By Elizabeth Pietanza

As I leave my office for the Pedro de Valdivia metro station to catch the subway home, I walk past myriad purveyors of pirated goods who are hawking CDs, DVDs, books, designer label sunglasses, computer programs, video games and other goods to all the potential consumers in one of the city's busiest thoroughfares. I contrast this experience to one of the key aims of the Chile-US Free Trade Agreement (FTA) as stated in its preamble, which is to “foster creativity and innovation, and promote trade in goods and services that are the subject of intellectual property rights.”  

The intellectual property (IP) provisions of the FTA go further than similar provisions in previous free trade agreements.  Most of the provisions require Chile to strengthen their IP laws.  For example, Chile is adapting the “first-in-time, first-in-right rule,” where the first to file for a trademark will be granted the first right to use that trademark.  Copyright regulations are greatly enhanced mostly to guard against the unauthorized use of music, videos, software and text on the Internet.  Patent protection is expanded by making it more consistent with US regulations.  Most importantly, IP laws are strengthened by stepping up enforcement of piracy and toughening penalties.  End-user piracy is now criminalized and both countries have the power to seize goods in transit found in their respective ports and free trade zones, so as to prevent the trafficking of pirated products.

Heightened IP protection and enforcement are not only critical FTA provisions, but also timely.  Just as with illegal drugs and arms sales, Interpol reports that profits made from the sale of pirated goods go on to finance terrorist training and activities.  This is of great concern to Chile, as the free trade zone of Iquique, Chile is suspected as one of several sites attractive to terrorist financiers who deal with pirated goods.  In addition, US and international authorities believe Chile’s banking laws have facilitated the establishment of international terrorist bank accounts. 

Strengthening and enforcing IP laws around the world not only protects innovation and creativity, but can work as a force to prevent the funding and execution of terrorist acts.  Hopefully, such strong provisions will be included in future free trade agreements, such as the Free Trade Area of the Americas.  In the less than three months that the FTA has been in force and due to the fact that all the new IP laws are not yet enacted in Chile, it is difficult (if not impossible) to measure any progress in the enforcement of IP protective laws.  However, it is easy to gauge the costs of not enforcing such laws.  At the end of my subway commute, as I exit the El Golf metro station, the first building I pass on my walk home is the Spanish Embassy, the walls of which are now surrounded by guards and adorned with flowers, letters of support and anti-terrorism signs.