ACTA: thought for FUD, Part 1

By Terry Hart, August 20, 2010.

FUD – Fear, 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 ofÂ naivetÃ©Â 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).Â 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.” Â A Google attorney has called it “cultural imperialism” and describes the treaty as “something that has grown in the shadows,Â Gollum-like.”

Others claim it “could outlaw Google“; “create a culture of surveillance and suspicion“; Â 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, ACTAÂ does have supporters outside those negotiating it. Organizations and trade unions representing “actors, musicians, performers,Â composers, songwriters, music publishers, technicians and craftspeople, directors andÂ 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,Â the EU,Â 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.

[â€¦]

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.” ¹Substantive law. (2010, May 31). InÂ Wikipedia, The Free Encyclopedia. Retrieved 06:45, August 18, 2010, fromÂ http://en.wikipedia.org/w/index.php?title=Substantive_law&oldid=365190840 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. ²Substantive 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. 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 Â§ 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 [â€¦] (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 Â§ 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 Â§ 602(a). Infringing importation or exportation of copies or phonorecords (2) Importation or exportation of infringing items.â€” 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. ³See Patry on Copyright Â§Â 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.”
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 Â§ 504. Remedies for infringement: Damages and profits (a) In General.â€” Except as otherwise provided by this title, an infringer of copyright is liable for [â€¦] â€” (1) the copyright ownerâ€™s actual damages [â€¦] (b) Actual Damages and Profits.â€” 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 infringerâ€™s profits, the copyright owner is required to present proof only of the infringerâ€™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 Â§ 504. Remedies for infringement: Damages and profits (a) In General.â€” Except as otherwise provided by this title, an infringer of copyright is liable for [â€¦] (2) statutory damages, as provided by subsection (c). [â€¦] (c) Statutory Damages.â€” (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 attorneyâ€™s fees.	17 USC Â§ 505. Remedies for infringement: Costs and attorneyâ€™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 attorneyâ€™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. ⁴See “Loser Pays,” by Walter Olson, for more on this topic. 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 holderâ€™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 Â§ 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 reasonableâ€” (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. [â€¦] (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 ownerâ€™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 Â§ 512. Limitations on liability relating to material online (h) Subpoena To Identify Infringer.â€” (1) Request.â€” A copyright owner or a person authorized to act on the ownerâ€™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 Â§ 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: â€œThe standard for issuing a temporary restraining order (â€œTROâ€) is identical to the standard for issuing a preliminary injunction.Â 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.” ⁵See Viacom Appeals Lawsuit Against YouTube for a discussion on direct infringement versus secondary liability. 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 Â§ 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 reasonableâ€” (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. [â€¦] (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 ownerâ€™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 plaintiffâ€™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.

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 Â§ 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 [â€¦]
(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 Â§ 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 Â§ 602(a). Infringing importation or exportation of copies or phonorecords

(2) Importation or exportation of infringing items.â€” 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. ³See Patry on Copyright Â§Â 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.”

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 Â§ 504. Remedies for infringement: Damages and profits

(a) In General.â€” Except as otherwise provided by this title, an infringer of copyright is liable for [â€¦] â€”
(1) the copyright ownerâ€™s actual damages [â€¦]
(b) Actual Damages and Profits.â€” 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 infringerâ€™s profits, the copyright owner is required to present proof only of the infringerâ€™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 Â§ 504. Remedies for infringement: Damages and profits

(a) In General.â€” Except as otherwise provided by this title, an infringer of copyright is liable for [â€¦]
(2) statutory damages, as provided by subsection (c).
[â€¦]
(c) Statutory Damages.â€”
(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 attorneyâ€™s fees.

17 USC Â§ 505. Remedies for infringement: Costs and attorneyâ€™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 attorneyâ€™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. ⁴See “Loser Pays,” by Walter Olson, for more on this topic. 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 holderâ€™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 Â§ 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 reasonableâ€”
(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.
[â€¦]
(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 ownerâ€™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 Â§ 512. Limitations on liability relating to material online
(h) Subpoena To Identify Infringer.â€”
(1) Request.â€” A copyright owner or a person authorized to act on the ownerâ€™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 Â§ 502. Remedies for infringement: Injunctions

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: â€œThe standard for issuing a temporary restraining order (â€œTROâ€) is identical to the standard for issuing a preliminary injunction.Â 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.” ⁵See Viacom Appeals Lawsuit Against YouTube for a discussion on direct infringement versus secondary liability. 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 Â§ 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 reasonableâ€”
(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.
[â€¦]
(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 ownerâ€™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 plaintiffâ€™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.

References[+]

References
↑1	Substantive law. (2010, May 31). InÂ Wikipedia, The Free Encyclopedia. Retrieved 06:45, August 18, 2010, fromÂ 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 Â§Â 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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