Increase in Internet Marketing of Counterfeit Goods Poses

UNCLAS TAIPEI 001534

SIPDIS

SIPDIS

DEPT FOR INL/AAE, EB/TPP/IPE AND EAP/TC
BEIJING PASS CHENGDU
HONG KONG FOR DHS

FROM AIT KAOHSIUNG BRANCH OFFICE

E.O. 12958
TAGS: KIPR ECON EINV KCRM TW
SUBJECT: Increase in Internet Marketing of Counterfeit Goods Poses
Enforcement Challenge For Southern Taiwan



1. Summary. Lin Chih-ming, Team Leader of Kaohsiung's IPR
Enforcement Team, told AIT/K that in the past year, more than ninety
percent of their caseload involved sale or transfer of pirated and
counterfeit goods via the internet. Lin said that enforcement
efforts and seizures of equipment had driven the mass producers of
counterfeit digital media to move their factories to the mainland.
Frequent raids and a continuing police presence have virtually
eliminated the vending of counterfeit goods in Kaohsiung's night
markets. End Summary


2. According to Lin, while large scale vending of pirated software,
movies and music has nearly disappeared, small scale, burn-to-order
vending remains common. This poses a problem for investigators, as
the vendors generally don't maintain any stock on hand, and so must
be caught in the act. Generally the only evidence available is a
list of titles.


3. The IPR police said they face an even greater difficulty in the
sale of counterfeit designer goods. According to IPR enforcement
officers, counterfeit designer goods, including leather bags,
garments, glasses, and accessories bearing the brand names of Luis
Vuitton, Chanel, Prada, Christian Dior, and Gucci, are sold directly
over the internet. The primary customers are generally young career
women. The purchases are made over the internet using credit cards
and the counterfeit goods are shipped directly from the mainland.
Team Chief Lin said that since the producers and vendors of the
merchandise are located in the mainland, there is little that the
Taiwan police can do to stop the problem. When they shut down a
suspected website, the perpetrators just set up a new website and
resume business.


4. Lin went on to say that illegal peer-to-peer downloading, like
direct internet vending, poses great difficulties to investigators.
He said that, while Taiwan was able to obtain a conviction against
the P2P company, Kuro, they have made little progress against other
P2P vendors. Among the many difficulties faced in this area, Lin
emphasized that most of the companies involved are incorporated and
maintain their servers outside Taiwan. Additionally, the "shared"
software could come from any computer in the world that has the
software installed, and seldom comes from a single source. He said
that his office is working with internet service providers to find a
means to resolve the problem, but that there is little enthusiasm on
the part of prosecutors to pursue cases against individual
downloaders.


5. The IPR Task Force Kaohsiung Team was established in 2004 and
has responsibility for Yunlin, Chiayi, Tainan, Kaohsiung, Pingtung,
and Penghu. The Kaohsiung team has fifty plain-clothes officers.
The Kaohsiung team and the other two such teams in Taichung and
Taipei accounted for 56 percent of pirated and counterfeit goods in
Taiwan for the year 2005.


6. Comment. The Kaohsiung IPR team continues to make more than its
share of arrests and seizures, and the sale of pirated software and
counterfeit goods in night markets appears to have dropped
substantially. However, burn-to-order schemes are common, and are
openly advertised in the local press. The vendors' use of
disposable cell-phone numbers makes these cases difficult for the
police to trace. Likewise, there are few counterfeit goods
available in local shops, but the merchandise is readily available
over the internet. Effective Taiwan enforcement efforts have
encouraged counterfeiters to move to the mainland, but the result is
that jurisdictional problems now make it virtually impossible to
prosecute the perpetrators. End Comment.


Thiele

Young