Abandon all hope, ye who settle here

The BRICS IP Forum and the IP Summit allowed intellectual property professionals to reflect on a topsy-turvy 2016, and hope for a simpler 2017

The 2016 BRICS IP Forum in London heard that certain BRICS markets are so pervasive with copyright infringement that they are being abandoned altogether.

Speaking at the forum, Sarah Coombes, managing director for Europe, the Middle East and Africa at the Business Software Alliance (BSA), said that Russia and India have become so difficult to navigate that BSA has abandoned its enforcement programmes in those jurisdictions.

Coombes revealed that BSA has received up to 20,000 reports of piracy annually and has engaged in 7,000 legal cases and actions over the past year.

But looking at BSA’s enforcement actions by country, Coombes said that Russia has become “a more and more challenging market” when engaging in enforcement actions.

“Russia has become a very difficult commercial market for us, we are finding that IP rights are no longer a priority for law enforcement.”

“Official case statistics for this year and last are reflecting that the number of IP infringement cases initiated, brought to court and resolved continues to decrease each year. It has been so painful that our members have decided they do not want to be part of an enforcement programme in Russia, and as a result, we have had to close the programme. It is no longer a market BSA wants to cover.”

Coombes then turned to India, stating that it was a “very similar market to Russia”.

“In our experience, the courts take too long, it’s too cumbersome. So once again a decision has been made to close the programme there,” she said.

“The biggest problem is that threatened litigation is not a ‘threat’, we do not want to become involved in long-term litigation.”

“We will still engage in educational activities in India, but enforcement is no longer a priority.”

In another session, attendees heard that intangible assets, such as trademarks, are increasingly making up a significant portion of a brand’s value.

David Haigh, chief executive at Brand Finance, used the example of Denmark to illustrate his point.

The Nordic country has a large number of brands with strong intangible assets.

According to Haigh, this is due to Denmark’s “intellectual property-rich” industries, with famous brands such as Lego, and a focus on pharmaceuticals.

The trading of intangible assets on platforms such as the London Intellectual Property Exchange (LIPEX) demonstrates their increasing strength and value, according to Haigh.

LIPEX currently has more than 40,000 purchasable trademarks, coupled with domain names, which can be either purchased or licensed for shorter terms.

Turning to the BRICS countries, Haigh said that South Africa is the strongest for intangible assets, while Russia is the weakest, due in part to the Russian focus on industries such as oil and mining.

BRICS markets are also developing a culture of branding, Haigh said.

Despite the US and Japan still housing the most valuable brands, BRICS markets are continuing to build and exercise brand enforcement in order to create more value.

China is putting more stock in brands, according to Haigh. He said: “Chinese president Xi Jinping has said he wants China to become more brand-oriented. They don’t want to manufacture goods anymore, they want to maximise value through brands.”

“Lately, the evangelists for IP rights seem to be the BRICS, especially in China.”

At the IP Summit in Brussels, attendees heard that the UK’s decision to ratify the Unified Patent Court (UPC) Agreement despite Brexit is a monumental one for the unitary patent project, but doesn’t guarantee the country’s participation in the long term.

Margot Fröhlinger, principal director for unitary patent, European and international legal affairs at the European Patent Office, assured attendees that the UK is unlikely to be forced out of the unitary patent system once it officially leaves the EU.

There are no legal barriers to the UK staying in the system but being outside of the EU, she said.

Unitary patent system members would also hate to lose UK judges, who are considered among the best in the world, and the UK’s participation makes a unitary patent all the more attractive to users.

But the UK has pointed out that it will not have its Brexit negotiations compromised by the unitary patent project, and that ratification of the UPC Agreement doesn’t mean it’s making a long-term commitment.

Fröhlinger went on to praise the lobbying of users to have the UPC Agreement’s ratification raised at the recent EU Competitive Council meeting where the UK confirmed its intentions, saying: “Everyone showed a strong commitment to get this done.”

Following the UK’s ratification, Germany will be the only country required to ensure the UPC Agreement is implemented.

A European commissioner was on hand to update attendees of the IP Summit on the Digital Single Market initiative.

Maria Martin-Prat, head of the copyright unit at the European Commission, used her presentation to explain the aims behind the European Commission’s recent copyright law proposals, many of which have proven controversial.

Chief among the September proposals, which form part of the European Commission’s legislative programme as it undertakes its long-running Digital Single Market initiative, was the link right, which promises to allow publishers to secure licence fees from search engines and other intermediaries who use their content for up to 20 years from publication.

The European Commission also announced plans last year to introduce a cross-border portability right to allow users to take their online content between EU member states for short stints.

Taken together, “this is the largest collection of changes to copyright law ever tabled” in the EU, according to Martin-Prat.

She said the European Commission was responding to a demand for cross-border access to content, despite fierce criticism from rights holders, including sports, who are worried that the Digital Single Market is the beginning of the end for rights that are national in scope.

The EU has also been a victim of its own success, according to Martin-Prat.

She said that because copyright law is so harmonised across member states, they are unable to make any sufficient tweaks themselves. “We all have to do it together,” she explained.

In-house experts at the IP Summit reacted to the news that the EU Regulation on Cross-Border Portability had passed the parliamentary legal affairs committee, urging further tweaks and amendments before trilogue discussions proceed.

The legal affairs committee unanimously approved the regulation, which will enable EU citizens subscribing to online content services to access content while abroad in another EU country, in a vote on 29 November.

European member of parliament Jean-Marie Cavada said: “I am very pleased, as rapporteur, to have been able to take part in drafting this regulation, which makes it possible to introduce the uniform application of portability rules in Europe, a reform much awaited by our fellow citizens.”

“I am all the more pleased that the report makes it possible to ensure respect for territoriality, which is essential for the proper development and financing of the audiovisual and cinematographic sector in Europe.”

The IP summit panel was in agreement that territoriality would need to be respected, otherwise investment in content would suffer.

A report issued in May argued that full cross-border content portability in the EU would cost TV and movie producers up to €8.2 billion per year in the short term.

Nicolas Galibert, president of Sony/ATV Music Publishing, said: “Portability is compatible with territoriality.”

He added: “[Of course] portability can mean piracy. As long as we’re getting paid, portability is fine by us.”

Philip Pilcher, head of European policy at Sky, argued that the broadcaster’s customers want portability.

Making portability mandatory would also help to level the playing for the likes of Sky, which operates in five European markets and has 22 million customers.

Platforms such as Netflix are able to strike global licensing deals with rights holders, he explained, allowing them to enable their subscribers to benefit from roaming.

The European Parliament’s legal affairs committee did opt to exclude geolocation from random checks, via the subscriber’s IP address, that can be carried out for verification purposes, to ensure the protection of personal data.

Pilcher told attendees of the IP summit that this will be “very problematic” and that Sky is advocating for its reinstatement to the regulation during trilogue discussions between the council, commission and parliament.

How long any period of portability will last once the regulation comes into effect is also under consideration.

Telifonica special legal counsel Alec Cameron argued that “a limited period of time” would be best, as it indicates a short vacation, as opposed to relocating to a new member state in the EU permanently.
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