Paper of the

International Intellectual Property Alliance

Submitted to the

Americas Business Forum V

Workshop on Intellectual Property Rights

Toronto, Canada

September 10, 1999

 

The International Intellectual Property Alliance (IIPA) takes this opportunity to expand upon the already agreed goals on copyright issues discussed at prior Working Groups on Intellectual Property Rights at the Americas Business Forums held in San José (1998), Belo Horizonte (1997) and Cartagena (1996), in which IIPA was an active participant. IIPA, based in Washington, D.C., is a coalition of seven trade associations that collectively represent the U.S. copyright-based industries -- the motion picture, music, recording, business and entertainment software, and book publishing industries. IIPA’s member associations (listed below) represent over 1,350 U.S. companies producing and distributing creative products protected by copyright laws throughout the world. Several of our member associations and in turn, their member companies, are actively engaged in many of the FTAA nations, conducting commercial activities and/or anti-piracy enforcement actions. The U.S. copyright-based companies and our Latin and Caribbean colleagues involved the creative and cultural industries share similar goals of expanding the legitimate markets for these creative products, which result in higher levels of domestic employment, more tax revenues generated for governments, and stronger economic development of local economies.

The mandate of the FTAA Ministers to the IPR Negotiating Group is clear: "Determine how to reduce distortions in trade in the hemisphere and promote and ensure adequate and effective protection to intellectual property rights. Changes in technology must be considered." IIPA’s recommendations to our business colleagues in this Americas Business Forum (ABF) aim to provide an expansive view on strengthening copyright substantive law and improving enforcement in this Hemisphere.

1.      The FTAA IPR Chapter should include substantive copyright provisions which go

beyond the TRIPS Agreement and include obligations that support adequate and effective copyright protection in an era of technological growth and development.

            Previous gatherings of the ABF IPR Working Groups have agreed that, at a minimum, the levels of protection found in the WTO TRIPS Agreement should be implemented in the FTAA countries. The January 1, 2000 deadline for full compliance by WTO developing country members with all their copyright substantive and enforcement obligations under the TRIPS Agreement is fast approaching. With respect to substantive copyright obligations, particular and immediate attention in national legislation must be paid to the protection for a full TRIPS-compliant term of pre-existing works and sound recordings ("retroactivity") and to the practical fulfillment of enforcement obligations (discussed separately, below).

            IIPA believes that the FTAA IPR Chapter must go above and beyond the copyright substantive obligations found in TRIPS. The FTAA IPR Chapter must be a forward-looking document with technologically neutral terms. If we look around the globe, there are international trends in substantive copyright law which IIPA believes should be included in the FTAA.

                        Fundamentally, the Internet transforms copyright piracy from a mostly local phenomenon to a global plague. It makes it cheaper and easier than ever for thieves to distribute unauthorized copies of copyrighted materials around the globe. Modern copyright laws must respond to this fundamental change by providing that creators have the basic property right to control distribution of copies of their creations. Copyright owners must be able to control delivery of their works, regardless of the specific technological means employed. The challenge to legislators in each country is to make whatever changes to current law are necessary to realize this goal.

Many of these changes are contemplated by the two so-called "internet" treaties of the World Intellectual Property Organization (WIPO): the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT). The Americas already lead the world in the number of countries from its region which have either deposited their instruments with WIPO or have passed ratification legislation necessary to move forward with developing their instruments of deposit. El Salvador and Panama have deposited their instruments for both Treaties with WIPO. Argentina has passed legislation ratifying both Treaties, and Mexico has passed legislation ratifying the WPPT. The U.S. has amended its domestic legislation, and is expected to deposit its instruments for both Treaties soon.

            Here is an illustrative (not exhaustive) list of the kinds of substantive copyright obligations (beyond TRIPS) which should be included in the FTAA IPR Chapter:

·         Copyright owners should have the exclusive right of "making available" its works or phonograms to the public for on-demand access. Modern copyright laws recognize that exclusive rights over any means of delivery in which "members of the public may access works from a place and at a time individually chosen by them" is critical. Outlawing the unauthorized distribution of tangible copies of creative works must be covered. Furthermore, provisions against the circumvention of technological measures and rights management information should be included in an IPR Chapter.

·         The term of copyright protection should be extended beyond the TRIPS minima. The basic term should be life of the author plus 70 years, or 95 years from date of first publication where the author is a legal entity, or in the case of the rights of a sound recording producer or a performer.

2.         TRIPS’ enforcement obligations must be implemented immediately (not later than January 1, 2000) and continue thereafter to ensure the deterrence of copyright piracy in-country and at the borders. Additional means and measures (below) to achieve this outcome should be considered for inclusion in an IP Chapter.

Prior ABF IPR Working Groups have agreed that effective enforcement against piracy is a priority. Of course, it is easy for business and government officials to agree on this point; it is an entirely different matter to actually take actions on all levels of national enforcement – using criminal, civil, border, judicial and/or administrative means – to achieve results.

Inadequate and ineffective copyright enforcement continues to inflict significant trade distortions in this hemisphere. For example, in the case of U.S. copyright-protected products, U.S. companies lost an estimated almost $2.6 billion in 1998 due to copyright piracy in 18 of the 34 FTAA countries. This conservative estimate does not even include losses due to piracy over the Internet. And without a doubt, the creative products of Latin and Caribbean authors, artists and producers are being stolen throughout the region as well. Between 2000 and 2005, the copyright industries expect to see much improvement in the effective enforcement of intellectual property rights in all the FTAA countries.

Although implementation of the TRIPS enforcement text remains an immediate priority, IIPA submits for ABF consideration additional measures aimed at enhancing enforcement efforts in this Hemisphere. Some of these suggestions are derived from the TRIPS Agreement, yet move beyond the requirements of TRIPS. Such measures, we believe, would simplify and expedite anti-piracy legal actions, reduce the costs of enforcement, and provide more effective and deterrent remedies. Examples of these tools include:

·         authorizing ex officio anti-piracy actions by law enforcement agencies, thus dispensing with a formal complaint by a private party as a procedural prerequisite to enforcement of the copyright or neighboring rights law. Within the past year, Paraguay and Guatemala, for example, have amended their laws to explicitly provide for this "public" action which grants authority to police and prosecutors to initiate copyright infringement actions;

·         establishing statutory or pre-determined damages in civil cases, thus assuring the availability of deterrent damage awards, as required by TRIPS Article 41. Brazil has instituted such a system in its copyright law, and this has been most helpful in expediting civil infringement cases and generating just results;

·         establishing presumptions of ownership and subsistence of protection in copyrighted works and sound recordings in favor of the right holder whose name appears on copies in the usual manner (an extension of Article 15 of the Berne Convention);

·         authorizing exclusive licensees of copyright or neighboring rights to bring piracy and infringement cases in their own names.

Importantly, countries in the Americas should cooperate to secure commitments from its neighbors to take effective, coordinated enforcement measures against cross-border piracy operations, including those taking place over the Internet and in electronic commerce generally.

As mentioned above, the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty also contain key provisions — notably including the requirement to provide "adequate legal protections and effective legal remedies" against the circumvention of technological protection measures used to protect copyrighted materials. This broad enforcement obligation will need further explication as it is translated into national law.

3.         Governments and business should support additional measures to improve the scope of legal protection for legitimate copyright-protected materials and promote commercial development.  

IIPA encourages our business colleagues as well as government officials to promote the three objectives below because they have an immediate impact on commercial business transactions involving the use and distribution of legitimate copyright materials.

·         Legalizing Government Use of Computer Software: Governments in the FTAA countries should agree to issue appropriate instruments which mandate that all government agencies use only legal computer software. Such instruments (whether laws, executive decrees or agency regulations) should also cover government systems involving the acquisition and management of software to prevent end-user piracy from occurring. For example, the United States has an Executive Order (1998) covering federal agencies, and several countries and provinces in Latin America have also issued similar decrees (including, for example, Argentina, Colombia and Paraguay).

·         Keeping Import Duties Based on the Physical Medium: For those copyrighted products on which tariffs continue to be imposed, it is imperative for governments to ensure that customs valuation is based on the physical medium embodying the copyrighted work or recording, and not the value of the copyrighted work or recording itself. The overwhelming international trend is toward assessing duties only over the value of the physical media.

·         Keeping the Internet "Duty Free": IIPA recommends that all FTAA countries continue to honor the May 1998 WTO Ministerial Declaration which reflects a standstill agreement where countries agreed not to impose tariffs on electronic transmissions. Such duties would certainly slow the growth of electronic commerce. While IIPA realizes that discussions on this issue continue at the multilateral level, we urge leaders – both in government and in business – in this Hemisphere to continue their support for this important principle.

Conclusion

IIPA appreciates this opportunity to discuss additional measures on copyright protection and enforcement for the FTAA Americas Business Forum V. A legal framework within the FTAA which gives incentives to creativity, encourages responsibility, and rewards respect for property rights is indispensable to the healthy development of the marketplace for creative products in this hemisphere.