USTR Still Discussing China Complaint at WTO, Chief Says
China and Russia top the U.S. list of markets “notorious” for intellectual property (IP) piracy, though China is making enforcement progress, experts told a Thurs. U.S. Chamber of Commerce conference. Blocks away, trade groups told U.S. agency representatives China is failing its WTO obligations in regard to criminal piracy and enforcement (see separate story in this issue).
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IP and its protection are a “high priority for the Bush administration,” said U.S. Trade Representative Susan Schwab, estimating that IP theft costs the U.S. $250 billion and 750,000 jobs a year.
The annual “Special 301” USTR report card on malefactors nailed China and Russia as countries “not doing enough” to combat piracy. “China made a fair amount of progress, contrary to press reports, but there are still extremely serious problems on the enforcement side,” the report said. The U.S. may bring a WTO case against China, an option unavailable with Russia, which isn’t a WTO member, she said. Russia-based Allofmp3.com, which offers dirt-cheap downloads and is thought not to pay licenses, is “a prime example of what is wrong in Russia and exactly the kind of problem we are trying to address.” The site looms on the 301 list (WID Sept 8 p6).
It’s not easy being China’s piracy “ombudsman,” with 2/3 of counterfeit goods seized in the U.S. coming from there, said Yang Guohua, IP counselor, Embassy of China. The real problem is enforcement, not Chinese law, which has “a lot of ways to protect IP,” he said. Chinese provinces have “unique local administrations of industry and commerce which have the power to carry out raids, punishment and fine counterfeiters,” he said: “I don’t agree with the 2006 301 USTR report saying these methods aren’t as important as criminal punishments.”
China recently opened 50 IP protection reporting centers (WID Aug 31 p7), run by local and provincial govts., to field complaints and coordinate with other agencies. “[The centers] are receiving many, many complaints and they are making some progress. At this time next year there will be a report and you will see… the achievements,” Yang said: “Public awareness has also increased.” The country is also sponsoring 100 days of “action combating piracy, and cultivating partnerships with industry groups. “We have good relations with authorities in China,” MPAA Senior Vp Greg Frazier said in a separate panel.
Enforcement Creates Receptive Environment for Education
Ignorance not only of IP crimes’ gravity but the means of committing them complicates efforts to obtain justice, RIAA Senior Vp Joe Papovich told the conference. Consumers and lawmakers need an education in reality, he said: “It’s absolutely essential that governments update laws. Too many governments have laws that are still in the vinyl era when piracy is in the digital era.”
RIAA often has trouble convincing consumers and govts. of the music piracy’s magnitude, Papovich said: “For the pirates that are producing DVDs, CDs, MP3s et cetera, there’s a tendency to view it as a victimless crime, but [a country’s] whole tax base is adversely affected… There’s a whole range of… entities that suffer.” It’s also a matter of where the illicit profits go, Frazier said: “It’s not just a Hollywood problem. It affects all of us because entertainment piracy funds organized crime.” Piracy cost the movie industry $6.1 billion worldwide in 2005, with 62% of those profits lost in hard goods such as DVDs and 38% from Internet piracy, MPAA said. When govts. crack down on IP theft, thieves move to nations with more lax laws, he said: “Governments [must] find a way to impose penalties that actually deter” piracy.
Copyright holders themselves have some responsibility to “be there” and educate the public, since they known their content, Papovich said: “Don’t just think that you can go to the U.S. government and say ‘Please help.’ The government often won’t know or understand how to identify counterfeit versions of your product [when it comes to technology].” Industry groups such as the MPAA are working with authorities on better detection and prevention methods. Theaters soon may employ technologies that block video camera signals to prevent recording, Frazier said: “With the Internet, we are employing the same technologies, blocking the signal, tracking the signal. A new generation of DVDs that will be on the market with Blu Ray and HD DVDs [will contain] new security mechanisms.”
Enforcement should precede education in copyright strategy, Papovich said: “We find in our area that simply doing public education falls on deaf ears. [Users think] ‘In the privacy of my own home, it’s free, I'll do it.’ It was only after we began bringing aggressive enforcement actions that we found a receptive audience for education,” he said. “If you just seek to educate people, it won’t work.”