The U.S. Congress loves to criticize the trade and business practices of other countries. Don’t get me wrong, legislatures and parliaments across the world enjoy this game and play it themselves, but nobody makes quite the fetish of it that the United States does. The annual Special 301 reports by the Office of the U.S. Trade Representative are part of this game. USTR recently published its 2012 report on intellectual property rights. One can’t exaggerate the importance of IPR issues. It is hard to think of an industry that doesn’t have a need to protect intellectual property from somebody. Of course, the report does not address anything that the United States itself may have done because our politicians, like all others, really do not want to think that we – of all people – may have done anything that wasn’t perfect. After all, the objective of this game is to blame others, deflecting criticism so that voters have nothing but praise for their own domestic politicians. Clear?

The report drones on for 56 pages, grouping countries into categories of egregiousness. But first I want to tell you the good news. The good news only covers two pages out of the 56, so it won’t take long to see who USTR likes this year. First, however, the Section 301 report is highly organized and groups deficient trade partners into three categories of badness: the worst is the Priority Watch List, followed by the Watch List, and then simply monitoring (though this is rarely used). You need to know this, because some of the good news involves moving countries from one list to another.

USTR is pleased that Malaysia passed legislation that strengthens protection of copyrights and stiffens anti-piracy enforcement. I won’t go into the details, and USTR is still concerned about Malaysia’s practices with pharmaceuticals, but the improvements are enough that Malaysia is getting a free pass: removal from the Watch List.

Spain needs some good news right now. This won’t bring the Spanish economy back, but USTR has also removed Spain from the Watch List following new legislation to fight copyright piracy on the Internet. Israel got kudos from Washington for moves to strengthen IPR protection on pharmaceuticals.

Russia announced plans to establish a new IPR court by 2013 and narrowed its thresholds for prosecuting copyright piracy. USTR approvingly mentioned legal proceedings against interfilm.ru and civil findings against vKontakte for copyright infringement. The Russians seized two million pirated optical disks and made substantial progress in cleaning up the Savelovskiy Market, previously a notorious haven for pirated goods, especially electronics. USTR also commented favorably on Russia’s attempts to combat sale and use of counterfeit medicines.

USTR gave credit to China for stiffening its IPR protection apparatus, and took credit for the new IPR protections in the free trade agreements with South Korea and Colombia. They commend the Czech Republic for its attempts to get the word out to its companies and citizens on the need to protect IPR. And USTR liked steps that Hong Kong Customs took to stop counterfeit imports from reaching local markets.

We’ll get to the not-so-good news in coming posts.

I write this while Wikipedia and others protest the faint possibility of censorship by censoring themselves. The web protests against SOPA and its bedmate PIPA strike me as being in the “I’ll take my ball and go home” genre. Most of the commentary online is highly biased and begins from the uncritical assumption that Congress wants to somehow censor what appears on the Internet. Congress doesn’t know what it wants, nor what it is doing. Is that such a surprise? Some of the more reasonable vitriol can be found here and here. A more balanced approach is taken by the Wall Street Journal.

Forgotten in the hyperbole about “Internet freedom” is that the basic issue here is international trade in health and safety-threatening counterfeit or pirated goods. The original intent of the companies and organizations that pushed for SOPA or legislation like it has been lost. I could care less about the film industry here. Yes, pirated films cost the industry a lot of moola, but I’m not likely to die from seeing a pirated movie (though some of the unpirated ones might bore me to death). I am concerned about the egregious international trade in such things as pharmaceuticals that don’t do what they say they will do, drugs that harm or possibly kill, adulterated food products, counterfeit auto parts, wine containing antifreeze – you know, stuff that kills the buyer. Always puts me off.

Knockoff toy producers need not worry about choking hazards or paint toxicity. Counterfeit auto parts are not subjected to the rigorous safety testing borne by their licit counterparts. Due to cheaper materials and workmanship, counterfeit batteries and cigarette lighters are prone to explode. Counterfeit medicines need not contain any active ingredient at all. Worse, they could contain a substandard dose, allowing the target microbes to develop resistance. – UN Office on Drugs & Crime, 2010

Unsafe products are what the legislation was meant for, but the debate has lost this. The protests appear to be of two varieties: those concerned about “freedom” and those that object to the technical implementation. “Freedom” automatically attracts unthinking support from no-nothings who like the idea, but can’t spell “responsibility”. We can have absolute freedom on the Net and elsewhere, but it has a cost: anarchy. It’s been tried in some places, but I’m not sure how that is working out. The “Occupy” movements, I am told, don’t tolerate the sale of stolen goods in their camps. Why should we tolerate the sale of counterfeits?

I’m not qualified to discuss the technical opposition, but I have faith in our geek community to come up with solutions. They are a creative bunch. Steve Jobs never let a technical problem stop him. Some object that the same software tools that oppressive regimes use to censor the Internet would be employed to stop the pirates. Uh, oppressive regimes use hammers, too, so should they be banned in America? By the way, I am not fond of oppressive regimes. I have become acquainted with several during my career – and there is a reason this blog can’t be read in China (where 2/3s of the world’s counterfeits are now produced, by the way).

In 2007, the OECD estimated that trade in counterfeit goods accounts for about 2% of world trade – or roughly $176 billion. Counterfeit goods were intercepted at the borders of 140 countries in 2008. But enforcement at the borders simply isn’t enough. Websites have become the primary means of advertising and selling counterfeits. We need to do something about that.

So, rather than blacking out websites and hurling epithets, let’s get some technically savvy people together to figure out how to stop the advertising and sale of unsafe counterfeited or pirated goods on the Internet. Surely, Wikipedia, Google and others have a few smart techies around, don’t they?

Full disclosure: I was one of the original signers of a letter recommending SOPA, or something like it, to get at this problem of trade in counterfeit goods.