Piracy Problems in Taiwan

Cultural Factor and Government Attitude
When we look at the culture and government attitude of Taiwan, it is not difficult to understand why Taiwan becomes the "pirate kingdom of the world". Shared the same Confucian legacy as China, Taiwanese are generally having the concept of "knowledge should be shared" and it is not a problem to disseminate one's creation to benefit others. In addition, people's concept on protecting intangible property rights is very weak that they do not consider infringing intangible property a kind of stealing.

This concept was further reinforced by the Taiwan government's attitude in the early decades. As cited in the "Intellectual Property Rights Protection: A Republic of China Prospective (1983)" published by the Ministry of Economic Affairs (MOEA), "the R.O.C. [Republic of China] government has viewed imitation as a necessary process in the evolution of human civilization and believed that commercial counterfeiting is an inevitable phenomena in most developing countries" (Sun 1998). Apparently, the Taiwan government also agreed that piracy gives the country tools and competitive edge to foster its own industry. According to a survey conducted by the Directorate General for Budget, Accounting & Statistics (DGBAS) on SAM practices within central level government ministries, departments and agencies in 2001, there was over 30% of respondents admitted they did not purchase software through the authorized central office (International Intellectual Property Alliance 2002).

Historical Factor
Since the United States ceased its official recognition of Taiwan in 1979 while establishing formal diplomatic relations with PRC simultaneously, the political difficulties that Taiwan faced had almost left Taiwan completely out of the international arena. The awkward situation made Taiwan's inability to seek IP protection under any international convention and rely exclusively on bilateral arrangements to gain international benefits (Sun, 1998).

Taiwan's lack of international standing precludes its participation in all multilateral international conventions for IP protection. As such, Taiwan's IP laws only protect those works that are produced by countries with bilateral treaties and agreements with Taiwan. This gives Taiwan a way to deflect the other countries' demand to revise its domestic law to conform to certain international standards and allow certain loopholes for piracy activities in Taiwan.

Economic Factors
Although Taiwan has been sort of a secret child of the United States that its existence is still officially denied, US is still the single most influential player in shaping Taiwan's IP policy and reform. The reason is that Taiwan has been enjoying a significant trade surplus with the United States for years and its economy still depends heavily on this relationship. In 2002, the US trade deficit with Taiwan was $13.8 billion, so the imposition of "Special 301" sanction may directly blow to Taiwan's domestic economy (2003 National Trade Estimate Report on Foreign Trade Barriers).

While Taiwan is considered as the most important place for worldwide OEM (original equipment manufacturer) product manufacturer, it is also a place that has a very high piracy rate. Being the major supplier of optical media, Taiwan is usually blamed for allowing various types of optical media related piracy activities. For 2002, trade losses to the U.S. copyright industries due to piracy in Taiwan were an estimated US$757 million (International Intellectual Property Alliance 2003) (Appendix 1).

Though the high piracy rate in Taiwan, Taiwanese is now getting more aware of the importance of their own IP protection following along with the growth of domestic high-tech industry. Instead of relying on the bilateral arrangements with individual countries, Taiwan is anxious to be concluded in the WTO because Taiwan could then be protected under various WIPO conventions.