Sliding back

The Philippines again faces the risk of being included in a US government list of so-called “notorious markets” where intellectual property rights (IPR) are not protected. Two influential international lobby groups have reportedly urged the US government to reinstate the Philippines in the list after the Aquino administration showed “little improvement” in curbing piracy and counterfeiting. The Philippines just got off the US list of “notorious markets” for pirated products in December last year.

Every year, the office of the US Trade Representative (USTR) prepares a so-called Special 301 Report that addresses significant concerns with respect to 95 of America’s trading partners, including the Philippines. The report notes that the United States will consider all options, including the initiation of dispute settlement consultations with countries that do not appear to have implemented fully their obligations under the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). In 2010, the USTR began publishing the “notorious markets” list separately from the annual Special 301 Report. This list identifies selected markets, including online markets that are engaged in piracy and counterfeiting.

In separate filings submitted to the USTR, the Business Software Alliance (BSA) and the International Intellectual Property Alliance (IIPA) sought the Philippines’ inclusion in the “physical piracy notorious markets” list. They identified as hotspots Quiapo, Binondo, Baclaran and other nearby malls in Divisoria, Manila, including Juan Luna Plaza and New Divisoria Mall. “There has been little improvement in these specific areas since our past report. Vendors of counterfeit software are still there,” the BSA said in its submission.

The BSA is the leading global advocate for the software industry and has world-class companies like Apple and Microsoft as members. It noted that software piracy was by far the biggest form of copyright piracy in dollar terms, with the worldwide commercial value of illegally installed software at more than $63 billion in 2011.

The IIPA also cited as hotspots  Makati Cinema Square, Metrowalk, and 168 Mall, all of which continued to contain retail pirate trade. “While Manila’s Quiapo district was removed from the USTR’s notorious markets list in 2012, unfortunately, recent raids, including a major raid in August 2013, revealed hundreds of thousands of pirate discs, including pirate and counterfeit software,” the IIPA explained.

Studies have noted that the Philippines had long recognized the significance of IPR protection, given the country’s pool of talents in science and technology, biotechnology, engineering, arts and music. It has been a member of the Berne Convention on Literary and Artistic Works (1951); Paris Convention on Industrial Property (1965); the 1980 Convention Establishing the World Intellectual Property Organization; the Rome Convention on Performers, Producers and Phonograms and Broadcasting Organizations (1984), and the TRIPS Agreement in 1995, among others. The primary source of IPR protection in the Philippines is the Intellectual Property Code (IPC), which was enacted in 1997 to fulfill the country’s TRIPS obligations. It covers patents, trademarks and copyrights. This was aided by the Optical Media Act in 2004, which regulates the manufacture, mastering, replication, importation and exportation of optical media. This expanded IP protection to movies, music, video games and software, which were not adequately addressed in the IPC.

Despite all these, IPR infringements in the country have remained a problem. In fact, the Philippines was a mainstay in the Priority Watch List of the USTR until last year. Among the main IPR infringements cited were optical media piracy, copyright and trademark violations, importation of counterfeit merchandise, software piracy and even cable television piracy.

It is an accepted fact that the Philippines has the legal and regulatory framework to effectively handle the proliferation of pirated media and counterfeit goods. The real problem, it seems, lies in the implementation and enforcement of these laws. Our inclusion again in the US list of “notorious markets” will diminish the current admiration being enjoyed by the Philippines following a robust economy and credit-rating upgrades to investment grade. The Aquino administration should not take this issue lightly. Piracy should have no place in an investment-grade economy like ours.