[Random-bits] CPTech comments to WIPO Advisory Committee on Enforcement
James Love
james.love@cptech.org
Mon Jun 28 10:07:01 2004
Comments to the World Intellectual Property Organization
(WIPO) Advisory Committee on the Enforcement of Industrial
Property Rights (ACE/IP) on
Social Aspects of Enforcement of Intellectual Property Rights
Consumer Project on Technology (CPTech)
28 June 2004
CPTech asks to provide comments to the WIPO Advisory Committee
on Enforcement of intellectual property rights. We are
concerned that WIPO is focusing narrowly on the concerns of
right owners, without consideration of the social aspects of
enforcement. We ask WIPO to allocate time and attention to
the social aspects of enforcement, in order to provide more
balance to the enforcement agenda. Among the topics that
might be discussed are the following:
1. The relationship between privacy and copyright
enforcement.
The development of new information technologies has led to
concern that copyrighted works will be inappropriately
distributed without authorization and without compensation to
authors or owners. Right owner groups have mobilized
politically to lobby for new treaties, trade initiatives and
domestic laws that are designed to give right owners greater
control over the dissemination of works, and new legal and
technological tools to fight unauthorized uses of works.
Collectively these efforts are providing a situation that
poses enormous risks to society in terms of the ability to
track and monitor the distribution and sharing of information.
The concerns over privacy are at the core of public debates
over enforcement issues. It is unwise and unbalanced for the
WIPO ACE to ignore these concerns.
2. The relationship between affordability and infringement
We believe there are important links between prices of goods,
affordability and the likelihood of infringement of
intellectual property rights. For example:
- In an April 2004 TACD workshop on Access to Essential
Learning Tools, several experts said that in developing
countries, infringement of copyrights was often seen as a
lesser sin that leaving children without access to adequate
educational materials.
- In as study of software licensing fees, Rishab Aiyer
Ghosh recently calculated the prices of Microsoft" Windows XP
and Office XP, in terms of the number of months one would have
to work, using the GPD per capita as the income metric. This
was compared to the BSA estimates of piracy. There was a very
high correlation between affordability (as measured by the
time required to buy the products) and the BSA piracy rates.
See: Rishab Aiyer Ghosh, "Licence fees and GDP per capita:
The case for open source in developing countries," First
Monday, volume 8, number 12 (December 2003), URL:
http://firstmonday.org/issues/issue8_12/ghosh/index.html
- The recent success of iTunes and similar services were
thought to be related to the more affordable pricing
strategies in online music services.
Member states cannot be expected to address enforcement issues
without having the tools to also address social concerns
regarding affordability of copyrighted goods. This may
require some further consideration of the appropriate
application of the three step tests that are included in most
treaties on copyright or related rights, particularly as
relates to essential products, such as materials used in
education and learning, or core software products.
3. The relationship between enforcement and control of
anticompetitive practices.
This issue is related both to the issue of affordability and
the issue of fairness. The most widespread infringement of
software is for an operating system and office productivity
suite that has global market shares of more than 95 percent.
These monopolies have benefited from a plethora of well-
documented anticompetitive practices. The inability of
governments of address abuses in consumer/client software
markets have lead to high prices, but also a widespread
willingness to infringe on the products.
Weak enforcement of copyrights on these software products have
also likely undermined the development of competitive
products, including both proprietary and free software
alternatives, as have the inability of governments to protect
competitors from predatory acts, such as the deliberate
undermining of open standards for interoperability.
In the music industry, concerns about concentrations of media
companies and cartels has lead to high prices and combined
with a popular perception that distribution companies have
exploited artists, has undermined the public’s willingness to
comply with copyright laws.
In the area of pharmaceutical drugs, restrictive licensing
practices that are associated with either excessive pricing or
anticompetitive restrictions on follow-on research have both
led to a decline in public support for enforcement actions.
In the United States, some critics claim that widespread
infringement of patents is deliberate among academic
researchers, when there are high transaction costs and
restrictive conditions for follow-on research.
In the area of software, attention might be given to how
Members countries could better implement Section 8, Article 40
of the WTO TRIPS Agreement, which is titled "Control of
Anticompetitive Practices in Contractual Licenses." Topics
for discussion might include which "licensing practices or
conditions . . . constitute an abuse of intellectual property
rights having an adverse impact on competition in the relevant
market," which is referred to in Article 40.2, and also, how
states could implement the cross border enforcement
cooperation alluded to in Article 40.3.
4. Enforcement abuses.
As we know from many well-documented cases, law enforcement
actions sometimes involve abuses. This includes both
government enforcement actions, and the efforts by private
parties to enforce their rights.
With regard to private enforcement actions, we recommend study
of the web site www.chillingeffects.org, which is sponsored by
the Electronic Frontier Foundation and Harvard, Stanford,
Berkeley, University of San Francisco, University of Maine,
and George Washington School of Law clinics. Parties have
used the threat of litigation, which is costly, as club to
prevent the public from exercising their legitimate rights in
fair use, or to pay license frees for patents that should
never have been enforced.
Another set of enforcement abuses are those that are described
in a number of reports by the United States Federal Trade
Commission (FTC) concerning pharmaceutical drugs. The
Chairman of the FTC described the enforcement abuses by BMS as
follows:1
Just last month, the FTC reached a major settlement with
Bristol-Myers Squibb ("BMS") to resolve charges that BMS
engaged in a series of anticompetitive acts over the past
decade to obstruct entry of low-price generic competition
for three of BMS's widely-used pharmaceutical products:
two anti-cancer drugs, Taxol and Platinol, and the anti-
anxiety agent BuSpar.(46) Among other things, the
Commission's complaint alleged that BMS abused Food and
Drug Administration ("FDA") regulations to obstruct
generic competitors; misled the FDA about the scope,
validity, and enforceability of patents to secure listing
in the FDA's "Orange Book" list of approved drugs and
their related patents; breached its duty of good faith
and candor with the U.S. Patent and Trademark Office
("PTO"), while pursuing new patents claiming these drugs;
filed baseless patent infringement suits against generic
drug firms that sought FDA approval to market lower-
priced drugs; and paid a would-be generic rival $72.5
million to abandon its legal challenge to the validity of
a BMS patent and to stay out of the market until the
patent expired. Because of BMS's alleged pattern of
anticompetitive conduct and the extensive resulting
consumer harm, the Commission's proposed order
necessarily contains strong - and in some respects
unprecedented - relief.(47) (Footnotes omitted)
The US FTC’s discussion of the BMS cases is highly relevant,
because in some bilateral trade negotiations, there are
proposals for mandatory linkages between patents and drug
registration. These linkages are proposed as mechanisms to
enhance the enforcement of the patent rights. But as
evidenced in the BMS and similar cases, an unintended
consequence is the abuse of the linkage for anticompetitive
purposes.
In the area of copyright, some government enforcement actions
have been criticized as abuses of civil rights, and as
undermining privacy.2
5. The relationship between development and enforcement.
For poor countries, strong enforcement of foreign copyrights
will reduce national incomes and undermine development. Some
have proposed that low-income countries be permitted to
allocate some or all money from collection societies to
domestic artists and authors, in a fashion similar to the
distribution of levies for private copying in many high-income
countries. This may promote development and also provide
stronger domestic incentives for enforcement.
6. Cost benefit analysis for enforcement in developing
countries.
We know too little about the costs and benefits of enforcement
of intellectual property. This is particularly true for many
developing countries, where resources are particularly scarce.
It is doubtful that investments in IPR enforcement actions
will increase national incomes in the poorest countries, and
those that argue otherwise should provide more evidence to
support their views. Given the complexity of enforcement
options, one also should consider the range of options that
countries have. In this regard it is astonishing that most of
the signatures to the WIPO Copyright Treaty (WCT) are
developing countries. Indeed, using the World Bank income
classifications, 11 low income countries, 31 middle income
countries, and only 5 high income countries have signed the
treaty.3 The WCT is known for introducing the most advanced
and complex enforcement obligations, including new rights for
copyright owners, and new obligations in the areas of
technological measures and rights management information.
Given the enormous poverty, scarce resources, low capacity to
implement governmental functions, and competing needs in these
countries (even for law enforcement), it is remarkable that
global trading partners are pushing poor countries to join the
WCT, even before it has been adopted and implemented in rich
countries. In many cases, countries sign such treaties, not
because it is in their own interest to enforce these new
rights, and not because there is a creditable intention of
enforcing the treaty obligations, but because it is something
asked from a high-income country in bilateral trade and aid
negotiations. However, this creates a growing gap between the
official and the actual practice, which has the effect of
undermining the creditability of copyright laws. Better to
focus on more appropriate and realistic obligations, than to
promote the fiction that countries have agreed to certain
levels of enforcement, and then complain about the failure to
follow through.
What is the WIPO framework for considering the costs and
benefits of enforcement of copyrights, patents and other forms
of intellectual property rights in developing countries? Is
there a willingness to explicitly recognize that countries of
lower levels of development should rationally devote fewer
resources to enforcement of the largely foreign-owned
intellectual rights?
Some proponents of stronger enforcement measures have asked
that right-owners be granted rights normally reserved for the
state to hire private police forces to enforce rights. We are
wary of such measures, pointing out there are risks to society
when police powers are given to private parties, particularly
when a private right-owner is the one who pays and directs the
police effort.
7. Collection societies and the free distribution of works.
Copyrighted works are often distributed for free deliberately.
This would include for example software distributed under the
GNU General Public License (GPL), the Berkeley Artistic
License, various Creative Commons licenses, and many other
licenses for free distribution of works. Richard Stallman, an
author of software, text and at least one song, reports that
in some countries, collecting societies forbid their members
to release works on terms that permit free distribution. This
should be discouraged, since it undermines both the interests
of the authors and the general public.
8. Special problems poised by technological protection
measures
Under every important copyright treaty, it is recognized that
countries will provide various exceptions and limitations on
exclusive rights. There are many uses of works that are
appropriately done without the permission of right owners, and
without compensation, including for example, certainly uses
for personal, educational or non-commercial purposes, uses by
the handicapped, decompilation in order to address concerns
over interoperability, and other uses. New technological
protection measures present special problems, because they
prevent the public from using works in ways that have been
traditionally permitted as free uses. Also, works in the
public domain have been made inaccessible by technological
protection measures. In these cases, public policy is needed
to regulate and limit the use of technological protection
measures. German law requires the unlocking of documents for
the blind. It would be useful for WIPO to collect information
from national governments to determine when and how
governments limit or regulate technological protection
measures.
_______________________________
1 Prepared Statement of Timothy J. Muris, Chairman of the
Federal Trade Commission, before the Subcommittee on Commerce,
Justice, State, the Judiciary and Related Agencies of the
Committee on Appropriations, United States House of
Representatives Washington, D.C. April 9, 2003.
2 Americal Civil Liberties Union, "The Seven Reasons Why The
Senate Should Reject The International Cybercrime Treaty,"
December 18, 2003.
3 Countries that have joined the WIPO WCT by April 2004.
Low Income (11) -- Burkina Faso, Georgia, Guatemala, Guinea,
Honduras, Kyrgyzstan, Mali, Mongolia, Nicaragua, Senegal,
Togo.
Middle Income (31) -- Argentina, Belarus, Bulgaria, Chile,
Colombia, Costa Rica, Croatia, Cyprus, Czech Republic,
Ecuador, El Salvador, Gabon, Hungary, Indonesia, Jamaica,
Jordan, Latvia, Lithuania, Mexico, Panama, Paraguay, Peru,
Philippines, Poland, Republic of Moldova, Romania, Saint
Lucia, Serbia and Montenegrom, Slovakia, The former Yugoslav
Republic of Macedonia, Ukraine.
High Income (5) -- Japan, Republic of Korea, Slovenia, United
Arab Emirates, United States of America.
--
James Love
http://www.cptech.org mailto:james.love@cptech.org
mobile +1.202.361.3040
--
James Love
http://www.cptech.org mailto:james.love@cptech.org
mobile +1.202.361.3040