[A2k] Positive outcome reached at WIPO Advisory Committee on Enforcement while ACTA looms in the East
Thiru Balasubramaniam
thiru@keionline.org
Fri Nov 6 06:51:02 2009
http://keionline.org/node/681
Positive outcome reached at WIPO Advisory Committee on Enforcement
while ACTA looms in the East
By thiru
Created 2 Nov 2009 - 1:02pm
While the 6th Round of negotiations of the Anti-Counterfeiting Trade
Agreement (ACTA) [1] is taking place in Seoul, Republic of Korea [2]
from November 4-6, 2009, the 5th session of the WIPO Advisory
Committee on Enforcement (ACE) [3] met from November 2-4, 2009.
The three day meeting of the WIPO ACE concluded on a positive note
with the Committee requesting the WIPO Secretariat to ramp up its work
on undertaking an "an empirical assessment of the nature and extent of
intellectual infringements" given the paucity of reliable data
detailing the value of "international trade in IPRs-infringing goods".
The 5th Session of the ACE was chaired by Mrs. Rodica Parvu, Romania
(Director-General of the Copyright Office). The two themes on the
agenda [4] included: 1) Contribution of, and costs to, right holders
in enforcement, taking into consideration Recommendation No. 45 of the
WIPO Development Agenda, and 2) Identifying elements for creating an
enabling environment for promoting respect for intellectual property
in a sustainable manner and future work.
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 =93the 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=94, in
accordance with Article 7 of the TRIPS Agreement.
The discussion of the Committee was guided by: 1) eight expert papers
commissioned by WIPO for the 5th Session and 2) three papers by Member
States including A) Pakistan: "Creating an enabling environment to
build respect of IP", B) Brazil: "Future work proposal by Brazil" and
C) Group B: "Elements of a General Framework for future discussions in
WIPO ACE".
The country papers of Pakistan, Brazil and Group B provided a
conceptual framework for the program of work assigned to the WIPO
Chief Economist (Carsten Fink) including a "literature review of
methodologies and gaps in the existing studies", and an "analysis of
various efforts, alternative models and other possible options from a
socio-economic welfare perspective to address the counterfeiting and
piracy challenges'."
The ACE agreed that the papers of Pakistan, Brazil and Group B and
other country proposals from the floor of the Committee would serve as
a basis for "selection of topics for discussion by the Committee at
its future sessions, to be agreed by consensus by the Members of the
Committee, in line with the mandate of the Committee".
As mentioned earlier, WIPO commissioned eight expert papers including
presentations by Professor Michael Blakeney (Policy Responses to the
Involvement of Organized Crime in Intellectual Property Offences [5]),
Carsten Fink (Enforcing Intellectual Property Rights: An Economic
Perspective [6]) and Sisule Musungu (The Contribution Of, and Costs
To, Right Holders in Enforcement, taking into account Recommendation
45) [7].
On the reliability of statistics pertaining measuring levels of
counterfeiting and piracy, Musungu noted,
In many ways, the success of global efforts to combat
counterefeiting and piracy and
other IP infringements will turn on the credibility of the data
and evidence that is used by
policy-makers to design enforcement laws and procedures. While
studies, such as the OECD
one, offer some insights regarding the scale of the problem and
there are on-going efforts to
develop models to measure the levels of counterfeiting and
piracy, including the economic
impact, there is still along way to go in establishing globally
accepted and/or credible models
or data sets.
Musungu suggested that title holders could do the following in light
of Recommendation 45 of the Development Agenda:
=96 Supplying better data and information to public institutions;
=96 Providing better and fuller caveats to the figures that are
generated for advocacy
purposes;
=96 Using figures from international public institutions, such as
the OECD or WIPO,
in the proper context and with due care to avoid
misrepresentation; and
=96 Supporting public institutions in their legitimate efforts to
develop credible
methodologies for studying the problem and generate better data
to support
policy-making.
In Carsten Fink's paper (first published by ICTSD when Mr. Fink was
Professor of International Economics, University of St. Gallen), he
noted that upon closer examination, the oft-cited 200 billion dollar
figure provided by the Organisation for Economic Co-operation and
Development (OECD) for the estimated value of IPRs-infringing goods in
international trade in 2005 (2 percent of global merchandise trade)
used methodology that revealed that the figures were "more an
=93educated guess=94 than a true estimate".
Essentially, OECD staff made use of seizure rates across
different product categories and exporting nations to extrapolate what
a given share of IPRs-infringing trade in one individual product
category means for the overall share of trade in counterfeit and
pirated goods. However, the share in the relevant =93fix-point=94 product
categories=97wearing apparel, leather articles and tobacco products=97
underlying the 200 billion dollar estimate is not based on any hard
data, but rather reflects the best guess of OECD staff.
While his observations should not be construed as a critique of the
OECD's analysis, he raised concerns with the use of the $ 200 billion
figure in the press (including a December 4, 2007 piece in the
Financial Times entitled "World 'losing' war against fakes and
piracy"). Fink remarked that the OECD analysis did provide some
perspicacious insight into the "relative importance of IPRs violations
across different product categories" with nearly 2/3 of all seizures
relating to fashion apparel, AV recordings and software. Fink further
assailed estimates lost revenues due to piracy produced by industry
associations representing copyright holders. He referenced a critique
by the Economist (May 19th, 2005)
entitled "BSA or Just BS?" and noted that,
BSA (2007) simply assumes that, in the absence of piracy, all
consumers of pirated software would switch to legitimate copies at
their current prices. This outcome is unrealistic=97especially in
developing countries where low incomes would likely imply that many
consumers would not demand any legitimate software at all.
Accordingly, estimated revenue losses by software producers are bound
to be overestimated.
With respect to music, Fink referenced the more "nuanced approach" of
an IFPI study (2007) disclosing the "value of pirated goods
(presumably valued at pirated goods prices)"; however, its methodology
was not disclosed. Regarding consumer behavior with respect to the
pricing of legal products, Fink cited a study by Maffioletti and
Ramello (2004) which concluded that "students=92 willingness to pay is
generally lower than the market price for legal products" resulting in
the observation that
"increased copyright enforcement would not expand sales of
legitimate copies on a one-for-one basis. At the same time, the study
revealed that students=92 willingness to pay for a pirated copy was
significantly greater than its marginal cost. This finding suggests
the possibility that copyright holders respond to stronger copyright
enforcement by lowering their prices to capture a larger number of
consumers."
Professor Blakeney characterized the existing metrics of
counterfeiting and piracy as an imprecise science on account of three
reasons: 1) the criminal and clandestine nature of counterfeiting and
piracy shrouded their true extent, 2) the figures produced by trade
associations "are inevitably biased upward" in order to "highlight the
extent extent of the trade in infringing products" and 3) the
statistics produced by policy and customs authorities were "likely to
be exaggerated with a view to securing favourable future budget
allocations if the problems with which they are dealing are magnified".
Blakeney, Fink and Musungu all raised questions on the veracity of
estimates of the value of counterfeited and pirated goods with respect
to its share of world trade. In his oral presentation, Blakeney
cautioned ACE members against making uninformed policy choices on
enforcement predicated on "foundations of sand". Blakeney recounted how:
[i]n 1988, following the launch of the GATT Uruguay Round, the US
International Trade Commission estimated losses to the U.S. economy in
revenue and jobs due to IPR violations to be in the region of $US 60
billion. In 1998, following a more than a decade of TRIPS enforcement,
the International Chamber of Commerce (ICC) estimated that from 5 to 7
per cent of world trade comprised counterfeit goods, a market which it
estimated to be worth USD 350 billion. This statistic was repeated in
a 2004 report by Union des Fabricants on Counterfeiting and Organised
Crime which stated that: =93Globally, an OECD report published in 1998
estimated that counterfeiting was generating 250 billion in illegal
earnings annually and represented 5 to 7% of world trade=94. This group
of statistics was repeated so often that it they have almost become
factual. Whatever their veracity, they were undoubtedly influential in
precipitating the TRIPS Agreement into existence.
As the TRIPS Agreement, with its dispute-settle mechanism, was
designed to thwart international trade in infringing products,
Blakeney observed that this aspect of the Agreement is a dismal
failure if one were to take the estimates of the OECD (2007) at face
value which concluded that figure for trade in counterfeit and pirated
products at $US 200 billion in 2005. Blakeney provided a final set of
statistics: 1) the 2005 International Chamber of Commerce (ICC)
estimating $600 billion trade in infringing good and 2): the
hyperbolic figures reported by the Gieschen Consultancy in 2005 in
excess of $US 3 trillion to round the mark.
As evidenced by the papers from Blakeney, Fink and Musungu, the dearth
in reliable empirical evidence on counterfeiting and piracy is not
commensurate with measures to enact higher standards of enforcement
whether it be in bilateral free trade agreements (FTAs), regional
FTAs, the ACTA negotiation, WHO Impact or the World Customs
Organization.
In an insightful footnote (Fink, footnote 43, page 21), Fink stressed
that "there is a certain asymmetry in international enforcement
obligations. Existing international agreements and current initiatives
seek to strengthen the enforcement of private rights. By contrast,
there are no international obligations to enforce laws against the
abuse of these rights=97for example, in the form of erroneous patent
awards for subject matter already in the public domain or anti-
competitive business practices associated with intellectual property
ownership."
The presentations by Blakeney, Fink and Musungu provided academic
buttresses to the interventions of Brazil, Egypt, India and Pakistan
and the concept papers of Pakistan and Brazil. In Pakistan's paper on
"Creating an Enabling Environment to Build Respect for IP", the paper
noted on TRIPS plus enforcement demands being made on developing
countries often linked to trade and investment decisions. However,
Pakistan noted that while "stricter laws and capacity building of
enforcement agencies" are perceived to be the "primary means to ensure
enforcement", it is not a sustainable strategy. Pakistan asserted that
a sustainable strategy for creating an enabling environment to build
respect for IP would first need to identify the key reasons for IPR
infringement.
Pakistan's submission reiterated the need for "impractical assessments
of the extent of counterfeiting and piracy" before embarking on norm-
setting for higher standards of enforcement. Pakistan identified nine
factors precipitating IPR infringement including the following:
* Huge margins between the prices of original and pirated items
offer significant profit incentives to individual and organized IP
infringers. Quite clearly, business models are not adequately
addressing the pricing-cost involved in selling products (especially
pharmaceuticals, books, music, movies). Unreasonably, higher costs
along with barriers to access, do provide some justification to the
consumers to use counterfeit and pirated goods.
* Invariably, in bilateral trade agreements, higher standards of
IPR protection are demanded in return for trade and market access.
This reinforces the view that IPRs are an external imposition, rather
than a domestic need.
* The IP enforcement agenda is pursued at different international
fora such as WCO, UPU, WHO. Developing countries are increasingly
concerned that the limitations of their diplomatic and technical
resources and infrastructure, diverting resources from development and
even other law enforcement requirements to the protection of IPRs is
often difficult to justify.
* Technological breakthroughs have facilitated IPR infringements.
It is now comparatively easier to copy, share, reproduce and reverse
engineer the protected materials/works. For instance, despite all
encoding efforts, infringement is still a very real issue in the
digital environment.
As part of its recommendations, Pakistan suggested nine measures (four
of them are included here): A) conducting "independent, objective and
empirical assessments of the nature and extent of IPR infringements,
B) address the "socio-economic welfare needs of countries particularly
for access to medicines and educational materials at affordable prices
through use of TRIPS flexibilities and alternate business models for
price reductions...", C) "develop international guidelines for levels
of IPR protection in the bilateral and regional FTAs, in accordance
with TRIPS agreement. Such guidelines should be followed in the
negotiations on FTAs", and D) [u]undertake independent socio-economic
impact assessments of the existing and future IP norms".
Brazil's submission for the future work of ACE was indeed a call for
action for a "qualitative change in the approaches to dealing with the
subject of 'enforcement' of intellectual property rights within WIPO".
Brazil cautioned against embarking on a "one size fits all approach"
noting that violations of IPRs did not exist in a void. Thus, Brazil
called for an approach that could combine a "plurality of instruments
to combat intellectual property infringements" tailored made to the
specific social and technical needs of countries. Echoing Pakistan's
position, Brazil's paper requested that the work program of the ACE
develop methodologies for measuring the economic and commercial impact
of counterfeiting and piracy "taking into account the diversity of
economic and social realities" and stage of development.
In conclusion, the ACE agreed that the papers of Pakistan, Brazil and
Group B and other country proposals from the floor of the Committee
would serve as a basis for "selection of topics for discussion by the
Committee at its future sessions, to be agreed by consensus by the
Members of the Committee, in line with the mandate of the Committee".
This particular point, although rather bland sounding on first glance,
was the result of nearly a half day's negotiation; originally certain
developing countries including Egypt, Pakistan, Brazil and India
suggested that future work of the ACE be modeled after the approach
taken by WIPO's Standing Committee on the Law of Patents (SCP) by
establishing an open-ended, non-exhaustive list of topics for future
discussion. The country papers are annexed to the conclusions of the
chair as part of the official record of the Committee.
The conclusions of the chair noted that the country papers of
Pakistan, Brazil and Group B provided the impetus to the Chair to
invite the Chief Economist of WIPO to respond to the questions of
delegations "including with a view to the feasibility of undertaking
an empirical assessment of the nature and extent of intellectual
property infringements, and the availability of respective data". As a
result of negotiation, the 6th session of the WIPO ACE would consider
the following:
"Developing on the substantive study contained in WIPO/ACE/5/6 [paper
of WIPO Chief Economist, Carsten Fink], to analyze and discuss IPRs
infringements in all its complexities by asking the Secretariat to
undertake:
1. A literature view of methodologies and gaps in the existing
studies;
2. Identification of different types of infractions and
motivations for IPR infringements, taking into account social,
economic and technological variables and different levels of development
3. Targeted studies with an aim to developing methodologies that
measure the social, economic and commercial impact of of
counterfeiting and piracy on societies taking into account the
diversity of economic and social realities, as well as different
stages of development;
4. Analysis of various efforts, alternative models and other
possible options from a socio-economic welfare perspective to address
the counterfeiting and piracy challenges'.
The WIPO Advisory Committee on Enforcement (ACE), recognizing that
informed policy choices on enforcement measures must be predicated on
sound empirical evidence, has taken a positive step forward.
Recommendation 45 of the Development Agenda instructs WIPO to approach
the question of intellectual property enforcement in the context of a
broader societal interest delineated by Article 7 of the TRIPS
Agreement which states:
"[t]he 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."
Recommendation 45 of the Development Agenda has clearly permeated the
sinews of the ambitious work program of the WIPO ACE instructing the
International Bureau to undertake a literature survey of existing
methodologies, to develop robust methodologies for measuring the
social, economic and commercial impact of counterfeiting and piracy,
and to consider alternative models to address the twin challenges of
counterfeiting and piracy. This work program, complements the
conclusions of the Chair which noted that the expert presentations
provided, inter alia, "suggestions for closer analysis to give meaning
to Recommendation No.45 of the WIPO Development Agenda, such as the
effects of seizures of goods in transit; safeguards in relation to
provisional measures; the scope of criminalizing intellectual property
infringements; and possible abusive enforcement practices, such as in
the context of competition law, unjustified threats to sue, and the
abuse of intellectual property enforcement measures". The
deliberations of WIPO's 5th Advisory Committee on Enforcement stands
in stark contrast to the shadowy conclaves of of the ACTA
negotiations, an exercise in non-transparent, uninformed policy making.
* ACTA
* Interpol
* UPU
* WCO
* WHO Impact
* WIPO Advisory Committee on Enforcement
* Enforcement
Source URL: http://keionline.org/node/681
Links:
[1] http://www.keionline.org/node/682
[2] http://www.international.gc.ca/trade-agreements-accords-commerciaux/fo/=
seoul-seoul.aspx
[3] http://www.wipo.int/meetings/en/details.jsp?meeting_id=3D17445
[4] http://www.wipo.int/edocs/mdocs/enforcement/en/wipo_ace_5/wipo_ace_5_1_=
prov_rev.pdf
[5] http://www.wipo.int/edocs/mdocs/enforcement/en/wipo_ace_5/wipo_ace_5_5.=
pdf
[6] http://www.wipo.int/edocs/mdocs/enforcement/en/wipo_ace_5/wipo_ace_5_6.=
pdf
[7] http://www.wipo.int/edocs/mdocs/enforcement/en/wipo_ace_5/wipo_ace_5_10=
.pdf
------------------------------------------------------------
Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru@keionline.org
Tel: +41 22 791 6727
Mobile: +41 76 508 0997