Intellectual Property Protection and Management in ASEAN

Focus on Piracy and Counterfeiting in Physical Markets Adam Richard Tanielian

ASEAN Economic Review

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 GDP (PPP, Rate, US$bn) US$bn) $15.6 $21.11 $13.2 $32.95 $834.3 $1,121 $7.9 $17.44 $247.6 $447 $50.2 $82.72 $216.1 $393.4 $266.5 $314.5 $339.4 $609.8 $121.6 $299.2

GDP Per Capita ($US) $49,400 $2,300 $4,700 $2,700 $15,600 $1,300 $4,100 $59,900 $9,700 $3,300

Note: Cambodia, Laos, and Myanmar are Least Developed Countries (UN, 2011)

All figures are from 2011-2012 Source: CIA

BR KH ID LAO MY MR PH SG TH VN

Real Growth % Below Poverty Labor Force Rate Unemployment Line (million) 2.8% 3.7% ('08) 0.1888 ('08) 6.7% 3.5% ('07) 31% ('07) 8.8 ('10) 6.4% 6.7% 13.33% ('10) 117 8.3% 2.5% ('09) 26% ('10) 3.69 Unless otherwise 5.3% 3.1% 3.6% ('07) 14.9 stated, all 5.5% 5.5% 32.7% ('07) 32.53 numbers are 4.7% 7.2% 32.9% ('06) 39.81 from 5.3% 1.9% 3.212 2011-2012 1.5% 1.0% 9.6% ('06) 39.28 Source: CIA 5.8% 4.1% 10.6% ('10) 48.23

BR KH ID LAO MY MR PH SG TH VN

% of Labor Force % of Labor Force % of Labor in Agriculture in Industry Force in Services 4.2% 62.8% 33% 57.6% 15.9% 26.5% 38.3% 12.8% 48.9% 75.1% 13% 36% 51% 70% 7% 23% 33% 15% 52% 0.1% 30.2% 69.7% 42.4% 19.7% 37.9% 53.9% 20.3% 25.8%

Statistics are from 2001-2010

Source: CIA

BR KH ID LAO MY MR PH SG TH VN

% of GDP in % of GDP in % of GDP in Agriculture Industry Services 0.9% 72.3% 26.8% 30.9% 22% 40% 14.9% 46% 39.1% 27.8% 34.8% 37.4% 10.2% 42.1% 47.8% 43% 20.5% 36.6% 12.3% 33.3% 54.4% 0% ('10) 28.3% ('10) 71.7% ('10) 12.2% 45.3% 42.5% 20.0% 41.4% 38.6%

Except where otherwise indicated, figures are from 2011-2012

Source: CIA

Percent of Population with at Least a Secondary Education
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%

BR KH ID LAO MY MR PH SG TH VN

Source: UN (2010)

ASEAN Domestic Laws

© BR 1999 Emergency (Copyright) Order

™ 2000 Trademark Act (Chapter 98); 1953 Merchandise Marks (Chapter 96) KH 2003 Law on Copyright and 2002 Law Concerning Related Rights Marks, Trade Names, and Acts of Unfair Competition ID* Law No. 19 of July 29, 2002 Law No. 15 of August 1, on Copyright 2001 regarding Marks

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

* Indicates a stand-alone trade secret statute

© LAO 2007 Intellectual Property Laws MY 1987 Copyright Act; 2000 Optical Discs Act MR 1911 Copyright Act; 1877 Specific Relief Act; 1996 TV & Video Law; 1996 Motion Picture Law; 1996 Computer Science Development Law

™ 2007 Intellectual Property Laws 1976 Trademark Act; 1972 Trade Descriptions Act 1994 Citizens Investment Law; 1860 Penal Code; 1889 Merchandise Marks Act

Patents 2007 Intellectual Property Laws 1983 Patents Act 1945-46 Burma Patents and Design Act

© PH 1997 Intellectual Property Code; 2003 Optical Media Act SG 1987 Copyright Act (Chapter 63) 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

™ Patents 1997 IP Code; 1992 Consumer Act; 1930 1997 IP Code Penal Code 1998 Trade Marks Act (Chapter 332) 1995 Patents Act 1991 Trademark Act of B.E. 2545; 1979 1999 Patent Act and Consumer Protection Act of B.E. 2522 Amendments 2005 Law on IP No.50/2005/QH11; 1999 2005 Law on IP; 2000 Law Criminal Code; 2005 Civil Code on Science and Technology; 2007 Law on Technology Transfer * indicates trade secret statute

BR KH ID LAO MY MR PH SG TH VN

Prison Prison Capacity Population % Population (yr) (yr) of Capacity 379 ('10) 366 ('07) 103.6% 15,001 ('11) 8,360 ('11) 179.4% 141,689 ('11) 85,474 ('09) 165.8% 4,020 ('04) N/A N/A 38,387 ('10) 32,000 ('09) 120.0% 60,053 ('09) 26,100 ('02) 230.1% 104,710 ('11) 35,000 ('11) 299.2% 12,978 ('10) 15,564 ('10) 83.4% 224,292 ('11) 105,748 ('08) 212.1% Source: ICPS, 2012; Walmsley, 2011 108,557 ('10) N/A N/A

International Law
Overview and National Status of Treaties

BR KH ID LAO MY MR PH SG TH VN

Status of the Vienna Convention N/A Signature 1969 N/A Accession 1998 Accession 1994 Accession 1998 Ratification 1972 N/A N/A Accession 2001

Articles 26 & 29 – Treaties are valid and binding. Article 27 – Internal law may not be used as justification for non-performance of treaty obligations.

Big 4 Treaties
• • • • Berne Convention Paris Convention Madrid Agreement & Protocol WTO TRIPS Agreement

BR KH ID LAO MY MR PH SG TH VN

Party to the Berne Convention 2006 None 1997 None 1990 None 1951 1998 1931 2004

Status of the Paris Convention Accession 2011 Accession 1998 Application 1950 Accession 1998 Accession 1988 None Accession 1965 Accession 1994 Accession 2008 In Force 1949

WTO Membership (m.d.y) 1.1.1995 10.13.2004 1.1.1995 Observer 1.1.1995 1.1.1995 1.1.1995 1.1.1995 1.1.1995 1.11.2007

Status of Madrid Protocol None None None None None None None Accession 2000 None Accession 2006

BR KH ID LAO MY MR PH SG TH VN

Copyright Trademark Criminal Trade Duration Moral Term Penalties for Secret (50, 20yrs) Rights (7yrs+) Infringement Statute                     Legislative Implementation                               Source: WIPO Lex

WTO TRIPS Agreement

Personal Use Exception BR Yes KH Questionable ID No* LAO Yes MY Yes MR N/A PH Yes SG Yes, questionable TH Yes, questionable VN Yes *If we assume such use "prejudices the legitimate interests of the author."

Throughout the region, infringement seems to be qualified when profit is generated through the sale, rental, and or exhibition to the public of works. Although the language of some statutes is unclear, and although cases involving fair use exceptions were not found, it is apparent that private domestic use is generally not considered infringement. If we do not automatically assume that non-profit private use of unauthorized copies “prejudices the legitimate interests of the author”, then we can infer that throughout the region, such use is generally allowed under the law.

WIPO Treaties
• WIPO Convention • WIPO Copyright Treaty • WIPO Performances and Phonograms Treaty

WIPO WIPO Convention Copyright Treaty BR 1994 N/A KH 1995 N/A Ratification 1997 ID 1979 In Force 2002 LAO 1995 N/A MY 1989 N/A MR 2001 N/A PH 1980 Accession 2002 SG 1990 Accession 2005 TH 1989 N/A VN 1976 N/A

WIPO Performances and Phonograms Treaty N/A N/A Ratification 2004 In Force2005 N/A N/A N/A Accession 2002 Accession 2005 N/A N/A

Supplementary Copyright Treaties
• 1952 UNESCO Universal Copyright Convention • 1961 Rome Convention • 1971 Convention for the Protection of Producers and Phonograms against Unauthorized Duplication of Their Phonograms

Supplementary Trademark Treaties
• 1973 Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks • 1994 Trademark Law Treaty • 2006 Singapore Treaty on the Law of Trademarks

Patent Treaties
• Patent Cooperation Treaty • Patent Law Treaty • Strasbourg Agreement Concerning International Patent Classification

BR KH ID LAO MY MR PH SG TH VN

Status of the CTOC Accession 2008 Ratification 2005 Ratification 2009 Accession 2003 Ratification 2004 Accession 2004 Ratification 2002 Ratification 2007 Signature 2000 Signature 2000

UN Convention against Transnational Organized Crime Article 2 defines “serious crimes”, which qualify “organized criminal groups”, as crimes having maximum penalties of 4 or more years imprisonment.

BR KH ID LAO MY MR PH SG TH VN

© 2yrs 1yr 7yrs 2yrs 10yrs 3yrs 6yrs 5yrs 4yrs 3yrs

™ 10yrs 5yrs 5yrs 2yrs 3yrs 3yrs 5yrs 5yrs 4yrs 10yrs

Dispute Resolution
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

Piracy and Counterfeiting Statistics

BR ID MY PH SG TH VN NA WE CN

Software Piracy Rates 2006 2007 2008 67% 68% 85% 84% 85% 60% 59% 59% 71% 69% 69% 39% 37% 36% 80% 78% 76% 88% 85% 85% 22% 21% 21% 34% 33% 33% 82% 82% 80%

2009 67% 86% 58% 69% 35% 75% 85% 21% 34% 79%

2010 66% 87% 56% 69% 34% 73% 83% 21% 33% 78%

"NA" = North America (excluding Mexico); "WE" = Western Europe; "CN" = China

Source: BSA

BR ID MY PH SG TH VN NA WE CN

Commercial Value of Unlicensed Software ($M) 2006 2007 2008 2009 $13 $15 $14 $350 $411 $544 $886 $289 $311 $368 $453 $119 $147 $202 $217 $125 $159 $163 $197 $421 $468 $609 $694 $96 $200 $257 $353 $8,104 $9,144 $10,401 $9,379 $10,642 $11,655 $13,023 $11,750 $5,429 $6,664 $6,677 $7,583 "NA" = North America (excluding Mexico); "WE" = Western Europe; "CN" = China

2010 $19 $1,322 $606 $278 $233 $777 $412 $10,623 $12,771 $7,779

Source: BSA

ID MY PH SG TH VN Music 63% 61% 32% 20% 43% 100% Movies 90% 80% 74% 25% 63% 100%

Piracy Rates (top) Source: Proserpio et al (2005)

ID MY PH SG TH USA CN

Pirate Pirate Sales at Units Sold Trade Prices (mil) ($USmil) 220.7 $368.1 2.6 $14.2 2.9 $11.7 0.3 $1.7 17.2 $47.3 39.1 $335.6 Estimated Pirate Music Value (bottom) 424.6 $585.2 Source: IFPI (2006)

Estimated Movie Piracy Rates and Market Value: Top 10

China Russia Thailand Hungary Poland Mexico Taiwan Spain India Italy

90% 79% 79% 76% 65% 61% 54% 32% 29% 25%

Mexico UK France Russia Spain China Japan Italy Germany Thailand

$483 $406 $322 Estimated Losses to MPA Companies $266 Internet $253 ($USmil) $1,859 $244 Hard Goods $216 ($USmil) $2,906 $161 $157 $149 Source: MPA (2004-2005)

Status of ASEAN Nations on the USTR’s Special 301 Report
Brunei Indonesia Malaysia Philippines Thailand Vietnam PWL PWL PWL WL WL PWL WL PWL WL WL PWL WL PWL WL WL PWL WL PWL WL WL PWL WL PWL WL WL PWL WL WL WL WL WL WL WL PWL WL WL WL WL PWL WL WL PWL WL WL PWL WL WL PWL WL WL PWL WL WL PWL WL WL PWL WL WL = "Watch List", PWL = "Priority Watch List" Cambodia, Laos, Myanmar, and Singapore not on lists.

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: USTR, IIPA

Consumer Survey
196 Participants

Age
51-77 13% 36-50 14% 18-25 40% Female 50%

Sex

Male 50%

26-35 33%

Occupation
Government 2% Other 6% Service 14% Business 24%

Certificate 9% Doctor 2%

Education

Education 13%

Master 10%

High School 27%

Retired/Student/ Unemployed 23% Health Care 9%

Bachelor 52%

Engineer/Tech 9%

Native Language
Other 5%

Nationality
USA 16%

Not English 32% English 68%

European 27% UK & IRE 27% AUS & NZ 16% CA 9%

Religion
Buddhist 1% Protestant 8% Catholic 9% Christian 13% Atheist/Gnostic 5%

Other 4%

Not Reporting 60%

Q1: How much of a problem are piracy/counterfeiting of goods in this country?
70 60 50 40 30 20 10 0 Lowest Low Medium High Highest No Opinion 20 18 16 14 12 10 8 6 4 2 0 USA Male Female UK & IRE CA AUS & NZ European Other

Question 1 Responses by Nationality

Lowest Low Medium

Question 1 Responses by Sex
40 35 30 25 20 15 10 5 0 Lowest Low Medium High Highest

High
Highest

Q2: How much of a problem are piracy/counterfeiting of goods in ASEAN?
100

80
60 40 20

Question 2 Responses by Nationality
25 Lowest Low Medium High Highest No Opinion 20 Lowest 15 10 Low Medium High 5 0 USA UK & IRE CA AUS & NZ European Other Highest

0

Question 2 Responses by Sex
50 45 40 35 30 25 20 15 10 5 0 Lowest Low Medium High Highest

Male Female

Q3: What level of appeal do knock-off goods have to foreign tourists?
100 80 60 40 20 0 Lowest Low Medium High Highest No Opinion 35 30 25 20 Lowest Low Medium High Highest

Question 3 Responses by Nationality

Question 3 Responses by Sex
60 50 40 30 20 10 0 Lowest Low Medium High Highest Male Female

15 10 5 0 USA UK & IRE CA AUS & NZ European Other

Q4: Estimate the level of purchases of knock-off goods by foreign tourists.
100 80

60
40 20 30 0 Lowest Low Medium High Highest No Opinion 25 20 15 Lowest Low

Question 4 Responses by Nationality

Question 4 Responses by Sex
60 50 40 30 20 10 0 Lowest Low Medium High Highest Male Female

Medium

10
5 0 USA UK & IRE CA AUS & NZ European Other

High
Highest

Q5: Estimate the threat level that knock-off goods organizations post to the public.
70 60 50 40 30 20 10

Question 5 Responses by Nationality
18 Lowest Low Medium High Highest No Opinion 16 14 12 10 Lowest Low Medium High Highest

0

8

Question 5 Responses by Sex
45 40

6 4 2 0 USA UK & IRE CA AUS & NZ European Other

35
30 25 20 15 10 5 0 Lowest Low Medium High Highest

Male
Female

Q6: Estimate the level of losses to companies that shanzhai/knock-off goods create.
70 60 50 40 30 20 10

Question 6 Responses by Nationality
Lowest Low Medium High Highest No Opinion 20 18 16 14 12 10 8 6 4 2 0 USA Male Female UK & IRE CA AUS & NZ European Other

0

Lowest Low Medium High Highest

Question 6 Responses by Sex
35 30 25 20 15 10 5 0 Lowest Low Medium High Highest

Q7: To what level do non-genuine goods threaten jobs and economies?
70 60 50 40 30 20

Question 7 Responses by Nationality
Lowest Low Medium High Highest No Opinion 20 18 16 14 12 10 8 6 4 2 0 USA UK & IRE CA AUS & NZ European Other

10
0

Lowest Low Medium High Highest

Question 7 Responses by Sex
40
35 30 25 20 15 10 5 0 Lowest Low Medium High Highest Male Female

Q8: What is the quality level of knock-off goods?
70 60 50 40 30 20 10 25 Lowest Low Medium High Highest No Opinion 20 Lowest 15 Low

Question 8 Responses by Nationality

0

Question 8 Responses by Sex
35 30 25 20 15 10 5 0 Lowest Low Medium High Highest Male Female

10

Medium
High

5
0 USA UK & IRE CA AUS & NZ European Other

Highest

Q9: Why do customers purchase pirated/counterfeited/knock-off goods?
200 150 100

50
0 Lower Price Support Lower Class People Destabilize Markets Convenience No Opinion 50 45 40 35 30 25 20 15 10 5 0

Question 9 Responses by Nationality
Lower Price Support Lower Class People Destabilize Markets Convenience

Question 9 Responses by Sex
90 80 70 60 50 40 30 20 10 0 Lower Price Support Lower Class People Destabilize Markets Convenience

Male Female

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