Piracy said to have worsened in RP

MANILA, Philippines - Copyright piracy has worsened in the Philippines, leading to a 25% increase in trade losses to $212.3 million or around P9 billion last year, according to an influential business lobby based in the US. The International Intellectual Property Alliance (IIPA), in comments submitted to the US government for its yearly report on copyright violators, said the Philippines should continuously be monitored but there should be no change in the country’s status in the US "Special 301" findings. A group of cable broadcasters based in Hong Kong, however, wants the Philippines taken to task for "blatant" signal theft by fly-by-night cable operators. The Cable and Satellite Broadcasters Association of Asia (CASBAA) said annual revenue losses had hit $85 million, with illegitimate connections outnumbering legitimate ones at 950,000 versus 925,000. Apparel and footwear firms have also complained of the "disproportionate" resources devoted by authorities to certain industries instead of addressing piracy "on a broader scale." The Philippines was removed from the Office of the US Trade Representative’s (USTR) Special 301 priority watchlist of copyright violators in 2006 but remains on the ordinary watchlist. The 2008 report is expected this month. The IIPA said book publishers lost $49 millon in potential sales last year because of rampant "commercial-scale photocopying" of textbooks near schools and illegal reprints, while business software makers lost $75 million, up from $71 million in 2006. With pirated music easily available for download in malls and on the streets, it said record firms lost $88.3 million in potential sales, up from $50.3 million in 2006. There were no estimates from movie producers, but the group said the Philippines heavily imports pirated discs from China, Hong Kong, Taiwan, Indonesia, and Malaysia. Pirates have a 71% market share in business software and 80% in records and music, the IIPA said, adding that progress in law enforcement "unfortunately waned in 2007." "The copyright piracy situation on the ground has gradually gotten worse, including the digital piracy phenomena such as mobile device piracy (in which pirate files are loaded onto mobile devices or memory carriers), Internet download piracy, and camcording piracy of motion pictures in the movie theaters." The IIPA complained that criminal cases in the Philippines target mostly small-time retail pirates "and take too long." "There remains a paucity of criminal actions against large-scale producers and distributors ... Further, irregularities like compromises in raids and leaks make deterrent enforcement impossible to achieve." The CASBAA said in its own report to the USTR that intensive discussions with Philippine authorities should be held as "Intellectual property violations remain a widespread problem..." "No aggressive regulatory action has been taken against these continued violations. Cable company licenses continue to be renewed by the National Telecommunications Commission (NTC), without regard to whether the company is engaging in signal theft," the group added. It noted that the NTC and the Intellectual Property Office (IP Philippines) had agreed to create an administrative enforcement mechanism. "This [agreement] was put into place last year, and its effectiveness is now being tested with cases filed by copyright owners," the group said. It recalled that it had to convince the Justice department to proceed with criminal cases against a Mindanao cable firm last year after an "astonishing" ruling that broadcast firms do not enjoy copyright protection. "Legitimate copyright owners and broadcasting organizations are close to concluding that no real relief is available under current law through the Philippine judicial system," it said. An NTC official who asked not to be named said content was beyond the agency’s jurisdiction. "The Intellectual Property Office handles administrative complaints for IPR (intellectual property rights) violations. NTC doesn’t have the right to interfere with program content. As long as the cable operator does not violate radio regulation, we can’t revoke licenses," the official said. IP Philippines director-general Adrian S. Cristobal, in a statement sent to BusinessWorld, said the claims were "unfounded." "We are receptive to feedback ... but they must be based on facts," Mr. Cristobal said. He said last year’s raids resulted in the confiscation of fakes worth almost P3 billion, half a million pesos more than the combined value for 2005 and 2006. The American Apparel and Footwear Association, meanwhile, said "the focus on enforcement is not equally distributed among industries..." Levi Strauss & Co. agreed, saying the anti-piracy drive was "almost exclusively targeted on unlicensed software and optical media." "The only way in which enforcement has been possible for these ’less favored’ goods is for rights holders ... to take direct enforcement action at their own expense," it said. Levi Strauss said 2007 also saw a continued trend in "copycat" trademark applications, and claimed that IP Philippines has been refusing to reject them despite a clear legal prohibition. Washington’s International Anti-Counterfeiting Coalition said there were continued problems with imported fakes, and that pirated goods continue to be sold in "notorious" markets like Binondo and Quiapo in Manila, Greenhills in San Juan, the Makati Cinema Square, and Metrowalk in the Ortigas business district. Licensed apparel is now being made in the Philippines and even supported by advertising, and it was likely manufacturers are connected to suppliers in China, it said. Moreover, it claimed that special economic zones were being used for the transshipment of counterfeit and smuggled goods. A local anti-piracy group led by musician John J. Lesaca, meanwhile, told the USTR that authorities had achieved "significant strides in improving enforcement of IPR." The Intellectual Property Coalition pointed to the nearly P3 billion in confiscations; the seizure of $2 million worth of DVD-replicating equipment; counterfeit Batman and Superman toys worth P7.2 million; counterfeit Vans rubber shoes worth P1.5 million; and fake Lacoste slippers and Express shirts and pants worth more than P1.7 million Some P84 million worth of designer goods were also seized in separate raids at Harrison Plaza in Manila and Market! Market! Mall in Taguig City, it added. But it said: "As we asserted in our previous submissions, the raids and seizures are not enough to deter piracy and counterfeiting. Enforcement is but the initial stage in the process to protect intellectual property ... Unfortunately, the true weaknesses in the Philippine legal infrastructure to protect IPR are, for the most part, embedded in the stages after the seizure or confiscation." — Felipe F. Salvosa II with a report from Marian Grace S. Ramos, BusinessWorld