{"id":23410,"date":"2013-12-04T14:16:00","date_gmt":"2013-12-04T19:16:00","guid":{"rendered":"http:\/\/www.iposgoode.ca\/?p=23410"},"modified":"2013-12-04T14:16:00","modified_gmt":"2013-12-04T19:16:00","slug":"pirates-of-the-caribbean-us-intellectual-property-rights-to-walk-the-plank","status":"publish","type":"post","link":"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2013\/12\/04\/pirates-of-the-caribbean-us-intellectual-property-rights-to-walk-the-plank\/","title":{"rendered":"Pirates of the Caribbean: US Intellectual Property Rights to Walk the Plank?"},"content":{"rendered":"<p>The government of Antigua and Barbuda\u00a0has recently published a <a href=\"http:\/\/www.ab.gov.ag\/article_details.php?id=4503&amp;category=38\" target=\"_blank\" rel=\"noopener noreferrer\">press release<\/a> detailing their plans on establishing a statutory body to oversee the\u00a0monetization and\u00a0exploitation\u00a0of the suspension of\u00a0American intellectual property rights. The World Trade Organization (WTO) authorized the suspension of\u00a0US IP rights in the\u00a0small twin-island nation\u00a0<a href=\"http:\/\/www.wto.org\/english\/tratop_e\/dispu_e\/cases_e\/ds285_e.htm\" target=\"_blank\" rel=\"noopener noreferrer\">earlier this year<\/a>. The\u00a0organization\u00a0overseeing these developments, the\u00a0WTO Remedies Implementation Committee, is in\u00a0the final stages of preparing legislation\u00a0to be submitted to the Antiguan\u00a0Parliament.<\/p>\n<p><!--more--><br class=\"none\" \/><br class=\"none\" \/><\/p>\n<p>The suspension of US intellectual property rights stems from a dispute between Antigua and Barbuda and the United States concerning online gambling sites. In 1994, Antigua and Barbuda had passed the <a href=\"http:\/\/www.laws.gov.ag\/acts\/1994\/a1994-12.pdf\" target=\"_blank\" rel=\"noopener noreferrer\"><em>Free Trade and Processing Zone Act, 1994<\/em><\/a>\u00a0allowing licenses to be granted to\u00a0organizations applying to\u00a0open online\u00a0casinos. The industry became quite lucrative\u00a0and the online gambling industry became the <a href=\"http:\/\/www.usitc.gov\/publications\/332\/journals\/online_gambling_dispute.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">second-largest employer<\/a> in Antigua reporting peak revenues of <a href=\"http:\/\/www.antiguawto.com\/WTO_Economic_gambling_data.html\" target=\"_blank\" rel=\"noopener noreferrer\">$2.39 billion in 2001<\/a>\u00a0(although other sources <a href=\"http:\/\/www.usitc.gov\/publications\/332\/journals\/online_gambling_dispute.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">quote<\/a> a much lower value).<br class=\"none\" \/><br class=\"none\" \/><\/p>\n<p>The trouble started in the early 2000s when the United States Department of Justice began <a href=\"http:\/\/www.usitc.gov\/publications\/332\/journals\/online_gambling_dispute.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">cracking down<\/a> on internet gambling sites based in foreign jurisdictions. Several\u00a0pieces of federal legislation, including the <em><a href=\"http:\/\/www.gpo.gov\/fdsys\/pkg\/USCODE-2011-title18\/pdf\/USCODE-2011-title18-partI-chap50-sec1084.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">Federal Wire Act<\/a><\/em>, the <em><a href=\"http:\/\/www.gpo.gov\/fdsys\/pkg\/USCODE-2011-title18\/pdf\/USCODE-2011-title18-partI-chap95-sec1952.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">Travel Act<\/a><\/em> and the <em><a href=\"http:\/\/www.gpo.gov\/fdsys\/pkg\/USCODE-2011-title18\/pdf\/USCODE-2011-title18-partI-chap95-sec1955.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">Illegal\u00a0Gambling Business Act<\/a><\/em>, prohibit (or were proposed to prohibit at the time) financing, managing, supervising, directing, or owning a gambling business. This had a <a href=\"http:\/\/www.antiguawto.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">profound effect<\/a> on\u00a0Antigua and Barbuda's online gambling industry.\u00a0The profitable sector, once accounting for <a href=\"http:\/\/www.antiguawto.com\/WTO_Economic_gambling_data.html\" target=\"_blank\" rel=\"noopener noreferrer\">59% of global online gambling<\/a> in 2001, shrunk to less than 7% of global online gambling market\u00a0in 2007 with revenues of less than one billion.<br class=\"none\" \/><br class=\"none\" \/><\/p>\n<p>Antigua and Barbuda <a href=\"http:\/\/www.wto.org\/english\/tratop_e\/dispu_e\/cases_e\/ds285_e.htm\" target=\"_blank\" rel=\"noopener noreferrer\">began challenging<\/a> the United States' prohibition on cross-border online gambling services in 2003, alleging these constraints were against the\u00a0United States'\u00a0obligations under the <a href=\"http:\/\/www.wto.org\/english\/docs_e\/legal_e\/26-gats_01_e.htm\" target=\"_blank\" rel=\"noopener noreferrer\">General Agreement on Trade in Services<\/a> (GATS). In November 2004, the panel established by the Dispute Settlement Body (DSB) determined that the United States failed to \"accord services and service suppliers of any other Member treatment no less favorable than that provide for under the terms, limitations and conditions specified in the US Schedule\" contrary to Articles XVI:1 and\u00a0XVI:2 of the GATS. The US appealed the decision but the Appellate Body <a href=\"http:\/\/www.wto.org\/english\/tratop_e\/dispu_e\/cases_e\/ds285_e.htm\" target=\"_blank\" rel=\"noopener noreferrer\">upheld the ruling<\/a>.<br class=\"none\" \/><br class=\"none\" \/><\/p>\n<p>In May 2005, the United States said it intended to implement the DSB's recommendations\u00a0concerning changing the laws\u00a0and it was given 11 months and 2 weeks to do so. However, they never really seemed to get around to it as in June 2006, Antigua and Barbuda requested a panel be established under Article 21.5 of the <a href=\"http:\/\/www.wto.org\/english\/tratop_e\/dispu_e\/dsu_e.htm\" target=\"_blank\" rel=\"noopener noreferrer\">Dispute Settlement Understanding<\/a> (DSU). The DSU applies when there is a \"disagreement as to the existence or\u00a0consistency with a covered agreement of measures taken to comply with the recommendations and rulings\".<br class=\"none\" \/><br class=\"none\" \/><\/p>\n<p>In March 2007, the panel confirmed that the United States had failed to properly address the rulings of the DSB. Article 22.2 of the DSU provides\u00a0that in\u00a0situations where a member \"fails to bring the measure found to be inconsistent with a covered agreement into compliance\" within a reasonable period of time the innocent member may \"request authorization from the DSB to suspend the application to the Member concerned of concessions or other obligations under the covered agreements.\" In this case the agreements include both those under the GATS and intellectual property rights covered under the agreement on <a href=\"http:\/\/www.wto.org\/english\/docs_e\/legal_e\/27-trips.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">Trade Related Aspects of Intellectual Property Rights<\/a> (TRIPS). In December 2007, the Arbitrator assessed Antigua's annual losses due to US\u00a0restrictions\u00a0on online gambling websites to be US$21 million. On January 28, 2013, the DSB authorized the suspension of concessions and obligations Antigua owed\u00a0to the United States in respect to their intellectual property rights.<br class=\"none\" \/><br class=\"none\" \/><\/p>\n<p>While Antigua and Barbuda are not the only country to demand compensation for the United States' refusal to lift restrictions on Internet gambling (for example, a <a href=\"http:\/\/trade.ec.europa.eu\/doclib\/docs\/2007\/december\/tradoc_137307.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">compensation deal<\/a> was reached with the EU), they are the only\u00a0country to pursue the somewhat uncommon remedy of a suspension of intellectual property rights.\u00a0Perhaps they are insisting on this remedy in the hopes of\u00a0negotiating a better deal.\u00a0The US$21 million annually\u00a0awarded by the DSB\u00a0is much less than the billions the online gambling industry was claimed to be\u00a0worth. In this sense it may not seem as though the punishment is sufficient for the US's transgression. However, <a href=\"http:\/\/ictsd.org\/downloads\/2009\/06\/cross-retaliation-in-trips.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">cross-retaliation in TRIPS<\/a> (suspension of concessions in a sector of trade different than the sector in which the trade injury was suffered) is proposed to offer members with less economic power a meaningful mode of redress against more-developed WTO members. The threat of the suspension of IP rights could result in rights-holders pushing the government to settle the matter in an alternate manner. At this point it is not exactly clear what US intellectual property might be sold by Antigua and Barbuda or if there will be any rules concerning bundling and minimum prices. Theoretically, this could pose major problems to US IP rights-holders as their intellectual property could be sold for a mere pittance. While government authorized piracy may\u00a0be anathema to some, it is certainly a valuable bargaining chip for future negotiations.\u00a0With the government in the final stages of developing a platform to monetize the suspension of IP rights,\u00a0it looks likes intellectual property rights are poised to take the plunge.<br class=\"none\" \/><br class=\"none\" \/><\/p>\n<p><em>Corey McClary is an IPilogue Editor and a JD candidate at Osgoode Hall Law School. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The government of Antigua and Barbuda\u00a0has recently published a press release detailing their plans on establishing a statutory body to oversee the\u00a0monetization and\u00a0exploitation\u00a0of the suspension of\u00a0American intellectual property rights. The World Trade Organization (WTO) authorized the suspension of\u00a0US IP rights in the\u00a0small twin-island nation\u00a0earlier this year. The\u00a0organization\u00a0overseeing these developments, the\u00a0WTO Remedies Implementation Committee, is in\u00a0the [&hellip;]<\/p>\n","protected":false},"author":2140,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","footnotes":""},"categories":[65,1049,69,60],"tags":[1952,2350,27,2301,1954,2351,719],"class_list":["post-23410","post","type-post","status-publish","format-standard","hentry","category-copyright","category-gaming","category-infringement-copyright-ip","category-ip","tag-antigua","tag-barbuda","tag-copyright","tag-corey-mcclary","tag-gambling","tag-online","tag-wto"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Pirates of the Caribbean: US Intellectual Property Rights to Walk the Plank? - IPOsgoode<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2013\/12\/04\/pirates-of-the-caribbean-us-intellectual-property-rights-to-walk-the-plank\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Pirates of the Caribbean: US Intellectual Property Rights to Walk the Plank? - IPOsgoode\" \/>\n<meta property=\"og:description\" content=\"The government of Antigua and Barbuda\u00a0has recently published a press release detailing their plans on establishing a statutory body to oversee the\u00a0monetization and\u00a0exploitation\u00a0of the suspension of\u00a0American intellectual property rights. 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