The End of U. S. Copyrights? Or the End of the WTO?

The headline is pretty dry: the tiny Caribbean nation of Antigua has won a settlement in its World Trade Organization case against the United States over Internet gambling. The nature of the settlement strikes me as a pretty Big Deal:

The islands of Antigua and Barbuda are threatening to strip intellectual property protections from American goods as part of a long-running trade dispute over the U.S. embargo on the tiny Caribbean nation’s online gambling industry.

U.S. officials say the proposed copyright haven – whose broad outlines were approved Monday at the World Trade Organization in Geneva – amounts to “government-authorized piracy.” But Antiguans, who’ve won a series of legal victories against the U.S. at the international trade body, reject any suggestion that they’re pirates.

“We have followed the rules and procedures of the WTO to the letter,” Antigua’s high commissioner to London, Carl Roberts, said in a statement Monday. “Our little country is doing precisely what it has earned the right to do under international agreements.”

The U.S. and Antigua have been tussling for years over the ability of Americans to use online casinos based in the Caribbean nation. U.S. laws have long been interpreted to mean that Internet gambling is illegal if it crosses state lines.

The World Trade Organization, however, has come down on Antigua’s side. In 2007, it allowed the islands to draw $21 million a year’s worth of “nullification or impairments” from the United States as a penalty for the continuing refusal of the U.S. to allow American customers to place their online bets in Antigua.

Does this case have the potential to nullify U. S. copyright law? Or could it bring down the WTO itself? I haven’t been able to locate the precise wording of the settlement but here’s the sort of scenario I’m envisioning.

Imagine that some gazillionaire or, possibly, a group of individuals with the appropriate mindset approach the Antiguan government. In exchange for $21 million a year paid to the Antiguan government they set up shop there. They then purchase legal copies of every American copyrighted item they can put their hands on, strip the notifications, and put them online, available for free download. No law will have been broken by anyone. Technically, there’s no piracy. As the lawyer for the Antiguan government put it: “It’s not piracy if you have the right to do it.”

The U. S. government might be able to enact laws prohibiting Americans from accessing the sites (imposing a competitive disadvantage on Americans that would be unenforceable outside the U. S.). I doubt that such prohibitions could be made effective. Such prohititions would also make American complaints about the “Great Firewall of China” ring pretty hollow.

An important question: does the settlement pertain only to copyrighted materials but to patented ones as well? If the latter, the damage that would be done to the U. S. pharmaceutical industry could be substantial. Lots of pharmaceutical companies set up shop here because of robust U. S. intellectual property law. If the law becomes highly porous, that incentive could vanish.

Worse, every country that won a trade settlement against the U. S. would want the same deal.

I’ve made no secret of my dislike for United States’s present copyright laws. I wouldn’t want them to be subverted in this way. Even if the U. S. knuckles under to Antigua’s demands on Internet gambling that wouldn’t end the matter. As I wrote above, every country would want the same kind of deal. As I see it the solution is to make U. S. intellectual property law a less attractive hostage.