IP Watch: Submissions To US Unilateral IP Enforcement Process Highlight Piracy, Health, and ACTA

Catherine Saez and Kaitlin Mara
Intellectual Property Watch
March 5, 2010

Submissions to the United States annual review of how well it says the rest of the world is protecting US intellectual property are being assessed this week, with marked changes from previous years.

In a process typically dominated by industry groups and the occasional stakeholding nonprofit, 2010 submissions not only included far more public interest groups but also a significant number of submissions from private citizens - primarily commenting on the tangentially-related Anti-Counterfeiting Trade Agreement. This year is also notable as it is the first review process conducted after the new Obama administration has developed its trade agenda. The new trade agenda, released this week, might give some clues about the Obama administration’s thinking.

Submissions from major industry groups discussed the interplay between IP and public health, and one particularly controversial copyright industry contribution called out governments on their procurement of open source software.

Industry groups also cited typical targets of concern about piracy and counterfeiting and internet-based copyright infringement such as China and Russia. The International Intellectual Property Alliance said China had an inadequate enforcement system and that piracy of books, CDs, movies and software was “widespread” and that US businesses’ ability to conduct lawful business was limited. IIPA also said Canada for not having updated its copyright law.

Every year the Office of the US Trade Representative (USTR) identifies countries it says are failing to provide effective protection of US IP rights or denying fair and equitable market access to US persons relying on IP protection. This is under a provision of Section 182 of the Trade Act of 1974 (Trade Act), commonly referred to as “Special 301.”

USTR has a “watch list” and a “priority watch list” to indicate trade partners that are allegedly not complying with international obligations for IP protection and market access. Placement on the list means carries the (seldom-used) threat of removal of unilateral US trade benefits. USTR accepts comments from stakeholders on foreign country policies, acts or practices that might be identified as infringing US IP rights.

Normally this means commentary comes from industry stakeholders, but this year marked a change as comments came also from nongovernmental organisations, governments, universities and hundreds of individual US citizens. There were hundreds of submissions to the process, available here.

On 3 March, the USTR held its first-ever public hearing in the special 301 review process, with 25 government representatives, nonprofits, academics and industry groups scheduled to speak. The audio is available here; some foreign delegations based abroad were reportedly unable to speak as live streaming of the event was not allowed.

Individuals Decry ACTA Secrecy; Researchers Applaud 301 Transparency

While public interest groups have been campaigning against the secretive Anti-Counterfeiting Trade Agreement for two years, this may be the first time in which large numbers of private citizens have made a coordinated effort to do so. Part of this seems to have sprung from a campaign by advocacy group Public Knowledge, which posted information on its website calling for a “balanced copyright regime” and encouraging citizens to contribute to the 301 process with an easy-to-use web form. One of the first comments on the Public Knowledge campaign page quotes civil liberties group Electronic Frontier Foundation’s criticism of the ACTA.

All ACTA commentators - of which there were hundreds - decried ACTA’s secrecy, calling it inappropriate not to involve consumers and citizens in a treaty that will personally affect them; some added that needed secrecy is a sign of anti-consumerism. Several IP owners also wrote in to express their particular dissatisfaction.

Writer and musician John Young said, “I believe the regime of ‘protections’ of creative work as generally advocated by copyright institutions in the US are far more focused on protecting the profits of licensing corporations than protecting the vigorous exchange and resynthesis of ideas necessary for my trade to function properly,” he wrote, and appealed to the USTR not to “make the mistake of exporting the broken state of copyright from the US to foreign countries.”

Shawn Stricker, a film, music and software creator, said the secrecy is a “fertile breeding ground for corruption” and that “laws that restrict the free exchange of ideas, however seemingly well intentioned, are the tools of tyranny, and will be misused by profit-seeking corporations and by governments seeking to control and restrict their citizens.” And photographer Andrew Davies said as a creative professional and an IP owner he was “alarmed by the trend of locking up content,” and demonstrated his commitment to non-restrictive licensing by submitting a digital photograph of a bucolic mountain scene to the USTR under a Creative Commons Attribution NonCommercial license. “Why? Because I can.”

“Since the inauguration of the [World Trade Organization] in 1994, the USTR has operated in a position of ambiguous legality and soft power, able to threaten countries through Special 301 but mostly unable to implement unilateral sanctions for fear of generating an adverse WTO ruling,” said the Social Science Research Council. Over the years, factors such as the rising awareness of developing countries toward IP policy and enforcement have changed the conditions that formerly allowed “IP policy making to fly under the radar of most consumers and public interest groups,” they said. The Council pictured a “more transparent and participatory Special 301 process” as the “only viable way forward for all parties.”

Foreign Governments Comment

Most foreign government statements discussed improvements in national intellectual property systems, reiterated commitments to prevent piracy and to protect IP (and often emphasised enforcement measures taken as well as arrests and seizures made), and stated expectation that these efforts should improve their status on the Special 301 report. Comments came from a variety of places, including Costa Rica, Indonesia, Italy, Pakistan, Spain and Turkey, among others. Not many protested the US’s pressure related to their national IP protection.

India’s submission, while on similar lines, defended its patent system as “fair and transparent,” said that patent applicants could appeal if they thought they had been rejected unfairly, and noted that it is “important to distinguish between legitimate generics and spurious or counterfeit drugs.”

Thailand said it had “actively recruited participation of [the] US pharmaceutical industry” in order to “identify constructive ways and means to ensure continued supply and access to medicines,” and is creating a joint database with the US Food and Drug Administration on patented pharmaceuticals. The country has also pledged $700,000 to upgrade its patent system. Thailand has previously been put on the priority watch list in part due to compulsory licences issued on pharmaceutical products it deemed necessary to obtain more cheaply.

A coalition of Thai civil society organisations submitted a comment saying most essential medicines in the country “are patented and their prices are very expensive” leaving little choice to use the compulsory licence flexibility but that this move was “heavily opposed” by the US government and “harshly retaliated” by the US pharmaceutical industry. The comment asked that Special 301 no longer be used to push policies stronger than the TRIPS agreement.

Public Health and IP Draws Comment

Issues of IP flexibilities and public health drew attention from groups on all sides of the table, and raised some questions about World Trade Organization rules on IP rights such as those allowing flexibilities to IP rights like compulsory licences for public health reasons.

The Pharmaceutical Research and Manufacturers of America registered an objectio to Thailand and protested several public health laws as potentially inhibiting future access to innovative drugs. These included a health law in Indonesia that sought to expand compulsory licences or other government uses of patented medicines, price controls on branded generics, private sector financing to the public sector; a cheaper medicines act in the Philippines that required price-cutting on five drugs; and regulations in several European countries capping pharmaceutical prices.

The Biotechnology Industry Organization similarly criticised Thailand on “egregious and onerous policies relating to compulsory licensing,” as well as Chile and Indonesia on data protection measures related to biotechnology, China on the trafficking of counterfeit drugs, India on what BIO said were too-narrow patentability standards.

Oxfam voiced concerns about the Special 301 report being used to sanction countries which had employed legitimate measures to protect public health, and has encouraged an inappropriately high level of IP protection in low and middle-income countries, limiting access to medicine. According to its submission, Oxfam called for the USTR to “take a fresh look at its approach to intellectual property provisions.”

A joint submission of several major global health organisations coordinated by Sean Flynn of the American University College of Law (Washington, DC) called on USTR to stop using the Special 301 report to promote so-called “TRIPS-plus restrictions on access to medicines,” which the groups said violates the Doha Declaration on IP flexibilities and public health. “TRIPS-plus” refers to laws that go beyond obligations negotiated under the World Trade Organization Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, including a 2001 declaration in Doha that clarifying that countries have a right to use built-in health-related flexibility in TRIPS.

Médecins sans Frontières (Doctors without Borders) said TRIPS gives countries the right to define their own patentability criteria and the right to issue compulsory licences, and called on the USTR to stop using the Special 301 report to pressure developing countries to implement stronger domestic IP laws than are required by international law.

Public Citizen echoed the call for USTR to respect IP flexibilities for public health, in particular saying Ecuador should not be sanctioned for issuing compulsory licences on needed medicines (including indirectly “through imprecise references to alleged IPR-protection failings.”

According to Knowledge Ecology International, USTR is pushing for TRIPS-plus provisions in developing countries by censuring countries which do not grant exclusive rights for the registration of pharmaceutical test data. The unavailability of those data is preventing generic manufacturers “from relying on the safety and efficacy data of the original clinical trials to register their products,” it said.

Software, Seeds and Cigarettes

Other commentary came in from a variety of sectors.

The International Intellectual Property Alliance, which collectively represents all of the major US copyright industry groups.

IIPA drew commentary from internet rights groups and open source software proponents by saying that government procurement policies encouraging or mandating the use of open source software were akin to piracy. The IIPA suggested Brazil, India, Indonesia, the Philippines, Thailand and Vietnam be put on USTR watch lists for policies favouring open source software, saying it limited the ability of proprietary software to compete.

Philip Morris said the increasing number of countries proposing to adopt plain packaging for cigarettes, or having heath warnings covering more than 50 percent of cigarette packaging is worrisome, as it might infringe trademark rights, and encourage “illicit trade in tobacco products.” The cigarette maker called for their IP rights to be protected and enforced in a number of countries, arguing that “these initiatives, which are not based on any solid scientific evidence that they contribute to legitimate public health objectives, would effectively constitute an expropriation of some of the world’s most valuable trademarks without the payment of adequate compensation to manufacturers.”

The Free Software Foundation called for an end to digital rights management software, which they said prevents users from freely enjoying their purchases and are almost always incompatible with free software.

The National Association of Manufacturers (NAM) said that IP rights were wrongly considered to be mainly the concern of sectors such as pharmaceuticals, software, and entertainment. International counterfeiting and piracy is a “mainstream and Main Street issue for US manufacturers,” they said. The specific focus of NAM in 2010 is “four Cs”: counterfeiting, customs, cooperation internationally and China.

Agricultural technology company Monsanto complained about patent backlogs in Argentina and Brazil, which it said delays their ability to enter the market and enforce rights on their products, and about government procurement that favours locally owned or registered IP in China. The European Union’s recent trend to “unduly broaden breeder’s exemptions” will undermine IP rights on plants, Monsanto said. Breeders exemptions are intended to protect plant varieties while not restricting follow-on innovation by people other than the original rights holder.

USTR’s final report is due in April.

Catherine Saez may be reached at csaez@ip-watch.ch. Kaitlin Mara may be reached at kmara@ip-watch.ch.

(cc) Intellectual Property Watch. 



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