Abstract:

As all-encompassing as the idea of Intellectual Property and Copyright is today, the mis-coinage "Piracy" has wide applications beyond those of w4r3z d00dz, key generators and bootleg distributions. Music soundtracks, HTML source code, and 2D graphics are all subject to low-cost duplication efforts.

This study aims on providing a local perspective on the positive effects provided by uncontrolled duplication, both on industrial growth and cultural identification; this mentality was arguably the core reason of the so-called "Taiwan Miracle", which heavily depends on IP-free materials in the Commons.

Duplication has always been one of the key factors for distributing information ever since before. Especially for developing countries such as Taiwan, people couldn't receive foreign information easily in the early times, from the nineteen fifties to the seventies. And with "Speech Censorship" during the "White Terrorism" era (1946-1987), many creations might not have had a chance to be seen on the mainstream media due to its ideology.

Since 1980, the economy of Taiwan started prospering, with the growing consumption of foreign entertainment and policies of turning into an "advanced" country, the government did a series of modifications of copyright laws putting tighter restrictions on duplication. And now, with progressive digital technology, the ability of duplicating and distributing is no longer held by a few. What comes with this situation is the fight between users and enterprises on copyright.

Highlighting the most influentual events of the past few years, we provide a chronology of the mass-movement of duplication and distribution using various media. Because music and software have something in common on duplicaion: 1) low cost, 2) fast transmission, 3) high degree of user experience and acceptence, the organizations promoting IP most are Business Software Alliance (BSA), IPAPA, MPA and International Federation of the Phonographic Industry (IFPI). Influenced by their extremely vigorous promotion and action, the Legislative Yuan passed numbers of more resrictive law acts, like the "Optical Media Control Act" and new copyright law modification acts.

Thus, focusing on the development of software and pop music in Taiwan, this article attempts to explore the following issues:

1. Background: Changes on Copyright laws since 1980, and how they affected Taiwan's creative environment.

2. Revolution: How did the emergence and ubiquity of digital technology impact the current situation?

3. Current situation: Various ways of acquiring information.

4. Case studies: Boycotting organizations and legislative institution's policies.

5. Impact: Can more restrictive laws really stop the expansion of copying? Or is it the creativity that's being stopped?

I. Background

In the early days, the purpose of copyright legislation in Taiwan was to protect domestic creations only. The economy growth since the end of 1970 promoted a steady increase in consumption of imported products. The general public was exposed to manga (comics) from Japan, pop music from USA, as well as a variety of movies from Europe, the USA and many other countries, brought about by the emergence of MTV shops.

There were unregulated uses of these videos, books and mangas. One could import them, make copies, and distribute them without penalty. These goods were so called "Parallel Imports of Genuine Goods". There were no laws to restrict these behaviors.

And then, comes the big modification of copyright law. Taiwan was first listed on the annual "Special 301" Report on Global Intellectual Property Protection by the USA in 1989; Since that time, our copyright law has been constantly directed by the USA.

Section 301 of the Trade Act of 1974 provides the United States with the authority to enforce trade agreements, resolve trade disputes and open foreign markets to U.S. goods and services; it also enacts the principal statutory authority under which the United States may impose trade sanctions on foreign countries that either violate trade agreements or otherwise maintain laws or practices that are unjustifiable and restrict U.S. commerce.

Ever since 1989, Taiwan has always been included in the report due to infringement of IP protection. The United States Trade Representative usually starts investigation in February and releases the report in April or May. In order not to let section 301 effect the trade between Taiwan and USA, once being listed on the report, Taiwan government will take action to try to meet American demands.

Modified copyright laws give imported intellectual property goods the same IP protection as domestic IP goods, and Taiwan's IP goods will be protected when exported to those foreign countries. For almost all developing counties, this means more severe restriction, because copyright law in developed countries are always more sophisticated than ours.

For the content industry, one main impact was the consolidation of the agent system. We could no longer obtain foreign cultural commodities, duplicate and distribute at our will, instead, we had to get it through imports by its agent retailers or branch companies, as self-importing becomes illegal.

Those copyright law changes consolidate the agent system of importing goods. This system had two important impact on Taiwan:

1. Users cannot choose the content such as books and music they prefer, because the law restricts people form parallel importing goods by themselves. Audiences can only adapt the content filtered by agents. Agent retailers make importing decision by the amount of consumption, thus, those alternative and unpopular goods such as professional books and unpopular music performance lost its way of being introduced to Taiwan.

2. For pop music, due to the prosperity of foreign pop music, those companies are no longer satisfied with sharing profit with local agent retailers. During 1990-1995, mainstream pop music enterprises either established branches in Taiwan, or acquired local companies; this changed the pop music environment of Taiwan. Software, when it became increasingly popular and more widely used in the '90s, was immediately included into copyright law protection, and developed in a similar way and got much more monopolized.

Now, except for one local record company, Taiwan's pop music market is dominated by the five major labels from USA (eg. EMI, SONY, Time Warner). So is the software market: OS -- Microsoft Windows, productivity suite -- Windows Office, image processing -- Photoshop and Illustrator. Products increased in abundance, but became much more monopolized.

II. Revolution

Progress of digital technology and popularity of hardware not only accelerate the speed of information distribution, but also break the barriers outlined above. Some important changes are as follows:

* Spreading of computer and optimal read/write device

CD ROM, CD Writer, DVD ROM, DVD RW, VCD/DVD player, MP3 player, MO, MD, DV, Digital Camera, etc.

* Expansion of storage device capability

The age of 10 MB hard drives is long past, and hard drives less than 10 GB are rarely found. What we have now is HD's with dozens of Gigabytes storage space.

* Simplicity of transforming digital file formats

Besides text, more and more data can be transformed into small and low distortion digital file formats; this includes soundtracks, images and photographs. And, according to its usage, different file formats can be converted back and forth.

* The Internet

The presence of Internet breaks the restriction of borders, and goes through the barrier of agent retailers. Cross-border on-line ordering enables users from everywhere to chose their preferred content; all kinds of information transfer architectures like HTTP, FTP, E-mail, peer-to-peer expanded the scope and speed of information distribution.

Due to popularity of hardware, convenience of software, and the connection by Internet, we are able to get in touch with more content, create and transfer information more easily. For users, it is natural to transform their favoured music into other file format (.mp3 or .ogg), store them, and use a variety of tools (Media Player, Winamp, iTunes) to rearrange, playback, and to introduce them to others through the net. Lending software tools on hand to others, or reusing them, is more common behavior. On the other hand, massive piracy organizations were also steadily established -- instead of selling in the physical world, you can order and buy it on the Internet.

However, self-motivated distributing behavior by users and profit-oriented transaction of pirating are being equated by the law enforcement agency -- they are both piracy, illegal, and non-respecting of the intellectual property of creators. These technological developments and effects are a global situation, and Taiwan is not unique, so we are not going to focus on that debate. What follows here are descriptions of the current condition and specific cases happening in Taiwan, their context and impact.

III. Current situation

Thanks to technology, besides regular agent retailers, there are a variety of small and underground channels.

When talking about electronic devices, local people will immediately think of the Guang-Hua Market. Besides computer-related software, hardware and electronic devices, there are also unauthorized CD copies of different kinds of movies, animations, games and warez. Before 1995, as broadband and CD burner were not so popular at that time, buying necessary warez in Guang-Hua Market was a common memory shared by many.

In addition to the usual operating systems or Office packages, there are also specialized engineering graph tools (eg. Autocad), image processing softwares (eg. Adobe products), and even softwares not imported by domestic agent retailers. The price may be 1/10 or lower than its retail price.

Moreover, commodity products without official agent retailers (such as Japan animation/TV series VCDs, game and animation OSTs, China an Korean TV series, and old movies) are also available there in vast amounts.

- Map of Guang-Hua Market
- DBT (warez cdr), everybody's secret pleasure
- Introduction to the DBT culture
- An explanation to DBT

* Bagonia Alternative Movie Store

This is just a small store at the corner of Chung-Chin South Rd., selling all kinds of artistic/non-popular movie VCDs, DVDs and VHS. Available genres varies from 1930's Chinese movies, out-of-print European and American movies, to performances of famous directors all over the world.

Begonia Website

* 8 1/2 Classic Theater

This is a private theater in Taichung, playing different kinds of art movies. Members can even rent them home.

8 1/2 Classic Theater

* Internet-based distribution

With the help of TANet (Taiwan Academia Network) and broadband access, there are web sites for software downloading and BBS boards focusing on cracking technique, they provides users software serial numbers or cracking tools:

- Slime's First Homepage

- The tw.bbs.comp.hacker (sic) newsgroup

Within the TANet, it became a common practice for students to use Window's "Network Neighborhood" sharing or private FTP site for data transferring.

P2P technology spearheaded ICQ is also welcomed by the public. Besides international utilities like Napster, AudioGalaxy and Gnutella, there are tools with Chinese-only interfaces: Ezpeer and Kuro, the later is provided by Hinet ISP for their customer only.

- Ezpeer

- Kuro

For students without much buying power but who have high need for cultural content or information technology, those are inexpensive and quick ways of getting data. Because of this cradle of information abundance, these future intelligentsia can become the main niche of non-popular art and alternative culture when they grow up and have stronger economic ability.

Therefore, we can find stores like Eslite Bookstore/music, Cafe 2.31, small movie exhibitions and music community communicating primarily through Internet and on-line purchasing.

IV. Case Studies

Technology brings not only advantages; while it may benefit users, it also damages the old providers' benefit. Facing growing and hard-to-defend digital technologies, instead of moral appeals to the public, enterprises turn to the legal system for help, expecting that laws could solve those copyright disputes arising from digital technologies. Following here are some big cases that happened during the last two years:

* "National Chen-Kung University MP3 (NCKU) Event" and students' protest

On April 11th, 2001, the Tainan District Prosecutor's Office led police to sweep NCKU's dormitory, arresting 14 students because they had MP3s on their computer. IFPI went to the Tainan District Prosecutor's Office and said they will accuse these students of pirating copyrighted music.

This incident proved to be highly controversial; NCKU established a students' protest all over Taiwan, and there were many comments from the academic and law community. These comments focused on some particular issues: is it appropriate for Justice to intrude into the dormitory? Is it reasonable to treat MP3s stored in computers as criminal evidence? Does downloading MP3s violate copyright?

On the other hand, in order to protest mainstream recording industry, "People's Union for Music Promotion" hosted a booth in front of Kaohsiung City's Chiang Kai-Shek Cultural Center on May 5th, when the "Golden Music Award" was held there on that day. They prepared laptops and CD burners for downloading and duplicating MP3s, so people just need to bring a blank CD and then they can copy these music.

This is arguably the first case in Taiwan that targets general users, treating their non-profit music exchanging action as illegal piracy. The case was settled out of court, but the accused students must pay some $3,000 US dollars for an advert in major newspapers to publicly apologize.

- Taipei Times: Record industry sues file-swapping students
- Slashdot: Music Industry Raids Taiwan Computers For MP3s - China Times coverage - IFPI's official statement
- Download and copy, on-the-fly action

* Ezpeer's payment controversy

Established in mid-2000, Eastern Sky Inc., a Taiwan-based company introduced a P2P file transfer service called "Ezpeer" (ala Napster+ICQ), it has started to charge its users since 16th Oct 2002. The model is as follows: 1 Taiwan dollar (~3 cents USD) equals to 1 "P-dollar", which must be bought by users in order to begin exchanging files over Ezpeer. The fee is calculated by a simple formula 1MB = $1P. 30% of the paid P-dollars are transferred to the providing party's account, with an undisclosed portion paid to the labels.

IFPI immediately objected to this mechanism; they consider that providing users with a file transferring service indicates piracy, and ordered Eastern Sky to stop providing this service. Eastern Sky rebutted by saying providing tools to users doesn't break the law, since the data is controlled by users. This is like a Taiwan version of the Napster dispute.

Ezpeer had created a branch in Hong Kong in July 2002. IFPI says that they will continuously watch the data transferred through Ezpeer, and once they found IFPI copyrighted music, they shall send a cease-and-desist letter to Eastern Sky.

* IFPI's 4th April "March against Piracy"

On 4th April 2002, many of Taiwan's performers in the entertainment industry marched on the streets, claiming the rampant piracy had hurt their rights, and encouraging fans to support official copies. Cinemas, VCD and video cassette store owners also made a strike on that day, echoing their support for protesters. The industry appealed to the government for a harsher law against copyright infringements, to pass the Optical Media Control act, and to turn copyright infringements into public-prosecutable crimes.

- IFPI's manifesto of "March against Piracy"
- News coverage

* Ministry of Justice's "War against piracy"

After Taiwan's Executive Yuan marked 2002 as "The Year of Intellectual Property Protection Activities", the Ministry of Justice ordered a national investigation and prosecution on 1st of May, in hope to get rid of Taiwan's notorious image as the "Kingdom of Piracy", as well as to "preserve the vital creativity in Taiwan". The targets of the investigation include all government agencies, companies, schools and individual users.

The public panicked at the sudden announcement; the "anti-anti-piracy" grass-root movement quickly gathered, and hosted the "March against march against Piracy" on 25th May, attempting to publicize the harm to knowledge and creativity caused by draconian anti-piracy laws.

V. Impact

In order to respond to the content industry's demands and display its dedication on protecting intellectual properties, Taiwan government drastically changed its legislative policies, enacting harsher penalties to various kinds of copying.

* Optical Media Control Act (OMCA)

The OMCA was first drafted in year 2000, passed in 2001, and came into effect since September 2002.

It mandates producers of optical media to acquire a license from the government; moreover, they have to burn a "source identification code" on the discs, assigned by the deputy office. Producers also have to keep client's orders, license certifications and produced contents, for a minimum of three years. All applicant's data are subject to IFPI's inspection at any time; the technology of the source ID code is also provided by IFPI.

We can argue that the OMCA aims to raise the cost of CD's production, as well as to limit their usage. The mandated preservation of contents and source ID enables the government to trace any illegally distributed CD back to its producers and clients. Its restriction to blank CD's general availability may also stifle the public's ability to copy their data.

* The impending amendment to the Copyright law

The most recent amendment to the Copyright law, submitted for review at 4th of July 2002, has three major changes: Some copyright infringement cases may become public-prosecutable; extended definition of infringement; DMCA-like anti circumvention articles.

In addition to treating for-profit copying activities as copyright infringement, the amendment proposed to turn non-profit, "commercial-scale" copying into criminal activities. That is, enabling "Network Neighborhood" sharing, peer-to-peer software, or mass-mailing copyright restricted information would all become punishable. Also, for-profit copyright infringements would become public-prosecutable crimes.

DMCA-like articles were also added, in the interest to enhance restriction on digital contents. Circumvention of copy-protection technologies, production, import and distribution of circumventing devices, as well as dissemination and service of circumvention are all to be banned.

These amendments have not yet been enacted, but there was little controversy except for the public-prosecutable articles.

- Summary of amendments and changes

On the other hand, the content industry also used technological and media resources to suppress and denounce the so-called "Piracy Activity".

* Technological restrictions

In addition to legislative restriction, the content business also produced copy-protected CD, which prevents playback on personal computers, allowing only uses on traditional CD players.

* Media denouncement

On the "Voice of Taipei" channel's radio show, the DJ played soundtracks of a pre-release album, while telling the audience "Ready? Set, record!" IFPI and the album's record label strongly admonished this incident, and boycotted by retracting all advertisements on that channel, until the DJ personally apologized.

The label and IFPI repeatedly stressed in public that such "blatant activities to promote piracy, infringement and disrespect of intellectual property" are not to be allowed.

- Press coverage

* Increased entry barrier for independent artists

For small-scale studios and independent artists, the various legal and technical barriers undoubtedly increased the difficulty of creation and publishing. The Optical Media Control Act raised costs of self-publishing, while the IFPI-regulated licensing scheme may create another field of monopoly. We may hope for the net to remain as the alternative distribution channel, but judged from the trend in legislations, control for digital contents will only become harsher in the future.

Creations are rarely totally made from scratch; we all stand on shoulders of giants. Movie makers need accompanying soundtracks; music producers need sound samples; without reusable contents, creation remains difficult even with appropriate tools. At least, many of my friends worried that once blank CDs become expensive, they cannot easily burn and distribute their works anymore.

John Gilmore's "What's Wrong With Copy Protection" discussed this problem in detail.

- What's Wrong With Copy Protection

* Crippling users' rights

The restrictions placed on user's ability to listen to music, as well as treating all paying customers as potential thieves, does not seem to create a positive image on "respecting intellectual properties", but merely cause inconvenience and dissent. The inconvenience factor alone may very well convince users into pursuing unauthorized, unrestricted copies.

Actually, fan-based copying for promotion is more like lending good books to friends; they should not be confused with large-scale, for-profit infringement businesses.

Also, much rebuttals had already been made against the "piracy is killing music" rhetoric employed by music industries.

- Hit Charade -- The music industry's self-inflicted wounds
- Free Culture

VI. Conclusion

Sharing of information had always been a part of human life. We sing along with familiar tunes; we tell each other about good stories and movies; this is how the civilization passes itself on across generations. In the dawn of this copyright war brought by technological changes, some would optimistically think that the liberating trends of technologies are unstoppable: "Government has its laws; People has their hackers". Some, on the other hand, think it's the citizen's duty to obey the current laws.

In the past, dissemination of information via copying was part of Internet's nature, but we cannot foretell what it will become in the future. This article presented several cases and conflicts that occurred in Taiwan; it is the author's wish to raise the reader's awareness about Taiwan's status.

VII. References

- The Legislative Yuan of Taiwan
- InfoShare Tech Law Office
- Tech Laws News Archive
- Essays on Copyright
- Office of the Chief Counsel for International Commerce
- The 301 Act