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