It is supposed to be known next week what sanctions the Office of the US Trade Representative (USTR) will impose on Ukraine. As is known, the Special 301 Report, published in early May, designated Ukraine a Priority Foreign Country (PFC), i.e., the world’s top offender of intellectual property rights (IPR). According to the report, the USTR office was to initiate an investigation under section 301 of the Trade Act of 1974, which empowers the US president to take measures against the infringer. It is known so far that this designation is supposed to launch a revision of Ukraine’s eligibility for benefits under the Generalized System of Preferences (duty-free importation of certain goods) as well as to incur additional economic sanctions.
The official text of the 301 Report says that Ukraine is designated a PFC due to a non-transparent system for collecting music royalties, severe deterioration of enforcement in the areas of government use of pirated software and piracy over the Internet, as well as denial of fair and equitable market access through the authorization and operation of copyright collecting societies.
The USTR office comments that Ukraine constantly fails to meet the commitments taken under the Action Plan 2010 and the level of intellectual rights protection is always on the decline in this country.
So the USTR office has identified three main areas of intellectual rights infringement in Ukraine:
Firstly, the unfair, nontransparent administration of the system for collecting societies, which are responsible for collecting and distributing royalties to US and other rights holders;
Secondly, widespread (and admitted) use of illegal software by Ukrainian government agencies;
Thirdly, failure to implement an effective means to combat the widespread online infringement of copyright and related rights.
As is known, Ukraine was designated the status of a “priority offender” of intellectual property rights after a seven-year break, during which there were no offenders of this kind at all in the world. Ukraine last had this exclusive status in 2001 to early 2006. At the time, this country was expelled from the US Generalized System of Preferences and had $75-million-worth annual economic sanctions imposed on it.
It is no wonder, therefore, that the current situation has triggered a stormy reaction on the part of Ukraine’s creative public (authors, performers, recording companies), music experts, and intellectual property protection specialists. Dmytro Prykordonny from the Coalition of Ukrainian Performers and Producers believes that “the US government has made an amply-grounded decision due to chaos in the collective management of music rights (our organization has pointed this out very often for a long time) and the dominance of online piracy which just leaves no chance to develop digital distribution in Ukraine.”
“Promised reforms to modernize the legal environment remain long stalled. Internet piracy remains essentially unchecked, with major notorious markets such as ex.ua permitted to operate without interference. Collecting societies duly empowered by rights holders lost their state accreditation, resulting in market confusion and loss of revenue. We hope that the government of Ukraine will take prompt action to address these issues before sanctions are imposed,” says Neil Turkewitz, executive vice-president of the Recording Industry Association of America (RIAA).
On her part, pop singer Ruslana Lyzhychko is convinced that we should begin combating piracy in Ukraine “on a mental level.” “While the copyright issue was still waiting for its turn to be settled, pirates built a solid monopoly which it is practically impossible to destroy now,” the singer says, explaining her viewpoint. “And it will take several generations of users to change the current way of paying for music if we begin today to teach our children to value intellectual property – the way we teach that they must not take things from shop shelves just for free. Piracy exists and is rising not because there are more and more pirates but because they have more and more users.”
At the same time, the State Service of Ukraine for Intellectual Property Protection is sure that it is too early to sound the alarm.
Here is what Oleksii YANOV, First Deputy Chairman of the State Service for Intellectual Rights Protection, told The Day in a brief interview.
In early May the Office of the US Trade Representative pronounced Ukraine “the world’s No.1 pirate.” Why do you think Ukraine is the only country with this status? Do you know any countries where the situation is worse but they are not on the Priority Watch List?
“It is up to the Office of the Trade Representative, not us, to assess the level of intellectual rights protection.
“As for the actual magnitude of infringements, Ukraine must not be compared to such big countries as Russia and China. They commit more violations and cause US companies much more damage.
“Putting Ukraine on this list means that, in the view of the Trade Representative’s office, we have an inadequate level of intellectual rights protection.
“The US government defends the rights of American corporations which want to get much greater cash reward from Ukraine than they usually get for a product made.”
There should have been a special investigation within 30 days under the Special 301 Report, which empowers the US president to take measures against the offender, i.e., Ukraine. It is known so far that the designated status is supposed to launch a revision of Ukraine’s eligibility for benefits under the Generalized System of Preferences (duty-free importation of certain goods) as well as to incur additional economic sanctions. What is this investigation about? Do you know its preliminary results?
“The issue is not subject to the US law because it is only within 30 days after the publication of the report that the Office of the Trade Representative should decide on whether or not to conduct an investigation. If a decision is made, the office will have 6 to 9 months to duly consult the country’s government, study the situation in detail, and come to some conclusions. We have not yet been informed about any decision made.
“It is important that the Office of the Trade Representative makes a decision on the basis of the information it receives from the lobbying groups that conduct business in the field of intellectual property.”
What measures are you taking?
“We had discussions with music business representatives, such as the companies Catapult Music, Proremedia, Lavina Music, Chesna Muzyka, Mamamusic, Glory Media Group, and Universe Media. We held consultations with software-providing firms, including Microsoft. We are also planning to meet collective management societies and other intellectual property representatives. I think business people will inform the US Embassy and the Office of the Trade Representative of the measures taken. In this period, we have been informing quite in a detail the US Embassy of the measures we took on the territory of Ukraine. This also applies to educational activities.”
Are there any deals with Microsoft on software purchase privileges?
“We are going to hold consultations on the prices they can offer us. I am sure privileges will be granted to the public sector.”
Interviewed by Olena SKYRTA
