Taiwan: Campus IPR Enforcement Improves, but Piracy

UNCLAS SECTION 01 OF 04 TAIPEI 001655 SENSITIVE BUT UNCLASSIFIED STATE PLEASE PASS USTR STATE FOR EAP/RSP/TC, EAP/EP USTR FOR RAGLAND AND WINELAND USDOC FOR 4430/ITA/MAC/AP/OPB/TAIWAN USDOC FOR USPTO GIN, BROWNING, AND SNYDOR SIPDIS E.O. 12958: N/A TAGS: ECON KIPR ETRD PGOV TW SUBJECT: Taiwan: Campus IPR Enforcement Improves, but Piracy Continues REFTEL: A) 2001 Taipei 1681 B) 2004 Taipei 533 C) 2006 Taipei 562 D) 2006 Taipei 4007 E) 2004 Taipei 3953 F) 2007 Taipei 2529 G) 2007 Taipei 2595 H) Taipei 8 I) Taipei 49 J) Taipei 1318 K) Taipei 745 L) 2007 Taipei 2005 Summary -------------- ¶1. (SBU) Spurred by U.S. encouragement, the Taiwan Ministry of Education (MOE) made combatting campus intellectual property rights (IPR) violations a priority over the past 12 months, and Taiwan universities' enforcement activities have increased. Over the Plan's second six months, the Plan's requirements and incentives spurred schools to increase enforcement efforts, and the MOE is helping schools to implement best practices across Taiwan. Students continue to use TANet for unauthorized file sharing and other digital piracy, but rights holders confirm cooperation with the MOE improved over the second six months of the plan, and that schools are tracking and punishing violations. Industry, however, still reports widespread use of pirated or unlicensed software. On-campus textbook copying and other physical infringement appear to have continued their decade-long decline due to heightened awareness and enforcement, but rights holders report continuing off-campus piracy. End summary. Background -------------- ¶2. (SBU) Taiwan's teachers and administrators have traditionally viewed campuses as havens from normal law enforcement. Universities rarely refer students to the police or prosecutors' offices for non-violent crimes, including IPR violations, and prosecutors are wary of taking action to address such problems. The last major crack-down on campus piracy--an attempt in 2001 by the Tainan District Prosecutors Office to prosecute 14 students at national Chengkung University for sharing MP3 files (ref A)--set off a strong reaction from administrators, students, and the Taiwan public and led to the reassignment of the prosecutors involved. Unauthorized textbook copying and digital piracy, therefore, remain common on Taiwan's campuses (refs B, C, D, and E). ¶3. (SBU) After an initial suggestion from the United States led to several rounds of consultations with campus representatives, the Ministry of Education (MOE) began implementing the Campus IP Action Plan in November 2007 (ref F). The Action Plan did not impose new requirements on students--even the MOE's original proposal to require that all university students take a short "IPR Knowledge Test" before getting access to campus libraries or computer networks was dropped in the face of university complaints--but instead reflected the MOE's belief that the best way to reduce illegal copying and downloads is by encouraging schools to follow the best practices in the Taiwan university community (ref F). Under the Plan, the MOE publicly grades each university's performance on numerous IPR-protection metrics in order to promote best practices, as well as to shame less successful schools into taking more action. Action Plan Leads to Enforcement -------------- ¶4. (SBU) The MOE's initial efforts under the Action Plan spurred universities to deal more seriously with IPR (ref G),and this progress continued over the Plan's second six months. Although some administrators told us last year the Plan had not changed the way they protect IPR on campus, over the past six months, administrators from the dozen schools econoff has recently visited have told us their schools have stepped up efforts in response to the plan. On October 16, Yang Chi-jin, Southern Taiwan University of Technology Library Director Yang Chi-jing, briefed econoff on the university's new, more aggressive program to combat IPR violations. Yang, who is responsible for STUT's overall IPR-protection efforts, said the MOE Computer Center now sends regular requests from industry groups to the university to investigate alleged TANet TAIPEI 00001655 002 OF 004 violations. Yang said her office, which had never received similar requests from the MOE in the past, must investigate and respond quickly to each request. Administrators from all other schools econoff spoke with echoed this. ¶5. (SBU) Some schools that reported less drastic improvements during the Plan's first six months are now taking more aggressive actions. Professor Wen-jen Hsieh, Director of the Library at National Cheng Kung University in Tainan, reported to econoff in late 2007 that the Action Plan had not initially spurred Cheng Kung to take extra steps to combat piracy (ref H). On November 14, however, Hsieh detailed to econoff a wider set of IP-protection measures Cheng Kung has taken since then, including more aggressively monitoring illegal downloads on TANet, shutting down campus access to the most notorious P2P websites, and increasing IP-protection coordination across departments. MOE Responding to Digital Piracy -------------- ¶6. (SBU) When it announced the Plan end-October 2007, the MOE agreed to form a task force that would include representatives from the Taiwan Book Publishers' Association (TBPA),the Business Software Alliance, the Taiwan International Federation of the Phonographic Industry (IFPI),and the Taiwan Foundation Against Copyright Theft (TFACT) [Note: TFACT was formerly called the Motion Picture Association - Taiwan. End note.] Initially, these groups complained the MOE did not meet regularly with rights holders, did not seem interested in cooperating closely with them in implementing the Plan (refs H, I),and did not respond in detail to rights-holder reports on possible copyright violations on TANet (ref J). ¶7. (SBU) However, representatives from all four major industry groups tell us that although students continue to use TANet for unauthorized file sharing and other digital piracy, industry's communication and cooperation with the MOE improved over the second six months of the plan. The MOE pledged in May to respond to individual complaints about TANet infringements every 60 days (ref K),and industry groups confirm the MOE has made good on the promise. On November 24, Stella Lai of the Taiwan branch of the Business Software Alliance (BSA) told econoff BSA sends about 50 notices per month to the MOE about possible infringing incidents on TANet. Lai said the MOE responds within six to eight weeks confirming whether the incidents were violations, and describing actions taken by the schools in response. According to Lai, school actions range from removing the infringing material, freezing the student's TANet account, and, in rare cases, terminating the account. Although rights-holder groups would like MOE responses to include details, they are all satisfied with the MOE's increased feedback. Software Piracy Still a Problem -------------- ¶8. (SBU) BSA's Taiwan representative, Gina Tsai, acknowledges the MOE has made progress dealing with Internet piracy on Taiwan's campuses, but says the Ministry is failing to deal with software piracy. BSA member companies say through Internet monitoring, software sales records, and student enrollment figures for classes using AutoCad and other expensive software, the companies know many universities either buy too few licenses for the number of students who use the software ("under-licensing"),or simply allow students to use pirated versions. ¶9. (SBU) Although BSA does not think the problem is any worse on campuses than it is among the general population (ref H),they are frustrated the Ministry of Education does not seem willing to deal with the problem. Tsai said when BSA detects probable under-licensing of member software on campuses, university administrators typically either assure BSA no university computers use illegal software, or claim many professors' computer labs--though connected to TANet through the school--are funded with private-sector grants and are therefore not subject to university compliance measures. BSA's Lai told econoff many professors tell member companies they should turn a blind eye to campus under-licensing, since their students may one day go on to purchase the software to use professionally. ¶10. (SBU) BSA is also frustrated the police are not willing to enforce copyright laws on campuses. On November 24, Tsai told econoff she met earlier in the day with a local prosecutors' office to discuss the case of a university student allegedly selling burned copies of Windows XP from his campus dormitory room. Tsai said TAIPEI 00001655 003 OF 004 although the prosecutor agreed evidence shows the student is likely committing a crime, the prosecutor indicated to her his office--out of respect for academic independence--will not go onto the campus to investigate, but will instead ask the university to take action. ¶11. (SBU) Many school administrators econoff meets with acknowledge some students may be using illegally-copied software, but the officials invariably argue legal software is often too expensive for individual students and, in some cases, for universities. Director Chao of the MOE Computer Center told econoff on November 14 that, in response to schools' complaints about the high cost of software, the MOE is now offering small subsidies to universities to buy legal software. Textbook Piracy Down, Not Out -------------- ¶12. (SBU) University administrators continue to report on-campus copying of textbooks is less rampant and less visible in Taiwan year over year. Although a 2007 survey showed that roughly half of college students still buy pirated versions of some books and supplementary materials (ref L),administrators at every university econoff recently visited noted the problem of illegal textbook copying has almost disappeared at on-campus copy shops. They also report off-campus copy shops are either more reluctant to copy textbooks in whole or in part, or have begun to refuse to copy morethan a few pages of any one book. University officials believe on-campus shops are fearful of MOE-mandated copy-shop lease agreements that include anti-piracy clauses, and that off-campus shop owners are increasingly aware that copyright violations could result in fines or arrest. ¶13. (SBU) The Taiwan Book Publishers' Association (TBPA),however, complains that the problem has merely gone underground. According to TBPA's Theresa Liu, although near-campus copy shops now rarely openly display copied materials, the shops still take orders through representatives on campus and standing student relationships, then deliver books directly to customers. Liu added even professors commonly copy pages or whole chapters of books for handing out in class. ¶14. (SBU) TPBA has collected strong, though indirect, evidence to bolster their claims of continuing copyright violations on Taiwan's campuses. During the 2008 fall semester, TBPA conducted a survey of usage rates for member textbooks in 34 classes at 21 Taiwan universities. According to the information they gathered from school administrators and campus bookstores, an average of only 28 percent of students in each class bought the textbook from the university bookstore, including 14 classes whose students did not buy even one copy of the book. Although Liu says some students may have found the books from other sources, she thinks most students simply bought pirated versions. TBPA plans to present the final results of their investigation to the MOE in December. ¶15. (SBU) School and publishers remain reluctant to seek other ways to pay textbook royalties. In the United States and many other countries, schools pay royalties for journals and other copyrighted materials used in classes through the Copyright Clearance Center and similar clearinghouses. Taiwan has one such for-profit clearinghouse, the Chinese Oral and Literary Copyright Intermediary Association (Colcia). According to TBPA's Liu however, publishers say the per-page prices offered by Colcia are far below fair value. In addition, MOE Senior Specialist Chang Chung-hsin recently told econoff rights holders in Taiwan are unfamiliar with and do not trust for-profit copyright clearance services, and most do not want to authorize them to manage copyright issues on campus. Comment -------------- ¶16. (SBU) Although the MOE and many campus officials were initially unenthusiastic about the Campus IP Action Plan, the increasing attention paid by officials and college administrators to campus IPR protection suggest Taiwan is paying more than lip service to curbing campus violations. Music, movie, and software industry groups are pleased with Taiwan's actions against TANet piracy, though continued progress--including passing the long-awaited Internet service provider (ISP) law in the coming months, which the Taiwan authorities expect by the end of December--will be key to further reducing digital piracy on Taiwan's campuses. Taiwan's progress on campus enforcement, a key problem listed in this year's Special 301 IPR Watch List citation, underscores the importance of completing the out-of-cycle review on Taiwan's Watch List status. End comment. TAIPEI 00001655 004 OF 004 YOUNG