In my last blog, I talked about Taiwan’s history of weak intellectual property protection going back to the days of the “ingenious rascals”, the industrial-scale book pirates of Chungking Street in the 1950s and 1960s, but also about the remarkable change that has taken place in recent years as it has climbed the ladder of creativity and innovation. At the same time, I noted concerns expressed by the US copyright industries over a “stalling” of Taiwan’s progress in terms of protecting IP, particularly copyright. How serious is this stalling, and what factors are at play? Nothing happens in isolation. The intellectual property situation in Taiwan is affected by broader political developments internally—and has to be viewed in the context of its challenging relations with China.
The China Factor
No discussion of Taiwan can take place without immediately mentioning China; the relationship with its huge mainland cousin is the touchstone of all that happens in Taiwan. China officially regards the regime on Taiwan as a form of renegade state, and considers it a part of China. The recent Taiwan election that brought a new President, Tsai Ing-wen of the independence-leaning Democratic Progressive Party (DPP), to power is now making the relationship more complicated. Over the past 8 years of the previous Kuomintang (KMT) administration, Taiwan and China became much more integrated economically, although not politically. This economic dependence has given China a means to influence outcomes in Taiwan, although that influence is now tempered by the current economic slowdown in China.
The Role of the Trans-Pacific Partnership (TPP)
The new DPP leadership would like to diversify Taiwan’s relationships and become less dependent on China. One obvious way to do this would be for Taiwan to be invited to participate in the Trans-Pacific Partnership (TPP), the 12-country trade bloc that includes the USA, Japan, Canada, Mexico, Australia, New Zealand, Peru, Chile, Malaysia, Vietnam, Singapore and Brunei, which was signed in February and is currently pending ratification. (Whether it will be approved by the US Congress and supported by whichever candidate becomes President is another question. The current prospects do not look good). China, like Taiwan, is not a member of the TPP trade pact.
While China is unlikely to be willing to take on the high level trade disciplines required of TPP members, Taiwan’s situation is different. Among the commitments already agreed to by TPP participating states are several in the area of intellectual property, including the extension of the term of copyright protection from 50 to 70 years. This would require a change in Taiwanese law. Other required changes would include criminal liability for circumvention of technological protection measures (TPMs) and establishment of ex-officio authority to seize pirated goods. Taiwan has indicated that it is willing to make these changes as part of its TPP commitments, if the TPP comes into force and if it is invited to participate.
China’s position on Taiwan’s participation has been ambiguous, but it’s a pretty good bet that China will discourage the current TPP members from inviting Taiwan to join. What this would mean for strengthened copyright protection in Taiwan is an open question, but if Taiwan does not become a TPP member and consequently fails to update its copyright laws, an opportunity to bring its copyright regime into line with new evolving international standards will have been missed. Taiwan’s copyright industries will be the main losers.
While Taiwan has made considerable progress in the area of IP protection, internet piracy is a recurring major problem, and is a major source of complaint for US copyright industries. But here again, the China factor looms large. Taiwan has an excellent record of “notice and takedown” with respect to domestic websites, with compliance rates of over 95%, but the problem is not created within Taiwan. Instead it comes from websites in China, safely established beyond the reach of the Taiwanese authorities. Site-blocking of such websites would be one solution, and a proposal to introduce a site-blocking mechanism was proposed by the Taiwan IP Office in 2012. This was met with a wave of political opposition in the legislature, driven in part by a political sentiment that blocking content in Taiwan, even copyright-infringing content, was somehow “undemocratic”. There was a desire to differentiate Taiwan from China where the “Great Firewall” censors and blocks much content on the internet, including search results and content that the Chinese authorities dislike for political reasons. In the face of this political opposition, the IP Office backed down and withdrew the proposal. There may still be a way to introduce site-blocking for copyright infringement reasons in Taiwan, but the issue is highly political owing largely to Taiwan’s unique relationship with China.
Cross-Straits Relations and IP
While relations with China are fraught with potential for rivalry, there is a simultaneous movement to improve relations across the Taiwan Straits in order to dispel misunderstandings. As a result, over 20 bilateral agreements have been signed between China and Taiwan; one of these covers intellectual property cooperation. This agreement provides, among other things, for the copyright accreditation of Taiwanese audio-visual products in the mainland market. Since Taiwan cannot be a signatory to the Berne Convention given its ambiguous legal status, bilateral agreements of this type are the substitute. The agreement also allows the Taiwan authorities to bring to the attention of China the existence of infringing websites targeting consumers in Taiwan, so that remedial action can be taken. To date there has apparently been some limited success in getting the Chinese to tighten surveillance and licensing of such websites, as well as to exert pressure on Chinese set top box (STB) manufacturers producing boxes for the Taiwanese market designed to facilitate infringement. This “Cross-Straits” cooperation is one response offered by the Taiwanese authorities in dealing with complaints from the copyright industries that they are taking insufficient action to attack online piracy.
Taiwan’s “three strike policy” with regard to users of infringing content is another area of concern. The government has tried to broker a voluntary system but the sending of notices to violators has broken down and neither the platforms nor the content owners are happy with the situation. There is some hope that as more providers of legitimate content enter the market (Netflix for example, has just launched in Taiwan), there will be less incentive for consumers to seek their content through unlicensed sources, largely based in China.
Copyright Act amendments are another area for discussion. Will Taiwan widen and loosen copyright exceptions, a move that can lead to greater uncertainty and litigation about what is legal use? I was told by Taiwanese officials that they are grappling with the issue of how to differentiate between public transmission and broadcasting, given digital convergence, and how to allow educational institutions to engage legally in distance education. They have also looked at, and discarded, a proposal to introduce a Canadian-style UGC “mash-up” exception, a wise move given the uncertainty that this experimental provision has generated.
Is the copyright glass in Taiwan half-full or half-empty? That depends on your point of view; it’s a lot better than it was but not as good as it could be. There is no doubt that there are problems with internet piracy, much of it originating in China, and that the political relationship between Taiwan and China complicates the situation, making enforcement difficult. On the other hand, the degree of economic dependence in its relationship with China provides Taiwan with an incentive to differentiate itself from the mainland, and to seek membership in international trade blocs that require higher standards of IP including copyright protection. Taiwan has come a long way from the bad old days when it was among the global centres of book piracy, but now it has to grapple with new forms of piracy coming from outside its borders, mostly from China, facilitated by the internet.
Taiwan has made remarkable progress over the past half century, most of it in the last 10-15 years, but it cannot afford to rest on its laurels and be complacent. If reforms are “stalled”, it is time to make an effort to resume forward momentum. Copyright in the digital era, with new means of infringement and a corresponding need for new forms of protection, is evolving rapidly as technology changes. While Taiwan may not have been placed on USTR’s 2016 Special 301 Watch List as recommended by the US copyright industries, if this island of 23 million people wants to continue to be one of Asia’s leading knowledge-based innovative and creative economies, it needs to keep up with the emerging challenges (and opportunities) facing the copyright industries.
The prime motivation for Taiwan to effectively deal with new copyright challenges should not be to stay off USTR’s Watch List, but rather to improve copyright protection for Taiwan’s own benefit and self-interest. In the process it can continue to demonstrate that, as in other areas of public policy, copyright protection in Taiwan is markedly different from what is currently happening in China.
(In 2016, China was once again placed on USTR’s Special 301 Priority Watch List).
© Hugh Stephens, 2016. All Rights Reserved.