Winning a Right to Piracy? Huh?

Posted: December 27, 2007 in Digital Entertainment, Society & Culture
Tags: , , ,

I read something the other day that totally boggled my mind. In a NY Times article from Dec 22, it was reported that the World Trade Organization ruled that “the Caribbean nation of Antigua won the right to violate copyright protections on goods like films and music from the United States — an award worth up to $21 million — as part of a dispute between the countries over online gambling.”

Huh? Am I reading that correctly? Is it April fool’s day?

How can the WTO hold jurisdiction over the intellectual property rights of private entities and use these assets to fulfill a ruling against the government of the country of origin?

And furthermore – in the day and age of rampant digital piracy, questionable valuations of these assets and an entertainment industry in flux as to how to generate revenue from the new digital distribution platforms, what were they thinking??? Apparently this is the second such ruling in modern history, but I can’t seem to find info on that first instance.

A little background here…after the proliferation of online casinos in the ’90’s and early ’00’s, the US government banned online gambling, and in 2006 subsequently even made it illegal for US banks to collect gambling bets over the internet. There are a few gray areas, such as horse racing, which is the hook that Antigua is trying to hang it’s hat on here. In 2003 Antigua, a country ripe with offshore casinos making millions from online gambling, petitioned the WTO to get involved under the premise of a violation of “free trade treaties”. The WTO ruled against the US back in 2003, and again under appeal in 2004. In 2005 the WTO gave the US a year to comply, but the US claims that it is doing nothing wrong and is already in compliance. Oh and by the way – you gotta love international politics – apparently the US has brokered agreements with larger nations in Europe and Asia while leaving out the smaller nations like Antigua that rely on these revenues. Currently the online gambling industry plays a major role in the health of Antigua’s economy. In fact, the countries of Antigua and Barbuda claim a loss of $3.4 billion per year due to the actions of the US. This sort of leverage-play reminds me of stories told to me by an interesting friend who works on the nuclear proliferation committee at the UN and in Geneva. The goal of the task force is to help negotiate the elimination and destruction of nuclear weapons around the world everywhere around the world except the US. The only problem is that the US looks at ourselves as exempt. Of course we are allowed to be different…of course. However, there are over 150 members of the WTO and until they all agree otherwise, the actions taken by the US have been deemed illegal. But I digress…

Why is this such a big deal? The US accounts for a significant portion of the global online gambling revenues, estimated in the $20 billion mark – yes that’s right, $20 billion – search and social media eat your heart out.

But this brings me back to my main point and question. How can the WTO hold jurisdiction over the intellectual property developed by private entities of a country, and use these assets to fulfill a ruling against the government of that country?

If you dig up the first instance of intellectual property rights being used by the WTO to fulfill legal obligations of one country to another, please post it as a comment! I’m really taken back by this ruling!

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