US Government, Copyright Industry Continue Push For Stronger Enforcement

By Dugie Standeford for Intellectual Property Watch
The United States is gaining ground in its fight against intellectual property piracy and counterfeiting, a potent interagency commission told President George Bush and the US Congress this week. Yet for every gain in IP enforcement, increasingly complex and unpredictable threats emerge, the agencies said in their 11 February report.

Enforcement also is on the minds of US film, music and software companies, who this week unveiled their latest candidates for the “Special 301″ list in which the US Trade Representative’s office annually names nations it claims have ineffective IP regimes. While developing economies such as China and Russia have long faced pressure over IP rights violations, this year the copyright sector asked for heightened monitoring of Canada, Sweden and Germany, among others.

The National IP Law Enforcement Coordination Council (NIPLECC) comprises the five federal agencies tasked with national and international IP enforcement: The Departments of Commerce, Homeland Security and Justice, the State Department, and the Office of the USTR.

In its report for 2007 (pdf), NIPLECC noted that IP prosecutions were up, as were seizures of bogus goods. The US last year launched two IP-related disputes against China in the World Trade Organisation (WTO) and opened talks on an Anti-Counterfeiting Trade Agreement (ACTA). The Bush administration broadened its focus on the public health and safety implications of counterfeit goods, and continued to make IP enforcement a key element in multilateral and bilateral trade relationships.

Despite signs of improved enforcement in some places, NIPLECC said there are growing concerns. Significant increases in seizures of counterfeit goods at US borders illustrate how vast the problem is, it said. Some “influential international organisations” and countries now question the need for IP protection. New technologies allow rights owners to better protect their IP but piracy is on the upswing. Most troublesome, the report said, is the health and safety risk posed by bogus and substandard products.

Concern over the potential disruption of cross-border trade flows from suspicion of counterfeiting has been raised by some developing countries. The focus on health and safety risks echoes the 2007 push by developed-nation industry to bring that issue to the forefront after recognition that years of complaints of copyright and patent theft have failed to garner public support.

Priorities for 2008 include a tougher stance against international crime groups trafficking in stolen and counterfeit IP, NIPLECC said. In addition, the US will work “aggressively” with trading partners to finalise the ACTA; build on commitments made within the Group of Eight industrialised nations and other international bodies; and continue to help developing countries develop effective protection regimes.

“Special 301″ Lists

Organised commercial piracy and the failure of foreign governments to enforce existing copyright laws threaten to outpace US government efforts to promote copyright reform and effective enforcement, industry group International Intellectual Property Alliance (IIPA) said in 11 February recommendations to USTR. The organisation – which collectively represents the US film, music, television, publishing, software, and video game industries – urged the government to place 43 countries on Special 301 watch lists and to monitor eight more.

The crux of the problem lies in the borderless Internet, IIPA said. It wants governments to adopt laws that embody the standards in the WIPO Copyright and Performances and Phonograms Treaties, and to vigorously enforce new and existing measures against digital and online piracy.

Under the annual Special 301 process, nations seen as problematic are placed on differing watch lists representing degrees of seriousness. Being placed on the list can be politically difficult and failure to address USTR’s concerns could lead to a nation losing unilateral trade benefits offered for goods and services into the US market.

The USTR list typically closely reflects IIPA’s suggestions. Many of the “usual suspects” made this year’s IIPA list, but there were some surprises.

Canada: List a “Lobbying Exercise”

The IIPA recommended that Canada, which has appeared on the Special 301 watch list since 1995, be elevated to the priority watch list because of its failure to take “meaningful steps” toward updating its copyright laws to WIPO treaty standards. Among other items on IIPA’s wish list are legislation bringing Canada into full compliance with the WIPO treaties, the creation of strong incentives for Internet service providers (ISPs) to cooperate with copyright owners, and legislation clarifying liability of those who knowingly facilitate or encourage infringement, such as illegal file-sharing services. Industry also is seeking stronger border controls against counterfeit goods and greater emphasis by law enforcement agencies and prosecutors on IP enforcement.

The IIPA “makes it clear that it wants Canada to move well beyond WIPO implementation by instead following the Digital Millennium Copyright Act model,” University of Ottawa e-commerce and Internet law professor Michael Geist wrote in his blog. The reality is that in many areas Canadian law is more restrictive that in the US, he said.

Canadian officials have “rightly dismissed” the Special 301 process as “little more than a lobbying exercise,” Geist said. One official told a parliamentary committee that Canada does not recognise the process because it “lacks reliable and objective analysis” and is “driven entirely by US industry,” Geist wrote. It remains to be seen if the government caves in to US pressure, Geist said.

Sweden Preparing Enforcement Proposal

Sweden, “a notorious Internet piracy safe haven,” should be moved up from the special mention to the watch list, IIPA said. Among other things, Sweden is host to The Pirate Bay, a BitTorrent tracker site whose owners were indicted for criminal copyright infringement in late January, IIPA said. It faulted inadequate provisions in a measure adopting the EU Copyright Directive and the failure to implement the EU Enforcement Directive.

The Swedish government is concerned about the recommendation, a spokeswoman for Minister of Justice Beatrice Ask told Intellectual Property Watch. IP is high priority for the government, which is working on improving the situation, she said.

Sweden has extensive legislation on IP rights enforcement, and an ongoing evaluation process to ensure it is effective, the spokeswoman said. It created a new organisation with specialised prosecutors to handle IP crimes, and is looking at ways to make it easier for police and prosecutors to get access to information on owners of specific Internet Protocol addresses used for infringement.

Following the 29 January 2008 European Court of Justice Promusicae decision clarifying that governments may, but are not obliged to, require ISPs to give rights holders information about the identity of infringers on their networks, the government will present a proposal to implement the Enforcement Directive in the spring, the spokeswoman said.

“Special Attention” for Germany

The IIPA asked the USTR to give “special attention” to Germany to ensure it enacts effective enforcement legislation. At issue are proposed amendments to national law adopting the Enforcement Directive which, the IIPA said, will make it hard for rights owners and the government to fight Internet pirate by preventing IP owners from obtaining Internet addresses and identities of alleged infringers and from applying for injunctions against ISPs whose services are used by third parties for piracy.

The German Parliament is now considering legislation adopting the Enforcement Directive, a spokesman for the Federal Ministry of Justice said. In the process, it took account of all relevant interests, including those of rights holders, he said. The new measure will bring several key improvements for copyright owners, but, with regard to the right to obtain Internet address data from ISPs, German legislators must also consider privacy and data protection rights enshrined, as the Promusciae case noted, in EU law.

Combating privacy and counterfeiting “continues to figure high” on the German government’s agenda, the spokesman said. Germany is working with its partners in several European and international fora to increase protections worldwide, he said.

German ISPs and web hosts would probably deny that the situation in Germany is worse than in comparable countries, said Bingham McCutchen LLP attorney Axel Spies. Nevertheless, the music industry is pushing hard for access to personal data on servers and in databases to zero in on software pirates, he said.

William New contributed to this report.

Dugie Standeford may be reached at info@ip-watch.ch.