Copyright lobby (IIPA) demands that USTR punish governments who ‘consider’ mandating open source software

The industry is also concerned about moves by the government to consider mandating the use of open source software and software of only domestic origin. Though such policies have not yet been implemented, IIPA and BSA urge that this area be carefully monitored.

Worse yet, instead of focusing attention on piracy and solutions to the problem, the government retained onerous market access barriers, including the requirement to locally manufacture film prints and home videos in Indonesia (which had been suspended throughout 2009) and added new restrictions. For example, in March 2009, the Ministry of Administrative Reform (MenPAN) issued Circular Letter No. 1 of 2009 to all central and provincial government offices including State-owned enterprises, endorsing the use and adoption of open source software within government organizations. While the government issued this circular in part with the stated goal to “reduc[e] software copyright violation[s],” in fact, by denying technology choice, the measure will create additional trade barriers and deny fair and equitable market access to software companies.

Priority Actions Requested in 2010: IIPA requests that the government of Indonesia take the following actions, which would result in the most significant near term commercial benefits to the copyright industries:
Market Access and Related Issues
• Rescind March 2009 MenPAN circular letter endorsing the use and adoption of open source software which threatens to create additional trade barriers and deny fair and equitable market access to software companies.

Government Procurement Preference Denies U.S. Software Companies a Level Playing Field: The government of Indonesia, under its Ministry of Administrative Reform (MenPAN), officially sent to all central and provincial government offices, including state-owned enterprises in Indonesia, Circular Letter No. 1 of 2009 issued on March 30, 2009, endorsing the use and adoption of open source software within government organizations. More specifically, the MenPAN letter, concerning the “Utilization of Legal Software and Open Source Software (OSS),” encourages government agencies to use “FOSS” (Free Open Source Software) with a view toward implementation by the end of 2011, which the Circular states will result in the use of legitimate open source and FOSS software and a reduction in overall costs of software. The letter was followed by subsequent clarification documents, including an April 2009 State Ministry of Research & Technology (RISTEK) document regarding the “Migration to Open Source in Government Agencies.”

While IIPA has no issue with one of the stated goals of the circular, namely, “reducing software copyright violation,” the Indonesian government’s policy as indicated in the circular letter instead simply weakens the software industry and undermines its long-term competitiveness by creating an artificial preference for companies offering open source software and related services, even as it denies many legitimate companies access to the government market. Rather than fostering a system that will allow users to benefit from the best solution available in the market, irrespective of the development model, it encourages a mindset that does not give due consideration to the value to intellectual creations. As such, it fails to build respect for intellectual property rights and also limits the ability of government or public-sector customers (e.g., State-owned enterprise) to choose the best solutions to meet the needs of their organizations and the Indonesian people. It also amounts to a significant market access barrier for the software industry. The “Principles for Technology Choice Pathfinder,” adopted by APEC in 2006 (furthering the 2002 “Statement to Implement APEC Policies on Trade and the Digital Economy,” to which Indonesia was a participant), recognize that procurement preferences can close markets and stifle innovation and economic development. By implementing this government procurement preference policy, the Indonesian government is not adopting an effective approach to drive down piracy rates, but rather, is creating an additional trade barrier and denying fair and equitable market access to software companies worldwide, which is inconsistent with the APEC Principles.

Rather than start down this path away from innovation and to further promote respect for copyright, the government should abandon the Circular’s approach and follow a realistic policy framework that includes adequate education and effective enforcement of IP rights and non-discrimination in business choice, software development, and licensing models. The government of Indonesia promised to legalize the public sector’s use of software, e.g., in the January 13, 2006 Indonesian Ministry of Communication and Information (MOCI) and Microsoft Memorandum of Understanding (MOU) in which the government undertakes to legalize government use of its products on government computers. We strongly urge USTR to consider the implications that Indonesia’s open source preference policy has on IP protection and access to Indonesia’s market for U.S. goods and services.

Other Draft Legislation: The Congress of the Philippines went on recess on February 5, 2010. Prior to that, there were several other copyright-related bills being watched by IIPA. IIPA states in general its support for Senate Bill 1572, An Act Strengthening the Enforcement of the Copyright Protection of Intellectual Property Right Owners of Computer Programs Creating For This Purpose the Business Software Copyright Piracy Enforcement Unit etc. IIPA also states its support for Senate Bill 684, An Act Requiring the Teaching of Intellectual Property Ownership Particularly Copyright Law as Part of the Curriculum of All Primary, Secondary and Tertiary Schools In the Country, and For Other Purposes. IIPA was concerned regarding reports of consideration of a Free Open Source Software bill which would require government offices to use open source software. Passage of that bill would deny technology choice regarding software usage and ultimately would stunt the growth of the IT industry in the Philippines.

Priority actions requested to be taken in 2010: The copyright industries recommend that the following actions be taken in the near term in Brazil in order to improve the adequate and effective protection of copyrighted materials:

Avoid legislation on the mandatory use of open source software by government agencies and government controlled companies.

Conversely, IIPA is concerned by the proposed preference policy of the Prime Minister mandating government agencies to buy open source software, which is inconsistent with APEC policy guidance on technology choice. Priority Actions Requested In 2010: IIPA requests that the Royal Thai government take the following actions, which would result in the most significant near-term commercial benefits to the copyright industries:

Market Access and Related Issues
• Among other market access restrictions to be addressed, reverse proposed policy mandating use of open source software, and, e.g., requiring bundling of government funded computers and computers for schools with open source software; maintain neutral policies with respect to technology choice

Regarding government legalization of software usage, IIPA is pleased that, according to the Royal Thai government’s latest report, it has requested the cooperation of all government sectors to abide by the decision of the Cabinet in 1999, which stipulates that all government sectors are to strictly use legitimate software. However, this positive request may be made much less valuable by the Prime Minister’s apparent policy that government agencies acquire open source software, thus restricting their technology choice.

Onerous Restrictions on Technology Choice: On December 14, 2009, according to press reports, 37 Prime Minister Abhisit Vejjajiva instructed the Ministry of Information and Communications Technology (MICT) to conclude plans for measures focusing on promoting open source software. Indeed, IIPA has become aware that the Software Industry Promotion Association (SIPA) is the government entity under MICT openly promoting open source software to other government agencies and enterprises as a solution to curb piracy. As one example of implementation of this policy, the Ministry of Education reportedly has plans to purchase 1.4 million computers for schools using a budget allocated from the ‘Strong Thailand’ project and is considering bundling the computers with open source software in order to achieve cost savings. The government says the new policy purports to promote protection of intellectual property as well as achieve cost savings. IIPA has no issue with such policy goals, and fully supports the goal to legalize software usage consistent with APEC economies’ agreement that central government agencies should use only legal software and other copyrighted materials. However, the implementation of this goal, e.g., by MOE being pressured to bundle computers with software not of their choosing, clearly flies in the face of the market, and harms companies that rely on software copyright for their livelihoods, since it denies such legitimate companies access to that education market. As such, it fails to build respect for intellectual property rights and limits the ability of government or public-sector customers to choose the best solutions to meet the needs of their organizations and the Thai people. It also amounts to a significant market access barrier for the software industry.

It should be noted that the “Principles for Technology Choice Pathfinder,” adopted by APEC in 2006 (furthering the 2002 “Statement to Implement APEC Policies on Trade and the Digital Economy”), recognize that procurement preferences can close markets and stifle innovation and economic development. By implementing this government procurement preference policy, the Royal Thai government is not adopting an effective approach to drive down piracy rates, but rather, is creating an additional trade barrier and denying fair and equitable market access to software companies worldwide, which is inconsistent with the APEC Principles. Rather than start down this path away from innovation, and to further promote respect for copyright, the government should abandon this approach and follow a realistic policy framework that includes adequate education and effective enforcement of IP rights and fosters non-discrimination in business choice, software development, and licensing models. We strongly urge USTR to consider the implications that Thailand’s open source preference policy has on IP protection and access to Thailand’s market for U.S. goods and services.

Priority Actions Requested in 2010: IIPA requests that the government of Vietnam take the following actions, which would result in the most significant near term commercial benefits to the copyright industries:

Cease government-endorsed open source preference policy which is limiting technology choice in Vietnam.

Onerous Restrictions on Technology Choice Through Government Procurement Preference: The Vietnamese government, under the auspices of the Prime Minister’s Office, has established a framework for the procurement, use and adoption of open source software within government organizations with one of the key objectives being “enhancing copyrights protection.” This regulatory framework was officially established in the Prime Minister’s 2004 Master Plan for Applying and Developing Open Source Software in Vietnam for the 2004 – 2008 Period, followed by subsequent clarification and implementation through a number of ministerial directives and decisions, most recently in late 2008 by the Ministry of Information and Communications. The 2008 Directive mandated government agencies to install and use Open Source Software (OSS), which it indicated would be “contributing to reduce software copyright violation.”

IIPA has no issue with the policy goal stated in the Directive, and fully supports the goal to legalize software usage consistent with APEC economies’ agreement that central government agencies should use only legal software and other copyrighted materials. However, the implementation of this goal by creating a clear procurement preference flies in the face of the market, and harms companies that rely on software copyright for their livelihoods, since it denies such legitimate companies access to that education market. As such, it fails to build respect for intellectual property rights and limits the ability of government or public-sector customers to choose the best solutions to meet the needs of their organizations and the Vietnamese people. It also amounts to a significant market access barrier for the software industry.

It should be noted that the “Principles for Technology Choice Pathfinder,” adopted by APEC in 2006 (furthering the 2002 “Statement to Implement APEC Policies on Trade and the Digital Economy”), recognize that procurement preferences can close markets and stifle innovation and economic development. By implementing this government procurement preference policy, the Vietnamese government is not adopting an effective approach to drive down piracy rates, but rather, is creating an additional trade barrier and denying fair and equitable market access to software companies worldwide, which is inconsistent with the APEC Principles. Rather than start down this path away from innovation, and to further promote respect for copyright, the government should abandon the current approach and follow a realistic policy framework that includes adequate education and effective enforcement of IP rights and fosters non-discrimination in business choice, software development, and licensing models. We strongly urge USTR to consider the implications that Vietnam’s open source preference policy has on IP protection and access to Vietnam’s market for U.S. goods and services.