Ukraine, that’s who! Ignoring the fact that China produces close to 3/4s of the world’s counterfeit goods, the Office of the U.S. Trade Representative has handed the title of Pirate King to the Ukraine. I’m trying to figure how that happened. Must be something like giving the Nobel prize to the wrong person, though I am not sure that Beijing will complain that they didn’t get the title this time. USTR released the annual Special 301 report on intellectual property rights last Thursday, 58 stirring pages about who cheats whom around the world.
We’ll get the good news out of the way first. Won’t take long. The Special 301 Report sets up two categories of bad guys. Those that are just somewhat bad, perhaps merely an irritant, are put on the Special 301 Watch List. The really bad guys are featured on the Special 301 Priority Watch List (sort of a “Most Wanted” list of IPR violators). The good news is that Brunei and Norway are in the clear and no longer on either list. And Canada has been downgraded from the Priority Watch List to the Watch List. The Bahamas, China, Israel, Laos, Panama, the Philippines and Russia all worked on new IPR laws in the last year. Taiwan granted more IPR protection on pharmaceuticals. And Turkey beefed up its enforcement on IPR. That’s it.
While we are at it, the inmates of the Priority Watch List are Algeria, Argentina, Chile, China, India, Indonesia, Pakistan, Russia, Thailand and Venezuela. Not many surprises there. The plain old Watch List contains Barbados, Belarus, Bolivia, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Finland, Greece, Guatemala, Israel, Italy, Jamaica, Kuwait, Lebanon, Mexico, Paraguay, Peru, Philippines, Romania, Tajikistan, Trinidad and Tobago, Turkey, Turkmenistan, Uzbekistan and Vietnam. Naughty, naughty. But not as bad Ukraine – now IPR Public Enemy #1 and in a category all by itself.
What did the Ukrainians do to deserve this special tribute? A lot apparently. USTR seems miffed that Kiev has ignored earlier agreements and negotiations to clean up its act. The “collecting societies” that are supposed to collect and transmit royalties to foreign rights holders aren’t doing the job fairly or transparently. Ukrainian government agencies are openly and merrily using pirated software, making no secret that they are doing so. And the country is making next to no effort to combat online piracy and copyright infringement. At least the Chinese pay lip service on such things before they go back to pushing out more counterfeit goods.
I regret that the Government of Ukraine has earned the first new Priority Foreign Country designation in 11 years due to its severely deteriorating climate for IPR protection and market access, and call upon that government to reverse recent backsliding and swiftly resolve the problems identified today.
~ Demetrios Marantis, Acting U.S. Trade Representative
The collecting society dispute has an interesting twitch. Ukraine pulled the license for the reputable Ukrainian Music Rights League last year. “This action has been credibly characterized as an attempt to empower rogue collecting societies, including a rogue collecting society that reportedly has strong ties to government officials.” Sounds like Ukrainian officials found a new source of income, one that is spreading beyond the music industry now that Ukrainian courts have abolished the previous rules for accrediting collecting societies. The country has reverted to ad hoc licensing and the rogue societies are winning. USTR says that this legalizes misappropriation of royalties. And the Special 301 report certainly hints that the pockets of Ukrainian officials are being lined.
Kiev has told USTR that they want to begin using legal software in government ministries, and that $12.3 million was budgeted for this purpose in 2013. The actual value of the pirated software in official use far exceeds that amount – and there is no indication that any of the money has actually been spent – or is likely to be spent – on legal software.
Online piracy is a thriving business in the Ukraine. One Ukraine-based pirate website, ExtraTorrent.com, bills itself as “The World’s Largest BitTorrent System” and is among the top 200 most-visited websites in seven other countries, including the United Kingdom, India and Australia. Ukrainian authorities did make a brief effort, early in 2012, to close a pirate website, called EX.UA, which sold pirated music, videos and software and had become Ukraine’s 12th most-visited website. EX.UA was quickly back online, following an uproar by Ukrainian consumers and celebrities. [Both EX.UA and ExtraTorrent.com are up and running today. I checked.]
There is much more in the Special 301 report including details on all the other pirates mentioned on the Priority Watch List and the Watch List. Go read about your favorite black hat.