USIA - U.S. Industry Urges Action Against Piracy in Many Countries, 97-02-25

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U.S. INDUSTRY URGES ACTION AGAINST PIRACY IN MANY COUNTRIES

(Backgrounder on "Special 301" trade law review) (1,010)

By Jeanne S. Holden
USIA Staff Writer

According to documents released February 18 by the International Intellectual Property Alliance (IIPA), U.S. industries -- including computer software and entertainment firms -- lost an estimated $10,600 million due to copyright piracy in 52 countries in 1996.

"The magnitude of the global copyright piracy problem demands a decisive response from the U.S. government under our trade laws," IIPA President Eric Smith said in a February 18 statement.

The recommendations made by IIPA and other groups representing U.S. businesses are used in compiling a final list of countries in which intellectual property rights protection is problematic. The list, required by U.S. trade law, is released each April by the Office of the U.S. Trade Representative (USTR). Unless countries designated "priority foreign countries" by USTR take specific action to improve copyright protection, they may face trade sanctions.

The IIPA is recommending that three countries -- Greece, Paraguay and Russia -- be designated "priority" unless significant improvements in copyright protection and enforcement are made by April 30.

IIPA also asked USTR to monitor China, which agreed last year to crack down on copyright pirates after narrowly skirting a trade war with the United States over the issue.

The IIPA's member associations are the Association of American Publishers, the American Film Marketing Association, the Business Software Alliance, the Interactive Digital Software Association, the Motion Picture Association of America, the National Music Publishers' Association, and the Recording Industry Association of America.

In general, these industries support USTR's multilateral efforts to improve intellectual property rights protection through the World Intellectual Property Organization (WIPO) and the World Trade Organization (WTO), but believe the United States must continue to take unilateral action since piracy continues to grow.

"Despite tremendous progress made through international trade agreements such as the treaties reached during the WIPO negotiations, intellectual property rights violations around the globe persist at an unacceptable level," said Robert Holleyman, president of the Business Software Alliance.

"These figures are a real call to arms," added Jonas Rosenfield, president of the American Film Marketing Association. "The fact that piracy not only continues but continues to grow leaves our government no choice but to counter-attack with the full force of the 301 actions."

Section 301 of the Trade Act of 1974 gives USTR the authority to negotiate to eliminate unfair foreign trade practices. If a Section 301 dispute is not successfully resolved, the president has the authority to impose retaliatory trade sanctions.

In 1988, U.S. trade law was amended to make insufficient protection of intellectual property rights actionable under Section 301. The amendment requires that USTR conduct annual reviews of foreign-country practices to identify those countries that deny adequate and effective protection for intellectual property rights, or deny fair and equitable market access for persons that rely on intellectual property protection.

In its February 18 submission to USTR, IIPA recommended 50 countries be included in the government's final Special 301 list. Although only three were recommended for the actionable priority list, other countries were recommended for other lists established by USTR that signify the need for varying levels of monitoring.

Under U.S. law, priority foreign countries are those that have the most onerous or egregious acts, policies or practices, resulting in the greatest adverse actual or potential impact on U.S. products.

IIPA is recommending Greece as a priority foreign country because of "inadequate and sporadic enforcement" of copyrights, particularly of broadcast piracy of U.S. motion pictures.

It is suggesting Paraguay for the priority foreign country list because that country is a "major export and transshipment center for pirated and counterfeited products" including CDs, CD-ROMS, and entertainment software.

It is recommending Russia as a priority foreign country because in that country "copyright enforcement has been virtually non-existent for years."

The IIPA is also recommending that Brazil, Bulgaria, Hong Kong, Italy, Kuwait, the Philippines and Vietnam be elevated to the "priority watch list, " and that four countries currently on that list -- Indonesia, Saudi Arabia, South Korea and Turkey -- remain on it. The priority watch list is for countries whose acts, policies and practices meet some but not all of the criteria for priority foreign country identification, USTR says. The problems of these countries warrant active work for resolution and close monitoring to determine whether further Special 301 action is needed.

In recognition of advances in legislation and enforcement made in India, IIPA recommends that it be moved from the priority watch list to the "watch" list.

According to USTR, countries on the watch list are subject to special attention because they maintain intellectual property practices or barriers to market access that are of particular concern.

The IIPA is recommending that 13 countries be newly placed on the watch list: Czech Republic, Dominican Republic, Germany, India, Ireland, Israel, Jordan, Lebanon, Panama, Qatar, San Marino, Spain and Taiwan. It is also recommending that 15 countries be retained on it: Australia, Bahrain, Bolivia, Canada, Colombia, Ecuador, Egypt, Guatemala, Oman, Pakistan, Poland, Romania, Thailand, United Arab Emirates and Venezuela.

The IIPA further recommends that Cambodia, the Confederation of Independent States (not including Russia), Cyprus, Honduras, Hungary, South Africa and Uruguay be placed by USTR on a special mention list.

The IIPA also highlighted what it considers critical violations of intellectual property provisions of international trade agreements, the World Trade Organization Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and the North American Free Trade Agreement (NAFTA). It identified several countries with regard to possible violations of TRIPS obligations including Austria, Denmark, Ecuador, Germany, Greece, Hong Kong, Ireland, Israel, Japan, Luxembourg, South Korea and Sweden. The IIPA also focused on Mexico's failure to comply with the intellectual property rights provisions of NAFTA.

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