Cayman enters 'intellectual property' era

Copyright, IP rights get overhaul

Enforcing what little copyright protection the Cayman Islands has today is a difficult and expensive process, but the lack of a modern intellectual property regime, including copyrights, trademarks and patents, is also holding up or even discouraging international business from being conducted in the islands, public and private sector leaders said Thursday.  

That’s about to change. By fall, the government is expected to adopt the copyright-related provisions included in the U.K.’s 1988 Copyright, Designs and Patents Act, adding a few adjustments to “Caymanize” the legislation for local use. The adoption of the U.K. act is expected to be a precursor to Cayman’s passing its own Copyrights Law and updating its current Patent and Trademarks Law. The government hopes the entire process will be complete by next year.  

Local attorney Huw Moses, who has served for the past year on a select government advisory committee aimed at bringing Cayman’s copyright and intellectual property rights regime “up to date,” said Thursday the new legislation will be a sea change for the territory.  

“[Anyone] who’s selling [pirated] DVDs, they may find themselves in difficulty very quickly,” Mr. Moses said. “But this is about being internationally compliant … not just to attract business, but to do business internationally out of the Cayman Islands.”  

Mr. Moses said his law firm has fielded questions from various Fortune 500 companies over the last few years along the lines of “If we send you intellectual property, can you assure us that it will be protected in the Cayman Islands?” 

“That question is becoming more difficult to answer,” Mr. Moses said.  

Previously, enforcement of alleged copyright infringements in Cayman was based on a version of the U.K. 1956 Copyright Act extended to the Cayman Islands and written at a time when the Internet, computer software development, and international television broadcasting, among other things, did not exist.  

There have been recent consequences for Cayman not having a modern copyright and intellectual property rights regime, Commerce Minister Wayne Panton said Thursday.  

Mr. Panton gave one example in which U.S.-based cable network Home Box Office had filed a complaint with the U.S. trade representative concerning what the broadcaster alleged was theft of some of its channels by a Cayman Islands cable broadcaster. Mr. Panton said that complaint could affect Cayman’s application to be accepted as one of the Caribbean Basin Initiative countries by the U.S.  

That initiative, which is essentially a trade agreement, would allow – among other things – U.S. citizens who visit Cayman for business conferences to get tax write-offs for the trip.  

“That’s just an example,” Mr. Panton said, adding that other, more positive reasons to change current copyright laws could also be found.  

“Intellectual property rights are featuring very significantly now as assets of businesses,” he said. “New tech-based [company] registrations will boost Cayman’s economy. This type of modernization was envisioned as part of [Cayman Enterprise City].”  

Mr. Panton said many companies registered and operating in Cayman use subsidiary companies in other jurisdictions to protect intellectual property rights. “We’re losing the opportunity to provide that service here,” he said. “And if they have to go elsewhere, they’re exposed to other jurisdictions and what they may have to offer.”  

Trademarks 

Going hand-in-glove with copyright legislation is the need for updated patent and trademark rules, Mr. Moses said, indicating there is a clear need for Cayman to have its own trademark registration. Now, any company seeking to register a trademark in Cayman has to first go through the United Kingdom trademark registration process. 

“We’re planning to change that,” Mr. Moses said. “Caribbean Utilities Company’s ‘sparky’ [the turtle] logo, is registered in the U.K. Does CUC do business in the U.K.? I don’t think so.”  

There is also the situation created with current trademarks legislation that causes Cayman to lose out on revenue if certain large international firms register through the United Kingdom, but also do business in the Cayman Islands. Often, Mr. Moses said, those companies will wait “until there’s a problem” before registering their trademarks in Cayman.  

“[The government is] missing out on a huge potential revenue opportunity,” he said.  

Enforcement  

The extended U.K. 1988 legislation, as it is to be applied in Cayman, will make the government Department of Commerce and Investment the designated body to handle complaints regarding copyright infringement.  

DCI Director Ryan Rajkumarsingh said his department will eventually have five inspectors to look into claims regarding copyrights as well as other issues involving trade and business licenses and other licensing matters.  

However, Mr. Moses said the legislation, when fully implemented, should allow business representatives themselves the ability to seize copyrighted materials from stores where they are illegally being sold.  

Going back to the “pirated DVD” example, under current Cayman Islands law, court action would have to be undertaken – costing potentially tens of thousands of dollars – simply to remove a few DVDs or knock-off clothing items from the shelves.  

The DCI is also given the ability to make inspections of business premises, seize goods and documents and search for copyrighted items. Abuses of search and seizure powers done “in bad faith” can lead to compensatory claims from the businesses involved.  

The law also establishes a six-person Copyright Tribunal to hear arguments in cases where claims of copyright infringements are disputed.  

Hon-G-Wayne-Panton-MLA

Mr. Panton
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  1. Even 1988 is a long time ago and creates its own problems…

    As the Compass mentions DVD”s let me use that to pose a question…

    Does anyone know what region we are in here?

    It”s muddled and confusing, but for DVD”s Cayman is…
    Erm… maybe Region 1 USA, Canada, Bermuda, Caribbean, US territories ?
    But British Overseas Territories are actually region 2 (Europe) ?

    For Blue-Ray they simplified it – But is Cayman 1 (Americas) or 2 (Europe)

    Does it matter?

    Well, Hollywood has been known to release different regions at different times.

    So if a film is released as region 1 and 2 at different times, and IF Cayman is actually region 2.

    Could company B who imports from Europe (region 2), where the film is not out, seize official region 1 DVD”s from company A who imports from the USA? To protect their marketplace in the interim.

    Of course the region 2 DVD”s wont actually play on the USA imported region 1 DVD players found here when it is finally (officially) released in Europe/Cayman 6 weeks later.

    If a third company found a source of genuine Region 9 (All) DVD”s – could that also put them in hot water with the other 2? And someone else finds a legitimate supplier with it on Blu-Ray… Aaaargh ?!?!?

    Think it”s just technology?
    There is a case where a company with the distribution rights to a book in the US, and CHOSE only to sell a deluxe leather-bound $300 hardback edition, sued a student for importing ”legal” (i.e. all royalties paid to author) $30 paperback versions from Europe and Asia – believe it”s still under appeal but the copyright implications are fascinating.

    Is a shampoo made and sold in the USA but also packed in an ”export” bottle with additional spanish text for South America allowed to be subsequently re-imported as a legal product back to the USA.

    Copyright law needs careful consideration if it is not to be misused as a tool to hinder free trade of legitimate goods across borders.

    Cayman could even thrive if the variations between US and Euro copyright laws created a loophole (maybe even deliberately), allowing Cayman to become a ”grey market” hub between US and EU.

    Would a shipping container which sat on Cayman soil for 24 hours before returning back to the US be a ”legitimate” European import on completion of its ”Caribbean cruise” thereby circumventing any ”exclusive US distribution rights”.

    Talk about opening a can of worms…

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