Asia bows to US pressure for crackdown on copyright pirates
Last Christmas, movie fans in Singapore bought pirated copies of ``Top Gun,'' ``Club Paradise,'' and ``Crocodile Dundee.'' This Christmas, many of them will be watching ``La Bamba,'' ``Space Balls,'' and ``Innerspace'' - legally. After years of allowing the pirating of American movies, books, and audio tapes, the ``four tigers'' of Asia - Singapore, South Korea, Taiwan, and Hong Kong - are yielding to pressure from the United States to honor and enforce American copyrights.
Japan, long a haven for pirates, conducted 33 raids of illicit businesses in the first six months of the year. And other Asian nations that still allow pirates to flourish are under increasing pressure to stop the practice. (US warns South Korea about import barriers, Page 5.)
This shift could mean millions of dollars in extra sales of US goods to countries that are running large trade surpluses with the US. Already, American book publishers report that sales this year are up 400 percent in Taiwan and Singapore. Sales of legitimate videotapes now make up 60 percent of the Japanese market - a substantial improvement over past years. Illegal audio cassettes have been virtually cleared from the streets of Singapore, where three years ago such illegal purchases made up 85 percent of the total market.
This reversal is welcome news to the US business community, which has complained about pirating for years. ``We are getting encouraging news in response to the complaints of US business'' says Charles Valentine, a trade specialist with the accounting firm of Arthur Young.
It is also good news for the US government, which would like to see intellectual property protection added to the trade rules covered by the General Agreement on Tariffs and Trade.
There have been some major advances in the copyright laws of Asian nations, agrees Clayton Yeutter, the US trade representative. But Mr. Yeutter adds, ``It's an open question on their effectiveness.''
The changes are taking place even as Congress is tackling the issue in the trade bill. In a measure supported by both parties, Congress proposes to let industries such as film and computer-software producers file quick-action trade complaints. The reason: Films, records, and computer programs have a short shelf life. Trade actions have to be fast.
The International Intellectual Property Alliance, made up of seven US trade associations, estimated its members lost $1.3 billion in sales in 1985 because of pirating. The US International Trade Commission, an arm of the Commerce Department, is completing a survey of 426 companies to determine losses to US business.
It is likely the report will find that while losses are declining, trade abuses are continuing. For example, US publishers charge that book pirates in South Korea used forthcoming changes in Korea's laws as a marketing tool. ``They told buyers to purchase illegal books before the textbooks went up in price or were not available,'' reports Carol Risher, director of copyright and new technology at the Association of American Publishers.
The publishers say they believe the pirates unloaded half of the 2 million books pirated annually, costing US companies $15 million to $20 million. ``We obtained a computer printout representing 980,000 copies of US pirated books, listed by author and publisher with the price in Korean won and how many copies were available,'' says Eric Smith, a Washington lawyer who specializes in international copyright law. Other Asian countries have picked up the illegal trade when their neighbors have stopped.
Piracy in South Korea has been endemic. Mr. Valentine of Arthur Young recalls that during a visit to Seoul he saw merchants who would sew ``any designer label you wanted'' into clothing or footwear. Fashion-conscious shoppers could buy counterfeit Cartier luggage, Rolex watches, and Pierre Cardin suits.
Still other Asian countries have picked up the illegal trade when their neighbors have stopped. ``Cleaning up Singapore has led to problems in Indonesia,'' complains Jason Berman, executive director of the Recording Industry Association.
The International Federation of Phonogram and Videogram Producers in London estimates 80 percent of the cassettes bought in Thailand in 1986 were pirated, up from 55 percent in '84. The organization estimates piracy represents nearly the entire market in Indonesia and 87 percent of the Malaysian business.
The pirates go to extremes to protect their turf. The local licensee in Thailand for Warner Bros. received a bomb in the mail and had to install X-ray equipment. ``There is a heavy level of serious criminal involvement,'' says Molly Kellogg, antipiracy director at Warner Bros.
The pirates not only sell in the local markets but export movies as well. The usual route is through the Middle East and to Europe. ``We've had recent US releases end up in Ireland with Chinese subtitles,'' Ms. Kellogg says. As for audio tapes, Mr. Berman says his office frequently finds pirated tapes at US flea markets.
Filched movies - usually action films - often are of low quality, since they are sometimes shot right off the screen. But the pirates are sophisticated marketeers, often reshooting films once they can get a better copy. ``I think they've taken marketing courses at UCLA,'' Kellogg complains.
In Taiwan, piracy has also become more sophisticated. The Taiwanese have set up about 1,000 ``public performance centers'' in the past eight months. The Taiwanese owners say they are providing ``private booths,'' where individuals can invite their friends in to watch movies. But money changes hands, and the shops include viewing booths that can seat up to a dozen people at a time. Recently, industry executives say, a 120-seat viewing center opened, showing pirated videotapes of first-run movies on a 200-inch video projection screen. ``It's eroding the traditional cinema,'' complains William Nix, vice-president of antipiracy at the Motion Picture Association, ``and we are very much up in arms over that.''
To try to counter the pirates, the association has begun an antipiracy foundation that will include local lawyers, investigators with police backgrounds, and local distributors. They will work with the Taiwanese government to make sure the local laws are enforced.
Despite these problems, US businessmen are pleased to see some progress, especially in enforcement. In March, the Philippine government raided one major pirate, seizing 64,000 illicit tapes.
In Singapore, the government is prosecuting six cases a month. This is especially significant for the film business because 91 percent of the 600,000 TV-set owners also have video recorders.
``Once we get the bugs ironed out,'' predicts Mr. Smith, the Washington lawyer, Asia ``could become the second-largest market in the world. From the standpoint of intellectual property, it is very underdeveloped.''