a joint production, from a pair of acronymic organisations: BASCAP and INTA. BASCAP is "Business Action to Stop Counterfeiting and Piracy", and was set up by the International Chamber of Commerce (ICC). INTA is the International Trademark Association, and in the context of ACTA has already made a rather remarkable offer to the ECJ.

The main section of the BASCAP/INTA document is headed "The role of ACTA in protecting Europe’s intellectual capital, competitiveness, economy and jobs", and takes the form of a syllogism.

intellectual property (IP) is vital for innovation, creativity and competitiveness

and

The European economy is particularly susceptible to IP crime.

therefore, we need ACTA, because:

it is an important tool that complements the array of international provisions that exist to protect governments and public from counterfeiting and piracy.

So let's examine at that argument.

Of course, open source and all the other highly innovative open movements based on sharing information rather than hoarding it, show that the initial premise is false for a start. But for the sake of argument, let's pretend it's true. The evidence for the second premise is given in the BASCAP/INTA text as follows:

The European Commission notes that there has been: "an amazing upward trend in the number of shipments suspected of violating intellectual property rights (IPR). Customs in 2010 registered around 80,000 cases, a figure that has almost doubled since 2009."

The European Commission also noted that: "more than 103 million products were detained at the EU external border and that on-line sales caused a spectacular increase of detentions in postal traffic where 60% of the goods detained were medicines".

On the digital piracy side, a recent study by ICC showed that EU losses from piracy will reach as much as 1.2 million jobs and ‚¬240 billion in retail revenue by 2015 in the Europe's film, TV, music and software industries.

I'll take the last of these first. To start, note that this is a recent study by the ICC – so BASCAP, which is an ICC initiative, is quoting research that it commissioned itself. Nothing wrong with that of course, provided that work was carried out objectively, and that the figures were obtained using a rigorous methodology.

As it happens, I am not only one of the few people in the universe to have read the original report, which is called "Building a Digital Economy", but I also checked out where it got those impressive-sounding figures of 1.2 million jobs and ‚¬240 billion lost due to digital piracy; some readers with good memories may even recall it, since I published my results here on Computerworld UK. Here's the summary of what I found:

So the net result of this 68-page report, with all of its tables and detailed methodology, is that four out of the top five markets used for calculating the overall piracy loss in Europe draw on figures supplied by the recording industry itself. Those apparently terrifying new figures detailing the supposed loss of money and jobs due to piracy in Europe turn out to be little more than a re-statement of the industry's previous claims in a slightly different form.

In other words, those figures are really quite worthless, since they simply recycle the industry's earlier unfounded claims: they are not independent at all.

So let's look at the two other figures quoted. You may recognise these, too: they are from the European Commission's report on piracy that I discussed in detail in ACTA Update V. My conclusion from looking at these figures was as follows:

the countries that are signatories to ACTA aren't sending counterfeits to Europe (except possibly Greece, and that's in Europe, and already covered by strict EU laws), while the countries that do export large quantities of counterfeits to Europe aren't in ACTA, and therefore will ignore it.

That's imply because according to the European Commission's own figures, 94.92% of counterfeits come from China: China is not a signatory to ACTA, and therefore not bound by its terms.

And yet this is precisely what the BASCAP document tries to gloss over in the other main section, entitled "The Benefits of ACTA":

ACTA is an instrument that fosters international trade. By ensuring that businesses outside the EU compete on fair terms with non-EU companies, ACTA supports EU exports. ACTA does not require that the EU's existing intellectual property enforcement rules be changed. Indeed, the standards for enforcing intellectual property in the EU are already higher than ACTA requires, as explained further below.

However, many countries outside the EU, including countries outside the group of countries that negotiated ACTA, do not ensure a similar level playing field. In many parts of the world, piracy, counterfeiting and unfair competition are not banned or deterred through effective enforcement. If adopted and implemented by countries participating in the trade agreement – and in turn by the EU's broader trading partners, such as the BRIC [Brazil, Russia, India, China] countries, ACTA will improve the rule of law on intellectual-property matters in such countries. This will give EU companies more incentives, protection and encouragement to export abroad and to invest in international development. This, in turn, induces EU companies to expand their manufacturing facilities and to hire people, prompting a virtuous cycle for EU economic growth.

The second paragraph is the key one, because it exposes the disastrous logic failure of ACTA. BASCAP rightly notes that piracy is not "banned or deterred through effective enforcement" in many parts of the world – absolutely true. Then comes the great big "if":

If adopted and implemented by countries participating in the trade agreement – and in turn by the EU's broader trading partners, such as the BRIC countries, ACTA will improve the rule of law on intellectual-property matters in such countries.

But there is absolutely no connection. If the ACTA countries ratify the treaty, it will have zero effect on counterfeiting in the EU as I've explained in Update V or on counterfeits of EU goods outside Europe, as I noted in Update VIII. And even if they do ratify, there is zero reason to believe that the BRIC countries will then ask to join the club – why should they?

ACTA was drawn up in order to penalise business activities in countries like the BRIC block that are viewed as inconvenient by the US and EU (principally): signing up to ACTA would cause huge harm to those emerging economies. So there is no reason whatsoever to believe that China and India, say, will happily sign up to ACTA's terms that were explicitly devised to "improve the rule of law" in those countries – that is, make them subject to the West. Those days of neo-colonialism are over, in case people hadn't noticed.

So BASCAP/INTA's central argument – that "the ratification of ACTA will provide important global support for the EU’s innovative, cultural and branded sectors - and the numerous jobs and other economic benefits that they generate" - simply doesn't stand up to scrutiny.

The rest of the document comments on a number of other areas in the treaty, and makes various erroneous assertions – notably about "commercial scale", the scope of criminal measures and the scale of civil damages – that I have tackled in previous updates, so I will leave their debunking as an exercise to the reader. Future ACTA Updates on Computerworld UK will look at some of the other key issues that it chooses – for understandable reasons – to ignore.

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