ECONOMICS AND TRADE | Achieving growth through open markets
22 April 2008
Taking Action: How Countries Are Fighting IPR Crime
From Estonia to Taiwan, countries foil IPR lawbreakers
(The following is taken from the U.S. Department of State publication, Focus on Intellectual Property Rights.)
PERFORMING ARTISTS GROUP WINS IN BELGIAN COURT
A Brussels court ruled against an Internet service provider (ISP) in a lawsuit brought by SABAM, a Belgian group responsible for collecting royalties due performing artists. SABAM claims that this is the first such successful judgment of its kind in Europe. The November 30, 2004, ruling requires that Tiscali, a small but popular ISP, block certain net services that permit Internet web surfers to download music protected by copyright. The judge did not fault Tiscali management for the activity of its site users, but did find that Tiscali had an obligation to halt such infractions of copyright.
SABAM says its goal is to turn off the peer-to-peer trading of data from users' hard drives when on line, a system used by popular sites to facilitate music downloads. Defenders of the Internet users and music traders claim that compliance with the judgment is technically impossible. They liken it to asking for an interdiction of CD writer technology because it could be misused for pirating copies of music. Sources at Universal Music in Brussels, one company that has suffered heavily from Internet piracy, assert that the screening technology does exist, and that ISP companies could filter transmissions made over their systems.
Universal Music estimates that up to 85 percent of the blank recordable digital media sold in Belgium is used for downloads of protected intellectual property, be it music, videos, movies, or software. The Belgian Anti-Piracy Federation, supported by the Motion Picture Association of America, estimates that 250,000 protected movies or videos are downloaded daily in Belgium.
BURKINA FASO TARGETS COPYRIGHT PIRACY
Burkina Faso, which has a vibrant and significant local music industry under assault by cut-rate imported pirated music products, is fighting back. In the fall of 2004, the Ministry of Culture, Arts, and Tourism and the Copyrights Office kicked off a three-day meeting to discuss anti-piracy strategies against the more than 10 million pirated cassettes that enter the country each year, 80 percent of them from neighboring countries. The meeting ended with the incineration of 17,000 pirated cassettes and CDs seized by the Copyrights Office and the Gendarmerie in Ouagadougou and Bobo-Dioulasso.
Before reporters covering the meeting, Mahamoudou Ouedraogo, minister of culture, arts, and tourism, called piracy “a cancer” for Burkina Faso and insisted that pirates should be prosecuted for their crimes. The director general of the government's Office for the Rights of Authors, in turn, outlined Burkina Faso's anti-piracy strategy. The strategy will include setting up an independent anti-piracy organization; issuing a common policy with the neighboring countries to secure the borders against pirated goods; setting up a subregional court in charge of copyrights; providing intellectual property rights (IPR) training to judges, gendarmes, police, and customs agents; and pressing criminal charges against pirates and sellers of pirated goods, of which there are an estimated 100,000 in Burkina Faso. The majority of these sellers are street hawkers.
SUPPORTING IPR THROUGH IMPROVED GOVERNMENT-NGO COOPERATION IN ESTONIA
Estonia's Police Board and its Customs and Tax Board signed a cooperative agreement on December 27, 2004, that allows them to improve Estonia's IPR regime through the exchange of information on operations, investigations, and procedures. Both boards also are working more closely with the country's leading IPR nongovernmental organization (NGO), the Estonian Organization for Copyright Protection (EOCP), in gathering information and securing evidence on specific cases of IPR infringement.
EOCP and other Estonian NGOs also work independently to teach the younger generation about the importance of IPR. According to EOCP's managing director, Ilmar Harg, Internet piracy is a more worrisome problem than pirated CDs in Estonia, with an average of 50 web sites closed each month because of pirated content. In November of 2004, the NGO organized a media campaign in Estonia's leading newspapers explaining the criminal nature of IPR infringement on the Internet. The campaign materials reported that, beginning in 2005, the Estonian Police will step up its investigations and prosecutions of Internet piracy, and noted that the Estonian penal code calls for up to three years of imprisonment for those found guilty of Internet piracy.
The Estonian Computer Club, another local NGO that boasts about 4,500 members, is using a U.S. Embassy grant to organize several IPR-related seminars and Local Area Network (LAN) parties for young computer users. The seminars will be held in cooperation with EOCP and the Business Software Alliance.
IN INDIA, A LAW FIRM COMBATS PIRACY WITH NEW STRATEGY
The Mumbai-based law firm of Krishna and Saurastri's new strategy for combating copyright infringement in India is to use the legal system to inconvenience the pirated material manufacturer through persistent search-and-seizure tactics and with recurrent civil and criminal litigation.
According to Sunil Krishna of Krishna and Saurastri, their strategy combats violations in the pharmaceutical, software, audio, and music industries. Owing to what Krishna describes as “the reluctance of local police to pursue” complaints about counterfeited goods, his firm now has turned to the “Anton Pillar” order along with other means to fight piracy. The “Anton Pillar” order allows for the appointment of court receivers to search and seize suspected counterfeit property for custodial purposes without any prior notification to the alleged perpetrator. The court also orders the police to provide protection to the receiver of the goods. Krishna claims that this method has proved extremely successful with pirated software.
After the seizure, Krishna says, he can obtain an injunction against the alleged perpetrator. This will prevent additional manufacturing and/or trading of the counterfeit products. Violating the court injunction is punishable by a minimum of six months to a maximum of three years' imprisonment. Krishna argues that this sentence serves as a deterrent against future counterfeiting operations.
The attorney cites two cases where both civil and criminal statutes were used in successfully eradicating a spurious pharmaceutical product. Krishna said this process is time-consuming, and involves filing hundreds of cases against the manufacturers of the fake goods. Convinced that it is a successful strategy "guaranteed" to make the manufacturer or trader of illegal goods close up shop permanently, Krishna says that the cost for this approach is less than 5 percent of the legitimate turnover of the company whose goods are being copied.
Krishna believes the government of India could make a few changes that would make his job easier. He favors the continual education of law enforcement officers about piracy. He recommends that Indian Customs be empowered to destroy counterfeit goods, something they cannot do now. He also suggests that pirated goods coming into or going out of India could be prosecuted under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act. The act allows for a one-year imprisonment without bail for the illegal import or export of any good.
OPTICAL DISC REGULATIONS NOW LAW IN INDONESIA
Former Indonesian President Megawati Soekarnoputri signed Indonesia's first-ever optical disc regulations on October 5, 2004. The long-awaited regulations require producers to register their production facilities, maintain and report production records, and open their factories to unannounced police and/or civil service investigators, among other measures. Then Minister of Industry and Trade Rini Soewandi signed the accompanying implementing ministerial regulations on October 19, her last day in office. In anticipation of a decision by incoming President Susilo Bambang Yudhoyono to split the Ministry of Industry and Trade into two separate ministries, Soewandi issued two separate implementing regulations, dividing issues and responsibilities between the two future ministries.
According to a local Indonesian Motion Picture Association consultant, who worked with Indonesian officials in drafting the new regulations, these will require existing and future companies with optical disc production facilities to:
• Register each of their production facilities, the production capacity at each facility, and manager names at each facility with the Ministry of Industry.
• Hamg company signs outside factories in a manner that makes them clearly visible to the public.
• Use and have in their possession only those production molds that are engraved with government-approved source identification codes (SID).
• Keep records of orders, the quantity of polycarbonate (the material used to make discs) purchased, numbers of disc copies produced, samples of each batch of discs produced, and copyright agreements.
• Register with an internationally accredited organization that issues SID codes, such as the International Federation of the Phonographic Industry (IFPI).
The regulations provide for the possibility of administrative sanctions, specifically the removal of a producer's registration. Since the optical disc regulations fall under Indonesia's copyright law, they call for criminal penalties of up to five years' imprisonment. These new regulations went into effect on April 18, 2005.
PARAGUAY: USE OF LAWS, ENFORCEMENT TO PROTECT IPR
Paraguay moved forcefully in 2004 with legislation and enforcement actions that strengthen IPR protection. For instance, the government worked with the private sector and supported the introduction of two draft laws that increase penalties in criminal cases of IPR violations, one law for copyright piracy and the other for counterfeiting. The draft laws increase penalties to five years or more, avoiding provisions for crimes with lower penalties that provide the option of paying a fine in lieu of jail time.
Paraguay's Specialized Technical Unit, designed to act as an intelligence and inter-agency coordination unit for IPR enforcement, became part of the Ministry of Industry and Commerce, and gained a stronger focus on copyright piracy and falsification. This unit has participated in a significant number of enforcing actions, often in cooperation with private sector groups. Reviews of company registration data following increased cooperation (including data sharing) between the ministry and the Customs Service led to the closure of 56 importing companies and the cancellation of 73 import licenses.
A report prepared by the ministry in February 2005 states that between December 2003 through January 2004, for instance, action by the Paraguayan authorities resulted in: 11 million virgin CDs confiscated; 1,600 CD burners confiscated; five cigarette factories raided that were suspected of producing counterfeit cigarettes; three printers raided that were producing cartons and labels for counterfeit cigarettes; four warehouses raided where counterfeit cigarettes were stored; 15 operations resulting in the seizure of various counterfeit products, such as watches, toys, and cell phones; raids of 10 TV cable operator companies engaged in piracy of cable signals; two raids in Market 4 in Asuncion with 11 stores raided and the confiscation of thousands of pirated CDs and DVDs; and the investigation of five major organized crime groups that imported CDs for sound-recording piracy.
The ministry reached agreement in August 2004 with Fox Sports Latin America to cooperate in ending the theft of Fox's programming, among the most popular in Paraguay. The first such agreement signed by Fox in Latin America, it allows Fox and the ministry to use the powers of the country's communications regulator (CONATEL) to revoke the licenses of companies providing pirated cable signals, a more efficient method than relying solely on the courts. Since the agreement was reached, at least four cable TV providers have reached accords with Fox and stopped pirating the signals.
SOUTH KOREA: BRINGING SOUND RECORDING PROTECTION ON THE INTERNET INTO THE PUBLIC EYE
South Korean media headlines in January 2005 on the government's new action to protect sound recordings grabbed the attention of the Korean public. A drastic slide in revenues over the last three years for the music industry in South Korea, including both domestic and foreign rights holders, prompted the government to push through amendments to the country's Copyright Act that require prior permission from rights holders before anyone can download music from the Internet. In an effort to protect the "cultural future" of Korea – especially the "Korea wave" of popular music, TV dramas, and films that permeates Asia – the government has been very aggressively raising public consciousness about the new rules.
The Ministry of Culture and Tourism posted information on its web site to inform and educate the public regarding the practical consequences of the new amendments, which went into effect January 17. The web site unequivocally states that only performers and phonogram producers themselves can transmit their performance or phonograms over the Internet or other networks. If the general public, the users, want to transmit phonograms over the Internet, they must seek prior permission from the rights holders. The site lists acts now illegal in Korea, including uploading music files and other copyrighted works onto web sites, mini-homepages, Internet cafes, or blogs, and uploading music files with the purpose of file sharing to closed web sites, mini-homepages, Internet cafes, or blogs. The government's campaign seems to be bearing fruit: Recording companies report that they already have received inquiries from some of the smaller on-line music services asking for a meeting to discuss contract details.
In addition, three National Assembly members are sponsoring a bill to revise Korea's Copyright Act yet again. The bill would grant significant additional rights to producers and performers, including the right of communication to the public. The Ministry of Culture and Tourism's Game and Music Division, in turn, drafted a new Music Promotion Bill for consideration by the National Assembly that would introduce additional protections for sound recordings, as well as authorize the ministry to set up and run an inspection team to investigate and handle illegal phonogram cases.
SRI LANKA'S BIGGEST RAID DISCOVERS ILLICIT DISC-PRINTING PLANT
Although the sale of counterfeit CDs and DVDs is common in Sri Lanka, authorities assumed discs on sale were being imported to Sri Lanka from other parts of Asia. Then, on the night of October 9, 2004, Sri Lankan police investigating other criminal activities raided a previously unknown CD manufacturing plant, Optical Media Pvt. Ltd. Owned and operated by Malaysian nationals, the plant had been in operation since early that year, ironically as a company approved by the Board of Investment, the government of Sri Lanka's foreign investment promotion agency. The police also raided the main bazaar in Colombo and confiscated a large number of optical media products. The news of the raids spread to other counterfeit CD sellers, and most of the shops have stopped displaying counterfeit copies of the Eagle brand produced by the plant.
The plant had counterfeited music, movie, and software products and produced CDs using polycarbonate resin, which will make it possible to calculate the number of CDs and DVDs that were pirated. Informants told the police that a truck had removed approximately 175,000 discs and some stampers the night before the raid. Officials assume that, because of the large number of discs involved and the presence of several hundred Chinese Microsoft discs, the plant must have manufactured illegal discs for export as well as local consumption.
The U.S. Embassy in Colombo reports that its public/private IPR Working Group is helping to coordinate private sector support, including that of Microsoft, for Sri Lankan authorities' continuing investigations.
TAIWAN STRENGTHENS COPYRIGHT LAW
A new law passed by Taiwan's Legislative Yuan on August 24, 2004, closes loopholes in the version they passed in 2003. The new bill makes any technology or information used for circumventing "anti-piracy measures" a crime punishable by up to one year in prison and/or a fine of up to approximately U.S.$8000. It also allows Taiwan Customs to impound goods, pending determination of their authenticity. However, rights holders must still take measures to apply for attachment and/or initiate criminal or civil proceedings to protect their intellectual property rights within three days, or Customs is required to release the goods.
The 2003 law eliminated minimum sentences for counterfeiters, giving judges the discretion to allow violators to pay a fine instead of serving jail time. Most intellectual property pirates saw paying these minimal fines as a justifiable cost of doing business. The new law mandates that those involved in the sale or rent of copyright-infringing optical discs must be imprisoned between six months and five years, and also may be fined between U.S. $16,100 to U.S. $161,000.
