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May 13-15, 1997                                                   Workshop VII:                      Belo Horizonte, Brazil                                             Technology and Intellectual Americas Business Forum                                       Property Rights      

THE IMPORTANCE OF IMPROVING COPYRIGHT

PROTECTION AND ENFORCEMENT IN THE AMERICAS

Position Paper of the

International Intellectual Property Alliance

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High levels of intellectual property rights protection and enforcement are critical to the growth of the cultural, entertainment and high technology industries in each country in the Hemisphere, regardless of its level of development.

The International Intellectual Property Alliance (IIPA) believes that several actions are essential to foster local economic growth and increased trade and investment among member states of the Free Trade Area of the Americas (FTAA).  We ask our colleagues in both the private sector and in national governments throughout the Hemisphere to support our three-point agenda which we urge the Trade Ministers to adopt at Belo Horizonte:

  • Governments should take immediate actions to enforce copyright laws to reduce the high levels of commercial piracy;
  • Governments should revise their laws to ensure the highest levels of copyright protection.  This includes the rapid implementation the new WIPO copyright treaties as well as the TRIPS Agreement;
  • Governments should provide non-discriminatory market access for information and entertainment services.

I.  Governments in this Hemisphere should take immediate action to enforce their current copyright laws (including criminal laws) in order to reduce high levels of piracy and encourage the development of legitimate cultural, entertainment and high technology industries which depend on copyright protection.

IIPA believes the most immediate problem in the Americas is the failure to adequately enforce existing copyright laws.  The high levels of piracy of films, television programs and home videocassettes, music, audiocassettes and compact discs, textbooks, tradebooks, reference and professional publications and journals, business software, and interactive entertainment software on all platforms, rob local creators, stunt cultural and technological development and retard economic modernization.  The U.S. creative industries estimate that losses due to copyright piracy of U.S. copyrighted materials in 19 FTAA member countries amounted to $2.3 billion last year.  These losses represent only a fraction of the total damage inflicted upon both foreign and domestic copyright owners by copyright piracy throughout the Americas.

Copyright piracy is the number one trade barrier affecting the health and growth of local copyright industries in the hemisphere.  A lowering of these losses will not only mean increased employment and revenue in this fast growing sector but will bring much needed new tax revenue to governments in the region (pirates do not pay taxes and contribute little to enhancing “creativity” within a country).  IIPA encourages governments within the hemisphere to undertake studies, as have been done in the U.S. and other countries, to measure the economic impact of their local copyright-based industries — and industries dependent on them — on the domestic economy.  IIPA believes the result will be surprising to governments and will form the basis for critical economic policy decisions in the 21st century.

Copyright piracy is a trade barrier which can be lowered significantly in a relatively short period of time, in most cases, by a clear commitment from the responsible political officials and enforcement authorities to take immediate action against large-scale commercial pirates, and to impose deterrent penalties on such infringers.  Substantially lowered piracy levels have been achieved in the last five years in countries in Asia without the commitment of major enforcement resources.  But piracy can only be fought through effective enforcement of laws.   IIPA believes that the enforcement obligations in Part III of the TRIPS Agreement provide a comprehensive foundation for the development of civil, administrative and criminal procedures and remedies necessary to provide the basis for effective enforcement against copyright piracy.  For example, TRIPS contains specific obligations, including such  important enforcement tools like ex parte searches, injunctive relief, damages, effective border enforcement measures and deterrent criminal penalties. 

However, TRIPS also requires that member countries must apply their criminal laws in cases of commercial piracy; it is not enough to merely have laws on the books unless those laws are used by the police, prosecutors, and courts.  FTAA countries  should consider creating specialized intellectual property police units, prosecutor pools, administrative agencies, and courts.  Working together, these bodies would be able to expedite judicial proceedings involving copyright and other intellectual property matters.  Several countries have already implemented such organizations.  Improved coordination among all enforcement entities, including customs agencies,  is essential.  Governments throughout the Hemisphere should make the education and training of judges, prosecutors, police and other experts on intellectual property rights protection and enforcement a top priority. 

The U.S. copyright community, often in conjunction with our local counterparts throughout the  many countries in this hemisphere, has organized and participated in numerous in-country and regional training programs over the past few years, and will continue to do so.

II.  Governments should ensure high levels of copyright protection for these valuable works and recordings found in digital format on the "Information Superhighway" throughout the Hemisphere and the world.  Countries should take action to implement immediately the World Intellectual Property Organization Copyright Treaty and the WIPO Performances and Phonograms Treaty as well as the TRIPS Agreement.

It is in every country's own domestic interest to bring its substantive copyright (including enforcement) regimes up to the highest levels as soon as possible.  This would accelerate domestic and foreign investment, enhance domestic and cultural economic growth, and, importantly, position these countries for the coming Information Revolution, in which protected content will be shipped around the world instantaneously through advanced networks, like the Internet. 

IIPA believes that the FTAA should include the highest levels of copyright protection.  We believe that this approach not only incorporates the minimum standards of TRIPS, but includes the higher levels of copyright protection found in the North American Free Trade Agreement (NAFTA).  Furthermore, given the increased vulnerability of copyright materials to piracy over advanced networks, we believe all Governments in the Americas should ratify and implement the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.  These Treaties respond to the challenges of digital technology; they contain rights and obligations which will allow authors, performers, and producers the ability to better protect the products of their creativity in the information age.  In addition, the Treaties contain provisions concerning technological measures of protection and electronic rights management information which are essential for the efficient exercise of rights in the digital age.  These Treaties are essential in safegand individuals and in encouraging the continued growth of, and jobs in, these industries.

The potential investment and trade opportunity for the development of a Hemispheric Information Infrastructure (HII) continues to be high.  But such potential will not be realized if adequate copyright protection on the HII's advanced networks is not afforded.  Without this protection, rightholders simply will not make their works available on the network.  Adequate protection for content in digital environments necessitates the adoption of technical measures to control unauthorized uses.  And without valuable content on the HII, the massive investment necessary to build the infrastructure simply will not materialize. 

III.  Governments also should provide non-discriminatory access for information and entertainment services to all markets through the reduction of tariff and non-tariff barriers, and other measures which affect the free circulation of information, education and entertainment-based goods and services. 

Providing non-discriminatory access can be accomplished by reducing  tariff and non-tariff barriers and other measures which affect the free circulation of information, education and entertainment-based goods and services.  For example, these barriers may include customs valuation practices, quotas, regulatory issues, discriminatory taxation, certification procedures and restrictions on both content and technological aspects affecting the copyright industries.         

It is important for Governments to ensure that customs valuation is based on the physical medium embodying the copyrighted good, and not the value of the copyrighted good itself.  The overwhelming international trend is toward assessing duties only over the value of the physical media.   In addition, countries should have open regulatory regimes for Direct-To-Home/Direct Broadcasting Satellite services that allow programming to freely circulate within the Hemisphere.  By taking advantage of this new technology, diverse programming reflecting the cultural wealth of the region can be disseminated through this multi-channel environment.   Furthermore, FTAA countries should join the Information Technology Agreement (ITA), an agreement which reduces tariffs on information technology products. 

Conclusion

The creative industries depend critically on strong copyright protection and enforcement around the world.  Every nation in this Hemisphere has an interest in nurturing the economic development of its local copyright industries.  Not only will this provide income and jobs, it will encourage foreign and domestic investment in this fast-growing sector.

IIPA recommends that the Trade Ministers at the Third Western Hemisphere Trade Ministerial  incorporate our recommendations.  We ask that the Ministers direct the Governments of this Hemisphere to take immediate actions to enforce their copyright laws to reduce the high levels of commercial piracy; ensure the highest levels of copyright protection; and provide non-discriminatory market access for information and entertainment services

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The IIPA represents more than 1,350 U.S. companies which produce and distribute materials protected by copyright laws throughout the world:  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 and home videocassettes; music, records, CDs and audiocassettes; and textbooks, tradebooks, reference and professional publications and journals (in both electronic and print media).   In 1994, the core copyright industries accounted for 3.78% of U.S. Gross Domestic Product (GDP) or $254.6 billion in value added; between 1987 and 1994 the core copyright industries grew twice as fast as the rest of the U.S. economy -- 4.6% vs. 2.3%, and created new jobs in the U.S. more than twice as fast as the economy as a whole between 1987 and 1994 -- 2.85% vs. 1.25%.  In 1995, the U.S. core copyright industries achieved foreign sales and exports of $53.25 billion, surpassing every other export sector except automotive and agriculture.