Due to its role in the advancement of of entertainment and pharmaceutical interests within the GATT-TRIPS negotiations of the 1980s, the United States is typically assigned the role of bully in the international intellectual property sphere (for an excellent account see Drahos and Braithwaite’s “Information Feudalism”). Viewed in combination with its bilateral trade agreements, foisting stringent IP rules on smaller, poorer nations, this is somewhat understandable. But such a reading obscures the role of the European Union. Since the 1980s, key business organizations within the EU such as UNICE have functioned as a key vector for the same policy messages. In more recent times these ideas have been fully integrated into numerous aspects of institutional activity at an EU level. In what follows I will outline some developments at the level of trade policy since 2002.
The new phase was confirmed in a 2004 communication from the Commission Communication “Strategy for the enforcement of intellectual property rights in third countries“ (hereinafter Strategy), which listed eight elements considered essential to the campaign. Several of these recall practices long established in the US. The thrust of the strategy was confirmed in a major policy document issued by DG Trade in autumn 2006, “Global Europe: Competing in the World”, regarded as signalling the relaunch of a bilateral approach to trade negotiation, and marking the dimming of the multilateral phase which in the IPR sphere produced both TRIPS and the two treaties (WCT and WPPT) at WIPO in 1996.
Pursuing the New Approach
1. Watch Lists
The first task defined in the Strategy is the identification of ‘priority countries’, analogous to the s.301 report produced annually since the 1980s by USTR, deemed the source of egregious infringements of European rightsholders.
The BBC reports that the US will formally lodge a complaint with the WTO over the failure to prevent copyright violations and the production of counterfeit products. At the Fordham International Intellectual Property Conference last year there was a lot of discussion on this topic, as it is common knowledge that enforcement of the law is half-hearted – and that regards not only copyright but intellectual property in general. Today’s developments caught me somewhat off-guard however as my impression from listening to the heavy-hitters was that they would really rather find another way of dealing with the Chinese on this issue. Many US firms are cagey about going public on their complaints as they believe that it rebound negaticvely on them at a moment when they are trying to establish themselves in the Chinese market. The US Trade Representative however placed China top of the list of villains in last year’s Special 301 report (the official report card of compliance with the US IP agenda) and sought public input regarding problems with enforcement last February.
There are in fact two seperate complaints by the US against China at the WTO:
2. Regarding barriers to market access for the copyright industries; here the US alleges that restrictions on importation etc function so as to create unsatisfied demand for legitimate products incentivizing the operations of IP pirates.
The International Intellectual Property Alliance (IIPA) this week published their annual report and submission to the US Trade Representative. Each year they compile together reports from the Business Software Alliance, MPAA and the International Federation of the Phonographic Industry. The purpose of all this is to get the USTR to place countries considered as intellectual property malingerers onto a Section 301 watch list where compliance with IP obligations is monitored and may result in the imposition of trade sanctions or removal of benefits under the General System of Preferences. These reports are widely regarded as fiction, largely due to the inflated estimates of losses bandied about. Essentially the IIPA considers every unauthorised copy to be a lost sale, where in fact most people would not use a product at all if they couldn’t get it for free off the net or cheaply from a street hawker. Thus their estimated losses for the sixty countries covered was 15.2 Billion in 2006 alone!
Nonetheless the report is always interesting. Principal villains this year are: Argentina, Canada, Chile, Costa Rica, China, Domincian Republic, Egypt, India, Israel, Mexico, Russia, Saudi Arapia, Thailand, Turkey, Ukraine and Venezuela.
Vladamir Putin has taken time off from denying the murder of critics to work out a deal whereby the US will support his country’s entry to the World Trade organization. Apparently intellectual property issues have been a key issue as the press releases celebrating the successful outcome of the negotiations clearly tolls the bell for ‘websites that permit illegal distribution of music and other copyright works.’ Unsurprising allofmp3.com contest this characterization of their activity, as licensed as they are by the collective rights agency Russian Organization for Multimedia & Digital Systems (ROMS) at a rate of 15% of revenue. A small snag to this is that in 2004 ROMS were expelled from CISAC, an international organization of 217 worldwide copyright societies. Indeed the International Federation of the Phonographic Industries claims that they have no right to license the distribution of music by their artists. ROMS claims that it distributes the monies collected to artists, but how this is done seems a little unclear.
Allofmp3.com has been in the crosshairs of US Trade Representative Susan Schwab for some time now, and the admission procedure for the WTO is traditionally used as a chance to lean on countries to change practices in the grey zone. Now that Visa and Mastercard are refusing to process payments to them, the skies have taken on a more foreboding hue.
Aside from music copyrights, USTR continues to provide full-service to the Big Pharma as evidenced by the demand to protect pharmaceutical test data, essentially a scam to drive up the prices of potential competitor’s products by forcing them to conduct expensive and time-consuming tests where proof of bioequivalency already reveals the necessary information. In South American countries such as Argentina there has been a wide campaign of litigation against competitive local producers based on exactly these types of claims.
See the ipwatch article on the negotiations here.
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