Special Reports

Embassy-Sponsored Intellectual Property Rights Roundtable Focuses On Protection Of Digital Music, Films And Software

November 12, 2004

Summary

       A one-day roundtable on "Intellectual Property Rights Protection: A Source of Economic Growth" co-sponsored by Embassy Seoul and Korea's Ministry of Foreign Affairs and Trade (MOFAT) on November 12, brought together 80 right holders, Korean government officials, academics and lawyers to discuss the legal and enforcement challenges of protecting intellectual property in the digital age.

       Keynote addresses by the Ambassador and the Korean Minister of Trade set a cooperative tone, while underscoring shared recognition that much work needs to be done. The opening panel showcased initiatives of the Korean Government -- the Office of Government Policy Coordination's May 2004 "IPR Protection Master Plan" -- as well as the U.S. government, including our recently announced "Strategy Targeting Organized Piracy," or "STOP!" program.

       Subsequent panels featured Korean and U.S. government officials and rightholders from the sound recording and film industries sharing their views on enforcement, penalties and most of all the new legal frameworks needed to protect content in the digital environment. National Assemblyman Lee Jung-kul from the Uri Party used a luncheon speech to stress the need for Korea to grow into its responsibilities as a leader not just in information technology and broadband connectivity, but also in protecting creative content and quality.

Keynote Speakers Provide Clear Messages

       The Ambassador and Korea's Minister of Trade, Kim Hyun-chong, set the tone for Embassy Seoul's inaugural IPR Roundtable with strong statements on how increased IPR protection stimulates economic growth. The Ambassador noted the "high bars" that the Korea needs to surmount to put in place legal regimes to protect the creativity of writers, performers and producers in the online environment, as well as to allocate adequate resources for IPR enforcement. He encouraged the Korean government to interpret as broadly as possible the recent amendment to the Copyright Act, in order to protect the exclusive rights of performers and sound recording producers. The Ambassador also expressed appreciation that Korea has expressed interest in working with United States to halt trade in counterfeit goods worldwide through the STOP! Initiative.

       Minister Kim addressed Korea's responsibility to "Build a Knowledge-based Economy through IPR Protection," stressing that the protection of IPR has "become one of the priorities of my government's economic policy." Kim specifically noted that since Korea is the seventh-largest export market for U.S. goods, any strengthening of bilateral trade, such as through a Free Trade Agreement, would require strong legal and enforcement regimes for the effective protection of IPR. He also noted that achieving the Korean government's goals of developing a knowledge-based domestic economy and attracting more foreign direct investment requires full protections for IPR. Kim briefly reviewed the main points of the Korean government's IPR protection plan. He also noted that the USG's STOP! Initiative is "timely and appropriate" since Korean-made goods also suffer from counterfeiting and illegal copying in the global market, and added that he believes it is essential our two governments work cooperatively in the fight against organized global piracy.

Global Coordination on STOP!-ing IPR Violations

       The morning's first panel highlighted United States and Korean government IPR initiatives. Chung Byung-hoa, Director of the North America Trade Division of the Ministry of Foreign Affairs and Trade (MOFAT), noted that Korea's IPR protection plan has 15 key tasks, and aims to establish a stronger system to crack down on IPR infringements, improve IPR-related laws, and promote public awareness of IPR protection. In Chung's view, the latter is the most serious problem; as a result, the Korean government is planning to incorporate IPR protection education in school curricula beginning from Middle School. Chung acknowledged that the U.S. government's interest in IPR has enhanced Korea's interest in protecting IPR, yet suggested that international cooperation, rather than only review and scrutiny, would go farthest toward supporting Korea in strengthening its IPR protections.

       Andrew Quinn, Acting Deputy Assistant U.S. Trade Representative for Korea, outlined the key elements of the USG's interagency STOP! Initiative and explained that the United States looks forward to working with like-minded trading partners such as Korea, to improve both policy and practice to halt the movement of counterfeit goods across borders. Quinn noted that Korea's chairing of the Asia Pacific Economic Cooperation (APEC) meetings in 2005 should present an opportunity to demonstrate leadership on intellectual property issues, including efforts to decrease global trade in bogus goods.

Prosecuting Pirates

       Panel Two, "Role of Enforcement in IPR Protection," featured Jung Jin-Sup, Senior Prosecutor at the Seoul District Prosecutor's Office, Kenneth Doroshow, U.S. Department of Justice Senior Counsel at the Computer Crime and IP Division, and Hyun Sung-hoon, Director of IP at the Korea Intellectual Property Office (KIPO).

       Summarizing the evolution of IPR enforcement efforts in Korea, both Jung and Hyun briefed the participants on laws and amendments that have allowed the Supreme Prosecutor's Office and KIPO to become more effective. Jung emphasized that revisions of the Korean Copyright Act in 2002 and the Industrial Property and Patent Act in 2001 enhanced prosecutors' toolkits and gave powers to halt IP criminal activities including piracy of software and books, and illegally produced CD's and DVD's. The levels of fines and punishments have been increased as well. KIPO's Hyun outlined the Intellectual Property Office's front-line efforts to identify trademark and patent violations in close cooperation with local police and customs, and through anonymous hotlines, to allow businesses and the public to assist with tips about IP infringement.

       Justice's Ken Doroshow stressed that digital crimes do not know borders, and the perpetrators of sophisticated on-line piracy are located physically in many countries under numerous legal regimes. He presented a case study of the largest Internet piracy crackdown operation to date (Operation Higher Education) that was prosecuted through tight coordination among the law enforcement agencies of 12 nations. He demonstrated the efficient organizations of on-line pirates, and how crucial evidence can "disappear" in the matter of a few hours.

Wake-Up Call from National Assemblyman

       Representative Lee Jong-kul, Senior Deputy Floor Leader for the majority Uri Party, emphasized in his luncheon address that IPR protection has been and will remain a focal point of trade discussions between the U.S. and Korea. One of the United States' top ten trading partners, Korea needs to realize that "we have our own stake in fully protecting IPR." He noted that his meetings in Washington in July had helped him understand the United States' concern about problems accompanying Korea's high broadband Internet connectivity.

       Rejecting the view that users of digital content should have equal rights with right holders, Lee urged the Korean government officials and business leaders present at the meeting to understand that Korea is faced with a test: "It is abundantly clear that IPR protection in Korea needs to expand from seeking damages to becoming wide enough to encompass cultural improvements and products, so that both right holders and ultimately the public can enjoy maximum benefits."

Challenges of the Digital Environment

       Both afternoon panels turned to concerns about laws related to protection of digital content, with participants' questions and in-depth discussion centered on the challenges and legal frameworks needed to guarantee full protection for right holders.

       MaySeey Leong, Deputy Regional Director for IFPI (International Federation of Phonogram Industries) Asia, outlined the severity of music file sharing problem in Korea. Korea is the country that produced the first MP3 player in 1997, made the first 8-gigabyte computer chip in 2004 and has one of the world's highest rates of broadband Internet connection -- but it also currently has an estimated 800,000 unauthorized music files on the Internet being shared through peer-to-peer (P2P) services involving more than 10 million "netizen" subscribers. Hardest hit has been Korean performers and phonogram producers, with Korean music-lovers no longer having any incentive to buy CD's when top tunes are available for free on-line. Leong pointed out that the market for both domestic and international sound producers has shrunk more rapidly in Korea than anywhere else in Asia. "Korean music companies need to sell at minimum a break-even number of CD's or paid on-line tunes in order to have money to reinvest in new artists," she stressed. "Otherwise, Korea's music industry risks losing its creative edge and high popularity."

       Jennifer Ness of the U.S. Patent and Trademark Office stated that not only music, but also software, games, and films are being downloaded in Korea without authorization or compensation to the right holders. Adequate laws are needed to deal with both current and anticipated problems, and should be flexible enough to cover newly emerging technologies, yet tight enough to prevent loopholes. "Consumer education is also essential; neither sustainable economic or creative growth can be based on free content," Ness said.

       Hugh Stephens, Time Warner's Vice President for Public Policy in the Asia-Pacific, emphasized the global nature and corresponding responsibilities of the digital environment. "Unauthorized P2P file swapping should be labeled as stealing, rather than the more adventurous term "piracy" with its swashbuckling image," Stephens noted. "Thieves should pay the price as well as restitution for what they steal." Stephens added that countries' IPR frameworks must address the sophisticated means hackers use to evade access controls. In addition, Internet Service Provider (ISP) liability has to be clearly delineated. Stephens also pointed to the advantages of extending the copyright for films beyond the minimum of the Berne Convention's 50-year protection.

       Dr. Choi Seung-yul, Director of Research at Korea's Program Deliberation and Mediation Committee (PDMC) under the Ministry of Information and Communication (MIC), launched the final panel. Dr. Choi shared a detailed Powerpoint presentation on the growth of the domestic digital content industry, including software, games and music. He noted that the Ministry of Information and Communication's Standing Inspection Team (SIT) has grown in both size and responsibility since its judicial police powers became effective in October 2003. PDMC has invested resources in public education against software piracy and set up a consulting service for software management companies to avoid infringing on right holders' exclusive rights.

       Steven Tepp of the U.S. Copyright Office explained how the United States implemented the World Intellectual Property Organization (WIPO) Internet Treaties and how the U.S. has gone beyond the minimum requirements of those instruments to create appropriate protections for IP as the digital market has evolved. Tepp stressed the need for attention to four areas: a) protection for performers and producers of sound recordings; b) legal safeguards for technological protection measures; c) a balanced approach to the liability of Internet Service Providers (ISP's) which promotes cooperation between them and the copyright owners; and d) clear standards of secondary liability in copyrights in order to facilitate ISP-right holder cooperation and provide a remedy against infringement on peer-to-peer networks. Tepp noted that neither the U.S. nor any country's IP law is perfect, as exhibited by past and ongoing court cases. Thus it is essential that governments observe the marketplace and make legislative adjustments as quickly as possible.

       Dr. Choe Kyong-soo, Senior Research Fellow of the Copyright Commission for Deliberation and Conciliation (CCDC) under the Ministry of Culture and Tourism closed the session with comments on Korea's IP legal structure. He stated that in the ongoing global discussion on ISP liability, concerning "how soon is soon enough" for unauthorized content to be taken off an Internet site, in his view, "immediate action is the least confusing." Choe stated the CCDC published a thorough study in 2003 examining options to protect content in the digital broadcasting environment, making several recommendations. However, court cases in the U.S. and in the Asian region have often made the picture less certain. In his view, the "gaps" left by court decisions need to be filled in by legislation so that Korea and all treaty signatories can be fully compliant with both the WIPO Copyright Treaty (WCT) -- ratified by Korea in June 2004 -- and the WIPO Performers and Phonogram Treaty (WPPT). Korea is currently drafting revisions to its Copyright Act to move toward ratification of the WPPT.

An Inter-Active Dialogue

       Throughout the day, government officials, right holders, businessmen, media reporters, European Union and other diplomats and academic participants asked thought-provoking and often challenging questions of the panelists and one another. Although their views were divergent at times, and more questions were raised than answered, both panelists and participants appreciated the fact that the Roundtable helped move the debate on IPR protection in Korea -- especially protection of digital content -- into better focus.