Industry Losing Faith In WIPO; Debates US WTO Cases Against China

By Liza Porteus Viana for Intellectual Property Watch
NEW YORK–The World Intellectual Property Organization is seen as in a state of tumult these days, as the global body searches for a new director general and tries to grapple with issues such as implementing a Development Agenda and further harmonising global patent regimes. And some industry observers think it is causing some to lose trust in the organisation.

WIPO will try to pass its 2008-2009 budget Monday, six months late. It also has a list of 15 candidates from a wide range of countries such as Pakistan, Brazil, Italy, Australia and Honduras, to choose from in selecting its next director general. The WIPO Coordination Committee will meet on 13-14 May to nominate one candidate to be appointed by the annual WIPO General Assembly, scheduled for 22-30 September. The new DG is expected to take the helm on 1 October.

Richard Wilder, associate general counsel for intellectual property policy at Microsoft, said Thursday at an intellectual property law conference at Fordham University in New York City, that the next WIPO leader must be a person of integrity who will run a transparent operation, has experience running a large and complex technical organisation, can work effectively with member states and understands the role intellectual property plays in a broader sense than just technical aspects. There are some candidates on the list that have those qualities, Wilder added.

But beyond choosing a new director general, more work needs to be done on the WIPO organisation as a whole, relationships with member states and constituencies and staff relations, along with issues such as work-sharing.

“I think right now there continues to be a reservoir of good will” WIPO can draw from to improve itself, Wilder said. “The next DG will have some healing to do in terms of the staff.”

Many want to see WIPO’s culture change. It is vital the technical body become efficient in approving necessary norm-setting directives to prevent other organisations or governments from enacting various treaties or initiatives on their own to combat IP-related blights such as piracy and counterfeiting, speakers said. The US government, for example, joined by several other governments, last fall announced a negotiation for an Anti-Counterfeiting Trade Agreement (ACTA), as a way to combat piracy.

“I think we do need to accept that we’re at a stage where norm setting is at somewhat of a fallow period at WIPO” and that is not necessarily a bad thing, said Shira Perlmutter, executive vice president of global legal policy at IFPI (International Federation of the Phonographic Industry) in London. But “people are looking elsewhere” to get things done.

Jamie Love, director of Knowledge Ecology International in Washington, predicted WIPO will improve in the next few years, and will eventually “think about IP and try to solve problems.” It will, he added, become “less a propaganda place … the demand will be to become smarter.”

Debate on Addressing China IP Violations

Conference speakers also debated whether the piracy complaints lodged against China at the World Trade Organization are going to be effective in compelling Beijing to enforce anti-counterfeiting and anti-piracy measures. WTO panels have been formed to deal with two IP rights-related complaints. Twelve members have signed on to the United States’ arguments, including Brazil, Argentina, Thailand, Turkey and the European Union.

The United States filed a case against China, WT/DS362/7, for which a panel was formed on 25 September. In it, the United States alleges China has failed to provide “criminal procedures and penalties to be applied in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale that fail to meet certain thresholds” (IPW, WTO/TRIPS, 27 September 2007).

In a second case brought by the United States, WT/DS363/5, the WTO in November launched an investigation into allegations that China is unfairly limiting the flow of copyrighted material from the United States into the country (IPW, WTO/TRIPS, 28 November 2007).

Victoria Espinel, who served as the first assistant US Trade Representative for intellectual property and innovation, said litigation in the China matter was not preferable but “it was deemed necessary by the US government.” The alleged violations of intellectual property rights enforcement and market access provisions of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) have a “tremendous impact” on the industry, she added.

There has been much discussion surrounding whether the United States should have lodged a complaint in the first place. Espinel outlined some of the criticisms, which include: the US could lose (which could be interpreted to mean the TRIPS agreement does not include effective enforcement); the case is not big enough; China could retaliate against US companies and stop cooperating with the US on intellectual property matters; and that it is unfair to China since it has made some progress in this area.

“None of them, to me, are compelling reasons for the US to not exercise its right before the WTO,” Espinel continued. Doing nothing, she said, will “leave the US hostage to China’s desires.”

China has repeatedly urged the US to withdraw its complaint, arguing that it has made progress. But experts on Thursday said that is not enough and there could be broad implications in a US win in the matter. Even if it does not significantly effect how the Chinese do things, “the political impact of the US will be very significant” in terms of what else could be done, said Daniel Gervais, an intellectual property and law expert at the University of Ottawa who was actively involved in the TRIPS agreement negotiations.

“I think this is a small-arms fire case … the heavy artillery is still in the hangar somewhere,” Gervais added.

Criticism of European Commission’s Proposed Copyright Extension

On other topics, Tilman Lueder, head of the Copyright Unit, Directorate General for Internal Market and Services at the European Commission, came under fire by activists and others, who accused the commission and its commissioner, Charles McCreevy, of being dishonest in explaining who a proposal extending copyright protection for sound recording performers would benefit, and how.

The commission wants to extend protections for some performers from 50 to 95 years. Other proposals include a fund for session musicians consisting of 20 percent of revenue derived from the extended term, and allowing features artists to retain all royalties accruing during the period. McCreevy also supports a “use it or lose it” concept, in which performers can move to new labels if theirs refuse to release tracks during the extended term.

“I still have a feeling we’re not hearing the whole story,” said Bernt Hugenholtz, director of the Institute for Information Law at the University of Amsterdam who has served as an adviser to WIPO and the commission, and recently authored a paper on the subject. He added: “There’s something fishy here.”

Silke von Lewinski of the Max Planck Institute for Intellectual Property in Munich accused the commission of blindly following the United States – Europe’s proposed change would bring its rules in line with those in the US – going so far to say: “Does the commission want to be a satellite of the US,” like Eastern European countries were satellite countries of the Soviet Union.

Lueder countered by saying the EU should not be viewed as the body that cares the least about the sound recording industry. An IFPI official said any extension should also apply to record producers.

Meanwhile, the US Copyright Office is expected to soon release a notice of proposed rulemaking regarding digital recordings delivered via streaming.

Liza Porteus Viana may be reached at info@ip-watch.ch.