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Legalized Piracy: Copyright in the Crossfire

Imagine being able to download your favorite movies for a fraction of the current cost. Download all seasons of Breaking Bad for ten dollars, blockbusters available the day after leaving theaters for five dollars, or a brand new edition of Adobe Photoshop for two dollars.  And not a single royalty payout to the property owners.  This could be the reality by the end of the year.

Our story begins, with the shady world of off-shore gambling in 2003. At the time, Antigua and Barbuda had a flourishing gaming industry. Its major users? Americans. Arguing that the gaming portal violated international gaming laws, the U.S. sued Antigua and Barbuda through the World Trade Organization (WTO). The WTO sided with America, and the offshore gaming portal has since been shut down.

The destruction of this gaming portal has had a devastating effect on the economy of Antigua and Barbuda. The small countries, made up of about 85 thousand people, had grown dependant on the gaming industry as their source of survival in the world.

Looking to protect its own interests, Antigua and Barbuda petitioned the WTO in 2004 to have the U.S. compensate them for the money they lost when the sites were shut down. The WTO found in favor of Antigua and Barbuda and commanded that the U.S. pay 21 million dollars to Antigua and Barbuda, the amount the WTO deemed they lost each year as a result.

As of right now, the U.S. hasn’t paid the fee, and has, instead, spent years in negotiations. Antigua and Barbuda put forth the idea of the portal on the table as leverage, and a way to reinvigorate their economy. The WTO has agreed to allow Antigua and Barbuda to suspend U.S. copyrights; to sell movies, TV shows, and other types of intellectual property for little or no cost to the user, without the need for revenue sharing with the owners.

Although the portal will be aimed at American audiences, it would still be illegal for any citizen of the U. S. to use the portal. If caught, any user could be sued by the U.S. government. Ariel Lavinbuk, as quoted by John Villasenor in his article, Will It Be Legal To Download ‘Pirated’ Music And Movies From Servers In Antigua?, stated, “When you download a song, a new, distinct copy is created. And the creation of that copy on a computer in the U.S. without copyright-holder authorization is unlawful in this country, regardless of whether the website providing the content is now considered lawful in Antigua.”

For that matter, all countries would be subject to their own trade laws as to whether or not the citizens can use them. According to several news sites including the BBC, in certain countries it is illegal to download pirated files; such as Italy. While other countries abide by a more lax system: warnings, and small fines. These countries include, France, the UK, and New Zealand. Lastly, you have the countries where it is basically legal to download copyrighted material: e.g. Switzerland.

The closest comparable situation to Antigua and Barbuda was found in China few years ago. China has a history of pirating intellectual property from the United States. This has allowed China to keep as much business in China as without paying royalties for something that it could pirate. The intellectual property piracy came to an end in 2010 though, after the United Stated brought a complaint to the WTO about it. The WTO found in favor of the United States, and the piracy has since then decreased.

In January of 2013, the WTO finalized a decision in favor of Antigua and Barbuda, for the portal listed above. Once the portal is up and running, they will be allowed to sell intellectual property for as much or as little as they want, whether it is ten dollars for unlimited use or a half a penny for a file. Antigua and Barbuda are only allowed to make 21 million dollars yearly off of this portal and no more. The same amount of money that WTO decided was owed to them by the United States.

According to Raphael Satter, of Business Week, the Antiguan and Barbudian government has decided to suspend US copyrights and move forward with creating the portal. There is no news currently on when the portal will be released as Antigua and Barbuda are still hoping for a settlement that won’t harm the “innocent industry”.

In response to the situation, Steve Metalitz, of the council for the International Intellectual Property Alliance, said in a statement, “that suspending intellectual property rights is not the right solution, and that state‑sanctioned theft is an affront to any society”. Nkenge Harmon, a spokeswoman for the United States Trade Representative, believes that the creation of the portal will hinder the chances of the settlement that all parties desire. Harmon, also, stated in the end, “It also would serve as a major impediment to foreign investment in the Antiguan economy, particularly in high-tech industries.”

At this time Antigua and Barbuda are being backed by, not only the WTO, but the Caribbean Community Secretariat (CARICOM) as well in their endeavor to bring back the economy through this portal. The twenty-one million that they are allowed to earn has no bearing on the possible losses for the intellectual property they would be selling, at this time there is no way to predict that loss. It is unclear what that would mean for the royalty accounting of those U.S. companies.

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MetaComet Systems, Inc., Computer Software Publishers & Developers, South Hadley, MA

Have any questions?
+1 (413) 536-5989