Commentary on the report: THE GLOBAL IP UPWARD RATCHET, ANTI-COUNTERFEITING
AND PIRACY ENFORCEMENT EFFORTS: THE STATE OF PLAY. by Susan K. Sell

URL = http://www.twnside.org.sg/title2/intellectual_property/development.research/SusanSellfinalversion.pdf

IP Maximalists are those who want to strengthen Intellectual Property protections to the maximum amount possible, to protect private monopoly interests, in disregard of any human cost, such as the millions who die from too expensive IP-protected medecines.

Susan K. Sell has written a report summarizing their political tactics:

Some excerpts:

1. Relentless search for non-participative institutional forums

“Proponents of an IP maximalist agenda increasingly have been rebuffed in recent years.
Developing country governments, NGOs, and Access to Knowledge (A2K) advocates have
thwarted their efforts to ratchet up standards of intellectual property protection in multilateral
intergovernmental forums such as the World Trade Organization, the World Intellectual Property
Organization, and the World Health Organization. A2K advocates challenge the premises behind
ever higher and broader intellectual property protection and seek, if not a rolling back of IP
rights, at the very least a standstill. They argue that in the balance between rights and
obligations, IP maximalists assert their rights without recognizing their obligations. IP
maximalists always have seen TRIPS as a floor, not a ceiling. Ever since the WTO TRIPS
negotiations that ended in 1994, they have been using every opportunity to increase intellectual
property protection and enforcement beyond TRIPS. They have been relentless, focused, and
have devoted untold resources to their quest for higher global standards of intellectual property
protection and enforcement. Undaunted by recent setbacks at the multilateral level, IP
maximalists have launched a major, almost surreptitious, anti-A2K campaign focused on
“counterfeiting”, “piracy” and “enforcement”.

Since the early 1980s advocates of a maximalist IP agenda have shifted forums both
horizontally and vertically in order to achieve their goals. Those who seek to ration access to IP
are engaged in an elaborate cat and mouse game with those who seek to expand access. As soon
as one venue becomes less responsive to a high protectionist agenda, IP protectionists shift to
another in search of a more hospitable venue. As Peter Drahos points out, developing country
negotiators, NGOs, and A2K advocates must adopt a longitudinal perspective on IP
negotiations or they will risk winning small battles (e.g., the Doha Declaration) but losing the
war (e.g., access to affordable medicines).According to Drahos, “forum shifting means that
some negotiations are never really over.” Strong states like the U.S. shift forums to optimize
their power and advantages and minimize opposition. The IP enforcement agenda is just the
latest in a series of strategic forum shifts.

IP-based firms, with their supportive governments, seek to go far beyond TRIPS in IP
enforcement. Their four main goals are to: document and explain the value of IP; ensure strong
government support for IP in the US; rally allied nations and organizations to defend IP; and
hold anti-IP governments accountable. For instance, under the proposed Anti-Counterfeiting
Treaty (ACTA) they would like to see all countries sign on to the WIPO Copyright Treaty and
the WIPO Performances and Phonograms Treaty (WPPT); together they are referred to as the
“Internet Treaties.” Enforcement provisions under these treaties include legal remedies against
circumvention of technological protection measures (e.g., encryption) or deletion of electronic
rights management information. Since many countries have not signed on to these treaties,
the efforts to have everyone sign would raise IP standards and reduce some states’ flexibilities in
IP policy. For economically advanced countries like Canada, IP-based firms would like to see
them go beyond the TRIPS-Plus WIPO treaties and adopt something similar to the US Digital
Millennium Copyright Act (DMCA). The ACTA would run roughshod over differences
across jurisdictions. (e.g., many countries have yet to sign on to the WIPO Internet
Treaties). The following section provides a brief institutional roadmap to the complex and
comprehensive process underway.”

Susan’s report has a very extensive overview of the organizations involved.

2. Politics of fear

“Advocates of the IP enforcement agenda have engaged in a shrill public relations campaign to
frighten people into accepting their agenda. At a CropLife America meeting on December 1st
2007 Dan Glickman, head of the Motion Picture Association, recommended that advocates
underscore the danger of counterfeited and pirated goods. Through fear mongering, IP
enforcement agenda advocates are constructing a big tent that includes all types of intellectual
property: trademarks, patents, copyrights. Despite the very real differences between all the types
of intellectual property contained in the IP enforcement agenda’s “big tent” approach, there is
one thing that Kate Spade bags and pharmaceuticals DO have in common and that is high
prices. High prices are directly related to the demand for counterfeit products. This campaign is
characterized by strategic obfuscation; its message is intentionally misleading. For example, it is
difficult to imagine a “dangerous” counterfeit handbag, or a “dangerous” dvd.

The fear mongering ranges from tales of exploding cell phones and toxic counterfeit drugs, to
unsubstantiated allegations of organized crime and even terrorist involvement.

The IP enforcement agenda advocates have promoted two sensationalist books, Illicit: How
Smugglers, Traffickers, as Copycats are Hijacking the Global Economy and Knockoff: the
Deadly Trade in Counterfeit Goods.The ICC funded a public broadcast of a program based
on Illicit, which equates counterfeiting with human smuggling, drug smuggling, small arms
trafficking, and black market trade in nuclear materials.

The big tent approach to “counterfeiting” and “piracy” is designed to capture behavior that is
legal.”

3. What can we do to counter such tactics?

Susan K. Sell recommends:

“Is there any way to stop the IP rights holders’ juggernaut of ever higher levels of protection and
enforcement?

I present several possibilities below.

First, one should insist that IP enforcement proponents define terms such as trademark
counterfeiting and copyright piracy quite explicitly. As Outterson and Ryan suggested, it is
important to clarify terminology and explicitly distinguish between and create different sets of rules
for counterfeited goods, pirated goods, grey goods, parallel imports, generic goods, and goods
produced under TRIPS-compliant compulsory licenses.

It is also imperative to identify and target policymakers and industry representatives who are
sympathetic to the A2K agenda. Some members of the US Congress have been supportive, and the European Parliament has injected some balance into EU policies.

The OECD is another potential venue to lobby against this IP enforcement agenda. Also, despite the USCC approach, many successful and powerful business firms have good reason to object to the IP enforcement agenda.

Many IT firms have been lobbying Congress to roll back patent protection in their industry because
of the so-called” patent troll” problem.

The hypocrisy of the campaign must be highlighted. For instance, the MPA always emphasizes its interest in preserving American jobs. Indeed, when you watch a Hollywood dvd you get to see the FBI anti-piracy notice, and sometimes the brief testimonials of caterers, stunt people, make up artists, and camera people claiming that downloading movies illegally costs them their jobs. MPA is always telling Congress how many American jobs counterfeiting costs Hollywood.

Yet MPA does huge amount of filming in Canada due to lower production costs and generous subsidies;
Hollywood unions have tried to sue MPAA for taking jobs out of the country. As Lee points out,
“in a 2000 report, the US Department of Commerce estimated that this ‘runaway production’ to
Canada resulted in production losses of $2 billion to the U.S. economy in 1999.” Thus, despite
the sometimes seemingly altruistic rhetoric, MPA “lobbies for the interests of its own members,
even when doing so appears to go against the interests of the U.S. economy.”

Furthermore, films and music, and even apparel, do not fit in to the “danger” trope, even though
US State Department ads about dangerous counterfeits (e.g. pills, exploding cell phones, faulty
electrical cords, failing care brakes, and DVDs?!) include images of dvds.. Also, it is reasonable to
assume that Microsoft would prefer that poor people use bootleg Microsoft software rather than
Linux, in order to get them hooked on the Windows platform. Monsanto just might not mind the
unauthorized transfer of GMO seeds across borders from Argentina to Brazil to circumvent
biosafety regulations, because once the proverbial cat is out of the bag it is hard to go back.

Hypocrisy is also evident in the narrative that counterfeits cause injury. According to the
USPTO-commissioned study on the subject, governments are obligated to protect public health. Yet
IP enforcement agenda advocates actively oppose government efforts to protect public health when
it comes to compulsory licensing and parallel imports, even when millions of patients are at risk of
death.

Clearly, in this field, evidence-based empirical analysis is necessary to counter some of the more
outlandish claims advanced in support of this enforcement agenda. The current ACTA push is based
on highly suspect data. The IP enforcement agenda advocates’ use of data can be creative. For
example, while BASCAP claims that worldwide losses to counterfeiting and piracy amount to $600
billion per year, $250 billion in the U.S. alone, the more sober yet still supportive OECD
estimates that worldwide trade in counterfeit and pirated goods is closer to $200 billion per
year.The IIPA quoted one study as estimating lost tax revenue in the US to be $2.6 billion in
2006. Many IP enforcement agenda advocates rely on just one economist, who continues to
produce reports that echo the ACTA lobbyists’ narrative. Steve Siwek provides figures for IIPA, and
Institute for Policy Innovation, RIAA, and MPAA with his “True Cost of Piracy” series. Siwek
has conducted over 11 studies for industry and also helped to formulate methodology for WIPO to
calculate the copyright industries’ role in all economies. Figures provided by self-interested
industry lobbyists can be inflated, by assuming, for example, that one may calculate lost revenue
based on the differential between the full retail price of a good and the lower price of the
“knockoff.” Yet often those who buy the cheaper version could not afford to pay the full retail price
and would not buy it if the knockoff were unavailable. Thus the industry-generated numbers are
unreliable guides for policymaking. Finally while the danger rhetoric is sensational, a USPTO commissioned study on injuries and counterfeit goods concluded that over 60% of counterfeit
seizures have nothing to do with health or safety.Independent studies must be conducted by
economists who are not on industry’s payroll and who will not be tempted or obligated to inflate
numbers.

Finally, it is important to emphasize that “enforcement” is not a one-sided concept. Enforcement
means not only enforcing IP holders’ rights, but it also means enforcing balance, exceptions and
limitations, fair use, civil rights, privacy rights, and antitrust (or competition policy).”