Update: The leaked European Commission memo is now online.

Negotiations on the highly controversial Anti-Counterfeiting Trade Agreement start in a few hours in Seoul, South Korea. This week's closed negotiations will focus on "enforcement in the digital environment." Negotiators will be discussing the Internet provisions drafted by the US government. No text has been officially released but as Professor Michael Geist and IDG are reporting, leaks have surfaced. The leaks confirm everything that we feared about the secret ACTA negotiations. The Internet provisions have nothing to do with addressing counterfeit products, but are all about imposing a set of copyright industry demands on the global Internet, including obligations on ISPs to adopt Three Strikes Internet disconnection policies, and a global expansion of DMCA-style TPM laws.

As expected, the Internet provisions will go beyond existing international treaty obligations and follow the language of Article 18.10.30 of the recent U.S. – South Korea Free Trade Agreement. We see three points of concern.

First, according to the leaks, ACTA member countries will be required to provide for third-party (Internet Intermediary) liability. This is not required by any of the major international IP treaties – not by the 1994 Trade Related Aspects of IP agreement, nor the WIPO Copyright and WIPO Performances and Phonograms Treaty. However, US copyright owners have long sought this. (For instance, see page 19 of the Industry Functional Advisory Committee report on the 2003 US- Singapore Free Trade Agreement noting the need for introducing a system of ISP liability). (Previously available at http://www.ustr.gov/new/fta/Singapore/advisor_reports.htm.)

Second and more importantly, ACTA will include some limitations on Internet Intermediary liability. Many ACTA negotiating countries already have these regimes in place: the US, EU, Australia, Japan, South Korea. To get the benefit of the ACTA safe harbors, Internet intermediaries will need to follow notice and takedown regimes, and put in place policies to deter unauthorized storage and transmission of allegedly copyright infringing content.

However, contrary to current US law and practice, the US text apparently conditions the safe harbors on Internet intermediaries adopting a Graduated Response or Three Strikes policy. IDG reports that:

"The U.S. wants ACTA to force ISPs to "put in place policies to deter unauthorized storage and transmission of IP infringing content (for example clauses in customers' contracts allowing a graduated response)," according to the [leaked European] Commission memo."

Let's reflect on what this means: First, the US government appears to be pushing for Three Strikes to be part of the new global IP enforcement regime which ACTA is intended to create – despite the fact that it has been categorically rejected by the European Parliament and by national policymakers in several ACTA negotiating countries, and has never been proposed by US legislators.

Second, US negotiators are seeking policies that will harm the US technology industry and citizens across the globe. Three Strikes/ Graduated Response is the top priority of the entertainment industry. The content industry has sought this since the European office of the Motion Picture Association began touting Three Strikes as ISP "best practice" in 2005. Indeed, the MPAA and the RIAA expressly asked for ACTA to include obligations on ISPs to adopt Three Strikes policies in their 2008 submissions to the USTR. The USTR apparently listened and agreed, disregarding the concerns raised by both the US's major technology and telecom companies and industry associations (who dwarf the US entertainment industry), and public interest groups and libraries.

How does this fit with the oft-repeated statement of the USTR that ACTA will not change US law, which justified the decision to negotiate ACTA as an Executive Agreement outside of regular US Congressional oversight measures? That remains to be seen.

The safe harbors in the US Copyright law require ISPs to adopt and reasonably implement a policy for termination of "repeat infringers" "in appropriate circumstances". US law currently gives ISPs considerable flexibility to determine what are "appropriate circumstances" justifying the termination of a customer's Internet account. If the leak reports are correct, this would no longer be true. Instead, ISPs would be required to automatically terminate a customer upon a rightsholders' repeat allegation of copyright infringement at a particular IP address. Could the USTR be relying on the somewhat specious distinction between a Three Strikes law, and its implementation by a policy adopted by ISPs as part of a gun-to-the-head self regulation regime?

According to IDG, the leaked European Commission memo also states that the US Internet chapter is "sensitive due to the different points of view regarding the internet chapter both within the Administration, with Congress and among stakeholders (content providers on one side, supporters of internet freedom on the other)."

That's hardly surprising, given that the ACTA text appears to leave the door open for major changes to the existing national Internet intermediary liability regimes that have been the global status quo since the mid 1990s, and which have underpinned both tremendous Internet innovation, and citizens' online freedom of expression and the rich world of user generated content that we take for granted today.

European citizens should also be concerned and indignant. As reported, the ACTA Internet provisions would also appear to be inconsistent with the EU eCommerce Directive and existing national law, as Joe McNamee, the European Affairs Coordinator of EDRi notes:

"The Commission appears to be opening up ISPs to third party liability, even though the European Parliament has expressly said this mustn't happen," McNamee said, adding that ACTA looks likely to erode European citizens' civil liberties."

Last, but by no means least. ACTA signatories will be required to adopt both civil and criminal legal sanctions for copyright owners' technological protection measures, in line with the US-Korea (and previous) FTA obligations. They will also be required to include a ban on the act of circumvention of technological protection measures, and a ban on the manufacture, import and distribution of circumvention tools. This will reduce the flexibility otherwise available to countries drafting these sort of laws under the WIPO Copyright Treaty and WIPO Performances and Phonograms Treaty. The majority of WIPO's Member States rejected the circumvention device ban sought by the US delegation in the draft Basic Proposal for the 1996 WIPO Copyright Treaty. Because ACTA is intended to create new global international IP enforcement standards, including these provisions will allow US negotiators to achieve what they have not been able to do to date – ensuring that the US's overbroad implementation of the WIPO Internet Treaty TPM obligations becomes the global standard.

This should give all citizens - and the ACTA countries negotiating in their names - pause for thought.

Also great coverage of what this means for other countries: Cory Doctorow at Boing Boing; Michael Geist (Canada); Kim Weatherall at LawFont here and here and Electronic Frontiers Australia (Australia); and InternetNZ (New Zealand).