萬國法律事務所

Taiwan was hoping to be removed this year from the U.S. government list identifying nations that have varying degrees intellectual property violations. That hope appears to have been dashed recently after the International Intellectual Property Alliance, a very influential US business group recommended that Taiwan remain on the list for another year. U.S. trade law permits the U.S. government to respond to inadequate or ineffective protection of intellectual property rights with sanctions according to Section 301 of the U.S. Trade Act of 1974. The lists are rated for severity with respect to IPR violations, from the most threatening “priority country” to “priority watch list” to “watch list” to the least serious “special mention list.”

The U.S. Trade Representative is required to identify on an annual basis those countries that deny adequate and effective protection for intellectual property rights, or deny fair and equitable market access for persons that rely on intellectual property protection. Section 301, as amended, gives the U.S. Trade Representative the authority to negotiate to eliminate unfair foreign trade practices. Each year, the U.S. Trade Representative reviews foreign-country practices in what is referred to as a Special 301 annual review. The International Intellectual Property Alliance has submitted recommendations to the U.S. Trade Representative and is requesting that Taiwan be kept on the “watch list.” The “watch list” is generally reserved for nations that receive special attention because they maintain intellectual property practices that are of particular concern to the U.S. Trade Representative.

Although the International Intellectual Property Alliance praised efforts taken by Taiwan and for improvements in countering piracy of software, videos, music, films, TV shows and books, it nonetheless called attention to an increase in Internet piracy taking place in Taiwan, including piracy over the Taiwan Government’s TANet network, which is allegedly being utilized throughout Taiwan for Internet piracy, including illegal peer-to-peer (P2P) file sharing while Taiwan’s with the Ministry of Education claims that it has no legal obligation to control the situation.

The International Intellectual Property Alliance recommendations are normally accepted by the U.S. Trade Representative office, which subsequently releases its yearly spring list of countries that have piracy problems than need to be addressed.

Taiwan is currently on the so-called "Watch List" under the US “Special 301” trade law. Taiwan was previously on the more serious “Priority Watch List” since 2001 until January of 2005, when it was lowered to its current status by the U.S. Trade Representative office at the recommendation of the International Intellectual Property Alliance.

Although appearing on the Watch List does not expose or subject Taiwan to any immediate threat of trade sanctions, its failure to be further downgraded could prove an obstacle to Taiwan’s efforts to negotiate a free trade agreement with the U.S., which Taiwan has been seeking in recent years.

The International Intellectual Property Alliance estimates that U.S. companies lost approximately US$ 376.9 million in 2005 as a result of piracy in Taiwan, primarily in connection with entertainment software and the motion picture industries. Although that amount is far lower than the US$ 847.9 million estimated lost in 2002, the figure represents an increase from the US$ 320.4 million believed to have been lost in 2004.

The International Intellectual Property Alliance focused its complaints on Internet piracy, and particularly with respect to the growing numbers of unauthorized P2P file sharing services in Taiwan in its recommendations to the U.S. Trade Representative office. The International Intellectual Property Alliance alleged in its recommendation that the number of on-line infringements involving business software traced back to Taiwan surpassed 344,000 in the period of January to October in 2005, a dramatic increase from a total of less than 50,000 in the entire year of 2004. The rise of on-line piracy in Taiwan in connection with music, books and other types of intellectual property has also increased substantially, according to the recommendation.

The International Intellectual Property Alliance recommended that Taiwan’s Joint Internet Infringement Inspection Special Task Force and the Intellectual Property Rights Police enhance enforcement of Taiwan’s intellectual property laws, and suggested that companies in Taiwan that provide Internet access should be required to cooperate, and that the relevant law should be amended to clearly define such companies’ liability and penalties for violations.

The report also reiterated an old complaint that Taiwan still lacks effective action to prevent the long-standing problem of illegal photocopying of academic texts, journals, English-language teaching materials and professional reference materials. Finally, the report also recommends that Taiwan monitor the export of pirated cartridge-based video games and components of the same, and an expansion of Taiwan’s new Intellectual Property Court to handle more copyright cases.