What if Piracy Were Legal?

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I don't know if you've been following the online gambling lawsuits currently being evaluated by the United States, the European Union, and World Trade Organization (WTO), but I have. It's a study in international online laws and its outcome could set precedent for Internet regulation for years to come.

"The New York Times" reports the WTO on December 21 imposed a $21 million sanction against the U.S. in response to a complaint made by Antigua, the home of many online casinos. After WTO ruled in 2005 that a U.S. law prohibiting online gambling was illegal, Antigua and Barbuda claimed $3.4 billion in annual damages as a result of the U.S. prohibition.

As part of the WTO ruling, the tiny island nation of Antigua was awarded compensation up to $21 million -- but not in cash. Under the WTO ruling, Antigua basically gets a free to violate up to $21 million in copyright and trademark protections from the United States.

As "The New York Times" puts it:

"...the ruling is significant in that it grants a rare form of compensation: the right of one country, in this case Antigua, to violate intellectual property laws of another -- the United States -- by allowing it to distribute copies of American music, movie and software products."

Whoa.

I wonder if U.S. media companies were consulted about this deal before it was offered. I wonder if there aren't people in Antigua right now snapping up every (remaining) video-related domain name.

This has the potential to explode right back in the face of the United States. By essentially giving people or companies in Antigua a free pass to distribute content without the copyright holder's permission, the WTO opens a Pandora's box of video and music piracy that will be very difficult to close back up.

Even if the U.S. government strictly enforces the perceived dollar value of copyright violation, it's been proven many times before that it's difficult to assign a mutually agreed-upon value to each offense.

We might be looking at another video distribution free-for-all reminiscent of the early days of Napster and Kazaa, before anyone in a suit knew what was going on -- but every college kid sure did. It's the wild West Indies, and every major copyright holder may be taken along for a ride.

A U.S. trade representative recently warned Antigua to avoid acts of piracy or other intellectual property rights violations while the talks continue. I'm doubtful that will be enforced.

The irony is, the only advertisers that will be willing to go near advertising inventory on sites or services that spring up will be online gambling and porn -- at least half of what the U.S. government wants to curb with this resolution.