After years demanding stronger public sector response to copyright infringement, IP industries have now shifted to the strategy of forcing governments to assume the role of facilitators in agreements between private parties. In Brazil, this tendency is clearly noticeable in industry demands related to copyright enforcement in the digital environment within the National Council on Combating Piracy (CNCP, Conselho Nacional de Combate à Pirataria).

By Pedro Nicoletti Mizukami

The CNCP: a brief history

The year of 2005 is a turning point in the history of copyright enforcement in Brazil. It was in 2005 that the Brazilian government finally gave in to the pressure exerted by the IP industries through the US government, and definitively internalized the international IP enforcement agenda. That was the year when the National Council on Combating Piracy and Crimes against Intellectual Property (CNCP, Conselho Nacional de Combate à Pirataria e Delitos contra a Propriedade Intelectual) effectively became operational, with the mission to serve as public-private forum for the discussion of IP enforcement policy and coordination between industry and government. [1]

The events that led to the creation of the CNCP were documented in detail by the Media Piracy in Emerging Economies report, available in English, Spanish, Russian, and Chinese. That story is reasonably long, but can be summarized as the result of years of pressure on Brazil promoted by the IP industries through the United States Trade Representative (USTR) and its Special 301 reports. The validity of the “pirate country” lists produced for Special 301 is extremely ambiguous in a post-WTO world. It is undeniable, nonetheless, that the lists had a fundamental role in the process that resulted in the creation of the CNCP in Brazil, and in the drafting of a National Antipiracy Plan, currently in its fourth edition. Regardless of the fact that commercial sanctions can only be imposed after a WTO ruling and never unilaterally—strongly diluting Special 301’s power to intimidate—the lists continued to serve as fuel for effective pressure in Brazil halfway through the past decade.

While internationally Brazil defends a progressive IP agenda, and was an important actor in the debates that led to the approval of WIPO’s Development Agenda (2007) and the Marrakesh Treaty (2013), the domestic context is considerably more ambiguous. As an illustration, at the same time that Brazil was presenting a strongly argued defense of evidence-based policymaking, and demanding respect for Recommendation 45 of the Development Agenda at the 5th WIPO Advisory Committee on Enforcement, the CNCP was still widely publicizing three spurious numbers on the damages supposedly caused by piracy to the Brazilian economy. These numbers, we found in Media Piracy in Emerging Economies, had no clear source or methodology.

Contradictions like this are to be expected in complex political processes, such as those related to intellectual property. The existence of the CNCP, furthermore, gives Brazil the opportunity to criticize maximalist IP policies in international fora, backed by the argument that international standards on IP enforcement and industry demands are all being met domestically.

Nonetheless, the Ministry of Justice eventually demonstrated some sensibility to the academic debates on copyright and piracy and criticisms of antipiracy discourse. For the 2012-2014 mandate, the Ministry admitted as members of the Council the University of São Paulo’s GPOPAI and the Center for Technology and Society of FGV Law School. Both research centers maintain views on IP enforcement that clash with CNCP’s traditional approach to the subject. [2]

As a councilor for CTS-FGV, I had the opportunity to directly confirm the analysis contained in Media Piracy in Emerging Economies. For example:
● The boundaries between what is public and what is private are sometimes blurry in a forum composed by both industry and government actors;
● The CNCP mainly operates towards strengthening the repressive measures of the National Antipiracy Plan, in detriment of the educational (antipiracy propaganda) and economic (business model-related) measures that are also part of its three-pronged approach to “combating piracy”. (Considering how industry awareness campaigns are, we are better off without the educational measures, but a conversation on business models would be a healthy step forward for the CNCP. Unfortunately, the industry councilors usually do not receive mandate to discuss this issue from their employers);
● The government usually shifts discussions on more important/sensitive themes to its Inter-ministerial Group on Intellectual Property (GIPI, Grupo Interministerial de Propriedade Intelectual) and other fora where the private sector has no direct participation; [3]
● The CNCP has been historically more concerned with counterfeiting, the informal economy, and contraband, as opposed to piracy, in the definition established by note 14 to article 51 of TRIPS; [4]
● As a consequence, when it comes to online piracy, previous attempts to deal with the subject in the Council never really took off. This situation, however, could change.

Since the interplay of forces and interests within the Council is reasonably complex — industries as diverse as the film, beverages, pharmaceutical, and tobacco industries are represented — the priority of the CNCP has so far been addressing concerns that are shared between as many different sectors as possible. In other words, the CNCP has prioritized repressive measures focused on the informal economy and clandestine cross-border flows of goods. For that reason, coordination between the Federal Highway Police, the Federal Police, Customs, and agencies such as Brazilian Health Surveillance Agency (ANVISA, Agência Nacional de Vigilância Sanitária) has reached a considerable degree of maturity, and the CNCP is working towards helping authorities at the state and local levels to achieve a similar level of organization. As concerns over physical goods piracy and counterfeiting diminish, it is inevitable that attention will finally shift to online piracy.

The CNCP and online piracy

Industry’s first serious attempt to deal with the subject in the CNCP happened in 2008, when a graduated response/three strikes system was put under discussion. A working group was set up to carry forward a project called “Cooperation with ISPs.” The goal was to to have the CNCP act as mediator between content industries and ISPs, for the implementation of an entirely private system where ISPs would forward notices to users found sharing copyrighted material in p2p networks.

At a first moment, disconnecting users was proposed as a sanction after the third notification, but rapidly taken off the table in light of the backlash against Hadopi in France. The proposed measures included lowering bandwidth of suspected infringers, or blocking p2p protocols. The idea was vetoed by the Ministry of Justice itself in September 2009, after an unfavorable opinion by its own Department of Consumer Protection and Defense (DPDC, Departamento de Proteção e Defesa do Consumidor), understandably concerned about negative impacts on users’ privacy rights.

In August 2012, the working group was resurrected, with another objective. Industry seemed to have given up on the idea of graduated response, and set the matter of p2p file sharing aside, to focus its demands on the creation of a notice-and-takedown system in Brazilian law. There were rumours at the time that the Marco Civil, a framework on Internet and digital rights, would be voted at the Chamber of Deputies (something that, as of this writing in February 2014, has not happened). Industry representatives claimed that in the absence of a notice-and-takedown system in Marco Civil, industry would be left “unprotected”. The Copyright Reform Bill, which would include such a proposal, had not — and still has not — been introduced in Congress.

Since Marco Civil was gestated from within the Ministry of Justice, and the bill had already been sent to Congress, it was evident at that point that the discussion was closed. Nonetheless, this last minute attempt to desperately resurrect the subject, along with other recent developments, reveals a strong industry preference towards a “privatization of copyright enforcement” approach at CNCP, wrapped in a language that insists on “cooperation” instead of coercion.

“Cooperation”

The legislative process is usually slow, and by its own nature more sensitive to the demands of a variety of actors, and to interests that are frequently contradictory. In issues related to online enforcement, industry representatives seem to currently favor strategies that either completely ignore the state, or have the state act as a mediator of agreements between the different industry actors that will effectively enforce IP rights. Legislation, in this context, is of secondary importance, and serves only to invest public authorities with the function of mediating the aforementioned agreements, or to establish mechanisms of content removal that are then entirely maintained by private entities (such as, for example, notice-and-takedown systems). [5]

It was following this reasoning that the working group that was created to import a graduated response system into Brazil had as its goal “a cooperation agreement with ISPs,” instead of legislation to the same effect. And it is following the same strategy that a recently proposed project at CNCP has the objective of having the government encourage cooperation agreements between IP rights holders and payment facilitators/systems (Visa, MasterCard, PayPal, etc.). The next targets for these agreements will be advertising networks. If this sounds a lot like SOPA, it’s because SOPA was the inspiration for the proposal. Which has the strategic advantage of bypassing the legislative process.

With or without legislation—establishing general incentives for cooperation or specific mechanisms for content removal—the future seems headead towards the complete privatization online copyright enforcement. Agreements between companies, best practices manuals, technical standards, and not legislation, will be the instruments that will determine the rules and the enforcement regimes for copyright infringement.

Much like in 2005, we are witnessing another turning point in Brazil. This time, to a scenario where the fora dedicated to IP enforcement policy are entirely private, discussions happen behind closed doors (sometimes mediated by public authorities), and the regimes produced leave users in conditions of extreme vulnerability, and without a chance to be heard. Beyond the more substantive questions regarding the nature and legitimacy of such regimes, we face the challenge of finding means to help civil society react against unfair enforcement practices, and of identifying actors within industry fora who might be able to defend public interest goals. Besides fighting for legislation to establish checks and balances in private enforcement regimes, we need to understand how to deal with the issue directly at the source.

[1] Fora such as the CNCP are exactly what ACTA refers to in its article 28(3) and (4):
“Article 28
[…]
3. Each Party shall, as appropriate, promote internal coordination among, and facilitate joint actions by, its competent authorities responsible for the enforcement of intellectual property rights.
4. Each Party shall endeavour to promote, where appropriate, the establishment and maintenance of formal or informal mechanisms, such as advisory groups, whereby its competent authorities may receive the views of right holders and other relevant stakeholders.”

[2] Besides the two academic institutions mentioned above, the 2012-2014 composition of the CNCP is as follows:
Representing the public sector: the Ministry of Justice, Ministry of Foreign Affairs, Ministry of Treasury, Federal Revenue Service, Ministry of Development, Industry and Foreign Commerce, Ministry of Culture, Ministry of Science, Technology and Innovation, Ministry of Labor and Employment, Federal Highway Police, Federal Police, Chamber of Deputies, National Senate, National Public Security Office.
Representing the IP industries: the Brazilian Association of Intellectual Property (ABPI, Associação Brasileira da Propriedade Intelectual), Interfarma (Association of the Pharmaceutical Industry and Research), National Forum on Combating Piracy (FNCP, Fórum Nacional de Combate à Pirataria), Instituto ETCO (representing the tobacco, beverages, fuel, and software sectors), and the Brazilian Video Union (UBV, União Brasileira de Vídeo).
Former members such as the Brazilian Association of Record Producers (ABPD, Associação Brasileira de Produtores de Discos), Brazilian Association of Software Companies (ABES, Associação Brasileira das Empresas de Software), and Motion Picture Association (MPA) are listed as collaborators, and can participate in all meetings of the Council.

[3] For more information on the GIPI: PORTO, Patrícia Carvalho da Rocha e BARBOSA, Dênis Borges. “O GIPI e a governança da propriedade intelectual no Brasil”. Radar IPEA n. 29, 2013, p. 19. Available at: http://www.ipea.gov.br/agencia/images/stories/PDFs/radar/131009_radar29.pdf

[4] The conflation of piracy and counterfeiting in public discourse has been a hot topic in CNCP, which improperly uses the word “piracy” to describe a variety of offenses, including counterfeiting and circumstantially related but very different crimes such as contraband. Hinding behind what some in the Council classify as an “excessive concern for technical terms,” there are battles between the different industry members for attention and priority in the CNCP’s activities, as well as the strategic use of numbers and research results across completely unrelated industry sectors in the quest for stronger enforcement.

[5] IIPA’s 2014 Special 301 submission provides many examples of this type of demand. The Mexican chapter suggests that the country should “enact legislation to create incentives for ISPs to cooperate with right holders to combat infringement taking place over their networks or platforms […].” The Argentina chapter mentions the need to “develop processes that enhance cooperation between rights holders and online intermediaries in ways that are likely to contribute to a decline in online piracy.” The Brazil chapter argues that “active government involvement could help to bring ISPs and rights holders together to find effective means to deal with the most serious forms of online piracy, and to prevent its further growth.”
WIPO’s December 2013 Building Respect for IP newsletter included two examples of recent cooperation agreements between private entities: a Memorandum of Understanding signed between the International AntiCounterfeiting Coalition (IACC) and Taobao Marketplace, e and an agreement signed by Google, Yahoo!, Microsfot and other companies, supported by the Interactive Advertising Bureau, to establish “a set of best practices to address online infringement by reducing the flow of ad revenue to operators of sites engaged in significant piracy and counterfeiting.”