Author Archives: Frank Pietrucha

About Frank Pietrucha

Frank Pietrucha is president of the Washington-based marketing communications company Definitive Communications and a member of the Creative and Innovative Economy Center at George Washington University. Through his professional and pro bono work, he has campaigned for solid intellectual property rights (IPR) and their enforcement as essential to the advancement of developing economies and the strength of established ones.

Want Trade? Stop Piracy.

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Japanese patent examiner learns during exchange program with USA.

Japanese patent examiner learns during exchange program with USA.

Rampant piracy has its costs.

 

And members of the Association of South-East Asian Nations (ASEAN) are learning how steep the price can be. 

The news site Monstersandcritics.com reports that the European Union “has put on pause” negotiations to sign a free trade agreement with ASEAN.  Weak protection of intellectual property rights in countries including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam is cited as a major issue for the Europeans.  Instead of a free trade agreement with ASEAN, the European Commission decided to pursue bilateral free trade agreements with ASEAN member states instead.

This move should send a clear message to the governments of emerging economies:  Do not ignore the problems of piracy and then expect full trading-partner benefits. 

It’s a message that, if heeded, will help those not welcomed into EU trading agreements.  That’s because bootlegged DVDs, CDs, luxury brands or medications are bad for everyone’s economy (except for that of the small group of thieves who run the piracy syndicates).  Intellectual property infringements can help derail an established economy, but they can also prevent an economy from ever getting started. 

The European Commission did announce, at the recent ASEAN summit, that it will provide 4.5 million Euros (6.7 million dollars) to ASEAN to help build judicial capacity, train law enforcement officials, and build awareness in the region.  Programs like these are not especially new.  The United States Patent and Trademark Office, for example, started a Visiting Scholar Program back in 1985 and now operates a successful Global Intellectual Property Academy along with other global initiatives.  Australia and Japan are among other nations who have such programs. 

The problem, unfortunately, is that despite what seems like a lot of money paying for intellectual property awareness and capacity-building programs, we are scratching the surface.  There are millions, or rather billions, of people who have no idea what intellectual property is or why it is important to economic development.  Consequently, we need millions, if not billions, of dollars – or Euros or yen –  more to make a dent in the war on piracy.

Fashion Victims

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Owner of a cloth store in Abidjan, Ivory Coast, shows her wares.I’ve always appreciated the proud look of West African women who wear clothes created from the beautiful cloth produced in their native countries. Their dresses are exotic – different from what American or European women wear. Seeing West African women in this vibrant attire makes me happy to be a global citizen. There is still diversity in fashion despite our globalized economy!

The design and production of cloth is an art I would love to see continue, especially in countries such as Nigeria, Ghana and Ivory Coast.

But the tradition is dying. I recently caught up with my colleague Tony Carroll, who has been studying the harm from counterfeiting on West African textiles. His words were not promising.

He says the cloth production business used to be the number one employer after the government in this region. But what was a torrent of creativity and good jobs has become a trickle. The cloth industry is experiencing “de-industrialization.” According to Tony, in 1985 there were a quarter million people in West Africa who worked in textiles. Now, he counts only about 40,000.

Did people in Africa suddenly stop wearing clothes?

No. The problem, says Tony, is that African textile manufacturers are being driven out of business by factories in China that are knocking off traditional West African designs and then selling them to Africans at a price cheaper than what the cloth would cost if produced locally. Tony says the Chinese manufacturers often mislead African consumers by masking their goods with a “Made in Nigeria” label. It seems West African shoppers can go to market and believe they are buying locally when they aren’t.

Tony urges the governments of the West African nations to take a stronger stance: “African law enforcement authorities should seize and destroy textiles which fake local manufacturers’ trademarks and falsify country of origin.”

China has been cultivating closer trade ties with African nations in recent years as its growing economy thirsts for the oil and minerals so abundant in Africa. Given that, I can’t help but think it would be in China’s interest to better enforce international trade rules on its manufacturers.

A Cloudy Issue

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April 3 I discussed cloud computing and how it was being touted as a possible “silver bullet” for the video game industry.

Before writing, I had spoken with several game developers at a conference in San Francisco about how cloud platforms would enable them to rent their games online instead of selling them at stores.

Cloud computing uses the Internet; users access data and software stored in remote servers. The idea is to no longer keep software on our computers, but instead to access it from “the cloud.” The game developers with whom I spoke were intrigued. They hope that, if gamers were to rent games off the cloud instead of buying, there would be fewer opportunities for scofflaws to copy software.

Several months later, I’m still excited about the evolution of cloud computing. Cloud will change the way we process and share data and will open opportunities for all of us.

Except that now that I am a bit more informed about cloud, I am starting to see some downsides, especially when it comes to intellectual property theft. An article I recently read confirms my worries. The San Jose Mercury News published a piece written by Brandon Bailey and aptly titled “Cloud Computing May Create New Venues for High-Tech Criminals.” Bailey was informed by a top U.S. federal technology prosecutor that in fact we do need to be wary: “As businesses shift more of their operations online, they may create more opportunities for hackers or other crooks to steal IP,” Bailey writes.

Part of the reason why is that globalization has provided opportunities to crooks. Digital criminals can operate anywhere in the world, and they tend to locate in places where they can avoid the prying eyes of legitimate businesses and governments. When they get a hold of intellectual property, they can turn their theft into huge profits — profits that seriously hurt the bottom lines of the honest people who create software and content. While organized crime syndicates already operate boldly, hawking their bootleg wares on the streets of cities around the world, cloud computing can give them a much larger arena in which to conduct their illicit activities. They could potentially sell their stolen products to tens of thousands of people faster via the Internet then they could through street vendors.

Will cloud computing further escalate the problems of intellectual property protection?

Despite that troubling question, I look forward to seeing the good that cloud might bring. If companies create a strong game plan – excuse the pun – against criminal hackers to safeguard their interests, it may be an intellectual property win in the long run. It will at least immediately put a stop to the less-nefarious type of copying – that done by a student for a friend, for instance.

To stop the big-time crooks, we’ll need serious thought from company engineers to top executives…and from lawyers, lots of lawyers. To protect the cloud, governments will also need to be on top of this issue. Because cloud is coming … quickly.

Swedish Voters Strike Back Against Copyright

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In Stockholm, a man waves a pirate flag in support of file-sharing while Pirate Party founder Rickard Falkvinge talks in background.

In Stockholm, a man waves a pirate flag in support of file-sharing while Pirate Party founder Rickard Falkvinge talks in the background.

In my last entry, I wrote about how the president of France, Sarkozy, wants stricter laws in his country to crack down on Internet piracy. Today, I find myself confounded by news from another European nation, where a group is taking a polar opposite view.

Sweden has a new political party, the Pirate Party, founded in 2006, that seeks to “fundamentally reform copyright law, get rid of the patent system, and ensure that citizens’ rights to privacy are respected.”

This “pro-file-sharing” Pirate Party won 7.1 percent of the Swedish vote recently and by doing so claimed one of the country’s 18 seats in the European Parliament. Party members say they are champions against the copyright system; they, according to their Web site, see themselves as “the next generation of the civil liberties movement.”

Is this news significant beyond the devious irony of the party’s name? Seven percent of the voting Swedish public is not a share one can readily dismiss. Could the copyright system be so disagreeable to so many people that it will be overhauled or replaced in our lifetime?

In the United States, National Public Radio reports that many of the Swedish voters supporting the Pirate Party are younger people. Will public opinion toward protecting copyright issues erode as the next generation comes of age?

I often talk to industry and government experts about what they call “the copyright crisis.” I spend more time than most people thinking about intellectual property issues, but even to me, news about an emerging political party that focuses exclusively on file-sharing is odd. During the past decade, I have worked with organizations that believe economic growth occurs when a nation’s citizens are encouraged to create and innovate. The premise being this: People need incentives to develop new products; historically, individuals have created and innovated when there was personal gain associated with their action. No drug company, for example, will invest a billion dollars to research and develop a new drug if there is no financial incentive for it to do so.

Economic growth cannot occur if everything suddenly becomes open source.

I find the Swedish development newsworthy, if troubling. Artists, software developers, pharmaceutical researchers, etc., need protection from pirates.

I am surprised that there are so many people in Sweden who would put file-sharing so high on their list of priorities and cast precious votes to back a measure focused on the single issue of Internet content. Shouldn’t more Swedes be backing a party that supports something like, say, surviving the current economic global crisis, containing nuclear proliferation in North Korea, feeding people in Africa or securing peace in the Middle East? Is downloading free songs off the Internet that important to the people of Sweden?

France Fighting Digital Crime

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French Culture Minister Christine Albanel testifies in the French National Assembly in May about a bill outlawing Internet piracy.

French Culture Minister Christine Albanel testifies in the French National Assembly in May about a bill outlawing Internet piracy.

If you are illegally sharing copyrighted material in France, be forewarned. President Nicolas Sarkozy wants you punished. On May 13, 2009, the French National Assembly passed a bill which is essentially a “three strikes and you’re out” act to suspend Internet access to anyone caught downloading copyrighted files three or more times. Combating digital crime is a priority for Sarkozy, and his government has taken note. What’s unique about this law? The enforcers, a new “high-level authority,” would require neither a court order nor a trial to take away violators’ Internet access for an entire year.

This bill is creating a stir in cafes from Calais to Marseille. It is also raising eyebrows around the globe as one of the most aggressive digital anti-piracy regulations ever conceived. And it looks like the controversy is just beginning. Producers of content, ranging from film to music to software, are hailing the bill as a monumental achievement. The European Parliament, as well as many civil rights proponents, is not so enamored.

A week before the French National Assembly passed the bill, known as HADOPI (Haute Autorité pour la Diffusion des Oeuvres et la Protection des Droits sur Internet), the European Parliament passed a measure banning EU member states from adopting such an amendment. They claim Internet access is a fundamental right, akin to freedom of expression and freedom of access to information.

Neil Turkewitz, executive vice president from the Recording Industry Association of America (RIAA), sent me an e-mail with some of his thoughts. He writes that the sanction is not harsh because it is a graduated response. “The alleged infringer is given multiple opportunities to confront his or her accuser, and to either protest innocence or modify his or her practices. And not just once! No one has proposed that termination of a user account be the response to an allegation of infringement — just to repeated indifference to such allegations.”

Opponents say the “big stick” approach to illegal downloading has never been proven to work. Many insist the graduated response effort will do nothing to foster communication or bring royalties to artists or innovators.

Fakes Are Never in Fashion

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Actress Sharon Stone poses beside a poster of the first Russian edition of Harper’s Bazaar magazine.

Actress Sharon Stone poses beside a poster of the first Russian edition of Harper’s Bazaar magazine.

The fashion magazine Harper’s Bazaar wants you to know that “fakes are never in fashion.” Valerie Salembier, the senior vice president and publisher of the publication, has emerged as a leading advocate against counterfeiting. And we hope her campaign continues … and keeps fashionistas and wannabe fashionistas aware that counterfeiting has its costs to us all.

Valerie took center stage at the U.S. Chamber of Commerce’s IP (intellectual property) event in Washington last month (http://www.uschamber.com/content/0905_8b.htm). Emerging from an audience of blue suits in her couture yellow jacket, she proclaimed that buying fakes is hardly harmless. She hit an experienced, been-there-done-that IP crowd from Europe and the United States with powerful news that luxury product companies are starting to do something to combat counterfeiting. Despite carnage to their industry, luxury product manufacturers have done little to fight the proliferation of fakes on city streets. Valerie brilliantly linked the counterfeiting of luxury products to problems in child labor, terrorism and human trafficking. She noted that it’s not just about ripping off high-end French and Italian manufacturers. It’s about honest consumers supporting a wretched, criminal business syndicate that derails economies and ruins lives. Counterfeits come from the underbelly of society, not resourceful creators or entrepreneurs. You can learn more about Harper’s efforts to counter counterfeiting at this Web site: www.fakesareneverinfashion.com.

Vive la Valerie!

It's a Bad Idea to Cut Innovation in Tough Times

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The Wall Street Journal has reported that major U.S. companies are still spending on innovation. In a survey of 28 companies that historically invest large sums in research and development (R&D), the Journal reported, these companies “learned from past downturns that they must invest through tough times if they hope to compete when the economy improves.” Many of the 28 companies are cutting jobs and wages, but spending for R&D is down only 0.7 percent, according to the survey released in April.

Does this mean industry is finally getting it that cutting back on innovation is exactly what not to do in economically difficult times? This is common sense, and I certainly hope it’s true. Dearth of innovation is a key ingredient for a prolonged recession. When belt-tightening measures are necessary, R&D and marketing departments are frequently the first to feel the ax.

But hold on. Data from the United States Patent and Trademark Office (USPTO) are not so rosy. USPTO claims patent filings are down 2 percent since January. USPTO predicted a 4 percent growth in patents this year, but with filings down 2 percent, they are 6 percent off from where they were expected to be. USPTO serves a much larger community of innovators than the select 28 companies the Wall Street Journal surveyed. Perhaps the big corporations have learned their lesson about keeping innovation strong, but small and mid-sized companies are not following suit.

I hope the Wall Street Journal survey is a good omen for economic recovery.

Counterfeiting and Piracy Hurt Real People

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Effective public awareness campaigns about intellectual property rights have been few and far between. Policymakers know they must educate the general public about issues such as counterfeiting and illegal downloading. But how do you get this across to the masses? How do you tell them that buying a knock-off Gucci handbag to improve your perceived status or downloading 12 copies of Beyoncé’s “Single Ladies” for your dance club contributes to economic stagnation and maybe even organized crime?

“Communicating the Value of Intellectual Property” was the topic of a round-table discussion at the IPR (Intellectual Property Rights) Transatlantic Collaboration conference April 27 and April 28, 2009, at the U.S. Chamber of Commerce in Washington. I was glad to see the U.S. Chamber and its partners, including Eurochambres, dedicating time to this important topic.

So why is it that many public awareness campaigns have failed miserably? The reason, said the conference participants, is that the campaigns attempted to shame people who violated IPR rules. Public service announcements made people feel bad about themselves. This had a negative effect on consumers. They felt they were being unnecessarily berated by Big Industry. The big stick approach of “you are breaking the law and could go to jail if you pirate CDs or buy fakes” was just not credible and left the intended audience with sour feelings.

Part of the solution, said John Tarpey, the director of communications for the World Intellectual Property Organization, is to avoid making people feel bad, but to explain to them how counterfeiting and piracy can hurt real people. John believes the best campaigns show the damages to artists, innovators and technical staffers when their products are illegally reproduced. Once the public comprehends the actual cost to honest folks, it starts to think that buying this fake isn’t worth it if good people are losing their jobs.

Let’s explain to consumers how they fit into the big picture of piracy and counterfeiting and how a single illegal action does have its costs, John said. From my vantage point at the Creative and Innovative Economy Center, I totally agree.

Green is the Theme

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An advertisement for World Intellectual Property Day

An advertisement for World Intellectual Property Day

The World Intellectual Property Organization (WIPO) says “green” is the theme for this year’s World Intellectual Property (IP) Day. World IP Day is celebrated each year on April 26 with events hosted worldwide — all with the purpose of spreading awareness of the importance of the patent, trademark and copyright systems to the global economy. Green, of course, refers to the myriad social campaigns for environmental protection and the exponential growth of environmentally friendly products, which one hopes will help save our planet from ecological calamity. Green is all about raising awareness of what we can do to save our troubled planet from man-made threats such as global warming. By the way, in the American vernacular, “green” also means money, a reference to the color of one side of the U.S. currency bills.

WIPO Magazine dedicated its April 2009 issue to the challenges of finding technological solutions to climate change. They’ve posted articles that provide examples of how IP can “contribute to the development of low carbon technologies and their transfer to developing countries.” Articles explore topics such as green design, solar technology, clean energy and plant breeding. Read them at: http://wipo.int/wipo_magazine/en/2009/02/. The European Patent Office is also looking into eco-oriented technologies. It offers information on emerging technologies such as wind power, car emissions and bioplastics at http://www.epo.org/topics/innovation-and-economy/emerging-technologies.html.

But what’s the link between things green and intellectual property? In order to develop the Earth-saving technologies, the innovators who are to deliver these marvels need to benefit from their research and development (R&D). History has shown us that innovators do the best job of innovating when they have the financial incentive to do so. Economies that welcome innovators and entrepreneurs with the academic, legal and financial framework to do their jobs are more likely to find the engine that does not emit carbon dioxide or the disposable products that will not lay in a landfill for the next millennium. In short, we have to encourage and reward the people who are capable of saving our planet. The global IP system’s intention is to encourage eco-friendly R&D that can be used by us in the North and the West and ultimately be transferred to developing economies.

A friend who heads a “green” telecommunications company says he does so because he believes in eco-friendly products and services from a standpoint of social responsibility. But he also adds, unabashedly, “green is the new green.” He is in business to make money … and better yet if he can make money by spreading a technology that makes the planet a better place to live. I think this convergence of profits and environmental products also applies to the commercial development of eco-friendly products and the need for their patent protection. This IP Day, let’s incentivize the innovators who are building an industry on saving planet Earth.

A Day to Celebrate Intellectual Propery Rights

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April 26th is the date when intellectual property (IP) practitioners around the world gather to recognize the global intellectual property system and the role it plays in stimulating creativity and innovation. The World Intellectual Property Organization (WIPO) decided back in 2000 to designate a date to help global citizens learn more about the impact patents, trademarks and copyrights have on their lives and their nation’s economy.

Any organization can set up its own IP Day. Typically it is government agencies, like patent and trademark offices, or universities, which host their country’s activities. WIPO encourages organizations in nations as varied as Saudi Arabia, Vietnam and Estonia to host events. The organization provides promotional tools and suggests activities, but leaves the actual management of the events up to each host. WIPO also provides a list of activities it recognizes. Click here to find out what events may be taking place in your hometown: http://www.wipo.int/ip-outreach/en/ipday/2009/activities.html. But this list is not complete. You may want to Google “World IP Day 2009” along with your city or country to find out what’s going on locally.

I plan to attend an event here in Washington hosted by the U.S. Chamber of Commerce and the Association of European Chambers of Commerce on April 27 & 28. http://www.ipr-policy.eu/web/conference. This year they are focusing on two themes: “US and EU approaches to protecting IP” and “Communicating the Value of IP.” John Tarpey of WIPO and Richard Maulsby of the U.S. Patent and Trademark Office will be participating. Too bad I can’t be in Jamaica on April 24th for its Creativity Expo featuring prominent local musicians.

Officially, green is the theme of this year’s IP Day. WIPO is promoting the role IP plays in advancing clean technologies, green design, and green branding. But a review of global IP Day activities reveals that most countries have developed their own agendas off the official theme. Regardless, WIPO and other organizations have put out quality articles on green IP, the topic of my next entry.