On Monday, two prominent U.S. Senators released a new government report (US International Trade Commission study) showing that "widespread counterfeiting and piracy in China" has had an impact on U.S. economic interests. Senate Finance Committee Chairman Max Baucus and Senator Charles Grassley, who requested the report, are highlighting its findings because high-level US China trade talks are taking place this week in Washington.

"China continually fails to protect and enforce American intellectual property rights and discriminates against American businesses," Senate Finance Committee Chairman Max Baucus said in a statement that accompanied the report.

"Small steps and empty promises won't cut it when American jobs are on the line. This week's US China trade talks are the perfect opportunity for China to make serious commitments to address these issues. It is time for action," Baucus added.

A recent tip to Boing Boing from Michael Geist reveals some new leaks related from the New Zealand government about their skepticism of international copyright laws being pushed by a certain country. Specifically, the leaked documents reveal the NZ government’s doubts about the U.S.'s push to change the level of protection the country affords "technical protection measures" (TPMs, DRM, or digital locks).

The U.S. wants NZ to make jailbreaking illegal. Interestingly enough, while the U.S. pushes for new jailbreaking rules in other countries around the world, at home the U.S. copyright office recently suspended the restriction on jailbreaking iPhones for three years..

According to Boing Boing, 115 leaked diplomatic cables from the latest Wikileaks document dump were related to the upcoming intellectual property law in Spain.

El Pais, a Spanish newspaper that has all of the 115 documents from the US Embassy in Madrid, has released 35 of them. The first batch of documents confirms what has been widely believed to be true: that the U.S. trade representative (working in conjunction with U.S. trade groups) wrote the country's upcoming copyright/Internet law.

Spain's new copyright law is being put to a vote this month. Boing Boing has some text in Spanish released from El Pais. Admittedly, trying to translate it via various online services (I’m looking at you Google), doesn't do the text justice.

Viacom President and Chief Executive Officer Philippe Dauman issued a short statement in support of the Senate Bill to deal with online infringement - the "Combating Online Infringement and Counterfeits Act." Viacom's support of such a bill is not surprising considering that it owns multiple media companies. Below is his full, unfiltered comments on the bill:

"The film and television industries are responsible for millions of U.S. jobs and tens of billions in wages to American workers. However, businesses hiding offshore are generating large profits from global theft of intellectual property in digital form, threatening our nation's prosperity and one of its most vital exports. The bipartisan legislation introduced today by Senators Leahy, Hatch and eight other original cosponsors provides necessary authority and flexibility for the Department of Justice to keep pace with the complexities of fighting digital theft. This bill is an important step forward to help curb rampant piracy here and abroad, and protect American jobs. We look forward to working with the Senate and House Judiciary Committees and Congressional leadership on its passage."

United States Intellectual Property Enforcement Czar Coordinator Victoria Espinel authored a blog on the White House website to outline some of the public feedback she has received in regards to assembling an IP enforcement strategy.

Espinel, the first to serve in the newly created position, indicated that she discussed the matter with parties from all walks of life:

I sat down with book publishers, movie studios, music companies, and videogame companies, all of whom are faced with widespread problems resulting from internet piracy.  I heard concerns from many other sectors as well: our airplane industry, small manufacturers, automobile industry, steelworkers, textile manufacturers, and biotech, software, and telecommunication companies.

Nintendo has settled a patent infringement case that could have blocked sales of the Wii in the United States, reports Bloomberg.

As GamePolitics noted last September, Hillcrest Labs not only sued Nintendo, but filed a complaint with the U.S. International Trade Commission, alleging that the Wii's motion control system infringed upon the Maryland-based company's patents.

Nearly a year (and lots of attorney fees) later, on August 21st, Nintendo and Hillcrest advised the USITC that they had reached an agreement. Financial details were not made public.

The Associated Press reports that the Entertainment Software Association, which represents the interests of U.S. video game publishers, spent $1.2 million on government lobbying efforts during the period April-June, 2009.

Looking beneath the surface, GamePolitics has obtained an actual copy of the ESA's latest federal lobbying report. The document shows that Big Gaming has its fingers in a surprising number of legislative and governmental pies. The following are issues which the ESA reports that it lobbied on in Q2:

• Media regulation
• First Amendment protection
• Entertainment industry ratings
• Parental control technology
• Content/video game sale regulation
• Retailer enforcement of ratings
• Piracy
• Copyright Act (believed to be the DMCA)
• Anti-circumvention
• Patent modernization
• Intellectual property enforcement
• Customs reauthorization
• PRO-IP Act appropriations
• Dept. of Justice appropriations
• Dept. of State reauthorization
• Free Trade Agreements
• Special 301 Designated Countries
• Trade Policy Reform
• Domestic regulatory & administrative issues
• Trade enforcement
• Doha Round Proceedings (trade talks)
• Trade Promotion Authority
• Internet Governance
• Virtual worlds
• Online gaming
• Highly skilled workforce
• H1-B visas
• Green cards
• Immigration reform
• ISP management
• Copyright Enforcement
• Broadband deployment
• Broadband policy
• Consumer Product Safety Improvement Act implementation

Agencies lobbied by the ESA include some surprising entities. Here's the list:

• U.S. House of Representatives
• U.S. Senate
• Federal Communications Commission
• Federal Trade Commission
• National Telecommunications & Information Administration
• U.S. Copyright Office
• U.S. Customs & Border Protection
• U.S. Trade Representative
• Department of Commerce
• Department of Homeland Security
• Department of Justice
• Patent & Trademark Office
• FBI
• National Security Council

DOCUMENT DUMP: Grab your own copy of the ESA's lobbying report... (9-page PDF)

It seems like just hours ago that we linked to a report claiming that Germany had surpassed the UK as Europe's number-one video game market.

Oh, wait. It was just hours ago. Well, put a big oops! on that one.

gamesindustry.biz, which was among several sites that also carried the original story, is now reporting that the source of the data, Gfk Chart-Track, has admitted to a screwup. Germany is not ahead of the UK in game sales:

Gfk Chart-Track in the UK has contacted GamesIndustry.biz to admit that the press release it issued earlier today had been written using incorrect data. The company is expected to release a correction shortly. It is understood that Germany is not a bigger games market than the UK.

This is the second time in as many weeks that GfK Chart-Track data has been publicly questioned. Last week, Nintendo contacted GamesIndustry.biz following confusion over UK sales figures for the first half of the year.

GP: Somebody at Gfk needs to get their act together...

While violent video games are a major target of late for German politicians, that hasn't stopped Germany from climbing into the number one spot among European game markets.

gamezine.co.uk reports that Germany edged out the UK, largely because the current recession hit the UK software market harder, triggering a 20% drop in software sales.

The top selling game in Germany? Wii Fit.

Among other European countries, Portugal posted a 16% increase in game sales, while Sweden (The Pirate Bay notwithstanding) climbed 4%. The Netherlands saw a 2.4% rise.

Check out GamePolitics' recent coverage of game-related news from Germany.

Video game publishers could gain direct access to the massive Chinese market following a ruling by the World Trade Organization that China may not invoke culture-based censorship to block foreign media imports such as books, games and movies.

According to Reuters, the WTO ruling came in response to an April, 2007 complaint filed by the United States:

The WTO ruling could potentially affect how foreign video game companies operate in China.

U.S. video game titans such as Electronic Arts, Activision Blizzard and Take Two Interactive, are not allowed to operate games directly in China, or through joint ventures with local firms. They instead license games to local operators or co-develop games with local firms.

But the WTO ruling was unlikely to overcome China's determination to govern the virtual landscape, said Dick Wei, vice president of equity research with JP Morgan in Hong Kong.

Basketball is wildly popular in China and so are online games.

Seeing big revenue in that combination, 2K Sports announced today that it will create an online version of pro hoops game NBA 2K for the Chinese market. Chinese Internet portal Tencent Holdings will partner with 2K Sports on the deal.

Licensing for the game includes all NBA team along with current and retired players. 2K Sports president Christoph Hartmann is quoted in a press release issued this morning:

The incredible popularity of basketball in Asia combined with the love of online games in that region makes this a very exciting project for 2K. For the first time, 2K is developing an online game combining our expertise in making the best-selling and top-rated NBA 2K video game franchise with the proven ability of Tencent for developing and operating highly successful online game communities in China.

Online gaming was a $2.75 billion business in China in 2008 and more than a billion Chinese viewed NBA programming during the just-completed season.

Returning to a theme that he touched upon often during the 2008 presidential campaign, President Barack Obama told the audience at a town hall meeting in Wisconsin that American kids spend too much time playing video games and watching television.

But Obama added a new wrinkle to yesterday's remarks, linking them to the United States' ability to compete in the global marketplace:

Even with the good schools, we've got to pick up the pace, because the world has gotten competitive. The Chinese, the Indians, they're coming at us and they're coming at us hard, and they're hungry, and they're really buckling down.

And they watch - their kids watch a lot less TV than our kids do, play a lot fewer video games, they're in the classroom a lot longer.

So here's the bottom line. We've got to improve, we've got to step up our game. While the average public school is actually doing a reasonably good job... we are falling behind when it comes to math; our kids are falling behind when it comes to science...

We used to be head and shoulders above other countries when it came to education. We aren't anymore. We're sort of in the middle of the pack now among wealthy, advanced, industrialised countries.

Via: IANS

On Wednesday game publishers' lobbying group ESA issued a press release praising members of the bipartisan Congressional International Anti-Piracy Caucus for singling out Spain, Canada, Mexico, Russia and China as anti-piracy priorities for 2009.

ESA CEO Michael Gallagher praised the IAPC in a press release:

We thank the Caucus for this year issuing a challenge to Canada and Mexico to pass additional legislative protections – such as prohibitions on ‘mod chips’ and other circumvention devices that are used to play pirated games – and to follow through with greater enforcement and border controls.

We also thank the Caucus for highlighting the severe problems that exist for our industry and other copyright industries in Spain. Online and peer-to-peer piracy are rampant and virtually unchecked in Spain and in other major European markets...

But Nick Farrell of the U.K.-based Inquirer, doesn't think much of the caucus, implying that the senators and representatives on the IAPC have been lobbied by the RIAA and other IP rights holders. Farrell writes:

The RIAA has got its tame politicians in the US congress to rail at other nations that don't hold such a jack-booted attitude toward copyright infringement as the Land of the Free...

[IAPC] singled out Baidu, China's largest Internet search engine, as being "responsible for the vast majority of illegal music downloading in China." That's interesting, because Baidu does the same thing as Google which, as a powerful US company, the music industry has not dared to denounce...

It seems almost as though the entertainment mafiaa would like the US to mount a cross-border raid into Canada over its perceived lack of draconian copyright enforcement and wants the US to treat its NATO ally Spain as a pariah for having the temerity to say that peer-to-peer file sharing over the Internet isn't a crime.

The Obama administration slammed Canada last week, adding our northern neighbor to a list of what the office of the U.S. Trade Representative says are nations which fail badly at copyright protection. U.S. media rights holders, including video game publishers' lobbying group ESA, lauded the USTR's addition of Canada to its Priority Watch List.

Some Canadians reacted with anger, claiming the action was driven by America's corporate IP lobby and arguing that Canada should not bow to such consumer-unfriendly pressure.

Via boingboing, we've gotten a look at C-61, a mini-documentary which addresses the Canadian government's so far unsuccessful attempt to pass DMCA-style copyright law.

boingboing's Cory Doctorow, who provided some narration to the film, comments:

A group of Canadian copyfighters produced this mini-documentary, "C-61," about the proposed new Canadian copyright law, which the US government is pressuring Canada to pass (that's why the USA added Canada to a nonsensical list of pirate nations).

 

Previous attempts to pass this bill have been a disgrace -- famously, former Industry Minister Jim Prentice refused to discuss the bill with Canadian record labels, artists, tech firms, or telcos, but did meet with American and multinational entertainment and software giants to allow them to give their input. In the bill's earlier incarnation as C-60, its sponsor, Sam Bulte, was caught taking campaign contributions from the same US and multinational entertainment companies...

A day after U.S. Trade Representative Ron Kirk added Canada to the USTR's "Priority Watch List" of copyright offenders, Canadians are beginning to fire back.

University of Ottawa law prof Michael Geist writes:

The move is not unexpected, given recent comments from Vice President Joe Biden and U.S. Congressional panels as well as the demands from U.S. lobby groups...  (never mind that Canada enacted anti-camcording laws in 2007, introduced C-61 last year, is an original negotiating partner in the ACTA negotiations, joined the U.S. as a third party in the WTO copyright complaint against China, etc.).

Geist also cites the Canadian government's 2007 objection to pressure applied by the USTR:

In regard to the watch list, Canada does not recognize the 301 watch list process. It basically lacks reliable and objective analysis. It's driven entirely by U.S. industry. We have repeatedly raised this issue of the lack of objective analysis in the 301 watch list process with our U.S. counterparts.

In a separate post, Geist calls the Priority Watch List designation absurd, noting figures which show Canada's piracy rate to be quite low compared to other nations:

The IIPA, the lead U.S. lobbyist on international IP matters, has issued a press release on the USTR Special 301 report, welcoming the inclusion of Canada on the Priority Watch List.  Yet the release inadvertently demonstrates why the designation is so absurd...

 

compare Canada to the remainder of the list.  Canada comes in at 32%... Not only is Canada not even remotely close to any other country on the list, it has the lowest software piracy rate of any of the 46 countries in the entire Special 301 Report... 

Those pesky Canadians have finally pushed the U.S. Government to the brink.

If the Bushies were still in power we might now be glued to CNN, watching the 82nd Airborne para-dropping into Ottawa. But as it is, the Obama administration has settled for delivering a nasty slap via the office of U.S. Trade Representative Ron Kirk (left).

The issue is copyright protection and the USTR, a cabinet-level post, has been making unpleasant noises in Canada's direction for several years. Today Kirk dropped the hammer, placing Canada on the "Priority Watch List" along with China, Russia, Algeria, Argentina, Chile, India, Indonesia, Israel, Pakistan, Thailand, and Venezuela. From the USTR report:

Canada is being elevated to the Priority Watch List for the first time, reflecting increasing concern about the continuing need for copyright reform, as well as continuing concern about weak border enforcement.

The Entertainment Software Association, which lobbies on behalf of U.S. video game publishers, was quick to applaud the action in a press release. No surprise there, as the ESA has been pushing hard in recent years for Canada to outlaw mod chips and adopt its own version of the consumer-unfriendly Digital Millenium Copyright Act.

In fact, with DMCA-like legislation an issue that Canada's Parliament will soon be considering, a cynic might be forgiven for thinking that the USTR's action was timed for its persuasive value as much as anything else.

Of today's announcement, ESA CEO Michael Gallagher commented:

Putting Canada on the ‘Priority Watch List’ is a signal of the Obama Administration’s commitment to strengthening global intellectual property protection, and its intent to address this issue firmly with the Canadian government. Canada’s weak laws and enforcement practices foster game piracy in the Canadian market and pave the way for unlawful imports into the U.S.

So what does the ESA want from Canada? They have a laundry list:

• Enact legislation outlawing game circumvention devices, such as “mod chips” and “game copiers,” in line with Canada’s international treaty obligations
• Create adequate legal incentives for internet service providers (ISPs) to work with copyright owners in combating online piracy
• Provide Customs officials with adequate authority to make ex officio seizures of counterfeit and pirate product at the border; and,
• Provide adequate resources to anti-piracy enforcement efforts and make prosecution of intellectual property crimes a high priority.

On several recent occasions, GamePolitics has reported on ACTA, the international copyright treaty being negotiated in secret by various governments, including the United States.

Here in the U.S., IP rights holders - including the video game industry - have been granted access to information concerning ACTA negotiations. John Q. Public has been shut out, however.

But the Obama administration's promised commitment to open government appears to be pulling back the curtain on ACTA, at least a bit.

IDG reports that the Office of the U.S. Trade Representative has released a six-page summary of ACTA negotiations, which have been going on behind the scenes since 2006. Gigi Sohn, President of Consumer rights group Public Knowledge praised the info release:

The dissemination of the six-page summary will help to some degree to clarify what is being discussed. At the same time, however, this release can only be seen as a first step forward. It would have been helpful had the USTR elaborated more clearly the goals the United States wants to pursue in the treaty and what proposals our government has made, particularly in the area of intellectual property rights in a digital environment.

In what could be viewed as a real-world version of a business tycoon game, the video game foreign trade wars appear to be heating up.

Earlier this month came word that Nintendo was jacking up the price of the Wii in the U.K. due to the weakness of the British pound vis-a-vis the yen.

Last week GamePolitics cited a report that China was using protectionist tactics by blocking entry of the Wrath of the Lich King expansion for World of Warcraft in order to promote home-grown MMORPGs.

Now, via Kotaku, comes word that Sony has stopped shipping PlayStation 3s to South Korea.

Thanks to the depreciation of South Korea's won versus the stronger yen, it seems that Japanese tourists have been picking up PS3s on the cheap and toting them home from Korean trips. A Sony employee told Chosun Online:

We are troubled by 'reverse-importing', which is when products exported into South Korea are flown back into Japan," said a Sony employee.

Recent reports that China is throwing up obstacles to the introduction of World of Warcraft expansion Wrath of the Lich King may be economic protectionism at work, says techno-financial site Silicon Alley Insider:

Wrath of the Lich King still isn't on sale in China, waiting on approval from Chinese censors who are nitpicking over "skeletons" in the game. And now it's looking less and likely Activision Blizzard's (ATVI) latest will get approval anytime soon -- China is vowing to make it harder and harder for games like WoW to get the thumbs up.

Blame good old-fashioned protectionism: The Chinese Government hopes to make homegrown, Chinese games more attractive by keeping foreign games off the market.

By way of evidence, SAI points to a report published earlier this week by JLM Pacific Epoch, which tracks business happenings in China:

The [Chinese government] intends to tighten approval criteria for online game imports in an effort to protect the development of domestic online game enterprises and avoid the excessive penetration of foreign culture among Chinese youth...

The central government supports the export of domestic online games as a way to promote Chinese culture, and... plans to organize an overseas roadshow for domestic companies to cultivate efforts abroad...

GP: So, if the JLM report is correct, the Chinese don't want Western games sold there, but would like to send Chinese games here. Sounds like something the ESA - which represents the interests of U.S. game publishers - might want to take up the U.S. government.