Music industry calls for better enforcement of rights on 10th anniversary of TRIPS

Brussels, June 23, 2004

The recording industry today urges the European Union to take action to strengthen enforcement of intellectual property rights. The call comes as the European Commission organised a conference in Brussels commemorating the 10th anniversary of the landmark Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). In the last decade the TRIPS Agreement, which was signed at the establishment of the World Trade Organisation in Marrakesh in April 1994, has helped to improve copyright legislation around the globe. It has set a number of useful benchmarks for many members of the WTO, such as the obligation to grant record producers exclusive reproduction and rental rights, as well as setting a minimum term of protection for sound recordings. The TRIPS Agreement has helped to acknowledge the value of the estimated $1 trillion contribution that entertainment-based copyright industries make to the world economy.

Yet the TRIPS Agreement has too often been implemented by WTO members on paper alone, rather than in practice. Piracy rates in many WTO countries are estimated at over 50 % and a number of WTO accession countries have high piracy levels that impede the development of a healthy music market. Global piracy rates, both online and in the physical world, have escalated over the last years, resulting in thousands of job losses, millions of euros of lost investment in industry and culture, as well as substantial loss of government tax revenue.

The recording industry estimates that there has been a global increase of 180% in pirate discs sold between 1998 and 2003, including rising piracy rates in a great number of WTO countries. This is despite the efforts of governments to implement the TRIPS Agreement. Today, no fewer than two out of every five music products sold in the world are pirate. The enforcement provisions of the TRIPS Agreement remain unenforced in many existing WTO members and in WTO accession countries.

Jay, Berman, Chairman & CEO of IFPI - the organisation representing the recording industry worldwide, said: "The TRIPS Agreement was a crucial step forward in recognising the global importance of intellectual property rights, but in the last 10 years its enforcement provisions have been poorly applied in too many countries or not applied at all. What we now need is a firm political commitment for TRIPS to be applied rigorously in the way that it was intended, so it becomes a truly effective global instrument in the fight against piracy."

In particular, the recording industry faces the following problems with the manner in which the enforcement provisions of TRIPS have been implemented:

Penalties for piracy are often too low - this lack of deterrent encourages the majority of pirates to re-start illegal trading the moment they leave the court room.
Lack of regulation of CD plants and lack of control over the global distribution of pirate discs through organised crime networks.
Lack of recognition for copyright offenses under organised crime statutes.
Insufficient application of criminal penalties for offenses that take place on a commercial scale even if there is no commercial motive.
Civil damages that do not reflect the full economic damage caused by piracy.
Long delays in starting and completing criminal and civil cases.
Inadequate border controls - customs officials often do not have ex officio authority to seize suspicious goods without a court order or the power to seize goods in transit.

On the occasion of the conference "TRIPS - ten years later", IFPI calls on the European Commission and its trading partners ensure that the enforcement provisions of the TRIPS Agreement are used effectively to substantially reduce piracy rates in the WTO member countries. The recording industry asks the European Commission to insist that WTO accession countries take concrete and measurable steps to tackle piracy before being allowed to join the WTO. The EU should make effective compliance with the TRIPS Agreement a primary condition for WTO membership during its bilateral and multilateral accession negotiations with candidate countries. In this context, it is notable that the European Commission has failed to include intellectual property rights in its bilateral agreement for Russia's accession to the WTO, even though pirate CDs produced in illegal plants in Russia are flooding the European market. It is therefore imperative that the European Commission makes intellectual property rights a priority during the forthcoming multilateral accession negotiations in Geneva.

Finally, IFPI welcomes the European Commission's initiative to issue shortly a list of its 10 priority countries where improvements are urgently needed in the enforcement of IPRs and compliance with the TRIPS Agreement. Countries that are priority territories for the recording industry's anti-piracy efforts outside the EU include: Brazil, China, Mexico, Paraguay, Pakistan, Russia, Taiwan, Thailand and Ukraine. IFPI requests the European Commission to take these countries on board when establishing the EU's priority territories. The recording industry remains committed to working together with the European Commission to improve the intellectual property enforcement in these countries.

For further information, please contact:
Francine Cunningham, IFPI European Regional Office: Tel: +32 2 511 92 08;
Fax: + 32 2 502 30 77; E-Mail: francine.cunningham@ifpi.org

Note for Editors:

1. $1 trillion estimated value of entertainment-based copyright industries from PriceWaterhouseCoopers, Global Entertainment and Media Outlook: 2002-2006.
2. The piracy rate is over 50% in the following WTO countries: Argentina, Bolivia, Brazil, Bulgaria, China, Columbia, Ecuador, Egypt, Estonia, Greece, Indonesia, Israel, Latvia, Lithuania, Malaysia, Mexico, Pakistan, Peru, Paraguay, Romania, and Venezuela. Piracy rates are estimated between 25-50% in Chile, Costa Rica, Croatia, Cyprus, Czech Republic, Hong Kong, Hungary, India, Italy, Kuwait, Philippines, Poland, Portugal, Slovakia, Spain, South Africa, Thailand, and Taiwan. Furthermore, WTO accession countries such Kuwait, Lebanon, Russia, Saudi Arabia, Ukraine and Vietnam have high piracy rates.