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Innovation creates jobs, sustains growth and market share, creates sustainable competitive advantages and ability to implement an effective push marketing strategy, and supplies markets with products from which consumers derive high utility. Fresh media, new outlooks and insight, creative, modern sights, sounds, and language are in demand like upgraded personal digital devices, lifesaving pharmaceuticals and medical technologies, industrial processes and designs, techniques, machines, chemicals, materials, and engineered biology. Enormous amounts of capital are invested into research and development projects in the varied economic sectors, and investors expect to see returns. Businesses facilitate the innovative processes by recruiting, training, and employing personnel who spend their lives concentrating on sometimes nano-sized components which may seem obscure to laypeople or other industry developers. The detail and complexity of pieces that make up fractions of a percent of larger integrated systems make the innovative steps expensive and time consuming. Individuals and firms take risks when they research and develop. Entrepreneurs, after having borrowed or supplied capital resources for immovable and moveable property and labor, expect their investments to return profits. Intellectual property (IP) laws protect rights of investors, inventors, and firms, and secure the continuous improvement of products. Composers, artists, musicians, writers, actors, publishers, performers, and production staff both independently and at firms put their vital energies into their trades. Substantial risks are taken in publishing and entertainment arts. Industry
professionals expect that their talents and disciplines continue to provide essential income for themselves, and their families when they are off-stage and not touring, or in the event that bursts of creativity cease or slow, or changes in consumer preferences occur, or if a person suffers injury, illness, or death. Computer programmers and software designers likewise demand their works be protected years after new editions or upgrades are released. Researchers, textbook authors, and writers in technical fields require similar protection of their works. Fashion, apparel, accessory, and perfume designers expect their trademarks, logos, name brands, and trade secrets be protected. Food and drug manufacturers need legal protection of their recipes and techniques to keep the business profitable. Intellectual property rights (IPR) ensure the livelihood of the owners and the steady progress of the arts, sciences, and industries. 1.2 International Partnerships in IP IP is at the core of our modern economy and business. We can find IP offices and partnerships in virtually every international group, or action plan designed to enhance economic cooperation and trade. The United Nations (UN) has the World Intellectual Property Organization (WIPO) as a specialized agency. The World Trade Organization (WTO) has its Trade-related aspects of Intellectual Property Rights (TRIPS) Agreement. The World Economic Forum has its Global Agenda Council on the Intellectual Property System. IPRs are a topic at the Organisation for Economic Co-operation and Development (OECD). The European Union (EU) addresses IP as a trade topic through the European Commission (EC). The North American Free Trade Agreement (NAFTA) part 6 chapter 17 provides for protection of IPRs. IPRs are a
trade topic at the Organization of American States (OAS). The IPR Experts’ Group educates the public and raises awareness as a focus of Asia-Pacific Economic Cooperation (APEC-IPEG). The Association of South East Asian Nations (ASEAN) has an Intellectual Property Association (AIPA). The EU and European Patent Office support the ASEAN Project on the Protection of Intellectual Property Right (ECAPIII). Scores of other organizations and partnerships are in existence worldwide, all with offices and personnel focusing on protecting IPRs and enhancing enforcement internationally. 1.3 Enforcement in the Globalized Economy World trade is a relatively new feature in business which has more recently suffered some devastating setbacks and fierce opposition but has also increased opportunities for individuals and organizations to prosper via more harmonized trade systems, allowing for broader access to raw materials, goods, services, and human resources. Increases in international sales of goods and services and the newfound ease and low cost of information transfer may have weakened IPR protection in practice, especially relating to online media, though the registration and records access system is stronger than ever with the aid of electronic networks of databases. The volume of IP transfer across borders today was likely unimaginable to early copyright, trademark, and patent law pioneers in the 1800s. Enforcement statistics worldwide show the total number of cases on court dockets and monetary damages fines paid out by infringers in criminal and civil legal proceedings in this decade are greater than entire global sectors and national economies from the not-so-distant past, and thus we can conclude that perceptions about the performances of the enforcement agents and regimes are often subjective, though we shall also accept the
opinions of many scholars and experts who posit that some overhaul of the copyright system, if not other parts of the IP system, are necessary. Rapid changes have impacted nations in the past 50 years in innumerable dimensions. Worldwide we find a broad assortment of legal systems, structures of government, degrees of separation of powers, interpretations of due process guidelines, and application of laws. Military coups and violent revolutions have in the past 50 years led to unexpected changes of government. National bankruptcy and civil economic collapse affected the stability of some sovereign nations and the fall of the USSR which some may call ‘the greatest geopolitical catastrophe of the 20th century’ furthered legitimate crises. When nations and people find themselves in dire times, IPRs are not generally at the top of the priority list. IP infringement is not a crime against humanity nor do we find IP in the subject content of contentious cases heard at the International Court of Justice (ICJ), though of course its importance is still enshrined in statute, code, precedent, and treaty in some form in every country.
1.4 Regional Focus When analyzing the current situation with IPR protection in the region primarily under study herein, the ten States in ASEAN – Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam – we must rely on some basic rigid axioms and rules given the standards in fields dependent on IPR protection. The psychology and philosophy of engineers, scientists, doctors and other technicians who rely on bounded, concrete physical laws and largely unbending logical parameters in their work which is directly responsible
for patented inventions need not be excluded from analysis and discussion of issues related to other aspects of the IP system, namely copyright and trademark. In fact, for the purposes of this research, the hard sciences have the lead. One of the recurring themes in this dissertation is the conflicts between pragmatism and theory, or between practice and law - or as applied to government - between the legislative and executive branches. Such divaricated governance is a threat to the integrity of the IP system, and as such a more singular, unified practice is a primary goal. In greater than 80% of the jurisdictions under study, the executive is urged to redevelop a strategy and enforcement plan given that the executive is the more dynamic of the two branches which we find in consistent conflict, whereas the legislative is more static and less in need of significant changes considering its documented commitments to the larger world IP system. A system of goals, targets, benchmarks, monitoring and flexible strategic management is necessary for any improvements in an enforcement regime designed to considerably reduce IP infringers’ market penetration and share. Alternatively, as is stated in this text, steps can be taken by customers, businesses, and governments to strengthen the IPR protection system. Ultimately this research points toward the idea that the burden of protection is primarily upon the owner of the IP as the party with the most interest in protection, although it is clearly the duty of the government to assist and facilitate enforcement. In locales where public budgets are low, where tax revenues cannot be easily and swiftly increased, where governments cannot afford expensive economic law enforcement efforts, businesses and IPR owners must take steps independent of the government and market to protect their property. Suggestions are offered for businesses operating in ASEAN. 1.5 Qualitative Methodology
Prior to offering a multiplicity of creative solutions, this author first presents information and data leading to conclusions. This is a mixed-methods, multidisciplinary study. Methodology for qualitative analysis of statutes, treaties, codes, and academic literature follows social scientific guidelines for research. Deductive and inductive reasoning form the methodological basis for conclusions. Philosophical disciplines and concepts such as phenomenology, logic, ontology, social epistemology, grounded theory, and ethics constrain and shape the course of the research. Semantics significantly affect the individual’s interpretation of words in the English language, and thus subjective reasoning could not be avoided, though both constructivism and legal positivism limited interpretivist techniques. The effects of the researcher’s personal worldviews were minimized and objectivity was maintained via the diversified methodology. Qualitative literature research and review methods were standardized into larger legal and social scientific paradigms and can be simplified into a basic process including, A) reading; B) reviewing and comprehending; C) associating concepts with other material, drawing initial conclusions, discovering contradictions, conflicts, and confounds; D) forming final formal logical conclusions; E) reporting. International legal analysis and consideration of issues are made using Article 38 of the Statute of the ICJ as a guide, with the applied prioritization of constituents of the law as stated in 38(1), in order from a to d, and as indicated in 38(2) when appropriate. Convenience and accessibility issues in conducting research in Bangkok, Thailand led to the bulk of references herein being from online sources, though the quality of the resources is not decreased in the shift away from hard-copy and to electronic-based research methods. 1.6 Structure
This study opens with ‚The Economics of IP‛ in section II, wherein the text reviews important economic bases of the theory of IP. The research as a whole takes an orthodox legalistic and economic approach, and as such, section II serves to justify the IP concept and validate its value to individuals, organizations, and societies. The economics section covers global and generalized rules which can be applied at the local and intermediary levels, though with varying grades of success in practice depending on the jurisdiction and status quo within the protection regime. This research aims to uphold the core stability and integrity of the IP systems. All IP owners’ rights are supported as they are well-supported in law. The interests of small and medium enterprises (SME) and academia are included and are no less important than those of larger organizations and institutions. Multinational corporate (MNC) values and interests are covered to a greater extent due to their status as the primary shareholders in proprietaries. Readers should not confuse a general allegiance to MNC interests with an ascetic social policy, however. ‚The Economics of IP‛ section II concludes that capitalization on IPRs provides corporations with sufficient resources to engage in philanthropic giving, and thus serve the community in two ways – in supplying the market with great products and helping impoverished individuals and communities. A review of corporate social responsibility (CSR) projects from 14 of the MNCs most threatened by IP infringement gives merit to post-classical economic ethics. In specific detail, we will focus on IPRs in the form of trademark and copyrights in physical markets in the ASEAN group. Although protection of IPRs on the World Wide Web is of crucial importance, the internet is not the subject of extensive analysis or discussion in this research. The complicated technical nature of the internet and laws related to it make the virtual realm difficult to regulate in the
OECD nations, which are more capable of such regulation. The developing and third world legal systems in ASEAN, with the exception of Singapore most notably, are not sufficiently equipped to handle internet IP issues, at least until a time when network security can be established and objectively verified, which first requires vastly decreased usage of non-genuine operating system software on personal computers. WIPO Director General Francis Gurry said in a speech on the future of copyright, "law is a much less potent instrument in the digital environment than it is in the physical world," and as such, if it cannot be sustained that law is a potent instrument in the physical world, then there can be little hope for any potency in the digital environment. Thus a preceding step to internet regulations and IPR protections online in ASEAN, again with very limited exceptions in Singapore and perhaps parts of Malaysia, is establishing and maintaining controls on physical markets. As this research will show in the ‚IPR Protection System‛ section III, laws are in force in ASEAN at the domestic level, partnerships and treaties have been signed and ratified and entered into force at the international level. The theory of intellectual property is supported in legislation and apparent international commitments, but in eight or nine of ten ASEAN States a lack of transparency is seen in non-enforcement at large-scale physical markets where counterfeit goods have replaced the genuine products. A limited number of case studies are included in section III. In the ‚Market Activity‛ section IV, statistics are provided to help readers achieve a better understanding of both the ASEAN economies and IP market.
Section IV and the ‚Interviews and Surveys‛ section V of this research qualify and quantify the threat level of criminal enterprise in physical markets in ASEAN. Section V includes coverage of the general economic and social threats of the organized criminal aspects of commercial IP infringement. Social scientific methodology and methods are clarified for both the surveys and interviews in section V. Government, business, and customer interests are reported, and the larger topic is triangulated via broad understandings of the opinions of each of the three major stakeholders in IP. Each stakeholder has its own economic and social interests which may not be simpatico with others. Evidence shows conflicts and dilemmas among and within the three groups which are reflected in adversarial academic arguments. An expected conflict lies between customers who want the lowest possible prices and governments which support and enact the IP systems that enable businesses to capitalize on their innovations via limited monopolies. A possibly unexpected conflict lies between governments in ASEAN which fail to adequately enforce laws and effectively regulate the market by punishing infringers, and businesses which lose profits and may feel as though they have suffered de facto expropriation of their IP. Discussion and conclusions follow section V and close the research. Recommendations of the author offered in the closing sections are designed to minimize conflicts and contradictions, and provide some practical solutions for a problem desperately in need of attention. 1.7 Originality and Necessity of New Research This topic of ASEAN IPR protection has not previously been approached in the same ways as are featured in this research. ASEAN and AIPA among other groups compare and contrast national IP systems, make partnerships, and research the topic,
but the region has not been thoroughly studied in the English language. Englishlanguage research on this topic has most notably been conducted by Singaporean authors, whose work has been remarkably well-written and whose nation serves as the model for the ASEAN region, but the persistent violations of IPRs at famous physical markets in ASEAN show prior work has been insufficient. WIPO is a relatively new part of the UN system, and the developing economies in ASEAN are among a newer batch of members. Interdisciplinary research is uncommon at the doctoral level in law, and legal dissertations rarely feature quantitative assessment of consumer attitudes and opinions. The present research is entirely unique and more completely represents the larger majority of ASEAN markets and people than historical projects. This original research offers company personnel, academics, entrepreneurs, and other interested individuals and organizations a single source including a review of all ASEAN domestic copyright and trademark IP laws. Consumer and market data provided herein may further assist individuals and organizations in developing IP management and protection strategies, especially when engaging in international operations and cross-border transfer of IP in the ASEAN region. THE ECONOMICS OF IP IP law exists because of compelling economic argument in favor of acknowledgement of IP being a form of property, and for protection of rights. The bridge is axiomatic which spans between the soft-science of economics and hard sciences involved in the creation of patents, which also extends to trademarks, copyrights, related rights and other IPRs. Validation of theories requires some subjective opinion, though the case for IPRs is more closely associated with the
objective absolutism of the physical sciences than we see in other fields of civil and criminal law, and as such in trade law IPRs have gained consensus and some unanimous recognition as being necessary for innovation and development. Interdisciplinary efforts are essential in supporting and reinforcing IPRs at the academic and professional levels. Theoretically the idea of IP itself is one which transcends and integrates various institutions and philosophies, requiring public and private partnerships, and parallel thinking among lawyers, economists, engineers, doctors, scientists, artists, musicians, and a wide array of workers in other disciplines. At the macro level, for IP theory to succeed internationally, a harmonization of vast sects’ policies and outlooks is necessary. Today we see some constrained successes of IP law in the global market, but alongside that is widespread approval of the argument opposing IPRs. IP law, like many aspects of international trade law and modern economics, may seem to be compound functions of predominantly ‘Western’ interests rather than of a more heterogeneous, comprehensive and inclusive set of standards. Traditional classical economic thought reminiscent of the Scottish Enlightenment is still a staple of capitalist philosophy though Adam Smith’s time is largely unimaginable to people living in the space age. Hence, some or much of the classicist rhetoric is non-contextual and inapplicable to our modern times. Nobel Laureate Joseph Stiglitz said about his research regarding how market economies deal with information and knowledge, ‚what was clear is that the standard paradigms of well-functioning markets solving the problems…Adam Smith’s invisible hand…just didn’t work…‛ Stiglitz showed in one of his papers on the topic, ‚the reason that the invisible hand often seemed invisible, was that it wasn’t
there…‛ (2007) These statements can be used to oppose specific intellectual property agreements, such as the TRIPS agreement which Stiglitz opposed while at the Council of Economic Advisors, along with the Office of Science and Technology Policy at that time, but what is more relevant about Stiglitz’s complaint of the classical economic view is that we have changed our economic paradigm and moved on. This change does not, however, indicate that the entire system is somehow obsolete or doomed to soon be regardless of continuing citation of historical philosophy in economic literature. .1 LIBERTARIANISM Arguments against intellectual property in general or relating to enforcement or in certain areas of IP law can be persuasive as they have been crafted using powerful knowledge and theory. Such arguments are also highly accessible. People around the world can attend an on-demand online streaming video seminar from the Mises Institute and learn about a libertarian thesis which is not in support of the current American and growing global regime. Libertarians are said to favor property rights, including ownership of tangible immovables and movables whether homesteadable or created, and rights over the body. However, IP is considered intangible, and like their objection to laws protecting reputation and against blackmail, a prominent number of libertarians do not support IPRs. (Stephen Kinsella, 2001) Followers and admirers of Ludwig von Mises and of Austrian economics may assume economics to be one branch of praxeology, which according to Rothbard is the ‚formal implications of the fact that men use means to attain various chosen ends‛. Libertarian scholars of praxeology contend that any economic system presupposes a legal order which protects private property rights plus related rights
such as contract, negotiable instruments, promissory notes and debt, etc. (Stephan Kinsella, 2011) Contractual rights, and any financial or post-gold standard fiscal rights would then include protection of intangibles, yet authors like Kinsella continue to speak against IP as intangible property, calling its origins a ‚conservative propaganda campaign‛, and using lucid ad hoc argument. Rejecting the legitimacy of intangible property as being property capable of having ownership rights over contravenes a number of fundamental economic and legal rules, and acceptance of the negative opinion of intangible economic value would require several changes to generally accepted accounting principles on depreciation and amortization. Clearly, arguments against IPRs are impractical. Notwithstanding the academic legal and economic origins of the libertarian anti-IP philosophy, the logic seems to contradict itself considering that the financially privileged are preaching a message of mutiny against classes including their own, communicating a message that suggests they are denying that the economic order which they have significantly benefitted from presupposes the associated pro-IP legal order or that it is inseparable from it as they have previously explicitly stated. Kinsella is a patent attorney who argues against IP, which is not only ironic, but is in fact an impossible standard to follow in the objective sense. Origins of fallacious arguments emanating from esteemed academic institutions in the first world are not limited to the Mises Institute. Instead, a great deal of American academia has been muddling around with its IP ethics ideology much in the same fashion as it has been forestalling legal positivist action intended to eliminate performance-enhancing drug use in NCAA programs among other redirection initiatives.
In 2011, the Authors Guild and other rights organizations filed suit against the University of Michigan, HathiTrust, and four other universities over storage and use of millions of copyright-protected books. (The Authors Guild, 2011) In 2008, the Recording Industry Association of America (RIAA) sent pre-litigation settlement letters to 18 American universities regarding copyright infringement on campus networks. (RIAA, 2008) Montana State University estimated more than 20,000 copyright infringement cases since the early 2000s involved college and university students, many of which retrieved infringing content via university networks in housing or computer labs under lax campus enforcement policies. (MSU, 2011) Universities continue to report and display their policies against infringement and in support of the laws, but behavior and cognition have been shown in numerous cases and in the culture as having distinctly separate qualities. A multitude of academic articles has been published since the turn of the century in favor of online infringement and against enforcement. Daniel D’Amico of Loyola University in New Orleans, a purported expert on IPRs, opened a 2011 Cato Institute lecture by confessing that he was a criminal. He prefaced his confession with a statement that he thought people over the age of 45 should have their rights to speak about IPRs removed because such old people do not download and infringe online enough to understand IPRs. (D'Amico, 2011) These uses of non sequitur in the speech did not give the impression of mere opening jokes, but appeared to be a part of his genuine intellectual arguments. D’Amico presented an eloquent academic libertarian argument against IPRs consisting primarily of ignoratio elenchi and youth-oriented argumentum ad populum fallacies which are particularly persuasive in political discourse. Like most criminals, D’Amico’s
ignorance of the rebuttal which the written laws provide invalidates the bulk of his arguments and exposes the crucial flaws of these libertarian doctrines. Despite contrarian university faculty and student support for abolition of IP laws, or non-enforcement of laws and therefore de facto abolition, and for rights to infringe online, the laws and supporting reasons for protection stand. As the world saw with the mortgage fraud and ponzi scheme epidemic that led to financial crises in the early 21st century, an economic system which is considered to exist in isolation and is not considered bound to a strict legal order is not a safe system for a society. Libertarian conjecture regarding morality and ethics in a state system, and the need for change, likewise is not constrained to objection to IPRs. Libertarians are famous for promoting the complete abolition of government. Libertarian anarchism, according to some academics, is the perfect system for protection of all rights though clearly such a system is rife with confound. The idea that in the absence of government, the citizens would naturally correct the judicial order among themselves until a balance were reached closely resembles Smith’s market theory on the ‚invisible hand,‛ which is outdated and has been at least partially disproven. Libertarian ethicist Roderick Long remarked in favor of anarchy, saying ‚I think that anarchy shouldn’t be seen as an absence of checks and balances…I think it should be seen as sort of taking checks and balances to its own conclusion…that it would sort of start a new check and balance,‛ (Long, 2010) This vision supposes a cessation of abuse, of corruption, and of such cyclical activity upon a first conclusion of a prior ordered system, which is denying the antecedent. Long then said, ‚…another thing is people often assume that there is going to be less legal uniformity under anarchy than under government…but I think there is
actually reason to expect that there might be more legal uniformity under anarchy,‛ (ibid) which again fails to recognize the very definition of anarchy, or ‚a state of lawlessness and disorder‛ (Princeton, 2011). Long’s adulterated thinking is clearly emotionally provocative which likely causes many readers and listeners to not thoroughly examine its intellectual constituents and in the process expose its myriad logical contradictions, confounds, and flaws. Moreover, theorists who earn their salaries in whole or in part by rejecting the current system under the presumption that any historical systems were superior are failing to acknowledge and understand the fundamental motivating factors which led to historical changes, and thus cannot fully comprehend the present tense. ‚Libertarians are attacking IP rights in the name of a so-called defense of property rights,‛ said George Mason University law professor Adam Mossoff in a speech hosted by the Ayn Rand Institute. Nonetheless, libertarian opinion on intellectual property rights is not restricted to mere opposition, abolitionist, and antiIPRs ideology. There is some diversity within the party. Much of the pro-IPR libertarian rhetoric draws on Ayn Rand’s radical idealism. Mossoff continued, explaining that Rand was the first philosopher use the connection between a man’s mind and his life to support IP when she described the anti-IPR position of her time as ‚an assault on man’s mind and on the values he produces, and thus, an assault on man’s life‛. (Mossoff, 2010) In ‚Atlas Shrugged‛ and in ‚Capitalism: The Unknown Ideal‛, Rand examined the relationship in capitalism between the man’s mind and the man’s survival. In the latter pamphlet, she asserted that ‚Man’s essential characteristic is his rational faculty. Man’s mind is his basic means of survival – his only means of gaining
knowledge.‛ (Rand, 1966) Rand argued in favor of IPRs as a fundamental right in capitalism in a turbulent ethos which likely had her as an enemy of certain states on the geopolitical front. While the articles are dated, the breakthroughs Rand made are still significant and, regardless of continuing argument against, help form the foundations of our formal laws. .2 ETHICS OF IP Historically, a host of schisms and schools of thought have made up the epistemological framework for IPRs. Origins of IP law may be 13th century Europe, though these first grants of rights would have been of a primitive form even compared to those in the early American Constitutional period. The 1883 Paris Convention and 1886 Berne Convention ushered in a new era of public commitment among nations to upholding principles that previously existed domestically for hundreds of years. Names like Locke, Paine, Fichte, and Kant are oft cited when discussing theories of IP, as are isms like utilitarianism, consequentialism, and capitalism, socialism, and communism. (Caslon Analytics, 2002; Waldron, 2004) Once established as property rights like those related to fixed, tangible, immovable and moveable physical properties, IPRs also have support in religious doctrine. Both Catholic and Protestant sects of Christianity support the Jewish Seventh Commandment, which protect rights to private property. (Holy Bible, NKJV; The Holy See, n.d.) The Vatican also recognizes and respects intellectual property rights as a member of WIPO. (Foley, 2002) Shari’a law recognizes private property rights, and Muslim states are compelled through the Quran to protect those rights, though the abstract concept of ownership is slightly different from the English common law definition. (Jamar, 1992) The five moral precepts of Buddhism include
a prohibition on stealing, or a protection of private property rights. ‚Asteya‛ is one of ten disciplines in Hinduism which teaches against stealing, and thus protects private property rights. Until the advent of internet technology, deontological ethical argument developed rather slowly with the official majority view being that property rights, both over physical tangible and immaterial intellectual properties, were embedded in any functional social, economic, or governing system. Currently, in general, nations are not so out of tune with others that harmonization cannot be said to exist. However, the consensus and unanimity present is in the legislative branches, whereas the executives worldwide have not exhibited as uniform a commitment to enforcing the harmonized laws. Since 1990s there has been rapid growth in the number of people and articles discussing information ethics, whereas ethical debate relating to traditional patents has remained more constant in the same time period. Increasing publication on the subject is also evidence of increasing interest. Growth in world trade, the inauguration of the World Trade Organization, increased access to education, general market growth and other related factors have together made information technology (IT) ethical issues part of the daily life of billions of people. Being such an integral part of our daily work, home, and social lives, people view IT ethical issues as important. (Peslak, 2007) Culture has been an important factor in perceptions of IPRs, and of the appropriateness of enforcement and of compliance with a given set of laws. Perceptions regarding IP and ethical use of technology vary worldwide. (Phukan & Dhillon, 2001) Hofstede’s cultural dimensions have been used to explain a variety of
business and trade-related differences among different nationalities of people, IPRs included. For example, so-called individualist and collectivist cultures have been shown to value IPRs differently. (Lee & Workman, 2011) Critics of the work argue that Hofstede’s 1970s study, which included analysis of over 116,000 questionnaires from over 60,000 IBM employees in over 50 countries, may not be relevant in the new millennium, and may have never been a reliable source of information regarding entire nations of people which are not as homogenous as the research suggested. Further methodological complaints include the sample selection since IBMers are not the ‚average Joe‛ in any society. Due to differences found between cognition and behavior, self-reporting surveys alone are not always accurate and reliable among a group. (Jones, 2007; McSweeney, 2002) Hofstede’s model may help support reasons for why people think as they do, but we must also conclude that if some behavior is prohibited in written law then such a behavior is also culturally undesirable. In other words, if a democratic nation has promulgated a law then that law is supported by the culture, and in the case that the culture or a subculture is decidedly opposed to a law then the law takes precedent in official matters until such a time that the law is repealed. Cultural rationalization for legal violation is not an adequate defense, nor does the culture motive establish any external validity, nor does such justification invalidate the law or its jurisdiction. Anti-IPR ideology has long existed in the ‘individualist’ American world, yet the USA provides some of the harshest penalties in the world for IPR infringement. In the 19th century, the United States was notorious for copyright piracy, which was considered a ‚development issue‛. (Khan, 2002) The USA did eventually undertake to engage in international conventions and protect foreign works along with domestic ones. Thomas Jefferson’s famous 1813 quote that ‚inventions then cannot, in nature,
be a subject of property‛ has long since been disregarded and determined to have been incorrect. Copyright piracy is still considered a ‚development issue‛ by some people, though the scale of infringing activity online is hardly similar to that in print in the 1800s. Legitimate literature consistently concludes that to usurp the economic and or moral rights of another is simply unethical and in many cases illegal. ‚Business ethics infrastructure‛ is not a debate team which crafts arguments against IPR enforcement, licensing, definitions of fair-use, and payment of royalties, but is instead a compliance office which attempts to direct the organization toward legal and ethical operations, which in turn theoretically reduces risks, costs, and liabilities. (US Department of Commerce International Trade Commission, 2004) Like Jefferson’s unruly two-centuries old quote, the popular hacker’s motto, ‚information wants to be free‛ has simply been quashed by the law and interests of IPR owners and holders. (Wagner, 2003) Internationally we see a growing debate against IPRs in whole or in part made by entities and persons from the private sectors, but those arguments do not abrogate the domestic laws or international treaties on IPRs. Developing national and collectivist theories that inventions are public goods where cultural esteem rather than material gain serves as the incentive for creativity (Steidlmeier, 1993) do not preclude the rights of IPR owners or holders to file suit against infringers under the law as we saw clearly in Cisco v Huawei ("Cisco Systems, Inc. and Cisco Technology, Inc. v. Huawei Technologies, Co., Ltd., Huawei America, Inc. and Futurewei Technologies, Inc.," 2003) .3 IP AS A HUMAN RIGHT
Some authors and commentators have been so bold as to consider a globalized IP regime as an aspect of ‚neocolonialism‛ (Rahmatian, 2009), but such theorists have neglected that such an ‚informal empire‛ is not an empire at all, nor is a system of voluntary treaty adoption and reciprocal rights protection arrangements similar to the models of the colonial era when equality and reciprocity were explicitly not options. The nations which benefitted most near the time of inception of the postcolonial IPR system surely were the wealthiest and primarily ‘Western’ nations, but the system is designed to provide rights for all people, and is built upon the concept of sovereign equality via the UN Charter (UN, 1945), which is a clear and obvious movement away from historical norms rather than hidden obedience thereto. The global IPR protection regime provides a framework in which developing and third world nations can achieve their goals, and at some time be economic equals with presently wealthier nations whose initially disproportionate benefits from the unified system when compared to developing nations may be considered mere coincidence in the future. Authors from the Institute for Policy Innovation Center for Technology Freedom considered IPRs as further extending human rights such as political speech, health care and education, arguing that copyright ‚took publishing out of the hands of governments and monarchs and enabled the free published expression of individual authors and publishers‛, that ‚expansive publication improves education‛, and that it was ‚implementation of intellectual property protection that has resulted in widespread creation and distribution of new pharmaceuticals‛. (Giovanetti & Matthews, 2005) Intellectual property rights are established as human rights in the Universal Declaration of Human Rights ("UDHR," 1946) and in the International Covenant on
Economic, Social and Cultural Rights ("ICESCR," 1966). With the rare exception like issues relating to compulsory licenses on pharmaceuticals, the agenda at the UN has been to fully support IPRs. As such, the UN High Commissioner for Human Rights (UNHCHR) has called on governments to protect IPRs (UNHCHR, 2000, 2001). The UN Economic and Social Council (ECOSOC) called on governments to implement the ICESCR with the view of enhancing IPRs (Chapman, 2000). Support for IPRs is support for economic among other human rights. .4 ECONOMIC ANALYSIS AND DATA The World Economic Forum concluded that IPR protection is fundamental concern in investment decisions leading to R&D spending and innovation. Nations with strong IPRs see comparative and competitive advantages in high-tech and cutting edge products and processes, in academic and research institutions, in technical literature, and in creative arts. In its 2010-2011 World Competitiveness Report, WEF listed IP protection in the 1st pillar (institutions) and 12th pillar (innovation). The competitiveness ranking of nations in the report closely followed the level of IPR protection in the nation. Singapore was the highest ranked global competitor nation in Asia, and third worldwide, due in large part to its focus on innovation and thus IPR protection (WEF, 2010-2011). Economic measures like GDP per capita and growth are associated with IP indicators like patent and trademark applications. Between 2006 and 2009, the top 8 nations or unions in patent filings in order were USA, Japan, China, Korea, EU, Germany, Russia, and India, where China had the highest growth in the period, while Japanese applications per year fell. The combine share of the top five offices was
76.2% in 2008, adding to the fact that high-income economies hold a greater share of total patent applications than of world GDP. All of the top 50 Patent Cooperation Treaty (PCT) applicant companies in 2009 were from Europe, the USA, China, Korea, and Japan. US universities held the top spot with the most 2009 PCT applications in the university sector, while Japanese, Korean, Israeli, UK, Swiss, Canadian, Singaporean, and Australian universities also filed 29 or more in the year. Trends in trademark applications and registrations similarly follow GDP growth and volume. China, USA, India, Japan, EU, Brazil, Korea, Germany, and Australia are all in the top batch in total trademarks or growth. Top 50 Madrid System applicant brands were all from China, USA, Europe, Japan, and Russia (WIPO, 2010l). Licensing is big money worldwide and OECD nations do have a large interest in protecting IPRs because of the value of licenses to their economies. Between 2003 and 2008, the value of royalties and licenses in service exports in G7 nations rose 13.7% while the value of the value of royalties and licenses in service imports rose only 9.3% in the same period. In 2008, royalties and licensing fees made up 7.3% of OECD exports and 6.9% of imports, helping the group post a positive current account in services (OECD, 2010). ASEAN nations and moreover nations of the world can and do benefit from IPR protection in wealthier nations. From 1995 to 2004, ASEAN nations received nearly 220 billion USD in foreign direct investment (FDI), with nearly half going to Singapore which has the highest standards in IPR protection in the region (ASEAN, 2004). The same trend continued between 2004 and 2008 when inflows totaled nearly 260 billion USD with Singapore, Thailand, Vietnam, Indonesia, and Malaysia
collecting about 95%. During the same period, ASEAN ranked as a competitive FDIdestination along with BRIC nations. Top 20 sources of FDI between 2006 and 2008 included EU, Japan, USA, Korea, Hong Kong, Taiwan, China, Australia, Cayman Islands, and Hong Kong, suggesting inflows consisting of high-tech and capital products and services. (ASEAN, 2009) Between 2008 and 2010, intra-ASEAN net FDI inflows ranged between about 13% and 20% of total inflows (ASEAN, 2011). There are, nevertheless, counterpoints to the argument in favor of protecting IPRs. The retail sector can increase profitability without paying licensing fees, and infringement can leave a positive financial impact at the point of sale. The ICC estimates that counterfeiting and piracy accounts for 5-7% of international trade (ICC Commercial Crime Services, 2011), and that volume provides real money to real people. However, there are significant data and theories suggesting that the economic costs of infringement, especially for SMEs, surpass the financial gains of the criminals involved in the trade. (BASCAP, n.d.; UNODC, 2011) Further discussion on piracy and counterfeiting will be provided in a later section of the present research. For now we can conclude that the majority of economists favor IPRs, and while it is not impossible that the majority is wrong, it is improbable that the experts would be so erred. Even in the event of total miscalculation by the academics, theorists, advisors and other professionals on this issue, the legal framework is valid and generally prohibits infringement. Lawyers with some scruples shall then most often favor obedience of the law and promotion of lawful behavior. .5 BUSINESS STRATEGY
The going theory is that protecting and enforcing IPRs provides incentive for innovation, investment, and progress. In the field of patents, incentives are for disclosure so people in the larger group can build on inventions and there may be a more collective benefit from such disclosure. For the purposes of the present research, we shall consider the copyright systems as fundamentally similar to the patent systems and infer that disclosure of ideas to the public has a similar effect in literary and artistic fields, where protected works may be used to inspire and support future works. We will therefore rely on economic theory that copyright simultaneously achieves socially optimal production and consumption of protected material (Watt, 2009). Marketing departments, rather than engineering or research or other departments, are most often charged with the task of deciding whether or not to launch new products or services (Mullins & Walker, 2010). Complex matrices of consumer preferences and probabilities are studied in the process of making such decisions regarding innovation. Intellectual Ventures vice president Greg Kisor (2006) found that ‚economics plays heavily into innovation and bringing things to market‛. Big businesses clearly have a competitive advantage over SMEs in bringing products and services to markets due to their comparatively larger budgets and more expansive access to human and other resources. However, universities, research labs, inventors, and small companies produce 60% of patents while only getting 1% of the revenue (ibid) as those patents are bought up and utilized by much larger companies. Likewise with copyright and related rights, oligopolies are the norm.
The big four record labels – Sony BMG, Universal Music Group, EMI, and Warner Music Group – hold 80-85% of the global market share (Phillips, 2011). The big six Hollywood studios which make up the Motion Picture Association of America (MPAA) – Paramount, Warner Bros., Sony/Columbia, Disney’s Buena Vista, Universal, and 20th Century Fox – held 63% of the world market share in 2009 (Wasko, Murdock, & Sousa, 2011). When it comes to media, Viacom, News Corporation, Walt Disney, Bertelsmann, Time Warner, Universal, and Sony own the vast majority of the global market (Roder, 2007). Revenues of the largest book publishing companies in the world, including Pearson, Reed Elsevier, Thomson Reuters, Wolters Kluwer, Bertelsmann, and McGraw-Hill dwarf the revenues of SMEs, independent publishers, and academic presses though many authors of books are employed full-time in research or academic positions. In software publishing, Microsoft, IBM, Oracle, SAP, Ericsson, HP, Adobe, and Symantec accrue revenues virtually unimaginable by SME and independent or academic standards. Similarly in video game publishing, companies like Electronic Arts, Activision Blizzard, THQ, and Take-Two Interactive realize enormous sales levels even in the face of free online competition and widespread infringement. We live in a time when a limited number of brands have grown and expanded market share, and while there are independent firms competing in some markets, the bulk of international trade in retail consumer goods is of famous or recognizable name brands. In a market and time when diffusion of information is such that, if unrestricted, new innovations could be manufactured by an unlimited number of companies in an entirely free market, and in a time when access to skilled personnel, funding and technology would support a vast number of competitors in the absence
of IPRs, the value of a company is often vested in its brand, and thus in its trademark(s) as much or more than in its products or services (Lom, n.d.). Nike, Adidas, Puma, Reebok, Oakley, and The North Face are synonymous with outdoors and athletic apparel, footwear, and accessories. Brands like Louis Vuitton, Prada, Chanel, Dolce Gabbana, Fendi, Calvin Klein, Christian Dior, Mont Blanc, Lacoste, Gucci, Polo Ralph Lauren, Yves Saint Lauren, Burberry, Versace, Hugo Boss, Diesel, DKNY, Moschino, Tommy Hilfiger, and Giorgio Armani are known worldwide and those names indicate a level of quality and esteem in fashion and luxury goods markets. International trade in small personal electronics is primarily in Apple, Sony, Samsung, Philips, Casio, Acer, LG, and Kingston products. Well-known brands are protective over their trademarks and copyright material because their company worth is very closely associated with perceptions of their brands which are known by symbols. .5.1 CORPORATE SOCIAL RESPONSIBILITY AND PHILANTHROPY As the largest beneficiaries of IPRs worldwide, MNCs are consistently in the black and under much less threat of dissolution or exit forces compared to smaller firms which simply cannot compete with the giants in the fields. Corporations and their employees sometimes have a bad reputation, and public outrage at corporate greed has been a fundamental cause of rebellion, protest, and civil unrest throughout the world. Negative public opinion gains the attention of international journalist agencies, which captivates millions in the short-term and provokes emotions. Without attempting to invalidate the feelings and opinions of millions who oppose certain elements of corporate policy and practice, the present research will examine
the charitable and philanthropic contributions MNCs and their leaders have made as part of the longer-term social strategy. Corporate Social Responsibility (CSR) is a fundamental component of higher business education today and a staple component of formal MNC policy. Corporations are still expected to fulfill their fiduciary duties and pursue profit for shareholders which become the exclusive norm after Dodge v Ford Motor Co. (1919), but another larger group of stakeholders including consumers, governments, and society in general have also become a focus. There exists a mutual benefit to both shareholders and MNCs in protection and enforcement of IPRs in that with strong IPR regimes corporations can create economies of scale and reduce the retail price of goods to consumers, and increased revenues at MNCs can then be distributed more broadly internally and externally such that products and services can continually improve, taxes may be paid, and the general public may benefit from community endowment or other social programs the MNCs may create with extra free cash. MNCs today engage in a range of activities not directly related to their sales and marketing agendas, such as educational, environmental, health and social initiatives. Companies often release CSR reports along with financial statements or other annual reports. Ethical behavior has become an explicit goal and part of a functional organizational policy at the world’s most profitable and top-grossing corporations. Various business groups, such as EthiSphere (2011) and Newsweek (2010) assess and rate policies and practices in sustainability, environmentalresponsibility, and ethics among MNCs. .5.2 UN GLOBAL COMPACT
Starting in July 2000, the UN partnered with private sector chief executives under the name of the Global Compact. The project aimed to align business operations and strategies with ten universally accepted principles involving human rights, labour, environment and anti-corruption. More than 8,500 signatories from over 135 countries voluntarily adopted the agreement. Participant companies are asked to embrace, support and enact, within their sphere of influence, this set of core values: Principle 1 – Business should support and respect the protection of internationally proclaimed human rights; and Principle 2 – make sure that they are not complicit in human rights abuses. Principle 3 – Business should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4 – the elimination of all forms of forced and compulsory labour; Principle 5 – the effective abolition of child labour; and Principle 6 – the elimination of discrimination in respect of employment and occupation. Principle 7 – Businesses should support a precautionary approach to environmental challenges; Principle 8 – undertake initiatives to promote greater environmental responsibility; and Principle 9 – encourage the development and diffusion of environmentally friendly technologies.
Principle 10 – Businesses should work against corruption in all its forms, including extortion and bribery. ("United Nations Global Compact," 2011) .5.3 ADIDAS As of 2011, Adidas had not joined the UN Global Compact, but it did top the list of the most ethical companies in the Ethisphere (2011) apparel class. At the end of 2010, Adidas employed 42,541 people, 23% of which were in Western Europe, 34% in European emerging markets, 24% in North America, 4% in China, 9% in other Asian markets, and 6% in Latin America. In 2010, Adidas worked with 1,236 independent supplier factories, 69% of which were in the Asia Pacific region including 27% in China, 17% in the Americas, and 14% in Europe, the Middle East and Africa (EMEA). Adidas constantly works with suppliers to assure quality and compliance with internal policies. In 2010, 1,451 factory visits including 1,350 audits were made involving management and worker interviews, document review, facility inspections and training session. By the end of 2010, 83% of suppliers obtained ISO 14001 and OHSAS 18001 certification. Adidas rejected 20.8% of potential new supplier factories due to failures to meet satisfactory requirements. In 2010, Adidas volunteered 16,468 hours to the global community, including over 7,000 hours in Asia Pacific, over 5,200 hours in EMEA, and over 3,500 hours in North America. Between 2008 and 2010, the numbers of donation requests received and units of products donated increased each year. In 2010 alone, Adidas donated 269,509 units of products, about 20% of which went to the EMEA region, 1% to Latin America, 49% to North America, and 30% to Asia Pacific. (Adidas, 2010)
.5.4 ADOBE As of 2011, Adobe had not joined the UN Global Compact, though it ranked at the top of Ethisphere’s (2011) World’s Most Ethical Companies computer software industry list, exactly where it was in 2010. In Newsweek’s (2010) Green Rankings, Adobe ranked #7 among US 500 companies, up from #16 in 2009. In 2008, Adobe donated more than US$42 million in cash and software to schools and nonprofit organizations around the world, and US$10.73 million to the Adobe Foundation. The company matches charitable donations made by employees. With focuses on environment, hunger and homelessness, access to technology, youth development, arts and culture, Adobe and the Adobe Foundation are leaders in corporate philanthropy. (Adobe, 2008) In 2009, software donations and grants to schools and nonprofits increased to more than US$51.5 million. Among the more than 7,000 employees in the Americas, Asia Pacific, EMEA, and India, 93% said they were proud to work for Adobe. By the end of 2009, the Adobe Foundation’s signature philanthropic program reached 27,000 youths and 1,500 educators in 32 countries at more than 500 sites. In 2009, more than 1,300 employees volunteered 3,500 hours and the company matched over US$2 million in employee charitable gifts. The company invested US$870,000 in the USA and US$59,000 in Canada in its education reimbursement program for employees who continue their education in business-related courses. (Adobe, 2009) .5.5 MICROSOFT AND THE BILL & MELINDA GATES FOUNDATION Microsoft has been a participant in the UN Global Compact since 2006. In 2011, Microsoft was the #2 most ethical company in the computer software industry
according to Ethisphere. In 2010, Newsweek ranked Microsoft #23 among the Global 100 Green Companies, up from #31 among the US 500 in 2009. In 2010, Microsoft employed about 89,000 people in more than 100 countries/regions and territories. Microsoft relies on more than 640,000 local business partners, most of which are SMEs, in developing, marketing, retailing, and servicing products. In 2010, Microsoft gave 3.2% of its pre-tax profits in cash and software, totaling US$603 million, marking increases from 2009 (2.61%, US$516.9 million) and 2008 (2.09%, US$498 million). In 2010, through new business models, partnerships, programs and technology innovations, creating new opportunities, jobs, and innovation, Microsoft’s Unlimited Potential program set a goal to provide 1 billion people with access to benefits of technology by 2015. Microsoft’s corporate giving extends to education, nonprofit organizations, humanitarian needs, disaster response, and social projects focused on diversity and inclusion. In 2010, Microsoft estimated that it supported 14.9 million jobs worldwide through partners and Microsoft-related IT professionals, generating an average of US$8.70 for each partner per US$1 of Microsoft revenue. The company provided technology training to more than 170 million people in more than 100 countries/regions between 2003 and 2010, including more than 29 million people in 2010. Between 2003 and 2010, more than 200 million students and teachers in 114 countries/regions worldwide were reached. MS products were translated into nearly 100 languages by 2010. (Microsoft, 2010) Microsoft chairman Bill Gates is the world’s biggest philanthropist. Gates stopped working full-time at Microsoft in 2008 to concentrate on the Bill & Melinda
Gates Foundation, the world’s largest private foundation. In 2011, Bill and Warren Buffet started up The Giving Pledge, which focused on recruiting the world’s wealthiest people to pledge the majority of their wealth to philanthropy. By the end of 2011, 58 of the world’s billionaires joined the club. (Bill & Melinda Gates Foundation, 2011a) From 1994 through September 2011, nearly US$26.2 billion in grants were given globally by the Gates Foundation, with more than US$15.25 billion in global health grants, over US$6.23 billion within the USA, more than US$3.6 billion to global development, and over US$1 billion in other charitable contributions. (Bill & Melinda Gates Foundation, 2011b) .5.6 CASIO Casio is a UN Global Compact participant since 2010. In 2010, Casio Thailand won its fourth consecutive ‚Outstanding Labor Relations and Labor Welfare Award‛ from the Thai government’s Ministry of Labor. In 2009, Casio was one of 31 Japanese companies selected by UK’s Carbon Disclosure Project as having a positive impact on global warming prevention and information disclosure (Casio, 2010a). The company supports numerous CSR activities annually. Disaster prevention and relief, safety, social, educational, artistic, cultural, sporting, environmental and health initiatives are funded by Casio. In 2004, the company matched employee donations and together they gave over JPY5 million to both the Niigata and Sumatra earthquake relief efforts through the Japanese Red Cross Society. The annual Casio World Open golf tournament proceeds are donated to charity (Casio, 2005).
Thousands of graphing and other calculators are regularly donated to schools. Since 1994, part of the proceeds from special G-SHOCK and Baby-G model watches has been donated to the International Cetacean Education Research Center of Japan in support of dolphin and whale eco-research. In 2009-2010, Casio donated about JPY5 million to earthquake relief efforts in Indonesia, Philippines, Haiti, and Chile. In the same period, the company supported a Japanese master’s thesis contest in China (Casio, 2010b). Education of the next generation, culture and arts, community service, environmental conservation, and study and research are the five priority themes for Casio’s social contribution initiatives. Between its start in 1984 and the end of 2010, the Casio Science Promotion Foundation awarded about JPY1.5 billion in grants in 5 fields (Casio, 2011). .5.7 International Business Machines (IBM) As of 2011, IBM had not joined the UN Global Compact. In Newsweek’s 2009 Green Rankings, IBM placed 5th among US 500 companies, and in 2010 Newsweek rated IBM first among the Global 100. IBM places in the top ten on numerous business, ethics, and corporate citizenship rankings. IBM manages a supply chain of more than 27,000 suppliers in about 100 countries. In its 2010-2011 Corporate Responsibility Summary, the company reported more than 425,000 employees, doing business in about 170 countries. Roughly 28% of IBM’s global workforce, 20%+ of global executives and 25% of managers are women. Employee satisfaction is generally in the high 60% range.
Almost 60% of IBM employees annually give about US$35 million to several thousand charitable agencies in the US. Between 2006 and 2010, corporate contributions worldwide increased from over US$150 million to nearly US$190 million, supporting education, culture, health and human services, environmental and other programs. By 2010, IBM procured more than 11% of its total electricity from renewable energy sources and reduced its CO2 emissions by 16.7% from the 2005 base year. (IBM, 2010-2011) .5.8 NIKE Nike, Inc. has been a participant in the UN Global Compact since 2000. In 2009, Newsweek rated Nike 7th greenest in the US 500 and in 2010 Nike ranked 10th. In 2010, Ethisphere rated Nike the 2nd most ethical company in the world in the apparel class, down from 1st in 2009. Nike operates in more than 160 countries and manages a supply chain that employs nearly 1 million people including more than 36,000 Nike employees on 6 continents (Nike, 2011b). In 2011, Nike charted its roadmap toward zero discharge of hazardous chemicals. The company raised US4.7 million in an auction then doubled the amount to US$9.4 million for the benefit of the Michael J. Fox Foundation for Parkinson’s Research (Nike, 2011c). In 2008, Nike launched the LIVESTRONG Collection of apparel and footwear with 100% of the profits donated to the Lance Armstrong Foundation. Nike corporate and employees routinely donates several hundred thousand US dollars in grants, several hundred thousand units of product, and thousands of volunteer hours to schools and community programs worldwide (Nike, 2007-2009, 2011c).
The Nike Foundation targets girls in the developing and third world on three continents. Education, health, safety, and economic opportunity are primary initiatives at the Foundation which is ‚working to bring about radical change based on understanding, valuing and incorporating girls‛ (Nike, 2008). The Jordan Fundamentals grant program was established in 1999 and is designed to support economically disadvantaged students in American public schools (Jordan Fundamentals, n.d.). Between 1999 and 2009, the Bowerman Track Program gave US$2 million in grants to support building new and refurbishing old running tracks in the USA (Nike, 2011a). The company has established other internal funds and programs to help schools and young athletes achieve in the competitive sporting environment. .5.9 PUMA Puma SE has been a participant in the UN Global Compact since 2006. The Puma Group distributes products in more than 120 countries and employs more than 9,500 people worldwide (Puma, 2011). The Puma Vision for sustainability includes safety, environmental conservation, peace action, and collaborative partnerships in creative fields. The vision is pursued under the core concepts of fairness, honesty, positivity, and creativity. Puma partnered with Adidas, Nike and other companies to reach zero discharge of hazardous chemicals in the supply chain by 2010. In its ethics code and code of conduct, the company communicates commitments to non-discrimination, intolerance of violence and abuse, respect for individual rights and freedoms, collective rights and freedoms of association, policy against child labor, and for a proactive, respectful, legal, safe work environment (ibid).
Since 2007, Puma supports the Peace One Day project with the One Day One Goal campaign which aims to see soccer matches played in every country on September 21st – Peace Day. Puma launched the Peace One Day Football Collection in 2008 and donates a portion of the profits to Peace One Day. In 2009, Puma retailed a limited edition bag and donated US$100 to the Contemporary Arts Foundation for per bag sold. Charity Cat is Puma’s internal charitable organization, founded by 20 employees in 2004. Charity Cat supports the needy through donation of products, money and time around the world. Charity Cat projects have included emergency relief in Bangladesh, housing in the Philippines, local ovens in Peru, care for impoverished children with HIV in South Africa, family assistance in Pakistan, housing and schooling for young people in Jerusalem, child and mother care in Germany, child sponsorship in Ghana, Pakistan, China, and Guatemala (Puma, 20072008). .5.10 SONY As of 2011, Sony had not joined the UN Global Compact. Sony was 4th among the Global 100 in Newsweek’s 2010 Green Rankings. The company has an expansive environmental policy. Sony employs over 168,000 people worldwide. The company’s philanthropy projects focus on feeding the hungry, housing the poor, disaster relief, environmental conservation, education, health, community, arts and culture. The company and its employees support a long list of charities and events. Scholarships, time, money, and a variety of goods are given out regularly (Sony, 2011).
In 2009, Japan and North America each received 36% of the JPY3.6 billion in donations while East Asia received 14%, Pan-Asia 7%, Europe 5%, and Latin America 2%. 61% of the funding in that year went toward education, 11% to arts and culture, 7% to health and welfare, 7% to social contribution, 6% to disaster relief and humanitarian aid, 4% to environment, and 1% to sports (Sony, 2010). .5.11 SYMANTEC Symantec Corporation has been a participant in the UN Global Compact since 2006. The company placed 144th in 2009 and 44th in 2010 in Newsweek’s US 500 Green Rankings. Symantec was 4th in the computer software division in Ethisphere’s 2011 World’s Most Ethical Companies rankings, down from 3rd in 2010. Ethisphere also mentioned Symantec in 2009. In 2010-11, Symantec operated in more than 59 countries, employed more than 17,600 people and provided software to 475 of the Global 500 companies (Symantec, 2011b). Core topics in the company’s code of conduct include diversity and inclusion, legal compliance, health, safety, human rights, environmental conservation, and anti-corruption. Electronic delivery of products, which accounted for about 70% of all deliveries in 2008, helped cut Symantec’s carbon emissions and packaging waste. In 2008, Symantec donated US$16.78 million in cash and software to schools, nonprofit organizations, and local communities, up from US$13.39 in 2007. Employees volunteered 6,000 hours in 2007 and 20,000 in 2008 (Symantec, 2008). Between 2009 and 2010, Symantec and its employees gave more than US$42.2 million to schools, nonprofits, and communities, including US$1.2 million in matching grants donations, over US$6 million in corporate cash contributions, over
US$34 million in software donations at retail value. 62% of philanthropic contributions in 2010 were within the Americas, 28% globally, 5% in both EMEA and Asia Pacific regions. In 2010, about half of contributions went toward education, around a fifth to online safety, a tenth to environment, diversity and other projects. Scores of foundations and other charitable institutions are supported annually (Symantec, 2011a). .5.12 VIACOM As of 2011, Viacom had not joined the UN Global Compact. Newsweek rated Viacom 442nd in 2009 and 298th in 2010 among the US 500 greenest companies. Viacom’s media brands have long supported social activism and awareness campaigns, especially targeting youth audiences and working with crucial topics like HIV/AIDS, voting, peace, diversity and inclusion, and education. BET and MTV Networks and Paramount Pictures are broadcast and played in more than a half billion households in over 160 countries with content in over 30 languages. Nickelodeon alone provides quality children’s entertainment media and merchandising, helping keep kids and parents laughing worldwide. Other MTV Networks like VH1, CMT, Nick at Nite, Comedy Central, Spike, and TV Land offer multimedia entertainment online and via cable or dish, and continuously satisfy audiences. In theatres, Paramount, MTV and Nickelodeon offer only the highest quality stories, graphics, editing, direction, production, talent, cast, crew and other creative works. Viacom employs over 10,000 people worldwide and is committed to total non-discrimination. Viacom pitch-in over US$600 million in media value for the KNOW HIV/AIDS campaign, which won both a Peabody Award and an Emmy. In 2009,
MTV’s ‚Get Yourself Tested‛ campaign drew attention from young people across the US, leading to a doubling of numbers of men tested for HIV in some areas. In 2008-09, MTV partnered with UNAIDS, UNICEF and UNFPA on the Staying Alive Foundation’s efforts at distributing over 120,000 condoms, training more than 4,000 peer educators, and raising more than US$1.7 million in 50 different countries for the fight against HIV/AIDS. BET’s ‚Rap-It-Up‛ campaign targets African American men and women, especially between the ages of 13 and 25, informing them about HIV/AIDS via public service announcements, documentary and entertainment programming, and community events. Viacom partnered with the Bill & Melinda Gates Foundation on the ‚Get Schooled: You Have the Right‛ education initiative, helping spark a US-national dialogue about the importance of improving the American education system. The Get Schooled documentary attracted nearly 13 million viewers and featured President Barack Obama, pop star Kelly Clarkson, the NBA’s LeBron James, and 3 career professionals. BET partnered with the Twenty-First Century Foundation and aired several documentaries on the same topics produced by Mario Van Peebles, featuring such black American icons as Chris Rock, Spike Lee, Dr. Cornel West, Ice Cube, Sean Combs, and Lou Gossett Jr. In 2008, Viacom launched a 5 year initiative to realize the goals outlined in the Get Schooled project. The brands further engaged the public in straight talk sessions with personalities Wyclef Jean, Neil Patrick Harris, Julia Louis-Dreyfus, Mekhi Phifer, Dr. Phil, Sheryl Crow, Cyndi Lauper and more. Various scholarships have been funded and otherwise supported by Viacom networks, their people, and their side-projects. VH1’s Save the Music Foundation provided over US$43 million worth of new instruments to over 1,600 public schools.
In 2008-09, Viacom committed over US$200 million in media value to prosocial programming. Employees volunteered over 50,000 hours. More than 250,000 kids in the US and more than 6 countries participated in over 1,000 local events as part of Nickelodeon’s annual Worldwide Day of Play. MTVU joined with the Peter G. Peterson Foundation and targeted college students to raise awareness of the dangers of excessive debt. The family of networks consistently raises awareness and millions of dollars in funding, directly and indirectly, for the popular issues. The company as a whole serves as a medium between the experts and general public, both creating and reflecting the zeitgeist of our socially active and responsible times (Viacom, 2008-2009, 2011). .6 COMPELLING INTEREST In spite of the oligopolistic nature of the IP market, despite the imbalanced rewards paid between MNCs and SMEs with regards to IP, and notwithstanding the inherent right of a people to a free market economy, there exists a compelling state interest in protecting and enforcing IPRs. Overwhelming evidence is present supporting the theory that IPR protection and enforcement is associated with higher economic returns, greater economic productivity, higher GDP, increased innovation, and improved social conditions. Nations that protect IP the most are typically the wealthiest nations and it is not coincidental that the world’s biggest and best companies are most often headquartered in nations which respect IPRs the most. A dilemma may exist in the developing stages of designing and implementing a strong IPR protection and enforcement regime, however the macro-level advantages of enforcement are proven in numerous state cases. Corporate expansion and capitalization on IP produces a clear reciprocal effect, whereby corporations provide
goods, services, jobs, and charity with the profits they generate. SMEs, university labs, and independent researchers benefit when an IP market is made by MNCs. Consumers benefit with access to continuously improving goods, and regardless of constrained unrest, demand for products bearing well-known trademarks is consistently high across socio-economic groups. As time goes on, the dilemma on IPR protection and enforcement shows itself to be largely a false dilemma. .7 ASEAN BUSINESS CASE STUDIES WIPO’s IP Advantage system offers a searchable database of business success stories involving utilization of IP. At least one case study is available from each of the ASEAN members. These cases help show the direct benefit of recognition and enforcement of IPRs in the region under study. Many cases involve an SME which started with limited capital and a domestic market dominated by MNCs, but succeeded in establishing a recognized brand name. .7.1 FOOD AND BEVERAGE Hagar Soya Co., Ltd. (HSL) was founded in Phnom Penh in 1998 by Hagar, a Swiss non-governmental charity organization (NGO). Its first product was an affordable, nutritious, and tasty soya milk drink sold under the brand name ‚So! Soya‛. Target markets included local children who needed to increase protein intake in the country with high malnutrition rates. The milk was originally sold on the streets from push carts, but after a few years of success, by 2003 the company increased its production to commercial levels and introduced long shelf-life packaging for the market where refrigerators are scarce.
‚So! Soya‛ was registered as a trademark in 2003, and in the years following, the company registered marks for its other products, such as ‚So! Soya kids‛, ‚So! Soya Gold‛, ‚So! Yo‛, ‚So! Yumme‛, ‚So! Milk‛ and ‚So! Choco‛. Branding success at HSL made the company the first large-scale soy milk plant in Cambodia, and led to a Corporate Citizenship Award from the Cambodian government in 2005. HSL aims to benefit society through poverty reduction and social development initiatives, job creation, and by providing nutritious beverages (WIPO, 2010h). Ly Ly Food Industry, Co. Ltd. started with a single rice cracker processing machine in the home of a Cambodian married couple in 2002. Ly Ly Food’s rice crackers were the first locally-made product sold in plastic packaging in Cambodia. Since 2003, Ly Ly registered several trademarks and engaged in a branding strategy for various flavors of rice crackers which focused heavily on providing attractive packaging under protected marks. Proprietors attended SME seminars on IP where they learned to upgrade company value through promotion of trademarks. In less than 10 years, the company’s product offerings grew to ten flavors, employees increased to 95, and annual sales rose to US$1.5 billion (WIPO, 2010g). Indonesia-based fast food restaurant chain Es Teler 77 started in 1982 as a fruit drink sales kiosk employing 5 people at a shopping center in Jakarta. Through a unique marketing strategy including staging competitions to increase public and media attention, the business expanded and started serving foods. Es Teler 77 registered a trademark early on, and since the beginning the company has registered other service marks, including for a related specialty restaurant – Mie Tek Tek. Franchising started in 1987, and by 2010, Es Teler 77 had more than 200 outlets in Indonesia, and 5 restaurants in Australia and Singapore. Mie Tek Tek also developed
about 20 locations in Indonesia. The company has received numerous businessrelated, food and other awards (WIPO, 2010a). Lao Brewery Co. Ltd. (LBC) was established in 1973 as a joint venture between French and Lao investors. After the founding of Lao PDR in 1975, LBC was nationalized and became a state-owned enterprise. In 1993, LBC again became a joint venture between the Lao government and foreign investors including Loxley Public Co., Ltd. and Italian Thai Public Co., Ltd. In 1997, LBC started exporting to 8 countries including Australia, France, Japan, New Zealand, the UK and USA. In 2002, Carlsberg Asia Co., Ltd. and TCC International Co., Ltd acquired the foreign shares. In 2005, LBC became 50% owned by Carlsberg Breweries and 50% was held by the Lao government. LBC started registering trademarks in Lao in 1994. The company markets 5 types of beer and 1 brand of drinking water. By 2011 LBC produced 210 liters of beer and 21 million liters of drinking water annually. LBC has a near monopoly on the beer market in Lao PDR. Exports under the Beerlao brand have become a successful aspect of operations. The company’s ‚drink Beerlao, absorb Lao culture‛ slogan and its associated trademark are important parts of the overall marketing strategy (WIPO, 2010f). San Miguel Corporation of the Philippines was established in 1890 and has since grown to be one of the region’s most recognized megabrands with over 15,000 workers and diversified operations. In 1925, San Miguel launched a dairy products subsidiary named Magnolia which endured through the 1980s as Asia’s oldest ice cream producer. In the 1990s, sales slumped in a competitive market thick with competition from overseas brands. In 1996, San Miguel sold its stake in Nestle
Philippines Inc. in an agreement which included a non-compete clause barring San Miguel from selling ice cream under any brand for five years starting in 1998. Magnolia ice cream was pulled from the shelves until 2004 though other dairy products like margarine continued to be sold under the Magnolia name with broad market appeal. Reintroduction of Magnolia ice cream to the market posed some marketing questions for San Miguel, which knew that the ice cream held a permanent spot in the childhood memories of older consumers. In designing the rebranding strategy, the Magnolia ice cream team tried to attract new consumers while counting on brand loyalty among older consumers. The original Magnolia trademark design was kept, but a brighter, more youthful color blue was used along with modern colorful packaging. Special edition packaging featured artwork from high school and college students among other local artists. San Miguel made many registrations related to the Magnolia brand name ice cream products, a brand that was temporarily discontinued but ‚never left the market‛ (WIPO, 2010i). In the mid-1970s, Tony Tan Caktiong started his food business with a Magnolia Dairy Ice Cream franchise in the Philippines. After adding hot meals and sandwiches to the menu, by 1978 Caktiong discontinued the franchise and started the Jollibee restaurant chain. Within 30 years, Jollibee grew to be the leading fast food chain in the Philippines with over 50% market share. The chain has hundreds of locations in the Philippines and operates in foreign markets such as Brunei, China, Hong Kong, Indonesia, Saudi Arabia, UAE, US, and Vietnam. By 2020, Jollibee plans to have 4,000 outlets worldwide. In 1993, Jollibee listed on the Philippine Stock Exchange. The company acquired competitor food retailers Greenwich pizza, Yonghe Dawang, and Chowking
since public listing. The Jollibee brand is valued at several billion pesos. Trademark registration and protection are essential to the company. Faced with infringement by free-riders and counterfeiters, Caktiong and Jollibee have taken enforcement of trademarks seriously. ‚Counterfeiting will destroy society in the long run,‛ Caktiong said, ‚this will hurt everybody because counterfeit does not have the right quality…customers will get confused by this and they are not happy…then they lose confidence in the real brand and everything will be destroyed…‛ (WIPO, 2010e) The Ya Kun International Pte. Ltd. coffee stand franchise brand was started by Loi Ah Koon, a teenage Chinese immigrant to Singapore. Between the 1930s and the death of the founder in the late 1990s, Ya Kun expanded its menu and became a popular family business. Ah Koon’s youngest son Adrin took over the company in 1999 and shortly thereafter designed a franchising strategy heavily dependent on IPRs. Ya Kun’s IP includes its recipes and techniques, name brand logo, various nostalgia posters featured in each franchise, and other business materials. Since 2001, Ya Kun received over 500 domestic franchise applications. By 2010, the company had 40 outlets in Singapore and 30 international locations in Brunei, Indonesia, Japan, Philippines, Korea, and Taiwan. Potential investors from Malaysia, Hong Kong, Thailand, India, China, and Australia have also shown interest in franchising the well-known brand (WIPO, 2011b). .7.2 CONSUMER GOODS Nibban Electric and Electronics (NEE) started in Yangon, Myanmar in 1972 selling AC/DC power adapters and later moved on to sell a range of electrical devices such as generators, inverters, voltage converters, battery powered fluorescent lights, battery chargers and TV antennas. NEE’s most important asset is its brand
name, which signifies quality and affordability to consumers, and for which it has registered trademarks (WIPO, 2010d). King Flute Philippines Inc. was established n 1991 by musician Dante Ursula after 10 years of research and development with bamboo flutes. For several years the flutes were sold on sidewalks in Manila until 1999 when King Flute got more organized. By 2010, the company successfully marketed a variety of instruments including the world’s smallest flute, pan flutes, and three sizes of the original traditional bamboo flute. King Flute instruments are sold internationally and revenues exceed one million pesos a month. Trademark and industrial design rights protect the company’s IP (WIPO, 2011f). Heatwave Shoes Pte. Ltd. started as a ladies’ shoe boutique in Singapore in 1992. Soon after start-up, Heatwave was designing original office, evening and casual shoes. The Heatwave name and trademark featured on every pair of shoes and on the retail stores was key to the company’s development. Directors wanted the shoes to sell like ‚hot property‛ around 2000 when the trademark was registered across South East Asia. The affordable shoes gained an international reputation as ‚uncompromisingly snug yet trendy‛, and by 2009 Heatwave had 29 outlets in Brunei, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Taiwan, and Vietnam (WIPO, 2010k). .7.3 MANUFACTURING, SCIENCE AND TECHNOLOGY Brunei’s DataStream Technology Sdn Bhd (DST) was founded in 1995 during a period of privatization of communication services. DST marketed various brands under registered trademarks, namely Prima, Easi, FasCom, Simpur, and Zippi. Mobile phone, payphone, two-way trunk radio, and internet services are provided
under DST’s diversified communications portfolio. Licensing of the Easi, Simpur, and Zippi brands increased the value of IP. DST’s success is due in large part to its easily recognized brand names and logos. Vientiane Steel Industry Co., Ltd. (VSI) was established in 1994 during a government campaign to promote industrialization and is the oldest steel mill in Lao PDR. The company started as a joint-venture between investors from Laos (40%), Thailand (30%) and Hong Kong (30%). The first steel factory went into production in 1997 with annual capacity of 40,000 tons. In 1999, two more production plants were opened and the company offered new products. In the few years following that, another steel factory and an iron foundry were opened. Every steel product is marked with the VSI logo which is registered to the company. VSI has developed a line of quality products and a name for itself in the industry, and it may consider licensing agreements in the future (WIPO, 2010b). Petroleum Nasional Berhad (PETRONAS) was incorporated in 1974 under the 1965 Companies Act and 1974 Petroleum Development Act. PETRONAS is wholly owned by the Malaysian government. The Global 500 company employs about 40,000 people, with business interests in nearly 40 countries, and over 100 whollyowned subsidiaries. PETRONAS has a broad IP portfolio including more than 200 trademarks in 65 countries. Branding was an essential component of the company strategy in an industry where there is little opportunity for price-based competition. Through print, electronic media, billboards, and souvenir books, PETRONAS logos were fixed in the minds of consumers worldwide. IP is clearly an important part of the company’s continued operations, and as such three cases were brought to the WIPO Arbitration and Mediation Center by
PETRONAS. The company won all three cases, which involved internet domain names – two in the USA and one in Switzerland. Nearly 40% of 2009 revenue was generated outside of Malaysia, so international protection of IPRs is crucial (WIPO, 2010c). In 2002, a group of executives from around the world started up Merlin MD Pte. Ltd., a company specializing in devices and technologies for the treatment and prevention of strokes and cerebral aneurysms. They chose Singapore in part due to the nation’s strong IP regime. Patents and trademarks for the ‚X*Calibur‛, ‚Joyeux‛, and ‚Falchion‛ products are the core of Merlin’s company value. Through a strong branding strategy dependent on IPR utilization, licensing, and aggressive R&D, Merlin attracted more than US$30 million in investments and has grown to be a well-known competitor in its field, especially in Asian markets (WIPO, 2010j). In the 1950s, a Thai-Chinese traditional medicine guru decided to market a popular herbal mixture that alleviates dizziness and fatigue. Through the 1960s, the family business had some success in selling its ‚Siang Pure Oil‛ in Thailand. In 1982, the company was renamed Bertram Chemical Co., Ltd. Bertram continued to capitalize on the popular Siang Pure Oil and also introduced a range of other oil, balm, and inhaler products. Bertram rebranded its product packaging and logo design to appeal to broader audiences, and expanded its distribution network to include over 6,000 pharmacies in Thailand. By 2010, Bertram held an 80% market share of herbal oil products in Thailand, and expanded sales into foreign markets such as Brunei, Cambodia, China, Hong Kong, Indonesia, Korea, Laos, Malaysia, Singapore and Vietnam. Since the rise in popularity of the Siang and Bertram line of products, the company has faced counterfeiting and infringement of its trademark packaging and logo design. Prosecuting infringers would be an expensive undertaking for the
company, and as such, it has not taken widespread action against violators. Without state-assistance to remedy ongoing infringement, both a public safety risk and unreasonable threat to the company are posed (WIPO, 2011i). .8 MARKET SYMBIOSIS A well-functioning market indeed presupposes or at least requires a similarly functioning legal order. Protection of IPRs can enable entrepreneurs, SMEs, independent researchers, university labs, and MNCs to engage in R&D efforts which yield profit. Without profit available, without a market for IP, the cycle of research and development may cease and markets could easily become dominated by foreign firms which enjoy IPR protection in their home countries. The nature of the strong market imbued with a strong IP legal system is such that research and development may lead to consistent new product offerings, which can be associated with increased market activity and sales for individual companies, the proceeds of which may be reinvested into further research and development in a cyclical order where growth may be established as a norm. Mutual benefits to consumers and producers are provided by the innovation economy whereby customers have access to high technology and other new materials, and businesses have sufficient capital and equity resources to expand and develop internally and externally. SMEs and independent inventors have a stake in MNC successes given that MNCs may have greater potential to acquire IPRs via licensing or assignment agreements. Smaller ventures which do not have the necessary finances to bring products to market may concentrate on innovation and the market may become more efficient through division of labor.
With broad IP portfolios, MNCs may be able to leverage their IP over competitors and take advantage of economies of scale, thus further reducing the costs of production and end-line prices of products offered to individual and organizational consumers. Reduced costs and increased profit margins lead to increased shareholder equity, dividends, and opportunities for businesses to tend to their fiduciary responsibilities. The profit motive may then also benefit society in general as MNCs and other private foundations will have more free cash and human resources to donate. Donations of time and money further increase buyer awareness of certain brands, improve the reputation of individual companies, and help make corporate social responsibility the expected norm. Theoretically, the economic merit of IPR protection and enforcement is virtually infallible. International Law IPRs have been the subject of major international conventions since the late 1800s. The 1883 Paris Convention for the Protection of Industrial Property, 1886 Berne Convention for the Protection of Literary and Artistic Works, and 1891 Madrid Agreement Concerning the International Registration of Marks form the basis for much of the present-day international IPR protection policy. After the dissolution of the League of Nations and subsequent formation of the United Nations under the 1945 Charter, numerous UN or UN entity-administered treaties were signed and entered into force though the new agreements did not abrogate the provisions of the late 19th century conventions. Additionally, a multitude of bilateral agreements related to IPRs exist today. For the purposes of this research, those bilateral arrangements will be considered ubiquitous yet will not be the subject of review herein. In this section, we will review
major international IPR treaties relevant to the WIPO and WTO systems and ASEAN group. After examination of international treaties and the signatories and parties thereto, we can review domestic statutes and determine whether or not implementation can be said to have occurred. Moreover, by looking into obligations among members of one or many treaties, we can ascertain the tenets of the current IPR protection and enforcement regime, and thus determine what could be considered adequate adherence thereto or compliance therewith. In cases where certain articles or points of treaties have not been implemented at the domestic level, such treaties are still binding according to Articles 26 & 29 of the 1969 Vienna Convention on the Law of Treaties. Furthermore, Article 27 of that
Table X: Vienna Status Status of the Vienna Convention BR KH ID LAO MY MR PH N/A Signature 1969 N/A Accession 1998 Accession 1994 Accession 1998 Ratification 1972
Vienna Convention prohibits a party from invoking internal law as justification for failure to perform a treaty. Manifest inconsistencies between requirements of international treaties and the nature of domestic legislation and or execution and or adjudication of laws at the national level shall for the purposes of this research be assumed to be breaches of obligations under international agreements. Where a conflict exists between domestic and international law, this research will give priority to international treaties for the purposes of analyzing and discussing the situation. SG TH VN N/A N/A Accession 2001 Treaties and Agreements 1883 Paris Convention Article 1 defines the scope of the treaty to all industrial property, including patents, utility patents, industrial designs, trademarks, service marks, trade names, indications of source of appellations of origin, and regarding unfair competition. National treatment for all members of the union is mandated in Article 2. Articles 4 & 5 concerning all industrial grant protection in all member nations for industrial property registered in one country of the union. Article 4ter grants inventors the right to be mentioned as such in the patent. Article 5 A(2) grants each country the right to enact legislation allowing compulsory licenses ‚to prevent the abuses which might result from the exercise of the exclusive rights conferred by the patent‛.
Well-known marks are protected in Article 6bis. Infringement thereon may be defined as ‚when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith.‛ Marks are assignable under Article 6quater. Article 6quinquies states that marks registered in any member nations shall be accepted for filing and protection as is in other member nations. Infringement and seizure Article 9 provides for seizure of all goods unlawfully bearing trademarks. Seizure on importation, and in the country where such trademarks are affixed, and within the country to which the goods were imported shall take place at the request of the public prosecutor or any other competent authority, or by application of the rights holder or owner under domestic legislation. Prohibition of importation is provided for if domestic legislation does not permit seizure on importation. Article 10bis binds member nations to assure nations protection against unfair competition, to wit, passing off of infringing products, or falsification of origins or quality or nature of products, or any such false indication in trade that is likely to mislead the public regarding the authenticity of products. Article 10ter requires all member nations to assure nationals of other member nations legal remedies to effectively repress any infringement on relevant IPRs. Obligations and allowances Article 19 declares that nothing in the treaty prohibits members from establishing separate agreements among themselves insofar as such bilateral and or multilateral agreements do not contravene provisions of the present treaty.
Ratification or accession to the treaty automatically entails acceptance of all clauses of the treaty unless otherwise declared by joining parties (Article 22). Parties automatically undertake to adopt the treaty and to give effect to the provisions therein through domestic legislations (Article 25). Dispute resolution In the event of a dispute concerning interpretation or application of the Convention between two or more countries within the membership, any one of the parties may submit the case to the International Court of Justice unless parties agreed on some other method of settlement (Article 28(1)). At the time of depositing an instrument of ratification or accession, a country may declare that it shall not be bound to the jurisdiction of the ICJ (Article 28(2)). Statistics 173 contracting parties were counted in 2011. (WIPO, 2011h) 1886 Berne Convention Article 2 specifies that party nations to this treaty are obligated to protect literary and artistic works and derivatives thereof, cinematographic works, musical compositions, photographic works, choreographic works and ‚entertainments in dumb show‛, and the like so long as they are fixed in some material form. Works must be protected in all countries which are parties to the treaty regardless of the nationality of the author. Article 2bis provides for some exceptions specified under domestic laws such as citation of works by the press or in academia. Article 5 clarifies rights in multiple jurisdictions, each of which govern exclusively the extent of protection and means of redress afforded to the author.
Moral rights Both economic and moral rights are provided. Moral rights according to Article 6bis are independent of economic rights. Authors have rights to claim authorship of works, and to object to ‚any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, which would be prejudicial to his honor or reputation.‛ Duration of moral rights extends for at least as long as economic rights, though some rights may expire upon death of the author in some contracting States. Duration In general, the term of protection is the life of the author plus 50 years after death. In cases of cinematographic works, a term of 50 years after first publication or showing may be established. Photographic works and applied art are protected for at least 25 years from first publication. In cases of multiple authors, the term shall extend to a period of time after the death of the last surviving author. In all cases, terms are calculated using the 1st of January of the year following first publication or exposure to the public. Economic rights Article 9 grants authors the exclusive right to authorize reproduction of their works. Paragraph 2 provides for limited exceptions under domestic legislation inasmuch as such an exception ‚does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.‛ Article 11 outlines the rights of authors of dramatic, dramatic-musical and musical works. Authors of such works have the exclusive right of authorizing any
public performance of their works or communication to the public of performances of their works. Article 11bis pertains to broadcasting and related rights. Authors of works, including organizations, have the exclusive right of authorizing broadcasting of their works by means of signs, sounds, or images, or any communication to the public by wire or rebroadcasting of an original broadcast, or public communication by loudspeaker or other instrument. Article 11ter grants authors the exclusive right of authorizing public recitation of works by any means or process, or other communication to the public any recitation of their works. Authors have exclusive rights of authorizing adaptations, arrangements and other alterations of their works under Article 12, which extends to cinematographic adaptations or public performance of adaptations in Article 14. Authors have the right to be compensated for any sale of their works under Article 14ter. All cinematographic copies of works are considered originals under Article 14bis. Royalties and collection procedures, unless otherwise agreed upon, shall be determined by national legislation.
Infringement and enforcement As per Article 15, authors have the right to institute infringement proceedings in cases where they are not named as the author. Protection may be sought in
member nations under domestic laws under Article 14ter. Infringing copies are liable to seizure in accordance with domestic legislation in any member nation under Article 16. Dispute resolution Under Article 33, any dispute between two or more countries concerning interpretation or application, which is not settled by negotiation and if the countries did not agree on some other method of settlement, may be brought by any one of the countries involved in such dispute to the International Court of Justice. Obligations and allowances Article 19 allows countries to provide greater protection than granted in the Convention. Article 20 allows countries to engage in other special agreements among themselves to provide greater protection so long as such bilateral or multilateral arrangements do not contain clauses contrary to the Berne Convention. Article 36 mandates that all parties to the Convention adopt measure necessary to ensure the application of the treaty. Member nations are required to give effect to the treaty in domestic law. Developing countries The Appendix contains special provisions regarding developing countries. Any country regarded as developing at the United Nations may make a notification that it does not consider itself in a position to protect all rights. Such notifications are valid for periods of ten years and renewable thereafter for periods of ten years.
Licenses for translations are also made available through special means for developing countries, though grant of such licenses does not abrogate authors’ rights to claim royalties. Compensation is the subject of Appendix Article IV(6), which states that royalties must be consistent with standards normally operating on licenses freely negotiated between parties in the country where the agreement exists. Statistics 164 contracting parties were counted in 2011. In 2004, both the Philippines (Berne Notification No. 235) and Thailand (Berne Notification No. 239) extended effects of accession to Articles 1-21. Thailand availed itself of the faculty provided in Article II of the Appendix, regarding translations, while the Philippines availed itself of the faculties provided in Articles II and III of the Appendix, regarding both translations and reproduction. (WIPO, 2011a) Table X: Treaty Status Party to the Berne Convention BR 2006 KH None ID 1997 LAO None MY 1990 MR None PH 1951 Status of the Paris Convention Accession 2011 Accession 1998 Application 1950 Accession 1998 Accession 1988 None Accession 1965 WTO Membership(m.d.y) 1.1.1995 10.13.2004 1.1.1995 Observer 1.1.1995 1.1.1995 1.1.1995 Status of Madrid Protocol None None None None None None None
SG TH VN
1998 1931 2004
Accession 1994 1.1.1995 Accession 2008 1.1.1995 In Force 1949 1.11.2007
Accession 2000 None Accession 2006
1891 Madrid Agreement National treatment is again established within a union for protection of trademarks for goods and services. All members undertake to recognize and protect marks registered in other member nations. International registration is also provided for. International registrations are valid for 20 years and renewable for subsequent terms of 20 years. 1989 Madrid Protocol The 1989 Protocol Concerning International Registration of Marks supplements the previously amended agreement in securing national treatment, protection among contracting parties for both marks registered domestically in any contracting State and internationally. International registration takes priority over national or regional registration. ("Madrid Protocol," 1989) 1957 Nice Agreement International trademark registrations are organized by the classification system for goods and services under the Nice Agreement. As per Article 3 of the Madrid Agreement and Protocol relating thereto, applicants for international registration must also specify the mark by class or classes of the related good or service according to the system under the Nice Agreement. Statistics
As of 2011, there were 56 parties to the Madrid Agreement and 83 contracting parties of the Nice Agreement. (WIPO, 2011d, 2011g) 1979 Patent Cooperation Treaty (PCT) Article 3 granted rights to apply for protection of inventions internationally. Applications must contain a request, a description, one or more claims, one or more drawings, and an abstract. Articles 15-18 pertain to international searches, the International Searching Authority, and international search report. International applications are published by the International Bureau according to Article 21. Chapter II contains explanation of international preliminary examinations. Chapter VI (Article 59) discusses dispute settlement. The International Court of Justice may be utilized for settlement of disputes concerning the interpretation or application of the treaty. Cases brought before the ICJ must be handled in conformity with the Statute of the Court. The court may reject jurisdiction if States previously agreed upon another method of settlement. Statistics Patent Law Treaty 1994 WTO TRIPS Agreement Annex 1C of the 1994 Agreement Establishing the World Trade Organization concerning Trade-Related Aspects of Intellectual Property Rights was written with the aim of reducing distortions and impediments to international trade. Members are obligated to provide national treatment (Article 3) and most-favored-nation treatment (Article 4) to nationals of all other contracting parties with regards to rights provided
in the Berne Convention and Paris Convention. Members are required to give effect to the agreement in national laws in accordance with Articles 1 and 8. Copyright and related rights Part II, Section I pertains to copyright and related rights. Members shall comply with Articles 1 through 21 of the Berne Convention except for Article 6bis regarding moral rights. Computer programs are protected as literary works under the Berne Convention. Except for certain cases involving cinematographic works, authors and successors shall have rights to authorize or prohibit commercial rental of copyright works. Duration Except for photographic works and works of applied art, terms of protection for works not calculated on a basis of the life of the author shall be no less than 50 years from the year of first publication or creation. Terms of protection for performers and producers of phonograms shall be the same 50 years from first fixation of performance. Broadcasts shall be protected for 20 years from first broadcast. Limitations and exceptions Any limitations or exceptions to general provisions must ‚not conflict with normal exploitation of the work‛ and ‚not unreasonably prejudice the legitimate interests of the right holder‛. Performers, producers, and broadcasters Related rights are granted such that performers shall have the right to prevent the unauthorized fixation of their performances and the reproduction of such
fixation. Performers shall also have the right of preventing the unauthorized broadcasting and communication to the public of their live performance. Producers of sound recordings shall have the right to authorize or prohibit the direct or indirect reproduction of their works. Broadcasting organizations shall have the right to prohibit the unauthorized fixation, reproduction of such fixations, rebroadcast and communication to the public of their original broadcasts. If members do not grant such rights to broadcasters, then they shall provide owners of copyright the same rights. Trademarks Part II, Section II relates to trademarks. According to Article 16, owners of registered trademarks shall have the exclusive right to prevent all unauthorized use of identical or similar mark(s) in the course of trade in identical or similar goods or services, or to the extent that the use of a trademark would be likely to cause confusion. Limited exceptions may be provided for in national legislation, such as fair use of descriptive terms, if such exceptions do not prejudice the legitimate interests of owners of trademarks. Duration Terms of protection shall be for no less than 7 years, and renewable indefinitely thereafter.
Licensing and assignment Compulsory licenses of trademarks are not permitted. Owners shall have the right to assign the trademark without transfer of the business to which the trademark belongs. Members may otherwise determine conditions on licensing and assignment. Patents Part II, Section 5 pertains to patents. Article 27 states that patentable subject matter is any invention – product or process – in all fields of technology, which are new, involve an inventive step and are capable of industrial application. Diagnostic, therapeutic and surgical methods, plants, animals and other micro-organisms may be excluded, although members shall protect plant varieties by patent or another sui generis system. Rights conferred include exclusive rights to prevent third parties from making, using, offering for sale, selling, or importing a product or process. Patent owners also have the right to assign, license, or transfer by succession the patent. Article 33 defines the term of protection as 20 years from the filing date. Undisclosed information Trade secrets are the subject of Article 39. Article 10bis of the Paris Convention is cited. Enforcement and remedies Part III pertaining to enforcement of IPRs specifies that members shall ensure that enforcement procedures are available under domestic law such that infringement may be prevented, ceased, and punished. Under Article 41(2) procedures must be fair
and equitable, and they shall not be unnecessarily delayed or costly, or unreasonably time consuming or slow. There is no requirement for additional resources to be allocated to IPR enforcement, or for any deviation from the normal distribution of funds and personnel within the law enforcement systems already in place. Part III, Section 2 requires members to provide civil and administrative procedures and remedies to rights holders. Judicial authorities shall be able to order injunction, to cease infringement and to prevent infringing goods from entering the market. Civil lawsuits shall be available for rights holders to seek damages from infringers, profits, expenses, and other monetary ends. Section 5 requires all members to provide for criminal procedures and penalties in at least cases involving trademark counterfeiting and copyright piracy on a commercial scale. Criminal penalties shall include imprisonment and or fines. Judicial officials shall have the authority to authorize seizure and destruction of infringing goods. In general, simple removal of counterfeit marks is insufficient disposal. Under Section 4, members shall also provide options for rights holders to apply to the Customs authority to block the importation of counterfeit trademark or pirated copyright goods. In such cases, rights holders must provide adequate evidence to authorities that there is prima facie an infringement of IPRs. When suspension of goods is approved, importers shall be promptly notified. Ex officio action among Customs agents is discussed, but not required of all members.
Dispute settlement Article 64 of the TRIPS Agreement references the ‚Dispute Settlement Understanding,‛ contained in Annex 2 of the Agreement Establishing the WTO concerning Understanding on Rules and Procedures Governing the Settlement of Disputes. The Dispute Settlement Body (DSB) handles complaints and cases involving two or more members of the WTO. Good offices, conciliation, mediation, negotiation, and arbitration are facilitated by the unit. (WTO, 1994) Developing and least-developed countries The WTO Agreement Article 65 gives developing countries 4 years beyond the 1 year provided to developed countries to apply provisions other than national treatment and most-favored-nation treatment, while Article 66 gives least-developed countries an additional period of 10 years. Original members from the developing world and transitional economies class were given 5 years, until 2000. Leastdeveloped countries were given 11 years, until 2006, which was later extended until 2013 in general. (WTO, 2009b) Statistics As of 2008, there were 153 members of the WTO. Of members from the ASEAN group, Indonesia has been involved in 5 cases as a complainant, 4 cases as a respondent, and 4 cases as a third part; Malaysia has been involved in 1 case as a complainant, 1 case as a respondent, and 2 cases as a third party; Philippines has been involved in 5 cases as a complainant, 6 cases as a respondent, and 8 cases as a third party; Singapore has been involved in 1 case as a complainant, and 7 cases as a third party; Thailand has been involved in 13 cases as a complainant, 3 cases as a
respondent, and 52 cases as a third party; Vietnam has been involved in 1 case as a complainant, and 10 cases as a third party (WTO, 2009c). One DSB case is relevant to the present research. DS362 involved the TRIPS Agreement with the USA as complainant, China as respondent, and Thailand as a third party. Copyright and trademark protection were the issues. The case is mentioned in the piracy and counterfeiting section of the present research. (WTO, 2009a) Table X: Treaty Status WIPO Convention 1994 1995 1979 1995 1989 2001 1980 1990 1989 1976 WIPO Copyright Treaty WIPO Performances and Phonograms Treaty
BR KH ID LAO MY MR PH SG TH VN
Ratification 1997 In Force 2002
Ratification 2004 In Force2005
Accession 2002 Accession 2005
Accession 2002 Accession 2005
1967 WIPO Convention WIPO is a specialized agency of the UN, established with the objective of promoting IP throughout the world. WIPO performs administrative tasks related to the Berne and Paris Convention Unions. WIPO further harmonizes national legislation among members, and may conclude international agreements to promote the protection of IP. WIPO is a specialized agency of the UN system with 185 members as of 2011. (WIPO, 2011e) WIPO “Internet” Treaties WIPO’s 1996 Performances and Phonograms Treaty and 1996 Copyright Treaty together are commonly known as the ‚internet treaties‛ (WIPO, 2011c). They also hold special importance in areas relating to piracy and counterfeiting of optical discs and electronic media. As of 2011, there were 89 contracting parties for each of the ‚internet‛ treaties. (WIPO, 2011j, 2011k) The 1996 Copyright Treaty essentially reinforces provisions from the Berne Convention and WTO TRIPS agreement concerning rights of reproduction, rental, and communication to the public. Articles 11 and 12 differ from prior Conventions in their focus on establishing protection and legal remedies against circumvention of digital rights management (DRM) such as Content Scramble System (CSS) found on DVDs. Under Article 12, members are required to prohibit unauthorized removal or alteration of DRM information, or distribution, import for distribution, broadcast or communication to the public copies of works which have DRM information removed or altered. The general prohibitions may also extend to hard-copy optical discs featuring software with crack files, or any variety of discs with musical or
cinematographic content given that reproduction was accomplished by altering or removing DRM information. The 1996 Performances and Phonograms Treaty similarly reinforces protection of related rights. Articles 18 and 19 concerning technological measures and rights management information apply both to the internet and reproduction onto disc by downloading. Pirated optical discs containing protected content are significantly different from original optical disc media in that DRM information has been removed or altered to allow multiple copies of content to be made by using nonspecialized rip-and-burn programs. Supplementary International IP Agreements The 1952 UNESCO Universal Copyright Convention, 1961 Rome Convention, and 1971 Convention for the Protection of Producers and Phonograms against Unauthorized Duplication of Their Phonograms supported protection of copyright and related rights within the scope of the Berne Convention and TRIPS agreement. Aside from limited exceptions, rights owners have the exclusive right to authorize or prevent the reproduction, distribution, communication to the public, and other commercial acts related to their works. Royalties shall be paid for use unless otherwise agreed upon in writing. The close similarity of these treaties to other more prominent agreements makes them a lesser priority for study in the present research. Although for the purposes of the present research, the Paris Convention, Madrid Agreement and Protocol thereto are considered the preeminent international standards relating to trademarks, it is noted that other treaties exist concerning the registration and protection of trademarks. The 1973 Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks, 1994 Trademark
Law Treaty, and 2006 Singapore Treaty on the Law of Trademarks together reinforce procedural rules and regulations relating to the application and registration of trademarks. Regional Arrangements ASEAN In 1995, 7 members of the ASEAN group – Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam – drafted the ASEAN Framework Agreement on Intellectual Property. Objectives stated in Article 1 included cooperation among governments and between government agencies and the private sectors, exploration of the possibility of setting up an ASEAN patent and or trademark office, and planning for future consultations regarding IPRs. Article 2 mentioned TRIPS and required members to recognize and respect the protection and enforcement of IPRs in each state. Article 3 defined the scope of cooperation as including drafting of legislation, enhancement of administrative and judicial agencies in the enforcement and protection of IPRs, and provided for dispute resolution mechanisms. The ASEAN IPR Action Plan for years 2004-2010 reaffirmed commitments to harmonization of registration, protection and enforcement policies and institutions in the region. Public awareness campaigns, human resources development, creation of a regional IP identity, collaboration with numerous IP-related organizations, and other visionary proposals were laid out. (ASEAN, 2004-2010) To the extent of the knowledge of this author, and to the extent that information has been made available to the public, it is not clear what, if any, goals the ASEAN group as a whole has achieved with regards to IPRs.
In 2009, a five-year renewable Memorandum of Understanding (MOU) between the People’s Republic of China (PRC) and ASEAN was signed wherein participants reaffirmed their commitments under IPR treaties and national legislation. The heads of all IP offices agreed to meet and exchange views on important IPR topics. Coordination of rights protection efforts was also established. The 2009 ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) agreement contains several provisions regarding IP. Chapter 10, Article 9(c) requires members to cooperate in training and research on electronic commerce and IP. Chapter 11, Article 2(c)(iii) defines IPRs as a form of investment. Chapter 13 deals entirely with IP and is intended to strike a ‚balance between the rights of IP owners and the legitimate interests of users‛. The TRIPS agreement, Singapore Trademark Treaty, and WIPO ‚Internet‛ Treaties are used as standards to follow within AANZFTA. Members are required to give national treatment to other members, and protect and enforce copyright under Article 5-6. Cooperation with the intent of eliminating infringing trade across borders is required under Article 9(6). Internet databases of trademarks registered nationally are required in Article 10(3). APEC Between the 1995 Osaka Action Agenda and 1997, APEC coordinated efforts among members and announced the start of the Intellectual Property Rights Experts’ Group (IPEG). IPEG aims to facilitate dialogue on IPR policy, survey and exchange information on the topics, study the effects of IPR enforcement, fully implement the TRIPS agreement, and provide technical assistance to help economies implement TRIPS (APEC, 2011).
In 2005, APEC Trade Ministers endorsed an anti-counterfeiting and piracy initiative allowing authorities to seize and destroyed pirated goods. The agreement concluded to reduce trade in counterfeit and pirated goods, reduce online piracy, increase cooperation to stop piracy and counterfeiting, and increase capacity building to strengthen anti-counterfeit and piracy enforcement (APEC, 2005). The 2010 APEC Yokohama Vision included a reaffirmation of commitments to strengthening the protection and enforcement of IPRs, reiterating that IPR systems provided and protected incentives for creativity and innovation, which are essential to continued economic growth and progress (APEC, 2010b). 2004 UN Convention Against Transnational Organized Crime (CTOC) Piracy and counterfeiting may be associated with organized criminal activity and may further be defined as ‚serious crimes‛ perpetrated by ‚organized criminal groups‛ under Article 2(a,b) of the Convention. A ‚serious crime‛ is present when a maximum penalty of four years or more imprisonment is possible via a criminal sentence. Transnational crimes are committed in more than one State, and have effects on multiple States. Members of the CTOC are required to criminalize participation in organized criminal groups. Criminalization of laundering of proceeds of crime, and undertaking measures to prevent money laundering are mandatory. Corruption and obstruction shall be criminalized and action shall be taken among members to prevent and stop corruption.
Table X: CTOC Treaty Status Status of the CTOC BR KH ID LAO MY MR PH SG TH VN Accession 2008 Ratification 2005 Ratification 2009 Accession 2003 Ratification 2004 Accession 2004 Ratification 2002 Ratification 2007 Signature 2000 Signature 2000 State parties shall adopt measures allowing for the seizure and confiscation of any proceeds of crime, or property, or equipment or instruments used in offenses. Tracking and freezing of accounts related to organized criminal groups must be possible. International assistance in any such seizure, tracking, or freezing is required as are reciprocal legal assistance and law enforcement cooperation. Witnesses must be protected from potential retaliation or intimidation, and victims must be assisted, protected, and provided with opportunity to receive compensation and restitution.
Disputes concerning interpretation or application of the treaty shall be settled first by negotiation, then if necessary by arbitration. If parties are unable to agree upon the organization of arbitration within 6 months after submission of the dispute, then any party may submit the dispute to the International Court of Justice. If no declarations prevent the ICJ from accepting the case, then the dispute may be settled there.
Table X: Maximum Prison Sentences in Criminal Infringement Cases As of 2011, there were 147 signatories and 164 parties © ™ to the Convention. (UNTC, 2011) BR 2yrs 10yrs Dispute Resolution KH 1yr 5yrs ID 7yrs 5yrs Disputes between states may be litigated at the International Court of Justice where treaties provide for such LAO 2yrs 2yrs an option. Among the ASEAN members, only Cambodia and MY 10yrs 3yrs Philippines have deposited notifications pertaining to MR 3yrs 3yrs acceptance of compulsory jurisdiction under the Statute of PH 6yrs 5yrs the Court, Article 36, paragraph 2. SG 5yrs 5yrs Businesses are not entitled to appear before the ICJ. If TH 4yrs 4yrs VN 3yrs 10yrs such entities desire to engage in dispute resolution proceedings, they must pursue alternative means such as arbitration. The World Bank’s International Centre for Settlement of Investment Disputes (ICSID) and United National Commission on International Trade Law (UNCITRAL) provide frameworks for resolving disputes. The ‚New York‛ Convention on the Recognition and Enforcement of International Arbitral Awards helps give binding legal effect to arbitral awards rendered against both states and businesses. International law in general lacks comprehensive jurisdiction in secular states and also lacks the coercive powers of a centralized government which could take control of uncooperative parties to disputes. Alternative dispute resolution processes can only succeed with the voluntary cooperation of both parties involved. No
legitimate international enforcement body is in existence, so payments and compliance with both court and tribunal decisions are again voluntary, although judgments and awards are final, legally binding, and generally without appeal or potential for amendment, although in cases involving fraud or corruption, or when relevant facts are discovered after conclusion of proceedings, some special provisions allow for amendments, explanations, revisions, and in few cases nullification of awards and judgments.
Party to the ICJ New York (Declaration of UNCITRAL Convention Compulsory ICSID Entry Model Law Entry into Jurisdiction) into Force Adoption Date Force BR KH ID LAO MY MR PH SG TH VN 1984 1955 (1957) 1950 1955 1957 1948 1945 (1972) 1965 1946 1977 2002 2005 1968 N/A 1966 N/A 1978 1968 N/A N/A 2006 2006 N/A N/A 2005 N/A 2004 1994 2002 N/A 1996 1960 1982 1998 1986 N/A 1967 1986 1960 1995
Table X: Status of Dispute Resolution Treaties and ICJ Jurisdiction
Bilateral investment treaties play an important role in arbitration of disputes between foreign individuals or commercial entities and secular governments. Without a bilateral investment treaty featuring an arbitration clause, a foreign claimant may have no potential recourse against a state. States maintain jurisdiction over their domestic territories, so in cases involving disputes between states and commercial entities, states may utilize domestic courts, although collection in foreign jurisdictions may not be available. Domestic Law Review Table X: Domestic Statutes © BR 1999 Emergency (Copyright) Order ™ 2000 Trademark Act (Chapter 98); 1953 Merchandise Marks (Chapter 96) Patents 1984 Chapter 72 on Inventions; 1999 Emergency Order on Patents 2002 Law on the Patents, Utility Model Certificates and Industrial Designs 2001 Indonesia Law on Patents 2007 Intellectual Property Laws
KH 2003 Law on Copyright 2002 Law Concerning and Related Rights Marks, Trade Names, and Acts of Unfair Competition ID* Law No. 19 of July 29, Law No. 15 of August 1, 2002 on Copyright 2001 regarding Marks 2007 Intellectual LAO 2007 Intellectual Property Laws Property Laws
1976 Trademark Act; 1983 Patents Act MY 1987 Copyright Act; 2000 Optical Discs Act 1972 Trade Descriptions Act
Table X continued MR 1911 Copyright Act; 1877 Specific Relief Act; 1996 TV & Video Law; 1996 Motion Picture Law; 1996 Computer Science Development Law PH 1997 Intellectual Property Code; 2003 Optical Media Act SG 1987 Copyright Act (Chapter 63) 1994 Citizens Investment 1945-46 Burma Patents Law; 1860 Penal Code; and Design Act 1889 Merchandise Marks Act
1997 IP Code; 1992 Consumer Act; 1930 Penal Code 1998 Trade Marks Act (Chapter 332)
1997 IP Code
1995 Patents Act
TH* 1994 Copyright Act of B.E. 2537; 2005 Optical Disc Production Act of B.E. 2548 VN 2005 Law on IP No.50/2005/QH11; 1999 Criminal Code; 2005 Civil Code
1991 Trademark Act of B.E. 2545; 1979 Consumer Protection Act of B.E. 2522 2005 Law on IP No.50/2005/QH11; 1999 Criminal Code; 2005 Civil Code
1999 Patent Act and Amendments
2005 Law on IP; 2000 Law on Science and Technology; 2007 Law on Technology Transfer
* indicates trade secret statute Brunei Copyright and Related Rights Legislation implementing general international commitments to protect copyright was drafted in 1999 as an Emergency (Copyright) Order under section 83(3) of the 1959 Constitution. The Constitution grants the state the right to seize certain properties via such orders. Under section 14 of the Order, copyright on literary, dramatic, music or artistic work extends 50 years from author’s death. Duration of copyright on sound recordings and films extends 50 years from the year of creation under section 15. According to section 16, copyright for broadcast or cable programs expire after 50 years from the year of original broadcast. Section 17 protects copyright for typographical arrangement for 25 years after the first publication of an edition. Part II concerning performers’ rights grants 50 years of protection from the year in which the performance took place.
Chapter II, section 18 grants owners the exclusive right to copy works, or to issue copies to the public, or to perform or show or play the work to the public, or to broadcast the work or to include it in a cable program, or to make an adaptation of the work, or to communicate the work to the public, or otherwise exploit the rights. Chapter IV grants authors and directors the right to be identified as such, and also the right to not be subjected to derogatory treatment of the work. Economic rights are transferrable by license, exclusive or other, according to Chapter V, though not all of the owner’s rights are assignable, and rights are not assignable for the entire copyright term. Moral rights are not assignable. Chapter VI provides for civil remedies in cases of infringement via injunction, damages or other means available to the plaintiff. Copyright owners and licensees may take action against infringers through the courts. Seizure of infringing goods is allowed. The court may award additional damages depending on the flagrancy of infringement and monetary gains made by infringing. Part III relates to commercial and criminal infringement. A person not authorized by the copyright owner who sells, or imports for a purpose other than private domestic use, or communicates to the public, or distributes, or otherwise uses a protected work in a way that prejudices the legitimate interests of the owner, or possesses or uses equipment designed to reproduce goods is guilty of an offense. Criminal penalties of up to 2 years and fines, or up to 6 months for smaller offenses, are available for the courts in cases where commercial gain was the end sought via infringement. In cases involving corporate infringement, directors, managers, secretaries and other administrative personnel may be held personally liable with the corporate body.
Trademark The main piece of legislation is the 2000 Trademark Act (Chapter 98). According to Chapter 98, the law on trademarks, section 43, trademarks are protected for 10 years from the date of registration, after which time they may be renewed at the request of the proprietor for further periods of 10 years each, subject to payment of fees. Section 13 defines infringement as the use of an identical trademark in relation to goods or services which are identical to those registered. Use of identical or similar trademarks in sales, advertisement, import or export of goods or services not identical or similar to those associated with the genuine trademark may be infringement if the trademark in question has a reputation and is established as qualifying a certain standard or distinct character. In deciding whether a trademark is infringing or not, officials may consider the likelihood that the public would be confused as to the origin or association of the goods or services bearing the trademark. An infringement is actionable by the proprietor of the mark under section 16. The court may order an infringer to remove, forfeit, or destroy goods bearing false marks. Part IV pertains to the importation of infringing goods, which may be detained upon complaint to the Controller of Customs by the proprietor or licensee thereof and after an inspection by an officer of customs yielding a decision that the goods are infringing. Under section 87, owners of any seized goods may apply to the court to make a determination that the goods are infringing goods imported for purposes other than private domestic use. After such a review, if the court determines that the
goods are infringing and not for private domestic use, they may be forfeited, destroyed or otherwise disposed of. Importers or consignees of seized goods may consent to forfeiture under section 88. Under article 94, unauthorized use of trademarks for commercial gain is an offense punishable by up to 10 years imprisonment and/or a fine. Counterfeiting trademarks, possessing instruments for counterfeiting, and or falsely applying registered trademarks to services are offenses punishable by up to 5 years and or a fine according to sections 98-99 and 101. Similarly, importation or sales of goods marked with counterfeit trademarks are punishable by up to 5 years imprisonment and or a fine under section 100. Nineteen fifty-three’s Chapter 96 on Merchandise Marks supplements Chapter 98 in prohibition of counterfeiting marks and associated activities. Use of false product trademarks with intent to defraud is punishable by up to 1 year imprisonment and a fine. Acts of counterfeiting trademarks on commercial goods are punishable by up to 2 years imprisonment and a fine. Possession of any die, plate or instrument used to counterfeit marks, for the purpose of deceiving consumers is punishable by up to 3 years imprisonment and a fine. Importation, sale, or offering for sale any counterfeit trademark is an offense punishable by up to 1 year imprisonment. Making counterfeit marks on the outside of cases, or packages, or containers with the intent to deceive consumers as to the nature or quality of the goods inside of such receptacles is punishable by up to 3 years imprisonment and a fine. All goods related to criminal offenses under the statute may be forfeited to the government. Patents
The 1984 Chapter 72 concerning inventions granted rights to register in Brunei for works previously registered in the UK, Malaysia, or Singapore. In 1999, a Constitutional Emergency Order on Patents was issued. Part III on patentability requires the invention be new, involve an inventive step, and be capable of industrial application. Article 36 establishes the duration of protection as 20 years from date of filing. Part IX concerning rights conferred grants the patent owner the exclusive rights to make, use, offer for disposal, dispose of, or import the patented product or process. Part XIII concerning infringement remedies provides civil options to proprietors. A court may issue injunction, or order delivery or destruction of infringing goods, or that the defendant must pay damages to the plaintiff, or require other declaration on the part of the infringer. Cambodia 1999 Constitution Human rights mentioned in the UN Charter, in the Universal Declaration of Human Rights, and in prominent international covenants and conventions are recognized and respected under the law, with the king as protector of the rights of people according to the Constitution chapters II and III. Khmers have a Constitutional right to participate in political, economic, social, and cultural activities. Article 41 specifically states that none shall exercise the right to infringe upon the rights of others. Article 50 mandates that citizens must respect private properties. Chapter V regarding the economy enumerates rights to sell products and have private properties protected, while prohibiting unauthorized use of properties. Article 64 declares that all who import, manufacture and sell counterfeit goods which affect
the health and life of consumers are in violation of the law and shall be severely punished. Chapter XI on the judiciary grants power to the branch to uphold and protect the rights and freedoms of citizens. Chapter XVI, Article 158 declares laws and documents safeguarding legal private properties effective. Copyright and Related Rights The main piece of legislation is the 2003 Law on Copyright and Related Rights. Article 14 and Section 3 grant authors and directors, creators of works, etc. exclusive economic and moral rights over such works. Moral rights include those granted in other nations and internationally, such as rights to decide the manner and timing of disclosure of works, right to be known as the author, and right to oppose all forms of distortion, mutilation, or modification of the content of works which would be prejudicial to the honor or reputation of the author. Economic rights include translation, adaptation, rental, sale or distribution, importation, reproduction, public performance, public display, broadcasting and other communication to the public. While moral rights are perpetual, economic rights expire 50 years after the death of the author as per Article 30. Article 53 grants 50 years of protection for related rights. Articles 32-37 discuss the partial or whole transfer of economic rights by license. All such arrangements must be in writing and detailed as to the objective, duration, and application. Collective management is allowed under Chapter IV upon recognition by the Ministry of Culture and Fine Arts.
Chapter V stipulates that any owner who suffers an infringement may petition to the court for a prohibition of the violation of right, and for an order awarding damages, and for return of disputed equipment or materials, and for redress of moral injury. The court may order confiscation or destruction of equipment or materials used to produce illegal copies or goods. Any importation for sale or lease, or other unauthorized reproduction or sale, or distribution, or such communication to the public, broadcast or other exploitation of economic rights not granted by contract from the owner or under such agreement is considered a crime. The customs authority may, at least on written petition of the rights owner, retain goods for inspection. Articles 64-65 spell out criminal sanctions available to the State. Criminal cases of infringement via production or reproduction, importation or exportation may be punishable by 6 to 12 months imprisonment and or a fine, where punishments double for repeat offenses. Infringement cases involving communication to the public may be punishable by 1 to 3 months imprisonment and or a fine, where punishment may be multiplied by the number of the offenses in cases where several offenses were present. Article 66 authorizes the confiscation of all or parts of revenues obtained through acts of infringement, and of equipment used in the offense. Materials or equipment may be returned to the rights owner or destroyed. According to Chapter VI, if any conflict exists between the statute and international treaty, provisions of international treaties shall prevail. Trademark
The main piece of legislation is the 2002 Law concerning Marks, Trade Names, and Acts of Unfair Competition. Article 12 declares registered trademarks valid for 10 years from the date of the application filing, and grants the right to renew for periods of 10 years upon payment of fees. Under article 11, rights to use registered marks in relation to goods or services which the mark is registered to, or in similar a variety of goods and services, are granted to the owner or licensee. Licensing agreements must provide for quality control in order to be valid as according to article 19. Chapter 8, regarding infringement and remedies, states simply that any use of a trademark by a person who is not the registered owner of the mark, or who has not been authorized as a licensee by the registered owner, is considered infringement. In cases involving well-known marks where the good or service under the trademark is not similar to that which the mark is registered, if it can be shown that a connection between the two is inferable, and if the interests of the owner of the mark would likely be damaged by use, infringement may be said to exist. The owner or licensee may request the court to grant injunction to prevent infringement or to stop unlawful acts. The court may further award damages to the injured party. Owners of registered marks may also apply to the customs authorities to suspend clearance of goods suspected of being counterfeit. After a process of review the court may order customs to destroy infringing goods. Article 47 specifically states that non-commercial possession of counterfeits contained in travelers’ personal luggage may be excluded from application of the law. Chapter 15 outlines the penalties for infringement. The act of counterfeiting marks, or of selling or importing or offering for sale goods bearing counterfeit
marks, may be punishable by 1 to 5 years imprisonment and or a fine. Imitation of marks causing the public to be misled into believing that the mark is genuine, or importing, selling, or offering for sale such marks, is an offense punishable by between 1 month and 1 year imprisonment and or a fine. Penalties may be doubled for repeat offenders. In organizational cases, managing directors, managers, or administrative personnel involved in the crime may be punished with the juristic person whether or not that person had working knowledge of or assisted in commission of the crime. All illegal goods shall be confiscated and or destroyed regardless of the final court disposition on defendants in criminal cases. Patents The 2002 Law on the Patents, Utility Model Certificates and Industrial Designs protects patents. Article 4 states that discoveries, scientific theories, mathematical models, schemes, rules or methods of doing business, diagnostic, surgical or therapeutic methods, plants and animals, plant varieties, and pharmaceuticals are excluded from protection. Pharmaceuticals are scheduled to be patentable by 2016 according to Article 136. Inventions are patentable if they are new, involve an inventive step, and are industrially applicable. Section 2 states that the right to a patent belongs to the inventor; in cases of an invention made in execution of an employment contract, in the absence of other contractual agreements, rights belong to the employer. Duration, under Article 45, is 20 years from the filing date. Section 9 discusses rights conferred to patent owners – make, sell, import. Under Article 43, the owner has a right to institute court proceedings against any person who infringes a patent. Indonesia
1945 Constitution Chapter XA on human rights grants every person the right to property, and that personal property shall not be unjustly held in possession by another party. Article 32 declares that the state shall preserve and develop cultural values, respect and preserve national cultural treasures. Copyright and Related Rights The main piece of legislation is Law No. 19 of July 29, 2002 on Copyright. Copyright owners have exclusive rights to publish or reproduce works. Performers have exclusive rights to broadcast or reproduce their performances; phonogram producers have exclusive rights to reproduce or rent those works; broadcasting organizations have exclusive rights to produce, reproduce, or broadcast their works. Copyright is a moveable good, meaning that it may be transferred in whole or part by inheritance, donation, testament, written agreement, or other exceptional reasons by law, under article 3. Chapter V authorizes licensing agreements whereby, unless otherwise agreed, general rights are transferred from copyright owners in return for a royalty from the copyright holder. Licensees have the right to sublicense to other third parties unless otherwise stated in the licensing agreement. Under Chapter III, duration of copyrights is 50 years after the death of the author in literary works, or 50 years after first publication for computer programs, cinematographic works, photographs, databases, and adaptations. Article 50 establishes the term of protection for performers and phonogram producers as being 50 years from the time the work was fixed, and for broadcasting organizations as being 20 years from the time the work was originally broadcast.
Part seven regarding moral rights forbids changes made to the work, including changes to the titles or subtitles or name or pseudonym, without the author’s consent or that of the heir if the author is deceased. Infringement of economic rights exists where there is a prejudice to the legitimate interests of the author in a commercial nature, with the limited exceptions listed in article 15. Under Chapter X, copyright owners or holders may sue for damages in the Commercial Court, and may also request the court issue an order for all or parts of income derived from exhibition of works. A judge may issue an order that infringers stop publishing and or reproducing works. Chapter XII regarding investigator powers of the state authorize agents to confiscate infringing materials as part of the criminal process. Chapter XIII provides for penalties in commercial criminal cases. Any person publishing or reproducing protected works or broadcasts or phonograms may be sentenced to prison for between 1 month and 7 years, and or fined. Deliberate broadcasting, exhibition, distribution, or sales of infringing works, or commercial reproduction of computer programs, is punishable by up to 5 years imprisonment and or a fine. Unauthorized rebroadcast of media is punishable by up to 2 years imprisonment and or a fine. Moral rights violations are punishable by up to 2 years imprisonment and or a fine. Any goods or materials relating to commercial infringement shall be seized and destroyed. Trademark The main piece of legislation is Law No. 15 of August 1, 2001, regarding Marks. Registered trademarks are protected for 10 years, after which time the term may be renewed for periods of 10 years.
Chapter V discusses transfer of rights by inheritance, testament, donation, agreement, or other reasons recognized by law. Transfer may occur after payment of a fee. With the transfer of rights, the licensee or recipient also acquires the responsibility to provide goods or services with the same ability, quality, or skills as the original owner or licensor as such rights and attributes cannot be separated. Licenses are valid throughout Indonesia unless otherwise agreed. A variety of licensing agreements are valid depending on the individual cases and needs of each party. Dispute settlement is the focus of Chapter XI. Owners and or licensees of registered marks may file a lawsuit against any party for unlawful use of marks featured in part of whole. Claimants may seek termination of infringing acts and or monetary compensation. A Commercial Court judge may order a defendant to cease production, distribution or trade of goods and services prior to a verdict. The court may further order a defendant to surrender goods. Chapter XIV regarding criminal penalties states that deliberate use of registered marks, in whole or in part, for the production and or trade of the same kind of goods and or services as those associated with the mark is punishable by up to 5 years imprisonment and or a fine. Uses of similar marks for production and or trade in goods and or services of the same kind as those associated with the mark are offenses punishable by up to 4 years imprisonment and or a fine. Trading in infringing goods and services is punishable by up to 1 year imprisonment and or a fine. Patents The 2001 Law on Patents Chapter II Part One states that patentable inventions must be novel, involve an inventive step, and capable of industrial application.
Article 7 provides exclusions regarding patentability to diagnostic, examination, treatment, medication, and/or surgery methods, biological processes, and living creatures other than micro-organisms. Patent terms are 20 years from the filing date under Article 8. Inventors have the right to be named as such, although patent rights belong to employers for works created in the course of employment, unless otherwise agreed upon. Article 16 grants the patent holder exclusive rights to make, use, sell, import, rent out, deliver, or make available for sale patented products or processes. Chapter V allows for licensing of the patent. Chapter II, Part Five, Article 19 grants the patent owner the right to bring legal action against infringers. Chapter XII on dispute settlement provides civil options. Trade secrets Confidential information which has economic value, the secrecy of which is essential for profitable operation of business in a competitive market, is considered trade secret under the 2000 Law No. 30 regarding Trade Secret. Ownership rights include usage and license or prohibition for use of trade secrets. Rights may be transferred by inheritance, donation, testament, written agreement, or other recognized means. Rights holders and licensees may bring lawsuit against persons who deliberately and without authorization uses or discloses the secret. Courts may order the infringer to cease or pay damages. Serious cases of infringement may result in criminal penalties of up to 2 years imprisonment and or fines. Laos 1991 Constitution
Article 8 declares that the state shall implement measures to improve socioeconomic conditions of all people. Chapter 2, ‚The Socio-Economic Regime‛, includes guarantees that the state shall promote domestic and foreign investment, modernization, and development. Article 16 protects property rights in all forms. The state promotes invention in all areas under articles 23-24, and explicitly undertakes to protect intellectual property rights in article 24. Chapter 4, ‚Fundamental Rights and Obligations of Citizens‛, contains enumerated rights of people, including equal economic rights, freedoms of speech, and of the press, and regarding research and literature. Intellectual Property The 2007 Intellectual Property Laws are the main legislation on copyrights and related rights, and on trademarks. All IPRs are generally protected under one law covering all aspects of IPRs. Chapter 3 concerning industrial property establishes minimum requirements for patentability. Inventions must be new, involve an inventive step, and have industrial application. Section 21 declares that business plans, regulations or methods, human or animal treatments, components of natural microorganisms or extracts from plants or animals are not eligible for grant of patent. Patents have a term of 20 years from the date of filing under section 46. Trademarks are considered industrial property. Terms for trademarks are 10 years from the filing date, renewable in terms of 10 years upon payment of fees. Well-known trademarks are protected whether registered or not according to section 17. Owners of industrial property have rights to produce, license or assign economic
rights, to keep, advertise, sell, offer for sale, export, import the product, and seek protection against infringement by filing with the courts. Chapter 5 grants rights to authors, programmers, performers, broadcasters, etc. over their original works. Copyright term is the life of the author plus fifty years. Terms are 50 years from the date of first publication, broadcast, or performance for performers, broadcasters, and producers of recordings. Royalties shall be paid for reproduction and commercial uses of protected works with limited exceptions or unless otherwise agreed upon. Owners are granted rights to assign their property or to allow others to benefit from use of their rights, though licenses of copyright are not explicitly mentioned. Chapter 6, part 3, and Chapter 7, section 110 prohibit any person or organization from unauthorized use of a protected work, or falsely citing the name of the author, or publishing works, or adapting or reproducing any part of works, or copying, or renting, importing or exporting, or selling works, or usurping the economic rights of owners. Section 106 grants an adapted form of moral rights, although ‚moral rights‛ are not mentioned as such. Chapter 7 defines trademark infringement as unauthorized use of protected marks, or utilizing a logo which causes confusion or is likely to mislead consumers about the legitimacy of goods or services, or using a mark which is similar or identical as a well-known mark, or various adaptations of protected marks. Chapter 8 provides for dispute settlement options including through the courts. Chapter 9 authorizes customs and border protection officials to inspect, seize and confiscate infringing goods.
Chapter 10, regarding disciplinary measures, provides civil or criminal punishment for infringers, including education and training. First time light offenses under section 130 shall yield a warning, education and training. Criminal penalties are available in section 134, which makes infringement punishable by between 3 months and 2 years imprisonment and a fine. Materials, goods, property, vehicles and equipment held by infringers may be confiscated under section 135. Malaysia 1957 Constitution Basic rights to private property ownership are established in Article 13, which states that no person shall be deprived of property, nor shall any law provide for compulsory acquisition or use of property without adequate compensation. Patents, trademarks, and copyrights are mentioned in the Ninth Schedule (8e) under trade, commerce and industry, which the federal government regulates. Copyright and Related Rights The 1987 Copyright Act and later amendments form the base for legislation on copyright and related rights. Part III defines the nature and duration of copyright and related rights. With limited non-commercial, academic and other such exceptions, reproduction, communication to the public, performance or showing or playing to the public, distribution or sale, and rental rights are granted exclusively to owners and licensees as per contractual arrangements. Duration of copyright on literary, musical or artistic works is the life of the author plus 50 years. Published editions are covered by copyright for 50 years from the year after the first publication of the
edition. Sound recordings are subject to copyright for 50 years from the year after first publication or fixation. Films are protected for 50 years from the year after first publication. Broadcasting companies retain rights over their works for rebroadcast and other commercial reproduction and public display. Duration for copyright on broadcasts is 50 years from the year after initial creation. Performers have exclusive rights over communication to the public, reproduction, and commercial benefit from their works. Performers’ rights are protected for 50 years from the year after first live performance. Full protection of moral rights is granted. Authors have rights to be named as such. Any distortion, mutilation, significant alteration, or modification of an author’s or perfomer’s work which might be reasonably regarded as adversely affecting the author’s honor or reputation is prohibited. Authors and performers have rights to object to such distortion that would prejudice the reputation of the copyright owner. Part IV pertains to assignment and licensing. Copyright is considered movable property and may be divided so that transfer of a limited or complete number of associated rights of ownership may occur. Licensing agreements must be in writing. Licenses are valid which have been granted by one of a group of copyright owners, in which case royalties shall be divided equally between all co-owners. Geographical restrictions in licensing are provided for in 27(2). Part VI relating to infringement outlines offenses and remedies. Unauthorized commercial reproduction, distribution, importation, transfer, offering for sale, exhibition to the public, or other infringement upon economic rights of owners are
prohibited. Making a backup of a computer program for domestic personal use is not prohibited. Infringement is actionable by the copyright owner who may at any time under article 37 seek injunction and or damages. Exclusive licensees have the same rights as owners to pursue action against infringement according to article 38. This section applies mutatis mutandis to performers’ rights. Article 39 provides the copyright owner and persons authorized thereby to apply to the Controller requesting a restriction on importation of copies made without consent or license outside of Malaysia. Infringing copies may be seized by the Customs authority. Any person who makes for sale or rental an infringing copy, or sells, rents, or offers for sale or rental an infringing copy, or distributes, or possesses for a purpose other than private domestic use, or exhibits to the public, or imports for purposes other than private domestic use, or otherwise usurps economic rights of owners and or licensees, is guilty of an offense. Such persons may be punished by up to 5 years imprisonment and or a fine, where penalties increase to 10 years imprisonment and double fines for subsequent offenses. Possession of three or more infringing copies of a work qualifies an offense under article 41(2). Any persons possessing or using equipment intended to make infringing copies may be punished by up to 10 years imprisonment and or a fine, which increases to 20 years imprisonment and higher fines for subsequent offenses. The 2000 Optical Discs Act supplements copyright law. Part III establishes a government licensing program for manufacture of optical discs, and unlicensed manufacture thereof as an offense. The government authority grants and may revoke or otherwise suspend licenses. Licenses are not transferrable
unless approved by the Controller. Licenses are valid for a period of time determined in the agreement, and must be displayed at all times on the licensed premises. Part IV mandates that licensees must mark each optical disc with the manufacturer’s code assigned by the government. Falsifying codes, or making dies or machines for forging, etc. are offenses. Civil penalties for non-compliance may be assigned under Part V, article 24. Part VI establishes criminal penalties for offenses. Persons violating any of the provisions of Part III other than failure to display licenses may be fined and or imprisoned by up to 3 years, or 6 years for subsequent offenses. Submitting false or misleading information on applications or other documents is punishable by a fine and or up to 3 years imprisonment for first offenses, a prison sentence which increases to 6 years for subsequent offenses. Corporate administrative staff may be held liable as individuals in addition to corporate penalties provided under the act in the way of fines. Inspectors may search with or without a warrant, and seize articles essential for prosecution under part VII. Infringing copies may be delivered to the owner or exclusive licensee after a trial. ("Malaysian Optical Discs Act," 2000) Trademark The 1976 Trademark Act as amended is the main piece of legislation establishing protection for trademarks. Article 32 establishes the period of protection of registered marks as 10 years, after which time the registration is renewable for further periods of 10 years.
Article 47 pertains to registration of licensees. Part IX, article 48 allows for a variety of licensing agreements. Licensees are legally required to control quality of goods or services for sale under the licensed trademark. Border measures are the subject of Part XIVA. Importation of counterfeit trademark goods is prohibited. A proprietor of a registered mark or agent thereof may apply to the Registrar for action on such imported goods. Infringing goods may be seized by the authority for inspection and thereafter forfeited if found to be infringing or otherwise released if not acted upon. In cases of infringement, the court may grant relief in the way of compensation paid to the proprietor by the importer. Article 70O explicitly authorizes ex-officio action on the part of any authorized officer who may detain or suspend the release of goods based upon evidence that they are counterfeit. ("Malaysian Trademark Act," 1976) The 1972 Trade Descriptions Act provides criminal penalties for counterfeiting of trademarks. Trademarks fall into a list of trade descriptions and are likewise protected under this act as per articles 4, 9, and 16. Article 18 establishes a general penalty of 3 years imprisonment and or a fine for first offenses, and double for subsequent offenses for cases involving individuals, whereas corporations may suffer fines. ("Malaysian Trade Descriptions Act," 1972) Patents The 1983 Patents Act and later amendments protect inventions which are new, involve an inventive step, and are industrially applicable. Scientific discoveries or theories, animal or plant varieties, schemes, surgical or therapeutic methods are not patentable. Rights belong to employers for inventions made in the course of work unless otherwise state in contractual agreements. Patents are protected for 20 years
from the date of filing. Owners have the exclusive rights to exploit the patented invention, to assign or transmit the patent, and to conclude licensing contracts. Sections 58-62 pertain to civil remedies provided to patent owners in cases of infringement. The court may issue injunction and damages where owners prove infringement has been committed or is being committed. Myanmar Constitution Intellectual property rights are delineated indirectly in articles 349 and 354, which grant rights to develop, explore, and carry out functions in know-how, technology, science, business, trade, language, literature, and culture. Rights to ownership, use of property, and patents are granted in article 372. Schedule One of the Union Legislative List (7)(f) regarding the Industrial Sector explicitly mentions ‚intellectual property such as copyrights, patents, trademarks and industrial designs‛, pertaining to which the Union may enact laws under section 96. Copyright and Related Rights The main law on copyright and related rights was promulgated as the Burma Copyright Act [India Act III] in 1914, based primarily on the 1911 United Kingdom Copyright Act. The Act pertains to works first published in Myanmar, formerly Burma. A blanket copyright duration of 10 years for production, reproduction, performance, or translation is established in §4. Chapter III lists penalties for infringement of economic rights in the form of small fines, which may be extended to one month imprisonment for subsequent offenses. Part I on ‚Imperial Copyright,‛ section 3 provides for protection for the life of the author plus an indeterminate
number of years thereafter. Performers’ rights are also outlined in Part I as an extension of copyright. A base royalty rate of 10% was established therein. For works authored jointly, the term of protection was specified as fifty years after the death of the author who dies first or the life of the author who dies last or whichever is shorter. Civil remedies are available under the Copyright Act. Infringing copies are presumed to be the property of the copyright owner. Civil proceedings may not be instituted after 3 years have passed since the infringement. Injured parties may be entitled to injunction and damages at the discretion of the court. Injunctions may also be granted under the Specific Relief Act of 1877 and later amendments. The 1996 Television and Video Law, Chapter IV, requires persons desiring to operate businesses related to the production, editing, reproduction, distribution, sales or rental of video to obtain first a license from the government. Operating any profitable business relating to the copying, distributing, hiring, or exhibiting or video without a license, is an offense punishable by up to three to five years imprisonment and or a fine. The 1996 Motion Picture Law, Chapter III, requires licenses for production, developing and printing, sound recording for, editing, distribution, importing and exporting motion pictures. Failure to obtain a license prior to conducting business in the aforementioned trades is an offense punishable by up to 1 year imprisonment and or a fine (WIPO, 2011a). The 1996 Computer Science Development Law supports regulations on computer-related material, although it provides no explicit protection for IPRs.
Trademark The 1994 Citizens Investment Law supports the general right to own and license trademarks. The colonial-era 1860 Penal Code, otherwise known as the Indian Act XLV, provides for basic trademark protection in sections 478-489. Use of false marks is an offense punishable by up to one year imprisonment and or a fine. Counterfeiting marks is an act punishable by up to two years imprisonment and or a fine. Possession or making of machines or instruments for counterfeiting marks is punishable by up to three years imprisonment and or a fine. Selling or offering or exposing for sale goods bearing counterfeit marks, with limited exceptions, is punishable by up to one year imprisonment and or a fine. Making or applying false marks on cases or packages of goods is punishable by up to three years imprisonment. The 1889 Merchandise Marks Act further provides for forfeiture of goods bearing false marks. Authorities may require importers or owners of goods to prove that the goods are from the origin which is written on packaging or crates. The schedule of goods listed in the Act is outdated, but some basic framework is established. The 1878 Sea Customs Act and later amendments further provide for seizures and verifications of imported goods bearing trademarks reasonably suspected of being false. Patents According to reliable sources, there is no law in operation in Myanmar protecting patents. The Burma Patents and Design Act and its emergency provisions were enacted in 1945 and 1946, but those laws are not enforced to the extent that
they were not available via the WIPO Lex database (WIPO, 2012, n.d.). The 1994 Science and Technology Development Law establishes some basic framework for promotion of technology transfer, and R&D, but the law lacks specific provisions protecting IP. Patents are also mentioned in the 1994 Citizens Investment Law, but not specifically protected. Philippines 1987 Constitution Article XIV, section 13 explicitly protects intellectual property rights of scientists, inventors, artists, and other gifted citizens. Copyright and Related Rights The main piece of legislation protecting copyright and related rights is the 1997 Intellectual Property Code. Part IV, chapter V grants economic rights over reproduction, dramatization, adaptation, distribution, sale, rental, public performance, and other communication of works. Copyright applies mutatis mutandis for performers, broadcasters, and producers. Chapter VII states that such rights may be transferred in whole or in part as per a written agreement. Exclusive licenses may be registered with the National Library (§182). Rights societies may be employed to enforce economic and moral rights (§183). Moral rights are provided in chapter X. Moral rights are non-transferrable but may be waived. Owners have the right to be named as the author on each copy and in connection with public use of works; to make alterations to prior works or withhold it from publication; to object to distortion, mutilation, modification, or other derogatory action relating to works which would prejudice the honor or reputation of
the owner; to restrain the use of his name related to works not of his ownership or distorted versions of his work. Under chapter XVI, copyright term on literary works is the life of the author plus fifty years, and in cases of joint authorship fifty years following the death of the author who survives longest. For works of applied art, 25 years after the date of making is granted; in cases of photographic works, 50 years from publication of the works; in audio-visual works, fifty years after publication. Rights for performers and producers of sound recordings expire fifty years after the year in which the performance took place; for sound and image recordings, 50 years after recording; 20 years for broadcasts. Infringement is covered in chapter XVII. Owners and licensees may make complaints on their own will and have civil options available at their disposal. The court may order injunction, damages, and forfeiture of property among other criminal remedies. Infringing upon rights or aiding and abetting acts of infringement is punishable by imprisonment of 1 to 3 years and or a fine for first offenses, which increases to between 3 and 6 years and or fines for second offenses, increasing again to imprisonment of between 6 and 9 years plus fines for third and subsequent offenses. Copyrights are mentioned in the Corporation Code as intangible property, the value of which may be used to consider in the issuance of stock. The 2004 Optical Media Act reiterates government commitments to protecting and promoting IPRs, and declares that all mastering, manufacture, replication, importation and exportation of optical media shall be regulated (§2-3). Part III requires licenses for all persons or companies engaged in import, export, acquisition,
sale, distribution, mastering, manufacture, or replication of optical media, or in possession of commercial machinery or equipment relating to optical discs. A general licensing period of 3 years is established in §14 upon approval by the authority, which may opt to deny applicants or otherwise suspend or cancel existing licenses. Part IV prescribes 3-6 years imprisonment and fines for first-time serious violations, penalties which increase to 6-9 years imprisonment and fines for subsequent offenses. For less serious offenses the court may hand down sentences of 1-3 years imprisonment and a fine for first-timers, or 3-6 years imprisonment and a fine for subsequent offenses. Summary convictions may yield 30-90 days imprisonment or a fine. Trademark The main piece of legislation protecting trademarks is the 1997 Intellectual Property Code. Part III establishes a base duration of trademark protection at 10 years, which is renewable for subsequent periods of 10 years upon payment of fees. Owners of registered marks have exclusive rights to prevent all third parties from using identical or similar marks in connection with identical or similar goods or services, or to the extent that it could be reasonably determined that the public would be misled by an infringing mark. Rights may be assigned or transferred by written agreement, which are validated by registration of the licensing agreement with the government office (§149). Licensees are responsible for quality control and must provide goods or services of the same standard as those under the original mark. Infringement is defined as use without the consent of the owner (§155). Reproduction, counterfeit, copy, colorable imitation, or use of the dominant feature
of a mark in connection with sale, offering for sale, distribution, or advertising of a product is infringement. Passing off an unlicensed variation or rendition or direct copy of a mark as the genuine object in connection with any activities leading to sale such that the consumer would be confused about the origin or nature of a product or service is prohibited. Owners may seek injunction and recovery of damages against infringers (§156). Infringing goods may be seized and destroyed. Section 160 explicitly grants rights to foreign corporations not engaged in or licensed to do business in the Philippines to bring civil action for opposition, cancellation, infringement, unfair competition, or false designation of origin and false description. Criminal penalties for infringement may be imposed in the way of 2-5 years imprisonment and a fine (§170). The 1992 Consumer Act, article 19 provides criminal penalties of 2 months to 1 year imprisonment or a fine for using false trademarks in the sales and representation of consumer products. Any commercial act in relation to counterfeit or misbranded food, drug, device or cosmetics is punishable by between 1 and 5 years imprisonment or a fine under article 41. Deceptive practices, such as misleading consumers regarding the origin or quality or standard of products or services, are prohibited in article 50 and punishable by between 5 months and 1 year imprisonment and or a fine. False warranties are prohibited in Chapter III and are punishable under article 73 by 1 to 5 years imprisonment and or a fine. Mislabeling products is punishable under Chapter IV, article 95, and offenders may be sentenced to 3 months to 2 years imprisonment and or fines, which may be reduced to 1 month
to 1 year imprisonment and or fines for cases not involving foods, cosmetics, drugs, devices or hazardous substances. The 1930 Penal Code, Section Two on Fraud in Commerce and Industry, Article 188 provides for a ‚minimum period‛ of imprisonment or a fine for falsifying trademarks in relation to commercial activities. Patents Part II of the Intellectual Property Code regarding patents requires a patentable invention be new, involve an inventive step, and that it is industrially applicable. Non-patentable inventions include discoveries, scientific theories, treatment, therapy, or surgical methods, plant varieties and animal breeds, although the subject of plant and animal varieties may be considered in a sui generis law. Employers own the patent unless otherwise agreed upon with employees. Rights conferred by patent include prevention of any unauthorized person from making, using, offering for sale, selling or importing the product or product obtained by a patent process. Chapter VIII regarding the rights of patent owners in cases of infringement allows civil action to be taken by proprietors against infringers. The court may order injunction, damages, or destruction of infringing materials. Criminal penalties may result if infringement is repeated, with between 6 months and 3 years plus fines available to penalize repeat offenders. Trade Secrets ‚Undisclosed information‛ is mentioned once in §4(g) of the IP Code, and is defined as intellectual property in general. No further mention of ‚undisclosed‛ information or any language relating to a trade ‚secret‛ is made.
Singapore 1965 Constitution The constitution does not contain provisions regarding IPRs, but it does protect the rights of citizens to own property. Part IV concerning fundamental liberties, article 12 provides for equal protection and non-discrimination in the holding and disposition of property. Article 15 grants property ownership rights to all religious groups. Copyright and Related Rights The 1987 Copyright Act and later revisions is the main piece of legislation pertaining to protection of copyright and related rights. Under Part III, article 26, owners of copyright are granted the exclusive right to reproduce, publish, perform, communicate to the public, make adaptations of, or otherwise exploit works. Part IV pertains to copyright in sound recordings, cinematographic works, television and sound broadcasts. Rights conferred to owners are those relating to copying, broadcasting or communicating to the public, publishing, rental and other general rights of all copyright owners. Rights granted in article 26 may be applied mutatis mutandis to other works as needed. Moral rights are not explicitly mentioned in the Act. Article 28 establishes a base period of protection for literary work including computer programs, dramatic or musical work as the life of the author plus 70 years. Part IV, Division 4 grants a period of protection to sound recordings of 70 years after the year in which the recording was first published; 70 years after the year of first publication for cinematographic films; 50 years after first production for television,
cable, and sound broadcasts; 25 years after first publication of editions of works. Part XII grants protection to performers for 70 years after the year in which the performance was first given. Part III, Division 2 defines infringement on literary, dramatic, musical or artistic works as an act usurping the rights of the owner without prior approval or license. Part IV, Division 6 defines infringement as the same for audio-visual recordings. Selling, trading, exposing for sale, renting, exhibiting to the public by way of trade, or otherwise prejudicing the legitimate interests of the owner(s) are considered infringement. In Part III, Divisions 3-7, limited exceptions to infringement rules are provided in cases of backing up a computer program, or public readings of literature, or relating to educational purposes, or in libraries, or in services caring for handicapped persons. Articles 111-115 provide exceptions to infringement in cases of reporting news, reproduction for preservation and storage, reproduction for private domestic use, and for educational purposes. A 5% royalty is established for musical recordings in Part III, Division 8, article 57. Infringement is actionable by copyright owners or exclusive licensees at any time under Part V. The court may grant relief in the way of injunction or damages. The court may further order infringing copies to be forfeited and destroyed. Part V, Division 5 establishes as criminal offenses the sale or hire, or exposing for sale or hire, or commercial exhibition to the public of protected works, or distribution or importation thereof for commercial purposes. Any such violations of a commercial nature are subject to penalties of up to 5 years imprisonment and or a fine. Less serious infringements may be punishable by up to 6 months imprisonment and or a
fine, penalties which increase to up to 3 years imprisonment and or a fine. Possession of machinery or instruments determined to be for the illegal reproduction of protected works is punishable by up to 2 years imprisonment and or a fine. Profitable infringement by exhibition or performance to the public is punishable by up to 2 years imprisonment and or a fine. Any advertising of copies of computer programs is punishable by up to 2 years imprisonment and or a fine. Article 138 grants ex officio powers to police who may arrest without warrant any person who in a street or public place sells or exposes or offers for sale or is reasonably suspected of having for the purpose of sale or letting for hire infringing copies. Officers may also stop, search and board forcibly or otherwise any conveyance which is suspected of having infringing copies, and seize or detain any such infringing copies. Part V, Division 6 concerning border enforcement provides rights for owners and licensees to object to importation of materials suspected of infringement. The authority may search, seize, detain and inspect items which may later be forfeited upon a finding that they are infringing. Individual persons and their baggage may also be searched upon entry. Obstruction of searches is an offense punishable by up to 12 months imprisonment and or a fine. Trademark The 1998 Trademarks Act is the main piece of legislation regarding the registration and protection of trademarks. Registered trademarks are protected for a period of 10 years, which is renewable for further periods of 10 years upon payment of fees (§18-19). Proprietors of trademarks have the exclusive right to use the mark and to authorize other persons to use the mark (§26). Marks are assignable and
transmissible, in whole or in part, in the same way as other moveable property (§38, 42). Written licensing agreements may be registered with the authority to give legal effect to the agreement (§39, 42). Infringement is the unauthorized use of an identical or similar mark in relation to goods or services which are identical or similar to those for which the mark is registered, or otherwise if use of a mark is likely to cause confusion to the public, or if the legitimate interests of the proprietor are likely to be damaged (§27). Infringement is actionable by the proprietor or exclusive licensee of a mark at any time, or other licensee in cases when the proprietor fails to bring suit within 2 months of being called upon (§44). The court may grant injunction or damages, and infringing goods may be seized and destroyed (§31-34). Part VI outlines criminal offenses and penalties. Counterfeiting registered trademarks, or falsely applying registered trademarks, or possessing articles for counterfeiting trademarks, or importing or selling or offering or exposing for sale or otherwise possessing for trade goods bearing false or counterfeit marks, is punishable by up to 5 years imprisonment and or a fine (§46-49). False representation of trademarks as registered or false representation of goods or services under false marks is punishable by a fine (§51). Counterfeit goods or goods bearing counterfeit marks may be forfeited and destroyed (§53). Police are granted ex officio powers to make warrantless arrests for selling or offering or exposing for sale goods bearing counterfeit marks, or upon reasonable suspicion that a person may possess such marks for trade or manufacture. Authorized officers may conduct warrantless searches and seizures where probable cause is established that a person possesses goods featuring falsely applied marks, and such
goods may be seized, removed or detained (§53A). Packages and personal luggage entering Singapore may also be searched (§96-97). Part VII pertains to international matters. The authority is empowered to make rules to give effect to the Madrid Protocol, Paris Convention, TRIPS Agreement, or other international conventions to which Singapore is a party. Patents Chapter 221, the 1995 Patents Act establishes formal procedures for application and grant of patents. Patentability is qualified in Part III which states an invention must be novel, involve an inventive step, and have industrial application. Terms of patents are 20 years from the date of filing. Infringement is defined in Part XIII as unauthorized making, disposing of, offering to dispose of, use or import of a patented product, or of a product obtained by means of a patented product. Civil proceedings may be brought in court by the proprietor of a patent in cases of infringement. The court may order an injunction, delivery or destruction of the infringing goods, damages, and other declaration. Thailand 2007 Constitution General support for IPRs is established in Part 9, section 86(2), which states that the nation shall institute policies which promote inventions and ‚protect intellectual property‛. Part 5, section 41 grants personal property rights while other sections offer indirect support for IPRs. Copyright and Related Rights
The 1994 Copyright Act is the main piece of legislation concerning copyright and related rights. In Chapter 1, Part 1, copyright applies to ‚literary, dramatic, artistic, musical, audiovisual, cinematographic, sound recording, sound and video broadcasting work or any other work in the literary, scientific or artistic field whatever the mode or form of its expression‛. Part 3 thereafter follows that owners of copyright shall have the exclusive rights to reproduction, adaptation, communication the public, rental, assignment or licensing of rights pertaining to the protected work. Copyright is assignable in whole or in part. Performers’ Rights are established in Chapter 2 and have the same effect as general copyright. Terms of copyright protection are set in Chapter 1, Part 4 at the lifetime of the author plus 50 years; 50 years after first production for photographic, audiovisual, cinematographic, sound recording, audio or visual broadcasting; 25 years from first production or 50 years from first publication for applied art; 50 years from first performance for performers. Chapter 5 provides rights for foreign works authored by citizens of nations which are party to international conventions on copyright protection to which Thailand is also a member. Moral rights are not explicitly mentioned in the Act. Infringement is defined in Chapter 1, Part 5 as unauthorized reproduction or adaptation, communication to the public, rental, rebroadcasting in whole or in part, distribution, selling or holding or offering or letting for sale or lease, or for-profit importation, or other profitable activity that would unreasonably prejudice the legitimate interests of the owner. Part 6 thereafter provides for exceptions, including research or study, personal private use, reporting for news, displaying or reproducing
for judicial proceedings, or non-profit use in education, academic citation, backingup or preserving a copy of a computer program, or other non-profit related use of works. Civil remedies are available to owners of copyrights and performers’ rights. Courts may order injunction or damages. Chapter 8 establishes penalties for offenses. Any person who, for profit in a commercial capacity, reproduces, or makes an adaptation, or rebroadcasts, or distributes, or sells, or rents or otherwise infringes upon economic rights of owners commits an offense punishable by between 6 months and 4 years imprisonment and or a fine. Obstruction and failing to testify may result in imprisonment of up to 3 months and or a fine. Any person who commits a second or subsequent offense within 5 years after being discharged from a penalty is liable to twice the penalty. Managers, directors, and administrative staff of businesses may be held personally liable for offenses committed by corporate persons whether such individuals had knowledge of the offenses or not. Half of fines imposed by judges in criminal sentences shall be paid to the rights owner. The 2005 Optical Disc Production Act supplements the Copyright Act. Chapter I requires anyone manufacturing optical discs, or any copyright owner wishing to manufacture or hire a manufacturer to inform the government authority prior to commencement of manufacturing. The government office keeps records of names, addresses, machinery and other information related to manufacturing facilities, and issues manufacturing and mastering discs to applicants. Manufacturers are required to openly display marks issued by the authority, and to keep records of all production, sales, disposal and inventory of optical discs.
Chapter IV provides criminal penalties for violation of policies pertaining to manufacture of optical discs. Failure to obtain marks prior to manufacture or moving manufacturing facilities without notice and approval by the authority is punishable by up to 1 year imprisonment and or a fine. Anyone failing to display manufacturing or mastering marks commits an offense punishable by up to 1 year imprisonment and or a fine. Misuse of marks is punishable by up to 3 years imprisonment and or a fine. Falsifying marks is punishable by between 6 months and 5 years and or a fine. Acquiring or possessing machinery without notifying the authority within 30 days, or selling, giving, or transferring machinery without notifying the authority within 7 days is punishable by up to 1 year imprisonment and or a fine. Possessing polymer grains or other material used in manufacture without providing detailed information about such materials and their storage conditions to the authority within 30 days commits an offense punishable by up to 6 months imprisonment and or a fine. Obstruction is punishable by up to 3 months imprisonment and or a fine. Managers, board members, and other administrative personnel at companies found guilty of offenses may be held personally liable whether or not they had knowledge of the crimes. Persons who commit a subsequent offense within 5 years of termination of previous offenses are liable for double penalties. Trademark The 1992 Trademark Act is the main piece of legislation concerning registration and protection of trademarks. Owners of registered trademarks have exclusive rights to use the marks for goods for which it is registered (§44). Ten year renewable terms are established in section 53. Trademarks may be transferred or
assigned as per Chapter I, Part 3, or licensed in whole or in part as per Chapter I, Part 5. Licensing agreements must be in writing and registered with the authority. Officers have the power to enter businesses or other places upon reasonable suspicion that counterfeit marks are being held for sale, and thereby seize property and make warrantless arrests (§106bis). Counterfeiting marks (§108), or importing, distributing, offers for distribution, or possessing for distribution goods or services under false marks (§110), is punishable by 4 years imprisonment and or a fine. Imitating marks with the intent to mislead the public (§109), or importing, distributing, offering for distribution, or possessing for distribution any goods or services under imitation marks (§110), is punishable by up to 2 years imprisonment and or a fine. Owners of marks may apply directly to the court for injunction against persons passing off counterfeit or imitation marks (§116). Misrepresentation of marks is punishable by up to 1 year imprisonment and or a fine (§111). If a person commits a subsequent offense within 5 years after the passing of punishment from a prior offense, penalties are doubled (§113). Goods which pose a threat to health and safety, such as counterfeit drugs or health or skin care products, substandard toys or other goods which may also be under false marks, may be removed for testing and from the market under Part 3, section 36 of the 1979 Consumer Protection Act. Section 4 of the Act provides that consumers have the right to receive correct information about the quality of goods and services. Officials may search and seize goods which are not in compliance with the Consumer Act.
Misleading consumers in advertising or with false labels or statements is punishable by up to 6 months imprisonment and or a fine, a penalty which doubles for subsequent offenses. Counterfeit goods may be seized under the 1979 Export and Import of Goods Act or 1926 Customs Act. The Customs Act authorizes officials to board and inspect any vessel or package or container therein at any time. Patents Chapter II requires inventions to be new, involve an inventive step, and have industrial applicability to qualify for grant of patent. Scientific or mathematical theories, computer programs, methods of diagnosis, treatment or cure are not protected by the act. Employers retain rights for patents arising out of the course of work unless agreements otherwise state, and if a patent yields profit for employers, the employee is entitled to extra monetary rewards. Terms of patents extend 20 years from the date of filing. During the period of protection, the patentee has the exclusive right to use, sell, possess for sale, or import a patented product, or a product produced by a patented process. Under Chapter V, civil remedies are available to proprietors in cases of infringement. The court may issue injunctions, damages, and surrender of infringing goods. Under Chapter VI, infringement of the patentees rights may result in criminal penalties of up to 2 years imprisonment and a fine. Trade secrets Trade secrets are information not publicly known or accessible, the secrecy of which is necessary for profitable operation of business in a competitive market.
Trade secret owners are entitled to disclose, deprive of, or use the trade secrets, or license another to disclose, deprive of, or use the trade secrets. Infringement is defined as disclosure or deprivation of usage of trade secrets without the consent of the owner in a manner consistent with breach of contract, bribery, coercion, fraud, theft, receiving stolen property or espionage. Persons affected by infringement may petition the court for an injunction and claim damages from the infringement. Disclosure of trade secrets may result in criminal penalties of up to one year imprisonment and or a fine. Corporate officers may be held liable for offenses which occurred under their supervision. Vietnam 1992 Constitution IPRs are indirectly supported in provisions relating to rights to language and writing (article 5), creative talents (article 30), art and literature (article 32), broadcasting (article 33), and State investment in sciences and technologies (article 38). Copyright and industrial property rights are explicitly provided in Article 60. Copyright and Related Rights The 2005 Law on Intellectual Property is the main statute protecting copyright and related rights. Article 2 states that the law applies to Vietnamese and foreign organizations and individuals. Section 5 grants priority to treaties in the event of a conflict with the IP law. Both moral and economic rights are provided in Part II, Chapter II, Article 18. Moral rights include the right to be known as the author of works, and to publish a work or authorize others to do so, and to prevent other persons from modifying,
mutilating or distorting works in a way that may prejudice the honor or reputation of the author. Economic rights include rights to make derivative works, to display works to the public, to reproduce works, to distribute or import works, to communicate works to the public, and to lease cinematographic works and computer programs. Rights, restrictions, and exceptions are applied mutatis mutandis for performers, producers of recordings, and broadcasting organizations. Article 27 establishes duration of rights. Moral rights are protected for an indefinite term. Cinematographic, photographic, dramatic works, and works of applied art are protected for a term of 50 years after first publication or fixation; literary works are protected for the life of the author plus 50 years, or in cases of multiple authors, until 50 years after the death of the longest surviving author. Article 34 grants protection of related rights for 50 years following the year of fixation. Copyright and related rights, but not moral rights, may be transferred, assigned or licensed under Chapter IV. Licensing agreements must be in writing and provide details related to the parties and agreement. Infringement is the subject of Article 28. Copyright infringement may be appropriation of copyright, or impersonating authors, publishing or distributing works without permission, or modifying or mutilating or distorting works such that the reputation of the author would be prejudiced, or reproduction of works without permission, or making of derivative works, or using copyright without paying royalties, or leasing without paying royalties, or otherwise benefitting commercially without paying royalties, or possessing equipment for infringement, exporting or
importing copies without permission. Infringement of related rights under Article 35 is essentially the same as that of copyright. Exceptions to infringement rules under Articles 25-26 & 32-33 include duplication for research or teaching, citation of works, good-faith use in newspapers or broadcasts, reproduction for archival purposes, transcription into Braille, and importation of copies for personal use. Aside from cases involving exceptions, when profit results from use, royalties must be paid for use or infringement is said to exist. Chapters XVI and XVII provide remedies to IPR holders in cases of infringement. Civil, administrative, or criminal measures may be undertaken to handle infringement. The court may order injunction, public apology, performance of civil obligations, or damages of infringing parties, and materials related to infringement may be destroyed. The 1999 Criminal Code, Article 131 provides for penalties in the way of fines for minor infringements of economic or moral rights. For cases involving organized criminal behavior, and for repeat offenders, and for serious offenses the court may penalize infringers with between 6 months and 3 years imprisonment, which may be accompanied by a fine and a ban on employment in certain professions for 5 years. The 2005 Civil Code further provides copyright owners civil remedies against infringers. Under Article 169, all property owners have the right to prevent infringement upon their ownership rights, to search for and reclaim property. Under Chapter XV, the court may, upon request from property owners, compel infringers to cease such behavior, to return property, and to compensate owners. Article 742 authorizes the transfer of copyright, and Article 309 authorizes the transfer of the
right to demand, and as such licensees should have the right to institute court proceedings against infringers except for cases of infringement of moral rights. Holders of IPRs are further allowed to request the customs authority to inspect, seize, and detain articles suspected of infringement under Article 57 of the 2001 Customs Law. Customs agents may search and board vessels or other means of transport of illegal goods. People, means of transport, and or goods may be seized or arrested under Article 66. Trademark The legislative framework for registration and protection of trademarks is the same as that for copyright and related rights. Part Three, Chapter VII of the 2005 Law on Intellectual Property relates to industrial property rights. Section 4 thereof provides protection for distinctive marks and well-known marks. Chapter VIII further establishes industrial property rights. Marks may be registered under Article 87, and under part 6 therein such marks may be assigned or transferred by written contracts. Term of protection for marks is stated in Article 93 (6) as 10 years after filing date, which is renewable for unlimited consecutive terms of 10 years. Article 139 establishes that trademarks are assignable via written contracts so long as such assignment does not cause confusion as to the properties or origins of goods or services under such marks (s4). Licensing agreements in all forms are authorized in Article 141-143. Article 129 concerning infringement upon rights to marks states that infringement is the use of mark identical or similar to registered marks in relation to
identical or similar goods or services or to the extent that the public would be likely confused. Chapters XVI and XVII again provides rights to IPR holders in cases of infringement. Civil, administrative, or criminal measures may be undertaken to handle infringement. The court may order injunction, public apologies, performance of civil obligations, rectifications or damages. Infringing materials may be seized, detained, and destroyed. Article 171 of the Criminal Code provides fines and or two years of noncustodial reform for infringement of industrial property rights. In cases involving organized criminal outfits, repeat offenders, or serious offenses the court may punish offenders with between 6 months and 3 years imprisonment, which may be accompanied by a fine and ban from employment in certain professions for 5 years. Article 444 of the Civil Code requires sellers to ensure the validity, quality, and safety of products under marks. Article 751 (3) grants trademark owners the right to permit or forbid others from using marks which would cause confusion among the general consuming public as to the nature or origin of goods. Given that trademark rights are handled as moveable property rights, owners and licensees may institute civil lawsuits in prevention and remedy of infringement under Articles 169 and 309. Holders of IPRs related to trademark have the same rights as holders of copyright and related rights as pertaining to the Customs authority. Customs may likewise search and seize, or make arrests in cases of trademark infringement under the relevant Act. Patents
Part III, Chapter VII of the 2005 Law on Intellectual Property requires inventions to be novel, involve an inventive step, and have industrial applicability to be eligible for patent protection. Theories, schemes, plans, plant varieties, animal breeds, biological processes, human and animal disease prevention, diagnostic and treatment methods are not protected. Article 126 defines infringement as use of protected inventions without permission or without paying compensation to owners. Part Five, Chapters XVI-XVII provides options to persons injured by infringement. Proprietors may request state agencies handle infringement, or initiate lawsuits. Courts may order injunction, public apology, performance of civil obligations, or damages. The 2000 Law on Science and Technology, Article 33 mentions patents as part of a developing technological market, though the statute does not specifically protect patents via registration. The 2007 Law on Technology Transfer, Article 44 provides income tax incentives to organizations or individuals owning or producing patents. Trade Secrets ‚Trade secrets‛ are mentioned as a type of industrial property in Article 3(2), Article 4(4), Article 6(1c), and Article 84. Ownership of business secrets are discussed on Article 121. Article 124(4) pertains to use of business secrets. Article 127 concerns infringement of business secrets. Article 220 refers to the Government’s Decree No. 54/2000/ND-CP of October 3, 2000 which provides protection to trade secrets. Piracy and Counterfeiting
“A man hated the way he walked and decided to learn how people in the city of Handan carried themselves. The result was, however, not only did he fail to learn the new style, but he also forgot his own way of walking. He could only but crawl back to his hometown and became a laughing stock. The moral is that one should use critical thinking rather than blindly following others' models. Copying others without applying what is useful to one's practical needs can only make things worse.” - 邯 郸学步, Chinese proverb (Yuan, 2009) Infringement of copyright and trademark are global problems which attract the attention of not only profit-seeking criminal persons and groups who engage in trades of infringing goods, but also of private, government, and international organizations seeking to gather information, engage in development projects, further protect IPRs, and advocate change in policy and application thereof. Executive branch (i.e. police and customs) interests worldwide are supported in part by private interest, business and academic groups. Enforcement actions in jurisdictions where public funds are in short supply are sometimes collaborative efforts between government and private industry. Stakeholders in the IP economy recognize the need for protection and enforcement of rights, and take action domestically and internationally pursuing enhanced IP regimes. Criminal individuals and groups recognize the profitability of infringement and take action to secure supply chains and capitalize on demand unmet by licit businesses. Worldwide, struggles between these two opposing sides manifest corruption, public outrage against IP legislation, severe sentences for relatively minor private-use infringement, new treaties and privacy rights debates. With the letter of the law on one end, and a demand for free market economies and perfect competition on the other, the middle ground can be difficult to hold as
interest parties consistently pull and push for their ideas to be exclusively represented. IP is an economic issue in times when public expenditures generally go toward health care, welfare, social security, and military. Mainstream global media coverage to big cases like that against Megaupload and Kim Dotcom in the USA (2012) is one of the few ways the general public is directly exposed to administration of IP law. Treaties like the 2011 Anti-Counterfeiting Trade Agreement, which was signed by 8 original parties including Singapore, are met with resistance by segment of the public that wants lower priced goods by any means. Nonetheless, the pursuit of intellectual property rights continues. ASEAN Case Law The ASEAN Project on the Protection of Intellectual Property Rights (ECAP III) started in 2010, funded by the European Commission and ASEAN Secretariat. ECAP III supports ASEAN with information management, language translation, IP enforcement coordination and administration, and education as part of a developmental plan for the region. ECAP III offers a database of recent ASEAN IP case law, providing further evidence that IP law is part of the caseload in ASEAN nations, including those most severely affected by piracy and counterfeiting. For the purposes of supporting a regional IP-focus and strategy, and to establish regional norms rather than pure secularism, cases in this section are analyzed together and considered within the jurisdiction of ASEAN. Although an ASEAN court proper does not yet exist, in order to support further development of the international union where jurisdiction could be shared among ASEAN members, the importance of the nation of origin with regards to cases mentioned herein is considered minimal.
Piracy The most obvious acts of infringement in physical markets are the illicit slavecopying and subsequent sales of software and media on optical discs. Blatant acts of piracy are committed in plain view of the public, including on streets and in districts where police regularly patrol or have sub-stations. Malls and other commercial developments often rent spaces to businesses and persons whose primary or only good or service is pirated optical discs. A 2010 survey of 25 pirated disc shops in Bangkok’s MBK shopping center – the most visited mall in Bangkok – found the average length of time the criminal businesses were operating at MBK was 6 years, ranging between 2 months and 14 years. Shops surveyed paid more than 1.4 million Baht per month in rent to MBK, ranging between 12,000 and 200,000 Baht monthly per unit. More than 1,000 customers daily were reported served by the 25 shops, which employed 81 people (Tanielian, 2010). Public Prosecutor, Office of the Attorney General v. Ms. Tuanchai Mensaeng (TH, 1999) showed that selling, offering, or occupying for sale infringing optical discs (i.e. CD, CD ROM, DVD ROM) is a crime. Public Prosecutor, Office of the Attorney General v. Midy Multi-Media Shop Limited Partnership, et al (TH, 2000) showed that such sale of pirated discs is a crime when it occurs in a high-profit shopping mall such as Panthip Plaza in Bangkok. Onestop Software Solutions (M) Sdn Bhd & Anor v Masteritec Sdn Bhd & Ors (MY, 2009) clearly showed that mere copying of a computer program in writing another computer program entitles the owner of the first program to injunction. Pubic Prosecutor, Office of the Attorney General v. Mr. Thongchai Srichaiya (TH, 2003) showed that selling or offering for
sale for profit or commercial purposes literary works in the form of Play Station games is a crime. Rose Video Co., Ltd. V. Seven Media Entertainment Co., Ltd., et al (TH, 2003) demonstrated that infringement of the copyright of only one motion picture constitutes a criminal offense. Public Prosecutor, Office of the Attorney General v. Mrs. Lamduan Linprachya (TH, 2002) showed that police may seize video CDs as evidence in criminal trials. Collective rights management organizations brought suit in Filipino Society of Composers, Authors and Publishers, Inc. v. Benjamin Tan (PH, 1987), Yayasan Karya Cipta Indonesia/YKCI v. CV. Pangrango qq. Hotel Pangrango 2/CVPH2 (ID, 2006), and Yayasan Karya Cipta Indonesia/YKCI v. PT. Telekomunikasi Selular/Telkomsel (ID, 2007). In Filipino Society v. Tan the court stated that ‚The playing of music in dine and dance establishment which was paid for by the public in purchases of food and drink constituted ‘performance for profit’ within a Copyright Law‛, and thus ‚the performance in a restaurant or hotel dining room, by persons employed by the proprietor, of a copyrighted musical composition, for the entertainment of patrons, without charge for admission to hear it, infringes the exclusive right of the owner of the copyright‛. Such is a major assertion relating to cover bands which play in thousands of restaurants and bars nightly without paying royalties. The court in YKCI v. CVPHP2 agreed that ‚playing a song or music in [a] business place can be qualified as making publication‛ and thus royalties must be paid. In YKCI v. PT Telekom, an injunction was issued to stop unauthorized distribution of reproductions of music in the form of ring-tones. Between 2007 and 2012, I made a series of market inquiries throughout Thailand and I found that legitimate software is nearly absent, while pirated software occupies 90% or more of the shelf space. Independent computer sales shops most
frequently offer packaged pirated software and or custom installation of pirated software, although Microsoft Corporation v. Niyom Thai Hitech Co., Ltd., et al (TH, 2002) showed that such practices are criminal. Microsoft Corporation v. Atee Computer Co., Ltd., et al (TH, 2000) further showed that cases involving sales of slave-copies of software are both criminally and civilly actionable, although without police cooperation during investigation, the rules on taking evidence in criminal cases may cause legitimate cases to be excluded from the court docket. Between 2005-2006 and 2007-2012, I worked at 15 primary and secondary schools – 4 private and 11 public – in 10 provinces in Thailand and found that all schools had computers which featured pirated Microsoft Windows and or Office hacked by ‚ILLUSION‛ or ‚GODZILLA‛ or ‚MOZARD‛. 8 of the 15 schools used photocopied textbooks. University bookstores in Thailand were also found selling photocopied textbooks, although Public Prosecutor v. Mr. Somsak Thanasarasenee (TH, 2000) established such sales are criminal offenses. Pham Thi Ha v. the Culture and Information Publishing House (VN, 2006) showed that unauthorized use or reproduction of an author’s works, including when renamed, is civilly actionable. Book piracy was considered problematic throughout the ASEAN region in IIPA reports (2011b, 2011c, 2011d, 2011e, 2011f, 2011g, 2011h). Counterfeiting Less obvious than slave-copies of optical discs in physical markets, yet remarkably salient to persons looking for such things, are counterfeit clothes, shoes, bags, wristwatches, calculators, and other replicas of patented and trademarked goods or goods bearing false trademarks. Tailor shops in tourist districts in Thailand most frequently market their products by showing customers catalogues of Hugo
Boss, Ralph Lauren, Versace, Armani and other high fashion suits. Tailor shops most often display signage containing trademarks and names of famous high fashion brands, though it is exceedingly doubtful that tailors have obtained permissions and licenses to advertise their products as having affiliation with high fashion brands. Shop owners, operators, and workers may be under the impression that trademarks and brand names are merely symbols of a general state of quality and popularity, rather than indicating that products bearing or behind such names are from a specific design and supply chain in addition to meeting certain quality standards. Cases involving infringement of trademarks, service marks, and names have shown that business owners want to identify their products and services with established foreign brands, but they do not want to pay licensing fees or satisfy the requirements for such comprehensive licensing schemes. In Public Prosecutor v. Subway the Western Restaurant Company Limited, et al (TH, 1999), the defendants operated a restaurant under a counterfeit ‚SUBWAY‛ trademark, which was clearly a crime. Unscrupulous business practices such as counterfeiting may not always pose a significant public health or safety risk, but in cases involving foods, medications, auto or other heavy machine or electrical parts, hygiene and beauty products, a legitimate threat is posed to the consumer such that a criminal offense is committed. In Unilever Co., Ltd., Lao People’s Democratic Republic, Lao Inter Consul Co., Ltd., and Sendala office Supplies Shop v. Mr. Dian Zho Zhang, Mr. Dian Li Zhang and Mr. Dian Zhong Zhang (LAO, 2009), the defendants sold and possessed equipment for manufacture of counterfeit Clinic, Sunsilk, and Pantene shampoo, and Colgate and Darlie toothpaste. The three counterfeiters were sentenced to prison and assessed fines. In Public Prosecutor, Office of the Attorney General v. ML Technical & Supply Co., Ltd., et al., Ariya Electric & Supply Co., Ltd., et al., Siam Huat
Electric Ltd. Part., et al (TH, 2000), four corporate defendants were found to have offered and occupied for sale circuit breaker boxes bearing forged ‚SQUARE D‛ trademarks, which constituted a major criminal offense and a public safety risk. A public safety risk could have been found in Public Prosecutor v. Chaiwongwan Limited Partnership, et al (TH, 2004), where there was no counterfeiting, but instead a petrol station owner who was at one time a Shell licensee continued to operate the station under the Shell signage and name long after the license expired and the owner decided not to renew. Trademark infringement tarnishes the good reputation of name brands. Levels of quality required of licensees are not likely met by infringers which offer a similarlooking product at an extremely low price when compared to the original, thus tipping off investigators to the crimes. Astute consumers inherently understand that price often correlates with quality, and when intelligent shoppers see famous international brands for sale at rock-bottom prices, especially in notorious markets where counterfeiting is ubiquitous, they cannot help but infer that the products are not genuine. Police and prosecutors have accepted the same as probable cause for further inquiry. In Levi Strauss and Co., et al v. Mr. Cherd or Cherdsiri Maneerattanaprud, et al (TH, 2002), counterfeit Levis marks were the subject of court action. Public Prosecutor, Office of the Attorney General v. Mrs. Youpa Kitlammee (TH, 2002) showed that counterfeiting a trademark registered in a foreign country can be considered a crime. In Fronsac Investment SA v. Mr. Thavisak Thosaponpaisarn (TH, 2008), the court applied provisions of the law which protected foreign trademarks registered abroad prior to registration in the domestic system. In Hackett Company Limited v. Mr. Sommai or Ithipong Lertpisitkul (TH, 2005), a foreign
brand never distributed domestically was found to have the better right to a trademark over a domestic applicant. Similarly, in Yuxi Hungta Tobacco (Group) Co. Ltd./Yht v. PT. Permona/PTP and Department of Law and Human Rights/Directorate General of Intellectual Property Rights/Directorate of Copyright, Industrial Design, IC Layout Design, and Trade Secret/DGIPR (ID, 2006), a wellknown Chinese tobacco brand, ‚HONGTASHAN‛ was granted exclusive rights over its trademark in Indonesia. Public Prosecutor, Office of the Attorney General v. Mr. Piroj Bramasuwan (TH, 2003) showed that persons counterfeiting one label, such as Levis, may also be counterfeiting other trademarks, such as Nike and Adidas. A tour of the Tilleke and Gibbins counterfeit museum in Bangkok showed the problem as far wider-reaching that even the brightest of street and mall shoppers may have guessed. Clothing, footwear, apparel, and accessories brands in the museum included Lacoste, Levis, Timberland, Playboy, Gucci, Casio, Dr. Martens, Ray Ban, Seiko, Converse, Adidas, Puma, and New Balance. Software included Adobe and Microsoft products. Other itms found in the museum were more surprising. An entire motorcycle was present, featuring the name ‚JAD‛. A Honda motor, Mercedes rims and pedals, a Volvo oil filter, NGK sparkplugs, and Peak antifreeze were present. Sanyo and Panasonic batteries, Philips lights and fuses, Nokia and Motorola phones, Casio calculators, a Kingston 2GB flash memory drive, a Yamaha guitar, and Canon ink were found. Perfumes, drugs, Marlboro cigarettes, Loreal cosmetics, shampoos, powders, Johnnie Walker Red and Stoli Vodka were exhibits. National Geographic, Lonely Planet guidebooks, and Collectable Treasures figurines were on display. Given the high prevalence of counterfeit goods in the developing and third world ASEAN markets, suspicion is drawn to products which may not be infringing, but are in the same shopping complex, or placed alongside infringing products.
When a citizen of an OECD nation sees Microsoft Windows Vista available for 179 Baht, or Adobe Illustrator at 99 Baht, or 8 movies on DVD for less than 100 Baht, whether in a flea market or international supercentre like Tesco-Lotus or Big C, suspicion is likely to arise. Courts have recognized the price disparity as indicating a high level of likelihood that goods are counterfeit in Public Prosecutor, Office of the Attorney General v. Mr. Suthi Chor-ruangsak (TH, 2004). When Popeyes does not serve chicken, but only fried fish balls, which are not on its menu in the United States, suspicion results. When famous cartoon characters like Mickey Mouse, Bugs Bunney, Foghorn Leghorn, Yosemite Sam, Daffy Duck, Garfield, Superman, Donald Duck, Goofy, Pluto, Doraemon, and assorted anime heroes are airbrushed on the side of a bus in a market where licensing is a last resort far behind infringement, simple questions of legitimacy and or law result. When CDs, DVDs, software, obviously counterfeit goods, forged diplomas, IDs and travel documents are available for sale at street level in plain sight of thousands of passersby and police, and at several locations on a single tourist block in Bangkok, suspicion is unavoidable. When it seems that every mall except for the one highestclass mall in a country is engaged in sales of pirated and counterfeit goods, the market integrity and image is relegated to something associated primarily and perhaps exclusively with the usual suspects. Figure X: Examples of Blatant Infringement in Physical Markets
Easily confused with ADIDAS
Polo apparel Diesel, Lucky, American Eagle watches
Men’s designer underwear Figure X continued
Figure X: Examples of Suspicious Goods and Images
8 DVDs for ~69 Baht
Windows Vista for 179 Baht
Mickey Mouse and Donald Duck cakes inspired by “Winnie the Pooh” Figure X continued
Adobe Illustrator for 99 Baht
Figure X continued
Unfortunately for victims of infringement, local courts may not always be sympathetic to the woes of multinationals. For example, in Public Prosecutor v. Mrs. Ngamjit Somsakraksanti (TH, 2000), the court dismissed a charge of criminal infringement of a ‚Winnie the Pooh‛ cartoon which was sold on balloons by the defendant on account of the natural qualities of all bears in general. Many cartoons are animals which are adapted from nature, and as such the court considered such cartoons ideas or imagination created from natural creatures, which were not eligible for copyright protection. The court reportedly sought to remove monopoly power from the injured party, and it clearly served a public interest in allowing sales of the balloons rather than a private one in enforcing a multinational’s claim via the prosecutor against an individual. Due to various complications with infringement prosecution, civil remedies may be more appealing to injured parties. ECAP III documented several civil trademark cases from the ASEAN region which show the relevance of international treaties and the validity of domestic IP legislation in the face of rampant unchecked infringement. In Bayerische Motoren Werke Aktiengesellschaft v. BMW Ltd Part. et al (TH, 1999), the court found that infringement includes use of a trademark or name which is translated into a different language when it decided defendants were not permitted to operate a business entitled ‚BMW‛ written in the Thai language. Unilever N.V., et al. v. Lion (Thailand) Limited, et al (TH, 2009) covered similar legal questions relating to language on laundry detergent packaging. American Cyanamid Company v. Shaft Formulator Co., Ltd., et al (TH, 2005) brought a decision regarding the common consideration of easily mistakable trademarks. The plaintiff complained about the defendant’s use of the word ‚ABATE‛ among other packaging designs in production and sales of pesticides. The
court decided that in a worst case scenario, the public could be misled about the origin or nature of the goods, and the defendant could then free ride on the reputation and publicity of the plaintiff, and thus the defendant was found to have infringed upon the plaintiff’s rights. Leo Pharmaceutical Products Ltd A/S v. Kotra Pharma (M) Sdn Bhd (MY, 2009) dealt with a passing-off issue relating to drugs, namely FUCIDIN, FUSIDIC, FUCICORT, and FUSI-CORTE. Confusion was found to be likely due to the similarity of the names of the drugs made by both the defendant and plaintiff. Other cases have resulted in decisions not in favor of the plaintiff regarding the potential for public confusion. Esso Standard Eastern, Inc. v. The Honorable Court of Appeals and United Cigarette Corporation (PH, 1982) may be an outdated case but it found that within the law it is ‚implicit‛ that goods must be similar for confusion to result from use of a name. The court confirmed that use of an identical mark, ‚ESSO‛, on cigarettes whereas Esso deals in petroleum, is not infringement. Despite the fact that Esso stations may sell cigarettes, the design and coloring of the marks were distinctly different, and so the ruling was made on a name alone. In spite of the earlier Filipino court’s contention regarding potential for infringement in separate classes of goods, Walton International Ltd. v. Yong Teng Hing t/a Hong Kong Trading Co. & Registrar of Trade Marks (MY, 2010) decided that well-known marks, to wit ‚GIORDANO‛, are protected in classes other than those to which they are registered, and goods may not be registered with such well-known names or marks in categories other than those which the well-known marks are registered. In Besniere SA Co., Ltd., v. Uni-President Enterprise Co., Ltd. (TH, 1999), the court ruled against the plaintiff because the essential and prominent parts of two trademarks, both featuring the three letters ‚UNI‛ and the word ‚PRESIDENT‛,
were distinctly different and thus were not likely to be confused. Levi’s Strauss & Co. v. Mrs. Ranjuan Wongrat (TH, 2001) featured argument regarding two backpocket embroidery patterns on jeans, one which consisted of two twin arch lines that looked like bird wings and the other which consisted of straight lines like the letter ‚V‛. The court ruled that it was unlikely that the defendants mark was an adaptation of the plaintiff’s. Some cases seem to indicate that corporations which own well-known marks have at least occasionally launched frivolous lawsuits regarding issues which lack sufficient merit. For example, in Ford Motors Company of Canada Limited v. Mr. Yingsan Ratapipat (TH, 2005), the Ford Company argued that it was the sole owner of the three letters ‚F-O-R‛ in succession in the field of automotive parts and accessories. The court disagreed and denied the claim. In McCurry Restaurant (KL) Sdn Bhd v. McDonald’s Corporation (MY, 2009), McDonald’s sued, unsuccessfully, over use of the prefix ‚Mc‛ in the restaurant industry although McCurry served Indian food rather than American-style fast food and there were no other similarities in signage design or menu names which would cause confusion to the public. Revlon sued over its rights to exclusive use of the word ‚CHARLIE‛ in Revlon Consumer Product Corporation Co. Ltd. v. Mrs. Au-am Ang-Suntikul (TH, 2004), although the defendant’s mark was not found to be similar or confusing, nor did it feature the word ‚CHARLIE‛ but instead was written as ‚ROYAL CHARLE‛. Wording and semantics may be troublesome in the ASEAN region where English is a second or foreign language, yet many of the most well-known brands use English on packaging and in marks. What some second- and foreign-language speakers consider a generic term or non-defining characteristic of a mark, multinationals clearly define otherwise. Language questions were brought up in both
Societe des Produits Nestle, S.A. and Nestle Philippines, Inc. v. Court of Appeals and CFC Corporation (PH, 2001) and Societe des Produits Nestle SA v. Department of Intellectual Property et al. (TH, 2002) when two courts in the region examined the words ‚TRUSTY‛ and ‚MASTER‛. In both cases, the words were considered distinctive as part of the Nestle trademark, and in the Philippines case ‚MASTER‛ was found to be so distinctive that it formed an essential part of the mark where consumers could have been confused had there been another product in the same class bearing the word ‚MASTER‛. Raids and Seizures Enforcement operations are routinely conducted by local and national police or special investigation forces, often with assistance and cooperation from international and foreign agencies. Law enforcement is generally not undertaken ex officio by police who are merely trying to do their jobs to the best of their ability. Instead, court orders and comprehensive planning and inter-jurisdictional cooperation are often required before seizures and raids occur. When raids do happen in ASEAN, they generally serve as an example and part of a larger international political effort while the day-to-day compliance among civilians is kept on the honor – or Confucian – system. One satisfactory reason for low enforcement rates may be the low financial efficiency of the processes. With ubiquitous piracy and counterfeiting in physical markets among primarily small business owners and operators, the potential for private or public bodies to recover costs of investigation and court trials is virtually nothing. When people sell the illegal goods as part of a subsistence lifestyle, they cannot afford to pay fines or damages, and when such a multitude of people have
made selling the goods their occupation, government budgets cannot support comprehensive prison sentencing. In most individual cases, the fines available and damages caused in point-of-sale transaction cases are of lower monetary value than the costs of pursuing enforcement, and thus it is cheaper to allow infringement to continue. Distributors and manufacturers are substantially more difficult to track down and produce evidence against when compared to end-line salespeople, and so the counterfeiting dilemma continues although IP caseloads worldwide are significant. Counterfeit medicines are obviously in the highest priority group for enforcement since they pose a real significant public health risk. ‚Operation Storm‛ in 2008 resulted in 27 arrests and seizure of more than 16 million pills in Cambodia, China, Laos, Myanmar, Singapore, Thailand and Vietnam (INTERPOL, 2008). ‚Operation Storm II‛ in 2010 yielded 33 arrests and more than 20 million packs of counterfeit medicines confiscated from more than 100 illegal pharmacies in the same countries (Bennett, 2010). Optical disc seizures are often easy to conduct and yield millions of units. Numerous reports of successful CD/VCD/DVD raids since 2008 are available. In Malaysia in 2008, one million pirated CDs were seized (INTERPOL, 2009). Six optical disc replicating lines and 500 burners were seized in Thailand in 2009 (MPAi). 100 sacks of pirated VCDs and DVDs were seized in the Philippines in early 2012 (Alcober). ASEAN-wide reporting from domestic intellectual property departments and agencies is not uniform or consistent enough to conduct full comparisons and reviews. For example, ECAP-III reported on 2009 statistics, but 22 of 40 boxes on
the seizure table contained ‚NA‛. In Brunei 181 CDs were seized in 2 procedures in the domestic market. In Cambodia, 50 cosmetics were seized. In Laos, 185,000 objects were seized. In Malaysia, 451 procedures yielded seizures valued at ‚RM3,877,120,21‛ which is an obvious misprint alluding to the language complications at the ECAP-Project. In Philippines, 563 search warrants were issued yielding seizures valued at P4,732,119,700. In Singapore 240 procedures were conducted yielding seizures valued at S$3,029,251. In Thailand, 7,613 procedures yielded 5,319,535 products. In Vietnam, no information on domestic market seizures was available for 2009. The International Chamber of Commerce (ICC) Commercial Crime Services provides a counterfeiting seizure information system where online users can view various enforcement efforts worldwide. 2010 ASEAN seizures included pharmaceuticals in Thailand; more than RM20 million in pirated DVDs and equipment in 3 instances, RM500,000 in fake shoes, and miscellaneous fake sports goods in Malaysia; in Singapore, electronics, clothing and other miscellaneous counterfeit goods valued at over S$4 million; 18,000 pirated books and the biggest CD pirating operation in Ho Chi Minh, Vietnam; about P100 million or more in fake Louis Vuitton, P32 million in computers, and assorted cosmetics in greater Manila, Philippines (ICC-CCS, 2010). Although data is insufficient to make further conclusions and study, we can see that seizures and raids have and do occur on a regular basis, thus suggesting the letter of the law is valid. Clearly, given the high prevalence of sales and offering or displaying for sale of counterfeit and pirated goods, the enforcement efforts have proven ineffective in managing the problem. Consequently, a vast number of complaints and criticisms of regional enforcement strategies and policies are present.
IIPA & Special 301 Since 1989, the International Intellectual Property Alliance (IIPA) has submitted annual reviews to the Office of the United States Trade Representative regarding IP protection and market access practices in outside of the USA. IIPA is a seven member organization which represents more than 1,900 American companies interested in protecting copyright laws. IIPA members include Association of American Publishers, Business Software Alliance, Entertainment Software Association, Independent Film & Television Alliance, Motion Picture Association of America, National Music Publishers Association, and Recording Industry Association of America. IIPA advocates enforcement reform and has assisted the US government in matters relating to the WTO TRIPS agreement and at the WIPO Diplomatic Conference regarding the 1996 internet treaties. Members also frequently take independent and outside action in addition to work at IIPA. The Special 301 report features a ranking of the threat level that nations pose to American economic interests in the way of copyright infringement. The ‚Priority Watch List‛ is the highest threat grade whereas the ‚Watch List‛ is the secondhighest threat category. Table X: ASEAN Member Status in USTR Special 301 Reports Brunei Indonesia Malaysia Philippines Thailand Vietnam 2001 PWL PWL PWL WL WL 2002 PWL WL PWL WL WL 2003 PWL WL PWL WL WL 2004 PWL WL PWL WL WL 2005 PWL WL PWL WL WL
2006 2007 2008 2009 2010 2011
PWL WL WL WL WL WL WL PWL WL WL WL PWL WL PWL WL WL PWL WL PWL WL WL PWL WL PWL WL WL PWL WL = "Watch List", PWL = "Priority Watch List" Cambodia, Laos, Myanmar, and Singapore not on lists.
WL WL WL WL WL WL
‚Notorious physical markets‛ in ASEAN commonly cited in the Special 301 report include Quiapo, Greenhills, Binondo, Makati Cinema Square, and 168 Mall in Manila, Harco Glodok in Jakarta, Thai ‚Red Zones‛ – Pantip Plaza, Klong Tom, Sapan Lek, MBK Center, Patpong, Seelom, Sookoomwit, and Baan Maw, among others. IIPA (2011b) mentioned an alleged association between pirate gangs and government in Brunei. Indonesian IP courts lacked transparency according to IIPA (2011c). In the Philippines, in 2010, IIPA did not find any criminal convictions for copyright piracy. The largest criminal fine ever imposed in the Philippines for copyright piracy was found to be less than US$5000, and in only two cases were defendants found to have been sentenced to prison (IIPA, 2011g). In both Thailand and Vietnam, physical piracy was found to ‚dominate the market‛ (IIPA, 2011f, 2011h). Reducing physical market infringement is an onerous task for executive branches, and some would easily argue that reduction cannot occur prior to broad economic expansion. Mandhachitara, Phil and Blois (2000) found that the Thai government was aware of high volume sales of counterfeit and pirated goods at
Bangkok’s Pantip Plaza, where shop owners are often tipped off before raids occur, and where ‚selling of pirated software normally resumes within a few hours of a police raid.‛ One can infer that corruption and trade in infringing goods are correlated given the blatancy of the criminal behavior over time and the failure of police agencies and courts to design initiatives which effectively seek to curb criminal behavior. During Russia's 2006-07 bid for WTO membership serve as a good example of government collusion with infringing gangs, where raids cleared out lower tiered supply chain operations in pirated products, but top producers and distributors stayed with police protection (Social Science Research Council, 2011). The longevity of businesses in notorious physical markets suggests bribes are paid for inaction on statutes. Organized Crime and Terrorism ‚With rare exceptions,‛ said John Malcolm, senior vice-president and director of worldwide anti-piracy operations for the MPAA, ‚the people procuring, producing, and distributing this pirated material are affiliated with large and dangerous international criminal syndicates…[which] have no qualms whatsoever about resorting to violence or bribery to conduct operations‛ (ibid). Violent intentions and potential of people selling counterfeit and pirated goods was seen in Public Prosecutor v. Midy Multi-Media (TH, 2000) when enforcement authorities were assaulted during a raid at Pantip in Bangkok. Authorities in Indonesia found that pirate and counterfeit gangs had broad public appeal and support when a 2000 Glodok shopping area VCD raid resulted in severe rioting, burning and looting in the area (Kusumadara, n.d.).
Numerous reports have documented the relationship between piracy, counterfeiting, organized crime, and terrorism. ‚Counterfeiting has become the preferred method of financing for terrorist organizations,‛ said Christophe Zimmerman, a Customs expert from the European Commission, who mentioned that the Irish Republican Army (IRA) was producing and selling fake CDs, DVDs, and other consumer goods (Baguioro, n.d.). The UNODC (2010) featured counterfeit products among trafficking in persons, smuggling of migrants, cocaine, heroin, firearms, environmental resources, maritime piracy, and cybercrime in a mega-report entitled ‚The Globalization of Crime: A Transnational Organized Crime Threat Assessment‛. Criminal groups naturally take up the cause of accruing illicit proceeds, and so it follows that such groups in any dimension would also be funding their activities with counterfeiting and piracy. The South American Barakat network reportedly raised funds for Hezbollah through selling pirated goods along with other contraband. South Asia’s mafia godfather, Dawood Ibrahim, and his D-Company reportedly bring in revenues through piracy of Bollywood and Hollywood films (Gregory F. Treverton, 2009). Japanese, Italian, Chinese, and Nigerian organized crime groups often have cells or partners in foreign territory where they can exploit markets for counterfeit goods (UNAFEI, 2000). Although these illicit incomes may only reach between 0.02% and 0.1% of total criminal proceeds, the nominal monetary values are significant at between US$38 million and US$100 million annually in countries like Germany and the US, respectively (UNODC, 2011). Pierre de Bousquet de Florian, Head of the French Direction de la Surveillance du Territoire said Afgan terrorist groups were able to survive ‚as a
result of crime, hold-ups, credit copying and even counterfeiting designer clothes.‛ In the month following Pierre’s statement, a container of counterfeit clothing belonging to former members of the Salafist Group for Call and Combat was seized in Greater Paris (Union des Fabricants, 2004). A forgery gang in Thailand supplied fake passports to terrorists who carried out 2004 Madrid and 2008 Mumbai attacks (MCOT, 2010). Extremist and terrorist groups in Kosovo, Chechnya, North Africa and Europe, and al-Qaeda were reported to have earned money directly through sales of counterfeit consumer goods or indirectly from organizations which sell counterfeit goods (Noble, 2003). IP crime has been said to be a contender for the preferred method of financing some terrorist groups (OECD, 2007). Notwithstanding the cases and theory available on the subject, Pollinger (2008) found the relationship between counterfeiting and acts of terrorism ‚inconclusive‛. Links between piracy, counterfeiting, and international organized crime, however, are indisputable. Economics of Piracy and Counterfeiting In the first roughly 45 years after cases involving brand counterfeits emerged, this segment of the black market economy has gained between 5%-7% of world according to popular estimates (Eisend & Schuchert-Guler, 2006; IACC, 2012; OECD, 1998). Including digitally pirated products, estimated values of counterfeit and pirated goods in 2008 topped US$650-$775 billion annually, forecasted to rise to US$1.77-$1.89+ trillion by 2015 (Frontier & BASCAP, 2011). Between 2000 and 2007, the volume of counterfeit and pirated physical products more than doubled worldwide and the market share of counterfeit/pirated products increased by about 10% (OECD, 2009). Global statistics often include only cross-border trade. The
Sixth Global Congress on Combating Counterfeiting and Piracy (GCCCP, 2011) Paris Outcomes Statement said ‚there is a strong need for empirical evidence‛ on the subject, which is difficult to obtain and in short supply (Gentry, Putrevu, Shultz, & Commuri, 2001) given the criminal nature of the market segment. Research into the buying behavior and cognition among consumers of pirate/counterfeit goods is limited primarily to qualitative with most evidence pointing toward price being the biggest motivating factor in making decisions to purchase fake goods. One can easily infer that in a society where per capita income is lower (i.e. developing and third world nations), counterfeit luxury goods would gain a sizeable foothold on the domestic market as the general population demands access to status symbols yet lacks sufficient monetary means to acquire the genuine articles. Cultural attributes have been loosely associated with IP economic topics. Santos and Ribeiro (2006) characterized a counterfeiter country as one in which there is lower power distance, uncertainty avoidance, and individualism. However, these findings are not valid under all conditions and do not fully represent virtual market activity. Nonetheless, when discussing the disrespect for private and personal property associated with infringement, commentators often enough bring up the Chinese Confucian and Communist systems (Yu, 2003), perhaps serving special political interests of the Occident along with a pro-IPR interest. We can plainly see that, in general, wealthier nations having companies that invest more in R&D value IPRs more actively and thus have lower rates of physical market infringement. For example, BASCAP (2007) ranked the top ten most favorable countries for IP – USA, UK, German, France, Japan, Canada, Switzerland,
Netherlands, Singapore, Australia. Proserpio, Salvemini, and Ghiringhelli (2005) found that perceptions toward piracy depended on complex relationships between legal, cultural and socio-economic factors. But the bottom 10 countries – Ukraine, Turkey, Pakistan, Taiwan, Vietnam, Indonesia, Brazil, India, Russia, China – showed that per capita income or technological advancement are not the only factors contributing to IP protection. Haque, Khatibi, and Rahman (2009) found that social influences, price, economy, and personality all play a role in piracy. Relating to software piracy, Moores (2003) found that although there is a cultural component influencing behavior and attitudes, the dominant factor is economic. BASCAP (2009) summed up consumer attitudes about counterfeiting and piracy as reflecting a lack of resources, lack of legal recourse or deterrent, and lack of moral/ethical remorse. Consumers were found to be motivated away from buying counterfeits and pirated goods when and if there was physical harm associated with the purchase (i.e. fake drugs, dangerous toys), a reduced supply of fake goods, or threat of prosecution for consumption. In the context of world trade, piracy may be seen as a ‚victimless crime‛ but moreover, it may be seen as a nationalistic undertaking whereby infringement of foreign IP is considered patriotic or beneficial to the national economy. The US International Trade Commission (Horan, Johnson, & Sykes, 2005) considered foreign IPR infringement as a ‚nontariff measure‛. Foreign IP infringement has been considered expropriation by business persons, investors, proprietors and others (Anton & Yao, 1994). American Senate Bill S.2237 (2004) was called the ‚Protecting Intellectual Property Against Theft and Expropriation Act‛.
Music & Film Many of the 2.5 million or more jobs lost to piracy and counterfeiting in G20 nations (BASCAP, n.d.; Frontier & BASCAP, 2011) are in the music and film industries as both digital and physical piracy are normalized into the heterogeneous consumer market. In 1996, at the beginning of the internet’s expansion, 12.5% of music sales and 33% of total music units offered to markets worldwide were pirated (OECD, 1998). By 2005, music and movie piracy rates in selected ASEAN nations were as high as 100% (Proserpio et al., 2005). Table X: 2005 Piracy Rates in Select ASEAN Nations Music Movies ID 63% 90% MY 61% 80% PH 32% 74% SG 20% 25% TH 43% 63% VN 100% 100%
Online media piracy is far more prevalent than physical market piracy. IFPI (2009) found that 16% of all European internet users in 2008 reported having regularly used file-sharing services for retrieval of free pirated music. P2P file sharing may account for up to 80% of ISP network traffic, theoretically costing the industry billions in revenues. A 2008 MTV Networks Asia survey found that youth in the target Asia Pacific region were demanding more media but unwilling to pay, preferring instead free downloads (Television Asia, 2008). Napster, Kazaa, Megaupload and others like them are not the first incidents when proprietors have needed the courts to help protect IPRs against slave copying. The invention of the Xerox machine in 1959, the mass marketing of audio tapes in the 1970s and of video tapes in the 1980s allowed people to copy others’ works
(Liebowitz, 2006). In Sony Corp. v. Universal City Studios, Inc. (1984), movie and television industries sought injunction against the manufacture and sale of video tape recorders (VTR) due to unauthorized reproduction of copyrighted material. While hardware like the DVD ripper/burner and VTRs certainly play a part in music and film piracy, the majority of losses for those industries occur online where methodology has not been developed enough to completely estimate losses (IIPA, 2010). The effects of digital and other piracy are certainly quantifiable to some extent regardless of immeasurability of the problem at its furthest limits. Between 2003 and 2010, global top 50 debut album sales fell 77%. Between 2004 and 2010, the total value of the global recorded music industry fell by 31% (IFPI, 2011). ‚We can’t compete with free. That’s an economic paradigm that doesn’t work,‛ said 20th Century Fox Films Co-Chairman James Gianopulos (Smith & Telang, 2009). Castro (2010) quoted that same outlook in a report arguing that copyright enforcement leads to more innovative media content and services for consumers. Accounting and management surely knows it’s impossible to compete with free, and creative may argue that some declines in the artistic quality of media since the advent of the internet may be a result of widespread infringement and reduction of potential to capitalize on certain types of content in a market where free is the demand price. A&R spending at global record labels has been about 16% of sales revenues (IFPI, 2010), which is a higher than the average R&D expense in the pharmaceuticals and biotechnology industry. A new pop act might cost about US$1 million for an advance, initial recording session, 3 videos, tour support, promotion and marketing. For superstar acts, those costs can easily rise to over US$4.5 million
without tour support. When albums are leaked onto the internet before the release date, those costs are more difficult to recover. When physical markets in a certain region are dominated by pirated content, then marketing costs essentially cannot be recovered, and potential markets may not be entered by licit providers. In 2004, the MPA funded a study to provide an assessment of the film industry’s losses to piracy. The report concluded that US motion picture studios lost US$6.1 billion in 2005 due to piracy. 80% of those losses were from overseas while 20% were from within the USA. 62% of the 2005 losses were from hard goods like DVDs while 38% were from internet piracy. Piracy rates were highest in China (90%), Russia (79%), and Thailand (79%). Worldwide, the MPA estimated the film industries lost US$18.2 billion to piracy. In 2005, internet piracy had begun taking a large market share among viewers of infringing media, which led to reductions in large volume CD and DVD seizures in the EU (EUROPA, 2006). According to MPAA, worldwide box office sales with or without increased piracy, increased by 25% between 2006 and 2010, so there is still hope for the industry. Software Microsoft, Adobe and other major American software companies have over 90% market share in core business software. Experts do not agree that use of pirated software threatens individual companies or contributes to less economic growth than the use of licit software. ‚It is difficult, if not impossible, to quantify the net effect of counterfeiting and piracy on the economy as a whole,‛ the US Government Accountability office (2010). Effects can be qualified much easier, however. Piracy has widespread market economic impact. Just as the big firms cannot compete with nearly free versions of their own software, neither can new firms
compete with high quality software at nearly free prices. R&D budgets the size of those at major software companies are impossible to develop and sustain at smaller firms, especially those without access to foreign markets where costs can be recovered in licit sales at full retail price. According to the Social Science Research Council (2011) ‚Piracy acts as a barrier to entry for competition, especially ‘free’ open-source alternatives that have no upfront licensing costs. When these emerging markets begin to grow, as most did in the last decade, piracy ensures they do so along paths shaped by the powerful network and lock-in effects associated with the market leader…all the major companies could adopt stronger online authentication measures, making it more difficult to use and maintain pirated software…but strong versions of these options go unexercised for a variety of reasons, including fear of alienating paying customers, fragmenting the installed-code base, and diminishing the other positive network effects of widespread use.‛ An operating system and business software package are parts of essential infrastructure in the modern working environment. High courts in Spain, Finland, and France have declared internet access a fundamental right, a view that 79% of respondents in a BBC survey in 26 countries shared. People inherently understand that freedom of occupation is a human right and one protected by treaty, so moral/ethical boundaries of using pirated software are blurred. Even at the big firms, however, accountants and managers are not very likely to adopt the ‚network-effect good, profit bad‛ outlook. Nobody who isn’t giving it away for free is looking to give it away for free all that much.
Domestic authorities in ASEAN have a major interest in domestic and maybe regional products before foreign brands from the Occident. Treaty and statute protection could be provided to multinational firms, but it’s likely only to happen following stronger protection of domestic firms. For domestic firms to qualify for protection, they need to work more, develop more, and produce economic effects locally. Emerging markets have such potential to establish new brands and create value via providing competition. According to Business Monitor International (2011a-e), software is a major growth in industry in the ASEAN group. Building a sustainable competitive advantage in the software industry as an ASEAN-based company will take a different approach, work ethic, and creative pricing and promotion strategy through the first decade of offering premium products, but without further opportunity to retrieve licensing and retail fees, without more market protection upon entry, companies are stuck with few options. A chicken-or-egg paradox between IPR and market capacity may exist. Table X: Estimated Software Industry Growth Rate (2011-2015) MY 49% PH 47% SG 49% TH 47% VN 106%
Software piracy statistics at a glance share similarities with movie and music piracy but emerging market rates tell a story of unmet demand more than with entertainment piracy. According to Business Software Alliance (BSA/IDC, 2010, 2011), rates in emerging economies are two and a half times higher than in developed economies. Purchasing power parity is a distorted concept when discussing high-tech products and services. The majority of developing world markets simply has insufficient income to afford tier-one prices. In 2010, the ratio of
legitimate software to unlicensed software on the market was 100:63. Pirated software was a growth industry in the years following the successful mass marketing of high speed affordable hardware. Economic benefits of licensing and licit software use include revenues to private industry and major tax revenues. Monetary value of BSA-estimated software piracy in countries like Indonesia and Thailand is above 0.1% of GDP. The economic value created through use of pirated software in businesses is unknown but likely above 10% of GDP. If 70% or more of the computers in a country are running pirated software, the effects of a sophisticated type of malware targeting illicit operating systems, or of a new fast-paced comprehensive active enforcement strategy are potentially devastating for entire districts and in some cases whole nations. Using dollar values as a basis of comparison and judgment, the EU and United States are by far the world’s biggest pirate markets. By using rates, the focus may be more easily put on jurisdictions like China and those in ASEAN which consistently rank among nations most severely affected by piracy. In terms of threats to growth in percentages (i.e. on stock exchanges), one may guess that higher rate win-lose offender nations pose the most significant risks, whereas in terms of lost tax revenues and jobs one may posit that lower rate winners are worse. If monetary growth is accompanied by only minor reductions in rate, China may be the first high rate winner up for assessment, but until such a mega-established-criminal presents itself in nation form, conclusions about the relative harms are more often subjective than universally verifiable. Table X: BSA Statistics for Selected Countries and Regions (2006-2010)
Piracy Rates 2006 2007 2008 2009 2010 BR 67% 68% 67% 66% ID 85% 84% 85% 86% 87% M Y 60% 59% 59% 58% 56% PH 71% 69% 69% 69% 69% SG 39% 37% 36% 35% 34% TH 80% 78% 76% 75% 73% VN 88% 85% 85% 85% 83%
Commercial Value of Unlicensed Software ($M) 2006 2007 2008 2009 2010 $13 $15 $14 $19 $350 $411 $544 $886 $1,322 $289 $119 $125 $421 $96 $311 $147 $159 $468 $200
$368 $453 $606 $202 $217 $278 $163 $197 $233 $609 $694 $777 $257 $353 $412 $10,40 $10,62 NA 22% 21% 21% 21% 21% $8,104 $9,144 1 $9,379 3 W $10,64 $11,65 $13,02 $11,75 $12,77 E 34% 33% 33% 34% 33% 2 5 3 0 1 CN 82% 82% 80% 79% 78% $5,429 $6,664 $6,677 $7,583 $7,779 "NA" = North America (excluding Mexico); "WE" = Western Europe; "CN" = China Plainly one can deduce that the retail sales increases some economic livelihood at the individual and small-business level, although given the criminal nature of the trades, there is low potential for sustainability. Criminal proceeds are laundered and funneled into unsound investments and public offices are robbed of their funding through tax evasion, but macroeconomic policy is not well developed in the developing world, and there is proof that a strict tax regime with active enforcement does not collect, as the cases in the USA and wealthier EU member
nations show. Higher rate offenders with lower dollar values have less effect at the macro level in absolute terms, but as a percentage of potential tax revenues, and as a portion of GDP, and as an economic loss proportional to current accounts the damage can appear greater. Microsoft estimated that for every US$1 that the company realizes from reduced software piracy, other companies in the software ecosystem will realize US$5.50 from increased revenues and lower costs. Companies and governments alike probably prefer revenues and tangible rewards over network effects. Dangers of Non-Genuine Software Although use of pirated software is surprisingly popular in the developing world, adulterated codes can pose significant threats to personal privacy, financial safety, and machine security. Theoretically, one may be able to make a case that from a computer scientists’ perspective, any computer network environment is intrinsically unsecure, or is only as secure as hackers allow it to be. World famous hacker group ‚Anonymous‛ has shown very clearly that even the most up-to-date and sophisticated security programs, designed and operated by top performing professionals at government and or private corporate servers are still penetrable. Theoretically, no code or encryption package is unbreakable. What one person or group encodes and tries to protect, another person or group given adequate time and resources can decode and violate. Knowing the continual threats of hacking, phishing, and other computerrelated scams, users of pirated software may find a sense of relative comfort with their systems. However, by installing and running a software package, especially an operating system, one essentially gives carte blanche control of the machine to a
third party. Consumers presumably trust that DVD and CD ROM sold at pirate malls and shops do not contain ‚backdoor programs‛ or additional code which could run a separate set of commands and programs away from the average user’s view. In reality, the threat that ‚ILLUSION‛ or ‚GODZILLA‛ or ‚MOZARD‛ and other pirate hackers pose when they offer cracked programs for sale to the public may be only slight, but I have no evidence to support such a hypothesis. Regardless of empirical corroboration on either side of the malware issue, the mere possibility that one’s home or office machine may be a slave to a third party conducting illicit matters remotely is alarming. In an IDC (2006) study, 25% of accessed websites offering counterfeit product keys, pirated software, key generators, or crack tools attempted to install either malicious or potentially unwanted software. In the same study 11% of key generators and crack tools downloaded from websites and 59% of those downloaded from peer-to-peer networks contained either malicious or potentially unwanted software. A range of malware was found, including software that was designed to open connections on a user’s system and allow third parties the ability to download and execute programs on the infected system; keystroke loggers for financial crime; redirecting traffic to fraudulent PayPal websites; Trojan droppers; adware; bots that take over a machine to relay spam, store illegal files, or give third parties access to private data. Organizational costs of recovery on a single workstation can reach US$1,000 or more. Microsoft told a story about how companies which used pirated software were 73% more likely to experience a loss of data and 43% more likely to have computer failures lasting 24 hours or longer (ICCWBO, 2010).
Software and computer industry experts appear to disagree about the risks of using pirated software. Hackers, amateurs, disgruntled hourly employee programmers, and the young men who generally purchase pirated content more than other age groups seem to believe that the hackers’ credo – information wants to be free – solves the problem, whereas PhD computer scientists, major project developers, and government security system techies apparently exclusively discourage use of pirated software due to data security issues. Some companies and executives ostensibly overlook the character component of using counterfeit and pirated software, but organizations face risks to their image when they violate IP law or major information ethics rules (Microsoft, 2009), especially if customer or employee data is compromised as a result of mismanagement. For example, when I went to the Samsung office in Bangkok in 2011 for an interview with one of the legal staff, I was surprised to find a notice on the reception doorway at Samsung which stated that anymore instances of discovery of pirated/counterfeit software installed on company computers by employees may result in disciplinary action. Samsung most certainly had sufficient cash to purchase licensed software, although so have several schools I worked at, as have Chinese government offices (Horan et al., 2005), but those organizations allowed, tolerated, overlooked, supported, facilitated, or organized use of pirated software, revealing philosophical dilemmas and conflicts. Both idealism and perceptions of the value of business ethics were inversely correlated with propensity to violate IPRs in recent studies (Lee & Workman, 2011; Winter, Stylianou, & Giacalone, 2004). Opportunism was to blame for employee use of non-genuine software in a KPMG (2009) study where availability was the most popular reason for use, followed by a
three-way tie between price, because it was the latest version, or because other were using it. Informed users outside of highly profitable labour markets may be playing safer odds than those in places like the United States, where the internet is largely unregulated. While China has some of the highest piracy rates in the world, in 2007 it suffered US$7.7 million in damages from Botnet attacks while the USA encountered US$20.6 million in attacks with less than 1/4th the piracy rate as China. Japan reportedly suffered US$142,000 worth of Botnet attacks in the same period with a little higher piracy rates as the USA (ibid). Clearly, the threat level that pirated and counterfeit software poses depends on various factors and most likely some one or more unknown variable(s). The wise advice at this stage is ‚use legitimate software if you have access to it and if you can afford it‛ but a remarkably large number of people obviously use non-genuine software without reason enough to stop. Methodological Discrepancies Although none could argue to successful conclusion that piracy and counterfeiting result in nil losses to businesses and economies, the precise nominal value of the damages is unclear and arguably incalculable. BSA (2010, 2011) quoted monetary values for software piracy are calculated using a very simple formula multiplying the estimated number of unlicensed software units by standard licit market prices. Unlicensed software units are estimated by comparing the hardware sold against the number of software units sold legally. The simplicity of the methodology is brilliant, but on the other hand it does rely on a base assumption that substitution rate is virtually 100%, that is pirated products are normal goods.
I suspect pirated products are inferior goods which would be consumed less as incomes among consumers rise. Furthermore, it is impossible to accurately and reliably estimate the substitution rate among global consumers of pirated/counterfeit software, although one may be able to rely on the logical conclusion that it is low considering that the only benefit of pirated/counterfeit software is the price and serious threats are incurred to obtain the good at the satisfactory price, suggesting a lack of ability to obtain the genuine product. Economically speaking, it is virtually impossible to imagine wealthy individuals and organizations deriving the same utility from counterfeit/pirated software as impoverished individuals and struggling organizations. In the same vein, higher education and computer literacy may be inversely correlated with propensity to use pirated/counterfeited software. Substitution rates for other products may be higher considering that there is a lesser privacy and financial security threat posed by non-genuine garments, handbags, and other media than there is with software. Substitution rate for pharmaceuticals may be nearly 100%, but the substitution then is most often not a conscious one, and consumption is coerced through fraud by the tertiary seller or previous seller on the supply chain. Hygiene products and other topical liquids and gels may also have a substitution rate nearer to 100%. Rates for consumer electronics may be higher than 50% due to seller misrepresentation of the nature and quality of the products. Consumption of luxury goods increases as income increases. Given access to cash and credit to purchase genuine articles, consumers of pirated/counterfeit goods may sustain consumption of genuine products and curtail use of the fraud, but this artificial scenario lacks empirical verifiability. To be accurate and reliable, it is
imperative that arguments are kept within the constraints of the practical world, wherein counterfeit goods purchasers do not have sufficient funds to acquire genuine luxury items. Herein lies one plausible real substitution rate among all products when the purchaser consciously and knowingly chooses the counterfeit/pirate over the real good: zero. Counterfeit/pirate goods purchases are just that whereas genuine product purchases are the only such potential or active purchases of the real items. We cannot discern whether or not the licit market would grow if the illicit market were reduced or eradicated. For these reasons, genuine goods and fake or unlicensed goods are separate categories of goods to be viewed as mutually exclusive and distinctly different. Illegal goods, the economics thereof, and interactions with the legal goods economy are not knowns by scientific standards. Cases are known and numbers of cases are growing, but some unknown parts exist from each perspective of the criminal-authority-institution meshwork. The ‚dismal science‛ itself is an imprecise and contradictory soft-science of facts more than legitimate theories by natural scientific standards. Law is largely sets of self-validating theories which sometimes complement and at other times confound other similar self-validating theories and sets thereof; the larger network has only started to be discovered, so harmony among the statutes and other constituents of the larger legal system is probably a long time away. Psychology and sociology similarly rely on base assumptions which cannot be fully proven but can be disproven with surprising effect. To a noticeable extent, sufficient means are lacking to analyze, interpret, and report as a scientist on issues like black market behavior and criminal influence on mainstream licit markets.
‚Losses‛ to businesses from counterfeits are economic losses. Opportunities are lost, but translating opportunity into a static monetary value may be impractical if not impossible. Accountants cannot include such ‚losses‛ due to economic conditions on balance sheets or to receive tax write-offs. Accounting and economic costs, or tangible and intangible costs, are very different and should not be confused for one another. Accounting costs are real, provable, measurable, and finite. Economic costs, while not wholly illusory, are more psychological or systemic in nature. Economic costs cannot be pinpointed for their precise magnitude in each case, especially for an entire industry. From the perspective of a single account, when a sale goes to another account at another business with price the main motivating factor for the switch, a mainstream businessperson might easily consider that a ‚lost sale‛, but in fact it was a sale at a different account, and in the larger economy that value was not lost, it was simply redirected. Thus counterfeiting and piracy are not ‚stealing‛ per se because no party’s fixed-quantity real property is taken up without permission and transferred directly to another. Goods obtained through piracy and counterfeiting are either done so for free on the internet or as straight cash purchases in physical markets. One party’s reproduction does not restrict another party’s potential to reproduce. The IPR owner(s) or holder(s) can continue to have and sell their products at the same time as counterfeiters and pirates have and sell the products. In general the situation does not resemble a case of ‚theft‛ because no tangible property is moved from a real owner to another without compensation or agreement. There is no ‚lost inventory‛ which has been stolen in the average piracy or counterfeiting case.
Furthermore, in an open or free market economy, consumers have choices among competing businesses, so theoretically there is little or nothing constraining purchasing behavior to one of very few options where one account’s credit translates directly to a loss of credit on another, and one’s credit certainly does not imply another’s debit. A false dilemma has been proposed whereby there are only two choices – counterfeit and genuine product X – and consumers may only choose to purchase the genuine item or a substitute (i.e. they may not discontinue use or significantly alter consumer behavior). In the same way, jobs ‚lost‛ to counterfeiting and piracy are more accurately jobs not created by specified businesses in a specific industry which may not have created the jobs had there been no piracy or counterfeiting at all. First, a false cause may have been found, leading to conclusions that counterfeiting caused job losses based presumably upon evidence only that both counterfeiting and demand for jobs existed in the marketplace. Then, the logic of evaluating ‚losses‛ was founded upon a classic denying the antecedent fallacy whereby one concludes that not P implies not Q merely because P implies Q (i.e. counterfeiting implies jobs lost, therefore reduced counterfeiting implies jobs created). In fact, there is no clear evidence that counterfeiting and labor market activity vary inversely. Counterfeiting and piracy remain largely unknown in marketing and business. Companies could be making ad hoc arguments based on limited valid information for the purposes of quelling social unrest about their high profitability versus unspectacular job creation practices while at the same time seeking further profits by discrediting IPR infringement. Counterfeit and pirated goods, artificial differentiation, may be unique economic phenomena not easily explained within the
current paradigm which the most profitable businesses and industries have major interests in maintaining support for. Anti-Piracy and Counterfeiting Among the 3 primary stakeholders, bigger business and government have a 2/3rds majority over consumers who want to have lower-priced counterfeit and pirated goods. If we add-in a fourth stakeholder, small business, which may split on the issue, arguments against counterfeits and pirated goods can still outweigh arguments for. Legislative framework at the domestic and international levels reflect the apparent majority opinion which holds that counterfeit/pirated goods are more damaging than helpful in the economy, although implementation of the TRIPS and other treaties has not been completed in many jurisdictions in the developing and third world. Courts have validated and upheld statutes, albeit to a lower degree in the developing and third world. Executive branches remain the most obvious obstacle in pursuing more cases for more change in the market, and it appears that executive branches which are not acting in an ex officio and comprehensive fashion are in the minority 1/3rd, opposed by the both the judicial and legislative branches of government. Contradictions among the branches of government may reflect a larger social conflict or juxtaposition of broader socio-economic issues and IPRs. More enforcement means more fines, more criminal penalties, more active police and other enforcement agents, which could stir greater unrest in countries still transitioning from military regimes to civil democracy. Where education levels are low, raids on small retailers may appear to be unconstitutional or unreasonable search and seizure, and many people who are generally ignorant of the formal laws may direct their
patriotism toward complaining about perceived abuses among the police for incidents where it seems the government has hampered free market activity rather than protected the citizens. Table X: Percent of population ages 25 or older with at least a secondary education, ASEAN (UN, 2010a) Secondary education levels in the ASEAN region are generally low, which makes it easier for BR foreign government and bodies corporate to KH disregard the popular opinion. Domestically, ID governments are compelled to allow citizens to LAO provide for their basic needs and those of their MY families without interfering given the relatively MR low levels of opportunity those without so much as PH a high school diploma face. Domestic economies in SG areas where education is low need to provide goodTH paying jobs to people with very few marketable VN skills or intellectual capacity, which is a difficult task. Luckily for some, although at the ‚cost‛ of others, black market economic niches provide these living wages to people who may otherwise be out of a job, more desperate, and more predisposed toward violence. Females 66.6% 11.6% 24.2% 22.9% 66.0% 18.0% 65.9% 57.3% 25.6% 24.7% Males 23.5% 20.6% 31.1% 36.8% 72.8% 17.6% 63.7% 64.8% 33.7% 28.0% Despite all of the weaknesses in and threats to the model of lawful behavior and compliance in the field of IP, the IP law promotion, advocacy and development industry has grown and expanded its knowledge, financial position and political influence worldwide in numerous languages in the 40 or more years since its
permanent seat in the daily administration of big business and government in virtually every country. The internet offers a wealth of information on the subject, and the internet alone has driven growth in publishing many times over in less than 20 years. Microsoft funds studies and other projects on counterfeiting and piracy, focusing primarily on the risks (e.g.Waterman, 2007). UNESCO and other UN programmes fund studies and provide high-quality analysis (e.g.Throsby, 2002). The UN library offers readers of the Journal of World Intellectual Property access to case studies like the Kappa sportswear company’s experience with counterfeiting (Sindico, 2005). The OECD offers unclassified reports on the economic impacts of counterfeiting and piracy (OECD, 2007). Interpol conducts operations on the project (e.g.Newton, 2010; Noble, 2008). Media production companies create original content on the subject (e.g.BBC, 2011). Secular governments and international partnership projects routinely meet and act on the subject of IPR development, enhancement, protection and enforcement (e.g.APEC, 2010a; Fowler, n.d.; WTO TRIPS Council, 2006). A real cooperative effort has occurred and is continuing to occur in IP. Bridges between parties, inroads between countries, links between institutions and organizations have been and are continuing to be made. Alas, providing free information is not a profitable endeavor. Public funds or private charitable contributions including individual researcher time is also why we have such a wealth of knowledge and articles available online. Universities and collegiate journals offer treasures on IP topics, although not always free. There is a paying publishing market and even IP writers have a profit and self-interest in their work, but this is not
immoral is it? Is making a profit a sin or haram or other forbidden fettish or pleasure? Lawyers say ‚no‛. There is a lot of opportunity in IP, including in black market economies. There are opportunities also for police to arrest, for prosecutors to try, and for judges to sentence to fines and or prison. There are opportunities to seize products because it is done in the line of duty. Opportunities to accept corrupt payments exist, as do opportunities to gain a foothold – and not a bit more – on control of the mob. There are also opportunities to strengthen the system, and opportunities to create sustainable opportunities, which are opportunities that should be capitalized on. If the market order presupposes a legal order, then we have competition presupposing a competition. Opportunity then results at the judicial level where rules can be applied to protect people’s rights to compete. An opportunity to create broader transparency exists if judicial officials can muster the ambition to allow more comprehensive defense arguments into the courtrooms. If the legal order which the market presupposes is corrupt, fundamentally misguided, volatile, or one which uses ultra vires techniques, then the market shall follow. In the Sino-centric world, society may be perceived as preparing the crime whereas the criminal may be perceived to have acted only out of opportunity. In areas where legal origins are Confucian, right living may be perceived as being capable of coming only from within the individual, whereas in Taoism and Confucianism people may be inherently distrustful of formal law (Dammer & Albanese, 2011). Such a legal order seems to lead to laissez faire economics, but communism and moreover militarism effectively suppressed that natural exchange
throughout ASEAN in the 20th century when capitalism was loathed by much of the impoverished population. Borrowed and turbulent pasts can significantly limit the extent to which the majority of the region develops successfully. Enormous herds of people throughout history have made the mistake of trying to copy others when independent action is required. Untold numbers not only failed to imitate another but also lost their own ways in the cycle of mediocre envy and vanity. Education was the big initiative at Microsoft in 2011, and education was on the top 5 projects to sponsor at a slew of our most philanthropic organizations. With some hard work and a lot of luck, but probably only with an education can people learn to walk again. People need free education though, and volunteers are in short supply compared to the real demand (i.e. lack of education = need = demand). There is then, of course, a real dilemma. Methodology Herein an original mixed methods multidisciplinary empirical study is presented. The aim of the research was to discover facts relating to market and legal conditions in the South East Asian region. Intellectual property rights were the focus of the study. OECD (2007) recommended strong and sustained action from, and cooperation between government, business, and consumers on the topic of counterfeiting and piracy. The researcher addressed each of the three stakeholders directly to assess the level of unity among them and to assist with the problem solving process. Kolb’s and Jung’s psychometric instruments did not strongly relate the author’s personality with any one style. Topics related to the study were diverse, including an array of professions, disciplines, and philosophies. A plurality of paradigms and
broad approach utilizing a variety of techniques suited both the author and the subject matter. Kolb’s learning cycle provided guidance on creating a comprehensive study inclusive of qualitative and quantitative methods incorporating active, reflective, abstract, and concrete stages. Inductive reasoning was applied in exploratory research. Deductive reasoning was applied in studying certain consumer behaviors. Positivism and interpretivism complemented each other in the legal study as the researcher attempted to understand and interpret both theories of law and behavior. Numerous authors have supported the existence of links between quantitative/qualitative methods and interpretivist/positivist epistemologies (e.g. Knox, 2004). Etic and emic perspectives were considered via observation and interviewing, or passive and active methods of inquiry, respectively. Physical market conditions were surveyed and understood from the first-person point of view, consistent with phenomenological and ontological philosophical methodology as the researcher attempted to observe life in the market at it happened naturally (Woodruff-Smight, 2008). Where conflicts existed, or where criminal behavior was noticed, the author had to consider logic and ethics to examine reasoning for certain actions, and in determining whether a clear right or wrong existed regarding such actions (Hofweber, 2011). The juxtaposition of the market economy and legal field enabled a study of the social dimensions of knowledge or information which was undertaken using social epistemological methodology (Goldman, 2006). Considering that this was not a natural scientific study, but one instead focused on matters of a more social dimension, strict adherence to the most rigid scientific
methodology was impractical if not impossible. However, the research was undertaken with the view that hard and soft sciences are unified in several ways, which the logical empiricism movement previously posited (WIPO, 2011k). Mathematical constructs relating to, inter alia, domain, range, probability, combinations, union, intersection, and ordering were imported to interpret nonnumerical information in an abstract framework. A legal positivist approach guided the literature review portion of the study, whereby the letter of the law was paramount to the morality of the law or that in the enforcement of the law. Linguistic meanings significantly affected the qualitative study of both interpersonal discourse and in literature review. Semantics were assumed to have a dynamic quality influenced by context, time, culture, and n other variables knowable and unknowable (van Eijck, 2010). In most cases, the most obvious or common definition of a word was considered the default meaning. Theories of epistemic and doxastic modalities, for which syntactical representation is non-essential herein, led the author to assume that not all beliefs are based on conscious reasoning (Hendricks, 2006; WIPO, 2011j). In cases where confound, conflict, and paradox existed, such as when there were laws prohibiting piracy and counterfeiting yet piracy and counterfeiting were ubiquitous in markets, implicature was interpreted and doxastic alternatives were explored in ascertaining valid reasons for certain phenomenon (Davis, 2010). In interviews and utterance interpretation, the speaker’s intended meanings were sought which related to Grice’s generalized conversational implicatures, although it is likely that Levinson’s presumptive meanings were also inferred at a less conscious level, which related to the hearer’s meanings (Jascvzolt, 2010).
With the mixed methods interdisciplinary approach, the researcher was able to triangulate the subject matter. Effects of the researcher’s personal worldviews were minimized and objectivity was maintained via the diversified methodology. To the extent that a third party may consider this study in an unbiased, realistic fashion, methodological criticisms may be neutralized by utilizing a few classic mathematical and philosophical theorems regarding the nature of truth and proof. A few bold scholars in the Vienna Circle addressed several paradoxical logical and mathematical ideas, and eventually helped change a stubborn paradigm in sciences. Kurt Gödel’s Incompleteness Theorem showed that in every branch of mathematics, there are statements which cannot be proven true or false using the axioms and rules within that system (WTO, 2009a). Karl Popper contended that all knowledge is merely conjecture or hypothesis which can only be provisionally supported, that a theory is can never be proven true but is instead only falsifiable (WTO, 2009c). Alfred Tarski’s Undefinability Theorem showed that truth is undefinable and that there is no language which can formulate a theory of truth within its own boundaries (WIPO, 2011c). Alan Turing, a homosexual British computer scientist who cracked the German Enigma code, later applied Gödel’s theorem in the infancy of the field of computer science (van Glabeek, n.d.) . Depression, psychosis, dementia and suicide were results of the ‚dangerous knowledge‛ the men held (Malone & Tanner, 2007), but real breakthroughs were made by those who suffered for their work. Obviously, most people hold that fact and truth are definable concepts, and people find it necessary to subjectively validate ideas relating to concrete reality on the daily level. Reality itself may be a malleable concept, and we may then be able to formulate a lengthy string of logical statements leading to a conclusion that there is
no singular reality, nor that any one subjective reality is entirely valid from all possible external positions, and thus if unanimity is required to qualify truth or prove a theory, then a theory would only be possible to disprove or falsify. For the pragmatic purposes of the present research, the author will not attempt to refute prior theories to the extent that proof will be provided showing that certain theories are considered valid among experts, or have gained popularity and may then be considered adequate suppositions in support of claims or logic within our language. Theories or conjecture proposing ideas contrary to those supported in this research may be considered valid within finite systems outside of the system in which this research is validated. Criticisms need not be actively disproven because they are already inherently falsifiable in much the same way as it may be possible to falsify the present research. In defense of the relative merit and stability of the present research and methodology, simple invocation of a solipsist zero-sum paradox may create a stalemate if pluralism is not a precondition, and the research shall then remain valid internally and within a subsystem separated from contenders. When organizing a plethora of theories which are all valid and verifiable within semi-autonomous systems of academic thought, no one model is sufficient for determining the best logical path. Occam’s Razor, reductionism, nominalism and doctrines of competing theories rely on a dichotomy which was an ineffective means of addressing the issues targeted in this research. Goals of the eclectic model in this research were to harmonize competing systems of thought, and to embrace diversity rather than to pose a fantasy of ultimate or indestructible truth as a singular entity knowable and communicable by a single person in a single piece of research. Qualitative Methods
Literature Review Qualitative literature review methods followed a basic flow process.
International legal analysis and consideration of issues are made using Article 38 of the Statute of the ICJ as a guide, with the applied prioritization of constituents of the law as stated in 38(1), in order from a to d, and as indicated in 38(2) when appropriate. Convenience and accessibility issues in conducting research in Bangkok, Thailand led to the bulk of references herein being from online sources. Quality of resources was not decreased in the shift away from hard-copy and to electronic-based research methods. Google and ProQuest searches provided a vast number of articles for review. WIPO offered statutes and treaties online. ASEAN, APEC, WTO and other international government organizations provided literature on the topic. National government websites were also utilized in literature research. Interviews
Survey participants who were willing to openly discuss IP related issues were encouraged to engage in a free-form conversation on the topic. Businesses with interests in IPR protection and enforcement were contacted via phone, in person, and or via email by the researcher who tried to interview legal staff, managers or other personnel with knowledge of IP management systems. Microsoft, Sony Music, Universal Music, Warner Music, the Princeton Review, Adidas, CNBC, and Samsung accommodated requests for interviews in Bangkok. Universal Music personnel forwarded information regarding the local collective rights management group TECA, which provided information via email. The American Chamber of Commerce also hosted an interview in its Bangkok office. Government and trade offices were approached in person and or via email and interviews were solicited. A WTO representative responded via email. The offices of the US Trade Representative, New Zealand Trade and Enterprise Office, and Royal Thai Police Economic Crime Suppression Division hosted in-person interviews in Bangkok. Quantitative Methods Potential Consumer Survey Target Sample Population Respondents were comprised of foreign English-speakers, primarily international tourists, in Thailand. The researcher had advance knowledge of the potential respondent population’s probable characteristics after having lived in Thailand for six years, and having conducted survey projects in Thailand with foreign English-speakers prior to the present study. For the benefit of time
efficiency, the target sample population was primarily ‘Western’, meaning primarily Caucasian, Latin, and Negro, or groups which were most likely to speak English as a first or second language. Survey Design Questionnaires were designed to collect opinion data regarding intellectual property issues. The likelihood of random participants having any technical knowledge of the intellectual property law or supporting economic theory was very low. The surveys focused on aspects of the issues which the potential participants were likely to have had some exposure to while in the Kingdom of Thailand and in the ASEAN region, and upon topics which respondents were likely to have heard of in the media, or may have known something about through their native cultures and societies. Respondents were asked to give their first impression of the physical markets, and to report on other points using their feelings or personal opinions which did not necessarily need to be based on any facts or elaborate logic or reasoning. Scale data was collected using Likert scales and in a section where respondents were asked to rate the severity of several criminal offenses. Nominal data was collected to describe the survey population. Sample Size Current theories in research methods are not fit to guide the present research due to the lack of models inclusive of sufficiently heterogeneous, international, and intercultural populations. We have today no universally valid global standard. Considering that the issues under study are multinational in nature, and affect a population as large as that of the entire world, the complexity of the study effectively
prohibits calculating a sample size which would accurately and reliably represent the whole population. Individual personality, cultural, social, political, legal, and other nuances within any sample population inclusive of persons from many nations distort the output of available mathematical models such that it is improbable that such formulae can be applied effectively. The sample population found in this study may also exhibit considerably different cognitive and behavioral traits from the majority of their national counterparts thus further proving unreliable in whole or in part various methods for finding sample sizes representative of larger populations. Zikmund et al recommended a static sample size for all populations between 500,000 and infinity, which we can intuit is not only unreliable but is also fundamentally mathematically misguided considering that the human population is finite and shall for our purposes always be. Given that the potential sample population herein – foreign English speakers in Thailand – is largely unknown or undiscovered in research, the researcher was unable to determine several parameter values such as consumer preference for counterfeit or genuine goods, which would help determine a statistically reliable sample size using existing models. It should be noted, however, that for a reliability rating of in a population size between 500,000 and infinity, when a parameter in a population such as consumer preference for one brand over another is assumed to be over 70% or under 30%, the Zikmund et al text recommended a sample size of 322, which is a rise from a sample size of 244 in a population of only 1,000 (Zikmund, Babin, Carr, & Griffin, 2010). Yamane’s simplified sample size formula (Israel, 1992) returns an upper limit of 400 with confidence interval of 5%, meaning that for the largest population size, 399 or 400 surveys will suffice.
Figure X shows Yamane’s formula is similar to a limited growth function closely following the natural log model equation: In this case c = 400 and k = .001. The graph shows a sharp change in slope before 5000 on the x-axis and low variation of y:x following, which is where the reliability complaints stem from. The research presented herein consisted of a sample size of 196. The sample was not intended to represent any specific population beyond the extent which sample size implied according to relevant theories. The research was intended to have some qualitative value though some general broader application may be made via interpretation of quantitative data. Herek (2011) verified that ‚a scientist can demonstrate that a particular trait occurs in a population by documenting a single instance.‛ The present survey shows that more than one trait is present in a population, that multiple individuals carry the same traits, and that on average certain opinions are more popular than others. Figure X: Graph of Yamane’s formula and natural log function.
Sample Size (y)
400 350 300 250
200 150 100 50
Population Size (x)
5000 10000 15000 20000 25000
Sampling A hybrid model sampling technique was used. Survey respondents were approached in broad daylight in public at popular tourist destinations in both Chiang Mai and Bangkok, Thailand. Due to the limited territorial proximity within which the research was conducted, the sampling technique closely resembled a non-probability convenience sample. Considering the high probability that any given foreign tourist in Thailand may pass through the Thaphae Gate in Chiang Mai or Khaosan Road in Bangkok features of a simple random sample are present. Additionally, due to the diverse geographical and national origins of the respondents, and because there were several participants from each of several different nations who were sampled in more than one place, elements of a cluster sample were present.
Analysis and Interpretation Surveys were numbered and data was entered into SPSS. Means, cross tabs, and histograms were generated. Parametric and non-parametric statistics were interpreted to discover what the average respondent thought of issues, and how people from different demographic categories responded. Means, medians, modes and frequencies were the most significant statistics in the study. Limitations Semantic variation significantly threatens the validity of any survey in an open market atmosphere. Different people often define words differently. Words on surveys were selected to be as plain as possible, and to avoid problems with doublemeanings or ambiguity. However, words representing a moral or value judgment, such as what a ‚problem‛ is can easily create dichotomous results where group P believes an act is a problem for party A created by party B, while group Q believes the same act is a problem for party B created by party A or that group P’s perceived problem for party A made by party B provides benefits to party B sufficient to say that such an act is not a problem at all, but perhaps more closely resembles a remedy. Legal and political fields are continuously exposed to controversy and argument, and as such semantic debate was expected and kept manageable via design. The results and discussion sections herein discuss responses and provide sufficient explanation of the questionnaire data and respondents’ opinions by examining corresponding interview responses. Research has suggested that people speaking a second language may adapt or develop a second set of personality traits which are not congruent to those traits when speaking their first language. (Ramirez-Esparza, Gosling, Benet-Martinez,
Potter, & Pennebaker, 2004) Second language respondents may have reported in English differently than what they would have reported in their native language. Research has also suggested that cultural context may influence individuals to report values and opinions supporting the culture of their context rather than that of origin (ibid). All respondents may have reported in the foreign context in a way not representative of their opinions that could have been found if surveyed in their home national or cultural context. Thailand’s laissez faire social environment may have also been linked to some distortion in the views and opinions of participants who may have been under the influence of various illicit substances and or alcohol, and or soliciting prostitution, and or engaged in violence within a short time frame around their participation. Budget limited this project significantly in the scope of direct physical market access, extent of corporate and other organizational interviews, and breadth of consumer surveying. A larger sample from 5 or more of the most notorious physical markets in ASEAN could have been gathered with more funding. A visit to WIPO in Singapore, visits to national IP offices, and to private corporate offices could have been part of a better funded study. Free resources and collegiate textbooks were sources of literature data. Although the quality of literature reviewed may not have been reduced due to budget constraints, certain publications and services, such as Lexis Nexis and Westlaw, were not cited. Ethics Potential participants were approached by the researcher, asked if they spoke English, and upon an affirmative answer, further asked if they would participate in a LLD dissertation-related survey. All sampling was conducted in public in plain view
of many people. From approach to refusal or completion of the survey, all participants had the option to stop participating and walk away at any time. Respondents were informed of the purpose of the research and provided with other information about the researcher, educational institution, and research as requested. Some friendly conversation was made between the researcher and some participants, on occasion lasting an hour or more. The ethical dilemmas involved related primarily to the research topic rather than to the method of surveying. Results Potential Consumer Survey Descriptive Statistics Of the 196 participants, 195 reported their age. Ages ranged between 18 and 77. Mean age was 32.6, median 28, and mode 23. More than half of respondents were under age 28 and less than 20% over age 43. Respondents came from 24 countries. 46 were from the UK, 32 from the USA, 21 from Australia, 17 from the Netherlands, 16 from Canada, 14 from Germany, 11 from New Zealand, 7 from France, 6 from Ireland, 3 from each Norway, Poland, and Denmark, 2 from each Israel, Spain, and Italy, and 1 from each South Africa, Russia, Thailand, India, Iceland, Latvia, Switzerland, Japan, and Finland. 95 males and 94 females reported their biological sex. Of the 190 participants who reported their occupation, 46 in business and administration, 44 were retired, students, or unemployed, 27 were in general services, 24 in education, 17 in engineering and technical fields, 16 in health care, 12 in trades and labor, and 4 in government.
195 participants reported on their first language, 132 people or 67.7% of which were native English speakers, 63 people or 32.3% of which were speaking English as a second language. 118 of 196 participants, or 60.2% did not report a religion. 26 people reported general Christian, 17 reported Catholic, 16 reported Protestant, 2 reported Buddhist, 10 reported either Atheist or Agnostic, and 7 reported another religion including 1 Irish male ‚Jedi‛ and 1 American female ‚energy‛ believer. Descriptive Statistical Tables Table X: Average Age Age Valid Missing Mean Median Mode Figure X: Age 195 1 32.6 28 23, 25
Table X: Distribution of Citizenship Citizenship Frequency 32 52 17 32 53 9 195 1 196 Percent 16.3 26.5 8.7 16.3 27.0 4.6 99.5 0.5 100.0 Valid Percent 16.4 26.7 8.7 16.4 27.2 4.6 100.0 Cumulative Percent 16.4 43.1 51.8 68.2 95.4 100.0
USA UK & IRE CA AUS & NZ European Other Total Valid Missing Total
Table X: Biological Sex Distribution Sex Frequency Percent Valid Percent 95.0 48.5 50.3 94.0 48.0 49.7 189.0 96.4 100.0 7.0 3.6 196.0 100.0 Cumulative Percent 50.3 100.0
Male Female Total Valid Missing Total
Table X: Distribution of Field of Occupation
Occupation Valid Frequency Percent Percent 24 12.2 12.6 46 23.5 24.2 17 8.7 8.9 16 8.2 8.4 44 27 12 4 190 6 196 22.4 13.8 6.1 2 96.9 3.1 100 23.2 14.2 6.3 2.1 100 Cumulative Percent 12.6 36.8 45.8 54.2 77.4 91.6 97.9 100
Education Business Engineer/Tech Health Care Retired/Student/ Unemployed Service Other Government Total Valid Missing Total
Table X: Distribution of Native and Second Language English Speakers Native Language Frequency 132.0 63.0 195.0 Percent 67.3 32.1 99.5 Valid Percent 67.7 32.3 100.0 Cumulative Percent 67.7 100.0
English Not English Total Valid
Table X: Distribution of Religious Affiliation
Religion Frequency Percent Not Reporting Christian Catholic Protestant Buddhist Atheist/Agnostic Other Total 118 26 17 16 2 10 7 196 60.2 13.3 8.7 8.2 1 5.1 3.6 100 Valid Cumulative Percent Percent 60.2 60.2 13.3 73.5 8.7 82.1 8.2 90.3 1 91.3 5.1 96.4 3.6 100 100
Table X: Education level by sex
Sex Education/ Sex Male High School 28 Bachelor 40 Master 7 Doctor 2 Certificate 11 Total 88 Female 17 51 11 2 3 84 Total 45 91 18 4 14 172
Table X: Education level by nationality
Education/ Nationality High School Bachelor Master Doctor Certificate Total UK & IRE 14 22 4 2 7 49 Nationality AUS & CA NZ European Other 3 14 12 0 11 11 21 8 1 1 7 0 0 1 0 0 2 3 3 0 17 30 43 8
USA 4 20 5 1 1 31
Total 47 93 18 4 16 178
Hypothesis Testing Hypothesis 1: On average, foreigners think counterfeiting and piracy in Thailand and in ASEAN are problems. Hypothesis 2: Given the location of markets and shops featuring counterfeit and pirated goods, and given the brand name selection of counterfeit and pirated goods, given also the price of the goods, in general the level of appeal to foreign tourists of counterfeit and pirated goods is perceived to be on the higher end of the scale. Hypothesis 3: Given the locations of points of sale of counterfeit and pirated goods, given the ubiquity of counterfeiting and piracy in markets in tourist areas, and given the relative absence of genuine goods in those locations, the level of purchases of those goods by foreign tourists is perceived to be on the higher end of the scale. Hypothesis 4: Perceptions regarding the threat level that counterfeiters and pirates pose to the public are not remarkably supporting or disconfirming that such a threat exists. Hypothesis 5: Given that the rate of substitution of pirated and counterfeit goods for genuine products is extremely difficult to determine, in general foreign tourists are not likely to perceive consumption of non-genuine goods as posing serious threats or losses to companies. Hypothesis 6: In general, people are not likely persuaded by economic rhetoric regarding the threat to jobs and economies posed by piracy and counterfeiting. Hypothesis 7: Foreign tourist consumers are attracted to pirated and counterfeit goods due to the low price of those goods.
Table X and Y: Questions 1 (left) and 2 (right)
Frequency Percent Lowest Low Medium High Highest Total Valid No Opinion Total 11 9 48 64 37 169 27 196 5.6 4.6 24.5 32.7 18.9 86.2 13.8 100
Valid Cumulative Percent Percent 6.5 6.5 5.3 11.8 28.4 40.2 37.9 78.1 21.9 100 100
Frequency Percent Lowest Low Medium High Highest Total Valid No Opinion Total 12 11 35 78 29 165 31 196 6.1 5.6 17.9 39.8 14.8 84.2 15.8 100
Valid Cumulative Percent Percent 7.3 7.3 6.7 13.9 21.2 35.2 47.3 82.4 17.6 100 100
Hypothesis 1 was supported. Participants most often reported on the high end of the scale regarding how problematic piracy and counterfeiting are in Thailand and ASEAN.
Table X: Question 3
Frequency Percent Lowest Low Medium High Highest Total Valid No Opinion Total 10 14 43 89 31 187 9 196 5.1 7.1 21.9 45.4 15.8 95.4 4.6 100
Valid Cumulative Percent Percent 5.3 5.3 7.5 12.8 23 35.8 47.6 83.4 16.6 100 100
Hypothesis 2 was supported. Survey participants most frequently reported that counterfeit and pirated goods have high and highest appeal.
Table X: Question 4
Frequency Percent Lowest Low Medium High Highest Total Valid No Opinion Total 3 7 39 95 39 183 13 196 1.5 3.6 19.9 48.5 19.9 93.4 6.6 100
Valid Cumulative Percent Percent 1.6 1.6 3.8 5.5 21.3 26.8 51.9 78.7 21.3 100 100
Hypothesis 3 was supported. Participants most frequently reported that the level of purchases of knock-off goods by foreign tourists was high or highest.
Table X: Question 5
Frequency Percent Lowest Low Medium High Highest Total Valid No Opinion Total 15 38 65 43 13 174 22 196 7.7 19.4 33.2 21.9 6.6 88.8 11.2 100
Valid Cumulative Percent Percent 8.6 8.6 21.8 30.5 37.4 67.8 24.7 92.5 7.5 100 100
Hypothesis 4 was supported. Participants neither strongly supported nor rejected claims that counterfeit and pirated goods organizations pose serious threats to the public.
Table X: Question 6
Frequency Percent Lowest Low Medium High Highest Total Valid No Opinion Total 4 27 51 58 43 183 13 196 2 13.8 26 29.6 21.9 93.4 6.6 100
Valid Cumulative Percent Percent 2.2 2.2 14.8 16.9 27.9 44.8 31.7 76.5 23.5 100 100
Hypothesis 5 was not supported. Participants most often reported on the higher end of the scale, indicating that they believed counterfeit and pirated goods posed serious threats to revenues and profits to businesses.
Table X: Question 7
Frequency Percent Lowest Low Medium High Highest Total Valid No Opinion Total 14 38 65 49 22 188 8 196 7.1 19.4 33.2 25 11.2 95.9 4.1 100
Valid Cumulative Percent Percent 7.4 7.4 20.2 27.7 34.6 62.2 26.1 88.3 11.7 100 100
Hypothesis 6 was neither strongly supported nor disconfirmed. Although more participants responded on the higher end of the scale than on the lower end, the mode was at the middle.
Table X: Question 8
Valid Cumulative Frequency Percent Percent Percent Lowest Low Medium High Highest Total Valid No Opinion Total 30.0 62.0 64.0 21.0 3.0 15.3 31.6 32.7 10.7 1.5 16.7 34.4 35.6 11.7 1.7 16.7 51.1 86.7 98.3 100.0
180.0 91.8 100.0 16.0 8.2 196.0 100.0
No hypothesis was made regarding this question.
Table X: Question 9
Valid Cumulative Frequency Percent Percent Percent Lower Price 171 87.2 91.9 91.9 Support Lower Class 4 2 2.2 94.1 People Destabilize 1 0.5 0.5 94.6 Markets Convenience 10 5.1 5.4 100 Total Valid No Opinion Total 186 10 196 94.9 5.1 100 100
Hypothesis 7 was strongly supported. Nearly 92% of participants reported that the lower price was a factor influencing consumption of pirated and counterfeit goods. Table X: Survey Responses By Sex
Q1 Lowest Low Medium High Highest Total
Sex Male Female Total 9 2 11 5 4 9 22 25 47 28 35 63 18 15 33 82 81 163
Q2 Lowest Low Medium High Highest Total
Sex Male Female Total 9 3 12 6 4 10 20 15 35 31 44 75 15 12 27 81 78 159
Q3 Lowest Low Medium High Highest Total
Sex Male Female Total 3 5 8 9 5 14 24 17 41 39 48 87 16 14 30 91 89 180
Q4 Lowest Low Medium High Highest Total
Sex Male Female Total 3 0 3 4 3 7 19 17 36 44 50 94 19 18 37 89 88 177
Table X: Continued
Q5 Lowest Low Medium High Highest Total
Sex Male Female Total 10 5 15 27 11 38 23 39 62 18 23 41 6 5 11 84 83 167
Q6 Lowest Low Medium High Highest Total
Sex Male Female Total 4 0 4 16 11 27 22 28 50 27 29 56 22 17 39 91 85 176
Sex Male Female Total Q7 Lowest 12 2 14 Low 22 16 38 Medium 26 38 64 High 23 23 46 Highest 10 9 19 Total 93 88 181
Sex Male Female Total Q8 Lowest 15 14 29 Low 29 32 61 Medium 30 32 62 High 12 8 20 Highest 0 2 2 Total 86 88 174
Table X: Continued
Sex Male Female Total Q9 Lower Price 79 85 164 Support 3 1 4 Lower Class People Destabilize 1 0 1 Markets Convenience 5 5 10 Total 88 91 179
Table X: Survey Responses By Nationality
UK & IRE 7 3 9 16 15 50 5 2 9 20 11 47 2 1 8 28 12 51 Nationality AUS & CA NZ European 0 2 2 4 3 11 0 3 0 6 2 11 2 1 4 7 1 15 1 1 9 8 8 27 2 0 7 10 8 27 2 4 10 13 3 32 3 3 19 14 7 46 5 6 11 18 5 45 1 4 12 31 1 49
Q1 Lowest Low Medium High Highest Total Q2 Lowest Low Medium High Highest Total Q3 Lowest Low Medium High Highest Total
USA 0 0 8 19 0 27 0 0 8 19 0 27 3 3 7 9 9 31
Other 0 0 1 3 3 7 0 0 0 5 2 7 0 1 1 1 5 8
Total 11 9 48 64 36 168 12 11 35 78 28 164 10 14 42 89 31 186
Table X: Continued
UK & IRE 1 0 7 28 13 49 3 13 15 13 5 49 2 7 9 18 13 49 Nationality AUS & CA NZ European 0 0 4 9 2 15 2 3 8 2 1 16 0 2 6 3 6 17 0 1 6 15 8 30 2 5 10 4 3 24 1 2 8 8 11 30 1 3 10 27 7 48 5 9 17 12 2 45 1 10 15 13 7 46
Q4 Lowest Low Medium High Highest Total Q5 Lowest Low Medium High Highest Total Q6 Lowest Low Medium High Highest Total
USA 1 3 8 14 5 31 2 7 11 8 2 30 0 5 9 15 2 31
Other 0 0 3 2 4 9 1 1 4 3 0 9 0 1 4 1 3 9
Total 3 7 38 95 39 182 15 38 65 42 13 173 4 27 51 58 42 182
Table X: Continued
Nationality UK & AUS & USA IRE CA NZ European Other 46 1 0 4 51 16 0 0 0 16 26 2 0 3 31 42 1 1 2 46 9 0 0 0 9
Lower Price 31 Support Lower 0 Class People Destabilize 0 Markets Convenience 1 Total 32
Total 170 4 1 10 185
Sidewalk discussion with potential consumers in the survey participant portion of the research yielded little more insight than the surveys. No less than 30 respondents remarked that they had little to no knowledge of intellectual property issues. Frequent remarks also included that participants did not have a great understanding of the Thai domestic or ASEAN economies, and that survey responses were sometimes guesses rather than evidence-based judgments. Of the roughly 20 survey respondents who took the opportunity to engage in conversations lasting more than 10 minutes most often identified with Confucian and Buddhist philosophical principles when objecting to strict enforcement of IP laws. A mix of ancient Buddhism, Dadaism, and transcendentalism appeared popular among the primarily Caucasian participants, some of whom had adopted an
outlook which can be summarized as: ‚All human thought exists before it comes into the minds of men, and people merely channel infinite, eternal truth; therefore, no intellect or idea is truly the property of a person or people.‛ Government interviews yielded mixed results with the foreign nationals thinking in a distinctly different way from the domestic ASEAN-representative Thais. An office from the Economic Crime Suppression Division of the Royal Thai Police spoke in Thai and limited English to answer questions phrased mostly in the Thai language. The officer focused on the budget constraints which the enforcement sector must operate within, stating that they did not have either enough manpower or money to accomplish goals which industry and foreign government desires. In Thailand, enforcement was said to be focused on bigger cases where plenty of evidence is available, and on cases involving goods which pose a genuine public health or safety risk. Whereas drugs and guns pose significant risks to the public, the office acknowledged that pirated DVDs as a product do not pose risks to the public. The officer said there were procedural issues which complicated arrests and seizures, such as the lack of expertise among the authorities to discern between genuine and non-genuine goods, although it was acknowledged that rock-bottom pricing tipped off officers in some categories such as luxury goods. The officer said that if the Thai police arrested everybody they found who was breaking the copyright and trademark law, there would be another person out at the same place the very next day, so there was a larger threat and issue at play which has apparently been eluding understaffed, underfunded police. New Zealand’s Trade and Enterprise office specialist offered a wealth of information regarding Thai-NZ trade relations, the evolution thereof over the past 10
and more years, and details on the business climate in Thailand. IP law was acknowledged as a concern among specific New Zealand businesses, although depending on the industry, the importance of IP protection and enforcement varied significantly. NZ businesses benefitted from the expansion of the ASEAN-AUS-NZ free trade agreement, and Thailand offers reliable, low cost factory wage labor for NZ businesses. Technology transfer is then an important issue within private companies which utilize independent advisories according to the NZT&E representative. No major complications between New Zealanders and Thais were mentioned, but the office-host alluded to various IPR issues the Americans and Europeans were having in Thailand. US Trade Representatives in Bangkok said ‚the US government is doing a tremendous amount of work‛ developing lasting trade relationships in Thailand and ASEAN, but ‚IP has been one of the obstacles in enlarging that relationship‛ and that IP remains a ‚trade issue and relationship irritant.‛ No clear, specific set of goals, targets, benchmarks, milestones, or any sort of organized plan or schedule was mentioned by the USTR, although such an approach would likely be ineffective. USTR spokespeople reiterated that China is the #1 source of infringing goods worldwide, listing reverse engineering, disgruntled employees, botched transfers of plans, patents, sensitive materials, and trade secrets for leaks into the marketplace. Although the USTR remarked that there has been a ‚growing awareness of IPRs‛ in Thailand and the ASEAN region, there have been some major setbacks. ‚IP is not really for Thai,‛ a Thai government representative reportedly told the USTR. The USTR explained its longer-term approach to developing respect for IPRs, whereby it hosts functions and supports education and awareness campaigns, acting as ‚facilitators‛ with the aim of establishing and sustaining a ‚good environment for
both US & Thai [or other domestic] business.‛ Internationally, the US government was said to have no interest in pursuing individual consumers, but instead focused on helping shut down factories. Regarding the lag time on enforcement and broader recognition of IPRs by the executive and judiciary, the USTR mentioned ‚generational issues‛ and did not agree that mere culture was the dominant opposition. A representative of the American Chamber of Commerce (ACC) in Bangkok said domestic laws – and those in ASEAN given the moderate legislative uniformity in the group – are ‚relatively good, but they’re not enforced, and the judicial system is weak.‛ Companies have to pay for action and punishment for infringement in Thailand specifically was low according to the ACC, which advocated education as the best means of satisfying the desired ends of compliance and market regulation. An estimated 5% of the population knows there is a problem according to the ACC staff. Business issues were more relevant or easier to disclose than IP at Adidas TH, a marketing and sales subsidiary of Adidas which focuses on JIT style acquisition and distribution of goods from within the Adidas group. Units from Adidas international bid to transfer and supply products vertically0 to subsidiaries like Adidas TH, which then sells to local retail and franchise resellers. No mention was made of any licensing agreements in the vertical supply chain. Adidas TH has partnerships with Coca-Cola, Muangtong Football, and Supersport within Central department stores. Disclosure policy within the company may have limited the amount of information I obtained from Adidas and Puma.
A CNBC Thailand spokesperson highlighted licensing agreements while explaining parts of the IP protection and management system. CNBC did not recognize the internet as a legitimate threat to sales at cable companies. Some difficulties in obtaining permissions from the USA and EU were mentioned. Universal Music Thailand is granted a blanket nonexclusive license for reproduction in Thailand. A Universal representative said master copies of music are downloaded from the internet then sent to independent contractor printers domestically where sales occur. Universal itself was said to have had only 100 customers in Thailand, thus its rights are most often exhausted before final sales to consumers. Sony Music Thailand staff reported a similar blanket license from the US on music. Piracy was said to be less of a problem with local artists as with foreign artists. Piracy was said to be primarily price motivated in the Thai market, where infringement cases are handled individually. Most cases are not economically efficient enough to pursue, according to Sony Thailand. A Warner Music Thailand representative said the ‚nature of Thai people‛ is to not respect IPRs. Warner reportedly undertook an initiative to urge the Thai government to protect copyright, but obstacles were severe because, as the Warner staff put it, ‚frankly the Thai government doesn’t take [IP] seriously.‛ Internet infringement, much of which occurs across national borders, was said to be a bigger problem than physical market piracy and counterfeiting. Price was the primary motivating factor for infringement according to Warner, which said that teens and students will not pay 400-500 Baht for international music and 150 Baht for Thai CDs. As a consequence of ubiquitous piracy, Warner Thailand reported decreases in
CD sales, which correlated with difficulty achieving goals such as improvement of music quality. ‚Artist development is very crucial now,‛ according to Warner Thailand, ‚but as sales drop, the company is not willing to invest and experiment.‛ Table X: MCT Royalty Fees Karaoke Disco Bar/Pub/Lounge Restaurant Hotel Shops Bowling Cinema Dance studio Fitness Center Single Event Jukebox/ Console Games Monitor Ad/TV Golf Range Hi-Fi Shop 2,500B/monitor/annum 120B/seat/annum 100B/seat/annum 50B/seat/annum 50-275B/room/annum 10B/sq m/annum 400B/lane/annum 5,000B/outlet/annum 6,000B/outlet/annum 20B/sq m/annum 2,500-50,000B/day Universal, Sony, and Warner referred me to Thai Entertainment Content Trade Association (TECA) and Music Copyright Thailand (MCT), which handle royalties and enforcement projects in Thailand. Royalties at Warner were said to be 30%, which clearly many retailers and other infringers are not willing to pay. MCT (2012) collects and distributes royalties from karaoke, disco, bar, restaurant, hotel, cinema, and other commercial establishments at rates unappealing to many vendors.
2,500B/unit/annum Media piracy results from 2,500B/monitor/annum 2,500B/outlet/annum inability or lack of will to pay into royalties and licensing schemes. TECA 2,500B/outlet/annum organizes investigations and advocates IP enforcement at the local government level in Thailand. TECA provided 2010 raid statistics for audio
music although the scope of TECA involvement in police and government affairs was not fully discovered. Audio disc piracy is approximately as prevalent in physical markets as other optical disc piracy (i.e. games, software, movies). A representative of Microsoft Thailand (MSTH), a sales and marketing subsidiary of MS Corp., said there is no national plan of action in Thailand, nothing that includes targets and clear, concise, specific goals regarding reduction of piracy. Table X: 2010 TECA Raid Statistics ‚We see there is political will,‛ said the MSTH Raids 198 Culprits 196 rep. ‚Are they doing enough to make a meaningful difference? We say no,‛ the spokesperson said, Discs 33,801 mentioning also that low-level fines and probationary Estimated 93,671,300 sentences in criminal cases were ‚no deterrent.‛ As for Value (Baht) rates and volume of piracy, MSTH referred me to the BSA, remarking that ‚we believe in that study.‛ MSTH confirmed the data and identity security threat that a non-genuine operating system poses to a single computer and to the online network. MSTH responds to ubiquitous piracy in the market primarily through education and awareness projects on, inter alia, the potential for remote access to personal computers via malicious code added to pirate/counterfeit packages. Workshops with the Thai Software Industry Promotion Agency (SIPA) and Department of Intellectual Property (DIP) are supported. Schools receive up to 90% off MS products as MS tries to meet or beat total software growth rates. Legal affairs at MS are handled by a
regional team which may not design aggressive domestic strategies, instead favoring a softer approach that is not as likely to harm the company’s image. A Samsung legal associate was opposed criminal punishment for IP infringement, which is rational from the business perspective since the only tangible rewards for the company/proprietor from any enforcement action are injunction and damages, whereas prison sentences levied in IP cases may harm public perceptions of the company’s morality or ethics. Headquarters controls IP transfer at Samsung, which is not as threatened by piracy and counterfeiting as media and fashion industries. Had Samsung TH experienced problems with IP infringement? ‚Not really,‛ said the representative. Samsung, being owner of one of the world’s biggest and best patent portfolios and having been the defendant in IP infringement suits, is a part of the IP conversation and its personnel offered some expert-level commentary on the topics. While discussing media piracy and slave copying of products most often seen in Bangkok notorious markets, the Samsung representative suspected a possible inside job, which is one of the more logical deductions given the scenario. Although the Princeton Review (TPR) material does not generally fall into the entertainment genre, some threat of piracy and counterfeiting still exists in education markets known to use photocopied textbooks. All of TPRs materials were said to be sourced from the US using a just in time (JIT) inventory management system including downloading master PDF files from the internet and printing locally. Historically, shipping costs for books would have caused prices in retail markets overseas to rise, whereas in the communication age delivery of master files online is virtually free, thus increasing profit margins and providing some room to take economic losses from limited piracy and photocopying of texts in local markets.
Discussion The TRIPS Agreement was a milestone in IP regime changing at the international level. Business executives, NGOs, and governments demand IPR protection now more than ever before. As everybody cannot be served equally under one system, globally we are seeing the emergence of multiple discrete regimes and subsystems among clusters of states such as OECD, EU, and ASEAN (Helfer, 2004). Within each of the semi-autonomous states where companies and governments are united through involvement in projects like the WTO’s ‚Made in the World‛ branding strategy, more sects and interest groups, conflicts and contests are present. Not at all anachronistically, a basic feud between the upper and lower classes has been a result, where the poorer segments seem to feel entitled to free or extremely cheap merchandise with no payment going to big companies that fund the research, development, design, manufacturing, and marketing of the genuine products. Bilateral investment treaties often feature broad definition of ‚investments‛ which may now include copyrights, trademarks, patents, industrial designs, and even trade secrets. Nations and nation-states are locked into treaty agreements. In the international competitive marketplace, no one party can afford to fully reject the status quo among other nations. Norm-setting is one of WIPO’s main activities (UN, 2010b), which undoubtedly seeks to harmonize the interests of both IP protectors & enforcers (states), and creators (individuals and companies). Acceptance of one norm over other potential candidates leads to in-fighting and the inefficient market commonly associated with IP (Kisor, 2006). Hence, diversity is an essential characteristic of any larger-order system.
Changes in the way people use and view information – the expansion of home computing, the internet, cable and satellite TV, GPS, personal tracking and mapping, and global commercial logistics – has changed the way ‚techies‛ think about moral, social, ethical and legal issues. What was once a profession for introverted, machines-only personalities has broadened to consider more topics from the artistic, humanitarian, social scientific and legal fields (Phukan & Dhillon, 2001). Growth in digital content between the mid-1990s and 2012 corresponded with massive expansion in copyright and trademark coverage. The emergence of nanotechnology, personal digital assistants, lightweight and fast personal electronic devices with gigabytes of memory capacity corresponded with a massive market shift and change in the way people live their daily lives. For many people, it may be more common to talk to or read from a stranger in another country via the internet than to talk to the neighbours. Some psychological textbooks define stress merely as ‚change‛. Some people fear change while others avoid it. Changes and stress, if mismanaged can create havoc. After having achieved a certain standard of living, and after having undergone massive changes in the 100 years or so following the early 1900s, many people have a natural instinct to protect themselves and others from a slide back to a lesser standard of living. IP protection and enforcement is associated with patents, trademarks, copyrights and trade secrets – the rights that keep our economies moving. There is certainly no mystery why some people consider IP real property and oppose free riding (e.g.Lemley, 2005; Terrel Gallaway, 2002). Arguments against IP are often met with the utilitarian model, in which a balance is found between the needs for invention and creation, and the needs for
diffusion and access – or the rights of the producer and the rights of the consumer (Institute for International Economics, n.d.). American policy supports the agenda of business, and especially big business, and as such IP enforcement is an important part of the American strategy. In the ASEAN world, market conditions suggest that the consumers and small independent retailers are taken care of while the major MNCs still dominate the markets. IP promotion and lobbying among MNCs shows the corporation as a permanent institution, and as a political body. Tax revenues form the base of government funding, and corporations contribute significantly in taxes. In the developing and third world, in most of ASEAN, macroeconomic policy and tax enforcement is not developed. Occidental models for macroeconomic flows may not work for whole populations in ASEAN member states. MNCs and FDI projects are unique in that they represent potentially high tax revenues where local businesses probably would not. MNCs therefore have certain rights not afforded to individuals and loosely organized activist groups. Politicians cannot afford to ignore MNCs, banks, finance and economics experts regardless of the education levels of the majority of their societies. Piracy and counterfeiting, while considered ‚free advertising‛ by several survey participants, are technically illegal and caustic in the multinational economic environment. There is a real problem to solve with IP infringements. The abrasive tactics and rhetoric of criminal supporters in no way reaches the level of clarity and coherence that would be required for the opposition to win the argument in front of an unbiased third party. Dishonesty and lack of transparency has only led to bigger disagreements.
Negotiations, conciliations, arbitration, mediation, and other legal remedies are available to injured companies and individuals. At the State level, the ICJ can provide services under treaties. However, nations like those from the Western European region and the USA may find some difficulty at the ICJ on the subject of copyright due to the possibilities that American and Western European websites may be supplying download-and-burn commercial infringement outfits in ASEAN. For some companies like Warner, Fox, Universal, Sony, Microsoft, Nike, Adidas, Puma, Ralph Lauren, etc., the ICSID or UNCITRAL arbitration may be options if domestic courts are ineffective and if jurisdiction can be established under bilateral investment treaties. The transparency principle and WTO TRIPS agreements may be violated by various parties on the subject of copyright, but for industrial property the WTO may provide alternative dispute resolution services. According to the WTO representative who was interviewed by email, the WTO does not necessarily recognize that there is a problem in the ASEAN region due to lack of TRIPS-related lawsuits. I suspect there are complaints among nations, but potential outcomes of lawsuits are insufficiently appealing to motivate filing. Integrated, international copyright and collective management societies are needed throughout ASEAN. National groups may be able to work together to establish a better union. Case law suggests that bars, restaurants, and karaoke establishments can be sued for royalties if only a profitable suit can be found. If courts could be compelled to allow class-action suits where a group of plaintiffs sue a group of defendants on one occasion for multiple instances of the same behavior, this may be a cost-efficient means of claiming what is the rightful property of the copyright, trademark, or other IPR. Procedural details, such as those regarding power of attorney agreements in Indonesia (YKCI v PT, 2007), need to be taken care of so
courts can justify paying out to artistic rights societies which may pose a conflict of interest to the public that wants drugs and illicit sex – popular media content – out of its communities. The model for collection and distribution of royalties is in place, it just has to be implemented more, which requires some government assistance. Figure X: Flow of musical works’ rights and royalties (Distabanjong, 2004)
After all external options seem to be exhausted at businesses, internal management and protection of IP may be the only power a firm finds it holds. Given the profitability of the pirate and counterfeit markets, insiders are likely involved somewhere in the supply chain, whether at the factory, in purchasing, shipping or receiving, or in a corporate or subsidiary office. A midnight shift manager in SE Asia may be able to easily conduct overruns and make thefts looks like damaged goods, or a purchaser may be able to buy extra material and coordinate an outside counterfeit manufacturing effort by using the company’s materials and patterns. A media or software manager or administrative assistant may be able to pass an
original disc to a counterfeiter for a fee, or when firms use outside companies for commercial reproduction, that company may be able to easily produce extras or coopt to infringe the product. Better hiring and screening practices in human resources, more accurate and reliable reporting and assessment in management, more inventory control in accounting and operations management, and a more trusting, trustworthy organization is needed to keep secrets. When I walked into several corporate subsidiary offices in Bangkok, such as Nike, IBM, Microsoft, and Buena Vista, I found the reception staff unprepared to handle any inquiry about IP in the English or Thai language. Companies should educate their own employees and build a consciousness within the organization where IP is a constant feature in office conversation, something that every employee knows something about because it’s the lifeline of the industry and business. Obviously companies undertake to protect their IP, but Six Sigma management throughout the entire organization is rare if it exists anywhere. Public officials in countries outside of where MNCs are based may not sympathize for the world’s most profitable institutions like Apple and Microsoft when units are ‚stolen‛. However, the compelling government interest is protecting the public against threat, fraud, and force. Internet networks are consistently threatened by malware, viruses, financial and other scams. Streets are threatened by violence which is consistent throughout much of ASEAN where criminal groups and their associates control significant portions of the small business economy. Public health is threatened by counterfeit drugs, hygiene products, unsafe toys, etc. Government agents should be able to rationalize further effort without losing their core identity or spirit.
For nations where there is public outcry to take down pornographic websites, and where sex tourism is a public concern, issues can be addressed by seizing slavecopy DVDs and VCDs, and by blocking online streaming sites like Putlocker, assorted Divx sites, and formerly Megavideo, using copyright protection as justification. Where prosecutors desire more reliable evidence and lower potential for error variance in trials related to the internet, serious reductions in use of pirated and counterfeit software are needed. For nations where drug trafficking is considered a serious crime, where the war on drugs is a primary component of political agendas, customs and border protection agents could step-up searches of cargo suspected of being shipped by international criminal organizations which can be incarcerated for IP crimes. In nations where US-ties are threatened by the war on terror and anti-Muslim sentiment in the Occident, diplomatic and security interests can be strengthened by focusing on stopping transnational shipments of counterfeits, and by helping reduce the presence of transnational organized crime in the ASEAN region. In nations where free speech and human rights are concerns, where people demand more individual freedoms, broader development of music, film, and art markets via copyright and trademark protection and enforcement can help. Where economic growth is inconsistent and where development is badly needed, innovation can be supported through with protection of software, patents, and trademarks. Moderate IP-legislative uniformity in ASEAN presents further opportunities to strengthen the ASEAN group. If an economic order presupposes a legal order, then ASEAN will need to develop political and legal ties before the market can expand and be developed to its fuller potential. IP falls into the larger category of trade law and can be a cornerstone in intra-ASEAN institutional economic
infrastructure. Domestic legal systems could be simplified and made more efficient by standardizing procedures within ASEAN, especially for international cases. Opportunities are probably abundant in a fully-developed SE Asian union, but major changes are still required among states, which are difficult to motivate to change. Numerous authors called for more cooperation between private and public sectors. The general public as a group probably has the lowest interest in protecting and enforcing IPRs. Consumers are the demand for counterfeit and pirated products. Consumers who are also voters may pose political threats to pro-IP legislation or executive actions. For consumers, infringement may be an opportunity to get a bargain. NGOs, special interest, ethics and rights groups emerge from the broader public, but outside of work there is little opportunity to engage the public in a productive effort. Governments and the general consumer public are less bounded than businesses, and therefore less easily directed and controlled. Businesses have clearly defined purposes which are limited in scope whereas governments and the public have far more extensive goals and interests than individual businesses. Businesses have the biggest interest among the three stakeholders in protecting and enforcing IPRs. If small business groups formed an interest on the subject of IP, there would be opportunity to pitch change to the government, firstly via the police. However, in the developing and third world, small business is limited primarily to retail and restaurant where licensing fees drive profit margins down or prices up, and where piracy and counterfeiting can pay off. Medium enterprises in ASEAN have interests in protecting at least trademarks if not other industrial property and copyrights. Banks targeting SMEs in lending campaigns should be able to develop IP interests as part of environmental risk management strategies. Big businesses and universities
obviously have a majority stake in IPRs, but in the ASEAN region, most of the big businesses are foreign, which significantly decreases their power domestically. Unfortunately for commercial organizations, without the coercive powers of the state to compel infringers to stop, education and public awareness initiatives don’t produce returns. A stalemate may be developing between the two opposing sides in the IP debate – infringers and consumers of pirated and counterfeit goods on one end, government policy, specialized personnel and bigger businesses on the other. Government inaction and rhetoric of hopelessness suggest that sympathies have been given to infringers, and thus governments appear to have only limited interest in pursuing their own clearly stated objectives. Financing enforcement projects is probably one of the bigger reasons for low enforcement rates in physical or virtual markets, but public response also factors into the situation. Within the 20th century paradigm, democratic functionality has been exposed as slightly ineffective and certainly as inefficient, which is befitting in the time that the People’s Republic of China rises to a world superpower, fueled by FDI and ideology that frequently condemn ‚Western‛ ideals and ‚Western‛ democracy – presumably including the American model directly to the East of China across the Pacific. The ‚trade war‛ analogy may apply when discussing issues of infringement and non-enforcement of primarily foreign IPRs. States have overarching interests in protecting the assets of their own citizens, and in increasing the wealth of domestic economies rather than in providing for and protecting foreigners. ASEAN went through several transitions, wars, rebellions, coups, and skirmishes in the 20th century as colonialism ended. Animosity certainly exists in the region regarding the historical and perhaps still present intentions of the Caucasians, especially those
from the wealthier Occidental countries. Counterfeiting currency has been part of real war strategies inclusive of economic combat whereby disabling or wounding a nation economically makes that nation more vulnerable to other attack and thus easier to defeat. Counterfeiting and pirating goods are certainly a less effective means of creating economic havoc than counterfeiting money, but some effect has been mentioned in the form of job and other economic losses. Since the majority of products in the mainstream global consumer goods markets are packaged under brands from only a handful of primarily OECD nations, it may be easier for developing and third world nationals, be they in the private or public sector, to ignore or support the counterfeiting and piracy as a kind of equalization effort. Some economic justice is likely considered to be served through piracy and counterfeiting. Big businesses sue and get sued for IP-related activities on a regular basis, and profit rather than compliance has been shown as the dominant motivator in the market among all participants. When ASEAN nations, especially those with the closest ties to China, allow and facilitate counterfeiting and piracy in physical markets, they protect money from flowing out of their countries. Of course domestic markets are theoretically harmed since barriers to entry include price, where new entrants cannot afford to offer quality products for the same or lower price than the pirated/counterfeited competition. However, there is no guarantee that new product development would occur naturally in the domestic market among domestically-based competitors even if perfect market conditions existed. Innovation requires not only incentive, but natural ability and internal motivation too. Conclusions
IP infringement is obviously not comparable to murder, human trafficking, or other egregious forms of human rights abuses. However, where domestic statutes have been established to protect IPRs, infringement is a violation of the law. Ignorance of one area of the law (i.e. failure to effectively enforce IPRs) may significantly affect the integrity of the larger legal system. Failures by executive and judicial branches to implement statutes may enable greater or wholesale rejections of the authority of the law among the civilian population. Nevertheless, people need incomes to provide for their basic needs even in times and places when and where licit economic opportunities are scarce. A dilemma exists in markets where piracy and counterfeiting thrive. Aside from a few categories of goods like drugs, autoparts, etc., IP crime poses little physical threat to the public. Given that relatively lower social harm that IP infringement poses when compared to other illicit trades like arms or narcotics trafficking, theft, and prostitution, authorities may find it easier to overlook IP crime rather than shut down pirate/counterfeit shops – a move that could force proprietors of such establishments to seek other means of income, including more severe forms of criminal behavior. In societies where organized crime is rampant, immediate threats may be managed by allowing counterfeiting and piracy to proliferate rather than drugs, guns, prostitutes, and underground gambling. Notwithstanding the logic in support of lax enforcement, economic costs accompany such a strategy. Markets dominated by piracy and counterfeiting are not likely to develop because there is no real value added through IP infringement.
Table X: ASEAN Economic Data (CIA, 2012)
BR KH ID LAO MY MR PH SG TH VN
Population 408,786 14,952,665 248,216,193 6,586,266 29,179,952 54,584,650 103,775,002 5,353,494 67,091,089 91,519,289
GDP (Official Rate) $15.6b $13.2b $834.3b $7.9b $247.6b $50.2b $216.1b $266.5b $339.4b $121.6b
GDP (PPP) $21.11b $32.95b $1.121t $17.44b $447b $82.72b $393.4b $314.5b $609.8b $299.2b
GDP Per Capita $49,400 $2,300 $4,700 $2,700 $15,600 $1,300 $4,100 $59,900 $9,700 $3,300
Real Growth Rate 2.8% 6.7% 6.4% 8.3% 5.3% 5.5% 4.7% 5.3% 1.5% 5.8%
All figures are from years 2011-2012 unless otherwise specified. $ = USD. Other than in Brunei and Singapore, throughout the ASEAN region Gross Domestic Product (GDP) per capita is low even when Purchasing Power Parity (PPP) is used in estimates. Least Developed Countries (LDC) like Myanmar, Laos, and Cambodia have compelling economic and social reasons to relax enforcement. LDCs are not the focus of IPR scrutiny worldwide, however, since such nations are given extra time to implement the WTO TRIPS agreement. Thailand and Malaysia are two of the most watched jurisdictions in the region with regards to IPRs.
Table X: ASEAN Economic Data (continued)
Poverty rates in ASEAN % Below Unemployment Poverty Line further complicate the political aspects of strict enforcement of IPRs. BR 3.7% ('08) KH 3.5% ('07) 31% ('07) The CIA offered no methodology ID 6.7% 13.33% ('10) regarding unemployment rates, although it should be noted that 1% LAO 2.5% ('09) 26% ('10) unemployment absent of very high MY 3.1% 3.6% ('07) inflation is unlikely. Throughout the MR 5.5% 32.7% ('07) region’s developing and third world PH 7.2% 32.9% ('06) districts, macroeconomic policies are SG 1.9% weak. Seldom do self-sufficiency TH 1.0% 9.6% ('06) farmers or city-based sellers report VN 4.1% 10.6% ('10) incomes or pay taxes, making All figures are from 2011-2012 unless reporting on economic topics otherwise specified. unreliable. Generally impoverished living conditions can be easily objectively verified with mere sensate information – sight, sound, smell – gathered from local areas, so statistics offered by the CIA are not without merit although the number of significant figures in percentages quoted may not be accurately stated. Millennium Development Goals (UN, 2000) relating to poverty eradication, hunger, education, child health, and HIV/AIDS treatment may be hindered by rigid enforcement of IPRs in places where poverty is already rampant. However, lenience on piracy and counterfeiting has its own economic costs which were discussed previously in this study. Ideally, in the developing period a nation must pass through to achieve economic goals, a balance must be struck between the needs of society
and the demands of industry – between rights of consumers to access goods, and the rights of innovators to control the flow of their IP. The question of whether or not to enforce domestic laws is more difficult to answer than the question of whether or not to impose criminal penalties in the form of incarceration throughout the ASEAN region given the situation with overcrowding in prisons. Table X: ASEAN Prison Statistics (ICPS, 2012; Walmsley, 2011) Prison Prison Capacity Among jurisdictions where data was available, only Singapore reported Population (yr) (yr) prison populations lower than 379 ('10) 366 ('07) capacity, suggesting that in 9 15,001 ('11) 8,360 ('11) ASEAN states imprisonment is not a 141,689 ('11) 85,474 ('09) humane or responsible option for 4,020 ('04) sentencing in cases where it is not 38,387 ('10) 32,000 ('09) absolutely necessary. But removal of 60,053 ('09) 26,100 ('02) the imprisonment option in 104,710 ('11) 35,000 ('11) sentencing does not jeopardize the 12,978 ('10) 15,564 ('10) pro-IPR strategy in governments. 224,292 ('11) 105,748 ('08) Seizures of infringing goods 108,557 ('10) remain the easiest, most cost-
BR KH ID LAO MY MR PH SG TH VN
effective remedy to the infringement problem. A vendor who consistently loses his or her inventory to police cannot make a profit and will soon cease sales of infringing goods. Confiscation requires virtually no added public expenditures yet accomplishes the goal of market regulation over time. Failure by law enforcement
agencies to utilize rights to seize infringing goods from shops does suggest apathy and ignorance of IP law if not expansive corruption. In the absence of public assistance, IP owners and licensees may pursue civil remedies, albeit at their own cost. Unfortunately for proprietors or copyright and industrial property, civil legal action may provide inadequate financial returns to justify initiation of such actions. Poverty is certainly associated with bankruptcy, and injured parties in civil IP suits are not preferred creditors, thus even in cases where civil courts may justify imposing large fines, payment is unlikely as insolvency could swiftly follow such a decision. Hence, the burden of enforcement rests primarily upon the states which entered into agreements with other states and enacted domestic statutes. States have the greatest interest in securing economic order considering that market efficiency, transparency, and reporting correlate to improved macroeconomic conditions, increased tax revenues, and less market volatility. Although the theoretical free market does not include barriers to entry, globally and locally the free market is not the exclusive goal which nations and people pursue, and thus classical capitalist economic ideology does not serve as a legitimate defense against legal claims. While monopolistic and oligopolistic competition increase market efficiency, we still have laws prohibiting unfair competition (i.e. price fixing in the form of offering free pirated media) which are not nullified by consumer demands for perfect competition. Furthermore, Adam Smith’s limited government role included protecting the market against force and fraud, and counterfeiting is a form of fraud.
A sense of cognitive dissonance exists with respect to IPRs and their place in modern markets whereby the well-documented positive aspects of protection and enforcement are being ignored along with the formal written laws, including by government personnel who preach the virtues of legal compliance and economic prosperity. Criticisms of IPR regimes and skepticism regarding the validity and merit of IP laws undoubtedly relate to a devaluation of literacy, creativity, innovation, math, science, technology, and diligent academic pursuits. Piracy and counterfeiting have a paradoxical existence in that the very same goods which are infringed, which people demand rights to infringe upon, to buy, sell, and use could not exist if the ideology of the pirates and counterfeiters were dominant. Infringers are dependent upon the very people and system which they so adamantly oppose, yet IP owners and licensees are not similarly dependent upon infringers. This lack of mutual benefit and reciprocity is presumably where the concept of injustice comes into play. Reasons for infringement are probably fairly simple: income can be generated by manufacturing, distributing and selling infringing goods, and consumers can obtain infringing or artificially differentiated goods at a lower cost than the genuine good. Those reasons are largely irrelevant legally. The challenge has become not in merely understanding the criminal and market demands, but in regulating the system. To accomplish this goal, we must identify and integrate multiple economic and legal orders. If an economic order presupposes a legal order, then our global economic order comes out of various legal systems. In the ASEAN region, historical elements of legal systems include Confucianism, Taoism, Buddhism, Shari’a, Canon, English Common law, Civil code, socialist and communist legal systems. Absolute unity among those various systems is unlikely. Ergo, at the macro level we may have
competing systems at best, although conflicting systems are more likely. As we look closer, multiple jurisdictions appear starting with the regional arrangement, then perhaps partnerships between neighboring or friendlier countries, then at the national, provincial, municipal, and smallest local levels. International economic partnerships are difficult to establish and maintain as seen in the tripartite currency interchangeability agreement between Singapore, Malaysia, and Brunei, which Malaysia opted out of in 1973. We can infer that legal unity is then quite difficult to establish. ASEAN is an economically diverse region, but if we exclude Singapore and Brunei, we see the 8 remaining ASEAN countries more closely grouped around the poorer end of the economic spectrum. Low-functioning economic orders may then stem from low-functioning legal orders. ASEAN has a modern history of military conflict following centuries of occupation by colonial powers, which represents failures legally and may not be a recipe for great success economically. The ASEAN Economic Community (AEC), scheduled to start-up in 2015 would be a major feat in political, legal, and economic organization, suggesting that a group effort at largerorder development may be realized. However, 60% of respondents in an ASEAN Business Advisory Council survey reported that the group is ‚behind schedule‛ or ‚very behind schedule‛ to create an AEC. In the same survey, 58% of respondents reported a ‚medium likelihood‛ that ASEAN would reach its goal of realizing the AEC by 2015 while 21% reported a ‚low likelihood‛ and 9% reported that the goal is ‚not likely‛ (Wong, 2011). Economic uncertainty accompanies legal indiscretions and failure to honor commitments in the larger region. In broad terms, at the international level, Kisor’s (2006) ‚inefficient market‛ concept correlates to inefficient and ineffective legal
infrastructure among nations. Statistics on piracy and counterfeiting in the region show that legislative unity on IPRs has not significantly impacted the state of physical or internet markets. Some argument can be made that ASEAN is not unique in this way, and that regarding piracy, Western European and American virtual markets account for not only larger monetary damages, but also supply the world’s physical market piracy whereby local sellers of infringing media and software can download content from American and Western European sites and burn onto discs locally. While nations continue to join agreements and make written pacts in support of IPRs, the pragmatic reality changes slowly if at all. As the average duration of education increases throughout the ASEAN region, technical knowledge and skills needed to produce an assortment of products will as a result be more common in the populations. In 2012, cases of IP infringement are limited primarily to copyright and trademark. Most patent awarded in and around 2009 were not to domestic applicants, which suggests that the domestic populations are not highly skilled and knowledgeable enough to invent at a similar or greater rate as foreign firms which dominate the majority of the markets (ECAP III, 2009). Likewise, domestic counterfeiters are not likely skilled and knowledgeable enough to infringe on patents, but instead are largely dependent on Chinese imports. As education increases, so may the potential and will to infringe on patents, which may represent a greater threat than mere copyright and trademark infringement. Copyright and trademark infringement still poses various well-known threats to markets, regardless of secular perceptions of the crimes. Virtually the entire value of some brands is based on trademarks (i.e. Coca Cola). Software and entertainment companies’ only product is copyrighted material and without copyright protection, there is no clear opportunity for success in media, publishing, or software.
Table X: 2009 Application and Registration Statistics 2009 2009 % of 2009 2009 Domestic Domestic % of Apps Regs Apps Regs Apps Regs Domestic Domestic BR 42 42 0 0 0.0 0.0 KH 36 0 0 0 0.0 NA ID 4,518 2,384 415 102 9.2 4.3 LAO 18 0 1 0 5.6 NA MY 5,676 3,428 1,234 270 21.7 7.9 MR 0 0 0 0 NA NA PH 2,997 1,679 171 22 5.7 1.3 SG 8,736 5,609 827 480 9.5 8.6 TH 5,857 846 1,025 59 17.5 7.0 VN 2,890 706 258 29 8.9 4.1 Although corporations sometimes have high profit margins, and some take in more revenue than small nations, those organizations have few rights under international law. If domestic law enforcement agencies do not enforce IP laws, MNCs cannot enforce the laws themselves. And unlike nations, companies face threats to their very existence. Even global leaders like Nike, Adidas, Microsoft, Adobe, IBM, Pearson, Warner, BMG, Sony, and Universal have futures which are not absolutely certain. Nations will likely always exist and remain open for business, but businesses do not enjoy that same luxury of immortality. Companies do not press for IP enforcement and enter into civil suits because of greed alone, but in fact exercise of their legal rights is an essential part of their survival.
Despite the spurious accusations regarding the integrity and character of globalists and MNCs in the era of Occupy Wall Street, corporations provide jobs, products, and services, thereby playing one of the most important parts in improving living conditions worldwide. Given the positive impacts on billions of lives the corporate persons make, they are entitled to defend themselves and their properties. Nations are also obligated to protect and enforce those IPRs. Figure X: Legal Conditions Flow Chart
Figure X: Legal Options
Monetary values of infringement in the USA and Western Europe may limit the successes those nations have at the ICJ and WTO against a recalcitrant State X, especially in cases involving media considering that the bulk of infringing websites are American and Western European. Other avenues then exist for governments and businesses to curtail the infringement problem. Administrative Options Labor market regulations can be relaxed to allow more free movement of people within the ASEAN system and into ASEAN from elsewhere. Increased
competition in professional services industries may result in improved IP protection and enforcement. Naturalization options for foreign residents in ASEAN states may help improve perceptions of international economic cooperation and systemic integration. If infringement of IP is considered a ‚loss‛ among businesses, and if governments accept infringement as a ‚loss‛, then businesses can consider those losses charitable contributions which may generate goodwill. Governments can offer tax breaks for businesses based upon losses due to infringement. Businesses should take further steps to monitor and protect their supply chains. Better accounting and factory auditing may help. Businesses should orient human resources toward more IP-conscious activities. Applicant screening, hiring, promotions, transfers, and employee monitoring should highlight IP security. MNCs should staff subsidiary offices with some personnel from the homeland. Headquarters culture, discipline, and protocols should be implemented into subsidiaries. The MNC should function as one organization rather than many. Companies providing optical disc content should update and improve security codes. Enhanced internet checks, updates, and monitoring should be developed to verify licenses and invalidate installations of counterfeit/pirated software. Smart hardware developments may also reduce the prevalence of use of unlicensed software if hardware could detect and react to key-gens, crack-files, and other adulterated code.
Intellectual property officials should audit software licenses on government office computer regularly. Department or Ministry of Education officials should audit software licenses on school computers regularly. Infringing websites should be removed without delay or excessive legal complications. Innovation and creativity should be a focus in developing internet controls. Expansive public-private partnerships should be considered. ISPs should partner up with law enforcement personnel to create a safer network environment whereby movement and transfer of malware, bots, viruses, etc. is minimized with integrated web-crawler macro-security software. Internationally, more reporting is needed. Better case law databases are essential. More explicit goal-oriented partnerships are a must. Systems of executive and judicial directives are needed to match legislative uniformity. Penalties for national noncompliance and failure to meet targets can provide motivation for states to ensure protection and enforcement. A new deal for technically-skilled infringers can be offered. Criminal mastermind IT and scientific professionals can be integrated into law enforcement and assist in bringing in other intelligent criminals. Closing Any successful international economic order must integrate various and sometimes conflicting interests of individuals, organizations, and societies. Micro and macro orders need to be unified. Individuals and organizations have limited rights under international law, so without the cooperation of domestic courts little
can be done to rectify the infringement problem. A thriving ASEAN Economic Community requires full implementation and consistent enforcement of major international agreements such as those protecting IP. Despite the apparent conflict between theory and practice, IP protection and enforcement qualifies as an international custom, and thus it has been written into international law. Opaqueness in the ASEAN region prior to the 2015 AEC goal only delays what seems to be inevitable. This report has shown that within ASEAN, excluding most of Singapore and parts of Malaysia, infringement is ubiquitous and largely overlooked in physical markets. Infringement online is a rising problem, but until the physical markets are policed, the public cannot be rationally expected to adhere to an internet IP law. There are myriad reasons for the ongoing criminal activity, and for the lax enforcement policies, but there are also injured parties which demand a higher standard of justice. Economic costs of infringement are incalculable, but presumably very large. Further research is needed to discover the substitution rate between genuine and infringing goods, and consumer preferences for infringing or genuine goods. Future research is also needed to determine the effectiveness of various policy elements such as civil and criminal penalties, and education. I conclude that the written laws of ASEAN members aside from Myanmar establish IPR protection at the legislative level. In LDCs which are not required to fully implement the TRIPS agreement, conditions prior to 2015-2016 are not the subject of much discussion. Myanmar, Cambodia, and Laos need to further develop their infrastructure and concentrate on middle-decade goals. Thailand, Indonesia,
Philippines, and Vietnam need to move into the next phase of development and undertake serious efforts to regulate their markets sufficiently to support expansive domestic-based growth, which means IPRs need to be protected. Malaysia, Singapore, and Brunei need to tweak minor components of their systems and act as leaders in the region. Primary data and physical market research gathered in Thailand for this study verified data from secondary sources regarding prevalence of counterfeiting and piracy such that I conclude that secondary data for the region is likely accurate and reliable. Consistent with the Special 301 report, Thailand and Indonesia likely pose the greatest threats to IPRs. Thailand is probably the biggest violator in the region considering its far lower population than Indonesia and 4th ranking GDP per capita in the 10 member group. Thailand, being the place where the original ASEAN agreement was made, plays another symbolic role in the group, although its faults and problems are not to blame for those of other nations. Singapore is a leading nation in the world and should be the model for ASEAN development. However, Singapore, like Brunei, is a small nation and its customs may not be directly applicable in other larger territories. Malaysia has seen some very positive economic results, although religious ideology may limit the extent to which its customs may be applied in ASEAN jurisdictions other than Indonesia. In any case, each nation is entitled to sovereignty and independence, and each nation must rise up as a secular body, even with expansive free trade or other benefits within a broader AEC. A fundamental truth in the region is reflected in the Confucian belief that right living must come from within individuals, and similarly, there may be no outside influence that can persuade a nation to fully honor treaties which it does not desire to honor.
As of 2012, there have been no ICJ or WTO cases directly related to the continuing problems of counterfeiting and piracy in ASEAN. If foreign nations and MNCs believe their rights are severely prejudiced, and if there is great quantifiable monetary injury from infringement in the ASEAN (or other regions), then I recommend the ICJ, WTO, ICSID, or other UNCITRAL arbitration as a means to retrieve damages. IP crime and violations of IP treaties will not result in military action, so peaceful resolution of disputes is likely if disputes are raised and to be resolved. Education and social empowerment initiatives form the basis of a long term solution, but in the short and medium terms more enforcement and innovation incentives are needed. In short, governments in the 3 nations with the most notorious activities – Thailand, Indonesia, Philippines – need to take serious immediate steps to comply with international law. Without good faith implementation of treaties and more enforcement of IPRs such that pirate and counterfeit physical markets would be a black market – that is, out of sight – rather than the mainstream market, there is little legal defense available for those nations. In the end, businesses and individuals – the IP owners and licensees – are most responsible for advocacy of their rights. Nations, however, are compelled to offer both civil and criminal remedies unless domestic statutes do not support such actions. Under the laws, infringement in physical markets is criminal as it does not qualify as one of many exceptions including private domestic use. Therefore, the police in each jurisdiction have a duty to enforce the laws where infractions occur. Failure to tend to those duties in the 21st century is not only a dishonor domestically, but internationally as well. Surely nations desirous of development, contracts, and investment can motivate themselves somehow to apply their own laws, to adhere to a
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