by Eric Davies

Introduction

The debate over the Anti-counterfeiting Trade Agreement (ACTA) rumbles on in the European Union, with no guarantee that the European Parliament will approve the Agreement in the EU.

Negotiated between June 2008 and November 2010, ACTA is an international trade agreement between 37 countries, intended to ensure protection of intellectual property rights (IPR) worldwide. The preamble to the Agreement states that:

the proliferation of counterfeit and pirated goods, as well as of services that distribute infringing material, undermines legitimate trade and sustainable development of the world economy, causes significant financial losses for right holders and for legitimate businesses, and, in some cases, provides a source of revenue for organized crime and otherwise poses risks to the public.

The EU is estimated to lose billions of euros each year through counterfeiting and piracy, with significant implications for EU businesses, trading both inside and outside the Member States. As Trade Commissioner Karel De Gucht recently noted:

Intellectual property is Europe’s main raw material, but the problem is that we currently struggle to protect it outside the European Union. This hurts our companies, destroys jobs and harms our economies. This is where ACTA will change something for all of us — as it will help protect jobs that are currently lost because counterfeited and pirated goods worth 200 billion Euros are floating around on the world markets.

Signatories

The signatories to ACTA are the EU and its Member States, plus Australia, Canada, Japan, Mexico, Morocco, New Zealand, Singapore, South Korea, Switzerland and the United States. It is open for additional signatories until 1 May 2013.

Unless and until the EU and its 27 Member States ratify ACTA, the EU will not be bound by the Agreement and it will not apply either to the EU or to any individual Member State. Although supported by the European Commission and the Council, ACTA must be approved by the European Parliament if it is to be adopted as EU law.

That approval is far from certain, with opinion on the initiative deeply divided in the EU. The European Parliament has received a petition signed by more than 2.4 million people who fear that ACTA threatens a free and open Internet. Although ACTA specifies that national enforcement procedures are to be implemented in a way that “preserves fundamental principles such as freedom of expression, fair process, and privacy”, concerns have been expressed that a lack of detail in the Agreement could lead to unintended consequences, depending on how the text is interpreted.

Supporters of the Agreement argue that it will not change EU law, but will enforce existing rights and help tackle large-scale infringements at the Union’s borders.

Court of Justice

In February this year, the European Commission agreed to refer ACTA to the Court of Justice, in order for the Court to assess whether ACTA is in any way incompatible with the EU's fundamental rights and freedoms as expressed in the Treaties and in the Charter of Fundamental Rights.

However, the Court’s decision may be irrelevant, as the European Parliament’s International Trade Committee is due to vote on the Agreement by the end of May, with the full Parliament then voting during its plenary session in June. Although Parliament will take account of the Court’s decision, if MEPs fail to support ACTA, then the Agreement will not become law in the EU, whatever the Court of Justice decides.

Further information

The text of ACTA, together with associated background and explanatory materials, can be found on the European Commission and European Parliament websites.

Last reviewed 4 May 2012