VZCZCXRO3412
RR RUEHGH
DE RUEHIN #1534 1240040
ZNR UUUUU ZZH
R 040040Z MAY 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 0009
INFO RUEHBJ/AMEMBASSY BEIJING 5155
RUEHGZ/AMCONSUL GUANGZHOU 9295
RUEHHK/AMCONSUL HONG KONG 6358
RUEHSH/AMCONSUL SHENYANG 5201
RUEHGH/AMCONSUL SHANGHAI 0107
RUEHBK/AMEMBASSY BANGKOK 3255

UNCLAS TAIPEI 001534 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR INL/AAE, EB/TPP/IPE AND EAP/TC 
BEIJING PASS CHENGDU 
HONG KONG FOR DHS 
 
FROM AIT KAOHSIUNG BRANCH OFFICE 
 
E.O. 12958 
TAGS: KIPR ECON EINV KCRM TW
SUBJECT: Increase in Internet Marketing of Counterfeit Goods Poses 
Enforcement Challenge For Southern Taiwan 
 
 
¶1.  Summary.  Lin Chih-ming, Team Leader of Kaohsiung's IPR 
Enforcement Team, told AIT/K that in the past year, more than ninety 
percent of their caseload involved sale or transfer of pirated and 
counterfeit goods via the internet.  Lin said that enforcement 
efforts and seizures of equipment had driven the mass producers of 
counterfeit digital media to move their factories to the mainland. 
Frequent raids and a continuing police presence have virtually 
eliminated the vending of counterfeit goods in Kaohsiung's night 
markets.  End Summary 
 
¶2.  According to Lin, while large scale vending of pirated software, 
movies and music has nearly disappeared, small scale, burn-to-order 
vending remains common.  This poses a problem for investigators, as 
the vendors generally don't maintain any stock on hand, and so must 
be caught in the act.  Generally the only evidence available is a 
list of titles. 
 
¶3.  The IPR police said they face an even greater difficulty in the 
sale of counterfeit designer goods.  According to IPR enforcement 
officers, counterfeit designer goods, including leather bags, 
garments, glasses, and accessories bearing the brand names of Luis 
Vuitton, Chanel, Prada, Christian Dior, and Gucci, are sold directly 
over the internet.  The primary customers are generally young career 
women.  The purchases are made over the internet using credit cards 
and the counterfeit goods are shipped directly from the mainland. 
Team Chief Lin said that since the producers and vendors of the 
merchandise are located in the mainland, there is little that the 
Taiwan police can do to stop the problem.  When they shut down a 
suspected website, the perpetrators just set up a new website and 
resume business. 
 
¶4.  Lin went on to say that illegal peer-to-peer downloading, like 
direct internet vending, poses great difficulties to investigators. 
He said that, while Taiwan was able to obtain a conviction against 
the P2P company, Kuro, they have made little progress against other 
P2P vendors.  Among the many difficulties faced in this area, Lin 
emphasized that most of the companies involved are incorporated and 
maintain their servers outside Taiwan.  Additionally, the "shared" 
software could come from any computer in the world that has the 
software installed, and seldom comes from a single source.  He said 
that his office is working with internet service providers to find a 
means to resolve the problem, but that there is little enthusiasm on 
the part of prosecutors to pursue cases against individual 
downloaders. 
 
¶5.  The IPR Task Force Kaohsiung Team was established in 2004 and 
has responsibility for Yunlin, Chiayi, Tainan, Kaohsiung, Pingtung, 
and Penghu.  The Kaohsiung team has fifty plain-clothes officers. 
The Kaohsiung team and the other two such teams in Taichung and 
Taipei accounted for 56 percent of pirated and counterfeit goods in 
Taiwan for the year 2005. 
 
¶6.  Comment.  The Kaohsiung IPR team continues to make more than its 
share of arrests and seizures, and the sale of pirated software and 
counterfeit goods in night markets appears to have dropped 
substantially.  However, burn-to-order schemes are common, and are 
openly advertised in the local press.  The vendors' use of 
disposable cell-phone numbers makes these cases difficult for the 
police to trace.  Likewise, there are few counterfeit goods 
available in local shops, but the merchandise is readily available 
over the internet.  Effective Taiwan enforcement efforts have 
encouraged counterfeiters to move to the mainland, but the result is 
that jurisdictional problems now make it virtually impossible to 
prosecute the perpetrators.  End Comment. 
 
 
Thiele 
 
Young