A Case Against the ACTA
51 Pages Posted: 13 Apr 2011 Last revised: 23 Apr 2015
Date Written: April 10, 2011
The Anti-counterfeiting Trade Agreement (ACTA) is being considered by the Obama Administration as an Executive Order. If signed, this Order will greatly enhance controls placed at the borders of 36 countries to attempt to stop the international flow of so-called counterfeit goods. To remove the social, political and emotional sensitivity, I adopt the value neutral term of “imitative commodity” to describe what some call counterfeits, knockoffs, pirates, etc. This article uses just three manufacturers of luxury status goods to consider whether the ACTA will have positive or negative consequences. It concludes that the data supporting the need for the ACTA is overstated and unverified, that the ACTA is actually not responsive to the precise problem which it purports to correct, that the ACTA merely acts a policy laundering getting the Obama Administration something they fear they could not get in the public law forum, and consists of vague and misdirected border measures and criminal provisions. The ACTA is raised in the context of international terrorism supporting and/or maintaining the imitative commodity industry. However, just like the value of the imitative commodity industry, the value of actual support the imitative commodity industry receives from terrorists and the benefit derived to terrorists is grossly overstated. In fact, there are many positive elements to imitative commodity. Some claim it is actually socially optimal to have some imitative commodity. Imitative commodities operate as free advertising for the legitimate good maker. Imitative commodities improve the goodwill of a legitimate good maker. The shear existence of imitative commodities allows legitimate high-end makers to sustain otherwise unsustainable prices for their luxury status goods. In the end, we have vilified imitative commodities makers without giving thorough and analytical thought to the economic, social or legal advantages made possible by some imitative commodities. This article is about quantity not quality. The ACTA operates as a sledge hammer to kill an ant. The ACTA works to make public the intellectual property rights of some manufacturers that used to be private. As such, the ACTA also operates as a corporate bailout. What is required is a nuanced solution to a nuanced problem.
Keywords: Anti-Counterfeiting Trade Agreement, ACTA, Trademark, Counterfeit Goods, Knock-Off Goods, Imitative Commodities
JEL Classification: A12
Suggested Citation: Suggested Citation