The chances that Taiwan will soon be removed from a US government list of countries with troubling rates of intellectual property violations sank drastically on Monday when a powerful US business group recommended that it be kept on the list for another year.
While the group, the International Intellectual Property Alliance (IIPA), commended Taiwan for making improvements in its fight against piracy of software, videos, music, films, TV shows and books, it complained about what it called a troublesome increase in Internet piracy in Taiwan, including piracy over the government's TANet network.
The recommendations of the group, a confederation of seven trade associations representing 1,900 firms in the high-tech, entertainment and publishing industries, are usually automatically followed by the US Trade Representative office, which publishes its annual list of countries with piracy problems in the spring.
Taiwan is now on the so-called "Watch List" under the US "Special 301" trade law. Taiwan was on the more serious "Priority Watch List" until January last year, but was lowered to its current status by the trade representative's office at the recommendation of the IIPA. It had been on the priority list since 2001.
While inclusion on the Watch List presents no imminent danger of trade sanctions, it is expected to severely hamper Taiwan's efforts to make progress toward a free trade agreement with Washington, which the country's officials have been working on for several years.
It also represents another point of political contention between Taipei and Washington.
The IIPA estimates that US companies lost US$376.9 million last year as a result of piracy in Taiwan, mainly in the entertainment software and motion picture industries. While that was well below the record US$847.9 million the IIPA estimated that US firms lost in 2002, it is up from the US$320.4 million figure for 2004.
The IIPA zeroed in on the Internet when making its recommendations for action.
"Taiwan is beset by rapidly increasing instances of Internet piracy, especially through unauthorized peer-to-peer [P2P] file sharing services. As the problem grows, so must the response," the group's report said.
Internet piracy "has become the predominant form of piracy for most industries in Taiwan," the IIPA says.
For instance, it says the number of online infringements involving business software traced to Taiwan exceeded 344,000 in the first 10 months of last year, up from under 50,000 for the whole of 2004. Music, books and other types of intellectual property are also showing sharp rises in online violations.
The group said that enforcement must be expanded by the two agencies responsible, the Joint Internet Infringement Inspection Special Task Force and the IPR Police.
This should include extra resources for training, equipment and manpower for the two ill-equipped agencies.
In addition, companies providing Internet access should be asked to cooperate, and the law should be changed to clarify their liability and provide for penalties.
The TANet network "is being used widely throughout Taiwan for Internet piracy, including P2P file sharing," the group said, with the Ministry of Education claiming that it has no lawful obligation to impose controls on the situation.
The report also urged effective action against the illegal photocopying of books, especially academic texts, journals, English-language teaching materials and professional reference books.
Other recommendations include effective monitoring of exports of counterfeit cartridge-based video games and their components, and an expansion of the new Intellectual Property Court to handle more copyright cases.
The report also recommends that China remain on the US Trade Representative's Priority Watch List for another year.
It estimates that US businesses lost nearly US$2.4 billion due to piracy in China, making it the world's worst offender in piracy of intellectual property.
TAIWAN'S RESPONSE
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Taiwan has made a concerted effort to improve the protection of intellectual property and had high hopes of being removed from the list, office Director-General Tsai Lien-sheng (蔡練生) said last month.
Citing a preliminary estimate, Tsai said that Taiwan's piracy rate had dropped from 43 percent in 2004 to 36 percent last year.
Additional reporting by Jessie Ho
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