VZCZCXRO1116
RR RUEHGH
DE RUEHIN #0135/01 0180850
ZNR UUUUU ZZH
R 180850Z JAN 07
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 3781
INFO RUEHBJ/AMEMBASSY BEIJING 6234
RUEHUL/AMEMBASSY SEOUL 8400
RUEHKO/AMEMBASSY TOKYO 8399
RUEHGP/AMEMBASSY SINGAPORE 6777
RUEHKL/AMEMBASSY KUALA LUMPUR 3657
RUEHML/AMEMBASSY MANILA 9920
RUEHHI/AMEMBASSY HANOI 3213
RUEHHK/AMCONSUL HONG KONG 7463
RUEHGZ/AMCONSUL GUANGZHOU 9911
RUEHGH/AMCONSUL SHANGHAI 0732
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SECTION 01 OF 04 TAIPEI 000135 
 
SIPDIS 
 
SIPDIS 
 
STATE PASS TO AIT/W 
STATE FOR EAP/RSP/TC, EAP/EP and EB/TPP/MTA/IPC 
STATE PASS to USTR for BOLLYKY and ALTBACH, STRATFORD 
USDOC for 4431/ITA/MAC/AP/OPB/TAIWAN/JDUTTON 
USDOC for USPTO Gin and Browning and Snydor 
USDOC FOR 3132/USFCS/OIO/EAP/WZARIT 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KIPR TW
SUBJECT:  Taiwan TIFA: AUSTR Stratford presses on IPR 
 
REF:   06 TAIPEI 4007 
 
Summary 
------- 
¶1.  Summary.  As part of a December 18-19 visit to Taiwan, Assistant 
United States Trade Representative Timothy Stratford and Deputy 
Assistant USTR Eric Altbach met with rights-holders, officials from 
the Taiwan Intellectual Property Office, and the Minister of 
Education to review IPR issues.  Rights-holders expressed worries 
over the impact of an IP court and encouraged passage of legislation 
covering peer-to-peer file sharing and Internet service provider 
(ISP) liability.  Their frustration ran high with IPR problems on 
university campuses.  TIPO highlighted recent progress and claimed 
that it was working with Chinese authorities to improve IPR 
protection in the PRC.  While professing not to care about the 
Special 301 process, TIPO's Director General asked that Taiwan be 
removed from the list.  AUSTR Stratford encouraged TIPO to push 
needed legislation though the Legislative Yuan and urged the 
Minister of Education to address on-campus IPR issues.  Other 
non-IPR meetings covered in septels.  End Summary. 
 
Rights-holders Complain -- IP Court and Campus Piracy 
--------------------------------------------- -------- 
¶2.  AUSTR Stratford and DAUSTR Altbach met with rights-holders to 
hear their views on IPR protection in Taiwan.  The group included 
Taiwan representatives from the MPA, IFPI, the Business Software 
Alliance, and American book publishers.  Their top concerns were 
pending legislation on regulating online peer-to-peer file sharing 
and on Internet Service Provider (ISP) liability, the scope and 
impact of an Intellectual Property Court, and on-campus piracy. 
 
¶3.  They opened the meeting with an update on IPR-related 
legislation currently before the Legislative Yuan. They expected 
legislation regulating peer-to-peer (P2P) file sharing to pass this 
session.  Although the legislation has a "for profit" provision, 
meaning that only P2P services that generate profit are liable for 
prosecution, rights-holders still favor passage of the bill.  They 
are more concerned about the progress of draft legislation on ISP 
liability.  In particular, they note the draft law only sets general 
guidelines for takedown notice procedures.  Rights-holders stated 
that procedures should be clearly spelled out in the law. 
 
¶4.  Rights-holders then raised the issue of piracy on and around 
university campuses.  The group was critical of the Ministry of 
Education's lack of response to their concerns about infringing 
activity on TANet, the Ministry's computer network.  They claimed 
that piracy was high on TANet and that TANet needs stronger internal 
controls.  The Ministry of Education does not reveal action taken on 
complaints on individual cases, nor did the Ministry release overall 
statistics on actions taken against online infringers. 
Rights-holders claimed that it was much easier to take action and 
monitor activity on commercial networks. 
 
¶5.  The local representative of MPA, shared preliminary results of a 
recent survey commissioned by his organization on Internet use by 
Taiwan university students.  The survey covered about 2300 students 
from 8 different universities around Taiwan.  Although the survey 
did not quantify levels of online piracy, the survey indicated heavy 
downloading of Internet files by university students.  More than 75% 
of the respondents stated that they downloaded files.  Of this 
group, 84% downloaded music and 49% downloaded movies.  Less than 
half of the respondents confirm whether the file is legal before 
downloading, and interestingly, only about 40% of students surveyed 
think the government and their school do enough to propagate an 
anti-piracy message. 
 
¶6.  Rights-holders argued that the Minister of Education should 
appoint a high-level official to take responsibility for IPR on 
campus.  The current contact window, which is a clerk-level employee 
at the Ministry's computer center, can be easily ignored by 
universities, who exercise a great deal of autonomy over their own 
university networks. 
 
¶7.  The representative of textbook publisher John Wiley & Sons also 
 
TAIPEI 00000135  002 OF 004 
 
 
urged universities to improve IPR protection for printed materials 
on campus.  Students should be not be allowed to use illegal 
photocopies in the classroom, he said, and colleges should "record 
demerits" for students using illegal photocopies.  He also suggested 
that the MOE establish a high-level task force with industry 
participation to address the IPR issue. 
 
¶8.  All rights-holders expressed concerns about the proposed 
intellectual property court.  Draft legislation is currently before 
the Legislative Yuan that will establish an IP Court with limited 
scope.  According to the draft, the IP Court will only cover civil 
cases in the first instance and civil and criminal cases in the 
second instance.  That means that all copyright cases would need to 
go through the regular district courts and would not have access to 
IP Courts until an appeal is filed. 
 
¶9.  Robin Lee, of IFPI, complained that this meant that a great deal 
of IP cases will continue to go through the district courts. 
Because Taiwan civil procedures are weak and ineffective, 
rights-holders typically take the criminal approach in dealing with 
infringers, he said.  He also complained that, although the law 
would create a dedicated cadre of judges assigned to the IP Court, 
it does not create a separate group of IPR prosecutors.  Because 
evidence can be difficult to collect and technical explanations 
complex, the Ministry of Justice had argued for special IP 
prosecutors to be assigned to the court, but the Judicial Yuan 
refused. 
 
¶10.  Spencer Yang of the MPA noted that different rights-holder 
groups had "various levels of urgency" regarding the IP Court.  For 
example, 50% of movie piracy involves street vendors.  These are 
relatively straightforward cases, so his members are not so 
concerned about the scope of the IP Court.  (Note:  The Amcham IPR 
committee also supports the current IP Court legislation in its 
current form. End note.)  All rights-holders expressed concern, 
however, that a new IP Court could absorb resources needed by 
district courts to effectively deal with IP cases. 
 
TIPO Proud of Taiwan's Progress and Efforts in China 
--------------------------------------------- ------- 
 
¶11.  Tsai Lien-sheng, Director General of the Taiwan Intellectual 
Property Office, reviewed his office's recent efforts at advancing 
Taiwan's IPR agenda.  He began by noting that AUSTR Stratford had 
just come from China and that he himself had traveled to the 
Shanghai area in May.  Jiangsu provincial IPR authorities and PRC 
central government authorities had also recently visited Taiwan. 
The Chinese were curious how Taiwan was able to improve its IPR 
environment so quickly, he said, and were very interested in how 
Taiwan was handling IPR issues.  "Determination," he said, was his 
answer.   Taiwan's efforts were not a response to foreign pressure, 
but part of a strategy to upgrade our industry and international 
competitiveness. 
 
¶12.  Tsai reported progress on draft legislation since last month's 
digital video conference on IPR: 
 
--P2P legislation - The bill was expected to pass without 
controversy.  On December 15 he had appeared before the Legislative 
Yuan's Economic Committee to answer questions about the bill.  He 
expected the bill to move smoothly through the LY. 
 
--ISP liability legislation - stakeholders are still debating the 
details of the bill and TIPO would be hosting a seminar next month 
on the issue.  TIPO planned to invite U.S. experts. 
 
--IP Court legislation - There are two separate bills moving through 
the LY to establish the IP Court:  the Procedure Law and the Organic 
Law.  The Procedure Law has already passed the first reading and the 
second and third reading will happen soon.  No party negotiation 
will be required to pass this law.  Some KMT legislators still have 
some reservations about the Organic Law, however.   The Judicial 
Yuan hopes that IP Court can begin work by March 2007.  Training for 
judges will have been completed by that time.  This start date 
 
TAIPEI 00000135  003 OF 004 
 
 
depends on when or whether the Organic Law passes in the LY. 
 
¶13.  Turning to Internet piracy, DG Tsai noted that in the first 11 
months of 2007, law enforcement pursued 1400 cases of Internet 
piracy. This was a 116% increase over the same period last year.  It 
does not mean that the problem has become more serious, he said, 
since all are small cases.  Taiwan has established a special IPR 
police team and an optical disk joint task force.  EzPeer and Kuro, 
two P2P services, have been transformed into legal operations. 
 
¶14.  He also hopes for more international cooperation to prevent 
Internet piracy.  Next August TIPO will host a meeting for the APEC 
Intellectual Property Experts Group.  The meeting will focus on 
Internet piracy, and Tsai hopes to share Taiwan's experiences with 
other APEC member economies.  He noted that international 
cooperation was particularly important in fighting Internet piracy 
and that most illegal websites uncovered by Taiwan law enforcement 
were overseas.  TIPO has passed lists of illegal sites based in the 
U.S. and in Japan to both countries for investigation. 
 
¶15.  Turning to IPR on-campus, Tsai stated that he had written to 
Minister of Education Tu, asking him to establish a contact window 
at the Ministry for IPR concerns.  We consider campus to be 
"sensitive" so police and judicial involvement must be discrete. 
Campus "self-discipline" may be most effective in protecting IPR, he 
said.  Although schools have improved regulations and require 
students to observe IPR, more precise regulations indicating that 
students can not use pirated textbooks or illegally download on 
TANet would be helpful. 
 
¶16.  Infringing activity off-campus is also an issue, and TIPO has 
requested that the IPR police set up a special team to deal with 
off-campus photo-copying.  We still need additional assistance from 
book publishers in this effort, he said. 
 
¶17.  Tsai concluded his remarks by commenting on the U.S. Special 
301 process.  He stated that he did not care about Special 301, but 
that when he appears before the LY seeking support for TIPO's 
budget, he is confronted with LY members asking him why Taiwan is 
still on the 301 list even after all of its efforts to improve its 
IPR protection regime.  He hoped, he said, that since Taiwan has 
done so much that it should not appear on the list with China. 
 
¶18.  AUSTR Stratford thanked Tsai for his comments and for the work 
TIPO has done with U.S. rights-holders.  In particular stated that 
he appreciates the work on the IP Court and hopes it can be 
established soon.  At the same time, however, he hoped that judges 
and prosecutors at the district court level would receive the 
training and resources necessary to effectively handle IP cases.  He 
looked forward to receiving a chart that that TIPO had offered to 
provide explaining how prosecutors receive training and are able to 
specialize on IP issues. 
 
¶19.  Regarding P2P and ISP liability legislation, Stratford noted 
that these were high priorities for the USG and for rights-holders. 
We hope, Stratford continued, that Minister of Economic Affairs Chen 
will offer his personal involvement to urge passage of the 
legislation. 
 
¶20.  He also thanked Tsai for his letter to the Minister of 
Education seeking his support on IPR issues.  Stratford quoted from 
the survey he had received that morning from MPA and said that we 
needed to set a good example for young people. 
 
¶21.  To assist in finding a good channel on law enforcement 
cooperation, Stratford remarked that the legal attach from Hong 
Kong will travel to Taiwan early in 2007 to discuss the issue. 
 
¶22.  In closing, he stated that the Special 301 report was written 
by IP office colleagues at USTR.  Of course they worked closely with 
our office, AUSTR noted.  I understand, he said, why Taiwan would 
not want to be listed in the same category as the PRC.  The U.S. was 
currently in intense negotiations with China about bringing a case 
against them in the WTO over IPR.  He pointed out that Taiwan and 
 
TAIPEI 00000135  004 OF 004 
 
 
China were placed in different categories.  But, he acknowledged, it 
was better to be in neither category.  We will try to talk about the 
progress that Taiwan has made and emphasize the close working 
relationship we have with each other.  The report is issued at the 
end of March.  We hope that we can talk about additional progress in 
the next few months. 
 
Minister of Education Acknowledges Serious Problem 
--------------------------------------------- ----- 
¶23.  At a separate meeting with Minister of Education TU 
Cheng-sheng, AUSTR Stratford called IPR one of the most important 
issues between the U.S. and Taiwan.  One of the major weaknesses is 
on-campus behavior.  Referring to the MPA student survey, Stratford 
stated that the U.S. was concerned about both about illegal activity 
on campus and the prospect of a new generation of college grads who 
had no respect for IPR.  Important work needs to be done, Stratford 
emphasized, and suggested that Minister Tu appoint a Vice Minister 
to take responsibility for IPR and establish a task force with 
stakeholders to deal with the issue. 
 
¶24.  Minister Tu acknowledged that IPR was "a serious problem."  He 
promised that the Ministry of Education (MOE) would do its best to 
deal with it.  I will ask my colleagues, especially the department 
of higher education to ask the universities to make our students 
understand this serious issue, he said.  He also wanted to point 
out, however, steps that the MOE had already taken such as 
university courses on IPR as well as IPR protection included in 
university evaluations.  Tu said that "we will consider how to 
improve." 
 
But Doesn't Seem to Do Much 
--------------------------- 
¶25.  He reviewed other MOE initiatives.  Ministry representatives 
had participated in the IPR Dialogue DVC hosted by AIT last month. 
MOE planned to set up supervisory groups at each university which 
would include faculty and set rewards for IPR compliance.  A TANet 
SOP has been drafted to handle IPR complaints and dataflow hardware 
and software has been purchased by many universities to regulate the 
transmission of large data files on the network.  The MOE is also 
planning more conferences and workshops on IPR.  We will teach our 
students to follow rules and regulations, he said.  At that point 
Minister Tu announced that he had to leave to meet with the Prime 
Minister, and Stratford once again urged him to think about 
appointing a senior official to handle this issue.  He did not 
directly respond. 
 
¶26.  Ministry staff wrapped up the meeting, DAUSTR Altbach once 
again asked the MOE to provide detailed information on the TANet SOP 
and possible penalties for Internet infringement.  Staff reported 
that this month three students were caught and punished for illegal 
online infringement. 
 
Comment 
------- 
¶27.  AUSTR Stratford's meeting with Minister Tu sent a strong signal 
that the USG is serious about on-campus IPR protection.  TIPO has 
indicated to AIT that they are also disappointed about the lack of 
real action by the Ministry of Education to address IPR issues on 
campus.  While Minister Tu agreed to meet and was courteous 
throughout the meeting, it is far from clear if the Ministry plans 
to take meaningful steps to strengthen IPR protection.  AIT will 
continue to push the Ministry and other high level Taiwan officials 
on this issue where appropriate.  Contrary to protestations 
otherwise, Taiwan is eager to be removed from the Special 301 list, 
but even if the LY passes all of the IPR legislation in this 
session, which is not likely, it would be appropriate to gauge the 
effectiveness of the legislation that becomes law. 
YOUNG