On April 21, 2010, the long-awaited draft text of the multinational Anti-Counterfeiting Trade Agreement (“ACTA”) was finally released. The draft text, which does not yet have the effect of law anywhere, is the result of three years of talks among representatives of the 37 participating jurisdictions – including the U.S. and European Union, Australia, Japan, South Korea, Mexico, New Zealand, Singapore, Switzerland, and several individual E.U. states.

In addition to significant developments in online and electronic anti-piracy measures, the draft ACTA agreement includes Section 2 on “Border Measures” which outlines in practical terms the potential future of Customs practices worldwide with respect to “goods suspected of infringing intellectual property rights.” If laws and practices consistent with ACTA are adopted in member countries, significant intellectual property rights (IPR) protections currently in place in the U.S. through U.S. Customs could eventually become the norm worldwide. Currently U.S. Customs has independent authority to act only on counterfeit trademarks and piratical copies of copyrighted works, not design, plant, or utility patents. The draft ACTA contemplates, however, broader protections to give border control agents the ability to independently detain and seize goods that infringe patent rights. The U.S. representative to ACTA opposes giving border control agents authority to make independent determinations of patent infringement.

Section 2 of ACTA would allow border authorities to request IPR information from rights holders and may allow for rights holders to lodge such information proactively. It would allow IPR holders to request detention and seizure of incoming, outgoing, and trans-shipped goods suspected of infringement. And, it would allow border authorities to detain and seize such shipments without prior request by the IPR holder. To protect against abusive assertions of intellectual property rights, ACTA provides safeguards such as the posting of bonds to protect innocent importers, exporters, and others. Proposed remedies include destruction of infringing goods and disposal outside the channels of commerce, as long as the IPR holder is not harmed thereby. Mere obliteration of a counterfeit mark will not be sufficient, other than in exceptional cases. IPR holders may be provided valuable information about the details of specific shipments of goods, in order to assist in detecting infringement. Member jurisdictions would be allowed to exclude from seizure small quantities of goods of a non-commercial nature contained in personal luggage.

The final text and adoption of ACTA is still in the future. Implementation of ACTA and potential standardization of a baseline for multinational border enforcement of intellectual property rights is still further off on the horizon. Benefits for U.S. IPR holders from an international framework could be substantial, especially as counterfeiters increasingly organize their activities on an international scale.

The draft text of the ACTA is available here on the U.S. Trade Representative’s ACTA page.