Late last week, the Office of the US Trade Representative (USTR) released an updated version of its “Out-of-Cycle Review of Notorious Markets,” identifying some of the worst IP-offenders worldwide.
The overview is largely based on input from major copyright holders and related industry groups. While the US Government admits that it doesn’t make any judgments, the list carries a lot of weight and can hurt the image of companies that are singled out.
For some of the ‘classic’ pirate sites such as The Pirate Bay, this doesn’t really matter. On the contrary, they may see it as a badge of honor. However, for billion-dollar businesses such as Alibaba and VK, it’s a different story.
They are not at risk of being the target of a criminal prosecution, as some classic pirate sites are, but the listing will make them a hot topic on the political agenda.
Interestingly, it seems that not all countries are happy with seeing some of their top companies being singled out. When China’s commerce ministry spokesman Gao Feng was confronted with the fact that Alibaba and its Taobao.com site were listed, he made some noteworthy observations.
“In the report, the U.S. frequently discusses the relevant Chinese businesses with the words like ‘reportedly,’ ‘according to authoritative sources’ and the like,” Feng told the local press.
In its report, the US Government stressed that Alibaba should do more to combat counterfeiting and piracy on Taobao.com and other platforms, but China’s officials don’t seem convinced.
“It lacked conclusive evidence and had no relevant figures to back up its points. We have no choice but to express our doubts about the objectivity and reliability of the department that issued the report,” Feng added.
China’s commerce ministry has a point. The USTR report is compiled from comments that are provided by copyright holders. These are not thoroughly vetted, as far as we know, which doesn’t seem very objective.
Even more concerning, copyright holders often cite the USTR’s notorious markets list in legal and lobbying efforts, even though they are in essence their own findings in a rewritten form. While that may be very convenient, it can also be misleading.
Alibaba itself went a step further than the commerce ministry and noted that the company is being used as a “scapegoat” in a geopolitical game. In a detailed ten-page rebuttal, the marketplace responded to the allegations point by point.
“As a result of the rise of trade protectionism, Alibaba has been turned into a scapegoat by the USTR to win points in a highly-politicized environment and their actions should be recognized for what they are,” the company commented.
“The USTR’s actions made it clear that the Notorious Markets List, which only targets non-US marketplaces, is not about intellectual property protection, but just another instrument to achieve the US Government’s geopolitical objectives.”
Critique on the USTR’s Special 301 reports, which the Notorious Markets lists are part of, is not new. Earlier this year Canada’s Government described the process as flawed as it’s mainly driven by one-sided copyright industry claims.
“Canada does not recognize the validity of the Special 301 and considers the process and the Report to be flawed,” a Government memo read.