Antigua Wins Another Round In Online Gambling Fight With U.S.

Dec 26, 2007 (06:12 AM EST)

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Arbitrators have ruled that Antigua can suspend its intellectual property obligations to the United States in retaliation for the U.S. prohibition of online gambling.

In a 97-page report (PDF) released last week, a panel weighing Antigua's complaint that the online gambling ban violates free trade agreements said that Antigua has no effective trade sanctions against the United States in terms of services and agreed that the country could suspend copyright, trademark, and intellectual property obligations.

The decision means Antigua can take copyright-protected U.S. goods, like CDs and software, and sell them without copyright protection. The value of the goods can total up to $21 million a year to satisfy the supposed damages the country has suffered.

The ruling estimated Antigua's trade loss at $21 million, which is less than the country estimated but more than the United States estimated. Antigua claimed $3.4 billion in losses; the United States said the country would lose $500,000. The panel came up with its figure based on compliance with the U.S. law rather than actual loss estimates based on the gaming prohibition.

Mark Mendel, the attorney representing Antigua in the World Trade Organization dispute, said that arbitration panels have only ruled once before that a country could suspend protection of intellectual property rights granted to U.S. businesses and said the move was "a very potent weapon.

"I hope that the United States government will now see the wisdom in reaching some accommodation with Antigua over this dispute and look forward to seeing efforts in this regard," he said in a statement.

However, Mendel said the amount of the damages favors the United States.

"What appears to have been done here is assuming a form of compliance that has not happened and probably will not happen without giving Antigua the ability to contest the method under the WTO's normal procedures," he said.

The amount chosen by arbitrators isn't subject to review by the appellate body of the WTO, he said.