Saturday, 27 February 2010

Watching the International Intellectual Property Alliance and the US Trade Representative

The International Intellectual Property Alliance is a trade organisation or lobby group of seven trade associations which represent US companies involved in businesses having a high intellectual property (principally copyright) content, such as US film and recorded music producers and sellers, computer software sellers and US companies involved in books and other similar publications.

Watch lists

Despite its name the IIPA is not "international", but a United States lobby group promoting the interests of the US corporations involved in the things I have mentioned. It is an influential one however: it makes recommendations to the Office of the US Trade Representative about how that Office should exercise its functions under section 182 of the Trade Act 1974 (19 USC §2242). Under that section, the Office maintains a "watch list" of "those foreign countries that (A) deny adequate and effective protection of intellectual property rights, or (B) deny fair and equitable market access to United States persons who rely on intellectual property protection".

Under the section there is a sub-category of countries called "priority foreign countries", that have "the most onerous or egregious acts, policies, or practices" denying adequate protection or access as mentioned. In addition to such egregiousness, to go on the priority list rather than the ordinary watch list it is necessary that these acts, policies, or practices "have the greatest adverse impact (actual or potential) on the relevant United States products", and that the countries concerned "are not (i) entering into good faith negotiations, or (ii) making significant progress in bilateral or multilateral negotiations, to provide adequate and effective protection of intellectual property rights".

Being on the watch list does not of itself automatically give rise to further sanctions (say in access to US markets) but it is used by the US government in international trade discussions to obtain leverage. It might perhaps unkindly be described as a "bullying list": those countries which the US government can, with supposed legitimacy, beat around a bit. However, a surprising group of countries are on this list, including Canada, ostensibly for failing to take enough action to curb internet piracy.

Actually I don't have a problem with issuing black marks for internet piracy (although the Canadian government consider that its inclusion is based on emotion and US lobbying rather than objective fact). However, the IIPA and the Office of the US Trade Representative have been expanding their activities to try to dissuade foreign governments from encouraging the use of perfectly legitimate and legal "open source" software in preference to software developed by "closed source" methods. The main US producer of closed source software is the Microsoft Corporation (although of course there are many other smaller or more specialist producers as well), and readers reading this probably have a Microsoft operating system on their computers.

In short, the IIPA and the Trade Representative are becoming lobby organisations to press other countries to buy US software products rather than to protect intellectual property as such.

Open source software

Open source software is computer software the source code for which is made freely available, subject often to restrictions such that for example any modifications of the code to extend its usefulness must also made available by the user/modifier: such restrictions form in effect a contract or licence under which "you can use my code for free provided you pass back any improvements you make to it for free". The "source code" comprises the computer code which is to be executed by the software program in question, in pre-compiled human-readable form.

Open source software is becoming increasingly important particularly in business uses: it is widely used in banks for example. It can comprise whole operating systems, such as Linux or BSD systems, or it can comprise particular programs such as the Firefox web browser (either running on an open source operating system, or on a closed source operating system such as Windows).

To see the way things are moving in terms of US-led lobbying on the issue, it is instructive to see the IIPA's latest proposal for the addition of Indonesia to the priority watch list, that is the list of those acting most egregiously contrary to US intellectual property interests. It proposes such inclusion in part because "in March 2009, the Ministry of Administrative Reform (MenPAN) issued Circular Letter No. 1 of 2009 to all central and provincial government offices including State-owned enterprises, endorsing the use and adoption of open source software within government organizations. While the government issued this circular in part with the stated goal to 'reduc[e] software copyright violation[s],' in fact, by denying technology choice, the measure will create additional trade barriers and deny fair and equitable market access to software companies." The IIPA want the Indonesian government to "rescind March 2009 MenPAN circular letter endorsing the use and adoption of open source software which threatens to create additional trade barriers and deny fair and equitable market access to software companies".

What the circular in question from the Indonesian government did was to recommend the use of open source software to government institutions but did not deny choice by mandating it, and it did so partly to reduce the government's software costs. It is difficult to believe that this could be regarded as an anti-competitive act at all. It must be reasonable, in deciding whether to adopt a (free) open source software product rather than a closed source (payment required) product produced by a US company, to take into account the fact that one is free and one is not. If the IIPA is of the view that that is not the case then it must surely be taking the task of protecting its members' interests too far. If however what the IIPA means is that the policy circular does not contain an adequate metric for assessing cost against, say, usability to enable a proper and fair comparison to be made in particular cases, then it is surely arguing about a minor point of implementation and choices of words, rather than something meeting the level of egregiousness necessary to be placed on the priority list by the Office of the US Trade Representative.

As it happens open source software has a number of advantages other than cost, such as the ability to inspect and audit the source code to make sure it does not contain any security weaknesses, or indeed any deliberately inserted code which "rings home to Mama". That can be important for security-sensitive uses. It should also be noted that a number of large US corporations now deal in open source software, mainly obtaining their revenue from it in providing consultancy, implementation and support services for it or in providing "bundled" distributions of such software. Such corporations include IBM. Google uses the open source Linux operating system as the underlying layer for its internet services, and obtains its revenue principally from advertising.

Possibly the IIPA and the Office of the US Trade Representative want to get their bullying in while they still can. The rise of China, India, Brazil and similar countries will make the US view on such matters less relevant as time passes. The problem with making enemies on the way up, though, is that people tend to kick you harder when you are on the way down.

No comments: