Who profits from weak IPR enforcement?

Pirated music CDs and DVDs are widespread in Lebanon. (The Daily Star/Mahmoud Kheir)

BEIRUT: For the past decade, U.S. officials have begged, berated and blacklisted Lebanon to convince the government to crack down on piracy and boost enforcement of intellectual property rights.

But no matter how much “capacity-building” assistance it gives to state agencies or how many technical workshops it hosts, pirated DVDs, video games, and software are a seemingly immutable part of Lebanon’s retail landscape.

Lately, the United States seems fed up and has shifted the focus of its campaign to inculcate the country with respect for IPR from the government to Lebanon’s cultural producers.

The latest pitch occurred this week at a U.S. State Department-funded copyright conference, where the deputy chief of mission at the U.S. Embassy in Beirut, Richard Mills, and the Washington-based International Intellectual Property Institute, spoke to about 20 local artists and lawyers – many of whom were also panelists in the conference – about the need to commercially license their work.

“Lebanon is fortunate to have an educated, innovative and creative workforce and an entertainment industry that is a major contributor to Arab culture,” Mills said in his speech.

“Renowned performers and artists such as Nadine Labaki, Ramy Ayach, Nancy Ajram and Paul Guiragossian, along with Lebanon’s copyright industries, contributed an estimated $1.4 billion to Lebanon’s economy in 2007. That’s 4.75 percent of GDP and almost 5 percent of jobs in Lebanon – a major engine of growth and the reason Lebanon is an entertainment and commercial hub in the Middle East. But the contribution to Lebanon’s economy could be much, much more.”

But could it really? Can you even sue for IP infringement in Lebanon and are these suits common? The answer to both of these questions, surprisingly, is yes, according to attorney Nisrine W. Haddad, a partner at Sader and Associates and the head of the firm’s IP department, which represents dozens of multinationals in a variety of fields.

It takes an average of two years to get a ruling, but the country’s antiquated 1924 law on trademarks and industrial design, an updated 1999 Law on the Protection of Literary and Artistic Property, and a law on patents passed in 2000, do allow some level of legal enforcement.

As for the second question, while trademark, and to a lesser extent, copyright infringement lawsuits do occur in Lebanon, unsurprisingly, they are largely filed by Western multinational corporations.

In the past few years, Nisrine said she has won awards of “several thousand dollars” in multiple copyright infringement cases for a regional publishing house and “significant indemnities” of between $13,000 and $20,000 in trademark infringement suits for numerous multinational clients.

She currently has over 100 copyright and trademark cases pending in Lebanese courts, she said, but knowledge of intellectual property rights among Lebanese artists, musicians, composers and writers is still weak, and the cost of filing legal claims in search of compensation is a further deterrent, she said.

Compared to the West, IP litigation costs in Lebanon are actually quite low, but the amount of indemnities awarded are proportionately paltry in comparison.

Attorney Mohammed Aldarwish, who has also represented U.S. multinational companies in trademark infringement cases, said violators are usually required to pay a small fine, or compensation for the loss of profits, which rarely exceed $10,000. Under the artistic property law, fines are capped at just over $32,000 (LL50 million).

Rights’ holders pay a lawyer 25 percent of the amount of compensation they are seeking, but only one quarter of the fee is required upfront, meaning if an artist is seeking an indemnity of $10,000, it will only cost him or her $300 to take the case to court.

Aldarwish would not go into details about the types of clients he’s represented, but he pointed to a trademark infringement suit that Pampers filed a few years ago against the Lebanese diaper manufacturer Bambi – because the name written in Arabic script closely resembles the word Pampers – as an example of a typical successful IP claim.

After his opening speech, the executive director and general counsel of the International Intellectual Property Institute, Andrew Jaynes, told The Daily Star that patents are filed rarely in Lebanon, and in these cases, almost always by foreigners.

An estimated 5 percent of the annual patent applications are filed by Lebanese citizens, he estimated. Patent infringement claims are almost never tried in court, he said.

“Part of it is because litigation, suing somebody else, is not as much a part of the culture here as it is in the U.S., where we are quite litigious. So there is definitely a question, if you file for a patent here and you want to enforce your right, how are you going to do that?

“I think that a place where Lebanon can really excel is in the copyright industry. This is where you get the economic growth in these fields, because in the end of the day developing countries like Lebanon aren’t using the patent system.”

There is one general collective copyright management body, the Society of Authors, Composers and Music Publishers in Lebanon, which collects royalties on behalf of 900 Lebanese artists, mainly in the music sector, according to Director Samir Tabet, but even he admitted that awareness of IPR and licensing is low.

Aldarwish said that he represented a hotel that was ordered to pay licensing royalties to SACEM for playing music created by artists that the organization represents, but it is not clear what portion of the licensing fees collected actually make it to the artists themselves.

Ceasar K, a D.J. who spoke at the conference about the need for Lebanese musicians to license their music, said SACEM’s enforcement and collection procedures were “random and not transparent.”

“You have no idea when they collect money from a bar for playing a song by Madonna or Fairouz if the money actually goes to Madonna and Fairouz.”

Ultimately, the main beneficiaries of IP enforcement in Lebanon today are mainly massive global conglomerates, not small, struggling creatives – a fact that the event organizers inadvertently admitted when discussing the level of judicial IPR enforcement.

This explains why the new patent and trademark laws that Lebanon passed in 2000 and 2005 respectively, were lobbied largely by major international corporations, Aldarwish said.

An alternative to registering a trademark or copyright with the Intellectual Property Rights department of the Economy and Trade Ministry that Aldarwish recommends to artists is to license their work online under one of six Creative Commons licenses.

Though most people opt for noncommercial CC licenses, Aldarwish said there is a commercial option. “We encourage licensing work on CC because it helps young artists spread their work and spread music and knowledge to everyone.”

There are moral reasons for using the CC license as well since it ensures that the knowledge needed to develop Lebanon’s human capital does not become the monopoly of only those affluent enough to afford to pay exorbitant fees for intangible cultural products that have become increasingly difficult to commoditize in the digital era.

“Microsoft Windows is expensive,” said Aldarwish. “It can only be used by people with a lot of money. When you license something under CC, you are allowing people of all income levels to benefit from it. [The U.S. government] is not going to promote this license because it isn’t profitable for its companies.”

Though the CC license was not endorsed at the conference Monday, in a follow-up email Jaynes wrote: “Yes, we tout [and use CC] licenses. They can be an easy way for creators to customize how they want to protect and promote their work.”

A version of this article appeared in the print edition of The Daily Star on April 25, 2013, on page 5.




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