AmCham arrow Publications arrow Topics Archive arrow Topics Archive 2003 arrow Vol.33- No.8 arrow Issues: Some Unfortunate Revisions
Issues: Some Unfortunate Revisions PDF Print E-mail

Due to last-minute legislative changes, the Copyright Law amendments passed in June are much weaker than the executive branch intended.

 

Due to last-minute legislative changes, the Copyright Law amendments passed in June are much weaker than the executive branch intended.


On the last day of the spring legislative session (June 6), the Legislative Yuan (LY) rushed through a series of amendments to the Copyright Law, enabling the government to keep its promise to Washington to enact long-awaited measures aimed at strengthening Taiwan's intellectual property rights protection. Media reports the next morning emphasized the major breakthrough in the new legislation -- making more violations of the Copyright Law (particularly those involving optical media) now prosecutable as "public crimes." In the past, piracy in Taiwan was treated chiefly as a private offense, preventing the police and prosecutors from taking action unless a victim came forward to lodge a complaint.

The immediate reaction of the international business community to the change was extremely positive. But as those concerned with IPR protection in Taiwan began to study the new law in greater detail, they discovered a dismaying number of shortcomings that had crept into the bill during those last few hectic days before passage. Besides suffering from imprecise wording and internal contradictions in certain sections, the bill as enacted significantly watered down some key aspects of the original version as drafted by the Executive Yuan.

The always-vocal chairman and CEO of the Motion Picture Association in the United States, Jack Valenti, lost no time in blasting the amendments as "an unfortunate step backward for intellectual property protection." He called on the U.S. government to refrain from negotiating TIFA (Trade & Investment Framework Agreement) and FTA (Free Trade Agreement) accords with Taiwan "until the necessary repairs are made to the amendments."

U.S. government officials are also known to be concerned, and in particular are looking at how elements of the amendments may contravene the international TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement and thus represent a question of World Trade Organization compliance. In Taiwan, the various organizations representing segments of the music, software, and motion picture industries are preparing a position paper analyzing the damage that the new law could do to this country's business climate.

Among changes made in the LY that have aroused such consternation are:

* Eliminating the minimum prison terms and fines for those convicted of manufacturing or distributing counterfeit products (while raising the maximum allowable penalties). A high minimum punishment is considered a greater deterrent than a harsh maximum, since judges in Taiwan have a history of leniency toward IPR violation, regarding it as less of an offense than stealing physical goods. Without a stiff minimum, it is also more likely that prison sentences will be replaced by fines.

* Adding a distinction between for-profit and not-for-profit activities in the reproduction or distribution of pirated products. The threshold at which not-for-profit infringement of a copyrighted work becomes illegal is set at five copies or a value of NT$30,000 (US$875). IP owners are concerned by the loose definition of the word "copies." Music publishers, for example, note that a single pirated disk could contain more than 100 songs.

* Weakening the ability of law enforcement agencies to make arrests at night markets, where pirates have sought to evade capture by operating unmanned stands (customers are instructed to place their payment in a box). The law as enacted removed a clause explicitly making it a crime simply to display or store counterfeit products. Critics of the amendments worry that a police officer would have to personally witness the sale of five copies or NT$30,000-worth of pirated goods in order to make an arrest.

* Removing penalties for tampering with the self-defense encryptions on optical disks known as Technical Protection Measures.

* Canceling a provision that would have authorized Customs to investigate shipments suspected of containing copyright-infringing products.

* Extending the deadline by one year -- in apparent violation of TRIPS -- for clearing inventories of pirated movies and music dating from before 1965.

Not all the experts are convinced that the recent revisions, despite their defects, represent a serious setback. Describing the public prosecution portion of the new law as "something we've been waiting to get for many, many years," Jeffrey Harris, co-chair of the AmCham Intellectual Property and Licensing Committee, views it as a "huge step forward" that outweighs in importance the negative aspects of the amendments. He notes that since movie and music companies tend to make most of their profits from sales during the period immediately after a new release appears, it is impossible for them to effectively monitor the piracy situation in every market in the world in that short time without the local police being able to take the initiative.

Harris said he expects that many of the problems in the new law can be overcome if strong implementation measures are adopted by the law enforcement agencies and the judiciary. For example, the Judicial Yuan could issue minimum sentencing guidelines to judges.

Already, the Ministry of Economic Affairs' Intellectual Property Office, Ministry of Justice, and the National Police Administration  have signed an understanding designed to close the potential loophole in the new law in cracking down on nightmarket piracy. Though it remains to be seen whether judges will accept the interpretation, the memorandum states that display of counterfeit products for the purpose of sale should be considered equivalent to a commercial transaction.  

Robin Lin, secretary-general of the phonographic industry organization in Taiwan (IFPI), also looks on the new amendments as a jumble of positive and negative measures, but is less sanguine that the weaknesses can be corrected without further legislation. Together with other anti-piracy industry groups, IFPI plans to try to educate LY members about the need for yet another round of amendments. But as the fall legislative session will be preoccupied with such issues as the budget, Grand Justice nominations, and the referendum bill, and with the 2004 presidential election following soon after, there is unlikely to be room on the legislative agenda very quickly -- and the immediate efforts of the IPR lobby will focus on how well the existing laws are enforced.


On the Positive Side

Regardless of any shortcomings, in a number of respects the new amendments represent some definite progress.

Besides broadening the public-prosecution coverage of the Copyright Law, which in the original statute was confined to repeat violators considered to be engaged in counterfeiting as their vocation (a charge often difficult to prove), the newly revised version contains numerous provisions representing a definite advance in terms of intellectual property protection. These steps were designed to update the law for the internet age and to bring Taiwan into conformity with the World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO Performance and Phonogram Treaty. Taiwan has pledged to respect these international pacts even though it has been excluded from being an official signatory.

Among the main improvements were:

* Providing a new right of "public transmission" for copyright owners, governing internet and intranet transmissions of both sound recordings and artists' performances.

* Strengthening the prohibition against use of infringing computer software for business purposes. The old law banned use of such copies for profit-making purposes but not for a business's internal operations.

* Authorizing the courts to confiscate pirated optical disks, the raw materials and equipment used to make them, and any profits derived from the infringement -- whether or not those items belong to the defendants. Previously, under the criminal code, ownership by the defendants had to be proved.

* Authorizing the police to seize pirated disks at a night-market stand -- and any money left behind -- when the suspected seller has escaped and cannot be identified.

* Increasing statutory civil remedies by 500% to up to NT$5 million (US$146,000) for serious intentional infringement when the amount of actual damage cannot be proved, and raising criminal penalties for "vocational infringement" to a maximum fine of NT$8 million (US$233,000) -- 18 times the level of the old law.

* Enhancing the copyright owners' protection on sound recordings by granting a comprehensive "distribution right" as a further bar against sales of pirated copies.

* Creating a right to remuneration for sound recordings and the performances in those recordings when they are played in public places of a commercial nature such as airplanes, restaurants, and department stores.

* Extending performers' protection to the performance of "folklore" and granting  performers the distribution and rental rights for their performances on sound recordings.
 
[ Back ]