Developing countries this week increased their proactive involvement in the enforcement agenda at the World Intellectual Property Organization, according to participants at the 2-4 November Advisory Committee on Enforcement meeting.

“The enforcement committee is now the pet of the developing countries,” said one participant during the meeting.

“For the first time developing countries put forth the agenda,” said Ali Asad Gilani, first secretary at the mission of Pakistan, referring specifically to proposals from Brazil [pdf] and from Pakistan [pdf] on future work for the committee that will be included in the permanent record of the meeting. A proposal also was submitted by Group B [pdf] developed countries.

Participants on all sides seemed pleased with the outcome of the week, characterised in a draft negotiated outcome text [pdf] that included a list of four topics for discussion at the next session of the committee, which is expected to be held in one year.

Topics chosen for discussion at the next session are: a literature review of methodologies; identifying types and reasons for IP rights infringement; targeted studies to develop methodologies measuring the social, economic and commercial impact of counterfeiting and piracy on societies, “taking into account the diversity of economic and social realities;” and analysis of possible enforcement measures from a socio-economic welfare perspective.

A possible reason for the change could be progress being made outside the WIPO system by the major rights-holding nations in building stronger enforcement rules, including through negotiation of an Anti-Counterfeiting Trade Agreement (ACTA), sources said.

“If they are not proactive in discussing things here,” said a developed country government official, “there is the risk of things going out of WIPO.” A developing country official downplayed this, however.

Another reason stated by participants for greater developing country interest was a new emphasis on social and economic aspects of enforcement, sparked by a presentation and paper by new WIPO Chief Economist Carsten Fink, who questioned the validity of existing statistics used to describe the detrimental effects of piracy and counterfeiting.

Overall in the meeting, “there was a mutual discussion,” an official said, among developed and developing countries at the meeting, which met for the first time in two years. This was a departure from past meetings where developing countries often viewed discussions in the meeting with suspicion to ensure Northern enforcement proponents did not push beyond the committee’s limited advisory role into policymaking.

Respect for IP and Development

A developing country official said during the meeting that developing countries want to capture the new strategic objective of the WIPO secretariat related to “respect for IP” and bring it in line with the WIPO Development Agenda.

Recommendation 45 of the Development Agenda states: “To approach intellectual property enforcement in the context of broader societal interests and especially development-oriented concerns, with a view that ‘the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations,’ in accordance with Article 7 of the TRIPS Agreement.”

In the ACE meeting, members could not agree on a proposal in the outcome paper to establish a “non-exhaustive, open-ended list of topics” for future discussion. But a last-minute agreement was sketched out which stated, according to a source: “The committee took note of the proposals suggested by member states for discussions at future sessions of the committee including the three documents mentioned in paragraph 9 (which are attached), as well as proposals from the floor. These proposals will serve as a basis for the selection of the topics to be discussed by the committee at future sessions which would need to be agreed by consensus and in line with the mandate of this committee.”

The proposals from Brazil and Pakistan addressed future work with a broader perspective than the committee had in the past.

“Violations of intellectual property rights … are not disconnected from concrete political and social variables,” said the Brazil proposal. Therefore, “‘one size fits all’ models … are clearly insufficient to ensure effective ‘enforcement’,” it added.

The proposal of Pakistan highlighted the need to create an “enabling environment” for respecting IP and said “huge margins between the prices of original and pirated items offer significant” incentives to infringe.

Fink’s presentation sparked discussion on possible new methodologies for measuring the costs and benefits of intellectual property protection, a participant said.

The Group B proposal, which sources said was submitted later in the week, said ACE discussions should include monitoring of progress in reducing piracy, and discussions on capacity building and technical assistance, including partnerships, to aid enforcement. Group B noted that the new activities are expected to be done under existing budget allocation. Fink also said statistical and economic analysis can be resource intensive.

The decision to pursue substantive study means, a source said, that statistics on costs and benefits to piracy will be more comprehensive, and include concerns about public goods as well as about private lost revenue.

“ACE took two years [to meet again] because there was no common theme” for discussion, said a US delegate, adding that hopefully the committee would meet next year.

New Reports Reveal Widening Perception of Enforcement

Delegates started the week by hearing reports of various experts, though the one most often cited by participants was Fink’s.

“Industry associations representing copyright-holders regularly publish estimates of lost revenues due to piracy. However, such estimates often rely on questionable assumptions about market demand,” said Fink’s report, available here [pdf]. It cites the example of the Business Software Alliance, which in generating statistics of loss assumes that all consumers of pirated software would have bought full price, legitimate software were the pirated versions not available.

But this is unrealised, Fink said, “especially in developing countries where low incomes would likely imply that many consumers would not demand any legitimate software at all.” Rather, how IP violations affect the economy depends on what kind of IP is violated, as well as “underlying market characteristics,” he added.

Fink’s presentation also suggested looking at IP enforcement as a matter of public policy, in the context of other public policy issues, as the decision to invest in it affects ability to invest in other key public services.

“Governments need to make choices about how many resources to spend on combating piracy” as “resources needed … are invariably scarce.” Fink also suggested richer countries might subsidise enforcement efforts in developing countries, as the former “derive direct benefit” from stronger IPR enforcement, making it in their interest to help fund those activities.

Sisule Musungu of think tank IQSensato in his presentation also said rights holders should have “an important role” in implementing both enforcement and Development Agenda Recommendation 45, which says enforcement should be done with broader social issues in mind.

Meanwhile, the International Chamber of Commerce said in a 3 November press release that it intended to challenge global leaders to find solutions to piracy which it said “has been exacerbated by the current economic crisis” at the upcoming Global Congress on Combating Counterfeiting & Piracy, to take place 1-3 December in Mexico. The Congress is cosponsored by WIPO and law enforcement and customs organisations.