The decision allows the island nation to violate U.S. intellectual property protection totaling $21 million per year, resulting from the WTO’s conclusion that the U.S. erred in blocking online gambling companies operating out of Antigua from accepting American wagers while still allowing online wagering on horse racing.
The award for Antigua is far lower than the $3.44 billion per year that Antigua had sought in its action, but much higher the $500,000 that the U.S. had offered in negotiations.
The unusual ruling from the WTO was predicted by adult industry attorney Larry Walters in an article published in the September issue of XBIZ World magazine.
“The ruling in this case is the worst-case scenario for U.S. media interests,” Walters told XBIZ. “It allows Antigua to completely ignore intellectual property protection and presumably distribute DVDs, books, websites and other media without fear of copyright infringement claims.”
Walters said that theoretically, Antiguan citizens, or even the government of Antigua and Barbuda itself, could set up a “Napster type site” and offer subscriptions to members throughout the world without fear of penalty from U.S. authorities.
“The news is even worse for patent holders, whose valuable patent rights — like those protecting brand name pharmaceuticals — can now be summarily disregarded by Antiguan businesses,” Walters said. “However, it is much more difficult to traffic in bootlegged products than to simply offer infringing material online. Customs and border authorities can regulate the influx of illegal products into foreign nations, but infringing movies and pictures distributed over the Internet are not subject to the same controls.”
The ruling might have a silver lining for the online gambling industry, Walters said, as the WTO’s decision will “put significant pressure on U.S. authorities to reverse their prohibitionist stance on Internet gambling services from foreign countries.”
Walters noted, however, that the possibility of an eventual lifting of the U.S. ban on Internet gambling doesn’t help American content producers with their intellectual property concerns in the short term.
“In the meantime, adult webmasters and content producers are exposed to substantial losses resulting directly from the hard-headedness of the Justice Department, which refuses to recognize that the vast majority of U.S. citizens do not want government-imposed prohibition on Internet gambling, and which insists on advancing a paternalistic agenda in an effort to pander to certain moral values voters,” Walters said.
“Although this is a sleeper issue now, it could become a significant concern in the upcoming presidential election as U.S. businesses start to feel the sting from the dilution of their intellectual property rights,” he said.
