Online Piracy – a Growing IPR Challenge

In recent years Taiwan has made great strides in bolstering its protection of intellectual property rights (IPR) by passing new legislation, tightening enforcement, and raising awareness among judges and prosecutors of the importance of the issue. The improvements in copyright, patent, and trademark protection – and in the past few years of trade secrets – make Taiwan’s longtime inclusion on the U.S. priority watch list of countries with rampant IPR violations seems like a distant memory.

Of the several problem areas still remaining, one – the provision of sufficient protection to pharmaceutical patents – is currently receiving attention from the authorities (see the Issues section for more details). But there is another problem that deserves to be dealt with – the massive illicit downloading of movies, videos, and other copyrighted content, especially from websites hosted offshore. The Taiwan Intellectual Property Office (TIPO) last year suggested enactment of a law to require Internet Service Providers (ISPs) to block domains or IP addresses of websites identified as chronic infringers. But the initiative was dropped in the face of objections that it could be subject to abuse and erode the freedom of the internet.

The issue was revisited in one of the presentations delivered last month at AmCham Taipei’s 2014 Telecom & Media Symposium on the opportunities and challenges posed by the Over-the-Top (OTT) market, which bypasses traditional telecom operators to deliver content to consumers directly from the internet. OTT offers promising potential for the development of legitimate business, but it can also have severely negative effects if not properly regulated.

The presentation at the AmCham symposium outlined just how serious the situation has already become. A survey of internet piracy of selected English-language popular films between November 2013 and October 2014 showed that Taiwan ranked third in the Asian region for the volume of infringement, surpassed by only Singapore and the Philippines, countries with much stronger backgrounds in English-language usage. For Mandarin-language content, five overseas-based pirate websites are among the 150 most frequently visited sites by Taiwan users. The easy access to free pirated content makes it very difficult for legitimate sites – such as those run by Chunghwa Telecom, Next Media, and Sanlih TV – to be competitive, and it deprives performing artists, content producers, and distributors of revenue that is the rightful reward for their efforts.

The argument that nothing can be done about offshore operations has been proved invalid, as more and more countries take action to block blatantly infringing sites. In Asia, such measures have already been adopted by Australia, India, Indonesia, Malaysia, Singapore, and South Korea. Within the European Union, 12 countries now conduct site-blocking, with the number soon to rise to 18. Data from the U.K. and South Korea show that online piracy traffic has decreased substantially since the new policy began to be implemented.

Fears that site-blocking could threaten the sanctity of the internet also appear overblown. Regulators would have to go through the judicial system to prove sufficient cause for a site to be targeted, a reassuring safeguard in a country like Taiwan with a democratic system and sound rule of law.

The success of Korea, in particular, in curbing online piracy should serve as an encouraging example. If Taiwan hopes to realize even a portion of Korea’s achievement in developing its creative industries, it will need to ensure that the fruits of creativity are fully protected against theft.