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GSP Subcommittee

Office of the U.S. Trade Representative

600 17th Street NW, Room 518

Washington, DC 20508

Re: Request for Review of the Intellectual Property Rights Practices of Lebanon in the 1999 Annual GSP Country Eligibility Practices Review, 64 Fed. Reg. 20046 (April 23, 1999)

To the Subcommittee:

            On April 23, 1999, the Trade Policy Staff Committee (TPSC) of the Office of the United States Trade Representative (USTR) published in the Federal Register a notice announcing the 1999 Annual Generalized System of Preferences (GSP) Product and Country Eligibility Practices Review. USTR indicated that interested parties "may submit petitions to have the GSP status of any eligible beneficiary developing country reviewed with respect to any of the designation criteria listed in subsections 502(b) or 502(c) of the 1974 Act (19 U.S.C. 2462(b) and (c))." See 64 Fed. Reg. 20047.

            The International Intellectual Property Alliance (IIPA) hereby submits its request that the eligibility of LEBANON as a GSP beneficiary developing country be reviewed, and that its GSP benefits be suspended or withdrawn, in whole or in part, if requisite improvements are not made by Lebanon to remedy the deficiencies (outlined below) which adversely affect U.S. copyright owners. In 1997, Lebanon exported goods valued at $29.2 million in preferential trade benefits under GSP, or almost 87% of its total exports to the U.S. In 1998, Lebanon received $25.6 million in preferential trade benefits under GSP, or nearly 95% of its total exports to the U.S. Last year, Congress reauthorized the GSP program through June 30, 1999. Currently there are several bills pending before Congress which would extend the GSP program.

Petitioner and its Interest: The International Intellectual Property Alliance

            IIPA is a coalition of seven trade associations that collectively represent the U.S. copyright-based industries C the motion picture, music and recording, business and entertainment software, and book publishing industries. IIPA’s member associations are the Association of American Publishers (AAP), AFMA (formerly the American Film Marketing Association), the Business Software Alliance (BSA), the Interactive Digital Software Association (IDSA), the Motion Picture Association of America (MPAA), the National Music Publishers’ Association (NMPA) and the Recording Industry Association of America (RIAA).

            These member associations represent over 1,350 U.S. companies producing and distributing works protected by copyright laws throughout the world C all types of computer software including business software and entertainment software (such as videogame CDs and cartridges, personal computer CDs and multimedia products); motion pictures, television programs, home videocassettes and DVDs; music, records, CDs and audiocassettes; and textbooks, tradebooks, reference and professional publications and journals (in both electronic and print media).

These U.S. copyright-based industries represent the leading edge of the world's high technology, entertainment and publishing industries. According to the most recent edition of the report, Copyright Industries in the U.S. Economy: The 1998 Report, prepared for IIPA by Economists, Inc., these core copyright industries accounted for $278.4 billion in value added to the U.S. economy, or approximately 3.65% of the Gross Domestic Product (GDP) in 1996 (the last year for which complete data is available). The total copyright industries accounted in 1996 for $433.9 billion in value added, or approximately 5.68% of GDP. The core copyright industries’ share of the GDP grew more than twice as fast as the remainder of the U.S. economy between 1977 and 1996 (5.5% vs. 2.6%). Employment in the core copyright industries grew at close to three times the employment growth in the economy as a whole between 1977 and 1996 (4.0% vs. 1.6%). More than 6.5 million workers were employed by the total copyright industries, about 5.15% of the total U.S. work force, in 1996. The core copyright industries accounted for an estimated $60.15 billion in foreign sales and exports in 1996, a 13% gain over the $53.25 billion generated in 1995. The Copyright Industries in the U.S. Economy report has been made widely available to officials working on country and IPR issues at USTR, and throughout other agencies, including the State Department, the Commerce Department, the U.S. Patent and Trademark Office, and the U.S. Copyright Office. IIPA’s press release on the issuance of this report is available on IIPA’s website, at http://www.iipa.com/html/pr_05071998.html.

            The U.S. creative industries represent one of the few sectors of the U.S. economy that regularly contributes to a positive balance of trade. It is essential to the continued growth and future competitiveness of these industries that our trading partners provide free and open markets and high levels of protection to the copyrights on which this trade depends. Inexpensive and accessible reproduction technologies make it possible for U.S. copyrighted works to be pirated C stolen C in other countries, and including specifically for the purposes of this petition, Lebanon. However, the copyright industries represented in IIPA lose an estimated $20-22 billion annually due to piracy outside the United States. These staggering losses, if not halted, could reverse this path of growth in these sectors, threaten the high wage employment that these industries bring to the U.S. economy, and damage U.S. competitiveness. In addition to the worldwide problem of piracy, several foreign countries have erected market access barriers to U.S. copyright products. To combat these dual problems in developing countries, the U.S. copyright-based industries joined with the Administration and Congress to fashion new legislation and negotiating tools. IIPA and its members have supported various trade tools with IPR provisions over the years, including the GSP Program, Special 301, Section 301, the Caribbean Basin Economic Recovery Act, and the Andean Trade Preferences Act.

Action Requested by Petitioner

            Pursuant to Section 501 et seq. of the Trade Act of 1974, as amended, 19 U.S.C. 2461 et seq., and 15 C.F.R. Part 2007, and pursuant specifically to Section 502(c)(5) of the Trade Act (19 U.S.C. 2462(c)(5)), and 15 C.F.R. 2007.0(b), IIPA, on behalf of its seven trade association members, hereby petitions the President to review the eligibility of Lebanon as a GSP beneficiary developing country, and if requisite improvements are not made by Lebanon, then IIPA requests the President to suspend or withdraw GSP benefits of Lebanon, in whole or in part, for its failure to provide adequate and effective copyright protection for U.S. copyright owners.

Legal Authority for this Petition and Discussion of the IPR Criteria in the GSP Statute

            Provisions tying intellectual property protection to trade benefits were first added to the Trade and Tariff Act of 1984 [hereinafter "TTA 1984"]. Title V of the TTA 1984, known as the GSP Renewal Act of 1984, renewed the GSP Program which had been introduced in the Trade Act of 1974 [hereinafter "TA 1974"], and specifically required the President to consider intellectual property protection in determining whether to designate a developing country as eligible for GSP benefits. The GSP Program provides unilateral, non-reciprocal duty-free tariff treatment to over 4,400 articles imported from more than 140 countries and territories designated beneficiary countries and territories (these are less developing countries) to aid their economic development through preferential market access. An additional 1,700 articles are eligible for GSP treatment for specified least developing countries. While there has been a minor change in the statutory language between the GSP Renewal Act of 1984 and the GSP Renewal Act of 1996, the Act remains essentially the same as in 1984. The legislative history of the 1984 Renewal Act is particularly instructive on the important link between GSP benefits and strong IPR protection.

            The GSP Renewal Act of 1984

            In the GSP Renewal Act of 1984, Congress specified conditions that GSP beneficiary countries must meet in order to gain and maintain their preferential trading status. In particular, one of these express conditions (which Congress also delineated as one "purpose" of the GSP Program) was to encourage developing countries "to provide effective means under which foreign nationals may secure, exercise, and enforce exclusive intellectual property rights."

            The legislation required the President to apply mandatory and discretionary criteria with respect to IPR protection as a condition to a country achieving "beneficiary" status under the GSP Program. The mandatory criterion prohibited the designation of a country from becoming a "beneficiary developing country" if, for example, "such country has nationalized, expropriated, or otherwise seized ownership or control of property, including patent, trademarks, or copyrights, owned by a United States citizen or by a corporation, partnership, or association which is 50 percent or more beneficially owned by United States citizens." See Section 503(b)(4) of the GSP Renewal Act of 1984, now codified at 19 U.S.C. 2462(b)(2)(D).

            The GSP Renewal Act of 1984 added as a discretionary criterion, in determining whether to designate a developing country as eligible to receive GSP duty-free trade treatment, namely, that

            the President shall take into account . . . the extent to which [the] country is providing adequate and effective means under its laws for foreign nations to secure, to exercise, and to enforce exclusive rights in intellectual property, including patents, trademarks, and copyrights.

Section 503(c)(5) of the GSP Renewal Act of 1984, codified at 19 U.S.C. 2462(c)(5). The Senate Finance Committee Report explained that

            [t]o determine whether a country provides "adequate and effective means," the President should consider the extent of statutory protection for intellectual property (including the scope and duration of such protection), the remedies available to aggrieved parties, the willingness and ability of the government to enforce intellectual property rights on behalf of foreign nationals, the ability of foreign nationals effectively to enforce their intellectual property rights on their own behalf and whether the country’s system of law imposes formalities or similar requirements that, in practice, are an obstacle to meaningful protection.

S. Rep. No.98-485, 98^th Cong., 2d Sess. At 11 (1984). The Senate Report also noted

            [i]n delegating this discretionary authority to the President, it is the intent of the Committee that the President will vigorously exercise the authority to withdraw, to suspend or to limit GSP eligibility for non-complying countries . . . .

The Report additionally pointed out that

            [w]here valid and reasonable complaints are raised by U.S. firms concerning a beneficiary country’s market access policy or protection of intellectual property rights, for example, it is expected that such interests will be given prominent attention by the President in deciding whether to modify duty-free treatment for that country.

Id. at 12-13 (emphasis added). The House Ways and Means Committee stated that "countries wishing to reap the benefits of preferential duty-free access to the U.S. market must fulfill international responsibilities" in the intellectual property area. House Rep. No. 98-1090, 98^th Cong., 2d Sess. at 12 (1984).

            The IPR criteria are a condition, not only for obtaining GSP benefits in the first place, but also for retaining them. The 1984 Act authorized the President to "withdraw, suspend, or limit the application of the duty-free treatment accorded under Section 501 of this title with respect to any article or any country" and requires the President, when taking any such action, to "consider the factors set forth in Sections 501 and 502(c)." TTA 1984 Section 505(a)(1); TA 1974 Section 504(a)(1), as amended; 19 U.S.C. 2464(a)(1) (emphasis added). The Act also created a system of "general reviews" to ensure that these statutory criteria are met. TTA 1984 Section 505(b); TA 1974 Section 504(c)(2)(A), as amended; 19 U.S.C. 2464(c)(2)(A); see also 15 C.F.R. 2007.3.

            This GSP Subcommittee is asked to follow the explicit intent of Congress, and advise the President to "vigorously exercise" his authority to withdraw, suspend or limit GSP eligibility of Lebanon for its non-compliance with the statutory criterion on IPR in the GSP Program.

            Over the years, retaining GSP benefits has figured prominently in the decisions of a number of countries to improve their IPR protection. In the 1980s, such leverage was used to encourage Singapore, Indonesia and Malaysia to adopt new copyright legislation. IIPA has filed petitions against several countries for their failure to provide adequate and effective copyright protection. IIPA petitions which have been accepted by USTR over the past ten years (1989-1998) include: Indonesia, Thailand, Cyprus, Egypt, El Salvador, Turkey and Poland. IIPA has participated in GSP IPR reviews involving Malta, Guatemala, the Dominican Republic, Honduras, Panama, and Paraguay (all of which were initiated by other petitioners or by USTR). IIPA also filed petitions in 1995 against the Russian Federation, the Philippines, Bolivia and Peru which, we learned in October 1996, were not accepted by USTR for the 1995 GSP Annual Review. A GSP petition which IIPA filed against Turkey in June 1993 remains under investigation.

            The GSP Renewal Act of 1996

            When the GSP Program was reauthorized in August 1996, the language of the IPR discretionary criterion for GSP eligibility in Section 502(c)(5) was simplified slightly and now requires the President to "take into account the extent to which such country is providing adequate and effective protection of intellectual property rights" (emphasis added). The expired law specified (as discussed above) that each beneficiary country provide "adequate and effective means under its laws for foreign nationals to secure, to exercise and to enforce exclusive rights in intellectual property, including patents, trademarks, and copyrights." Otherwise, the GSP Renewal Act contains identical IPR provisions, including "mandatory" criteria denying GSP status to countries that directly or indirectly expropriate U.S. property (including intellectual property), and authorizing the President to withdraw, suspend or limit GSP privileges based on failure to meet the IPR criteria.

            Lebanon Fails to Provide "Adequate and Effective Protection" of U.S. Copyrights

            Some of the information describing the deficiencies in Lebanon’s legal and enforcement regime has been presented previously to members of various U.S. governmental interagency groups, including the Special 301 interagency group, several members of the GSP Subcommittee, as well as the Trade Policy Staff Committee, in the context of USTR’s Annual Special 301 Review. On February 16, 1999, IIPA presented its annual Special 301 submission to Assistant USTR for Services, Investment and Intellectual Property Joseph Papovich; this submission was widely distributed among the interagency for its internal consideration in the 1999 Special 301 Annual Review. IIPA’s entire report is available on our website, http://www.iipa.com.

            However, there have been several recent developments (including passage of a new Copyright Law in March, 1999), one of which, in particular, has given rise to this petition. On May 26, 1999, the Lebanese Parliament passed a Bill suspending for six months the application of three articles, under which pirate cable TV operators could be subject to criminal penalties. In addition to other problems in the Lebanese copyright regime, this ‘suspension’ of remedies against cable pirates places Lebanon squarely outside the "adequate and effective" standard imposed under the GSP statute.

            1.         The Copyright Law in Lebanon Contains Deficiencies Which Render Legal Protection Inadequate and Ineffective

            A description of the deficiencies in Lebanon’s copyright legal regime, as of early February 1999, appears in Appendix 1 (the 1999 IIPA Special 301 report on Lebanon filed with USTR on February 16, 1999 in the Special 301 Annual Review). It should be noted that, at the time of our Special 301 report, copyright law in Lebanon was still governed under an outdated 1924 Decree (as amended), but that since this filing, Lebanon passed a new Copyright Law (see discussion immediately below). Lebanon is a member of both the Berne Convention for the Protection of Literary and Artistic Works (Rome (1928) Act) ("Berne Convention (1928)), as well as the International (Rome) Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations (1961) ("Rome Convention").

Lebanon passed its new Copyright Law on March 16, 1999 (published in the official gazette April 13, 1999; effective June 13, 1999). The new law provides a firm basis for U.S. works (but not U.S. sound recordings), but contains several other serious problems, among which are:

·        No direct point of attachment for U.S. sound recordings (Article 36).

·        Overly broad exceptions to protection (Articles 23, 25-30, 32-34).

·        A mandatory deposit requirement (Articles 76-79), and specifically, the request for deposit "shall be registered" (Article 79). While Article 5 states that "works" shall be protected without formalities (although the law is silent on sound recordings, performances, broadcasts, etc.), the mandatory deposit provisions not only include onerous documentary burdens, but also impose fees (much higher for audiovisual works and sound recordings than for other objects of protection). There is nothing expressly exempting foreign works, "audio works," performances, broadcasts, etc. from this requirement. It is unclear whether these provisions amount to a formality to the "enjoyment and exercise" of copyright in Lebanon (which would be a violation of Lebanon’s current Berne Convention obligations); it should be clarified that these provisions do not apply to foreign works.

·        An amendment passed by the Lebanese Parliament on May 26, 1999, ‘suspending’ application of Articles 87-89 of the law (which impose criminal penalties on pirate cable TV operators) for six months from the effective date of the law (i.e., until December 13, 1999). Such a ‘suspension.’ This amendment provides cable TV operators with a license to pirate and to inflict continuing economic damage on both the international and local audiovisual industries for the next six months.

            2.         Suspension of Criminal Remedies Against Pirate Cable TV Operators Makes Protection of U.S. Audiovisual Works Inadequate and Ineffective

            On May 26, 1999, the Lebanese Parliament passed a Bill suspending three articles (Articles 87-89) of the newly enacted Copyright Law (due to come into force on June 13) for six months. Under these articles, pirate cable TV operators could be subject to criminal penalties. This ‘suspension’ of the new law gives carte blanche to the pirate cable TV operators to unabashedly steal from the legitimate owners of the rights under the law. This change sends a terrible signal as to Lebanon’s preparedness to protect copyright in line with international standards, and does not bode well for how Lebanon will approach joining the world trading system. Most importantly, absence of Articles 87-89 will render the new Copyright Law impotent to fight cable TV piracy while the suspension remains in place.

            For many years, the motion picture industry had been preoccupied with the fight against rampant broadcast TV piracy in Lebanon. However, in 1997 (upon implementation of the Broadcast Law and the closure of the main pirate stations) the pirates merely shifted their operations to the cable TV sector. Cable TV piracy mushroomed quickly in the absence of a response by the Lebanese Government. Now, as many as 1,500 cable operators in Lebanon re-transmit the signals of both domestic and foreign terrestrial and satellite television channels to their subscribers for an average monthly fee of US$10. Many of these television channels carry motion pictures and television programs owned and/or distributed by the members of the Motion Picture Association. Most of the cable operators have not obtained licenses from the television channels to retransmit their signals, and have not obtained rights from the MPA member companies or others to transmit their motion pictures and television programs.

            The activities of these pirate cable TV operators have seriously damaged the local theatrical, home video and television markets in Lebanon, and cause huge financial losses not only to the MPA member companies but also to local Lebanese businesses that have invested in cinemas, video outlets and broadcast TV stations. Lebanese TV stations have little incentive to invest in the purchase of movies or TV programs since viewers will have likely seen them long before their airing on terrestrial TV.

            The enactment of the new Copyright Law in March, with tough penalties against cable piracy, appeared to signal Lebanon’s appreciation of the seriousness of the cable piracy problem and the need to do something about it immediately. The industry has looked forward to prompt and effective criminal enforcement actions against cable piracy. The May 26 amendments provide cable TV operators with a license to continue to pirate and inflict devastating economic damage on both the international and local audiovisual industries for the next six months. IIPA is at a loss to understand the justification for the Government of Lebanon’s action in permitting illegal activities, deemed serious enough to impose criminal penalties, to go unpunished for the next six months. The Government of Lebanon should take immediate and urgent steps to remove the suspension.

            3. Enforcement Efforts Against Piracy in Lebanon Are Totally Inadequate and Ineffective

            Also important to our discussion of Lebanon is its performance toward complying with the GSP statutory standard of "providing adequate and effective protection of intellectual property rights." For the purpose of this GSP review, IIPA strongly suggests that the GSP Subcommittee should look to the enforcement provisions found in Part III of the TRIPS Agreement (Articles 41 to 61) to evaluate the effectiveness of Lebanon’s copyright enforcement efforts. Because the GSP statute itself does not define this standard, IIPA asserts that any standard of "adequate and effective" in the enforcement realm should, at the very least, meet the obligations outlined in the TRIPS Agreement. Further, because we believe Lebanon’s enforcement efforts fall short of the TRIPS standard, we also conclude that Lebanon fails to meet its statutory obligations under the GSP Program to provide "adequate and effective protection." The U.S. Government should not be subsidizing, through its award of unilateral preferential trade benefits, the theft of U.S. copyrighted materials in Lebanon, as Lebanon fails to meet its already existing obligations under GSP to protect intellectual property, including copyrights.

A description of the deficiencies in Lebanon’s enforcement regime, as of early February 1999, appears in Appendix 1 (the 1999 IIPA Special 301 report on Lebanon filed with USTR on February 16, 1999 in the Special 301 docket). In brief, the copyright industries raised the following concerns regarding enforcement, none of which have been addressed in the intervening months. First, the Lebanese Government has taken no effective measures to eliminate the use of unauthorized copies of software in Government offices. Second, there was absolutely no reduction in the rate of video piracy in 1998. Third, IIPA received reports in February 1999 of the establishment of one or more pirate optical media (CD) plants in Lebanon. Without proper controls, these plants could transform Lebanon from a country with growing piracy in traditional formats to one with staggering export piracy losses. Fourth, compilation CD-ROMs (with thousands of dollars worth of software) sell on the streets of Lebanon for US$10. Cable piracy runs rampant, with unauthorized broadcasts of first run movies (like "Titanic") showing up on "community cable" TV stations throughout the country. Fifth, the courts remain backlogged and inefficient, posing major impediments to effective enforcement of copyright across the board. Sixth, book piracy in Lebanon, which took root during the years of civil unrest, is a net-export business.

            The purpose of the following discussion is to provide the GSP Subcommittee with tangible guidance on the key elements of an effective copyright enforcement regime under TRIPS. As the minimum standard of copyright protection in a multilateral world, TRIPS copyright obligations enter fully into force for developing countries (LDCs) on January 1, 2000 (see TRIPS Article 65). These LDCs must bring their statutory laws and, most importantly, their enforcement systems into compliance with these standards.

The TRIPS enforcement obligations were developed in recognition of the critical importance of enforcement to any effective IP regime. In the area of copyright enforcement, there are three articles in the TRIPS enforcement text that are the most relevant. These are Articles 41 (general obligations), 50 (provisional measures in civil cases) and 61 (criminal remedies), and are attached hereto as Appendix 2. In virtually every country in the world, most of the copyright industries deal with piracy through criminal enforcement. Years of experience have led these industries and virtually every country to conclude that civil remedies are simply not sufficient to deter commercial piracy. The one exception, viable in some countries with mature civil remedies, involves enforcement against corporate and other commercial end-users of business software. With this type of software piracy, the infringers are otherwise legitimate businesses who cannot afford to have their reputations sullied by allegations of illegal conduct.

Article 41 sets out the general obligations of each WTO member, including Lebanon. These obligations apply to all areas of enforcement --- civil, administrative, criminal, and border enforcement. First, the requirement that enforcement procedures permit "effective action" speaks to all possible remedies, including civil, administrative and criminal procedures, border measures, customs procedures, as well as enforcement provisions under tax and communications laws. Further, and most importantly, procedures that meet the test of effective action can only be tested in actual practice. They must result in the reduction of the level of piracy in that country. If not, they are not "effective." Second, making remedies "available" does not mean that remedies need only appear in the statutory law. Even if a country’s copyright law is amended to include criminal remedies for copyright infringement, for example, those amendments will not make the criminal remedy "available" unless they are actually used in practice. Third, remedies that are "available" must be "expeditious". The ex parte civil search order required under Article 50 of TRIPS (discussed below) must also be available without overly burdensome documentary or evidentiary requirements, and must be available at a reasonable cost (see TRIPS Article 41.2). The same applies to search warrants and seizure orders issued by a criminal court. For example, criminal cases that take three to four years to reach judgement simply do not meet the test of "expeditious." Finally, and perhaps most importantly, these remedies must constitute a "deterrent to further infringements." This phrase is key to the TRIPS enforcement text. To determine whether a country has satisfied this requirement, the results of the enforcement system must be objectively analyzed. There are several indicia that may provide needed evidence to determine whether a remedy is "deterrent." One of the most clear-cut tests is the change over time of the piracy level.

Under Article 61 of TRIPS, effective criminal enforcement has two major elements: (a) effective searches and seizures of pirate product by the police without notice to the infringer (raids), and (b) the existence in statutory law of deterrent criminal penalties and, in combination with Article 41, their imposition by judges in practice.

Specifically, Article 61 obliges countries to "provide for" criminal procedures and penalties "at least in cases of willful trademark counterfeiting or copyright piracy." Imprisonment and fines must be "sufficient to provide a deterrent." Article 41 combined with Article 61 (which should be understood as subsumed within the requirements of Article 41), requires countries to "provide for" or make "available" remedies not just in the law, but in practice as well. This obligation cannot be satisfied if no significant fines or imprisonments have been meted out against commercial pirates, or if sentences are regularly suspended or are commuted to low fines.

Article 61 also provides that seizure, forfeiture and destruction of the infringing goods and any "materials and implements the predominant use of which has been in the commission of the offense" must be available. This means all three actions (seizure, forfeiture and destruction of goods); simply seizing goods and leaving them to gather dust in a warehouse will not suffice (particularly if the pirate walks away unpunished and continues to remain in business). It cannot be underestimated how important the seizure, forfeiture and destruction of "materials and implements the predominant use of which has been in the commission of the offense" is in fighting piracy. Even where VCRs, computers and other machines have been seized, returning them to the pirates is extremely damaging and only encourages pirates to continue piratical activities. If fines are too low, or equipment and pirate goods are not seized, forfeited and destroyed, enforcement will not meet the test of "deterrence"; it will constitute simply a cost of doing business for the pirate.

Article 50 of TRIPS provides for provisional (or injunctive) relief in cases where the alleged infringer is present in court to defend against the rightholders request to stop the infringing conduct or to preserve evidence. But Article 50 also applies to cases where it is imperative that the rightholder search the defendant’s premises and seize infringing product and other evidence without notice to the alleged infringer. This is an essential remedy in civil cases since it is so easy to destroy the evidence of infringement in many cases, such as where a company has made unauthorized copies of software by loading them on the hard disks of all computers in a business network. Again, it is not sufficient that this remedy be merely in the law. Article 50 (and Article 41) provide that these procedure be "expeditious." This requirement cannot be judged by mere reference to the law; it compliance must be judged by its "effective" use in practice.

            4.         Because of Inadequate and Ineffective Copyright Protection and Enforcement in LEBANON, U.S. Copyright Owners Suffer Economic Harm

Total losses to the U.S. copyright-based industries in Lebanon were estimated at $14.0 million in 1998, an almost 15% increase from 1997 losses (of $12.4 million).

ESTIMATED TRADE LOSSES DUE TO PIRACY IN LEBANON

(in millions of U.S. dollars)

and LEVELS OF PIRACY : 1995 - 1998

            Attached as Appendix 3 is the methodology used by IIPA members to calculate estimated losses due to copyright piracy. This methodology was also submitted to USTR in IIPA’s 1999 Special 301 submission.

CONCLUSION

            For the reasons stated in this submission (including the Appendices), IIPA requests that the TPSC initiate a review of the country eligibility of Lebanon for its failure to provide adequate and effective copyright protection and enforcement for U.S. copyright owners. If requisite improvements are not made in Lebanon to remedy these deficiencies, then IIPA requests that the U.S. suspend Lebanon’s eligibility or withdraw GSP benefits of Lebanon, in whole or in part.

                                                                        Respectfully submitted,

                                                                        Eric H. Smith

                                                                        President

                                                                        International Intellectual Property Alliance

Enclosures