U.S. copyright waived in tiny nation


BRUSSELS -- The Caribbean nation of Antigua and Barbuda has won the right to waive U.S. copyrights in films, television and music under an unusual ruling by the World Trade Organization. The landmark decision by the Geneva-based trade watchdog means that the tiny islands are able to violate intellectual property protection worth up to $21 million as part of a dispute between the countries over online gambling.

The ruling ends a legal battle lasting nearly five years, which ended in the WTO finding that Washington had wrongly blocked online gambling operators on the island from the American market at the same time it allowed online wagering on horse racing.

The award is significantly lower than the damages of $3.44 billion a year Antigua and Barbuda had claimed, but higher than the $500,000 offered by the U.S. The Office of the US Trade Representative nevertheless welcomed the outcome, saying Antigua's claim, at three times the size of its economy, had been "patently excessive."

The WTO often takes decisions awarding trade compensation in cases where one nation's policies are found to break its rules. But this is only the second time the compensation lets one country violate intellectual property laws. In this case, Antigua will -- in theory -- be allowed to distribute copies of American DVDs, CDs and games and software with impunity.

"That has only been done once before and is, I believe, a very potent weapon," Antigua's lawyer Mark Mendel said. "I hope that the United States government will now see the wisdom in reaching some accommodation with Antigua over this dispute."

However, the ruling paves the way for further conflicts as the copyright holders concerned are expected to argue with the Antigua government over the actual value of the individual rights that are waived. The USTR has also warned that that the award was strictly limited to Antigua, and that even with respect to Antigua, "it would establish a harmful precedent for a WTO Member to affirmatively authorize what would otherwise be considered acts of piracy, counterfeiting, or other forms of IPR infringement."

The five-year WTO battle concerned the U.S. block on foreign online gambling operators from the American market at the same time it allowed online wagering on horse racing. Antigua, with a population of about 70,000, is a center for offshore Internet gaming operations and attracts large numbers of U.S. residents to its online casino-style games and betting services.

The European Union, India, Canada, Australia and other WTO signatories aligned themselves alongside the Antiguan case. However, separate deals were agreed with these economies, including U.S. trade concessions to the EU in mail services and warehousing as compensation.