Respect for IP – Growing from the Tip of Africa
22nd February 2019
Many experiences were shared during the International Conference “Respect for IP – Growing from the Tip of Africa,” which took place at the end of October 2018 in Sandton, South Africa. The conference was co-organized by South Africa’s Companies and Intellectual Property Commission (CIPC) and the World Intellectual Property Organization (WIPO), together with the International Criminal Police Organization (INTERPOL), the World Customs Organization (WCO), and the World Trade Organization (WTO).
This article highlights some of the shared experiences, starting with discussions at the heart of the event: how to ensure a better understanding by consumers of the benefits of protecting intellectual property (IP) rights, particularly when it comes to public health and safety as well as economic and cultural development. It also addresses the challenges related to implementing an effective IP system, which will enable a country’s citizens to acquire and manage IP rights, and enforce them. That being said, the focus in this article is mainly given to the discussions that took place during the panel session organized by the WCO on the value of collaborative enforcement.
Potential development tool
Opening the conference, Joan Fubbs, the South African Parliament’s Chairperson of the Portfolio Committee on Trade and Industry, summarized what was at stake: “Lately, there is a widening consensus among African leaders that economic sustainability hinges on the structural transformation of Africa’s economic base. This process involves harnessing a new generation of creative and innovative capacities in Africa by catalyzing the development of an enabling environment, where innovation and creativity can thrive; one that is underpinned by a widely respected, balanced and effective IP system.”
Several narratives shared during the event clearly showed that the strategic use of IP can be a means to breaking out of poverty and overcoming underdevelopment. Among them was the journey of Trinidad and Tobago which, in order to diversify its economy, put a focus on innovation and IP, reaching out to both students at schools and universities in order to educate potential entrepreneurs, as well as to professionals in specific creative sectors like the music and fashion industry – two sectors that had been identified through a study as generating a considerable amount of the country’s GDP.
The story of Movietowne in Trinidad and Tobago was showcased as an example of how a successful business can be built around IP. In a country where almost everyone is downloading movies illegally, an entrepreneur decided to open the first Cineplex, a shopping and entertainment complex, which is now the go-to venue in the Caribbean region. The company also launched a short film competition, which enables film students to not only get specialist support and tutoring, but win scholarships to higher education courses, and the “Trinbago Kids Got Talent” competition, which showcases young musicians.
The idea that the creative economy is a low hanging fruit from which one can generate IP and revenue was expressed by several speakers. Products such as Batik design in Indonesia and Mescal in Mexico were given as examples of cultural products with export potential. However, many agreed that the creative and cultural sector tends to be poorly served when it comes to accessing finance and trade facilitation measures.
“IP value capture” – the commercialization of IP assets – requires countries to develop a strategy and embed IP in their trade policy, whilst providing end-to-end business solutions, trade and financing support mechanisms, and marketing support. However, before making any moves in this direction, it is essential for a country to know itself – undertaking a study on the weight of IP in an economy is useful in raising awareness about the strategic importance of IP among small and medium-size enterprises (SMEs) and the public, in developing a strategy and policies, and in ensuring the availability of the necessary resources.
Participants also agreed that the value of IP is often not maximized and realized just because the creators are not aware of the potential of their IP. In South Africa, the focus has also been educating people to take advantage of IP legislation and use it to promote innovation and creativity. Incubators have been set up to provide entrepreneurs with information on all available support, including financial and technical support, and on where to start when it comes to IP-related issues. Hubs have also been created in more disadvantaged areas to provide people with access to facilities where they can create such as music and film studios, and learn how to run a business.
In Malaysia, to push the use of the IP financing programme, the government decided to train “IP valuers,” i.e. experts who know the economy and its customary needs and who are able to analyse and put a value on innovation and creation, particularly when it comes to the commercialization and financing aspects.
However, participants acknowledged that when setting up a business, investing early in IP is difficult. The cost of IP protection and management adds to a business’s setting-up costs or general running expenses, and is a huge decision. IP lawyers also highlighted the fact that their role was to demystify IP for their clients, explain the role that IP can play in their plan, and understand the needs of a client and what IP measures they could use. Pro Bono services such as the one provided through Public Interest Intellectual Property Advisors (PIIPA) were also mentioned, among others.
“The idea is not to punish, but to have at heart the welfare of all,” summarized a speaker during discussions on how to raise public awareness. An example was given of a communication campaign launched in Egypt involving famous actors and writers, addressing the public at large. Although similar initiatives have been taken in many countries, minimal public understanding of the benefits of IP and the respect that should be accorded to IP remains a concern.
IP may be seen as something removed from consumers when it actually affects them directly. Poor people on street corners who sell copies of goods may be seen as harmless, but the products they are selling are produced by criminal syndicates in the country that are linked to other crimes, highlighted a participant. People may also think that performers are rich, but this is not the case for many, pointed out another.
Building IP awareness among decision-makers and border officials is also key. This may seem obvious, but in many law enforcement agencies, IP-related issues are not really a concern, especially when revenue collection is a priority. This was the case not so long ago in Benin, explained Maurice Emiola Adéfalou, of Benin Customs, who was one of the panellists on the session organized by the WCO on the value of collaborative enforcement. But things changed in 2009, when, following a meeting in Benin’s capital Cotonou, six serving African Heads of State issued a declaration to raise the alarm about the health, economic and social impact of the scourge of counterfeit medicines.
At the beginning of 2010, a WCO expert undertook a diagnostic study of Benin Customs’ IP environment. The expert’s recommendations enabled Customs to review its legal framework. In 2014, a new Customs Code came into force, allowing Customs officers to suspend the clearance process for goods suspected of infringing IP rights not only upon prior request by right holders, but also if no request had been made beforehand, in order to give right holders the opportunity to make such a request – called an “ex officio right.”
Benin also criminalized IP infringements, with prison sentences going from two to five years, and more recently, incarcerating some individuals for importing fake medicines. To build its targeting capacities, Benin Customs has been working closely with the WCO over the past three years, actively participating in enforcement operations, training officers, and building a relationship with the country’s health authorities and the prosecutor’s office, aimed at better working together.
To explain how right holders work with enforcement authorities, Jack Chang, the Chairman of the Quality Brands Protection Committee of China (QBPC), a non-profit organization bringing together 192 foreign invested enterprises, took the floor. He said that the Committee had now adopted a cooperative approach with enforcement authorities, after first being very confrontational, claiming that it was the responsibility of the Chinese government to enforce their rights.
The mindset of the QBPC changed in 2001, when a police official asked for assistance, explaining that the counterfeiting trade was threatening china’s economic security, but that many enforcement officers were not aware of the problem and did not have the capacity to fight the phenomenon. A first workshop between police representatives and QBPC members was organized to raise awareness. Discussions have since moved progressively to capacity building, the sharing of intelligence, the organizing of special operations to fight illicit cross-border trade, and, lately, on how to build and strengthen international cooperation.
Meena Sayal, the Director of Global Brand Protection at Unilever, agreed that one company alone cannot make a difference. To protect a brand, one had to build partnerships: partnerships across the brand protection teams internally, so that they reach out to each other to learn and follow the counterfeiters’ modus operandi; and partnerships externally. This meant reaching out to law enforcement agencies in a way that responds to their needs, to policy makers so that they understand the kind of environment that needs to be in place for foreign investors that will provide maximum returns for the economy that they invest in, and to trade associations in order to avoid duplication of efforts.
Another example of cooperation with right holders was provided by Willbroad Poniso, of Namibia Customs, who explained that in his country, although Customs can only detain goods upon prior request by the right holders or their representatives, which are mainly based in South Africa, cooperation had improved over the years with big seizures being made thanks to intelligence provided by right holders.
Ellis Lai, an Assistant Commissioner at Hong Kong Customs, gave an overview of what a strong and well-resourced administration could do. The only agency responsible for enforcing criminal sanctions against trademark and copyright infringements on the Hong Kong territory is the Customs service that has large detention and investigation powers and adequate manpower resources: 6,700 officers of which 4,400 work at checkpoints to prevent contraband from entering or leaving Hong Kong, China, and 200 working on IPR criminal investigations. In 2013, an Electronic Crime Investigation Centre (ECIC) was created to research new challenges that have come with advancing Internet technologies, and to strengthen capabilities in order to cope with the latest crime trends.
It is worth noting here that Hong Kong, China is a free port and a huge transhipment hub, with no tariffs being levied on the import and export of goods. It is not a source economy for counterfeit goods as it has a very limited manufacturing capacity, but many types of goods do enter via different modes of transport for export to other countries around the world. Therefore, the role of Hong Kong Customs officers is not only to protect their citizens, but also the interests of other countries.
Hong Kong, China has signed mutual legal assistance agreements with 32 countries and specific Customs cooperation agreements with 23 Customs administrations, which enable information to be shared and joint investigations to be conducted with overseas countries and agencies seamlessly. For example, a strategic partnership is in place with authorities in the United States and the European Union to share information on seized goods. Such exchanges mutually reinforce profiling capabilities, and enable entire distribution networks to be disrupted.
Several participants representing law enforcement agencies echoed the views of the speakers, recognizing that they use international cooperation in their daily work and that it had become normal to inform partners in the source country, or the country of destination if it is a transit country.
Going back to the need to build strong relationships between right holders and enforcement agencies and improve information-sharing, both QBPC and Unilever representatives provided examples of good practices. QBPC came up with the idea to ask its members to nominate a government agency that had done a great job for them and to vote for the best case. The winning agency was then invited to the Committee’s annual meeting to receive the appreciation of the QBPC’s whole membership. Such a gesture enables the performance of civil servants to be recognized and cases to be collected, which are later analysed. Lessons learned can then be replicated by QBPC members if appropriate. The Committee also convinced the Chinese Government to have Customs and police treat cases, where an African country was involved, as a priority, in order not to damage the economic and political relationships that China has built with many countries in Africa.
In Shanghai, QBPC representatives also work closely with Customs when a case is being transferred to the police for investigation, enabling close cooperation to be established. In one specific case, the QBPC was able to delay the notification to the trading company, which usually takes place when Customs transfers a case to the police for investigation. The objective was not to raise the company’s suspicion to avoid evidence being destroyed and to identify the trader’s location and its supply chain. This single exporting company had more than 50 suppliers across the country. Once the evidence had been secured and the trader was back in Shanghai, China Customs transferred the case to the police who immediately arrested the suspects. According to Chang, it would be beneficial if this practice could be adopted by other provinces in China as well as in countries where Customs do not have the mandate to conduct investigations.
Daoming Zhang, the Assistant Director of Illicit Markets at INTERPOL, took the floor to explain that very often, the forms of fraud that were encountered involved criminal law and Customs legislation, and that INTERPOL promoted the formation of joint Customs-police investigation teams or, at the very least, close cooperation between the two entities, including the organization of joint training events. He also pointed out that the WCO and INTERPOL had recently issued a Customs-Police Cooperation Handbook,” which provides very practical guidelines on how to set up closer cooperation between these two authorities.
Unilever’s Meena Sayal also shared a story with the audience, illustrating how the company works with government authorities. In one case, following the transmission of information to the Chinese authorities about a network that was exporting to Colombia, two shipments were intercepted. As a third one was on the way to Colombia, instead of asking Colombia for mutual administrative assistance, China Customs asked Unilever to be the go-between and put Colombian Customs on the alert. The shipment was intercepted in Colombia and Unilever then worked with its local team to provide information to the Colombian and Chinese authorities, to assist the prosecution process.
A prosecutor participating in the event commented that it was important for prosecutors to understand how enforcement officers work, explaining that “If I know how they think, I understand better the case that is put in front of me”.
Jack Chang remarked that is was the police and Customs who were supporting brand owners in China, but prosecutors were still lagging behind. He explained that prosecutors in China think that if a company’s IP gets stolen, the company can obtain compensation and that, as such, there was no need to put offenders behind bars. Prosecutors do not even allow IP owners to participate in a public prosecution, the reason being that according to the law, they must protect the public interest and not private rights. After much work, prosecutors in Shanghai are now required to notify IP owners and let them participate in the process, more especially as they are victims in terms of the criminal procedure laws. This changed the game. The challenge now is to have this practice adopted in other Chinese provinces.
The problem posed by the sharing of digital goods was also on the programme. The representative from Hong Kong Customs explained that Hong Kong’s first Anti-Internet Piracy Team dates back to 2000 and was tasked with targeting peer-to-peer file sharing programs. In 2007, the first automatic detection system to monitor peer-to-peer infringing activities on the Internet was implemented, and later, new systems to extend the scope of monitoring to auction sites, cyber-lockers and social media platforms were deployed, including lately, “big data” analytics.
Participants also discussed the specific challenge emanating from the copyright “safe harbour” rules, which were aimed at ensuring the free flow of information by Internet service providers without liability for infringing content. The rules are seen as a way for “user upload content” services to use copyrighted works without the creators being rewarded for their work.
In Trinidad and Tobago, a study was undertaken to try and understand what was fuelling piracy. Island representatives reached out to large commercial entities such as Netflix, T&T Entertainment Network and Spotify, requesting them to provide their content at proper prices. But, it may still be difficult to be competitive when it comes to price.
For the music industry especially, the commercial world today is borderless, and taking down illicit platforms is necessary, but not effective as they easily move from continent to continent. Where countries use “website blocking” – one of the few means available to respond to illegal material hosted abroad – to fight digital piracy, the record shows that they have been effective in driving users from illegal to legal sources of copyrighted material online. But, in many countries, when domestic Internet service providers (ISPs) are asked to block access to websites engaged in illegal activities such as those facilitating cybercrime, child pornography, or terrorism, these countries are reluctant to ask their ISPs to block websites dedicated to distributing illegal copies of movies, music, and other copyright-protected works.
Many topics addressed during the conference are not reported in this article. Readers who may be interested in this topic are encouraged to participate in the next major IP event and to read the special edition of WIPO Magazine which is dedicated to the theme of the Conference (see below to access WIPO Magazine).