Democracy of Sound (39 page)

The consensus was not absolute, though. A few participants at the Council of Europe’s conference expressed the oldfangled notion that consumers might benefit from lower prices and more competition in the music industry. Gillian Davies, a British intellectual property lawyer who attended the proceedings, remarked ruefully on these ill-informed views. “The opinion was voiced by one or two speakers that piracy and private copying of phonograms were activities to be encouraged, on the ground that it was in the public interest that consumers should have access to recorded music as cheaply as possible,” she said. “Indeed, a surprising ignorance of the principles of copyright law was demonstrated by the speakers.”
⁴⁸
Davies took for granted that strong copyright served the public interest, much as the Whitford Committee had chided those who failed to recognize the importance of property rights in its report to the UK government: “It is always hard for those brought up to believe in competition as the most beneficent market force to realize that the exclusive rights which are granted by national copyright, patent, trade mark and design laws are granted because it is in the public interest to grant them.”
⁴⁹

The more property rights were disrespected, the Committee assumed, the worse off consumers would be. Property rights trumped free competition as the prime consideration for safeguarding the public interest. Anyone who thought that the state should not restrict the way people used creative works was just ignorant; so was the person who thought that lower prices would benefit consumers. The Whitford Committee presented strong copyright protection as good and wholesome, suggesting that stronger copyright is always better copyright—more of a good thing.

From Bootlegs to Bullets

Conferences, conventions, and committees did not stop people all over the world from pirating music. In the 1980s, the IFPI and other representatives of the record industry took a more aggressive approach to fighting copyright infringement, acting as intellectual property police where local governments refused to do so. Investigators traced the movements of bootleg tapes and seized shipments believed to contain illicit goods, while lawyers pushed for prosecutions under whatever local copyright laws existed. “Working with 10 investigators, the federation identifies shops selling pirated tapes and brings them to the attention of the police,” reporter Steve Erlanger wrote of Thailand in 1990. “Unfortunately, enforcement varies with the part of town and the susceptibility of the officers to outside inducements.”
⁵⁰
Seeking redress in foreign courts could be costly and even dangerous. According to the International Federation of Phonogram and Videogram Producers, prosecutions in Pakistan sometimes dragged on so long that plaintiffs had to appear in court dozens of times, while exposing themselves to intimidation and even retaliation.
⁵¹
One industry representative in Thailand claimed to have received “four bullets in the mail” and refused to give his name when speaking to the
New York Times
in 1990.
⁵²

If they can be believed, the IFPI’s figures for the early 1980s reflect an impressive campaign to suppress piracy. The group claimed to have confiscated a million and a half cassettes in raids throughout Southeast Asia, though adding that the amount was “a small percentage of the total.”
⁵³
Seizures in 1980 were confined to wealthier countries: 4,500 recordings were seized in Japan and 50,000 in West Germany. Spain, which was poorer than some of its neighbors, turned up 300,000 bootlegs. Investigators seized 25,000 records in Egypt the next year, and Chile, India, and Peru came under target in 1982. As the decade went on, various operations in the developing world made ever-greater gains in their pursuit of pirates; raids in Benin, Cameroon, Ivory Coast, Nigeria, and Singapore netted hundreds of thousands of tapes in the mid-1980s. The most developed countries posted big figures as well, even as antipiracy campaigners turned their attention toward illicit markets abroad. The Netherlands saw 250,000 recordings confiscated in 1983, and 350,000 were found in France the following year. The bigger the figures they announced, the more dramatic the problem looked to policy makers and the public.
⁵⁴

Table 7.3
Percent Change in Size of the US Recording Industry, 1977–1982

Source
: US Department of Commerce,
1977 Census of Manufactures, Volume II: Industry Statistics, Part 3. SIC Major Groups 35–39
(Washington, DC: US Government Printing Office, 1978), 36D–20; US Department of Commerce,
1982 Census of Manufactures: Subject Series General Summary, Part 1. Industry, Product Class, and Geographic Area Statistics
(Washington, DC: Bureau of Census, 1982), 1–16, 1–17.

By 1985, these legal efforts began to show scattered success. Singapore won the title of “biggest pirate” in the international press, as the
Economist
claimed that the small island nation produced $150 million of bootleg tapes—half of an estimated $300 million world market. Despite this sizable output of illicit music, the first notable victory for outside copyright interests did not actually deal with recordings. Rather, a group of British publishers won a judgment against a bookseller, Ng Sui Nam, for selling copies of books originally published in the United Kingdom by the Royal Academy of Music, among others. The Singaporean court ruled that British copyright law was still in force in the city-state, even though it had gained independence from the United Kingdom in 1963. Antipiracy campaigners thus turned to a vestige of colonialism to prop up their claim to protection in Singapore, which had not yet fully recognized copyright protection for foreign works. At the time, the US government of Ronald Reagan joined European powers in urging Singapore to pass tough new legislation and join the Berne Convention or another treaty. The ruling was an early sign that Lee Kuan Yew’s government might be ready to play by the West’s rules. “Singapore wants eventually to become a net exporter of information,” the
Economist
noted, “but in the meantime it wants to continue to import knowledge on the cheap.”
⁵⁵

Government and business groups began to make some inroads in foreign pirate markets, particularly in East Asia, during the 1980s. Chemical giant Monsanto happily reported that Taiwan was exporting fewer bootleg insecticides, while the government cracked down on factories that imitated General Motors auto parts. Indonesia banned pirate tapes in 1988, giving in to pressure from the United States and the European Community, and it agreed to adopt a patent law the following year. Indonesians swamped the markets in Jakarta to snap up tapes before the cassette ban went into force in June. “Our sales have tripled,” Andi Suhalan said of his music store. “Some people are buying 40, 50, or even 100 tapes at a time.”
⁵⁶

One wonders what a customer planned to do with forty copies of
Thriller
. The Europeans demanded to know how the local tape producers would dispose of an estimated three million tapes remaining in stock, as well as two million
that had already shipped to the Middle East. Whenever new laws were enacted, the same problem arose: how could the traces of such a widespread practice as bootlegging be scrubbed from everyday commerce, even if local authorities genuinely wished to do so? “There may still be some unauthorized reprints in the bookstores or pirated cassettes in video stores, but they are disappearing,” trade negotiator Hwang Doo-Yun said of South Korea. “It still takes time to educate our people.”
⁵⁷

Taiwan, at least, seemed to get the message. In 1989 the
Wall Street Journal
observed approvingly that retailers in Taipei’s shopping areas stopped openly selling counterfeit Rolex watches, although knockoffs of Gucci and Polo remained available on the street. Many upwardly mobile Taiwanese chose to buy legitimate goods in department stores such as Sogo and Sunrise, but rising affluence did not push bootleg products off the market entirely. Three main steps moved Taiwan and other countries toward compliance. First were the aggressive investigations funded by foreign companies. Apple Computer, for instance, hired a former narcotics agent to spearhead an operation against imitators who gave their knockoffs cheeky names like “Orange” and “Pineapple,” setting up fake businesses and hiring local people to pose as buyers of pirate goods, thus ensnaring sellers in criminal transactions and raids. Apple’s elaborate stings in Taiwan in many ways resemble the FBI’s ruse of setting up the Modular Sounds record shop to bust pirates up and down the East Coast in 1978.
⁵⁸

Antipiracy campaigners then had to pool their resources and organize to attain political clout in the developed world. Whether they made computers, pharmaceuticals, or sound recordings, corporations shared not just tactics but a larger interest: protecting all their products under the umbrella of “intellectual property.” Though they did not create the term out of whole cloth, it was still fresh enough in 1989 for the
Wall Street Journal
to refer to “a continuing U.S. war against thievery of so-called intellectual property.”
⁵⁹
Indicative of this shift was the formation in 1984 of the International Intellectual Property Alliance (IIPA). The group melded together a range of interests, including the Association of American Publishers, the Business Software Alliance, the Entertainment Software Association, the Independent Film and Television Alliance, the Motion Picture Association of America (MPAA), and the RIAA.
⁶⁰
A revolving door developed between the executive branch and industry. Gerald Mossinghoff, for instance, was both an assistant US trade representative and assistant secretary of commerce before heading the lobbying group Pharmaceutical Research and Manufacturers of America (PhRMA); the group was later led by former Louisiana congressman Billy Tauzin.
⁶¹

Once constituted, these groups pressured the US government to take up the cause of intellectual property worldwide. Lobbyists rallied together to awaken uncomprehending minds in Washington to the importance of preventing
handbags, records, and pills from being copied around the world. Working for Monsanto in the late 1970s, Jim Enyart found that some government officials did not believe that issues of copyright and patent belonged in international trade negotiations. “Everyone said: ‘Oh gee, patents are highly technical, very esoteric things. What do they have to do with trade?’” he said. “And we pressed them and said: ‘Look, intellectual property is property. It costs money and time to create; it has commercial value, and if people steal it, it’s like stealing any other kind of property.’”
⁶²

Meanwhile, companies such as Chanel, Gucci, and Izod banded together in 1978 to form the International Anti-Counterfeiting Coalition, which aimed to get the matter of trademark protection into the Tokyo Round of negotiations over the General Agreement on Trade and Tariffs. (The GATT system was established after World War II to foster international exchange by reducing tariffs and other barriers to trade.) The Tokyo Round ended in 1979 without attending to the intellectual property issue, but the copyright, trademark, and patent forces were sure to press on when new negotiations began in 1982.
⁶³
By 1989, the Reagan administration had “more than a dozen senior officials in the White House and the State and Commerce departments” working on intellectual property negotiations around the world, according to the
Wall Street Journal
.
⁶⁴

The United States and its allies forced copyright onto the agenda of trade negotiations in the face of stiff resistance from developing countries. Indeed, poorer nations showed much greater willingness to fight the extension of copyright as a group than, say, Singapore or South Korea did in individual negotiations with the United States or United Kingdom. Argentina, Brazil, Egypt, India, and Yugoslavia held to their opposition during talks in 1985, while President Reagan warned that the United States would press for greater copyright protection in bilateral negotiations if GATT did not provide adequate progress. In 1986 the United States and Japan proposed that GATT take on the issue of intellectual property as a whole, not just counterfeit goods in particular. This time, a “group of 10” stepped forward and argued that intellectual property was not any of GATT’s business; the faction consisted of Argentina, Brazil, Cuba, Egypt, India, Nicaragua, Nigeria, Peru, Tanzania, and Yugoslavia.
⁶⁵

Intellectual property was a fundamentally new consideration for GATT, whose main purpose over the years had been to prohibit restrictive trade practices. Member countries agreed to lower tariffs and avoid discriminating between trading partners, but they could regulate their domestic economies as they wished—including matters of intellectual property enforcement.
⁶⁶
Thus, the “new issues” of the Uruguay Round, such as copyright and trade secrets, were an extension of the push for active enforcement of property rights in the United States during the 1980s. The US strategy was clear: offer developing countries tariff reductions
and access to its markets and services in exchange for enforcement of intellectual property rights abroad.
⁶⁷