TIPS^®  Taiwan Intellectual Property Special

Selling Pirated CDs Is Subject to Publically Prosecuted Criminal Liability

The recent Copyright Law Amendment adjusted the civil and criminal liabilities for copyright infringement. Infringement on the moral right and parallel import are decriminalized. For copyright infringement not intended for profit, if the copies of each infringed work do not exceed 5 or the value of infringing goods does not exceed NT 30000 (about US$ 1000), the criminal sanction is removed, too.

However, copyright is a private right. If only personal legal interest is harmed, the infringement on copyright shall be a “complaint-based” offense, and the copyright owner can decide whether to sue or not. Only the infringement that severely injures the legal interests of society (the public) is a “non-complaint based” offense, which is subject to “public prosecution.” Under the standard, the Copyright Law before the amendment stipulates that only vocational or professional infringers are subject to public prosecution, and other offenses are complaint-based. Nevertheless, as the digital technology advances, illegal copying of digital CDs or computer software and the distribution of the illegal copies have become the most damaging copyright infringement. Digital technology allows reproduction in mass volume, with very low cost. The infringer is able to realize enormous profits from the illegal activity. It is not only detrimental to the market, but also harmful to the survival of technological, cultural and entertainment industries, which rely heavily on the protection provided by copyright. An offense of this kind is not merely harmful to personal legal interests but also to the legal interests of society and even the nation. Such offense no longer falls within the scope of complaint-based offenses and prosecution is initiated by the government. As a result, the Copyright Law Amendment extends the scope of non-complaint-based offenses to cover manufacturing pirated CDs for profit and distribution of the pirated CDs by sales or transfer for profits.

The “distribution” referred to here does not necessarily mean that the transaction is complete. As long as the pirated CDs are “made available to the public,” they are considered to have been distributed for profit by sale, whether or not the CDs are actually sold. It is very commonly seen in Taiwan that a street vendor displays CDs for sale while remaining out of sight from the display stand to avoid being captured by the police. A deposit box (or so-called “donation box) is left with the display for buyers to pay for the purchase. The act of displaying makes the pirated CDs “available to the public,” and therefore constitutes “distribution” by sale or transfer. Furthermore, where the street vendor flees and there is no way to identify who the seller of the pirated Cds is, the Copyright Law Amendment gives the police the right to seize the pirated CDs on site.

According to a statistic released by the Business Software Alliance in June 2003, the piracy rate of Taiwan in 2002 is 43%, 10% lower than in 2001. The dramatic decline of 10% is the highest rate of decline globally. Also, a National Police Administration report shows that the sales of pirated CDs at night markets has declined, in terms of incidence, as well as the dollar amount, after the Copyright Law Amendment. Protecting intellectual property is the established policy of the Taiwanese Government. The task requires a well-planned structure in the legal system and enforcement mechanism. In terms of enforcement, the government has built a network, composed of the police, the Prosecutors’ Office, and Customs. In terms of the legal system, the Copyright Law Amendment is expected to combat piracy and stop counterfeiting activities more effectively.