Identifier
Created
Classification
Origin
07TAIPEI135
2007-01-18 08:50:00
UNCLASSIFIED
American Institute Taiwan, Taipei
Cable title:  

Taiwan TIFA: AUSTR Stratford presses on IPR

Tags:  ECON ETRD KIPR TW 
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R 180850Z JAN 07
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 3781
INFO RUEHBJ/AMEMBASSY BEIJING 6234
RUEHUL/AMEMBASSY SEOUL 8400
RUEHKO/AMEMBASSY TOKYO 8399
RUEHGP/AMEMBASSY SINGAPORE 6777
RUEHKL/AMEMBASSY KUALA LUMPUR 3657
RUEHML/AMEMBASSY MANILA 9920
RUEHHI/AMEMBASSY HANOI 3213
RUEHHK/AMCONSUL HONG KONG 7463
RUEHGZ/AMCONSUL GUANGZHOU 9911
RUEHGH/AMCONSUL SHANGHAI 0732
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
UNCLAS SECTION 01 OF 04 TAIPEI 000135 

SIPDIS

SIPDIS

STATE PASS TO AIT/W
STATE FOR EAP/RSP/TC, EAP/EP and EB/TPP/MTA/IPC
STATE PASS to USTR for BOLLYKY and ALTBACH, STRATFORD
USDOC for 4431/ITA/MAC/AP/OPB/TAIWAN/JDUTTON
USDOC for USPTO Gin and Browning and Snydor
USDOC FOR 3132/USFCS/OIO/EAP/WZARIT

E.O. 12958: N/A
TAGS: ECON ETRD KIPR TW
SUBJECT: Taiwan TIFA: AUSTR Stratford presses on IPR

REF: 06 TAIPEI 4007

Summary
-------
UNCLAS SECTION 01 OF 04 TAIPEI 000135

SIPDIS

SIPDIS

STATE PASS TO AIT/W
STATE FOR EAP/RSP/TC, EAP/EP and EB/TPP/MTA/IPC
STATE PASS to USTR for BOLLYKY and ALTBACH, STRATFORD
USDOC for 4431/ITA/MAC/AP/OPB/TAIWAN/JDUTTON
USDOC for USPTO Gin and Browning and Snydor
USDOC FOR 3132/USFCS/OIO/EAP/WZARIT

E.O. 12958: N/A
TAGS: ECON ETRD KIPR TW
SUBJECT: Taiwan TIFA: AUSTR Stratford presses on IPR

REF: 06 TAIPEI 4007

Summary
--------------

1. Summary. As part of a December 18-19 visit to Taiwan, Assistant
United States Trade Representative Timothy Stratford and Deputy
Assistant USTR Eric Altbach met with rights-holders, officials from
the Taiwan Intellectual Property Office, and the Minister of
Education to review IPR issues. Rights-holders expressed worries
over the impact of an IP court and encouraged passage of legislation
covering peer-to-peer file sharing and Internet service provider
(ISP) liability. Their frustration ran high with IPR problems on
university campuses. TIPO highlighted recent progress and claimed
that it was working with Chinese authorities to improve IPR
protection in the PRC. While professing not to care about the
Special 301 process, TIPO's Director General asked that Taiwan be
removed from the list. AUSTR Stratford encouraged TIPO to push
needed legislation though the Legislative Yuan and urged the
Minister of Education to address on-campus IPR issues. Other
non-IPR meetings covered in septels. End Summary.

Rights-holders Complain -- IP Court and Campus Piracy
-------------- --------------

2. AUSTR Stratford and DAUSTR Altbach met with rights-holders to
hear their views on IPR protection in Taiwan. The group included
Taiwan representatives from the MPA, IFPI, the Business Software
Alliance, and American book publishers. Their top concerns were
pending legislation on regulating online peer-to-peer file sharing
and on Internet Service Provider (ISP) liability, the scope and
impact of an Intellectual Property Court, and on-campus piracy.


3. They opened the meeting with an update on IPR-related
legislation currently before the Legislative Yuan. They expected
legislation regulating peer-to-peer (P2P) file sharing to pass this
session. Although the legislation has a "for profit" provision,
meaning that only P2P services that generate profit are liable for
prosecution, rights-holders still favor passage of the bill. They
are more concerned about the progress of draft legislation on ISP

liability. In particular, they note the draft law only sets general
guidelines for takedown notice procedures. Rights-holders stated
that procedures should be clearly spelled out in the law.


4. Rights-holders then raised the issue of piracy on and around
university campuses. The group was critical of the Ministry of
Education's lack of response to their concerns about infringing
activity on TANet, the Ministry's computer network. They claimed
that piracy was high on TANet and that TANet needs stronger internal
controls. The Ministry of Education does not reveal action taken on
complaints on individual cases, nor did the Ministry release overall
statistics on actions taken against online infringers.
Rights-holders claimed that it was much easier to take action and
monitor activity on commercial networks.


5. The local representative of MPA, shared preliminary results of a
recent survey commissioned by his organization on Internet use by
Taiwan university students. The survey covered about 2300 students
from 8 different universities around Taiwan. Although the survey
did not quantify levels of online piracy, the survey indicated heavy
downloading of Internet files by university students. More than 75%
of the respondents stated that they downloaded files. Of this
group, 84% downloaded music and 49% downloaded movies. Less than
half of the respondents confirm whether the file is legal before
downloading, and interestingly, only about 40% of students surveyed
think the government and their school do enough to propagate an
anti-piracy message.


6. Rights-holders argued that the Minister of Education should
appoint a high-level official to take responsibility for IPR on
campus. The current contact window, which is a clerk-level employee
at the Ministry's computer center, can be easily ignored by
universities, who exercise a great deal of autonomy over their own
university networks.


7. The representative of textbook publisher John Wiley & Sons also

TAIPEI 00000135 002 OF 004


urged universities to improve IPR protection for printed materials
on campus. Students should be not be allowed to use illegal
photocopies in the classroom, he said, and colleges should "record
demerits" for students using illegal photocopies. He also suggested
that the MOE establish a high-level task force with industry
participation to address the IPR issue.


8. All rights-holders expressed concerns about the proposed
intellectual property court. Draft legislation is currently before
the Legislative Yuan that will establish an IP Court with limited
scope. According to the draft, the IP Court will only cover civil
cases in the first instance and civil and criminal cases in the
second instance. That means that all copyright cases would need to
go through the regular district courts and would not have access to
IP Courts until an appeal is filed.


9. Robin Lee, of IFPI, complained that this meant that a great deal
of IP cases will continue to go through the district courts.
Because Taiwan civil procedures are weak and ineffective,
rights-holders typically take the criminal approach in dealing with
infringers, he said. He also complained that, although the law
would create a dedicated cadre of judges assigned to the IP Court,
it does not create a separate group of IPR prosecutors. Because
evidence can be difficult to collect and technical explanations
complex, the Ministry of Justice had argued for special IP
prosecutors to be assigned to the court, but the Judicial Yuan
refused.


10. Spencer Yang of the MPA noted that different rights-holder
groups had "various levels of urgency" regarding the IP Court. For
example, 50% of movie piracy involves street vendors. These are
relatively straightforward cases, so his members are not so
concerned about the scope of the IP Court. (Note: The Amcham IPR
committee also supports the current IP Court legislation in its
current form. End note.) All rights-holders expressed concern,
however, that a new IP Court could absorb resources needed by
district courts to effectively deal with IP cases.

TIPO Proud of Taiwan's Progress and Efforts in China
-------------- --------------


11. Tsai Lien-sheng, Director General of the Taiwan Intellectual
Property Office, reviewed his office's recent efforts at advancing
Taiwan's IPR agenda. He began by noting that AUSTR Stratford had
just come from China and that he himself had traveled to the
Shanghai area in May. Jiangsu provincial IPR authorities and PRC
central government authorities had also recently visited Taiwan.
The Chinese were curious how Taiwan was able to improve its IPR
environment so quickly, he said, and were very interested in how
Taiwan was handling IPR issues. "Determination," he said, was his
answer. Taiwan's efforts were not a response to foreign pressure,
but part of a strategy to upgrade our industry and international
competitiveness.


12. Tsai reported progress on draft legislation since last month's
digital video conference on IPR:

--P2P legislation - The bill was expected to pass without
controversy. On December 15 he had appeared before the Legislative
Yuan's Economic Committee to answer questions about the bill. He
expected the bill to move smoothly through the LY.

--ISP liability legislation - stakeholders are still debating the
details of the bill and TIPO would be hosting a seminar next month
on the issue. TIPO planned to invite U.S. experts.

--IP Court legislation - There are two separate bills moving through
the LY to establish the IP Court: the Procedure Law and the Organic
Law. The Procedure Law has already passed the first reading and the
second and third reading will happen soon. No party negotiation
will be required to pass this law. Some KMT legislators still have
some reservations about the Organic Law, however. The Judicial
Yuan hopes that IP Court can begin work by March 2007. Training for
judges will have been completed by that time. This start date

TAIPEI 00000135 003 OF 004


depends on when or whether the Organic Law passes in the LY.


13. Turning to Internet piracy, DG Tsai noted that in the first 11
months of 2007, law enforcement pursued 1400 cases of Internet
piracy. This was a 116% increase over the same period last year. It
does not mean that the problem has become more serious, he said,
since all are small cases. Taiwan has established a special IPR
police team and an optical disk joint task force. EzPeer and Kuro,
two P2P services, have been transformed into legal operations.


14. He also hopes for more international cooperation to prevent
Internet piracy. Next August TIPO will host a meeting for the APEC
Intellectual Property Experts Group. The meeting will focus on
Internet piracy, and Tsai hopes to share Taiwan's experiences with
other APEC member economies. He noted that international
cooperation was particularly important in fighting Internet piracy
and that most illegal websites uncovered by Taiwan law enforcement
were overseas. TIPO has passed lists of illegal sites based in the
U.S. and in Japan to both countries for investigation.


15. Turning to IPR on-campus, Tsai stated that he had written to
Minister of Education Tu, asking him to establish a contact window
at the Ministry for IPR concerns. We consider campus to be
"sensitive" so police and judicial involvement must be discrete.
Campus "self-discipline" may be most effective in protecting IPR, he
said. Although schools have improved regulations and require
students to observe IPR, more precise regulations indicating that
students can not use pirated textbooks or illegally download on
TANet would be helpful.


16. Infringing activity off-campus is also an issue, and TIPO has
requested that the IPR police set up a special team to deal with
off-campus photo-copying. We still need additional assistance from
book publishers in this effort, he said.


17. Tsai concluded his remarks by commenting on the U.S. Special
301 process. He stated that he did not care about Special 301, but
that when he appears before the LY seeking support for TIPO's
budget, he is confronted with LY members asking him why Taiwan is
still on the 301 list even after all of its efforts to improve its
IPR protection regime. He hoped, he said, that since Taiwan has
done so much that it should not appear on the list with China.


18. AUSTR Stratford thanked Tsai for his comments and for the work
TIPO has done with U.S. rights-holders. In particular stated that
he appreciates the work on the IP Court and hopes it can be
established soon. At the same time, however, he hoped that judges
and prosecutors at the district court level would receive the
training and resources necessary to effectively handle IP cases. He
looked forward to receiving a chart that that TIPO had offered to
provide explaining how prosecutors receive training and are able to
specialize on IP issues.


19. Regarding P2P and ISP liability legislation, Stratford noted
that these were high priorities for the USG and for rights-holders.
We hope, Stratford continued, that Minister of Economic Affairs Chen
will offer his personal involvement to urge passage of the
legislation.


20. He also thanked Tsai for his letter to the Minister of
Education seeking his support on IPR issues. Stratford quoted from
the survey he had received that morning from MPA and said that we
needed to set a good example for young people.


21. To assist in finding a good channel on law enforcement
cooperation, Stratford remarked that the legal attach from Hong
Kong will travel to Taiwan early in 2007 to discuss the issue.


22. In closing, he stated that the Special 301 report was written
by IP office colleagues at USTR. Of course they worked closely with
our office, AUSTR noted. I understand, he said, why Taiwan would
not want to be listed in the same category as the PRC. The U.S. was
currently in intense negotiations with China about bringing a case
against them in the WTO over IPR. He pointed out that Taiwan and

TAIPEI 00000135 004 OF 004


China were placed in different categories. But, he acknowledged, it
was better to be in neither category. We will try to talk about the
progress that Taiwan has made and emphasize the close working
relationship we have with each other. The report is issued at the
end of March. We hope that we can talk about additional progress in
the next few months.

Minister of Education Acknowledges Serious Problem
-------------- --------------

23. At a separate meeting with Minister of Education TU
Cheng-sheng, AUSTR Stratford called IPR one of the most important
issues between the U.S. and Taiwan. One of the major weaknesses is
on-campus behavior. Referring to the MPA student survey, Stratford
stated that the U.S. was concerned about both about illegal activity
on campus and the prospect of a new generation of college grads who
had no respect for IPR. Important work needs to be done, Stratford
emphasized, and suggested that Minister Tu appoint a Vice Minister
to take responsibility for IPR and establish a task force with
stakeholders to deal with the issue.


24. Minister Tu acknowledged that IPR was "a serious problem." He
promised that the Ministry of Education (MOE) would do its best to
deal with it. I will ask my colleagues, especially the department
of higher education to ask the universities to make our students
understand this serious issue, he said. He also wanted to point
out, however, steps that the MOE had already taken such as
university courses on IPR as well as IPR protection included in
university evaluations. Tu said that "we will consider how to
improve."

But Doesn't Seem to Do Much
--------------

25. He reviewed other MOE initiatives. Ministry representatives
had participated in the IPR Dialogue DVC hosted by AIT last month.
MOE planned to set up supervisory groups at each university which
would include faculty and set rewards for IPR compliance. A TANet
SOP has been drafted to handle IPR complaints and dataflow hardware
and software has been purchased by many universities to regulate the
transmission of large data files on the network. The MOE is also
planning more conferences and workshops on IPR. We will teach our
students to follow rules and regulations, he said. At that point
Minister Tu announced that he had to leave to meet with the Prime
Minister, and Stratford once again urged him to think about
appointing a senior official to handle this issue. He did not
directly respond.


26. Ministry staff wrapped up the meeting, DAUSTR Altbach once
again asked the MOE to provide detailed information on the TANet SOP
and possible penalties for Internet infringement. Staff reported
that this month three students were caught and punished for illegal
online infringement.

Comment
--------------

27. AUSTR Stratford's meeting with Minister Tu sent a strong signal
that the USG is serious about on-campus IPR protection. TIPO has
indicated to AIT that they are also disappointed about the lack of
real action by the Ministry of Education to address IPR issues on
campus. While Minister Tu agreed to meet and was courteous
throughout the meeting, it is far from clear if the Ministry plans
to take meaningful steps to strengthen IPR protection. AIT will
continue to push the Ministry and other high level Taiwan officials
on this issue where appropriate. Contrary to protestations
otherwise, Taiwan is eager to be removed from the Special 301 list,
but even if the LY passes all of the IPR legislation in this
session, which is not likely, it would be appropriate to gauge the
effectiveness of the legislation that becomes law.
YOUNG