Media Piracy in Emerging Economy Report: Omnipresent China Conspicuously Absent

Media Piracy in Emerging Economies, is a very interesting report edited by Joe Karaganis, program director of Social Science Research Council. Digital copying of music, film and software works that fall outside the boundaries of copyright are not only a dilemma in developed countries but also in emergent markets such as Brazil, Russia, India and South Africa, which are covered in country cases. The report also deals with Mexico and Bolivia.

Conspicuously absent is a country case on China. However, the reader can observe this omnipresent protaganist, during the whole 400 pages, a bit like the great white whale in the novel Moby Dick.
The report contends refreshingly that the question is not whether stronger enforcement can preserve existing market structures, but whether business models can emerge that can serve the low end of the media market. Or in the words of Karaganis: the choice is between high piracy/low price and not high piracy/high price.
The report seems to take the copyright law of the respective jurisdictions as a given.

The report has many interesting critical notes, including about the alleged link between piracy and organized crime/terrorism. It persuasively makes the case that in the time that film and music were consumed via CD and DVD and optical disk production was only lucrative on a industrial scale, it might have had some relevance. But first cottage production of optical disks became possible and now even they are in competition with down loading consumers.

Media Piracy in Emerging Economies, funded by the Canadian International Development Research Center and the Ford Foundation, is available via pdf under a Consumer's Dilemma license, see here.

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China and ACTA: Why Is The Problem Not Made Part Of The Solution?

Medio December 2008 IP Dragon wrote about the controversial genesis of the China-less Anti-Counterfeiting Trade Agreement (ACTA) by Japan and the US (joined by Australia, Canada, the European Union, Mexico, Morocco, New Zealand, Republic of Korea, Singapore and Switzerland) whose goal it is to stem the tide of counterfeit and pirated goods that originate for the lion share from China, read here.

ACTA is not only controversial because it was born in darkness (then again out of darkness beautiful flowers grow), but also because:

- Why start a new multilateral trade agreement when the international community has already the World Trade Organization (WTO)'s Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs). Then again it is hard to reform TRIPs because there are many WTO members. So the way of least resistance is to start a new trade agreement with pre-selected countries that think the same about a TRIPs plus level of IPR enforcement;

- If the People's Republic of China causes the initiators of ACTA such headaches, should they not involve this country in some way with ACTA? In the philosophy of Yin and Yang, the problem (China's lack of IPR enforcement) is existent in the solution (multilateral trade agreement) and vice versa;

- ACTA's content is unknown, so this opens the gates to speculations.

Now the United States Trade Representative has posted ACTA's 'Summary of Key Elements Under Discussion' (Summary) which gives the countours of the draft structure:

• Chapter 1. Initial Provisions and Definitions;

• Chapter 2. Legal Framework for Enforcement of Intellectual Property Rights;

Section 1. Civil Enforcement

Section 2. Border Measures:

Under discussion is whether border measures should apply not only to importations (as TRIPs prescribes) but also to export and transit of goods;

Another possible point of contention is whether travelers can import counterfeit or pirated goods for their personal use (de minimis exception);

It is no surprise that ACTA tries to solve some of the points, which especially has frustrated the US (which among other reasons brought a claim against China at the WTO: DS 362): measures to ensure that infringing goods are not released into free circulation and the destruction of goods that have been determined to infringe intellectual property rights.

Section 3. Criminal Enforcement; the holy grail (overestimated to my taste) remains criminal enforcement of IPR. In the leaked out version of the ACTA proposal of 2007, see below on page 2 here, it was proposed to apply criminal sanctions to IPR infringements on a commercial scale "IPR infringements for purposes of commercial advantage or financial gain. This sentence that I could not find back in the Summary was a bit unclear, because either you apply criminal sanctions if a commercial threshold of the infringed goods is reached (problem: which threshold is not arbitrary and what to do with infringers that keep their activities just under the threshold) or you sanction the intention of commercial advantage/financial gain plus the infringement of minimal one product.

Section 4. Intellectual Property Rights Enforcement in the Digital Environment: surprisingly no draft proposal has been tabled yet.

• Chapter 3. International Cooperation;
• Chapter 4. Enforcement Practices; I cannot stress the importance of the exchange of best practices enough. Transparence of IPR enforcement information, including statistics is key;
• Chapter 5. Institutional Arrangements;
• Chapter 6. Final Provisions.

Expect a lot more discussion when the first draft provisions are disclosed (or leaked).

UPDATE: First draft leaked; read 'Do ACTA Member Countries Want to Confront China With A Fait Accompli?'

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Update WTO IPR and Market Access Case Against China, And What Has Antigua To Do With It?

On April 10 the US requested consultations for two, interrelated, WTO cases:

DS362 China - Measures affecting the protection and enforcement of intellectual property rights

DS363 China - Measures affecting trading rights and distribution services for certain publications and audiovisual entertainment products

These cases are interrelated, because market access is a contributory factor to intellectual property infringement. The salient example is the limited number of movies that are annually allowed into the Chinese market. The number of foreign movies that can be shown in Chinese cinemas is limited to 20 movies per year. One can argue that this stimulated pirated DVDs to the point that only 7 per cent of the DVDs on the market are legitimate. Reuters, 'Market access key to piracy fight', The Age, December 8, 2006, available here.

What happened so far with the respective cases?

DS 362: The following countries joined the consultations: Japan (April 20, 2007), Canada and the European Communities (April 25, 2007), Mexico (April 26, 2007). Subsequently, China informed the DSB that it had accepted the requests of Canada, the European Communities, Japan and Mexico to join the consultations. October 7, 2007, Australian trade minister Warren Truss announced that Australia is going to participate as a third country in the dispute.

"Participation as a third party does not mean we are taking sides in the case," Mr Truss said. "It does, however, allow us to register our views on the legal issues raised in the dispute." Read more here.

September 25, the WTO decided to establish a panel to investigate the claim by the US that China enforces its IP insufficiently. The US and China had twenty days to agree on the panelists. This means that the parties should have agreed yesterday, read more here.

DS363: October 11, 2007, the US Trade Representative has requested the WTO to establish a dispute settlement panel. The US panel request will be considered by the Dispute Resolution Body at its next meeting which will be held October 22, 20007. Read more here.

DS 285 A seemingly unrelated case is the WTO case by Antigua and Barbuda case against the US, because of America's prohibition to offer cross-border gambling and betting services to US citizens (DS285). Seemingly, because Mr Hartley Henderson of Majorwager.com writes:

"In fact many countries are closely monitoring this case to see if the United States is really committed to the WTO and is willing to abide by its rules. In particular, countries like China and a few in Africa are very interested in the outcome of this case given the pressure being exerted on them by the USTR to open up more of its industries. If the USTRs show that they consider the WTO to be a one-way street in favor of themselves, then naturally those industries will stay closed to American interests. The following few months will speak volumes about how serious the U.S. is in the WTO process. " Read Mr Henderson's article here.

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