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U.S., Antigua Look to End WTO Dispute that Threatened IPR Retaliation

Friday, August 07, 2015
Sandler, Travis & Rosenberg Trade Report

A long-running dispute that has threatened to open the door to intellectual property rights violations as a means of retaliation for breaking World Trade Organization rules could finally be nearing its end. Officials from the U.S. and the Caribbean island nation of Antigua and Barbuda recently held talks that they said were “productive and useful for the exploration of various elements that could ultimately bring closure to the matter” and pledged to continue those discussions “at an early date with a view to reaching a final settlement.”

A decade ago the WTO ruled that the United States’ Internet gambling ban violates commitments under the General Agreement on Trade in Services. The U.S. responded by removing online gambling from the scope of those commitments and saying it never meant to include them. The WTO subsequently found that the U.S. had not complied with the initial ruling and granted Antigua permission to levy $21 million in retaliation, far below the $3.4 billion it had sought. Authorities did not want to resort to traditional measures such as higher tariffs on imported goods out of concern that they would be more harmful to Antiguan consumers than U.S. suppliers. Instead, they sought and obtained authorization to suspend concessions under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights concerning copyrights, trademarks, industrial designs, patents and protection of undisclosed information.

One of the options raised by Antigua was setting up a subscription Web site that would have allowed users to download U.S. movies, music and software without having to pay royalties to the copyright holders. The U.S. called this plan “government-authorized piracy” but Antiguan officials said Washington’s refusal to engage seriously on the matter gave them no other choice. The threat was apparently enough to bring the two sides back to the negotiating table, particularly after it was given the green light by the WTO, and Antigua’s prime minister said after a meeting with Vice President Joe Biden in June 2013 that he expected to soon see “new and innovative proposals” to resolve the dispute.

There has been little news since then, however, and the issue was likely sidetracked by the election of a new government in Antigua last summer. Press sources indicate that Antigua may be looking to settle the dispute for a cash payment of $100-200 million, but neither government is yet providing any details.

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