House Democrats Urge USTR to Take Stand on Russian IP Piracy

Portman should learn from WTO experiences with China after it won membership in the international commerce and trade assembly, the letter said. “By any fair analysis, the commitments that China made before joining the WTO have failed America’s intellectual property community,” the letter states: “China’s intellectual property laws are not enforced, and the pirates who are investigated are rarely punished.” The group cites USTR’s 2005 National Trade Estimate report, which showed piracy and counterfeiting in China are at “epidemic levels” and cause serious damage to U.S. businesses in practically every sector of the economy. The lawmakers want negotiators to keep the China agreement in mind and do what’s necessary to “guarantee that any trade agreement with Russia is robust and effective.” By doing so, all businesses -- American and non-American alike -- will be given greater confidence in the rule of law and in the viability of the investments they might make in Russia in the years ahead, the group concluded.

One high-tech industry source told us Wed. the negative attitude expressed toward China’s WTO experience sends the wrong message. “We think that both for China and for Russia, getting them into the WTO is helpful to set a process to bring these countries toward greater reform and enforcement,” the source said. He said he doesn’t want to minimize the problems but said “getting them into the WTO is more helpful to the overall process than it is a missed opportunity.” The goal should be a multilateral push to get Russia to adhere to the organization’s rules, regulations and dispute settlement practices, he said. The official then lauded the letter, saying its authors are “trying to be helpful and represent the technology industry’s interests. We appreciate any member of Congress talking about and emphasizing how important it is to enforce IP laws and protections.”

Just back from a meeting with Russian govt. and industry leaders, Information Technology Assn. of America (ITAA) Pres. Harris Miller said he is glad to see lawmakers on the record with concerns about Russia and the WTO. This may help Congress avoid last-minute bickering such as has surfaced over CAFTA-DR, he said. While in Russia, Miller talked with Russian IT and Communications Minister Leonid Reiman about a number of issues relating to IP protections. He told us Reiman indicated his govt.’s interest in more IP partnerships between Russia and the U.S. Many high-tech executives he spoke with said they are interested in doing business on American soil, Miller said. “Certainly, Russia very much wants to be part of the WTO and this is a good time to focus on IP issues with the country,” Miller said: “The point of maximum leverage or influence on a country is at the time it is trying to become part of the WTO.”

The letter raises important points but Business Software Alliance (BSA) Vp Robert Cresanti cautioned against an overwhelming “glass is half empty” approach. While the sentiment expressed doesn’t deviate from the BSA’s experience in Russia, “there are signs of life and signs of fight there.” Despite the fact that 87% of software used in the country is pirated, Cresanti said the govt. has begun to work with industry on the problem. Trade engagement and involvement has brought positive results, he said, but the question is “is it enough and is it fast enough?”

RIAA endorsed the letter’s recommendations, saying the authors echo concerns expressed by others in Congress on both sides of the aisle. “Russia has emerged as the leading exporter of pirate CDs in the world, servicing at least 27 other nations with pirate product. Meanwhile, the Russian government has taken no effective action to rein in this lawlessness and has borne silent witness to a tripling of illegal production capacity over the past 3 years,” said RIAA Exec Vp Neil Turkewitz. Russia’s behavior is “not conduct befitting a member of the WTO,” he said, adding that RIAA says the U.S. should not conclude negotiations with the Russians on WTO accession until the issue is addressed adequately.

Russia’s IP woes have taken center stage at recent hearings. Senate and House panels heard from trade and high-tech experts in separate hearings last month. Witnesses urged the U.S. and trading partners to proceed with caution on Russia’s accession into the WTO. The hearings coincided with a barrage of IP-related events and report releases, including the USTR “Special 301” report documenting widespread piracy in Russia (WID May 2 p4) and a long list of piracy and counterfeiting reports indicating the U.S. isn’t sending the anti-piracy message as loudly as it should.

Though China broke some IP promises, it still enjoyed WTO membership benefits, officials repeatedly have noted. “We should hope to God that we don’t allow Russia to join with a total ineffective enforcement system,” House IP Subcommittee Chmn. Smith (R-Tex.) said last month. According to analysts, Russia sees particularly high levels of CD and DVD piracy and an escalating problem with Internet piracy. An out-of-cycle review is gauging IP protection progress in Russia against a backdrop of industry demands for the strongest possible action against Russian pirates. Earlier this year, Finance Committee Ranking Democrat Baucus (Mont.) introduced a resolution to highlight the damage done by Russia and China. Tallying over $4 billion in losses to U.S. creators of copyright products alone, the resolution cited those nations’ failure to live by international standards of protection and enforcement (WID April 27 p2).

At one hearing, Senate Judiciary Committee Chmn. Hatch (Utah) and Ranking Democrat Leahy (Vt.) spoke frankly about Russia. Hatch said that until Russian govt. leaders make visible strides against IP piracy, he and like-minded colleagues will make the country’s entry into the WTO arduous. A spokeswoman for committee Democrats said Russian IP piracy and trade issues are still “percolating” there and are “definitely on the staff radar.” She could not say whether a similar letter may be in the works from Leahy and his colleagues.