Piracy as trade retaliation

by on April 4, 2006 · 12 comments

The U.S. recently lost a WTO suit brought by Antigua. Basically the U.S. had outlawed overseas internet gambling, but allowed certain types of domestic gambling sites. The WTO sided with Antigua and told the U.S. it had to change its law. Today is the deadline for the U.S. to make that change and it doesn’t seem like it will. For one thing, the U.S. has little incentive. The normal course in this situation is that Antigua would be allowed to place trade sanctions on U.S. imports. But for a country with a population of 70,000, this would hurt them more than it would hurt the U.S. So, the Antiguans are looking for other options. According to the Boston Globe,

Antigua is considering retaliatory moves that could enable the tiny nation to punch above its weight. … the country may refuse to enforce American patents and trademarks. This would make it possible for Antiguan-based companies to produce knock-offs of American intellectual property, like video and music recordings or computer software. Such a tactic would get the attention of major US firms like Microsoft Corp. and entertainment titan Time Warner Inc. It would also put tiny Antigua’s trade war against the United States on front pages around the world.

There’s also an NPR story on the Antiguan affair here. Easier than actually producing physical knock-offs, they could allow online businesses a la Napster, My.MP3.com, or AllOfMP3.com to go up within their borders. I wonder how far this will go. If they just want to get attention and put pressure on the U.S., or if they’ll go further. Also, what will the WTO make of this? Under the Dispute Settlement Understanding, sanctions aren’t the express remedy. The treaty states that if a settlement can’t be reached by the parties, the plaintiff can seek the WTO’s OK “to suspend the application to the Member concerned of concessions or other obligations under the covered agreements.” The TRIPS Accord would be a candidate for suspension. Although it looks like the WTO Dispute Resolution Body has previously demurred on the topic, some have made the case that TRIPS can “serve as an enforcement device for developing countries in the WTO.”

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About Jerry Brito

Jerry Brito is a senior research fellow at the Mercatus Center at George Mason University, and director of its Technology Policy Program. He also serves as adjunct professor of law at GMU. His research focuses on technology and telecommunications policy, government transparency and accountability, and the regulatory process. Jerry is also a regular contributor to TIME.com's Techland. His personal web site is jerrybrito.com. You can follow him on Twitter and on Google+.

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  • http://www.techliberation.com/ Tim

    Jerry,

    A nitpick: I’m always bothered when people lump MP3.com together with Napster. MP3.com was a legitimate “space-shifting” business that allowed users to listen to their own music from different locations. It was killed by a bone-headed district judge, and unfortunately the case was settled before it could be appealed.

    Napster, in contrast, was primarily used for piracy, and they probably deserved to be shut down.

  • http://www.techliberation.com/ Tim

    Jerry,

    A nitpick: I’m always bothered when people lump MP3.com together with Napster. MP3.com was a legitimate “space-shifting” business that allowed users to listen to their own music from different locations. It was killed by a bone-headed district judge, and unfortunately the case was settled before it could be appealed.

    Napster, in contrast, was primarily used for piracy, and they probably deserved to be shut down.

  • http://www.blindmindseye.com MikeT

    And people here wondered why I said that providing modest protections for domestic manufacturing is important… What a house of cards. All it will take is for us to get into a pissing contest with a country like France and that’s all she wrote for our exports. If it gets really nasty, they may start to really go hardcore on trying to get bootlegs through customs and into our economy.

    Once again, the IP-driven economy is proven to be pathetically weak. We are making our economy as brittle as Mexico’s with this extreme dependency on IP law to protect our goods. Physical goods can be bootlegged, but they are a lot harder to do properly than digital data or patented ideas.

  • http://www.blindmindseye.com MikeT

    And people here wondered why I said that providing modest protections for domestic manufacturing is important… What a house of cards. All it will take is for us to get into a pissing contest with a country like France and that’s all she wrote for our exports. If it gets really nasty, they may start to really go hardcore on trying to get bootlegs through customs and into our economy.


    Once again, the IP-driven economy is proven to be pathetically weak. We are making our economy as brittle as Mexico’s with this extreme dependency on IP law to protect our goods. Physical goods can be bootlegged, but they are a lot harder to do properly than digital data or patented ideas.

  • http://www.jerry@brito.com Jerry Brito

    Tim, I agree about my.mp3.com. The point I’m making, though, is that given the district court ruling, such a space-shifting system is in a legal grey area, whether we think it should be or not. That’s why we haven’t seen the resurgence of another such service, because potential new entrants know they would have to fight it in court. So, for all intents and purposes, it’s a banned business model in the U.S. Antigua could put it up no problem if it chooses to go the IP retaliation route. -JB

  • http://jerrybrito.com Jerry Brito

    Tim, I agree about my.mp3.com. The point I’m making, though, is that given the district court ruling, such a space-shifting system is in a legal grey area, whether we think it should be or not. That’s why we haven’t seen the resurgence of another such service, because potential new entrants know they would have to fight it in court. So, for all intents and purposes, it’s a banned business model in the U.S. Antigua could put it up no problem if it chooses to go the IP retaliation route. -JB

  • Max

    Wow. One more reason to move to Antigua: I want to do a software startup without fear of being caught up in our (the US’s) domestic software patent thickets.

    Having previously received a cease-and-desist letter from a software patent holder for a class project I did while in college, I am scared shitless, literally, that any startup I could do would have to immediately fold if threatened. No matter how shaky, obvious, ignorant of prior art, etc., the patent is, I simply would not have the $10 (avg. cost to defend against a patent infringement suit) to fight it in court.

    The patents I was accused of infringing in college had prior art dating back to the mid-70s, and I didn’t infringe any of the claims anyway. But, I had to comply. I didn’t have the time or money to fight.

    Antigua, if you do this awesome thing, you’re economy will benefit from the presence of my company. It will be a beautiful thing. Ahh, the Carribean…

  • Max

    oops — that “$10″ should have been “$10 million”

  • Max

    Wow. One more reason to move to Antigua: I want to do a software startup without fear of being caught up in our (the US’s) domestic software patent thickets.

    Having previously received a cease-and-desist letter from a software patent holder for a class project I did while in college, I am scared shitless, literally, that any startup I could do would have to immediately fold if threatened. No matter how shaky, obvious, ignorant of prior art, etc., the patent is, I simply would not have the $10 (avg. cost to defend against a patent infringement suit) to fight it in court.

    The patents I was accused of infringing in college had prior art dating back to the mid-70s, and I didn’t infringe any of the claims anyway. But, I had to comply. I didn’t have the time or money to fight.

    Antigua, if you do this awesome thing, you’re economy will benefit from the presence of my company. It will be a beautiful thing. Ahh, the Carribean…

  • Max

    oops — that “$10″ should have been “$10 million”

  • http://www.spy.org.uk/drk drk

    “Piracy as trade retaliation”

    Please don’t use the word “pirate” to apply to copyright theft violators – it is not only inaccurate but is also a deliberate ploy by MPAA/RIAA to demonise people who copy music and films for space and time shifting purposes – as well as those who perform copyright violations.

    It also demeans the victims of real pirates who continue to kidnap for ransom, rape, torture, kill and hijack ships.

    Copyright theft is NOT piracy – and lets not forget it!

    Until the board members of the RIAA/MPAA have been kidnapped, tortured, raped and kept in the bilges for 5 days – they have no complaints with REAL piracy.

    Lets not buy into their propaganda – lets stop using the loaded word “pirates” when talking about Copyright Violators.

  • http://www.spy.org.uk/drk drk

    “Piracy as trade retaliation”




    Please don’t use the word “pirate” to apply to copyright theft violators – it is not only inaccurate but is also a deliberate ploy by MPAA/RIAA to demonise people who copy music and films for space and time shifting purposes – as well as those who perform copyright violations.




    It also demeans the victims of real pirates who continue to kidnap for ransom, rape, torture, kill and hijack ships.




    Copyright theft is NOT piracy – and lets not forget it!




    Until the board members of the RIAA/MPAA have been kidnapped, tortured, raped and kept in the bilges for 5 days – they have no complaints with REAL piracy.




    Lets not buy into their propaganda – lets stop using the loaded word “pirates” when talking about Copyright Violators.

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