Case A-001/12, ACTA – is an international IP law trade agreement compatible with EU law?

The EU Commission has asked the Court of Justice of the European Union whether the Anti-Counterfeiting Trade Agreement (ACTA) complies with the EU law.

Facts
ACTA is the acronym for the Anti-Counterfeiting Trade Agreement. It is a treaty supplementing another key piece of international law protecting intellectual property law, the World Trade Organisation’s ‘TRIPs’ agreement.

In 2008, negotiations began which would lead to the ACTA. One of the parties active in the negotiations was the EU. The EU Commission conducted a part of the negotiations on behalf of the EU. Another part of the negotiations, which related to criminal law, was negotiated on behalf of the EU by the rotating Presidency of the Council.

In 2010, the negotiations surrounding ACTA were concluded. In June 2011, the Commission proposed a Council Decision for signing ACTA. And in February 2012, in accordance with the decision-making procedure under Article 218(6)(a)(v) TFEU, the EU Parliament duly received the EU Council’s request to approve the Council’s Decision. However, the EU Parliament refused to give its consent.

Question Referred
In May 2012, the Commission requested the Court to produce an opinion on ACTA. According to the Commission’s ACTA website-page, the Commission has asked:

Is the envisaged Anti-Counterfeiting Trade Agreement (ACTA) compatible with the Treaties and in particular with the Charter of Fundamental Rights of the European Union?

The Commission’s Standpoint
The Commission’s Question was not, however, sent off to the Court in isolation. It was accompanied by an explanation as to why it believed that ACTA was compatible with EU law. The thrust of the Commission’s explanation is to dismiss the legal concerns expressed by both a specialist regulatory body, and eminent academics. A copy of the Commission’s formal request and its interpretation of EU law is available on a Dutch ministerial website.

Thus, whereas the European Data Protection Supervisor had claimed that ACTA’s provisions were so vague as to offer insufficient protection to prevent EU fundamental rights from being infringed, the Commission has responded by saying that the nature of ACTA has clearly escaped the EDPS. ACTA contains international obligations for the contracting parties. None of the provisions in ACTA are directly applicable inside the legal order of the EU. An incompatibility with EU law would only arise if the provisions would force the Union to act, in the form of legislation, in a way which was incompatible with the Treaties. And yet ACTA’s provisions are sufficiently flexible to allow for an implementation that complies with the EU Treaties – such a flexibility is not incompatible with the Treaties. Besides, ACTA contains numerous guarantees for fundamental rights, be they stated explicitly in Article 1 ACTA, or by means of mentioning provisions in the TRIPs Agreement. These guarantees, the Commission believes, contribute to the Union being able to realise a ‘practical balance’ between the enforcement of ACTA and the fundamental rights concerned.

And whereas the ‘Opinion of European Academics’ on ACTA had suggested that Article 12(2) ACTA, (allowing provisional measures without hearing the other party first), might infringe the legal principle of the right to be heard in urgent cases, this was without legal foundation. ACTA complies with the right to be heard. The right forms part of a fair treatment of a case. This is guaranteed by Article 47(2) of the EU Charter. Further, Article 12(4) ACTA has an eye to the interests of defendants in so far as it relates to evidence. The provision expressly requires a sufficient degree of certainty that the applicant’s rights are either already being infringed or that an infringement will take place imminently. Article 12(5) ACTA allows judicial authorities to require an applicant to provide the defendant with appropriate compensation in the event that the defendant is subsequently not shown to be infringing an intellectual property right.

Moreover, ACTA also provides implicit guarantees. Article 1 ACTA expressly states that ‘Nothing in this Agreement shall derogate from any obligation of a Party with respect to any other Party under existing agreements, including the TRIPS Agreement.’ And Article 50 TRIPs also provides a defendant with guarantees to be informed, and also the right to request a review of any measure which has been taken against them.

In so far as the EU Charter is concerned, provisional measures granted for the purposes of enforcing IP rights without the other party being heard does restrict the right to be heard, and falls within Article 47 of the EU Charter. Article 52(1) of the EU Charter allows fundamental rights to be restricted when the proportionality principle is taken into account, such as where restrictions respond to the need to protect the rights and freedoms of others. In that context, it is important that Article 17 of the EU Charter also recognises the protection of property, which covers intellectual property rights owned by the rights holder.

Further, any judicial measure issued without the other side having been heard must satisfy three cumulative requirements if it is to comply with Article 47 EU Charter. The measure must be designed to protect the rights or freedoms of others. Any avoidance of the need to hear the person affected by the measure must be necessary in order to guarantee the effectiveness of the measure. And third, there must be supplementary procedural guarantees that a person affected by the measure can challenge this at a later date.

In response to those doubts which have been expressed that Article 27(4) ACTA (allowing an authority to order an online service provider to disclose sufficient information to identify a subscriber) might not comply with EU privacy law; the Commission notes that in contrast to Articles 27(5)-(8) ACTA, subsections 3 and 4 do not contain a real obligation. Subsection 3 contains a mere invitation for ACTA parties to work together with industry to encourage the enforcement of specific intellectual property law rights. Article 27(4) is expressly voluntary. It creates no obligation on the Union, and such an obligation can only be created in accordance with its legislation and law. It should also be remembered that Article 4(1)(a) ACTA mentions the protection of privacy. Furthermore, Article 27(4) ACTA contains elements which reflect the need to respect the principle of proportionality, and to provide a balance with the rights of others, as required by Article 52(1) of the EU Charter. In that context, the EU Commission cites C-275/06, Promusicae, and C-461/10, Bonnier, to conclude that if the Union were to decide to implement Article 27(4) ACTA, then it would be necessary to grant the competent authorities the ability to balance the conflicting  interests and order disclosure on the basis of the facts in the particular case, taking into account the principle of proportionality.

In respect of Article 11 ACTA, which requires the alleged infringer to provide information to the rights holder or to the judicial authorities, the Commission merely reiterates its points which it had made in the context of privacy law, and adds that there are also general guarantees such as those enshrined in Articles 4 and 6 of ACTA.

Update
The Curia website indicates that the Commission has withdrawn its request for advice and that the reference has been removed from the register (Order dated 18 February 2013).

For an “article-by-article” commentary on ACTA, see Michael Blakeney (2012) Intellectual Property Enforcement: A Commentary on the Anti-Counterfeiting Trade Agreement (ACTA) (Edward Elgar).

For a review of this book, see ‘ACTA is dead? Long live ACTA! A review of Blakeney on ACTA‘ in the Journal of Intellectual Property Law and Practice, published online 9 January 2013.

Update – 13 November 2013
“The CJEU’s ‘copyright’ rulings in Promusicae and Bonnier Audio were mentioned in the context of the now aborted ‘ACTA’ reference to the CJEU.

These two CJEU judgments have just been mentioned in the context of a trade mark law reference from the German Supreme Court.

Note: my summary of the German Supreme Court’s reference, first posted here on 13 November 2013 and before it was listed by the CJEU, can be read here: Case C-580/13, Coty Germany – does fake toilet water flush bank confidentiality down the pan?

Update – 2 November 2014
According to an EU Commission Press Release dated 30 October 2014, the EU Commission is to seek a legal opinion from the CJEU about the competence of the EU Commission to sign the Free Trade Agreement with Singapore, and to determine which of the Agreement’s provisions are either in the EU’s exclusive competence or within its shared competence or within the ambit of the Member States and thus subject to approval by national parliaments.

Update – 26 November 2014
In light of the CJEU having declared the EU’s Data Retention Directive to be invalid, the European Parliament is now requesting a legal opinion from the CJEU about the new Passenger Name Record Agreement with Canada.

According to a Resolution of the European Parliament dated 25 November 2014, the opinion is to centre on whether this Agreement complies with various provisions of EU law and the EU Charter.

Of particular concern to the Parliament is the Agreement’s compatibility with Article 16 relating to Treaties and Articles 7, 8 and 52(1) of the EU Charter as regards the right of individuals to protection of personal data. The European Parliament also queries the choice of legal basis of the Agreement, namely Articles 82(1)(d) and 87(2)(a) TFEU (police and judicial cooperation) rather than Article 16 TFEU (data protection).