IIPA 2023 SPECIAL 301 REPORT ON COPYRIGHT PROTECTION

IIPA 2023 SPECIAL 301 REPORT

AND

ENFORCEMENT

SUBMITTED JANUARY 30, 2023

TO THE

UNITED STATES TRADE REPRESENTATIVE

BY THE

INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE

Material in this report is protected by copyright. It may, however, be reproduced for non-commercial purposes or quoted with appropriate attribution

to the International Intellectual Property Alliance.

International Intellectual Property Alliance

is a registered service mark of International Intellectual Property Alliance. IIPA

is a registered service

mark of the International Intellectual Property Alliance. The logo (three circles with a “c” in the center and the globe design) is a service mark of the

International Intellectual Property Alliance.

www.IIPA.org

January 30, 2023 Table of Contents

INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE

SUBMISSION: Letter to Mr. Daniel Lee, Assistant United States Trade Representative

for Innovation and Intellectual Property, Office of the United States Trade Representative

APPENDIX A: Country Surveys

Priority Watch List

Argentina .......................................................................................................................................................... 1

Chile ................................................................................................................................................................. 9

China.............................................................................................................................................................. 16

India ............................................................................................................................................................... 34

Indonesia........................................................................................................................................................ 46

Mexico ............................................................................................................................................................ 58

Russian Federation ........................................................................................................................................ 71

South Africa .................................................................................................................................................... 83

Vietnam ........................................................................................................................................................ 101

Watch List

Brazil ............................................................................................................................................................ 112

Canada ........................................................................................................................................................ 123

Colombia ...................................................................................................................................................... 137

Ecuador ........................................................................................................................................................ 144

Nigeria .......................................................................................................................................................... 150

Peru ............................................................................................................................................................. 156

Poland .......................................................................................................................................................... 161

Switzerland ................................................................................................................................................... 167

Taiwan ......................................................................................................................................................... 175

Thailand ....................................................................................................................................................... 185

United Arab Emirates .................................................................................................................................... 193

APPENDIX B: History of Countries’ Special 301 Placement (1989-2022) and IIPA’s 2023 Special 301

Recommendations

1000

TREET

NW,

LOOR

WASHINGTON, DC 20004

EL (202) 968-4472

WWW.IIPA.ORG ∙ EMAIL: INFO@IIPA.ORG

January 30, 2023

Submitted via regulations.gov Docket No. USTR 2022-0016

Mr. Daniel Lee

Assistant United States Trade Representative for

Innovation and Intellectual Property

Office of the United States Trade Representative

600 17

Street, N.W.

Washington, D.C. 20508

Re: IIPA Written Submission in Response to USTR’s Request for Comments and Notice of a Public

Hearing Regarding the 2023 Special 301 Review, 87 Fed. Reg. 76660 (Dec. 15, 2022)

Dear Mr. Lee:

The International Intellectual Property Alliance (IIPA) submits these comments in response to the above-

captioned Federal Register Notice as a part of the “Special 301” review. The filing focuses on three copyright industry

concerns in U.S. trading-partner countries: (i) inadequate copyright and related laws, particularly where rights holders

are unable to fully exercise their rights; (ii) inadequate and ineffective enforcement of existing copyright and related

laws; and (iii) market access barriers that inhibit the licensing and dissemination of copyrighted works and sound

recordings.

The annual Special 301 review requires the U.S. government to identify “foreign countries that deny adequate

and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who

rely on intellectual property protection.”

IIPA members appreciate USTR’s efforts to maintain Special 301’s focus on

improving and strengthening copyright protection and enforcement in the reported countries and on opening up these

markets for U.S. creators, producers, and workers who rely on copyright protection—as the statute requires and as

Congress intended. As USTR has noted in past Special 301 Reports, Congress expressed concern that intellectual

property (IP) protection and market access deficiencies “seriously impede the ability of the United States persons that

rely on protection of intellectual property rights to export and operate overseas, thereby harming the economic interests

of the United States.”

The ultimate goal of the Special 301 review, therefore, is not to catalog trade barriers or

admonish foreign governments for deficient laws or enforcement regimes as such, but rather to open markets for

American copyrighted materials in digital and hard copy formats.

American creators, producers, workers, and consumers all benefit when U.S. trading partners enact strong IP

laws, effectively enforce those laws, and eliminate barriers to their markets. These benefits include the enrichment of

American culture and consumers through enjoyment of creative content, including literary works, video games, movies

and television programing, and music.

Strong IP protection and enforcement also help U.S. trading partners develop,

19 U.S.C. Section 2242(a)(1).

See, e.g., 2022 Special 301 Report at 4, citing Omnibus Trade and Competitiveness Act of 1988, § 1303(a)(1)(B), and referencing S. Rep. 100-71 at 75 (1987)

in footnote 2 (“Improved protection and market access for U.S. intellectual property goes to the very essence of economic competitiveness for the United States.

The problems of piracy, counterfeiting, and market access for U.S. intellectual property affect the U.S. economy as a whole. Effective action against these problems

is important to sectors ranging from high technology to basic industries, and from manufacturers of goods to U.S. service businesses.”).

The most recently identified market access and other trade barriers around the world, including those pertaining to intellectual property rights, as well as key

barriers to digital trade, are detailed in the U.S. Trade Representative’s 2022 National Trade Estimate Report on Foreign Trade Barriers (March 31, 2022). That

report is available at https://ustr.gov/sites/default/files/2022%20National%20Trade%20Estimate%20Report%20on%20Foreign%20Trade%20Barriers.pdf

See, e.g., 2022 Essential Facts About the Video Game Industry, available at https://www.theesa.com/wp-content/uploads/2022/06/2022-Essential-Facts-About-

the-Video-Game-Industry.pdf (highlighting the benefits of playing video games including “fostering connection in person and online, building new skills and ways

of thinking, [and] promoting health and driving economic growth.”).

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page ii

nurture, and enjoy the economic and cultural benefits from their own cultural and creative sectors, ultimately for the

benefit of local consumers. Dynamic digital market conditions, including fair and equitable market access, create

enormous opportunities to further expand economic growth, which results in more well-paying jobs and foreign sales.

The benefits to American creators, producers, and workers are demonstrated in IIPA’s December 2022 update

of its comprehensive economic report, Copyright Industries in the U.S. Economy: The 2022 Report, prepared by

Secretariat Economics, Inc. (2022 Report). According to the 2022 Report, in 2021, the “core” copyright industries in

the United States: (i) generated more than $1.8 trillion of economic output; (ii) accounted for 7.76% of the entire

economy; and (iii) employed approximately 9.6 million workers, which is nearly 4.9% of the entire U.S. workforce and

over 5.5% of total private employment in the United States.

The jobs created by these industries are well-paying jobs;

for example, copyright industry workers earn on average 51% higher wages than other U.S. workers. Further, according

to the 2022 Report, the core copyright industries outpaced the U.S. economy, growing at an aggregate annual rate of

6.15% between 2018 and 2021, while the U.S. economy grew by 1.76%. When factoring in other industries that

contribute to the copyright economy (which together comprise what the 2022 Report calls the “total” copyright

industries), the numbers are even more compelling. The 2022 Report and statistics amply demonstrate the economic

importance of the copyright industries to the U.S. economy and to the livelihoods of millions of American workers.

The global health crisis unleashed by the COVID-19 pandemic has taken a toll on individuals, governments,

and industries around the world. The copyright sector is no different. While the creative industries have adapted and

responded to the crisis by making available more online resources for both distance learning and entertainment through

flexible licensing mechanisms, these businesses are themselves contending with economic stresses. Some of these

stresses are evident in the 2022 Report, yet the report shows that the copyright industries continued to be a significant

contributor to the United States economy and will likely remain so when the impact of the virus has been mitigated. For

example, while U.S. GDP decreased by 2.77% from 2019 to 2020, reflecting the strain of the pandemic, the core

2021. Thus, especially in the wake of the pandemic, the need for strong copyright protection remains critical to

incentivize the investment in the creation and dissemination of entertaining, informative, and educational content.

On behalf of its member associations, IIPA has filed comments every year since the 1988 Trade Act

established the Special 301 review proceeding. A particular focus of this IIPA submission is on the improvements

necessary to the legal frameworks of trading partners to further enhance digital trade in copyrighted works and sound

recordings. For more than two decades, the copyright industries have been at the forefront of digital technological

advances, creating and disseminating copyrighted materials using a wide variety of media and ever-more sophisticated

systems (including new services and applications (apps)) and new digital business models. For example, the 2022

See Secretariat Economists, Copyright Industries in the U.S. Economy: The 2022 Report (December 16, 2022) available at

https://www.iipa.org/files/uploads/2022/12/IIPA-Report-2022_Interactive_12-12-2022-1.pdf

. Core copyright industries are those whose primary purpose is to create,

produce, distribute, or exhibit copyright materials. The link between copyright protection and economic growth has been well documented by the World Intellectual

Property Organization (WIPO). See, e.g., WIPO Studies on the Economic Contribution of the Copyright Industries: Overview (2014), available at

http://www.wipo.int/export/sites/www/copyright/en/performance/pdf/economic_contribution_analysis_2014.pdf. The WIPO website provides links to 51 country

studies employing virtually the same agreed-upon methodology as the methodology used by Secretariat Economists. See

http://www.wipo.int/copyright/en/performance/. These studies provide the economic underpinnings for efforts to reform copyright laws, improve enforcement, and

lower market access barriers. For the video game industry, see a December 2020 report by ESA Video Games in the 21st Century: The 2020 Economic Impact

Report, available at

https://www.theesa.com/wp-content/uploads/2019/02/Video-Games-in-the-21st-Century-2020-Economic-Impact-Report-Final.pdf. This report

highlights how video games not only provide rich interactive entertainment experiences, but also power an innovative industry that has a significant impact on U.S.

economic growth and jobs. For the music industry (RIAA), see the 2020 Jobs & Benefits Report: https://www.riaa.com/wp-c

ontent/uploads/2021/02/The-U.S.-

Music-Industries-Jobs-Benefits-2020-Report.pdf and the 50 States of Music website – https://50statesofmusic.com/ – that provides (qualitative and quantitative)

state-by-state contributions. There are also music industry reports on employment and economic contributions in specific regions, e.g., Europe, available at

https://www.ifpi.org/wp-content/uploads/2020/11/IFPI_music_in_Europe_WEB_spreads.pdf, as well as in specific countries, e.g., India, available at

https://www2.deloitte.com/content/dam/Deloitte/in/Documents/technology-media-telecommunications/IMI%20report_singlePage.pdf. For the motion picture

industry (MPA), see the 2020 U.S. economic contribution infographic, available at https://www.motionpictures.org/wp-

content/uploads/2022/01/MPA_US_Economic_Contribution_2020_Final.pdf. See also individual (country) MPA economic contribution reports for Australia

(https://www.mpa-apac.org/wp-content/uploads/2022/09/Report-The-Economic-Impact-of-VOD-Services-in-Australia-2022.pdf), India (https://www.mpa-

apac.org/wp-content/uploads/2021/12/logos_India-Frontier-The-Economic-Impact-of-OCC-in-India.pdf), and the United Kingdom (https://www.mpa-emea.org/wp-

content/uploads/2018/09/OO-UK-AV-sector-economic-contribution-report-FINAL-2018.09.21.pdf). These reports illustrate the economic value of the production

and distribution of motion picture and television programs, and include analyses of direct and indirect economic impacts (i.e., employment and tax analyses).

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page iii

Report demonstrates that in 2021 the copyright industries contributed significantly to the digital economy, as defined

by the U.S. Bureau of Economic Analysis (BEA), with the core copyright industries accounting for over 52% of the

digital economy value added and over 48% of digital economy employment and the total copyright industries accounting

for nearly 65% of the digital economy value added and nearly 59% of digital economy employment. The report points

out that these numbers likely understate the total contribution of the copyright industries to the digital economy, because

the BEA’s digital economy classification does not encompass the full range of the copyright industries’ digital activities.

The end result of these digital technological advances is that more copyrighted material is now legally

available, in more diversified ways and with more varied pricing options than at any other time in history, for the

enrichment and enjoyment of consumers.

Though the copyright sector is increasingly employing electronic means to

produce and deliver its products and services to meet global consumer demand, laws and enforcement regimes in

many foreign markets have failed to keep pace. The success of the creative community in digital trade depends on

strong copyright laws and enforcement practices that foster a legitimate online economy. Open markets and modern

producers investing in the creation and dissemination of new high-quality materials, ultimately meeting worldwide

consumer demand. To maximize market potential, rights holders must remain at the forefront of technological

developments to expand markets and creative activity and to launch new business models.

IIPA members very much appreciate that USTR has made the Special 301 process a positive catalyst for

change to effectively address the challenges faced by the U.S. creative industries in key markets around the world. In

our view, the process continues to yield results, including positive legal reforms, enforcement actions, and the removal

of market access barriers. In addition to recommending improvements, IIPA’s comments also highlight some of the

recent successes and positive outcomes in several countries.

I. IIPA RECOMMENDATIONS ON DESIGNATIONS AND A SUMMARY OF COUNTRY REPORTS

IIPA’s submission focuses on the markets where IIPA members believe active engagement by the U.S.

government can reap positive results for creators and the industries that support and invest in them. The Country

Reports contained in the filing include a summary of developments from 2022 along with key issues to focus on in

2023. Most of the Country Reports identify key priorities and, wherever possible, detail the legal, enforcement, and

market access concerns specific to each market. Some Country Reports also contain details of specific trade

obligations to the United States in bilateral or multilateral trade agreements or identify unfulfilled obligations that, if

addressed, could improve the local market. In a few instances, the Country Reports focus on only a few key issues or

one or two industries.

IIPA’s 2023 Submission includes this Cover Letter plus two appendices—Appendix A and Appendix B.

Appendix A includes 20 Country Reports with recommendations for designation in USTR’s Special 301

Report this year.

These 20 Country Reports cover: Argentina; Brazil; Canada; Chile; China; Colombia; Ecuador;

India; Indonesia; Mexico; Nigeria; Peru; Poland; Russian Federation; South Africa; Switzerland; Taiwan;

Thailand; United Arab Emirates; and Vietnam.

For these countries, the IIPA recommends:

For example, there are now over 60 million licensed tracks on some of the major music streaming services. See e.g., https://www.apple.com/au/apple-music/ and

https://www.amazon.com/music/unlimited and hundreds of digital music services. The number of subscriptions to online audiovisual services worldwide increased

to 1.3 billion in 2021, a 14% increase from 2020. See, https://www.motionpictures.org/wp-content/uploads/2022/03/MPA-2021-THEME-Report-FINAL.pdf. For more

information generally on the proliferation of services, see, https://www.motionpictures.org/watch-it-legally/ (movies and television content); and

http://www.whymusicmatters.com, http://www.pro-music.org/, and the IFPI Global Music Report 2022 at https://globalmusicreport.ifpi.org/ (music).

The Country Reports were prepared by IIPA Staff, including Linda Quigley, Madeline Dunn, and the undersigned. We particularly thank Madeline Dunn for her

contributions to the preparation, production, and distribution of this submission. The Country Reports are based on information furnished by IIPA’s member

associations. The information contained in this submission should not be construed as providing legal advice.

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page iv

IIPA 2023 Special 301 Recommendations

Priority Watch List

Watch List

Argentina

Chile

China

India

Indonesia

Mexico

Russian Federation

South Africa

Vietnam

Brazil

Canada

Colombia

Ecuador

Nigeria

Peru

Poland

Switzerland

Taiwan

Thailand

United Arab Emirates

Appendix B provides a Historical Chart of countries’ placement on Special 301 lists by USTR since 1989 and

IIPA’s 2023 Special 301 recommendations.

II. ABOUT IIPA AND IIPA’S INTEREST IN SPECIAL 301

IIPA is a private sector coalition, formed in 1984, of trade associations representing U.S. copyright-based

industries working to improve copyright protection and enforcement abroad and to open foreign markets closed by

piracy and other market access barriers. Members of IIPA include: Association of American Publishers

(www.publishers.org), Entertainment Software Association (www.theesa.com), Independent Film & Television Alliance

(www.ifta-online.org), Motion Picture Association (www.motionpictures.org), and Recording Industry Association of

America (www.riaa.com).

Collectively, IIPA’s five member associations represent over 3,200 U.S. companies producing and distributing

copyrightable content. The materials produced and/or distributed by IIPA-member companies include: entertainment

software (including interactive video games for consoles, handheld devices, personal computers, and the Internet) and

educational software; motion pictures, television programming, DVDs and home video, and digital representations of

audiovisual works; music recorded in all formats (from digital files to CDs and vinyl) for streaming and other online

services, as well as broadcasting, public performance, and synchronization in audiovisual materials; and fiction and

non-fiction books, educational, instructional and assessment materials, and professional and scholarly journals,

databases, and software in all formats.

III. INITIATIVES TO STRENGTHEN IP PROTECTION AND ENFORCEMENT IN FOREIGN MARKETS

IIPA highlights positive developments in the following markets in the past year:

Brazil: The Brazilian Audio-Visual Agency (ANCINE) created an anti-piracy chamber, and the Ministry of

Justice’s National Council to Combat Piracy and Intellectual Property Crimes (CNCP) has pursued several helpful

voluntary initiatives to fight illegal activity. The Ministry of Justice has consistently deployed raids against online piracy,

such as the recurrent waves of Operation 404,

with the most recent wave focused on large numbers of infringing

A number of countries/territories have appeared on a Special 301 list every year since 1989, or for a considerable number of years. A 1994 amendment to Section

182 of the Trade Act, dealing with identification of “priority foreign countries,” provides that USTR must consider “the history of intellectual property laws and

practices in the foreign country, whether the country has been identified as a priority foreign country previously, and U.S. efforts to obtain adequate and effective

intellectual property protection in that country.” Uruguay Round Agreements Act Statement of Administrative Action, reprinted in H.R. Doc. No. 103-316, vol. I, at

362 (1994).

Operation 404 aims to tackle infringing services online, coordinated by the Brazilian Ministry of Justice and Public Security, together with cybercrime police units

from 11 states in Brazil, Homeland Security Investigations (US), and the Police IP Crime Unit, City of London Police (UK).

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page v

mobile apps, and regulatory agencies have recently improved their focus on combatting illicit streaming devices (ISDs),

although current efforts on ISDs remain insufficient given the scale of the problem. In addition, positive progress has

been made regarding disabling access to infringing websites. On August 10, 2021, the Tribunal of Justice of the State

of São Paulo issued a permanent blocking order against 14 stream-ripping sites in the criminal case initiated by the

recorded music industry’s anti-piracy body, APDIF DO BRASIL (APDIF). The decision was part of the campaign

developed by APDIF and the Unit against Cyber Crimes of the State of São Paulo’s Prosecutors Office (Cyber-GAECO),

and the first of its kind in Brazil against music piracy services, confirming the legal powers of Brazilian courts to order

permanent injunctions in cases against foreign sites with a significant audience in Brazil. More recently, on September

23, 2022, the Tribunal of Justice of the State of Sao Paulo, following a request from Cyber-GAECO, granted a dynamic

injunction for blocking against 40 major stream-ripping services for an initial period of 180 days. While these

developments are encouraging, as discussed in the Brazil country report, the government should make additional

improvements to Brazil’s copyright enforcement framework.

Canada: In June 2022, Parliament passed Bill C-19 to amend the Copyright Act to extend the general term

of copyright protection. As discussed in the Canada Country Report, IIPA encourages the government of Canada to

meet its U.S.-Mexico-Canada Agreement (USMCA) commitment by swiftly enacting this bill.

India: India established a site-blocking remedy in 2019 and, in 2022, rightsholders achieved two new

milestones. First, rights holders obtained orders to block “pirate brand” domains based on their apparent association

with an already-blocked site. This will create further efficiencies and help disrupt persistent infringers who mimic the

name or brand of popular pirate sites to attract traffic and ad revenues to their copycat sites. Rights holders also

obtained the first blocking orders against a cyberlocker, allowing blocking of server domains associated with

cyberlockers shown to be servicing referral sites with massive infringements. In addition, in February 2022, the Delhi

High Court Intellectual Property Rights Division Rules entered into force. The Rules establish an IP Division of the Delhi

High Court and are intended to ensure that the judges hearing IP cases are well versed in IP laws and practice. These

rules have had a positive impact on the adjudication of IP cases to date and could provide a model for other states.

Finally, in May 2022, the Supreme Court of India held that offenses under Section 63 of the Copyright Act are

cognizable and non-bailable offenses. This decision improves the police’s ability to effectively respond to copyright

infringements committed within their jurisdictions. The Ministry of Commerce and Industry should analyze, and, as

necessary, seek to amend any penal provisions or ancillary provisions related to Section 63 that may be inconsistent

with this Supreme Court judgment.

Kenya: In early 2022, a bill proposed by a Member of Parliament to repeal online enforcement provisions

(including notice and takedown obligations) was withdrawn, following strong opposition by Kenya’s Copyright Office,

as well as local and international rights holders. It is important for Kenya to effectively and consistently implement

notice and takedown and other measures demonstrated effective in preventing or restraining infringement to help

address online piracy. As discussed below, IIPA encourages the U.S. and Kenyan governments to work together to

ensure that legislative reforms are consistent with international obligations and standards and provide protection for

foreign and domestic rights holders alike.

Malaysia: In March 2022, new anti-ISD amendments to the Copyright Act entered into force. Pursuant to

these new amendments, the Alliance for Creativity and Entertainment (ACE), Premier League, and Malaysia’s Ministry

of Domestic Trade and Consumer Affairs (MDTCA) in October 2022 undertook a joint enforcement action against an

electronics retailer for allegedly selling ISDs.

Mexico: In 2022, the ESA entered into a Memorandum of Understanding (MOU) with the Mexican Institute of

Intellectual Property (IMPI) to work together on issues impacting video game IP protection and enforcement. The MOU

focuses on collaboration on IP enforcement activities, promotion of the importance of IP, public awareness campaigns

about the value and importance of IP to the video game industry, and collaboration with Mexican government agencies

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page vi

that work on IP matters. Work under the MOU has already begun, including an ESA-led training for over 60 members

of the IMPI enforcement team.

The Netherlands: The site-blocking mechanism in the Netherlands continued to improve in 2022. After the

Association for the Protection of the Rights of the Entertainment Industry of the Netherlands (BREIN) secured a final

blocking order of The Pirate Bay in 2020 following 11 years of proceedings, Dutch Internet service providers (ISPs)

agreed in 2021 to a covenant whereby a court order for blocking an infringing website against one ISP will be executed

voluntarily by the other ISPs. This agreement has been tested with the blocking of an additional six infringing sites (as

well as hundreds of proxies) in 2022. Blocking is dynamic, enabling updates by BREIN without further court orders.

Peru: Although Peru still has high levels of piracy, it has taken significant, positive steps to address this,

notably thanks to the decisive role that continues to be played by the Instituto Nacional de Defensa de la Competencia

y de la Protección de la Propiedad Intelectual (“INDECOPI”) in issuing injunctions for ISPs to disable access to

blocking order against a total of 147 websites, including over 40 globally popular stream-ripping sites that were blocked

by all ISPs. This unprecedented action was possible because of the close cooperation between INDECOPI and private

sector organizations representing national and international rights holders in Peru.

Singapore: In October 2022, the Criminal Investigation Department of the Singapore Police conducted

simultaneous enforcement actions at several retail shops, seizing 2,500 suspected illegal set-top-boxes. The Copyright

Act in Singapore was amended recently to provide that those found to have infringed the Act by making, dealing,

importing, distributing, or offering of devices or services to access works without the authority of copyright owners can

be fined up to $100,000, imprisoned for up to five years, or both.

Thailand: Although further improvements are still needed in Thailand’s copyright framework as discussed in

the Thailand Country Report, amendments to the Copyright Act that entered into force in August 2022 included some

helpful improvements, including on secondary liability, the protection of technological protection measures (TPMs), and

the reinstatement of a procedure for notice and takedown. There also have been some positive voluntary public/private

sector initiatives in the form of Memorandums of Understandings in connection with “Online Advertising and Intellectual

Property Rights” and “Protection of IPR on the Internet” devised by the Department of Intellectual Property, together

with the Department of Business Development and Department of International Trade Promotion, respectively.

Vietnam: In June 2022, the Cinema Law passed, allowing self-classification for films disseminated on the

Internet, which includes most video-on-demand (VOD) content, and a grace period for implementation. Vietnam should

maintain these positive changes in the related draft implementing decrees, while removing negative policies like the

screen quota and discriminatory film fund. In June 2022, Vietnam also passed amendments to the IP Law, which will

enter into force on January 1, 2023, following Vietnam’s welcome accession to the WIPO Performances and

Phonograms Treaty (WPPT) in April 2022. The latest amendments contain improvements for rights holders, with an

improved definition of the making available right, the illegal uploading and streaming of a cinematographic work

categorized as a violation of communication rights, and the copying of part of a work considered as a reproduction, all

of which create additional opportunities for rights holders to seek civil or criminal relief against online infringers. IIPA

understands that implementing regulations are currently being drafted by the Copyright Office of Vietnam under the

Ministry of Culture, Sports, and Tourism. This process offers an opportunity to further clarify and refine some important,

Illustrating the effectiveness of these website blocking actions, in November 2020, the most popular stream-ripping site in the country was Y2Mate, which received

an average of 138,000 visits from Peru each day. The site was blocked by ISPs in the country in December 2020, and by March 2021, daily visits from Peru were

down to just 22,000, a reduction of 84.1%. The blocking action of this single site continued to be effective and visits to the site did not exceed 15,000 per day during

the first six months of 2022. Ten further stream-ripping sites were blocked in May 2021, and an even more positive effect was observed. By July 2021, traffic to the

ten blocked sites was down by 88.4%. In June 2022, visits were 97.5% lower compared to the month before the blocking took place. These actions also had an

impact on overall levels of stream ripping. Total visits to all stream-ripping sites were 22.9% lower in Q2 2022 than in Q4 2020 when Y2Mate became the first

blocked stream-ripping site.

See Ang Qing, Sim Lim Square Shops Raided for Illegal Streaming Devices, 2,500 Sets Seized and 17 People Arrested, October 7, 2022,

https://stomp.straitstimes.com/singapore-seen/sim-lim-square-shops-raided-for-illegal-streaming-devices-2500-sets-seized-and-17

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page vii

outstanding elements of the law, and IIPA encourages the government to continue to incorporate feedback from rights

holders to ensure a smooth implementation of the improved IP Law.

IIPA welcomes these 2022 positive developments and looks forward to continuing to work with governments

to foster a healthy ecosystem for the creative industries. Despite these positive developments, serious additional legal

reform and enforcement issues remain in several of these countries. The details of these and other issues in certain of

these countries can be found below and in the respective Country Reports in Appendix A.

IV. ADDITIONAL CONCERNS IN OTHER KEY FOREIGN MARKETS

As detailed in the Country Reports, there are several countries, notably South Africa, Canada, Ecuador,

Indonesia, Nigeria, Peru, and Switzerland, where the press for reforms and modernization of national copyright laws

have failed to keep pace with market and technological trends. In some cases, reform efforts have become a vehicle

for proposals that threaten well-established global norms enshrined in long-standing international instruments,

including by introducing broad exceptions and limitations. In addition to the problematic legal reform efforts identified

in the Country Reports, the governments of several other countries, including Belgium, Germany, Kenya, Malaysia,

Paraguay, Philippines, South Korea, and Turkey, have introduced legislation, recently enacted legislation, or taken

other actions that threaten to significantly weaken, not strengthen, copyright protections or enforcement in those

countries. Further details of the serious concerns in these markets are provided below. IIPA urges the U.S. government

to monitor developments in these countries and proactively engage with these governments to ensure their legal reform

efforts result in adequate and effective copyright protection and enforcement.

A. Belgium

In June 2022, Belgium enacted a law implementing the European Union (EU) Directive 2019/790 on copyright

and related rights in the Digital Single Market (DSM Copyright Directive) that introduced an additional remuneration

right (ARR) for uses covered by Article 17, and more broadly in the context of the implementation of Article 18, of the

DSM Copyright Directive. The law was published on August 1, 2022, and entered into force on the same day. The

introduction of ARR in Section 62 of the implementing law was proposed by the government without conducting

consultations or any proper impact assessment of this issue. The new provision raises significant questions regarding

its compliance with fundamental EU principles, including its impact on freedom of contract and freedom to conduct

business, as well as regarding the practical application of the ARR and how the new legal regime should work (e.g.,

what is the impact on local and foreign rights holders and performers, how to ensure the correct distribution, to what

time period should it apply, etc.).

B. Germany

The 2021 transposition of the DSM Copyright Directive into German legislation and the changes to Germany’s

providers (OCSSPs). The new exceptions include an overbroad limitation on the exercise of exclusive rights for

“presumably permitted uses” and content that is “pre-flagged” by users as non-infringing. Those presumably permitted

uses apply to user-generated content that (1) contains less than half of a work by a third party or several works by third

parties, (2) combines the work parts according to (1) with other content, and (3) makes only minor use of third-party

works. Uses of up to 15 seconds each of a cinematographic work or motion picture, 15 seconds per soundtrack, 160

characters per text, and 125 kilobytes per photographic work are considered “minor uses” of a copyrighted work. These

new de facto exceptions exceed the “three-step test” and will lead to an untenable situation in which certain uses would

be permitted in Germany but not elsewhere in Europe or worldwide.

Article 13 of the WTO TRIPS Agreement obligates WTO members to “confine limitations or exceptions to exclusive rights to certain special cases which do not

conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the right holder.” See also Berne Convention Article 9(2)

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page viii

In addition, the implementation of Article 17 introduces direct remuneration claims for authors and owners of

certain related rights, subject to mandatory collective rights management. This means that creators who have licensed

or transferred their rights to producers and already obtained remuneration under these contracts, would still be able to

ask for a remuneration from an OCSSP. The direct remuneration claim would be unwaivable and administered only by

collective management organizations (CMOs). These provisions raise significant questions regarding both their

practical application, as well as their legitimacy, not least because they are unreasonable restrictions of the freedom of

contract.

C. Kenya

While the Government of Kenya has indicated its intention to ratify the WIPO Copyright Treaty (WCT) and the

WPPT (collectively, the WIPO Internet Treaties), it has yet to do so or to set a timeframe for accession. Kenya should

ratify and implement the WIPO Internet Treaties as part of its ongoing Copyright Act amendment process. Kenya’s

2019 amendment to the Copyright Act was intended to address some of the challenges of the digital age, but Kenya’s

copyright framework remains deficient in several significant respects. A 2020 draft Intellectual Property Bill (IP Bill),

which largely incorporated 2019 amendments to the Copyright Act, failed to address many of these deficiencies and

included additional provisions that fall short of Kenya’s international obligations and best practices. To ensure its legal

framework provides adequate and effective protection and enforcement of IP rights, Kenya’s government should revise

the IP Bill to address shortcomings in Kenya’s copyright and enforcement framework, including by:

• deleting the provisions requiring copyright registration and compulsory recordation of assignments, and

removing the requirement in the Copyright Act that authentication devices be affixed to sound recordings,

all of which are incompatible with Kenya’s international obligations, including under the Berne Convention

and the WTO TRIPS Agreement, and with the requirements of the WPPT;

• ensuring that the exclusive rights of communication to the public and making available are clearly defined

and meet the requirements of the WPPT;

• ensuring that exclusive rights apply to all sound recordings, including “born digital” recordings;

• retaining the rights of communication to the public and broadcasting as exclusive rights;

• providing adequate and effective protections for TPMs and rights management information (RMI), in line

with international standards;

• providing a term of protection consistent with international norms (life of the author plus 70 years, or at

least 70 years from fixation or publication for sound recordings or works not measured by the life of a

natural person);

• expressly incorporating the three-step test into the law to properly confine the scope of exceptions and

limitations to copyright protection;

• improving Kenya’s online liability regime to ensure that it supports sustainable growth of the digital content

markets and does not shield copyright infringing services, including by: (i) ensuring there is a clear legal

basis under which ISPs may be held liable for IP infringements carried out by third parties using their

services or networks; (ii) clarifying that safe harbors apply only to passive and neutral intermediaries that

do not contribute to infringing activities; (iii) clarifying the responsibilities of ISPs eligible for safe harbors,

including an obligation to remove infringing content expeditiously upon obtaining knowledge or

awareness of the infringing activity and to take measures demonstrated effective in preventing or

restraining infringement; (iv) requiring ISPs to implement effective repeat infringer policies; and (v)

(same, as to reproduction right); WIPO Copyright Treaty (WCT) Article 10 (same, as to all Berne exclusive rights and all exclusive rights granted under the WCT

itself); WIPO Performances and Phonograms Treaty (WPPT) Article 16(2) (same, as to all rights provided for under WPPT).

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page ix

encouraging all ISPs, not only those that may avail themselves of safe harbors, to implement “know-your-

business-customer” (KYBC) procedures.

• ensuring effective, transparent, and accountable collective management of rights consistent with

international standards and best practices to ensure rights holders are able to control the use of their

rights;

• introducing a rate-setting standard applicable to the licensing of collectively managed rights requiring that

rates reflect the economic value of the use of the rights in trade (i.e., willing buyer/willing seller standard);

• providing deterrent civil and criminal penalties to combat piracy, including applying increased penalties

for second and subsequent offenses and fines and imprisonment terms for criminal offenses to all

offenses, including circumvention of TPMs, distribution of devices designed to circumvent TPMs, and

removal/alteration of RMI; and

• clarifying the role of the proposed IP Tribunal.

D. Malaysia

Following a short consultation period in December 2021, Malaysia’s new Copyright (Amendment) Act 2022

was adopted on February 10, 2022. The Act introduces new offenses for the unauthorized sharing of links to

copyrighted works and for addressing streaming technologies that commit or facilitate copyright infringement in any

work. However, the Act also provides for broad intervention in collective management from the “Controller of Copyright”

(the Director General of the Intellectual Property Corporation of Malaysia (MyIPO)) to issue guidelines on any matter

relating to the declaration and operation of a CMO. New subsidiary regulations relating to collective management have

since been introduced but these have not been substantive. Proposals have been made to introduce mandatory one-

stop shop CMO licensing in Malaysia, interfering with rights holders’ right to determine how and by whom their rights

are managed. Unfortunately, the amendment did not change Malaysia’s outdated term of protection for sound

recordings and works, which should be extended to 70 years.

E. Paraguay

In August 2022, a problematic bill was introduced in the National Chamber of Deputies in Paraguay proposing

a new remuneration right for musical and audiovisual performers to be paid by all digital platforms. The one-article bill

establishes a 10% (default) statutory rate to be collected by banks and other financial institutions out of the subscribers’

payments to premium accounts. The new right is subject to mandatory collective management, and the financial

institutions must remit the proceeds to national CMOs. In certain respects, the proposal resembles a broad compulsory

license that may apply even to unauthorized performances (i.e., piracy) and, as such, would be inconsistent with

Paraguay’s obligations under the WTO TRIPS Agreement. The proposal has no sound foundation (legal, economic, or

otherwise), is unprecedented, and would significantly hinder the market for audiovisual works and recorded music in

Paraguay. If enacted, the proposal would undermine the free exercise of exclusive rights and contractual freedom and

would create chaos in the market because the scheme for administration is cumbersome and unnecessarily confusing

involving multiple transactions, which will prove difficult, if not impossible, to follow.

F. Philippines

Online piracy is a major threat to the creative industries in the Philippines, and a more robust IPR enforcement

regime is needed, including more timely investigations and prosecutions of online copyright theft. The Philippines have

long been a primary source of camcord piracy of major motion pictures, and the government should remain vigilant on

this issue. With the new Marcos government, an iteration of draft IP Code amendments has been introduced in

Congress which would, for the first time in the Philippines, provide for an administrative no-fault injunctive remedy to

disable access to infringing websites. IIPA encourages the government to enact this remedy to help rights holders

protect their copyrights and combat online piracy. The remedy should not include a fiscal bond requirement, which is

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page x

inapplicable to the online environment, and reasonable qualitative criteria should be applied (such as whether the site

has the primary purpose or effect of infringing or facilitating infringement of copyright). Unfortunately, the draft

legislation also retained several problematic provisions, which should be removed or revised as indicated below:

• Remove the extended collective licensing (ECL) mechanism in Section 204: ECL is a system that was

developed for certain specific cases in markets with well-developed collective rights management

systems, and with CMOs already representing a substantial number of rights holders in their respective

fields. This is not the case in the Philippines. Furthermore, an ECL is a limitation on the exercise of rights

and, as such, must comply with the three-step test. Accordingly, an ECL may be introduced only where

there is a proven market failure and where individual licensing is unfeasible, not into a developed and

well-functioning market. There is no evidence justifying the introduction of ECL in the Philippines, and the

proposed ECL does not comply with the three-step test. At a minimum, if evidence justifying ECL for

certain uses emerges, sufficient safeguards must be added to ensure compliance with the three-step test.

• Remove the provision for additional remuneration for performers for subsequent communications or

broadcasts, which, like the ECL mechanism, interfere with freedom of contract and established

contractual and licensing arrangements.

• Remove the open-ended fair use provision in Section 207 or at least change it to a closed-list fair dealing

provision. Open-ended exceptions create unnecessary uncertainty, litigation, and conflicting decisions,

causing confusion. Such exceptions can be harmful not only to rights holders but also to users who need

certainty regarding which uses are permitted. Closed list systems have been adopted in most countries

because they provide a high degree of certainty as to the permitted uses. Fair use is determined on a

fact-intensive, case-by-case basis. In the United States, a well-developed body of case law helps to

mitigate the inherent uncertainty of the scope of the fair use exception. Without this foundation of a well-

developed body of case law, a fair use exception in the Philippines raises questions regarding the first

requirement of the three-step test, that exceptions must be limited to “certain special cases.”

• Extend the term of protection for sound recordings and works: The term of protection should be extended

to at least 70 years in keeping with the international standard, as discussed below.

• Clarify the requirements for mandatory accreditation of CMOs with Intellectual Property Office of the

Philippines (IPOPHL) in Section 203.2: It should be made clear that individual rights holders, engaged in

licensing of rights they own or control, shall not be under any obligation to seek an accreditation.

Finally, the Philippines government should avoid any consideration of a screen quota in proposed legislative

amendments and remove or dial back foreign ownership and investment restrictions, which limit the U.S. industries

contribution to the growth of local creative economies.

G. South Korea

Several legislators in the National Assembly have proposed amendments to the South Korea’s Copyright Act

that contain problematic proposals, including to introduce a statutory remuneration right for directors and scriptwriters

who have already assigned their rights, which would allow them to claim additional compensation from any profits

generated. These proposals would undermine the freedom and sanctity of contracts and have a dramatic chilling effect

on investment in the audiovisual industry. If enacted, producers of content will be faced with uncertainties regarding

increased risks of unlimited liability for payouts of additional remuneration over an extended period of time. As a result,

producers may reserve profits from popular, best-selling works to pay this additional remuneration to directors and

scriptwriters, instead of re-investing the profits into the production of other, more niche content. This will ultimately harm

the diversity and variety of content produced.

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xi

H. Turkey

For over a decade, the Government of Turkey has promised to modernize its Copyright Law (1951, last

amended in 2016) to fully implement the obligations of the WIPO Internet Treaties. Turkey acceded to the treaties in

2008, but has yet to fully implement them, including by providing proper remedies against the circumvention of TPMs

and protecting RMI. In 2018, the Government of Turkey circulated a comprehensive Copyright Law reform bill (2018

Bill), but that draft was withdrawn in 2019, in large part because of disagreements about the provisions on CMOs. The

Ministry of Culture and Tourism worked on a smaller package instead of the withdrawn 2018 Bill, but only Article 72 of

the Copyright Law was amended to expand protections against circumventing TPMs. While secondary legislation was

studied and changes were made in the CMO regulations and banderol regulations, these small changes will not bring

the required solutions to many of the existing copyright problems as discussed below and, unfortunately, the needed

changes are not expected to be made soon.

Turkey’s legal framework should be amended to address Turkey’s digital piracy problem—including stream

ripping, cyberlockers, BitTorrent and other peer-to-peer (P2P) linking sites, download sites, and “topsites” (i.e., high

speed servers used covertly to share content)—which is widespread and has stifled the legitimate market. While the

current Copyright Law provides for a notice and takedown process, an ISP’s failure to comply with takedown notices

or requests to block access to infringing websites are merely subject to administrative fines. A rights holder must obtain

a criminal court injunction to require the ISP to remove the infringing content. In addition, current law does not provide

for criminal penalties for copyright violations.

The Internet Law sets out broad liability exceptions that are inadequate to incentivize ISPs to address

infringements on their sites or by those using their services. The law provides that service providers are not liable for

third-party content unless “it is clear that [the provider] adopts the content to which it provides a link and that the user

intends to access that content.” The definition of a provider is unclear, and should be clarified to define who is, and is

not, eligible for the limitation on liability, and the liability limitation should apply only to passive and neutral intermediaries

that do not contribute to infringing activities. Also, unlike most countries, including the United States, the liability

exemption denies the ability of a rights holder to obtain injunctive relief. This also should be corrected.

The governance and management of CMOs has been a long-standing problem in Turkey. Currently, foreign

rights holders face discriminatory policies that prevent foreign producers from being fully participating members of

Turkish CMOs (with full voting rights and management and decision-making authority). Because of this, the monetary

distribution rules and practices are discriminatory to foreign rights holders, and there is no transparency for non-

management rights holders. The prior drafts of CMO legislation (including the 2018 draft) would not have addressed

the fundamental problem of banning non-Turkish producers from full participation in, or management of, the CMOs.

The April 2022 Special 301 Report recommended, and rights holders agree, that Turkey should require “fair,

transparent and non-discriminatory procedures” for CMO governance of all rights holders’ rights.

One loophole in the 2018 Bill would allow Turkish collecting societies to license theaters to screen motion

pictures without authorization from film producers, and to subject them only to a compulsory license with a collecting

society-determined remuneration. This statutory license of an exclusive public performance right, if enacted, would

interfere with the freedom to contract by the copyright owner and violate international treaties and norms, and should

not be adopted in any CMO law (or Copyright Law) revision.

There were other concerns with the 2018 Bill that should be corrected in any future draft legislation, including:

(i) a broad exception to the right of reproduction, including for reprography and digital education; (ii) loosening the right

of distribution for imported copies with authorization, making it more difficult for rights holders to prevent the distribution

of pirated copies; and (iii) limiting the private copy levy royalty rate to rights holders to 37.5%, with the remainder going

to the Government of Turkey.

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xii

V. KEY CHALLENGES FOR THE COPYRIGHT INDUSTRIES—PROTECTION, ENFORCEMENT, AND

MARKET ACCESS ISSUES

Notwithstanding the positive developments noted above, the U.S. copyright industries face complex

challenges in overseas markets that fall into three distinct, but overlapping, categories: (i) inadequate copyright and

related laws; (ii) inadequate and ineffective enforcement of existing copyright and related laws; and (iii) market access

barriers that inhibit the licensing and dissemination of copyrighted works and sound recordings. Below is a summary

of the major challenges across the global markets in each of these categories:

A. Inadequate Copyright and Related Laws

Although the Country Reports highlight specific concerns and deficiencies in the copyright legal regimes in

each of the identified countries, some concerns are common to many countries. First, the current legal regimes of many

U.S. trading partners fail to meet their obligations to the United States, evolving global norms, or the minimum standards

of the WIPO Internet Treaties. Second, in several countries, CMOs are not operating fairly or properly, resulting in the

denial of monies to rights holders. Related to these concerns, as outlined above, several countries undertaking major

overhauls of their copyright and related laws are considering adopting or have adopted proposals that would weaken

rather than strengthen copyright protections or enforcement mechanisms, thereby undermining markets for the digital

creation or dissemination of rights holders’ materials.

1. Failure to Meet Legal Reform Obligations, Evolving Global Norms, and Global Minimum

Standards

As detailed in the Country Reports, U.S. trading partners have many unmet legal reform obligations from the

numerous bilateral, regional, and multilateral trade agreements with the United States. These agreements include: (a)

the WTO TRIPS Agreement, to which 164 countries have now acceded (and over 20 additional countries are in the

process of acceding);

and (b) free trade agreements (FTAs) or trade promotion agreements (TPAs) with over 20

countries, including the 2020 agreement with Mexico and Canada (USMCA), as well as bilateral agreements that

entered into force in 2012 with South Korea, Colombia, and Panama. These agreements are intended to open foreign

markets to U.S. goods and services dependent on copyright protection, chiefly (although by no means exclusively) by

mandating improved and modernized copyright laws, and, in most cases, higher standards for on-the-ground

enforcement of these laws.

The United States also has a series of Bilateral Investment Treaties (BITs) that are

increasingly relied upon to resist efforts by foreign governments to impose heavy-handed regulations, such as

mandated local-content quotas, purchase requirements, or restrictions on audiovisual over-the-top (OTT) businesses.

Some signatories to existing FTAs have not met their agreement obligations, yet these countries continue to

enjoy advantageous access to the valuable U.S. markets for goods and services. These concerns are detailed in the

Country Reports, notably in Chile and Colombia, where the legal frameworks for online enforcement remain deficient.

As detailed in the Mexico Country Report, Mexico has enacted key copyright reforms to implement certain obligations

under the USMCA (and longstanding commitments under the WIPO Internet Treaties), but IIPA is concerned about the

IIPA commends USTR and the interagency for helping to ensure the WTO’s TRIPS waiver decision on COVID-19 vaccines did not undermine the WTO TRIPS

Agreement’s important standards on copyright protection and enforcement.

In addition, some countries such as the United Kingdom (UK) and Japan are actively seeking additional trade agreements with their trading partners, some of

which are paying dividends in stronger intellectual property (IP) protection and enforcement obligations that, through the most favored nation (MFN) principle,

should afford benefits to U.S. rights holders as well. For example, the UK-New Zealand Free Trade Agreement (FTA), signed on February 28, 2022, includes

several important obligations, such as providing injunctive relief against intermediaries for copyright infringement (Article 17.70), incorporating a “commercial scale”

definition, mirroring that of U.S. FTAs, that requires criminalization of “significant acts, not carried out for commercial advantage or financial gain, that have a

substantial prejudicial impact on the interests of the copyright or related rights holder in relation to the marketplace” (Article 17.75), and providing for “blocking

orders” (Article 17.82), among others. In addition, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) contains similar

disciplines, for example regarding “commercial scale” criminal liability, which now bind countries like Vietnam, which has notoriously weak criminal enforcement to

date.

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xiii

pending constitutional challenge to these reforms, which if successful would seriously undermine Mexico’s compliance

with its USMCA obligations.

The U.S. government has entered into other wide-ranging bilateral agreements, including binding trade

agreements, in which our trading partners have committed to taking steps to modernize and strengthen their copyright

laws and/or enforcement regimes.

Some of the agreements were negotiated bilaterally in the context of accession of

U.S. trading partners to international entities such as the WTO, or in the settlement of WTO disputes, while others

constitute “action plans” or similar pledges resulting from negotiations to resolve bilateral issues, including for example,

an online enforcement obligation agreement with Russia that has never been fully implemented. As detailed in the

China Country Report, the Economic and Trade Agreement with China (Phase One Agreement) includes copyright

enforcement obligations and also purchasing obligations for licensing of audiovisual services.

IIPA urges China to

follow through on its Phase One Agreement commitments.

Some of the provisions in certain bilateral or multilateral agreements are outmoded and no longer fit the

original intended purpose. For example, some provisions meant to address digital technologies were negotiated more

than a quarter century ago, before the dawn of digital markets and interactive uses that have so dramatically changed

the marketplace for goods and services protected by copyright. In such instances, the U.S. government should seek

higher standard remedies that support the current business models of the creative industries—including remedies that

effectively respond to current challenges and reflect international best practices—to ensure the proper delivery of digital

works and services.

Our trading partners should be urged to bring their laws into line with evolving global norms regarding duration

of copyright protection. Setting the term of copyright protection at life of the author plus 70 years (or at least 70 years

from fixation or first distribution for works or sound recordings not measured by the life of the author) has become the

de facto global norm. More than 80 countries, including most of the United States’ major trading partners in Europe

and in the Americas, and all but a handful of Organization for Economic Cooperation and Development (OECD)

countries already meet or exceed this norm for some or all categories of creative works and recordings. Several U.S.

trading partners have not yet adopted longer terms for works or sound recordings, or both. It is hoped that countries

that have not yet adopted this longer term, particularly in Asia and Africa, will follow recent examples (many in Latin

America) and extend copyright term accordingly.

The U.S. government should also make it a priority in 2022 to encourage all U.S. trading partners to accede

to and fully implement the WIPO Internet Treaties. At the time they came into force, the WIPO Internet Treaties set the

global minimum standards for providing copyright holders with the full panoply of exclusive rights in the digital

networked environment. The treaties also include an overarching commitment for countries to enable effective exercise

of these rights in practice and to provide deterrent levels of enforcement of these rights online (and offline). The WIPO

Internet Treaties also were the culmination of a global consensus on the need to provide legal protection for TPMs that

controls, particularly access controls, are key enabling technologies for a full range of online digital services, such as

subscription streaming services, that deliver creative works to consumers at a time and place convenient to them, and

in a manner that protects the rights of and payments to creators and producers. IIPA urges the U.S. government to

remain vigilant on this issue, especially regarding legislation in any country purporting to implement the WIPO Internet

Treaties and copyright reforms undertaken in countries that are parties to an agreement with the United States. In

particular, anti-circumvention prohibitions (i.e., protections for TPMs) should protect access controls regardless of the

method or technology and should apply independent of whether there is an accompanying copyright infringement. Only

See, for example, the intellectual property rights agreements compiled by the Commerce Department’s Trade Compliance Center, available at:

http://tcc.export.gov/Trade_Agreements/Intellectual_Property_Rights/index.asp

See Economic and Trade Agreement Between the United States and China, available at:

https://ustr.gov/sites/default/files/files/agreements/phase%20one%20agreement/Economic_And_Trade_Agreement_Between_The_United_States_And_China_T

ext.pdf.

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xiv

in this way can TPMs legislation establish effective, practical, and enforceable anti-circumvention prohibitions that

protect and support digital content services.

Although recent trade initiatives—including the trade pillar of the Indo-Pacific Economic Framework (IPEF),

the U.S.-Kenya Strategic Trade and Investment Partnership, and the U.S.-Taiwan Initiative on 21

-Century Trade—do

not address IP rights issues, these initiatives do include a focus on digital economy-related matters. Given the

importance of the copyright industries to the digital economy as discussed above, the U.S. government should ensure

that the outcomes of these initiatives do not in any way reduce or undermine high standards of copyright protection,

including obligations in the WIPO Internet Treaties and the WTO TRIPS Agreement. IIPA also hopes that negotiators

can make progress on ensuring trading partners accede to and fully implement the obligations of the WIPO Internet

Treaties, which as noted above include critical provisions, such as protections for TPMs, that are fundamental to digital

trade of copyrighted works and sound recordings. Moreover, the digital trade negotiations are an important opportunity

to address policies and measures that discriminate against U.S. creative content and services, including through the

imposition of performance requirements. Furthermore, these trade initiatives provide important opportunities to work

with trading partners to enhance cooperation and capacity building activities to improve copyright protection and

enforcement, which is a longstanding United States trade negotiating objective.

To achieve these important goals,

negotiators should work with the U.S. government’s IP experts, including those at the U.S. Copyright Office and the

U.S. Patent and Trademark Office. Moreover, in addition to these recent trade initiatives, the U.S. government should

continue to use other bilateral trade dialogues, such as the U.S.-India Trade Policy Forum's Working Group on

Intellectual Property, the Transatlantic IPR Working Group, Trade and Investment Framework Agreements (TIFAs),

and Trade and Investment Council Agreements (TICs), to improve copyright protection and enforcement regimes of

U.S. trading partners, including by addressing the concerns identified in this filing.

The Country Reports in Appendix A, as well as in the section above regarding additional concerns in other

key foreign markets, identify certain key markets that have not acceded to or implemented the WIPO Internet Treaties

or have other unmet legal reform obligations. In addition to these countries, Saudi Arabia is an important market that

still needs to accede to and implement the WIPO Internet Treaties and ensure that the legal framework, including the

international standards and best practices. In particular, key definitions and rights should be clarified to ensure they

are consistent with the treaties, including the definition of “sound recordings” and the rights of communication to the

public, broadcasting, and making available, which should be separately enumerated and defined. In addition, Saudi

Arabia should ensure its exceptions and limitations are confined to the three-step test. The Government of Saudi Arabia

should also extend the current 50-year term of protection for copyrighted works and sound recordings to at least 70

years in keeping with the international standard.

2. Laws and Regulations Governing Collective Management Organizations (CMOs)

Direct licensing of copyrighted works and sound recordings by individual rights holders of their exclusive rights

should always remain the baseline. However, in certain circumstances where it makes economic sense, rights holders

may prefer to exercise some of their rights voluntarily on a collective basis, e.g., through CMOs. For audiovisual works,

for example, collective licensing of rights is the exception and not the rule. It applies (with all of the above-noted

limitations) for simultaneous transmissions of broadcast signals, but mandatory collective rights management is

otherwise opposed by the motion picture and television industry. For musical works and recordings, certain public

performance and broadcasting rights are more frequently licensed collectively, because often a large number of users

(potential licensees) are involved, for example, from cafés and restaurants to hundreds of radio stations, and the value

of individual transactions may be relatively small compared to the transactional costs.

See, e.g., 19 U.S.C. 4201(b)(5)(A) (The principal trade negotiating objectives required under the Bipartisan Congressional Trade Priorities and Accountability

Act of 2015 include “to further promote adequate and effective protection of intellectual property rights. . .”); see also 19 U.S.C. 4201(c)(1)(A) and (B) (“In order to

address and maintain United States competitiveness in the global economy, the President shall . . . direct the heads of relevant Federal agencies . . . to work to

strengthen the capacity of United States trading partners to carry out obligations under trade agreements by consulting with any country seeking a trade agreement

with the United States concerning that country’s laws relating to . . .intellectual property rights . . .and to provide technical assistance to that country if needed. . .”).

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xv

Royalties for the retransmission of audiovisual works and public performances of musical works and

recordings are significant revenue sources for all music rights holders and represent an important source of monies for

financing the production and dissemination of new works and recordings. This importance has heightened the need for

efficient, transparent, and accountable collective management services. It is therefore essential, particularly for music

industry rights holders, to set up and govern their own CMOs on a voluntary basis. Governmental roles should be

limited to establishing regulatory frameworks that enable efficient, fair, and non-discriminatory operations of CMOs

backed by rights holders, and, where appropriate, providing expert fora for the resolution of disputes on certain aspects

of collective management, including by ensuring that users cooperate in good faith in the licensing process and that

rights are properly valued based on reliable economic evidence (using the willing buyer/willing seller standard).

Serious concerns regarding rights holders’ ability to fully exercise their rights, especially the public

performance right, through collective management in key markets are detailed in the Country Reports in Appendix A

and in the section above regarding additional concerns in other key foreign markets. IIPA also has significant concerns

in several other important markets. The Ministry of Justice (MOJ) in Israel, encouraged by a coalition of small

businesses and large hospitality and accommodation service providers—generally using “COVID recovery” as a

pretext—is proposing to limit the communication to the public right

and create a “sole corporation” with the mandate

to set tariffs for the use of music rights in public performance, to collect the fees, and to distribute money to the different

CMOs or rights holders. Japan does not provide a public performance right for producers of sound recordings,

depriving U.S. rights holders of significant revenues.

In Kenya, in recent years there has been a notable increase in

government interference in the collective management sector, including the Copyright Office’s failure to renew the

operating licenses of the three music CMOs, despite reasonable efforts by the CMOs to meet the Office’s demands.

This has negatively affected the performance of the CMOs in terms of licensing commercial uses of copyright and

related rights. Singapore’s recently introduced public performance right includes a carve out for certain “indirect uses”

of works or sound recordings, allowing users to evade paying equitable remuneration to rights holders if the content is

received through a television or broadcast (including by radio) or a cable program. The exception is out of step with

Article 15 of the WPPT and has already proven to be a significant contributing factor to lower than expected public

performance collections in Singapore, which is expected to continue to the detriment of rights holders if the exception

is not removed. Like Indonesia, South Korea does not fully recognize producers’ public performance right, limiting it

to only a select list of venues recognized on a “positive list” and maintaining an unacceptably broad exemption from

the public performance right. This problem is exacerbated by the government’s interference in the setting of public

performance tariffs, resulting in rates set below international standards. Saudi Arabia, which presently has no CMOs,

should introduce voluntary, transparent, and accountable collective management of rights consistent with international

standards and best practices to ensure rights holders are able to control the use of their rights. This should include the

critical principle that any CMO established in Saudi Arabia should be owned or controlled by their member rights holders

(whether local or foreign).

B. Inadequate and Ineffective Enforcement of Existing Copyright and Related Laws

As a minimum standard, the WTO TRIPS Agreement requires “effective action” and “remedies that constitute

a deterrent” to infringement, through civil, administrative, and criminal channels, and effective adjudication in the

courts.

To be effective, enforcement tools must address the modern infringement challenges of all rights holders,

including all variety of online uses and those outside a territorial jurisdiction (frequently running anonymously), and

often across multiple countries. Moreover, enforcement authorities need adequate resources and the capability to do

their jobs effectively. As digital technologies have expanded consumer access to copyrighted materials, rogue services

The proposal would exclude the following entities from the scope of the communication to the public right: (i) small businesses (including waiting rooms) with no

more than 6 clients at the time; and (ii) “joint permanent places of residence.”

The music industry estimates that the value of public performance rights in Japan is $120 million per year, with a significant portion of that value attributable to

U.S. rights holders.

See WTO TRIPS Articles 41 and 61. There are many obligations for civil, administrative, and criminal remedies in Articles 41 through 61, including for provisional

relief and judicial procedures (e.g., injunctive relief), which are particularly critical for online enforcement.

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xvi

have exploited those technologies to facilitate different forms of piracy that undermine rights holders’ investments in

the production and distribution of new and existing materials and services. For example, cloud computing and

streaming technologies are used by cyberlockers and various platforms that do not have licenses for the content they

make available. In addition, various stream-ripping sites and apps circumvent TPMs and convert licensed streams (i.e.,

music authorized only for online streaming) into unlicensed downloadable content. Stream ripping is currently the most

prevalent form of online infringement of music. Thus, enforcement systems (and trade commitments to address

enforcement) must be adaptable, agile, efficient, and effective to deter the myriad forms of infringing activities. To deter

all copyright piracy on a commercial scale, countries should look to the standard in U.S. trade agreements, other

bilateral trade agreements (such as the recent United Kingdom (UK)-New Zealand FTA), and regional trade

agreements (such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)), which

define “commercial scale” piracy as not only “acts carried out for commercial advantage or financial gain” but also

“significant acts, not carried out for commercial advantage or financial gain, that have a substantial prejudicial impact

on the interests of the copyright or related rights holder in relation to the marketplace.” Countries should incorporate

these best practice standards in amending their criminal laws to ensure they can best address the latest forms of piracy

This Section highlights some of the enforcement challenges confronting IIPA members. The Country Reports

in Appendix A provide detailed discussions of these challenges where they are present in those key markets.

1. Online and Mobile Network Piracy

Digital delivery, whether through wired online or mobile networks, is the dominant form of delivery for

copyrighted works, including music, films and television programs, journal publications, and video games—both by

licensed and unauthorized services. The entrenchment of infringing services (including those misconstruing laws to

avoid licenses) is a leading barrier to access for U.S. creators and rights holders in markets worldwide. For example,

piracy via cyberlockers, which are often based in countries such as Russia where enforcement is difficult, and

BitTorrent and other P2P services continues to pose constant and serious problems for the creative industries. To

address these concerns, IIPA continues to recommend the following four steps:

(1) Identification: Identify and close down services and actors engaged in infringement activities, especially

criminal syndicates, through the use of criminal enforcement remedies and other tools. USTR makes an indispensable

contribution to this step by regularly conducting its “Special 301 Out-of-Cycle Review of Notorious Markets.”

detailed in the Country Reports, there have been many successes with the closure of Internet sites and services

identified as notorious markets by USTR. IIPA’s long-standing recommendation is that USTR should urge trading

partners either to convert sites and services to licensed disseminators of works and recordings, or these notorious

markets should be taken down followed by, where appropriate, criminal enforcement actions.

(2) Create an Adequate and Effective Legal Framework: The goal is a legal framework that: (i) prevents

the operation of services that promote or otherwise induce infringement; (ii) criminalizes online infringement

(particularly all “commercial scale” piracy, in line with the best practice definition described above); and (iii) provides

strong incentives for neutral intermediaries to work with rights holders to curb the use of their proprietary networks and

services for infringing purposes. Such a legal framework should: (i) provide the relevant panoply of exclusive copyright

and related rights (as well as effective TPMs and RMI protections) starting with the minimum standards mandated by

the WIPO Internet Treaties, and adopt global best practices for copyright protection in the digital environment; (ii)

ensure that any ISP liability limitations, if present, do not reduce the scope of substantive copyright protections and

require appropriate conditions to be met for eligibility, including obligations for ISPs to remove infringing content

expeditiously upon obtaining knowledge or awareness of infringing activity and to take measures demonstrated

effective in preventing or restraining infringement; (iii) recognize online piracy as a form of cybercrime (consistent with

The most recent report is USTR’s Out-of-Cycle “2021 Review of Notorious Markets for Counterfeiting and Piracy” (February 2022), available at:

https://ustr.gov/sites/default/files/IssueAreas/IP/2021%20Notorious%20Markets%20List.pdf

(NM 2021 Report).

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xvii

the Budapest Convention and global best practices); and (iv) foster cooperation among all industry stakeholders

(including ISPs) in the online supply chain, including the removal of impediments to collaboration.

While systems for notice and takedown of infringing materials are in place in many markets, often a mistaken

perception exists that they are the only means of online enforcement. The mere takedown obligation is not sufficient

or effective and should not be the only quid pro quo for limiting liability. Indeed, the U.S. Copyright Office has said in a

report about the U.S. notice and takedown system that such laws must properly “balance the rights and responsibilities

of [online service providers] and rightsholders in the creative industries.”

Moreover, some services, including some

clearly pirate services, attempt to rely on notice and takedown procedures to avoid proper copyright licensing. Clear

primary and secondary liability rules are necessary to discourage abuses and to avoid inaction or license evasion.

Where infringing activity rises to the level of criminal liability, imposing responsibility for aiding and abetting infringement

can be an effective remedy against commercial platforms. Proposals granting overbroad immunity to ISPs and other

platforms from any civil or criminal liability remain a concern. IIPA members urge foreign governments to include clear

language in legislative proposals to ensure that any blanket immunities do not apply to IP violations and that such

immunity does not hinder IP enforcement.

Separately, any copyright safe harbors should apply to only passive and neutral parties that do not contribute

to infringements. Additionally, there are concerns with provisions that immunize parties who induce or facilitate

infringement of copyright. Mitigating and preventing online piracy should be a shared responsibility with balanced

obligations between online intermediaries and rights holders, particularly because online intermediaries are best

positioned to assist with the mitigation and prevention of online piracy. Absent legal incentives to foster the cooperation

of ISPs and other online intermediaries, such intermediaries have little interest in fully cooperating with rights holders.

(3) Provide Injunctive Relief: A country’s failure to take effective action against its own (“homegrown” or

otherwise) notorious online marketplaces that target consumers in other markets causes harm to the markets of its

trading partners. Increasingly, responsible governments have pushed back against this “offshoring” of enforcement

responsibility by developing means and processes to restrict or disable access to foreign pirate sites from within their

borders. Government agencies and courts in over 42 countries—including Australia, Belgium, Brazil, Denmark,

France, India, Ireland, Italy, Peru, Portugal, Singapore, South Korea, Spain, Sweden, and the UK—employ

injunctive relief or administrative orders to compel ISPs to disable access to copyright infringing websites.

However, several important markets do not yet provide a legal basis for doing so, including Taiwan, as

discussed in the Taiwan Country Report. Japan is another example of a major market that needs to do more to address

effectively “offshore” infringements. An amendment was adopted in 2020, confirming liability against linking sites, but

additional measures are necessary to take effective action against offshore piracy. Japan’s Intellectual Property

Strategy Headquarters’ (IPSH) first ten anti-piracy measures, which were issued in their 2019 strategy document, have

had minimal effect. Piracy remains serious, which underscores the need for Japan to introduce additional effective

measures to prevent access to copyright infringing services, including infringing websites operated both within and

outside of Japan.

While Singapore’s Copyright Act provides injunctive relief for online infringement in Section 325,

improvements should be introduced to further strengthen the provision, including introducing an expedited procedure,

especially for infringed content that is newly released or has not yet been released. In Europe, Article 8(3) of the EU

whose services are used by a third party to infringe a copyright or related right.” Unfortunately, Poland has not fully

implemented this provision (as detailed in the Poland Country Report) nor has Bulgaria, which does not provide a legal

US Copyright Office, Section 512 of Title 17, at https://www.copyright.gov/policy/section512/section-512-full-report.pdf.

See, e.g., Eriko Watanabe, Study Update: Benchmarking and Tracking Online Film & TV Piracy in Japan (July 2018 to July 2021)

https://www.bunka.go.jp/english/policy/copyright/pdf/93696901_01.pdf

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xviii

basis for permanent injunctions.

The recently concluded UK-New Zealand FTA includes a provision that is similar to

Article 8(3), which hopefully will develop into a needed regional and international best practice and norm.

In short, there is a wide spectrum of judicial and administrative means through which to impose restrictions,

under defined circumstances, when other domestic remedies are insufficient, and this deserves the close attention of

the U.S. government. After over a decade of experience, studies have shown that injunctive relief can reduce usage of

infringing sites and increase traffic to legitimate offerings of copyrighted material. These steps are also effective against

service operators who cannot be identified or who avoid service of legal process.

(4) Develop Inter-Industry Cooperation: Because Internet services (including piratical services) are enabled

by and interlinked with a wide spectrum of supporting services, combating systematic online infringement of copyright

requires the active cooperation of all participants in the e-commerce ecosystem, including: online advertising players

(advertisers, ad agencies, ad networks, and the providers of advertising placement and related services); payment

processors; hosting providers (including reverse proxy providers and related optimization services); domain name

registrars and registries; search engines; and marketplaces and app stores. As entities with a direct stake in a secure

and stable Internet and in the healthy growth of legitimate e-commerce, including e-commerce in products and services

protected by copyright, cooperation against threats to that security, stability, and health is part of a sound business

strategy for all Internet intermediaries. Governments in many countries can do much more than they are currently doing

to foster and encourage such cooperation and the development of best practices to advance the common goal of a

safer online marketplace. For example, governments should encourage all relevant intermediaries to implement “know

your business customers” (KYBC) policies to ensure they keep up to date and accurate information about their

customers and to allow rights holders to obtain accurate information to protect their rights against direct infringers.

Additionally, governments should ensure that private sector agreements, especially those that provide enforcement

rights, properly reflect the needs of industry stakeholders, and that any remedies outside of a legal framework are

available to all copyright owners.

In a positive development, on December 20, 2022, approximately 20 organizations representing companies

from the audiovisual and telecommunications sector as well as government representatives and regulators from

Uruguay, Venezuela, Colombia, and Argentina signed an agreement to form a global anti-piracy coalition. The “Global

Anti-Piracy Pact” aims to improve and better coordinate the efforts of these companies and governments to combat

IPTV and audiovisual piracy.

This promising initiative should be encouraged by the U.S. government.

2. Circumvention of Technological Protection Measures (TPMs), Including Stream Ripping

The range and variety of legitimate material now digitally available to consumers, in so many formats and on

so many platforms, is possible because of the widespread use of TPMs by content producers and licensed services.

TPMs have fostered many of the innovative products and services available online by allowing creators and rights

holders to control and manage access to copyrighted works, as well as to diversify products and services and their

The Bulgaria Copyright and Neighboring Rights Act (CNRA) provides for a legal basis for injunctive relief against third-party infringers, but the provision appears

to provide for only precautionary and provisional measures, not for a permanent injunction. See Article 96a(8) of the CNRA.

Article 17.82 (“Blocking Orders”) of the UK-New Zealand FTA provides, “Each Party shall ensure that injunctions as provided for in Article 17.67 (Provisional and

Precautionary Measures) and Article 17.70 (Injunctions): (a) are available against an OSP, where its online services are used by a third party to infringe an

intellectual property right; and (b) include injunctions requiring that OSPs disable access to infringing content.”

See “Global Anti-Piracy Pact,” available at: https://certalatam.org/wp-content/uploads/2022/12/CERTAL_Documento-Pacto-Global.pdf (in Spanish). The “Global

Anti-Piracy Pact” includes the following requirements: (i) all governments are required to put administrative blocking procedures in place, with countries that do not

already have an administrative blocking procedure in place required to incorporate the issue into their 2023 legislative agenda; (ii) governments must guarantee

an expedited process to block retransmissions of illegal content over the Internet, whether on demand or live; (iii) governments must establish “effective mechanisms”

to demonetize online pirate services; (iv) audiovisual rights holders and distributors who own over-the-top (OTT), Multichannel Video Programming Distributor

(MVPD) and Virtual Multichannel Video Programming Distributor (V-MVPD) platforms must commit to actively demand and implement content protection

technologies (e.g., “watermarking”) that identify and block user accounts containing illegal content; (v) given the increase in recent years of pirated devices passing

through customs in various countries in the region, signatories must cooperate jointly to “reinforce customs controls for the effective seizure and destruction of

illegal devices, and, likewise, identify the marketing channels for devices to achieve the removal of offers and identify and punish those who generate them;” and

(vi) signatories must develop initiatives, create awareness campaigns, and establish procedures to educate the public and raise awareness of the importance of

consuming legal services, and the dangers of consuming illegal services, that offer audiovisual content.

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xix

pricing. In short, new business models depend on these technological controls. TPMs also ensure that works made

available in hard goods (DVDs and Blu-ray discs), in the online or mobile environment (including e-books and video

games), or through on-demand streaming services or conditional access (e.g., pay-TV, pay-per-view) are not easily

stolen and that pirated copies of video games are not playable on console platforms.

Unfortunately, there are business models built entirely around providing services, or manufacturing and

distributing technologies, software, devices, components, or tools, to circumvent TPMs to gain unlawful access to the

content or to copy it without authorization. One example is stream ripping, which was highlighted as a problem by

USTR in its 2016 Review of Notorious Markets for Counterfeiting and Piracy (Notorious Markets List) and in subsequent

Notorious Markets Lists, for example in 2021, including services such as Flvto.biz and Mp3juices.cc.

Stream-ripping

services infringe the making available right and circumvent the TPMs used to prevent download of music streams.

These services have proliferated in the last few years, making stream ripping, as noted above, the dominant method

of music piracy globally. Stream-ripping sites, services, and apps enable users to make a permanent, free download

of music that was licensed only for streaming on a video website such as YouTube and then allow that consumer to

listen to it whenever and wherever they wish, without paying for a licensed download or a premium streaming

subscription or accessing the stream on the licensed platform. This harms both legitimate streaming services and

channels for authorized downloads. While legal protection of TPMs, where properly implemented, enables effective

enforcement actions against distributors of unlawful circumvention technologies, these efforts are often undermined by

countries that have yet to implement adequate protections against circumvention activities and services.

3. Piracy of Books and Journals

Unauthorized photocopying of academic textbooks, and scientific, technical, and medical books, in many

markets remains a persistent problem for publishers. Combatting book piracy requires consistent action by law

enforcement authorities against entities engaged in unauthorized reproduction of textbooks and other professional

books. Counterfeit books continue to be produced for domestic sale in certain markets, but they may also be exported

to some developed markets. Government agencies and educational institutions (especially those that are state funded

or state operated) should do more to promote and adopt appropriate use and copyright policies, and in particular, the

use of legitimate textbooks and journal publications, as well as to discourage the use of unauthorized copies of all

literary, educational, and professional works in educational settings. Piracy of journal articles is likewise a significant

concern for the publishing industry. Piracy sites such as Sci-Hub and the Library Genesis Project (Libgen) and its many

mirror sites collaborate to acquire massive amounts of infringing copies of books and journal articles and enable the

seamless flow of the illegally obtained content between the two entities, and the multiple Libgen mirror sites.

4. Piracy of Motion Picture and Television Programs by Piracy Devices and Piracy-as-a-Service

A damaging piracy ecosystem has emerged around piracy devices and apps, i.e., ISDs. These piracy devices

and apps provide illegal access to movie and television content through a variety of means, including downloading and

streaming content, as well as unauthorized streaming of live television and sporting events, thus undermining the

licensing fees paid by distributors on which content creators depend. Motion Picture Association (MPA) members

continue to suffer enormously from a growing threat of these devices and apps. Streaming devices that are preloaded

with infringing apps and illicit TV/VOD subscription services can be found online and in physical markets. The challenge

is particularly acute in countries where the legality of the devices (i.e., boxes), and of activities surrounding their

trafficking, remains in doubt. Additionally, illegal apps that can place infringing material on otherwise legitimate

See NM 2021 Report.

Both Sci-Hub and the Library Genesis Project (Libgen) were listed as notorious markets in USTR’s 2021 report. See NM 2021 Report. For additional information

on Sci-Hub and Libgen see the Russia Country Report in Appendix A.

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xx

streaming devices can be found through a myriad of mainstream and specialty app repositories. This issue was the

focus of USTR’s 2017 Notorious Markets Report.

Because these piracy devices and apps are part of a sophisticated and integrated online ecosystem facilitating

access to pirated audiovisual materials, enforcement against them presents complex challenges. Under the right fact

patterns, the retailer/distributor can be held liable; alternatively, the app developer can be prosecuted (if identified).

Governments can also take action against key distribution points for devices that are used illegally, including

marketplaces (both online and physical) where such devices are sold. Many of the physical marketplaces of greatest

concern to the copyright industries now increasingly feature goods and services enabling piracy devices and apps, or

stalls, kiosks, or “repair” shops that offer to load unauthorized copyright material or piracy-enabling apps onto any

device. Vigorous action is needed to lessen the growing harm to the legitimate digital delivery of copyright materials by

these devices.

In addition, “Piracy-as-a-Service” (PaaS), which is a subset of the larger threat of Cybercrime-as-a-Service,

was identified by Europol as a growing threat enabling a variety of cybercrimes. PaaS encompasses a suite of often

off-the-shelf services that make it easy for would-be pirates without any technical knowledge to create, operate, and

monetize a fully functioning pirate operation, such as website templates, databases of infringing content, and hosting

providers specialized in servicing infringers. PaaS services are evidence of the scale, sophistication, and profitability

of modern online commercial copyright infringement. The emergence and development of PaaS services have become

a key concern of the motion picture industry and a top priority for its antipiracy efforts.

5. Illegal Camcording of Theatrical Motion Pictures

In addition to the problems of piracy devices and apps and emerging PaaS, another priority for the motion

picture industry involves stopping camcording or the illegal recordings of movies in theaters. One digital (camcorder)

copy, uploaded to the Internet and made available around the world, can undermine global markets and the huge

investments needed to produce and distribute a feature film. Illicit camcording in theaters decreased significantly in

2021, because many theaters closed due to the COVID-19 pandemic. With the re-opening of theaters in many markets

around the world, illicit camcording has resumed, with illicit audio and video recordings in 2022 up 71% from 2020.

A multifaceted approach is needed to tackle camcording that includes: (i) enacting and enforcing anti-

camcording legislation to outlaw the use or attempted use of an audiovisual recording device in a theater to make or

transmit a copy of all or part of a motion picture; (ii) educating the public about how unauthorized camcording hurts

both businesses and the consumer; and (iii) working with the private sector to identify and prevent unauthorized

camcording in cinemas. This strategy has been implemented in many foreign markets (including Canada, Japan, and

South Korea) with good results.

6. IPTV Piracy

Another long-standing problem for the motion picture and recorded sound industries is the unauthorized

broadcast, cablecast, or satellite delivery of motion pictures, television content, and music and sound recordings,

including the unauthorized retransmission of broadcast signals over the Internet. Cable and satellite piracy still persists

in some markets (including: the use of hacked set-top boxes; decoding or decrypting signals; and, stealing signals from

neighboring countries that are within the satellite’s footprint).

However, Internet Protocol TV (IPTV) services have

become the dominant threat in major markets. Pirate IPTV services provide access to stolen telecommunication signals

In its 2017 Notorious Markets Report, USTR spotlighted the growing problem of Piracy Devices (i.e., PDs), concluding that they “pose a direct threat to content

creators, sports leagues, and live performance, as well as legitimate streaming, on-demand, and over-the-top (OTT) media service providers.” See USTR, 2017

Out-of-Cycle Review of Notorious Markets at 8-9, https://ustr.gov/sites/default/files/files/Press/Reports/2017%20Notorious%20Markets%20List%201.11.18.pdf

Enforcement actions (and regulations) need to focus on: (i) prohibiting the trafficking in pay-TV or signal theft devices or technologies; (ii) the unlawful decryption

of encrypted cable or satellite signals; and (iii) the forwarding of decrypted signals (whether lawfully or not) without the authorization of the rights holders of the

content or of the signal. These actions can help to foster the licensing of broadcasters and cablecasters and to weed out unlicensed television distributors.

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xxi

or channels and offer on-demand infringing film and episodic television content to a global audience via dedicated web

portals, third-party applications, and piracy devices configured to access these services. Thousands of illegal IPTV

services operate worldwide, offering thousands of channels sourced from multiple providers, along with VOD content

of unauthorized movies and television programs.

Many of these illegal services are subscription-based, for-profit

services, with monthly or yearly user packages, and often coincide or are found or used with more typical online piracy

sites (e.g., streaming, BitTorrent, P2P). The technical infrastructure of these services is often vast and complex, making

the identification of content sources and service operators extremely challenging. The marketing and sale of these

IPTV services are often carried out by a network of global IPTV re-sellers who purchase subscriptions at wholesale

prices and re-sell them for a profit, further complicating investigations. IPTV services have been the driving force in the

emergence of related illegal businesses, including those engaged in the re-sale of IPTV services or the theft, distribution,

and sale of channel feeds. In addition, IPTV services rely on infrastructure and support services, including from hosting

providers, media servers, and panel hosts, sometimes without the knowledge or approval of the illegal services or

product (but sometimes in cooperation with these services). As a result, criminal enforcement against these large-scale

operations is the most effective deterrent.

C. Market Access Barriers that Inhibit the Licensing and Dissemination of Copyrighted Works

and Sound Recordings

In addition to the key challenges pertaining to copyright protection and enforcement, which constitute de facto

market access barriers, the U.S. copyright industries are also adversely affected by a variety of formal market access

barriers, investment restrictions, and discriminatory measures that make it difficult for U.S. producers and distributors

to participate fully in crucial foreign markets. These barriers also include interference with rights holders’ contractual

freedoms or with their licensing practices. The issues of copyright protection of authorized materials and enforcement

against infringing goods are moot if rights holders cannot disseminate legitimate American works and recordings in a

particular market in a fair and equitable manner to meet consumer demand. Market access barriers take many forms,

including:

• Restrictions on the ability to fully engage in the business of development, creation, production, distribution,

promotion, and publication of copyright materials;

• High tariffs (such as through inclusion of royalties in the calculation of duties), taxes, or fees on core

• Arbitrary restrictions on the ability of rights holders to decide how to manage their rights, in particular by

mandatory collective licensing and with government interference in the operation of CMOs and rate

setting;

• Quotas on audiovisual programming or complete bans on foreign programming, which overall curb the

ability of film and television producers to compete fairly, and which limit consumer access to legitimate

content;

• Local content investment requirements;

• Restrictions on advertising, including local content requirements;

• Restrictions on ownership and investment in copyright-related businesses;

• Discriminatory, onerous, and/or dilatory content review/censorship systems;

• Periods during which foreign governments prevent U.S. producers from opening their films or impose

onerous restrictions on the window for theatrical distribution (including unfairly shortening the run of a

theatrical motion picture);

In the United States, these illegal services are valued at over $1 billion in piracy subscriptions alone (and estimated profit margins range from 56% for retailers

to 85% for wholesalers worldwide). See, Money for Nothing: The Billion-Dollar Pirate Subscription IPTV Business. Digital Citizens Alliance and NAGRA (August

2020) at https://www.digitalcitizensalliance.org/clientuploads/directory/Reports/DCA-Money-for-Nothing-Report.pdf

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xxii

• Mandatory local replication requirements for films (that may also compromise the security of digital

materials); and

• Other forms of government interference with the exercise of rights or contractual freedoms by rights

holders.

One worrisome trend is governments seeking to regulate the online marketplace in the same manner as the

traditional television market, threatening the vitality of fast-growing and dynamic business segments such as VOD and

other streaming services. For example, in November 2020, the government of Australia released a consultation paper

that proposed an obligation on VOD services to invest five percent of local revenue in Australian content. A revised

content investment obligation was announced by the previous government in February 2022. The new Albanese

Government has outlined a commitment to introducing a content investment obligation and is currently consulting on a

National Cultural Policy, which is expected to contain such an obligation. Such an investment obligation would raise

concerns with Australia’s compliance with its obligations under the U.S.-Australia FTA. To ensure the continued

production of Australian content, Australia should maintain competitive programs for attracting international film and

TV productions. Doing so would boost the quantity and quality of local Australian content, rendering unnecessary any

consideration of quotas or a content investment obligation for digital delivery. In May 2020, the South Korea National

Assembly passed the Telecommunications Business Act Amendments (Articles 22-7), which require content providers

to take responsibility for “network stability” and consumer demand. The Enforcement Decree does not mandate content

providers to pay a network usage fee to ISPs. However, there are several amendment bills in the National Assembly

that would force content providers to pay for network usage fees, including a provision mandating negotiations for

network fees in network service contracts. If implemented, these proposed amendments would restrict trade and

freedom of contract, raising concerns under the U.S.-Korea FTA (KORUS). South Korea should avoid unnecessary

intervention into the commercial relationship between content providers and ISPs, apply light-touch regulation to OTT

services, and ensure consistency with its KORUS obligations.

The Country Reports in Appendix A include detailed discussions of these formal market access barriers in the

markets in which they occur. Whatever form they take, all market access restrictions that impede the entry of legitimate

products increase the appeal of unauthorized production and distribution operations. Often these illegal operations

cement strong loyalties with consumers, making them even harder to dislodge. U.S. officials should continue to strive

to open markets for American creators and producers and to eliminate or phase out market access barriers, as

identified in this year’s IIPA submission. IIPA members are committed to the promotion and protection of cultural

diversity and believe that governments can, in lieu of market access barriers, effectively rely on the flexibilities built into

FTAs, including permissible support programs, to promote their cultural interests.

VI. CONCLUSION

As detailed in the Copyright Industries in the U.S. Economy: The 2022 Report, the U.S. economy depends on

a thriving copyright sector to create revenue, jobs, and exports. Likewise, the health and competitiveness of our trading

partners’ economies also depend on promoting and respecting intellectual property rights and opening markets to

products and services that depend on copyright. Open markets foster jobs in the creative industries, benefit workers,

increase cultural diversity, promote international trade and exports, increase tax revenues from legitimate businesses,

and attract more foreign direct investment. It is essential to the continued growth and future competitiveness of the U.S.

creative industries that our trading partners provide high standards of protection for copyright; more effective policies

and tools to enforce that protection; and more free and open markets. IIPA continues to urge the U.S. government to

use the Special 301 review and other trade tools to encourage the countries and territories identified in our submission

to make the necessary political commitments and take the necessary actions to bring real commercial gains for the

U.S. creative industries, by strengthening copyright protection and enforcement regimes worldwide.

IIPA 2023 Special 301 Letter to USTR, January 30, 2023, page xxiii

We look forward to continuing to work together with USTR and all the U.S. agencies engaged in copyright

legal reforms, enforcement, and market access to meet the goals identified in this submission.

Respectfully submitted,

/Kevin M. Rosenbaum/

Kevin M. Rosenbaum, Executive Director

International Intellectual Property Alliance

APPENDIX A

COUNTRY SURVEYS

PRIORITY WATCH LIST

www.IIPA.org

January 30, 2023 2023 Special 301

ARGENTINA

NTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 S

PECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that Argentina be maintained on the Priority Watch List in

2023.

Executive Summary: Argentina lacks the resources and political will needed to match high rates of piracy,

which accelerated and diversified in the past several years. Argentina must recognize at the highest levels the need to

foster a digital market that is free from illicit content within its highly connected population. There is a dire need for an

agenda and strategic policy for enforcement and interagency cooperation, especially between prosecutors and law

enforcement cybercrime experts. The spike in demand for pirated content that Argentina experienced in the initial

pandemic lockdown has enabled pirate sites to take hold and expand to other Spanish-speaking countries. Satellite

and signal piracy also persists in Argentina. Hard goods piracy remains rampant through both importation and

production and is linked to organized crime groups. Market access obstacles persist, including film and television

quotas and high taxes on copyrighted content. Unauthorized digital goods (UDGs) for video game platforms are

rampant, with purveyors having taken advantage of the e-commerce boom generated by the pandemic to consolidate

the market among local game consumers. While sales of music recordings on physical media have declined in recent

years, the offer of unauthorized copies of new releases is still a significant problem for the Argentinean recording

industry.

IIPA urges the Government of Argentina to make use of the recently established Coordination Center to

Combat Cybercrime (Centro de Coordinación de Combate al Ciberdelito, known as C4) within the Cybercrime

Investigations Directorate in the Ministry of Security to combat rampant online piracy in conjunction with its anti-

cybercrime efforts. The government should also revisit efforts to strengthen the Penal Code to improve the enforcement

landscape for copyrighted works.

PRIORITY ACTIONS REQUESTED IN 2023

Enforcement

• Increase resources and political backing for a coordinated, long-term anti-piracy agenda at the federal level to

address online piracy.

• Partner with rights holders to maximize industry expertise in the fight against cybercrime.

• Engage cybercrime authorities and the National Communications Entity (ENACOM), Argentina’s

telecommunications regulator, to monitor and perform online operations against high-profile sites and commercial

activities occurring in online marketplaces and e-shops.

• Continue to apply the Civil and Commercial Code to Internet service provider (ISP) liability cases, including for

storing infringing content.

• Host private sector discussions on potential cross-industry cooperation to tackle online piracy more effectively and

to support the development of the local digital economy.

• Create a specialized Intellectual Property (IP) Prosecution Office and establish federal jurisdiction over copyright

crimes.

• Undertake routine, ex officio actions, such as inspections and raids of physical markets to stop commercial piracy.

• Actively involve the Argentinean Customs Office (DGA-AFIP) in copyright enforcement actions.

For more details on Argentina’s Special 301 history, see previous years’ reports, at https://iipa.org/reports/reports-by-country/. For the history of Argentina’s

Special 301 placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

• Engage customs authorities to monitor and perform border operations against counterfeit, high-value products

(such as circumvention devices and modified game consoles) entering the country via airports and land borders.

• Assign adequate legal powers and financial resources to the Ministry of Justice’s Copyright Office (Direccion

Nacional del Derecho de Autor).

• Introduce legislation for the adequate protection and legal remedies against the removal of technological protection

measures (TPMs) and rights management information (RMI).

• Ensure that any amendments introduced to the Argentina Digital Law, do not conflict with the activity of (and

enforcement actions by) right holders.

Market Access

• Remove quotas for motion pictures and television content, and electronic devices, and refrain from extending

quotas to over-the-top (OTT) services.

• Reject customs duties on audiovisual works based on the potential royalty value of the work rather than on the

value of the carrier medium, as well as other customs duties and taxes that burden foreign rights holders.

• Amend legislation to change collections on behalf of music performers and phonogram producers to be 50-50

between performers and producers instead of the currently inequitable split of 67% to performers and 33% to

producers.

• Reject other legislation or regulations that burden the creative industries or unfairly target foreign rights holders.

• Reject Executive Order No. 600/19 that imposes an obligation to unify performance rights tariffs for hotels and

establishes a governmental control system over tariff rates.

THE NATURE OF PIRACY IN ARGENTINA

The levels of online piracy of copyright works in Argentina worsened in the past year, showing no signs of

recovery from the spike in piracy that the country suffered during the spring of 2020, coinciding with the lockdown

implemented to contain the initial spread of the COVID-19 pandemic. The country’s Internet penetration rate of over

87% is the highest in the region, with 38.02 million users,

but a robust legitimate online content market cannot take

hold until the government makes concerted efforts to address the country’s rampant and increasing digital piracy via

torrent sites, and downloading, streaming, stream-ripping, and linking sites.

Audiovisual Piracy: Argentina, like the region as a whole, continues to see an increase in the usage of Piracy

Devices (PDs). In particular, Android boxes, such as the HTV box and Kodi boxes, are used to stream illicit copies of

films and television content. In recent years, IIPA has also seen an increase in consumption of films and television

through piracy mobile apps and add-ons.

According to the study Dimensión e impacto de la Piratería online de contenidos audiovisuales en América

Latina (by CET.LA and Ether City), during the twelve months ending in February 2020, illegal platforms received 53%

more visits than websites with authorized audiovisual content, and 17% of searches (45 million searches) for illegal

online content in Latin America came from Argentina.

Pirated content applications were downloaded 473,000 times,

while applications for streaming authorized content were downloaded 1.8 million times. Illegal sports broadcasting

websites received 22 million visits in the course of the year.

Video Game Piracy: The illegal distribution of physical and online video games and entertainment software

in Argentina has continued in recent years. During the pandemic, video game piracy spread over an even greater

Tiago Bianchi, Statista, Internet usage in Argentina - Statistics & Facts, October 18, 2022, available at https://www.statista.com/topics/6709/internet-usage-in-

argentina/#topicHeader__wrapper.

CET.LA and Ether City, Dimensión e impacto de la Piratería online de contenidos audiovisuales en América Latina, December 10, 2020, available at

https://cet.la/estudios/cet-la/dimension-e-impacto-de-la-pirateria-online-de-contenidos-audiovisuales-en-america-latina/

Id.

www.IIPA.org

January 30, 2023 2023 Special 301

diversity of formats, including: BitTorrent game content available on Spanish-language illegal linking and download

sites, increased availability of online UDGs,

and an increase of illegal consoles and devices available from small, local

businesses. According to Entertainment Software Association (ESA) data, Argentina ranks 16th in the world for peer-

to-peer (P2P) piracy of console-based video games, and 14th overall (accounting for over 44 million unique

infringements in 2022 of all types of video games) for the entertainment software industry. Instead, the volume of UDGs

available on the country’s major platforms increased further, by an estimated 40% in 2021. Infringing linking sites in

Spanish—monetized by advertisements—are the most popular piracy channels for video games in Argentina. Online

marketplaces, such as Mercado Libre, remain increasingly popular with providers of unauthorized copies of video

games, counterfeit consoles, circumvention devices, and modification services. During the lockdown period to contain

the spread of COVID-19 in Argentina, the availability of listings on Mercado Libre for illegal game titles, UDGs, or

physical video game products, including counterfeit controllers and modified game consoles, increased overall by 40%

on the popular marketplace; however, removals also increased. Social media platforms enable online pirates of all

varieties to attract wider audiences.

Music Piracy: The International Federation of the Phonographic Industry’s (IFPI) Music Consumer Study for

2022 (MCS) found that Argentina had one of the highest music piracy rates in the world. The study found that 48.1%

of Internet users (and 54.7% of 16- to 24-year-olds) had pirated music at least once in the previous month.

The most prominent forms of piracy in Argentina are stream ripping and the use of cyberlockers. IFPI’s MCS

found that 42.9% of all Internet users aged 16 to 64 used stream-ripping sites and services to illegally download music

from sites like YouTube in the previous month. In total, 12.7% of Internet users reported using the stream-ripping site

Y2Mate and a further 6.9% had used mp3y.download. Data from SimilarWeb reinforced the popularity of stream ripping:

y2mate.com received more than 20.4 million visits from Argentina during the third quarter of 2022 and ssyoutube.com

more than 7.6 million. Y2Mate was one of the top 100 most popular websites of any kind in Argentina. Mobile apps that

allow users to illegally download from YouTube are also popular: in IFPI’s MCS, 17.9% of Internet users said they

regularly used SnapTube to download music from YouTube. A further 6.6% used a similar app called TubeMate.

Cyberlocker sites also remain a threat in Argentina, particularly the site Mega.nz. IFPI’s MCS found that 12.6%

of all Internet users had downloaded music from Mega in the previous month, and SimilarWeb reported 14.7 million

visits in the third quarter of 2022. Zippyshare.com was also used by 3.3% of users in Argentina to download music.

SimilarWeb reported millions of visits to many other cyberlockers: for instance, there were 1.4 million visits to

1fichier.com in the third quarter of 2022 and 2.0 million to Uptobox.com.

Physical Piracy: Physical piracy continues to be a problem. After 217 days of closure due to the lockdown

to contain the COVID-19 pandemic, the notorious market La Salada reopened in October 2020 with strict protocols

that were blatantly violated when throngs descended on the market for Christmas shopping in December. The market’s

owner was arrested on non-piracy charges and remains under house arrest.

Illicit Theatrical Camcording: The COVID-19 pandemic, which caused the widespread closure of cinemas

in Argentina, temporarily halted theatrical camcording activity. However, as cinemas have reopened to moviegoers,

rights holders anticipate that this illicit activity will resume, and Argentina will continue to be the home to a number of

release groups that source camcorded material from all over the region and resell it online.

Unauthorized digital goods (UDGs) are unauthorized sales of in-game digital items. They have become a growing concern for the entertainment software industry.

Closely related to these in-game items are software products (collectively known as “cheat software”) that enable the unfair and rapid collection and aggregation

of virtual goods, such as bots, hacks, and “cheats”, or which otherwise tilt the scales in favor of one player over another. The rise of UDGs and cheat software have

a negative impact on video game companies and consumers in the following ways: (1) sellers of unauthorized digital goods and cheat software divert significant

revenue away from video game developers and publishers; (2) sales of digitally-delivered items, like in-game digital items, have the potential for consumer fraud

(such as stolen payment methods or compromised accounts) and the facilitation of money laundering schemes; (3) the unchecked sales of cheat software can

threaten the integrity of game play, alienating and frustrating legitimate players; and (4) video game publishers and developers are forced into a perpetual virtual

“arms race” to update their products and security technology before the sellers can update theirs.

www.IIPA.org

January 30, 2023 2023 Special 301

In 2022, in the absence of significant enforcement improvements to promote a legal online environment during

the pandemic, Argentina experienced rapid expansion of already high levels of piracy. Law enforcement authorities

suffer from a severe shortage of the resources and coordination needed to efficiently monitor and control digital piracy

and the use of illicit streaming devices (ISDs). Reforms in enforcement efforts are needed to stop the import of ISDs

into the country, conduct full-scale raids against piracy websites and applications, and take actions against unlicensed

retransmission and theft of Pay-TV signals.

In 2022, by Resolution 75/2022, the Ministry of Security updated the Federal Plan for the Prevention of

Technological Crimes and Cybercrimes 2021-2024 to redouble efforts to prosecute cybercrime that occurred,

especially in the finance sector and in the public sector. In February 2022, the Argentinian Ministry of Security issued

Resolution # 86/2022, which creates the ForCIC – Program for Strengthening Cybersecurity and Cybercrime

Investigation. The Program aims to coordinate, assist, and provide advice on digital infrastructure security techniques

and investigation techniques for cybercrime and crimes involving technology or the use of technology. Although the

scope of the program is not restricted to piracy, it is an important step in combating copyright infringement in the digital

environment.

Finally, Resolution No. 139/2022 of March 15 created, within the framework of ForCIC, the CICAT (High

Technology Cybercrime Investigation Center). The objective of the Center focuses on training, preventing, analyzing,

and investigating cybercrimes, covering specific areas of approach such as digital forensics and federal regional units,

among others. Within the framework of this plan, the Ministry of National Security called for a Federal Public Awareness

Campaign on Cybersecurity and Cybercrime Prevention, through Resolution 731/2022, with which it invites the

Provinces and the City of Buenos Aires to join the campaign.

It should be noted that the Specialized Cybercrime Unit (UFECI) also reported an increase in cybercrime from

2020 to 2021. Throughout 2020 they received 11,396 reports – around 31 per day – which is 381% more than in 2019,

which had 2,369 cases – 6.5 daily. While only in the first quarter of 2021 they registered 3,976, which is 403% more

than the same stage of the previous year.

Rights holders have reported very few significant cases of copyright enforcement actions by Argentina’s law

enforcement in 2022. General inaction and lack of coordination in online infringement investigations and cases between

federal and state jurisdictions remain major concerns. For example, when an online IP crime is reported, both the

Federal Police and the State Prosecutor might independently proceed processing the case without communicating or

sharing data. The federal police view copyright infringement as a federal crime, and the state prosecutor views it as a

crime involving a local Argentinean citizen. The Government of Argentina should establish greater cooperation among

federal enforcement agencies to address online piracy as a united front by creating a specialized IP Prosecution Office

and establishing federal jurisdiction over copyright crimes. Argentinean law enforcement authorities need to be trained

to recognize the importance of online IP protections as an important piece of Argentina’s digital economic development

and its collateral benefits for public security policies. Additionally, law enforcement authorities should take further

concrete steps to establish an agenda that reflects short- and long-term goals for tackling illegal sites and piracy groups

operating in the country.

The Government of Argentina should assign adequate legal powers and financial resources to the Ministry of

Justice’s Copyright Office (Direccion Nacional del Derecho de Autor). Moreover, the Government of Argentina should

undertake routine, ex officio actions, such as inspections and raids of physical markets to stop commercial piracy. The

Government of Argentina should actively involve the Argentinean Customs Office (DGA-AFIP) in copyright enforcement

actions and engage customs authorities to monitor and perform border operations against counterfeit, high-value

www.IIPA.org

January 30, 2023 2023 Special 301

products (such as circumvention devices and modified game consoles) entering the country via airports and land

borders.

Other procedural challenges in Argentina include defaults in the evidence chain of custody for cybercrime

cases and the characterization of profit and economic benefits from online advertisements. The Government of

Argentina should continue to apply the Civil and Commercial Code to ISP liability cases, including for the storing of

infringing content. Furthermore, Argentina lacks legislation establishing protections relating to TPMs and RMI, which

are critical for enabling legitimate online business models and products. The lack of these legal tools is a further

obstacle to enforcement against circumventions and hacks of copyright works.

Enforcement actions against piracy linking and direct download sites require complex investigations involving

data requests to multiple service providers, who, in turn, require the support of judicial authorities for the requested

actions. Unfortunately, because law enforcement authorities generally fail to prioritize online copyright infringement

cases, rights holders must instead rely on self-help measures. While there are some positive examples of private sector

cooperation, there are no clear incentives from the government to generate cooperation between the private and public

sectors, causing a shortage of voluntary and beneficial initiatives.

In 2022, in the absence of government action, rights holders continued to rely more on cooperation with other

actors in the online ecosystem. The video game industry has increased its cooperation with Mercado Libre’s regional

office, based in Buenos Aires, as a strong partner through which UDGs and other infringing video game items are

removed from listings, and to combat commercial game piracy in the entire region. ESA reports that from 2021 to 2022,

Mercado Libre successfully completed approximately 1,800 takedown requests. The Government of Argentina should

host private sector discussions on potential cross-industry cooperation to tackle online piracy more effectively and to

support the development of the local digital economy.

The music industry requests the removal of pirate sites through notices sent to registrars and hosting services.

In some cases, these notices result in successful site removal. The music industry also sends daily notifications to

Google services and YouTube to request the removal of pirate sites from search results and infringing user uploaded

content.

In August 2022, the Alliance for Creativity and Entertainment (ACE) managed to take down seven piracy

domains based in Argentina. The Pelismart/Pelispop ring comprised several websites that combined monthly traffic of

over 27 million visits. Due to ACE’s actions, the operator agreed to take down the content, transfer the domains to

ACE, and enter into a settlement agreement. However, it is important to note that this enforcement action was

undertaken by a private entity (ACE), and not by the Argentinian government.

In October 2022, the Supreme Court ordered a Buenos Aires lower court to investigate a complaint for illegal

broadcasting of audiovisual content of the Premier League of England. The complaint is from the Football Association

Premier League and maintains that “unknown persons” are illegally broadcasting audiovisual content of football in

England. The case, initiated several years ago, will now be processed by the National Criminal and Correctional Court

18. The Premier League’s claim maintains that the images are “limited access” and that the retransmission to the

detriment of the firm is done through the method of continuous download or “streaming.”

In May 2021, Argentina approved the Second Additional Protocol of the Budapest Convention. This bolsters

the Government of Argentina’s welcome creation of the C4 within the Cybercrime Investigations Directorate in the

Ministry of Security. The commission’s goal is to monitor the implementation of the NPAC and to coordinate actions

against cybercrime through collaboration among the security forces, public-private initiatives, and cooperation with

international organizations. This task force is comprised of representatives from four federal security agencies: the

Navy, Federal Police, National Gendarmería, and Customs. C4 concentrates on crimes such as large-scale money

laundering, fraud, and crimes against sexual integrity, trafficking, and pedophilia. The creation of C4 could be part of a

long-awaited solution for enhanced coordination to tackle online IP crimes.

www.IIPA.org

January 30, 2023 2023 Special 301

IIPA urges Argentina’s authorities to partner with rights holders to use industry expertise to combat

cybercrime. Additionally, Argentina should create forums of cooperation with the private sector and to accelerate law

enforcement actions against the increasing problem of online crime in Argentina. Indeed, at the beginning of this year,

by Resolution 1/2023, the Argentinean government called for a public consultation regarding the document on the

Second National Cybersecurity Strategy.

Law enforcement and administrative authorities are not promoting actions by the private sector, nor are they

taking any initiatives to tackle copyright piracy through securing the assistance of domain name registrars. Based on

feedback from the criminal enforcement authorities, it is understood that they view any infringing site that makes money

through advertising as not making direct profits from copyright infringement, and therefore, ineligible to be criminally

prosecuted. This narrow interpretation of the law is not compatible with the WTO TRIPS Agreement obligation that its

parties ensure that criminal enforcement measures are available, at a minimum, against commercial-scale copyright

infringement.

In November 2022, the National Court of Original Jurisdiction in Civil Matters issued a decision ordering ISPs

to effectively block access to the stream-ripping site Y2mate.com. This was the first time ISPs in Argentina had been

ordered to block a stream-ripping website. Prior to this, ISPs were ordered to block The Pirate Bay by the National

Court of First Instance in Civil Matters No. 64 (Case 67,921/13). This decision remains in full force and effect. After the

initial order was issued in 2014, it was found that some ISPs were not complying with the order. As a result, new legal

actions were filed and, at the end of 2018, all ISPs were sent new notices instructing them to continue blocking the

site.

Despite the success of the blocking action against The Pirate Bay, it should be stressed that, due to the time

required to prepare the evidence and information gathering for the action to move forward, as well as the jurisdictional

disputes that arise in ordinary civil and federal procedures, this is not the most effective way for scaled actions that

would have a real impact on the digital piracy ecosystem.

On September 23, 2019, the music industry filed a judicial review action challenging the constitutionality of

the Executive Order No. 600/19 that created a single public performance tariff for all hotels and established a

governmental control system over tariff rates. The action claims that the Order is an unconstitutional and confiscatory

measure because it deprives rights holders of the freedom to set rates according to the nature and specifics of different

uses and to enter freely negotiated agreements with users’ associations. In 2022, the case was still pending for

resolution before an administrative court of first instance in Buenos Aires.

No new laws regarding copyright, IP or piracy have been adopted by the legislature in 2022.

MARKET ACCESS IN ARGENTINA

A number of economic conditions in 2022, combined with a heavy tax burden on content, have driven

audiences in Argentina to seek pirated materials online as a less expensive alternative.

Local Content Quotas: Media Law 26.522 (promulgated through Regulatory Decree 1225/2010) established

a registry of national films at the National Film and Audiovisual Arts Institute (INCAA) from which Pay-TV programmers

select productions to comply with the quotas imposed by Article 67 of Media Law 26.522. The list includes both existing

and yet-to-be-filmed productions. Both INCAA and ENACOM have yet to establish compliance procedures for Pay-TV

programmers. The decree presents several problems, such as whether channels with highly specific content will be

www.IIPA.org

January 30, 2023 2023 Special 301

able to find suitable content in the registry and whether programmers are subject to fines if they do not broadcast

productions that ultimately fail to be completed.

Local filmmakers increased pressure on ENACOM and INCAA to enforce existing quotas

and to modify

Media Law 26.522 to extend quotas to streaming services. Another proposal by local interest groups would modify the

1994 Law 17.741 for the Promotion and Regulation of Film production (also known as the Film Law) to implement

screen quotas on digital platforms and subscription-based media for which more than 50% of broadcast content is

fiction, documentary, or animation programs: 35% must consist of nationally produced audiovisual content by

companies or studios not associated with or part of the exhibitor, 75% of which should be at most two years old. All

audiovisual broadcasting services including free-to-air television signals and mobile telephony with video platforms

would also be required to produce at least 20 hours of national audiovisual productions per year. There appears to be

an increase in proposals to regulate streaming services by introducing content quotas and imposing taxes (recently

tabled bills include 3951-D, 5735-D, and 6716-D). IIPA cautions against proposals for additional quotas or imposing

quotas on streaming services because they negatively impact non-Argentinean content industries and impact the

competitiveness of audiovisual ecosystems where cross-border services are subject to local content quota

requirements.

Customs Duties: Argentina assesses customs duties on audiovisual works based on the potential royalty

value of the work rather than on the value of the carrier medium. This runs counter to international best practice and is

a form of double taxation, as royalties are subject to withholding, income, value-added, and remittance taxes.

In December 2017, the government passed a tax reform law that imposes a 35% customs duty on imported

video game consoles, which negatively impacts the entertainment software industry as consumers resort to “unofficial

importation” to avoid paying the extra charges. Moreover, the law also imposed a 21% Value Added Tax (VAT) on OTT

services as well as on a range of services provided by companies in the “collaborative economy.” Then, in December

2019, the Fernandez Administration imposed a 30% Social Solidarity and Productive Reactivation Tax (PAIS Tax) over

OTT services, including video game, music, and movie services. The PAIS tax is currently in force and will expire on

December 31, 2024. Additionally, on September 19, 2020, Argentina’s Central Bank imposed a 35% fee on foreign

credit card charges, which has a negative impact on Internet and streaming services such as online game platforms

that operate in the country and use foreign currency. These laws contradict international norms and should be amended

or repealed.

Election commitments made at Alberto Fernández’ 2019 inauguration hint that the government could send a

Digital Tax Bill in 2023. The government is waiting for further international discussions on the topic, including technical

guidelines on how to calculate the income for companies before submitting a Bill to Congress.

Distribution of Performance Rights: Argentina’s current law, approved in 1974, establishes that collections

on behalf of music performers and phonogram producers shall be distributed 67% to performers and 33% to producers.

This unfair distribution rule, imposed by law, goes against international practice and basic fairness. IIPA urges

Argentina to consider legislation that establishes a more balanced distribution of 50% to performers and 50% to

producers.

Resolution 4773 E/2017, mandating certification of compliance with the screen quota provisions set forth in Section 67 of the 2009 Media Law and its

accompanying regulation (Decree 1225/10) went into effect on January 1, 2018, but it has never been enforced. The quota regime requires free television licensees

to air eight Argentine feature films per calendar year. Likewise, non-national (retransmitted) subscription television services that show primarily fiction programs

are required to allocate 0.5% of the previous year’s annual turnover to acquire, prior to filming, the broadcast rights to independent Argentinean film and TV movies.

Moreover, in July 2018, INCAA published a resolution (Resolution 1050/2018) regulating content quotas for movie theatres, which came into force on July 10,

2018. Domestically produced films must represent 30% of the volume of content shown, for the entirety of one week per quarter where there is a dedicated screen.

While that 30% content quota was in effect previously, under the prior regulatory regime, the screen could be shared with another film. Under the new regulation,

should the exhibitor share the screen with another movie, it will be considered a partial fulfillment, and the local production must be shown for two weeks (a minimum

of one screening per day for at least one additional week) or until the full quota is fulfilled. Also in July 2018, ENACOM announced Resolution 4513 establishing

that a 30% local content quota would be enforced on free-to-air TV in urban areas (10-15% for lesser populated markets). IIPA recommends that this quota provision

be eliminated, as quotas distort the market, discriminate against U.S. audiovisual content, and are likely to result in increased piracy because Argentinean

consumers are unable to get sought after U.S. content.

www.IIPA.org

January 30, 2023 2023 Special 301

Bill to Modify the Audiovisual Communication on Digital Platforms Law: In the last quarter of 2022,

representatives from Argentina’s Ruling Party (FdT, the Front for All) presented two separate bills to modify the

Audiovisual Communication on Digital Platforms Law and to amend the 2009 Media Law, inter alia, extending its reach

to regulate digital streaming platforms. A third proposal was sponsored by a broader range of the political spectrum.

All three bills establish OTT taxes and screen quotas that would negatively impact several audiovisual markets,

including but not limited to, streaming platforms, music streaming, video game production, and podcasts. Furthermore,

in one case, a differential percentage was proposed for taxation between foreign and national platforms (six and three

percent respectively) of billing. The proposals are in different stages of review; only one has been assigned to and is

awaiting treatment in the Lower House’s Communications and ICT’s Committee and Budget and Treasury Committee.

Decree 690/2020 Establishing Pay-TV, Internet, and Mobile Telephony “Competitive Public Services”:

In 2020, President Fernandez issued Decree 690/2020 establishing Internet, cable television with spectrum and

satellite use, and mobile telephony as “essential services” with rates increases determined by ENACOM and subject

to government approval. The Decree has been successfully challenged in court, with all the larger cable service

operators granted successive six-month injunctions suspending the principal articles (Arts. 1-6) of the Decree. The

Government has appealed to the Supreme Court.

TRAINING AND OUTREACH

A conference on cybersecurity and cybercrime investigation occurred from October 17- 21, 2022. Organized

jointly by the Ministry of Security of the Catamarca Province and the Federal Ministry of Security, the goal was to

provide support in capacity building in relation to cybercrime problems, investigation techniques, and protection and

analysis of digital evidence through forensic software.

www.IIPA.org

January 30, 2023 2023 Special 301

CHILE

NTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 S

PECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that Chile remain on the Priority Watch List in 2023.

Executive Summary: The digital market for creative content in Chile is teeming with illegal materials, a

problem exacerbated by a weak legal framework and inadequate dedication or coordination of government resources

for online enforcement.

Chile’s copyright law, which more than ten years ago established what at the time was an experimental notice-

and-notice online piracy response system, has utterly failed to deter infringement online. The law was adopted six

years after the 2004 entry into force of the U.S.-Chile Free Trade Agreement (FTA), and yet it left important FTA

obligations unmet, such as protections against circumvention of technological protection measures (TPMs) and

deterrent remedies against infringement. Other major gaps in Chile’s legal framework include: the absence of clear

and comprehensive secondary copyright liability standards to encourage voluntary cooperation from intermediaries; a

counterproductive court order requirement for online content removal; and broad exceptions to copyright protection.

The country lacks many of the standard copyright enforcement measures and procedures available in other similar

markets. We urge Chile to improve and significantly update its legal framework for Internet service provider (ISP)

liability and online copyright enforcement to foster the development of a healthy digital marketplace.

A number of recent legal developments in Chile threaten to hinder, rather than advance, enforcement efforts.

The pending amendment to Article 24-H of the Telecommunications Law would create an unlimited net-neutrality

principle, with no distinction between legal and illegal content, and would prevent ISPs and copyright holders in Chile

from addressing mass online infringement. The Digital Platforms Bill is another misguided proposal that could make

online enforcement more difficult. IIPA members are also concerned about legislation imposing national content quota

requirements that, if implemented, would discriminate against non-Chilean audiovisual works and would contravene

Chile’s FTA commitments. The Chilean government should abandon these proposals in favor of reforms that would

promote a vibrant legal environment for creative content.

On a positive note, in 2022, Chile made an effort to meet the requirements of important international treaties,

with the enactment of the Beijing Treaty on Audiovisual Performances, and the promotion of alterations to its legislation

to conform to the Budapest Convention on Cybercrime. The implementation of the new cybercrime law may assist in

prosecuting acts of piracy, but it will be necessary to see the results of the cases brought to court.

In an October 4, 2022, referendum, the proposed draft of the new Constitution was overwhelmingly rejected.

Negotiations on the modification of the Constitution continue. IIPA urges USTR to monitor the impact that any

constitutional changes may have on Chile’s intellectual property rights (IPR) landscape and, in particular, to closely

monitor how any reform will permit Chile to adequately implement its existing international, multilateral, and bilateral

commitments to provide strong copyright protection, enforcement, and equitable market access.

For more details on Chile’s Special 301 history, see previous years’ reports at https://iipa.org/reports/reports-by-country/. For the history of Chile’s Special 301

placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

PRIORITY ACTIONS REQUESTED IN 2023

• Amend the copyright law (Ley No. 17.336) and repeal Ley No. 20.435 of 2010 to: (i) clearly distinguish between

neutral and passive intermediary service providers and active services that cannot benefit from limitations on

liability; (ii) enable and meaningfully incentivize intermediary service providers to enter into voluntary cooperation

with rights holders against online copyright infringement; (iii) eliminate the court order requirement prior to content

removal or takedown; (iv) introduce deterrent civil and criminal sanctions for copyright infringement, establish

statutory (e.g., pre-established) damages, improved injunctions, including an express legal basis for injunctions

against intermediaries to prevent access in Chile to domestic and foreign-based infringing websites, and an

effective civil ex parte search remedy; (v) provide for deterrent criminal penalties for unauthorized camcording of

films in theaters, without requiring any proof of commercial intent; and (vi) adopt and enforce TPMs legislation with

civil and criminal penalties for acts of circumvention and the trafficking in devices or services.

• Create a centralized copyright authority responsible for all copyright-related matters, such as registration and

enforcement, to coordinate the promotion, administrative enforcement, and public policies related to copyrights

and neighboring rights.

• Refrain from reducing copyright infringement penalties currently provided in the Intellectual Property (IP) Law.

• Ensure that the eventual overhaul of the country’s Constitution and other laws adequately ratifies the country’s

international, multilateral, and bilateral commitments to strong copyright protection, enforcement, and equitable

market access.

• Avoid enacting legislative proposals on screen quotas that would discriminate against non-Chilean audiovisual

works and would contravene the U.S.-Chile FTA.

• Ensure that proposed amendments to the Telecommunications Law (Bill # 10999-15) and the Digital Platforms Bill

(Bill #14.561-19) do not interfere with the enforcement of IPR online, including through voluntary initiatives agreed

between rights holders and ISPs.

THE COPYRIGHT MARKETPLACE IN CHILE

The overall level of piracy in Chile remained high in 2022, after worsening in 2021. Digital piracy takes a

variety of forms, such as: Piracy Devices (PDs) including, for example, illicit streaming devices (ISDs); piracy apps;

stream ripping; file sharing of infringing content over peer-to-peer (P2P) networks; illegal use of cyberlockers; hyperlinks

to infringing materials; online sales of circumvention software; devices and modification services for use with illegal

video game files; illegal mobile downloads; signal theft; and, increasingly, Internet protocol television (IPTV) services.

Chile remains active in the sale of circumvention devices such as video game copier devices and modified or

unlocked consoles with free games for pre-street-date titles made available through online auction sites, such as

Mercado Livre. Businesses sometimes offer console modifying services for sale through their Mercado Livre listings.

Modified console offerings include the Nintendo Switch, Nintendo 3DS, Sony PSP and PS3, and Xbox 360. Mercado

Livre continued to have a steady audience in 2022, ranking as the 9th most popular site in Chile by SimilarWeb. A

significant portion of all game titles offered at Mercado Livre Chile are illegal and are predominantly unauthorized digital

goods (UDGs),

primarily digital unauthorized account resales.

An increasingly popular online marketplace, www.linio.cl (owned by the popular commercial entity, Falabella),

has been relatively unresponsive to requests from the video game industry to take down counterfeit products, despite

Unauthorized digital goods (UDGs) are unauthorized sales of in-game digital items. They have become a growing concern for the video game industry. Closely

related to these in-game items are software products (collectively known as “cheat software”) that enable the unfair and rapid collection and aggregation of virtual

goods, such as bots, hacks, and “cheats,” or which otherwise tilt the scales in favor of one player over another. The rise of UDGs and cheat software have a

negative impact on video game companies and consumers in the following ways: (1) sellers of UDGs and cheat software divert significant revenue away from video

game developers and publishers; (2) sales of digitally delivered items, like in-game digital items, have the potential for consumer fraud (such as stolen payment

methods or compromised accounts) and the facilitation of money laundering schemes; (3) the unchecked sales of cheat software can threaten the integrity of game

play, alienating and frustrating legitimate players; and (4) video game publishers and developers are forced into a perpetual virtual “arms race” to update their

products and security technology before the sellers can update theirs.

www.IIPA.org

January 30, 2023 2023 Special 301

having a rudimentary online notification system. The commercial area of Providencia in Santiago, Paseo Las Palmas,

is well-known for the sale of video games and related products. Stores offer handheld consoles for sale at different

prices, depending on whether the consoles have been modified. Known hackers have identified their “official reseller”

in Chile for the sale of Nintendo SX Pro/SX OS as chile-server.cl, which, in turn, refers to hacking groups as “our

partners.” In 2021, Chile placed 23rd (an improvement from 22nd in 2021) in the world in terms of the number of peers

participating in the unauthorized file sharing of select video game titles through personal computers on public P2P

networks. Chile ranked 15th in the world in P2P infringement of console-based video games (also an improvement

since last year when it ranked 11th).

The most prominent forms of music piracy in Chile are stream ripping and the use of cyberlockers. The most

popular stream-ripping sites in Chile are y2mate.com, mp3.download, and ssyoutube.com. These sites received 6.1

million, 2.2 million, and 1.4 million visits from Chile respectively in the fourth quarter of 2022, according to SimilarWeb

data. The most popular cyberlocker in Chile is Mega.nz, which received 8.7 million visits from Chile during the fourth

quarter of 2022. Other popular cyberlockers, 1fichier.com and Zippyshare.com, received over 2.2 million and 1.7 million

visits respectively during this same period. BitTorrent indexing sites are also popular in Chile, most notably

thepiratebay.org, with over 1.0 million visits in the same quarter.

In 2022, the motion picture industry continued to see an upward trend in audiovisual consumption through

streaming, but unfortunately, much of it is on unauthorized platforms, PDs, and piracy mobile apps. PDs, in particular,

are extremely problematic because the sale of the devices can be legal if used with legitimate services and

programming, but the simple download of software or piracy apps on the devices opens the door to infringing material.

PDs are freely offered in markets in Santiago without a proper response from law enforcement. Similarly, law

enforcement against free-to-air boxes is lacking because of the dual legal and illegal uses of the device. The Pay-TV

industry in Chile also continues to experience problems with signal and content theft.

IIPA members report a widespread lack of enforcement efforts by the Government of Chile to tackle online

piracy. Chile remains the only country in Latin America without a dedicated, centralized authority responsible for

Departamento de Derechos Intelectuales en la Dirección de Bibliotecas, Archivos y Museos (Ministry of Education);

(2) the Minister of Education; (3) DIRECON – Dirección de Economía, Departamento de la PI (Ministry of Foreign

Affairs); and (4) the IPR prosecutor.

The implementation of a unified department would advance the fight against copyright infringement and help

deliver the kinds of significant results that have been made possible in other countries that have set up such

organizations. The Chilean government should establish a national authority to oversee all copyright matters and to

better coordinate all policies for the promotion, protection, and enforcement of rights. This central copyright office would

also assume all currently dispersed duties, such as registration. The fact that no central and dedicated authority exists

in the copyright sector speaks volumes about the lack of political will by the Chilean government to prioritize copyright

in the national agenda. Additionally, specialized online crime police units from Carabineros and Policía de

Investigaciones are not focused on pursuing IP crimes or engaging in any disruptive strategy for broader IPR

enforcement, despite a good level of technical investigative skills.

The video game industry has reported in previous years that Chilean Customs had conducted several border

seizures and encourages additional such actions in 2023. As many of these seizures involved repeat importers, IIPA

urges Chile to implement policies and measures that deter repeat importers of infringing products.

www.IIPA.org

January 30, 2023 2023 Special 301

LEGAL REFORM IN CHILE

Cybercrime Law #21459: In June 2022, Chile enacted Law #21459, which alters provisions from several

laws to align with the Budapest Convention on Cybercrime. Law #21549 on computer crimes establishes new offenses

that should allow an efficient prosecution of certain piracy actions, but the law has not been tested in the courts. Among

the relevant criminal offenses in this area are the “attack on the integrity of a computer system,” which is committed by

anyone who hinders or prevents the normal operation, in whole or in part, of a computer system, through the

introduction, transmission, damage, deterioration, alteration, or suppression of computer data. Additionally, “illicit

access” is the crime committed by whoever accesses a computer system without authorization or who exceeds their

authorization and overcomes technical barriers or technological security measures. “Use of information obtained from

a computer-related crime” is the crime committed by whoever, knowing its origin or being unable to know it,

commercializes, transfers, or stores computer data, obtained by means of illicit access, illicit interception, and computer

forgery. Finally, “abuse of devices” is a crime that punishes whoever delivers or obtains for its use, imports,

disseminates, or otherwise makes available one or more devices, computer programs, passwords, security or access

codes or other similar data created or adapted mainly for the perpetration of the crimes of attack related to integrity of

a computer system, illicit access, illicit interception, and attack on the integrity of computer data.

Constitutional Reform: In an October 4, 2022, referendum, the proposed draft of the new Constitution was

overwhelmingly rejected. Negotiations on the modification of the Constitution continue. IIPA urges Chile to ensure all

future work on the Constitution preserves, at a minimum, current levels of protection for IPR. Rights holders seek to

achieve the right balance among all fundamental rights. IIPA urges the Convention to ensure that any reform

adequately implements the country’s existing international, multilateral, and bilateral commitments to strong copyright

protection, enforcement, and equitable market access. IIPA urges USTR to monitor the constitutional reform and its

implications for copyright protection and enforcement, particularly in view of Chile’s FTA obligations.

Digital Platforms Bill (Bill #14.561-19): Chile’s Senate is considering a bill to regulate digital platforms. The

initiative aims to address harmful activity mainly on social media networks, but with broad references to “digital services

platforms” and “providers for digital platforms,” the bill could have a spillover effect for all Internet applications operating

in the region, including curated video-on-demand (VOD) services. Moreover, as currently drafted, the bill contains

language that could negatively impact the way IPR are currently enforced online in Chile, as Internet applications might

delay or be prevented from applying their own policies and procedures in response to notices from rights holders.

Amendments to Telecommunications Law (Bill # 10999-15): In May 2020, amendments to the

Telecommunications Law were passed at the Specialized Commission of Transports and Communications in the

Senate. After consideration, the Bill was returned to the aforementioned Commission in July 2021 for further study and

consideration. The core of this reform is the proposed modification of Article 24-H (sections “a” and “b”). Under the

modification, ISPs are prohibited from implementing any policy measure for the purpose of prioritizing traffic, or any

measure that would have the effect of causing delay to Internet access. The Bill also removes from Article 24-H the all-

important “legal” requirement that would distinguish between access to “legal” content, websites, and apps on the

Internet, and “illegal” content, websites, and apps on the Internet. It would also have the effect of hindering the use of

tools or devices on the Internet to inhibit access to such materials online. In sum, the Bill imposes an unlimited and

unrestricted net neutrality principle in Chilean legislation with no limitation or distinction regarding the legality of the

content, device, or website accessed by the Internet users. This proposed “unlimited” net neutrality proposal is in stark

contrast with the law in both the United States and the EU, where net neutrality principles apply only to legal Internet

traffic and content. The Bill also proposes to further enshrine the position that access to illegal content can be blocked

“only by judicial order.”

The implications of this proposal are especially relevant to the consolidation of a digital music market in Chile.

An unlimited net neutrality principle would make it even more cumbersome for rights holders in Chile to enforce their

IPR online. The idea of resorting to the judiciary for each and every infringement of copyrights or neighboring rights is

www.IIPA.org

January 30, 2023 2023 Special 301

a de facto diminution of the level of protection in Chile, because most of the infringement cases committed online can

be addressed by coordinated and voluntary action between rights holders and ISPs. The reform could imply that

Internet users in Chile have a de facto right to freely access pirated music content, and that ISPs and rights holders

cannot do anything to prevent or deal with such infringements. Due to a lack of prioritization of this Bill, it is difficult to

predict any time frame for a vote on the floor.

Needed Legal Reforms Related to Chile’s Free Trade Agreement (FTA) Obligations

In the U.S.-Chile FTA, Chile made bilateral commitments to the United States to significantly improve its levels

of copyright protection and enforcement.

Yet, Chile’s copyright law regime remains inadequate and lags far behind

both international best practices and the baseline for member countries of the Organization for Economic Co-operation

and Development (OECD). Although Chile adopted amendments to its copyright law in 2010, Ley No. 20.435 is

detrimental to effective online copyright enforcement. For years, IIPA has repeatedly voiced concerns regarding Chile’s

deficiencies regarding copyright protection, and the urgency for reform is as strong as ever.

Broad Internet Service Provider (ISP) Safe Harbor: Article 85Ñ of Chile’s copyright law establishes a safe

harbor for hosting service providers and search engine, linking, or reference services that do not have “effective

knowledge” of IPR infringement, which – by law – can be established only by a court order (issued as per procedure

under Article 85Q). This provision significantly limits the circumstances where a hosting, search, or linking service

provider can be liable for infringements committed by its users. This article also opens the door to abuse because

online services that engage in making copyright-protected transmissions routinely seek to portray themselves as mere

”hosting” services to avoid liability under copyright law. Article 85O, which sets out the conditions for liability limitation,

also poses problems due to its conflicting criteria. The provision at first appears to narrow the safe harbor by setting

out an additional eligibility criterion that “service providers” must meet to avoid liability for IP infringements, namely:

“that the service has not generated, nor selected the material or the recipient” (Article 85O (c)). However, the last

sentence of Article 85O then sets out that providers of “search, linking or reference services” are exempt from these

additional conditions.

Content Removal: Where ISPs are eligible for the above safe harbor privileges, Article 85Q of the copyright

law requires ISPs to remove or disable access to copyright infringing content only following a lengthy, expensive, and

complicated court process that can take over a year and is out of step with international norms. This legal requirement

can be an excuse for ISPs unwilling to take down content and can even be a legal obstacle for ISPs who would

otherwise react to rights holders’ takedown requests expeditiously. There is no incentive for ISPs to act expeditiously

to remove infringing material, and there are no fines or sanctions for non-compliance with takedown notices. Instead,

the law provides time-consuming and disproportionately burdensome obligations on rights holders, such as requiring

rights holders to have a legal representative in Chile to send notices of infringement. Currently, the only method of

tackling infringing content online is to follow the burdensome and ineffective notice-and-notice system (Article 85U),

which requires ISPs to pass on takedown requests to uploaders. However, rights holders have no way to know whether

an infringer has actually been notified to take down material, and there are no provisions to deter repeat infringers or

to ensure that the notified content stays down. The cost and ineffectiveness of Chile’s “notice-and-notice” system has

prompted the music industry to discontinue using it altogether. The only remaining option available to rights holders is

to initiate a civil case directly against the user, a practical impossibility given the very high numbers of infringing users.

IIPA urges the Chilean government to amend its 2010 law to develop a meaningful legal framework for addressing

copyright infringement online. As part of this, to avoid abuse of the “safe harbor” provisions, the law should also clarify

that liability privileges are available only to passive and neutral intermediaries that do not contribute to infringing

activities. Finally, to be effective, the system should require measures that have been demonstrated to be effective in

preventing or restraining infringement, including removing infringing content on sites that have been identified by the

rights holder.

The U.S.-Chile Free Trade Agreement (FTA) is available at https://ustr.gov/trade-agreements/free-trade-agreements/chile-fta/final-text.

www.IIPA.org

January 30, 2023 2023 Special 301

Statutory Damages and Civil Remedies: Pursuant to the FTA, Chile is required to provide for civil remedies,

including seizures, actual damages, court costs and fees, and destruction of devices and products. Yet, Chilean

dedicated procedure for obtaining injunctions or an effective civil ex parte search remedy.

Protection of Technological Protection Measures (TPMs) and Criminalization of Circumvention

Devices: Even in light of its 2018 legislation criminalizing satellite signal decoders, Chile still falls short of its FTA

obligation to provide adequate legal protection for TPMs used to control access or restrict unauthorized acts to a

protected work. The sale of video game copier devices and modification services on online marketplaces and through

social media is prevalent. Also, music rights holders are left without support to tackle the problem of stream-ripping

sites that allow users to download content, without authorization, through circumvention of TPMs. Draft Bill # 14767-0

aims to modify the Chilean IP Law to include TPMs, but it is at a very early stage of the legislative process. Chile should

amend its law to provide adequate legal protection for all forms of TPMs and protect against their circumvention.

Exceptions to Protection: The law contains certain exceptions that appear to be incompatible with

international norms (as well as the FTA). These include: a reverse-engineering exception that is not restricted to

achieving interoperability; exceptions that could allow libraries to reproduce entire works in digital form without

restriction; and the lack of overarching language consistent with the three-step test set forth in international treaties

(and the FTA) to ensure that all exceptions and limitations are properly calibrated.

Lack of Secondary Copyright Liability Rules: In the civil liability area, general tort law principles do not

help copyright holders in establishing secondary liability in Chile. We urge Chile to incorporate secondary liability

principles in its copyright law to incentivize platforms to cooperate in the fight against piracy, among other goals.

Other Needed Legal Reforms

Website Blocking: The music, sports, and TV industries have pursued successful test cases regarding

infringing websites in Argentina, Peru, Mexico, Uruguay, Brazil, and Ecuador, but these industries report that Chile

lacks a legal mechanism for judicial website blocking. Article 85R provides that a court can order an ISP to block access

to clearly identified infringing content only if the blocking does not block access to other non-infringing content. This

limitation hampers enforcement under the provision, as the posting of a single non-infringing work can be relied on to

oppose blocking measures, and significantly limits the power of Chilean judges to order effective remedies to limit and

prevent online infringement. This contrasts with the situation in the EU and a number of Latin American countries where

courts have ordered ISPs to block access to websites while considering the totality of the circumstances. The music,

sports, and TV industries further report that the Article 85R procedure, in conjunction with the last line of Article 85L, is

also seen by some ISPs as preventing them from cooperating with IP rights holders on a voluntary basis.

Theatrical Camcording: IIPA continues to urge the Chilean government to enact legislation that would

criminalize illicit camcording in theaters, including deterrent penalties. Such legislation should not include any

requirement of proof of the camcorder’s intent to profit.

MARKET ACCESS IN CHILE

Screen Quota Bill: In January 2020, the Chamber of Deputies passed a bill adding a chapter on screen

quotas to the Audiovisual Promotion Law. The initiative awaits further debate and would require exhibitors to show at

least one fifth of nationally produced or co-produced audiovisual works as part of their total showings when ticket sales

for a Chilean or co-production film, taken as an average from Thursday to Sunday, constitute at least 10% of overall

cinema hall capacity in peak season and 6% in off-peak season. In free-to-air television prime time, 40% of content

would have to be of Chilean origin and at least 15% would have to correspond to Chilean cinematographic works, such

as feature films, series, and miniseries, among others. In July 2021, the proposal was approved by the Senate’s

www.IIPA.org

January 30, 2023 2023 Special 301

Education Commission (Comisión de Educación), but the bill has not progressed. U.S. motion picture exporters remain

concerned that the screen quota, if signed into law by the president and implemented, would discriminate against non-

Chilean works and would contravene Chile’s bilateral FTA commitments.

www.IIPA.org

January 30, 2023 2023 Special 301

CHINA (PRC)

INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 S

PECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that USTR maintain China on the Priority Watch List in

2023 and that China be monitored under Section 306 of the Trade Act.

Executive Summary: China remains a critical market for the creative industries. With the largest Internet

user base in the world, China’s online marketplace continues to expand, although 2022 saw some slowing in

momentum, in part due to continued disruptions arising from the COVID-19 pandemic. Persistent and evolving piracy,

worsening market access concerns, some procedural hurdles in the courts (in part due to the ongoing COVID-19

situation), and remaining legislative shortcomings hamper rights holders’ ability to distribute copyright content, protect

their content most effectively, and see the Chinese creative marketplace reach its full potential.

In a positive development, China’s 2021 amendments to its Copyright Law include the introduction of the

rights of broadcasting and public performance for producers of sound recordings, which are essential protections for

the music industry. Introduction of these rights is a critical development in China’s legal regime. Additional positive

developments include: enforcement reforms, including a ten-fold increase in maximum statutory damages and the

ability to shift the burden of proof to the accused infringer; protections for technological protection measures (TPMs),

which enable digital trade of copyrighted works; and the elevation of certain elements of the three-step test into the law

to appropriately confine exceptions and limitations. While these amendments are laudable, it is critical that the

implementing measures of the new law (and implementing measures of prior Opinions issued in 2019) allow rights

holders to fully take advantage of the improved (and promised) measures in practice, meet China’s international

commitments, and reflect global best practices. Unfortunately, the amendments did not include several reforms that

remain necessary to align the standard of copyright protection and enforcement with global norms and best practices

to effectively meet the challenges of the digital age, including on term of protection and the adoption of a more effective

online liability framework.

Moreover, the Supreme People’s Court (SPC) improves the position of rights holders generally by clarifying,

strengthening, and streamlining the application of copyright laws with respect to civil, criminal, and administrative

enforcement actions brought in Chinese courts. The National Copyright Administration of China (NCAC) continues to

pursue administrative actions against certain online services that facilitate piracy, but these actions alone are not

sufficient to meaningfully deter widespread online piracy. Other serious enforcement challenges in China include

unauthorized camcording, unauthorized distribution of journal articles, and the proliferation of thousands of “mini video-

on-demand (VOD)” facilities that screen unauthorized audiovisual content, among other things.

China remains one of the most challenging markets in the world for the distribution of copyright content.

Extensive market access barriers, both in law and in practice, severely limit foreign participation in the market. Notably

some of these barriers are violative of China’s multilateral and bilateral obligations to the United States. Rather than

continue to pursue policies that impede access to its market, China should meet its trade commitments, eliminate

market access barriers, and take other steps to open its marketplace for the U.S. creative industries.

For more details on China’s Special 301 and Section 306 monitoring history, see previous years’ reports at: https://www.iipa.org/reports/reports-by-country/.

For the history of China’s Special 301 placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

PRIORITY ACTIONS REQUESTED IN 2023

Enforcement:

• Fully implement the 2019 Guidelines on Strengthening the Protection of Intellectual Property Rights (Guidelines),

including lowering criminal thresholds; streamlining evidence processes; establishing a list of repeat infringers;

regulating websites to “remove infringing content, disrupt pirated website links, [and] stop the dissemination of

infringing information”; and separately define criminal violations regarding circumvention of TPMs or trafficking in

circumvention technologies.

• Improve effectiveness of administrative enforcement by:

o Imposing enhanced penalties for repeat infringements and repeat infringers, and where penalties have

already been issued against an infringer, issuing penalties for subsequent infringements without the need for

rights holders to issue a new complaint;

o Providing rights holders with timely, transparent, and detailed information regarding the process and the

results of administrative actions, as well as ensuring more consistent treatment of cases between provinces;

and

o Facilitating prompt and more efficient transfer of copyright cases from administrative to criminal authorities for

investigation and prosecution.

• Improve the effectiveness of civil and criminal enforcement, including by:

o Providing a full range of injunctive relief for civil enforcement, including injunctions against intermediaries,

and ensuring courts enforce injunctions in a timely manner, including simple and expeditious orders of

contempt for failure to comply;

o Streamlining civil and criminal enforcement, including by reducing documentation requirements to commence

action, such as documents needed to establish the identity and standing of the plaintiff, copyright ownership,

and infringement, as well as ensuring timely enforcement of monetary damages;

o Issuing deterrent-level civil and criminal penalties against operators of piracy websites that make available a

massive amount of infringing content;

o Ensuring proper implementation of the E-Commerce Law, including that Article 43 implementation does not

result in sellers of infringing products avoiding responsibility by merely objecting to rights holders’ notices of

infringement and eliminate liability for erroneous takedown notices submitted in good faith; and

o Encouraging Internet service providers (ISPs) to institute a “know your business customer” (KYBC) policy.

Legislation:

• Ensure that nationwide courts are moving away from the “server principle” and affording rights holders with a

remedy against websites and apps facilitating infringement, including where infringing content is hosted remotely.

• Provide a clear legal basis under which ISPs may be held liable for intellectual property (IP) infringements carried

out by third parties using their services or networks.

• Clarify that only passive and neutral intermediaries that do not contribute to infringing activities are eligible for safe

harbor protection from monetary liability and that such intermediaries fulfill certain conditions, including adoption

and implementation of a repeat infringer policy, and, upon obtaining knowledge of infringement (including through

notice) or otherwise becoming aware of circumstances from which infringement is apparent, intermediaries

promptly take steps to limit, stop, and prevent further infringement, including expeditious takedown of infringing

content and other measures demonstrated to be effective in preventing or restraining infringement.

• Provide at least a 70-year term of protection for copyright-eligible works and sound recordings in line with

international norms.

www.IIPA.org

January 30, 2023 2023 Special 301

Market Access:

• Immediately and fully implement all the terms of the 2012 U.S.-China Film Agreement, such as:

o Enhance compensation, liberalize the distribution market for private third-party Chinese distributors, and

finalize a new MOU;

o Substantially increase U.S. producers’ share of revenues for the box office revenue share films from the

current 25% to a level consistent with international norms;

o Allow U.S. producers more control over release dates, address the problem of U.S. films being locked out

from the prime release dates, and end the practice of “double booking” theatrical releases;

o Eliminate informal restrictions on the number of imported “flat fee” films so that independent producers have

unimpeded access to the Chinese market;

o Further relax the quota for revenue sharing films and VOD products for online video websites so filmmakers

and audiovisual companies may have fair and equitable access to the rapidly growing marketplace for films

and TV in China;

o Ensure U.S. producers receive timely responses to quota allocations and content review determinations and

effective access to ticketing system information to ensure proper reporting of revenues;

o Establish defined and prescribed content review time frames for theatrical and online distribution; increase

the frequency of content review windows; remove the burden of resubmitting film and television programs that

have already been approved; and establish a fast-track system for content review under special

circumstances; and

o Streamline the payment of deposits, guarantees, and royalties by local distributors to U.S. producers, and do

not establish any regulation or policy that impedes the collection of license fees by American IP owners.

• Reconsider measures prohibiting foreign involvement in online publishing activities and allow distribution of

audiovisual content on online video platforms;

• Increase the number of approvals for foreign video games to match the number of domestic approved video

games; revoke all other measures that discriminate against foreign content by imposing requirements such as

registration; onerous, opaque, and de facto discriminatory content review procedures; restrictions on foreign

content on broadcast, pay-TV, and online video; and strict quotas on foreign films and television programming,

with further limitation by genre-basis;

• Adopt a voluntary, age-based classification system to help eliminate disparate treatment of U.S. content and

ensure that China’s censorship process is transparent, predictable, and expeditious;

• Refrain from extending China’s burdensome content review regime to books merely printed in China but otherwise

intended for distribution in other markets; and

• Abandon the slew of proposals that discriminate against U.S. producers and distributors of creative content.

CHINA’S COPYRIGHT MARKETPLACE

China’s expanding online marketplace provides consumers with access to a vast array of legitimate music,

video games, movies, TV programming, and other works available through an increasing number of licensed digital

services. Chinese companies are investing heavily in content and media, with greater numbers of co-productions and

financing from China. China also leads the world in the number of cinemas with over 82,200 movie screens as of mid-

2022—most of which support 3D, and many of which offer enhanced formats such as IMAX and China Giant Screen.

China also remains the largest theatrical market in the world for the second consecutive year, with total box office

revenue in 2021 of $7.3 billion (RMB 47.3 billion), up 131.5% from 2020.

Further, China is now the sixth largest music

market, the second largest music streaming market in the world by number of subscribers, and China joined the United

Patrick Brzeski, The Hollywood Reporter, China Retains Global Box Office Crown With $7.3B in 2021, Down 26 Percent From 2019, available at

https://www.hollywoodreporter.com/movies/movie-news/china-tops-global-box-office-2021-1235069251/

www.IIPA.org

January 30, 2023 2023 Special 301

States, Japan, UK, Germany, and France to become a US$1 billion plus recorded music market.

China is also the

largest market for video games with an estimated 742.19 million gamers and revenues estimated to reach US$50.18

billion in 2022.

However, with China’s population size of over 1.4 billion in 2021,

the creative industries should be seeing

significantly higher revenues from China. For example, while the music market in China has enjoyed double-digit growth

over the recent years, it still remains far below the full commercial potential of a country of 1.4 billion people and behind

its immediate neighbors in South Korea (51.7 million people)

and Japan (125.7 million people).

Per-capita recorded

music industry sales revenues in China are some of the lowest in the world at US$0.73 per person, compared to

US$15.75 in South Korea, US$24.78 in Japan, and US$8.44 in Hong Kong.

Licensed music is widely available in

China across a range of different services but too often, listeners still find pirated content easy to locate and use. The

COVID-19 pandemic has exacerbated China’s online piracy challenges over the past several years, resulting in

substantially increased Internet traffic to both legitimate sites and known piracy websites. Prior IIPA submissions in the

Special 301 docket, as well as IIPA filings in WTO compliance reviews and other fora, have provided detailed accounts

of the many piracy and enforcement challenges and issues in China. This year’s Special 301 filing serves as a

supplement to those submissions and does not provide an exhaustive review of all concerns.

Online Piracy Remains Very Serious: Online piracy in China—including illegal downloading and streaming

of copyrighted content through piracy websites, apps, and devices—has evolved extensively in recent years and

remains a significant concern. For example, in 2022, China ranked 12th in the world in number of connections by peers

participating in the unauthorized file-sharing of ESA member video game titles on public peer-to-peer (P2P) networks,

and, according to this same metric, 13th in the world for mobile game titles. The music industry reports that 78% of

users in China admitted to using unlicensed or illegal sources to listen to music.

As discussed below, a more holistic

enforcement response is needed to effectively combat the entire online piracy ecosystem, which poses the greatest

threat to the continued growth of legitimate businesses in China.

Rights holders in China face problems from piracy apps and devices (including illicit streaming devices (ISDs)

like EVPAD, SVI Cloud, LokLok, and UnblockTech).

Piracy websites are also a significant challenge, whether

operating from within or outside China (like Dytt8.net, Dy2018.com, Dygod.net, Ygdy8.com, gaoqing.la, mp4ba.cc,

btbtt20.com, piaohua.com, vodxc.com, panduoduo.com, meijutt.tv, hao6v.com, 80s.tw, gimyvod.cc, 100vdo.com,

olevod.com, and fqfilm.com). Piracy cloud storage services and social media platforms (e.g., Baidu Tieba, WeChat,

and Weibo) are also a concern for rights holders. Apps that aggregate infringing content hosted on remote servers are

proliferating, and there remains legal uncertainty regarding the “server principle,” where several court cases in China

have held that no liability can be found unless the infringing material resided on the defendant’s server. Piracy over

cloud storage services (or cyberlockers) in China represent a major area of concern for copyright holders, with large

quantities of infringing content being stored on Baidu Pan (which is the cloud storage service provided by Baidu, Inc.,

which also provides more than 80% of China’s search engine market) and then disseminated through popular Chinese

International Federation of the Phonographic Industry (IFPI), 2022 Global Music Report, p. 144.

Newzoo, Top Ten Countries/Markets by Game Revenues, available at https://newzoo.com/insights/rankings/top-10-countries-by-game-revenues.

Macrotrends, China Population 1950-2022, available at https://www.macrotrends.net/countries/CHN/china/population.

Data Commons, Place Explorer: South Korea, available at

https://datacommons.org/place/country/KOR?utm_medium=explore&mprop=count&popt=Person&hl=en

Data Commons, Place Explorer: Japan, available at https://datacommons.org/place/country/JPN?utm_medium=explore&mprop=count&popt=Person&hl=en.

IFPI, 2022 Global Music Report, p. 144, 154, 161, and 178.

See, e.g., IIPA’s 2022 Special 301 submission on China (IIPA 2022), available at https://www.iipa.org/files/uploads/2022/01/2022-SPEC301-3.pdf; IIPA’s 2021

Special 301 submission on China (IIPA 2021), available at https://www.iipa.org/files/uploads/2021/01/2021SPEC301REPORT_12854504_1.pdf; and IIPA,

China’s WTO Compliance – “Request for Comments Concerning China’s Compliance With World Trade Organization (WTO) Commitments” (87 Fed. Reg. 52835,

August 29, 2022), September 28, 2022, available at https://www.iipa.org/files/uploads/2022/09/2022-Ch

ina-WTO-Compliance-Report_International-Intellectual-Property-

Alliance_Comment-1.pdf.

IFPI, Engaging with Music 2022, p. 26, available at https://www.ifpi.org/wp-content/uploads/2022/11/Engaging-with-Music-2022_full-report-1.pdf.

Another issue is that illicit streaming devices (ISDs) are manufactured in China and can be modified to support the installation of third-party, pre-loaded, or post-

purchase infringing applications, allowing consumers access to pirated content. The devices often target overseas customers, and their proprietary applications

are not accessible in China, which leave rights holders without a remedy, or at best, with an uncertain remedy.

www.IIPA.org

January 30, 2023 2023 Special 301

social media platforms and piracy linking sites. The Government of China needs to do more about piracy hosted through

cloud-based services that facilitate piracy, such as Baidu Pan, including by encouraging such services to keep pace

with other similarly sized services across the globe that provide prompt and consistent processing of takedown requests

and take more effective action to suspend or terminate accounts of repeat infringers.

Short video-sharing platforms, such as XiaoHongshu, Douyin, Dou Yin’s Huo Shan, and Kuaishou, have

become increasingly popular distributors of pirated popular movies, television series, video games, and music. Users

break up the content into short videos and distribute them on these platforms. In the past two years, this form of piracy

increased significantly, particularly from Multi-Channel Network (MCN) accounts. In response to this growing problem,

domestic rights holders and streaming platforms formed an alliance and launched public campaigns against

widespread piracy on MCN accounts. Piracy operators also use short video platforms to attract users to piracy websites

and applications. Some streamers, in particular via Douyin, will play official trailers of video games without authorization

to attract traffic for their channels, and further profit directly or indirectly from promoting other videos or mobile games

by recommending download links in connection with unauthorized game trailers. In addition, these platforms have

begun providing live-stream functions that enable infringers to provide unauthorized video content in real time. Finally,

some game operators will place short advertising videos on Douyin that use video game images, characters, or music

from rights holders’ games without authorization. The infringing uses mislead players to believe the linked game content

is related to the popular (unauthorized) content. Because these short-video ads are recommended to targeted users

by Douyin, it is sometimes difficult for rights owners to monitor proactively.

A significant problem for the video game industry is “plagiarism,” or “game cloning.” This form of infringement,

which is rampant in China, refers to the unauthorized copying of important game elements, including underlying

gameplay rules, user interfaces, maps, or categories of weapons and skills, without copying key character images,

soundtracks, and voices. Plagiarism against online video games through WeChat and Douyin (i.e, the Chinese

equivalent of TikTok) is becoming more prominent in 2022. Due to the suspension of approval for online video games

by the Chinese State Press and Publication Administration from July 2021 to April 2022, and the continuous strict policy

controlling approvals, most foreign online video games cannot be legally published in Mainland China. In the meantime,

those developers who were unable to get approved often had to make business decisions to publish the online video

games first in an overseas market on platforms like Steam or Google Play. On the other hand, no approval is required

if game developers do not receive money directly from game players (in other words, the developers do not require

payments or offer in-game purchase). To take advantage of this loophole, copycats quickly plagiarize video games

released overseas and launch them on mini-platforms in China at very low cost, then induce game players to watch

advertisements when they want to replay or go to the next level. While the infringers do not earn money directly from

players, they receive huge profits from advertisers through the display of advertisements.

Book and Journal Piracy: Online journal piracy remains a significant and persistent challenge. The

unfortunate lack of deterrence in the marketplace allows entities engaged in providing unauthorized copies of journal

articles to continue to operate. Several online platforms that facilitate access to unauthorized copies of journal articles

and academic textbooks, including Ureader, 2447.net, 80lib.com, Beijing Increscence, and Baidu Paperhelp, continue

unhindered. These platforms host unauthorized PDF copies of academic monographs, edited collections, and

textbooks. They also facilitate access to infringing content online in several other ways, including by providing users

with search tools, through the use of Internet bots, and by bypassing TPMs to gain unauthorized access to legitimate

online services. Some of these services even reach out to the customers of legitimate publishers pretending to

represent those rights owners. Administrative enforcement measures apparently still have no lasting impact, with

administrative authorities unwilling to act against previously sanctioned entities unless the rights holder files a new

complaint for the same infringing content. Rights holders need to meet lengthy procedures involving repetitious and

complicated evidentiary requirements and must do so repeatedly. In addition, pirated print publications and

compromised log-in credentials continue to be widely available on e-commerce sites, which also serve as platforms

through which producers of pirated and counterfeit textbooks advertise and sell these illegal products to overseas

www.IIPA.org

January 30, 2023 2023 Special 301

buyers. In part due to China’s inadequate online enforcement framework (often with complex evidentiary requirements),

sending notifications of infringement to remove these products remains unduly complicated.

A long-running case against the online site Keyandi, which made available infringing copies of more than 1.15

million textbooks and other reading materials, was finally concluded in 2022 with an administrative punishment decision

imposing a fine of RMB20,000 (around US$2,830). The case was initially brought in 2018 by the administrative

authorities, who—following their own investigation into and their discovery of the extent of the operator’s infringing

activity—later referred the matter for criminal prosecution. Unfortunately, the matter sat with the police for 5 months

and then the prosecutor’s office for over a year. Ultimately a non-prosecution decision was issued. Despite a promising

start with the administrative authorities, a review of the prosecutor’s files showed that the matter stalled as the police

failed to undertake any substantive investigation of the site or its operator, relying instead on the evidence initially

collected by the administrative authority, thus failing to provide the prosecutor’s office with the evidence necessary to

pursue a criminal action. The resources required to push the case forward, the long delays, and the insignificant fines

ultimately issued again demonstrate the difficulty with which any deterrence can be achieved in the market.

Sci-hub (Sci-hub.ru) and Library Genesis (Libgen.li), the Russian operated and facilitated platforms and

repositories of pirated content are frequented by Chinese Internet users and mimicked by Chinese-language piracy

platforms. At least 21 mirror sites are facilitated by Chinese domain registrars. Some Chinese copycat sites have also

added payment processing services to their cloned repositories of infringing book and research content, while the

copied pirate repositories lack such processes.

Publishers have identified at least 18 Chinese sites and platforms that either host infringing books or link to

pirated works, including: Baidu.com, Douban.com, Sina.com.cn, CSDN.net, Docin.com, Book118.com, and

doc88.com. To better combat infringement on these sites, as discussed below, China should provide rights holders

with more effective remedies, including improved administrative processes for notice and takedown as well as other

measures demonstrated effective in preventing or restraining infringement. P2P file sharing remains popular among

Chinese Internet users with one Association of American Publishers (AAP) member publisher identifying 2 million

downloads of pirated books since May 2021.

Circumvention Devices: As the world’s leading manufacturer, producer, supplier, and exporter of video

game circumvention devices and software components, China drives significant amounts of online video game piracy

around the world. Game copiers or modification chips are devices commonly used to bypass TPMs in a video game

console to download and play infringing video games on “modded” consoles. These devices allow infringing games

distributed over the Internet to be played on handhelds or consoles. The harm they cause is not limited to console

makers because almost all games developed for play on consoles, including those developed and published by third

parties, can be illegally downloaded from the Internet.

Illicit Theatrical Camcording and Mini-Video-on-Demand (VOD) Locations: Illicit theatrical camcording in

the region remains a significant challenge in China, though in 2021 there was a notable decrease in illicit camcording

in the country and globally because of theater closures. The numbers in 2022 were also low, owing to the small number

of foreign films that China approved for distribution. In general, the quality of films camcorded in China has improved

over the years, threatening the legitimate theatrical and home entertainment markets. Live streaming of theatrical

broadcasts of films online is a growing concern. While China has taken some successful enforcement actions in recent

years, a more comprehensive solution requires enactment of a specific criminal law against using, or attempting to

use, an audiovisual recording device to make or transmit a copy, in whole or in part, of audio or video of a

cinematographic/audiovisual work, from a performance in an exhibition facility. Further, as discussed below, to address

live streaming, the Copyright Law should be revised to prohibit the unauthorized retransmission of content online.

Moreover, the proliferation of thousands of mini-VOD locations that show unauthorized audiovisual content is

also causing significant problems in China. Regulations on mini-VOD cinemas and chains entered into force in March

www.IIPA.org

January 30, 2023 2023 Special 301

2018, but an estimated 14,000 of these entities are still operating in different cities across China without proper licenses

and are routinely screening U.S. content without authorization. In early 2019, China’s investigation of four illegal

camcording syndicates revealed that most illegal camcorded copies were destined for mini-VOD theaters. In August

2019, the China Film Administration (CFA) clarified that mini-VOD cinemas and chains are “entertainment premises”

and, therefore, must license rights for theatrical screening, not for online VOD. Instead of legitimizing the operations of

these facilities, China should severely penalize or shut down these businesses if they violate the Copyright Law.

Pirated/Counterfeit Books and Hard Goods of Certain Copyright Products: Certain copyright industries

continue to report piracy of hard goods, which harms both the domestic and foreign markets. Production of

pirated/counterfeit textbooks and trade books remains a significant concern. AAP member publishers report that there

have been instances where counterfeit textbooks exported from China have been sold, through online marketplaces,

into other markets. China remains an export center for pirated music CDs as well, feeding the global market with an

onslaught of illegal copies of foreign and Chinese music products, including “deluxe edition” collection sets of music

content that have almost identical artwork and packaging to the genuine products and that contain genuine-looking

International Federation of the Phonographic Industry (IFPI) source identification (SID) codes. These infringing sets

are often sold through popular Chinese and international e-commerce platforms. In recent years, another common

form of Chinese physical piracy exports involves the sale of USB flash drives that contain thousands of illegal music

files and are exported to other Asian territories (e.g., Taiwan), usually following a sale on e-commerce platforms. In

addition, some Chinese software developers have started to sell TPM circumvention software to the United States and

the European Union, which enables users to circumvent the TPMs used by legitimate digital music services, such as

Spotify, and obtain music content without getting legal access to the services. Video game machines, originating from

China, containing hundreds or thousands of infringing video games have been seized by customs agencies around the

world. These machines are found in kiosks and shopping malls in many countries and are sold through several online

marketplaces.

At present, domestic e-commerce platforms have onerous formal requirements for complaints from rights

holders or agents, and if they accept the complaint, they will delist only the specific infringing items and generally do

not take any further action to suspend or close the online shop. Depending on the scale of infringement, local cultural

enforcement authorities will pursue a warning and removal of infringing content, administrative penalties, and closure

of the online shop, or refer to the public security authorities for criminal investigation.

ENFORCEMENT UPDATES IN CHINA

Enforcement efforts have been largely the same in the last year. As highlighted in past filings, China has

increased its enforcement efforts in recent years, contributing to improved protection and development of the legitimate

marketplace for some creative sectors. Some enforcement actions, including the ongoing civil cases against the

operators of the app RenRen/DuoDuo ShiPin, and the Yyets and Diyidan criminal convictions, give some hope for

deterrent action in the Chinese market. While these actions are helpful, they are not enough to deter widescale piracy,

particularly when compounded by China’s many informal and formal barriers that restrict the distribution of legitimate

foreign content in China. Chinese courts should issue deterrent-level civil and criminal penalties against operators of

piracy websites that make available a massive amount of infringing content. Also, the same companies that operate

services like RenRen in China pivot to run apps like LokLok, which massively infringe outside of China but are geo-

blocked there, thus evading enforcement. Further, China remains the hub for the manufacture and distribution of piracy

devices (PDs, also referred to as ISDs) and its enforcement response is lacking, making it incumbent on the Chinese

government to closely examine this issue and crack down on such activities that are fueling much of the world’s Internet

protocol television (IPTV) piracy landscape. (Indeed, enforcement actions taken in Singapore and Malaysia, after new

laws were enacted and went into force in both countries, indicate the need for China, as the source of the problem, to

take action to fix it.)

www.IIPA.org

January 30, 2023 2023 Special 301

China’s large Internet user base creates opportunities for rights holders, but China’s enforcement deficiencies

have kept the creative marketplace from reaching its potential and hamper the development of legitimate services. In

2022, the impact of the COVID-19 pandemic continued to strain China’s enforcement resources and hinder the

progress of investigations in the country. IIPA is hopeful that China will fully implement commitments under the Phase

One Agreement to improve its enforcement framework, which would make progress in addressing some of the

concerns identified below.

Administrative and criminal enforcement against copyright infringement involves challenges for IP rights

holders. Moreover, in some industries, notice-and-takedown procedures on major platforms have proven ineffective at

addressing large-scale piracy abuses on their services. Short video-sharing platforms are reluctant to take action to

prevent the appearance of infringing content. In the face of the rapid distribution of short videos, the “Notice-Deletion”

doctrine runs into significant hurdles. Even if platforms delete the links upon the receipt of notices, in some cases this

deletion happens hours or days after the infringing content is posted when the damage has already occurred. Further,

the same content continues to reappear and many platforms do not take any measures against users that repeatedly

upload infringing content. In addition, most infringing websites and apps use overseas servers and domain registration

agencies to hide their identity, making it difficult to find the real operators of infringing websites and apps. These rogue

services effectively cannot be sued. The NCAC should establish a mechanism with the Ministry of Industry and

Information Technology (MIIT) and ISPs to shut down infringing sites operating without a business license, and the

government should, consistent with the Guidelines,

take immediate steps to guide and regulate management of all

types of websites to “remove infringing content, block or disconnect pirated website links, [and] stop the dissemination

of infringing information.” Chinese courts should streamline procedures for civil and criminal enforcement, including by

reducing documentation requirements to establish copyright ownership and infringement and to ensure timely

enforcement of monetary damages.

China’s Customs Database allows rights holders to record IP and authorized licensees for use in preventing

infringing items from being exported from or imported into China. However, the database is in Chinese only and does

not support any other languages. It would be helpful for the database to support other languages, at least English, to

reflect the international nature of infringement activity across China’s borders.

Administrative Actions Helpful but Insufficient: IP enforcement officials conducted the “Sword Network

Action,” an annual anti-piracy campaign, from September to November of 2022. During this campaign, online platforms

deleted nearly 1.2 million infringing links; 1,066 pirated websites and apps were shut down; 1,031 cases related to

Internet piracy were handled, among which 135 criminal cases involved a value of RMB711 million (around US$100

million). While the campaigns have produced some good results, there is a need for greater transparency, including

providing rights holders with timely and detailed information regarding the process and the results of administrative

action, and more consistent treatment of actioned cases as results have varied among various provinces. It is also

hoped that the IP Key Programme will continue its engagement with the Ministry of Public Security so that more

should be improved by expanding the resources and capability of the NCAC, local Copyright Administrations (CAs),

and Law and Cultural Enforcement Administrations (LCEAs) and improving the mechanism between NCAC, the MIIT,

and ISPs for shutting down infringing websites operating without a business license (consistent with the Guidelines).

Administrative enforcement should also be improved by imposing enhanced penalties for repeat infringers without the

need for a new complaint. Finally, improvements should be made for the prompt, more efficient, and transparent

transfer of administrative complaints to the criminal authorities for investigation and prosecution.

Civil Enforcement: Because the operation of piracy services is often overseas or multinational, cross-border

enforcement cooperation is critical and needs to be improved. Many piracy websites have applied for personal

See, e.g., IIPA 2020 at 23 for additional information on the 2019 Guidelines on Strengthening the Protection of Intellectual Property Rights (Guidelines), which

were issued jointly by the Communist Party of China’s Central Committee (CPCCC) and the State Council.

www.IIPA.org

January 30, 2023 2023 Special 301

information protection with overseas domain registrars, which makes it impossible for copyright holders to collect

information and lodge a complaint with related enforcement agencies in China, which require such personal

information. Even when rights holders can identify the infringers, China’s system creates a barrier to action by requiring

extensive documentation even to commence a civil action. There are also often delays by the courts in formally

accepting cases. More broadly, China should provide a full range of injunctive relief for civil enforcement, including

injunctions against intermediaries, and should ensure that courts enforce injunctions in a timely manner, including

simple and expeditious orders of contempt for failure to comply. Injunctions also should be available against ISPs in

content that has been subject to administrative law enforcement action, but which remains available. China should also

eliminate the “server principle.” While courts in Shanghai and Beijing are beginning to shift away from this principle in

practice, courts nationwide should follow suit.

Chinese courts have also issued judgments with some notable improvements in damages awards and

recognition of copyright in the gaming industry. In November of 2021, Perfect World, a gaming and entertainment

company, filed suit against another gaming company for the unauthorized use of character names, biographies, and

the relationship between characters in Jin Yong’s Wuxia novels. The Beijing IP Court upheld the judgment of the first

instance and granted damage awards of RMB20 million (US$2.81 million). In December of 2021, the High People’s

Court of Guangdong Province affirmed the decision of the Guangzhou IP court, which recognized that the map of a

MOBA game operated by Tencent was copyrightable. It should be noted that burdensome procedural requirements for

launching civil litigation by foreign plaintiffs can, if not remedied, undermine the effectiveness and availability of

enforcement action in China.

Criminal Enforcement: In recent years, several criminal enforcement actions have notably resulted in the

imposition of deterrent criminal sentences in a modest sea change in China. In November 2021, the Shanghai

Intermediate People’s Court sentenced the founder of the China-based multi-million user site Yyets.com (also operating

as “Rrys”) to 42 months’ imprisonment and a major fine following a guilty plea for copyright infringement offenses, in a

case jointly referred by the Motion Picture Association (MPA) and a local Chinese rights holder.

It will hopefully set a

positive example leading to greater deterrence. In July 2020, Chinese police executed a raid against the operators of

the Diyidan app.

Then in May 2021, the operator and 27 defendants were convicted of copyright infringement. It is

important for Chinese courts to issue deterrent-level civil and criminal penalties against operators of piracy websites

that make available a massive amount of infringing content.

In other positive news, the Xuzhou police and public security bureau (PSB) are aggressively chasing a

syndicate of TPM circumvention device manufacturers and sellers. Following their notable raid against the Team

Xecuter syndicate in December 2020, Xuzhou PSB raided another cluster across Shanghai, Guangzhou, Jilin, and

Sichuan provinces in May 2022 and continue investigations into similar targets. As a result of these actions, one hacker

programmer, two manufacturers, and seven distributors and retailers were raided.

Regional police took positive actions against video game pirates in other locations as well. In February 2022,

the Shanghai PSB raided a factory and seized more than 1,400 counterfeit controllers, taking action against seven

defendants. In November, the Shanghai court heard the case and reported it to the media. In June 2022, Guangzhou

PSB raided seven distributors of infringing game consoles and seized thousands of infringing game consoles from ten

locations (factories and warehouses). From the end of August to the beginning of September 2022, Hangzhou PSB

raided factories, distributors, and retailers of counterfeit game controllers, and seized more than 3,000 counterfeit

controllers and more than 40,000 related items. Following the investigation into an online seller, they found upper

One case was brought against the operators of the piracy service Yyets. Yyets had more than 6.8 million registered users and offered nearly 33,000 pirate TV

shows and films, earning almost US$2 million in profits since 2018. The case resulted in criminal convictions against Yyets, which was noted by the Supreme

People’s Court (SPC) as among “2021’s Top 10 IP Cases at Chinese Courts” and was further noted as an exemplary case. See also, IIPA 2022 at 15.

At its height, Diyidan was disseminating over 20,000 TV series, including series from the U.S., Japan, and Korea. See also, IIPA 2022 at 24.

www.IIPA.org

January 30, 2023 2023 Special 301

suppliers and factories, and related distributors and downstream retailers. Finally, in October 2022, a local Cultural

Market Comprehensive Law Enforcement Detachment shut down a pirate website following consumer tips.

In a raid action in July 2019, a Shenzhen company was raided for selling infringing game consoles and around

2,000 infringing game consoles were seized. In March 2020, a judgement was issued in which the court reduced

punishment on the basis of a false claim of a settlement agreement by the defendant. After resolving the fraudulent

evidence, the rights holder requested the original court, Shenzhen Bao’an District People’s court, to reopen the case

to consider proper punishment against the defendant, only to receive the court’s denial in June 2022. The appeal of

the case brought no resolution.

Late in 2022, the China National Intellectual Property Administration (CNIPA) published a three-year Plan

(replacing the prior 2020-2021 plan) of implementing the Guidelines jointly released by the Office of CCP Central

Committee and the Office of the State Council in November 2019. CNIPA’s plan specifies 114 measures in six

categories (with deadlines). The Plan contains relevant items to the copyright industries, and IIPA will be monitoring

these developments closely. Industry has identified at least 24 of the 114 measures as having direct relevance to the

protection and enforcement of copyright for IIPA members, including measure 56, “Push IP Courts to hear IP criminal

cases, continuously push reform of ‘Three in One (criminal, civil, and administrative cases in one court)’ IP trial

mechanism,” and measure 51, “Further enhance management of website platforms, push fulfillment of platform

accountability, and based on opinions of related departments, dispose suspected IP infringement information/content

online, in accordance with laws.” The “Three in One” approach is one which IIPA members would like to see fully

implemented, particularly against not only the piracy app ecosystem but also against the massive proliferation of the

manufacture and distribution of PDs (so-called ISDs) which are ravaging copyright holders’ legal businesses, largely

outside China. The fact that the entire APEC member community is considering soft-law approaches to this issue, and

Singapore and Malaysia have recently enacted statutes and implemented them to crack down on local sales of the

infringing activities of resellers, indicates that the government of China can do more to tackle this problem; hopefully

the Three in One approach will be effective.

Prior IIPA filings have documented in detail developments in the Chinese legal system for the protection of

These reform processes, including the ongoing

implementation of the Phase One Agreement, provide important opportunities to update the legal regime in China for

more effective copyright protection and enforcement.

After years of IIPA and other stakeholders pressing for progress on amendments to the Copyright Law, in November

2020, the National People’s Congress (NPC) passed amendments that entered into force in June 2021. IIPA

encourages China to expedite the process to revise the Regulation on the Implementation of the Copyright Law to

ensure proper implementation of the amendments, as discussed below.

IIPA is pleased that the amendments to the Copyright Law include rights of public performance and

broadcasting for producers of sound recordings. This critical reform is vital for the future of the music industry in China,

including both foreign and domestic rights holders, reflecting that these traditional “secondary uses” have become

critical aspects of core revenue for record companies as the industry has transitioned from sale of products to licensing

of uses. It is vital that China swiftly and effectively implement these new performance rights, including securing

protection for foreign sound recordings, ensuring the effective exercise and management of these rights in accordance

See, e.g., IIPA 2022.

www.IIPA.org

January 30, 2023 2023 Special 301

with international best practices, and establishing tariffs reflecting the economic value of the use of the rights in trade.

Despite the closure of this major gap in protection, Chinese law still falls short of international norms and standards

regarding the term of protection for sound recordings and other works. A minimum term of 70 years for the protection

of sound recordings and works has become the international standard, yet China’s Copyright Act still provides for only

50 years of protection.

The Copyright Law amendments also include some positive reforms that will improve the enforcement

environment in China, including increasing the maximum for statutory damages ten-fold and, upon prima facie

evidence, shifting the burden of proof to the accused infringer to show the use was authorized by the rights holder or

is otherwise permissible under the Copyright Law. In addition, the amendments elevate certain elements of the three-

step test from the Berne Convention and the WTO TRIPS Agreement into the law to appropriately confine exceptions

and limitations. China should implement all exceptions to and limitations on copyright protection in the Copyright Law

to ensure they are appropriately narrow in scope and otherwise consistent with the three-step test.

IIPA is also encouraged that the amendments include protections against the circumvention of TPMs,

including prohibitions against the act of circumvention as well as trafficking in circumvention devices or components. It

is critical that China properly implements these amendments to ensure these protections are adequate and effective.

For example, protection should apply to TPMs that control and manage authorized access to copyright works (“access

controls”) and prohibition against circumvention should apply to both access controls and TPMs that protect rights

(including against unauthorized copying) in those works (“copy controls”). As China is the world’s leading exporter of

video game circumvention devices and software components, the law should prohibit the export of circumvention

devices or components, which drives significant amounts of online video game piracy around the world. Furthermore,

certain exceptions—including for educational or scientific research, encryption research, and reverse engineering—

appear overbroad (certainly broader than those found in U.S. law). Implementation of these exceptions should ensure

they do not undercut the exclusive rights of copyright owners. China should also ensure that circumvention devices or

components are effectively removed from the channels of commerce, and that rights holders have standing to bring

suit in cases in which the TPM was employed by a licensee platform. Lastly, China should clarify that criminal liability

is available not only for circumvention of TPMs, but also for the manufacture, distribution, and exportation of

circumvention devices and software components and the trafficking of circumvention services. If necessary, China

should further revise the Copyright Law to address these issues and ensure adequate and effective protections of

TPMs.

Other positive aspects of the amendments include: requiring destruction or removal of the materials, tools,

and equipment used to produce infringing copies from commercial channels without compensation; enabling

“competent authorities” to investigate matters relating to the alleged illegal conduct, conduct on-site inspections of the

premises where the alleged illegal conduct took place, inspect and copy documents or materials related to suspected

illegal acts, and seal or seize premises and articles involving suspected illegal acts; providing new presumptions of

ownership; and adding a pre-injunction remedy to prevent further harm to rights holders.

However, the Copyright Law as amended did not address several deficiencies in China’s legal framework. To

address these, China should further revise its legal framework to ensure adequate and effective enforcement against

apps and websites that facilitate unauthorized access to copyrighted works stored on remote servers; and by clarifying

the right of “communication over information networks” to reject the “server principle” and provide a clear legal basis

under which ISPs may be held liable for IP infringements carried out by third parties using their services or networks.

The Copyright Law should be further updated to provide protection against unauthorized retransmissions of copyrighted

content over the Internet (including live-streaming), and consistent with the requirements of the Guidelines, clarify the

Unfortunately, China maintains its reservation of Article 15 of World Intellectual Property Organization (WIPO) Performers and Phonograms Treaty (WPPT). This

reservation remains an obstacle for the protection of international sound recordings in China. It is urgent that China withdraw this reservation to ensure Article 45

of the new Copyright Law is effectively implemented.

www.IIPA.org

January 30, 2023 2023 Special 301

legal basis for no-fault injunctions against online intermediaries whose services are used to infringe copyright, including

against access providers, requiring them to disrupt access to websites and other online services offering unlicensed

copyrighted content, especially in cases where the sites are operated outside of China or where the identities or

locations of the website owners are unknown. Finally, the Copyright Law should be amended to clarify that only passive

and neutral intermediaries are eligible for the safe harbors from monetary liability and that such intermediaries must

fulfill certain conditions, (including adoption and implementation of a repeat infringer policy) and that, upon obtaining

knowledge of infringement (including through a notice) or otherwise becoming aware of circumstances from which

infringement is apparent, intermediaries promptly take steps to limit, stop, and prevent further infringement, including

expeditious takedown of infringing content and other measures demonstrated to be effective in preventing or restraining

infringement. Service providers should be encouraged to institute a know your business customer policy. Chinese

out by third parties using their services or networks.

Criminal Law Reform: China’s 11th amendment to its Criminal Law was issued in December 2020 and

entered into force in March 2021. Among other things, the reform included some positive changes to the provisions on

criminal copyright infringement (Articles 217 and 218 of the Criminal Law), including increased criminal penalties for

In addition, the reforms expanded the scope of criminal liability to include the right of

transmission over an information network, performers’ rights, and the prohibition on circumvention of TPMs (although

there is no express prohibition against trafficking in circumvention devices, technologies, and services). Finally,

“disseminating to the public through information network” was explicitly added as a prohibited act of criminal copyright

infringement.

The Government of China should also adopt reforms that address shortcomings in China’s Criminal Law that

IIPA has identified in previous reports. In particular, China should meet its obligations in the TRIPS Agreement by

revising the criminal threshold to ensure that criminal penalties are available for all online piracy on a “commercial

scale” (which is addressed in the Guidelines and which will now be further explored through the recently issued Three-

Year Plan);

separately define criminal violations regarding trafficking in devices, technologies, or services to

circumvent TPMs used by copyright owners to protect their works in the digital environment; and separately criminalize

the manufacture and distribution of PDs when it is clear that these devices are exported for the purpose of infringing

or facilitating infringement.

Fully Implement Phase One Agreement: IIPA welcomed the conclusion of the Phase One Agreement,

signed by the United States and China on January 15, 2020. In the agreement, China made several enforceable

commitments that address certain concerns identified in these comments, particularly regarding intellectual property

rights (IPR) enforcement. While implementation is ongoing, in August 2020, the State Council took an encouraging

step by clarifying that, in accordance with Article 1.26 of the Phase One Agreement, transfers of administrative IP cases

for criminal enforcement are required upon “reasonable suspicion” that the criminal thresholds have been met. The

requirement that rights holders show that criminal thresholds have been met for a case to be transferred to criminal

authorities has been a longstanding enforcement concern for IIPA members, and IIPA is hopeful that this new rule will

be effectively applied by both transferring administrative authorities and receiving criminal authorities, although

implementation by local law enforcement and public security authorities has so far been uneven. IIPA is also

encouraged by recent measures enacted or proposed by the SPC and the NCAC to implement aspects of the

Agreement that we hope will improve the enforcement framework in China. IIPA urges China to follow through on its

Phase One commitments and encourages the U.S. government to work with China to ensure full implementation.

While secondary liability for intellectual property (IP) infringement is available under Chinese law, the basis for such liability should be clarified to ensure more

predictable liability decisions by Chinese judges.

Criminal detentions are no longer applied to the crime of copyright infringement (Article 217) and the crime of selling infringing copies (Article 218). The minimum

criminal punishments are fixed-term imprisonment, with the maximum sentence raised from seven years to 10 years imprisonment for the crime of copyright

infringement and from three years to five years imprisonment for the crime of selling infringing copies.

China should clarify that a single episode of a television program counts as one copy toward the threshold.

www.IIPA.org

January 30, 2023 2023 Special 301

China’s “e-commerce” law requires platform operators to take “necessary measures” against infringing goods

or services and, importantly, the standard of knowledge for a platform operator to take action is that the platform “knows

or should know” that the good is infringing.

Unfortunately, Article 43 does not explicitly adopt effective practices for

handling counter-notices, raising the concern that sellers of infringing products could avoid responsibility by merely

objecting to rights holders’ notices of infringement. As IIPA reported previously, the new Civil Code and SPC’s Official

Reply on Issues of Application of Laws for Disputes Related to Internet IP Infringement provide for improved takedown

procedures that are consistent with Article 1.13 of the Phase One Agreement.

It is critical that implementation of the

e-commerce law is consistent with the Phase One Agreement, supports rights holders’ actions to prevent illegal

trafficking of infringing goods on e-commerce platforms, and does not upset existing voluntary arrangements between

rights holders and some e-commerce platforms where there is already good cooperation.

Internet Information Services: The Provisions on the Management of Algorithmic Recommendations in

Internet Information Services (the Provisions) was implemented on March 1, 2022. According to the Provisions, the

algorithmic recommendation refers to “the application of any algorithmic technology, including without limitation,

generation and synthesis, individualized push, sorting and selection, searching and filtering, and scheduling and

decision-making, to provide information to users.” Legal liability associated with the violation of the Provisions include

the suspension of information updates, the imposition of a fine of RMB10,000 to RMB100,000, administrative penalties,

and even criminal liabilities. The Provisions could provide rights holders the opportunity to prove that a platform

improperly used its algorithm to recommend infringing content to its users and hold the platform responsible for direct

infringement.

Judicial Improvements: New legal interpretations and procedural guidelines from the SPC, which will come

into force from 2020-2022, improve the position of rights holders generally by clarifying, strengthening, and streamlining

the application of copyright and other IP laws regarding civil and criminal enforcement actions brought in Chinese

courts. Most recently in April 2022, the SPC released a judicial interpretation and a subsidiary notice that provided that

all copyright-related civil and administrative cases of first instances should be filed with basic-level courts designated

by the SPC, but that cases of significance can start at the Intermediate People’s Court. IIPA is hopeful that this will

help to ease the heavy dockets of the IP courts in China.

MARKET ACCESS UPDATES AND RELATED ISSUES

The piracy and enforcement concerns outlined above are exacerbated by China’s pursuit of policies that have

the effect of impeding foreign creators’ access to the Chinese marketplace, thereby restricting the supply of legitimate

products to Chinese consumers. China is still not in compliance with the WTO’s ruling in the landmark market access

case (DS 363) brought by the United States regarding many market access barriers in music, audiovisual products,

As previously reported, the e-commerce law entered into force in January 2019 and applies only to online transactions of infringing goods, while copyright liability

limitations for digital content platforms continue to be governed exclusively by the framework of the existing copyright law and related regulations. The interpretation

and implementation of the e-commerce law should be monitored closely, including with respect to its stated scope of coverage as well as any expansion of such

explicit coverage.

See, e.g., IIPA 2021 at 24-25. In May 2020, China enacted a new Civil Code, which took effect in January 2021, that includes provisions on liability and takedown

procedures for platforms that are similar to the e-commerce law. However, the provisions in the Civil Code permit rights holders to take action “within a reasonable

period of time” of the filing of a counter-notice while the measures to prevent the alleged infringement remain in place, whereas the e-commerce law required such

action within 15 days. In August 2020, the SPC enacted the Official Reply on Issues of Application of Laws for Disputes Related to Internet IP Infringement (Fa Shi

[2020] No.9) (“Reply”), which entered into force on Sept.14, 2020. The Reply provides for takedown procedures for online IP infringement consistent with Article

1.13 of the Phase One Agreement, including: prescribing that the period for rights holders to take further action in response to a counternotice may not exceed 20

working days; eliminating liability for erroneous takedown notices submitted in good faith; providing for the availability of punitive damages for erroneous counter-

notifications submitted in bad faith; and providing for the availability of preliminary injunction orders requiring platforms to take special measures including, but not

limited to deleting, blocking and disconnecting links.

www.IIPA.org

January 30, 2023 2023 Special 301

and publications.

After the case concluded in 2009, China eased several market access restrictions,

but many core

activities of copyright industries remain restricted or prohibited. For example, the Negative Investment List, revised in

2020, continues to prohibit, among other things, foreign investment in the “publication and editing of books,

newspapers, journals, audiovisual products and electronic publications,” and foreign investment in audiovisual

production studios, movie distribution, and online video services. While the prohibition of foreign investment in

audiovisual production studios is also a barrier facing U.S. record labels in China, Item 17 of the 2020 Negative

Investment List permits foreign investment in online music services, which is a welcome and positive step. Rather than

continue to pursue policies that impede access to its marketplace, China should meet its trade commitments and take

steps to open its marketplace for the music, publishing, video game, and motion picture and television industries by

eliminating the market access barriers discussed below.

Online Publishing Rules: As we have noted in prior reports, the 2016 Online Publishing Rules, which appear

to expand the scope of longstanding restrictions on the involvement of foreign entities in online publishing activities,

are having a chilling effect on foreign investment in online publishing services where, prior to the rules, some latitude

appeared to have been granted.

Furthermore, in June 2019, China revised the Foreign Investment Catalogue, lifting

certain restrictions, but production and distribution of audio-visual products and “network publication services” remained

on the “Prohibited” list. MIIT’s 2017 Regulations on Management of Internet Domain Names, among other things,

requires all Internet domain names available in China to be registered through a licensed, domestic service provider.

The regulations have unfortunately led to increased use of reverse proxy services by most piracy services targeting

China. Since 2019, the State Administration of Press and Publication (SAPP) has tightened the approval process for

the publication of video games and in August 2021, SAPP suspended the approval process altogether. SAPP should

increase the number of approvals for foreign video games to match the number of approved domestic games. Finally,

many of the increasing audiovisual market access barriers discussed below are applicable to online distribution.

In addition to existing online barriers, China has introduced several alarming draft measures that, if

implemented, would discriminate against U.S. producers and distributors of creative content. For example, the draft

Radio and Television Bill released by National Radio and Television Administration (NRTA) in March 2021 could tighten

regulation standards for online audiovisual programs and restrict foreign producers from participating in radio and

television activities, including online. In May 2016, the former State Administration of Press, Publication, Radio, Film

and TV (SAPPRFT) proposed policies that, if implemented, would provide state-owned media companies with voting

control over leading online platforms for films and TV content.

In June 2016, China published new content approval

regulations for mobile video games that would make it extremely difficult for foreign publishers of mobile games to

access the Chinese market. China has not approved a video game from an American publisher since June 2021.

Extension of Content Review to Books Printed for Export: China appears to now be applying its content

review regime to content intended for other markets. Books merely being printed in China but otherwise intended for

distribution in other markets are now also being subject to China’s burdensome content review regime. This appears

to be the case even for books that were previously being printed in and exported from China without issue. Extending

the reach of its burdensome content review regime to books merely being printed in the country but otherwise intended

China–Measures Affecting Trading Rights And Distribution Services For Certain Publications And Audiovisual Entertainment Products, WT/DS363/AB/R,

December 21, 2009, at https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=Q:/WT/DS/363ABR.pdf&Open=True

China eased investment restrictions for some sectors in amendments to the Catalogue of Industries for Guiding Foreign Investment. In late 2013, the Shanghai

Free Trade Zone (FTZ) was opened to foreign investment, allowing the introduction of game consoles into China for the first time, and easing restrictions on foreign

audio and audiovisual product distribution (although confirmation that distribution of “music videos” is permissible, and that a foreign-invested entity established in

the Shanghai FTZ may distribute music throughout China, would be helpful, as it remains unclear whether these activities are permitted). In 2015, China eliminated

most restrictions on gaming consoles, paving the way for video game companies to manufacture consoles in all of China, although manufacturers and publishers

must still comply with strict regulations including those for pre-sale content review. China also agreed to allow foreign entities to choose their licensees for online

music distribution, and to engage in content self-review of music for the first time. New incentives were also introduced for more film co-productions in China.

Among other things, these rules unfortunately restrict the distribution of foreign audiovisual content on online video platforms, even if the distributor has received

a home entertainment permit from the former General Administration of Press and Publication (GAPP).

The proposal was for leading online video platforms to sell up to a 10% “special management stake” and cede at least one board seat to a selected state-owned

media company. While this proposal was suspended due to significant opposition from online platforms, there is concern that it may reemerge.

www.IIPA.org

January 30, 2023 2023 Special 301

for distribution in other markets places an arbitrary and unjustified discriminatory burden on foreign publishers, who,

for decades, have used printing partners in China, and is arguably a disguised restriction on international trade.

Content Censorship of Physical Goods: Sound recordings that are imported into China in a physical format

are required to undergo a strict content censorship procedure, comply with a series of formalities, and receive approval

before distribution in the market. This requirement should be lifted.

Audiovisual Market Access Concerns: China continues to introduce additional impediments to its market

for U.S. audiovisual content, limiting the U.S. industry’s ability to compete fairly and inhibiting its potential growth in this

massive and fast-growing market. On June 1, 2022, the NRTA issued a new system of administrative licensing for

domestic online audiovisual works, essentially applying the same censorship rules and standards for offline (theatrical)

and online (VOD) content. The practice has been in place since 2019; the issuance of the new administrative licensing

requirement will formalize the obligation for online audiovisual works. This reflects a further tightening of government

oversight and the push for a higher censorship standard for the online content industry in China.

In 2014, the government-imposed rules capping the online distribution of foreign films and TV dramas at 30%

and requiring online distributors to register content, obtain permits, and submit content for review, resulting in extended

delays and further uncertainty. Furthermore, because there are only two opportunities to submit content for registration

and review per year, U.S. producers are unable to submit a full season of a television series when that season is

current due to the nature of television production. These rules have substantially reduced the number of U.S. film and

television programs licensed in China for online distribution and in practice further reduced the foreign content caps to

less than 30%. In September 2018, the NRTA proposed two draft regulations expanding the 30% cap for online

distribution of foreign audiovisual content to broadcasting and applying the cap on a genre-basis to film, TV, animation,

documentaries, and “other” programs.

While these regulations have not been officially promulgated, provisions to

further tighten the content review process for imported content have been implemented, and IIPA is concerned that

industry-wide application of the genre-based restrictions began in early 2020, in particular for animation, further

exacerbating the uncertainty and uneven playing field faced by U.S. audiovisual companies.

Chinese distributors have delayed or decreased licensing activity through multiple layers of restrictions under

a non-transparent content review system, significantly delaying and limiting Chinese consumers’ ability to access the

most valuable current U.S. television content within a reasonable period of the U.S. release, which has created fertile

ground for increased piracy. To help ensure the content review process is transparent, predictable, expeditious, and

does not have a disparate impact on U.S. content, China should adopt a voluntary, age-based classification system or

at least provide transparency as to the criteria used by content approval authorities and clear, predictable timelines.

China should also shorten the time for content review to provide certainty of release, increase frequency of content

review windows, remove the burden of resubmitting film and television programs that have already been approved,

and establish a fast-track system for content review under special circumstances. A transparent, predictable, and

expeditious content review process will attract investment and boost China’s potential as a regional film and television

production hub.

In addition, the 2016 Rules clearly intended to promote domestic Chinese radio and television programs at

the expense of foreign content have negatively impacted U.S. producers and appear to contravene China’s WTO

obligations.

A March 2016 Notice allowing refunds from the Film Development Fund to cinemas that report favorable

The “Administrative Provisions on the Importation and Broadcasting of Overseas Audiovisual Programs” would further tighten regulations on foreign broadcasting,

banning foreign films, TV dramas and animation from broadcasting during prime time, putting a 30% maximum cap on foreign audiovisual content in certain

circumstances, and restricting content that can be disseminated online. The “Administrative Provisions on Overseas Personnel Participation in the Production of

Radio and Television Programs” seeks to regulate the participation of foreigners in the production of radio and TV programs by, for example, banning the

employment of foreigners as broadcast TV presenters or newscasters, and banning programs having both a foreign screenwriter and a foreign director.

The June 2016 Statement and Rules on Importing Television Formats, among other things, established a procedure for filing/registration of foreign content by

satellite television channels that would apply to jointly developed programs or programs with foreign personnel playing a “major guiding role” in production if the

www.IIPA.org

January 30, 2023 2023 Special 301

annual box office receipts from the screening of Chinese films incentivizes cinemas to screen more Chinese domestic

films, further disadvantaging the competitiveness of foreign films in the Chinese market.

Another obstacle for U.S.

producers in China is that private Chinese distributors, including VOD platforms, arbitrarily, without clear explanation,

request from U.S. producers an excessive and particularly burdensome amount of legalized documentation regarding

production and distribution in order to complete a license agreement or obtain government approvals that permit access

to China’s online marketplace. These types of documentation requests (unique to China’s marketplace) cause

uncertainty and additional expense that slow or kill negotiations for licensing films to China.

China also maintains several longstanding discriminatory restrictions in the audiovisual sector that continue

to harm the U.S. industry. For example, China prohibits foreign-owned investment in online video services, which would

appear to violate China’s General Agreement on Trade in Services (GATS) commitments. China also prohibits foreign

investment in audiovisual production studios and distribution. As noted above, the June 2020 revision of the Negative

Investment List maintained these prohibitions.

U.S. firms are highly competitive globally in these sectors, and these

restrictions, including against direct-to-consumer audiovisual online services, undermine the ability of U.S. content

creators and distributors to compete in the Chinese marketplace, hurting their growth.

China needs to meet its trade commitments and open its marketplace to U.S. producers instead of continuing

down its current protectionist path. It is critical to send a strong message that these policies are unacceptable—

particularly when China is now the largest film market in the world—and should be reversed. As discussed below,

China should instead focus its attention on complete implementation of the 2012 U.S.-China Film Agreement and fulfill

its Phase One services purchasing obligations, including IP licensing of audiovisual works, as well as other market

opening steps for the motion picture and television industries.

U.S.–China Film Agreement Implementation: China still has not implemented certain key provisions of the

2012 U.S.-China Film Agreement signed by then-Vice President Xi and then-Vice President Biden. Hailed as a

“breakthrough,” the Agreement promised to economically uplift U.S. and Chinese producers and distributors.

Unfortunately, more than nine years after its signing, China has failed to meet its obligations under the Agreement. The

result of not implementing key provisions of the Agreement has been a steady further deterioration of U.S. producers’

ability to access the Chinese theatrical marketplace, as well as the broader marketplace for other types of distribution

in China, such as via VOD and television (especially for independent producers).

As part of the Film Agreement, China committed that in 2017 it would make a meaningful increase to

compensation for revenue-sharing theatrical releases, as the current 25% U.S. share of revenue is far below

Chinese party does not “fully obtain intellectual property rights” in the program. Only two of these “foreign” programs are permitted to be broadcast in prime time

per year; and no more than one new foreign program may be broadcast at any time per year, but it cannot be broadcast in prime time for that first year.

According to the Notice, if 66% of a cinema’s total annual gross box office comes from Chinese films, that cinema will receive a refund of half of the money

generated from Chinese films within the 5% of box office that the cinema contributed to the Film Development Fund.

Other examples of discriminatory restrictions include: China limits foreign investment in cinemas and in-home video distribution companies to 49% and prohibits

all foreign investment in television; local cable networks cannot carry foreign satellite channels without government approval or landing permits, which are limited

to Guangdong and a handful of foreign channels; foreign satellite channels beaming into China are required to downlink from a government owned encrypted

satellite platform and may only be shown in three-star hotels and above and in foreign institutions, and the annual fee for each channel remains excessively high

(US$100,000); foreign television and film programming are limited to no more than 25% of total airtime, and other foreign programming to no more than 15% of

total air time; foreign programming is banned during prime time and may not constitute more than 30% of pay television channels; foreign TV series and movies

are limited to 50 episodes; foreign animation is restricted to no more than 40% of total airtime, and importers of foreign animation must produce a like amount of

domestic animation; under State Council regulations as well as the 2017 Film Promotion Law, public screening of foreign films must not exceed one-third of the

total annual screen time; China requires home-video license agreements to be for a duration of at least three years, an unnecessary intrusion into copyright owners’

contractual rights; and China continues to require digital film prints to be replicated in local laboratories, impeding rights holders’ ability to control the print quality

or trace the source of camcording piracy.

According to a 2012 White House Press Release:

“This agreement with China will make it easier than ever before for U.S. studios and independent filmmakers to reach the fast-growing Chinese

audience, supporting thousands of American jobs in and around the film industry,” said Vice President Biden, who spent the day in the Los Angeles

area with Vice President Xi Jinping of China. “At the same time, Chinese audiences will have access to more of the finest films made anywhere in the

world.”

See https://obamawhitehouse.archives.gov/the-press-office/2012/02/17/united-states-achieves-breakthrough-movies-dispute-china

www.IIPA.org

January 30, 2023 2023 Special 301

comparable markets. Furthermore, the official quota on revenue-sharing releases of 20-plus-14 (enhanced format)

remains. However, review and additional compensation has never occurred, and China must be pressed to comply

with its obligations. In addition, China has imposed artificial limits on market access for imported films, despite the huge

increases in cinema screens in China since 2012 and the growing number of domestic productions, which were at an

all-time high in 2019.

In the case of “flat fee films,” which are imported by private distributors outside of the box office

revenue-sharing quota system, China has enforced restrictions, including an informal cap on the number of these films

that can be imported. Furthermore, China has retained governmental control of key elements of distribution, severely

limiting the ability of private Chinese distributors to import and distribute any foreign content. These barriers virtually

eliminated U.S. independent films from China’s theatrical marketplace, with only 9 films theatrically released in the

country in 2021, with a revenue of US$10.68 million, which is 0.15% of the year’s total share of the theatrical box office

revenue. Just 9 independent theatrical releases in China represents the lowest percentage of slots ever allocated for

independent films recorded by the Independent Film & Television Alliance (IFTA). U.S. independent producers who

rely on private distributors and the payment of minimum guaranteed or flat license fees to raise production financing

and secure distribution have seen their licensing revenues plummet and, in many cases, stop altogether.

China further committed in the Agreement (and reconfirmed in commitments at the June 2015 U.S.–China

Strategic and Economic Dialogue (S&ED)) to promote and license privately owned Chinese distributors to engage in

national theatrical distribution of imported films without the involvement of any state-owned enterprise. This requirement

has also not been implemented. The newly formed CFA, which replaced SAPPRFT in 2018, still permits only one film

importer (CFG) and two distributors of foreign films: CFG and Huaxia Film Distribution Company Ltd. While China

affirmed in the Agreement that any properly licensed Chinese enterprise may distribute imported films, CFA has yet to

approve any new private Chinese distributors. CFG also still dictates the release dates and length of theatrical runs of

foreign films, often restricting the ability of the U.S. producer to market and obtain the full value of the film.

IIPA recommends that China immediately take action on the following issues, which have been long delayed:

(1) immediately and fully implement all the terms of the 2012 U.S.–China Film Agreement, including the requirement

to enhance compensation in 2017 (such review has been delayed almost 5 years), liberalize the distribution market for

private third party Chinese distributors, and finalize a new Memorandum of Understanding (MOU); (2) substantially

increase U.S. producers’ share of revenues for the box office revenue share films from the current 25% to a level

consistent with international norms; (3) allow U.S. producers more control over release dates, address the problem of

U.S. films being locked out from the prime release dates, and end the practice of “double booking” theatrical releases;

(4) eliminate informal restrictions on the number of imported “flat fee” films so that independent producers have

unimpeded access to the Chinese market; (5) further relax the quota for revenue sharing films and VOD products for

online video websites so filmmakers and audiovisual companies may have fair and equitable access to the rapidly

growing marketplace for films and TV in China; (6) ensure U.S. producers receive timely responses to quota allocations

and content review determinations, and effective access to ticketing system information to ensure proper reporting of

revenues; (7) establish defined and prescribed content review time frames for theatrical and online distribution; increase

the frequency of content review windows; remove the burden of resubmitting film and television programs that have

already been approved; and establish a fast track system for content review under special circumstances; and (8)

streamline the payment of deposits, guarantees, and royalties by local distributors to U.S. producers, and do not

establish any regulation or policy that impedes the collection of license fees by American IP owners.

Full Implementation of the Phase One Agreement: The Phase One Agreement also includes purchasing

requirements (Article 6.2) that, among other things, cover IP licensing, and specifically licensing of audiovisual

products. If meaningfully implemented, this requirement could improve market access for the film and television industry

by increasing the licensing of U.S. audiovisual products for VOD services within China’s 30% quota, as well as

increasing revenue share and the number of U.S. films allowed into China.

Independent Film & Television Alliance (IFTA) IFTA Research and Analysis, “China Theatrical Market 2010–2019.”

www.IIPA.org

January 30, 2023 2023 Special 301

COMPLIANCE WITH EXISTING OBLIGATIONS TO THE UNITED STATES

As noted above, China is still not in full compliance with the WTO’s market access case (DS 363) and many

of the market access barriers discussed above raise concerns under China’s international obligations, including under

the GATS, TRIPS Agreement, and the Phase One Agreement (including Article 1.2 to ensure fair and equitable market

access to persons that rely upon IP protection).

In terms of copyright protection and enforcement, the deficiencies

outlined above regarding criminal enforcement procedures (e.g. thresholds that are too high or unclear, uncertainties

regarding increased penalties against repeat offenders) are inconsistent with enforcement obligations under TRIPS,

including Articles 41, 42, and 61. Finally, China must follow through on commitments it has made in other bilateral

engagements, including the Phase One Agreement and prior commitments, specifically addressing many of the issues

discussed above, including full implementation of the U.S.–China Film Agreement, enhanced enforcement against

PDs, improved enforcement against online piracy, and enhanced protection of academic journals, including

strengthening library copyright protection.

For example, in the 2021 Report to Congress on China’s WTO Compliance, USTR noted: “NRTA and other Chinese regulatory authorities have also taken

actions to prevent the cross-border supply of online video services, which may implicate China’s GATS commitments relating to video distribution.” See page 61,

available at

https://ustr.gov/sites/default/files/enforcement/WTO/2021%20USTR%20Report%20to%20Congress%20on%20China's%20WTO%20Compliance.pdf

www.IIPA.org

January 30, 2023 2023 Special 301

INDIA

NTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 S

PECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that India remain on the Priority Watch List in 2023.

Executive Summary: India plays an important role in the growth of the creative content industries, with its

large population of users and status as the second largest market in the world for Internet services and smartphones.

For both Indian and foreign-based creative industries, however, the promise of continued growth is threatened by

piracy; an inadequate online liability framework; market access barriers; attempts to expand statutory licenses for

broadcasting of literary and musical works and sound recordings to include Internet transmissions; criminal

enforcement difficulties; inadequate term of protection; collective management issues and sub-par tariffs; and broad

and unclear exceptions to copyright protection. India needs to consider strong copyright protection and enforcement

that meets international standards and best practices, as well as effective legal remedies against the circumvention of

effective technological protection measures (TPMs), which combined would help address many of these challenges

and could transform India into a more engaging business environment for the creation and dissemination of copyrighted

works.

India’s copyright legal framework is missing key provisions, including with respect to TPMs that are crucial

protections under the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT)

(collectively, the WIPO Internet Treaties).

IIPA urges the Government of India to pursue the necessary legal reforms

to fully comply with the WIPO Internet Treaties. IIPA also urges the Government of India to reform its online liability

framework concerning infringing content, including to limit its overbroad safe harbors and to clarify the responsibilities

of services eligible for them. This should be prioritized, particularly if India proceeds with its proposed Digital India Act,

to ensure that online services cannot exploit opportunities created by the existing law to evade liability, disincentivizing

them from seeking licenses from rights holders.

Regarding India’s review of the Copyright Act of 1957, IIPA respectfully requests that USTR continue to

monitor this process closely and to encourage India to pursue changes to its Copyright Act that comport with the

country’s international commitments and align the law with international best practices. IIPA greatly appreciates the

U.S. Government’s engagement with India regarding the highly concerning proposal to amend Section 31D of the

engagement of the United States to urge the Government of India to reject any attempt to impose a statutory licensing

system on Internet transmissions. The uncertainty caused by this proposal will undermine the creative market in India

and should be affirmatively rejected.

Criminal enforcement against Internet piracy continues to be challenging at both the national and state levels.

The last major government study on piracy, published in 2010 by the Ministry of Information & Broadcasting (MIB)

“Committee on Piracy,” concluded that “piracy is low in terms of priority in the radar of law enforcement agencies”

compared to other serious crimes.

It would appear that little has changed since this MIB report. A number of India-

based piracy services have become global exporters of pirated content, such as the hosting service DoodStream which,

For more details on India’s Special 301 history, see previous years’ reports, at https://iipa.org/reports/reports-by-country/. For the history of India’s Special 301

placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

CNA, India's smartphone shipments drop 10% in Q3 as prices hit record – IDC, November 14, 2022, available at

https://www.channelnewsasia.com/business/indias-smartphone-shipments-drop-10-q3-prices-hit-record-idc-3070631

India is also party to and obligated to comply with the Berne Convention, the Geneva Phonograms Convention, the WTO TRIPS Agreement and is negotiating a

free trade agreement with the UK, which it is hoped will impose more disciplines, especially in the area of enforcement.

Arpan Banerjee, Cardozo Arts & Entertainment, Vol. 34, p. 609, Copyright Piracy and the Indian Film Industry: A “Realist” Assessment, available at

http://www.cardozoaelj.com/wp-content/uploads/2016/08/BANERJEE-ARTICLE.pdf

(citing Committee on Piracy, Report of the Committee on Piracy, p. 14 (2010)).

www.IIPA.org

January 30, 2023 2023 Special 301

according to SimilarWeb, had 137 million visits in November 2022 alone. In addition, audiovisual rights holders continue

to face challenges from pirate infrastructure providers that provide unauthorized turnkey solutions (Piracy-as-a-Service

(PaaS)) to would-be pirate operators, such as WHMCS Smarters. While criminal enforcement in India is lacking, judicial

enforcement, particularly through the Delhi High Court, has been successful. The seminal 2019 Delhi High Court

decision in UTV Software Communication Ltd. V 1337x.To and Ors.

established permanent site blocking in India

against flagrantly infringing “rogue” piracy sites. Later decisions following this precedent led to the closure of the

notorious piracy site Tamilrockers, although TamilBlasters, StreamBlasters, and TamilMV have filled the void. In 2022,

industry secured the first “pirate brand” order by which a site can be blocked based on the use of the same name or

branding, and the first cyberlocker blocking order targeting the locker mixdrop. Orders are issued quickly and are

“dynamic,” meaning that subsequent iterations of the same piracy service can likewise be blocked quickly and

efficiently, and “doubly-dynamic” meaning new domains discovered prior to the final disposition of a case can be added

to orders.

In recent months, there have been encouraging landmark judicial decisions. The Delhi High Court, in Neetu

Sing v Telegram (2022), directed Telegram to disclose information about uploaders of pirated content. Moreover, a

recent Supreme Court decision found that the crime of copyright infringement (or abetting copyright infringement) is a

cognizable and non-bailable offense.

However, with copyright infringement remaining a low priority, the greater

challenge involves investigation and arrest, rather than bail. IIPA urges the Indian government to better prioritize

intellectual property (IP) crimes in addition to mobilizing to address these middleware services and other PaaS actors

and to modernize its laws on secondary liability, knowledge, and constructive knowledge.

PRIORITY ACTIONS REQUESTED IN 2023

Enforcement

• Strengthen and standardize the national IP enforcement regime through a national central authority to coordinate

with state-level enforcement units.

• Establish uniform, state-level cybercrime law (to include IP crimes) and enforcement procedures and state-level

IP crime units across the country to ensure proper investigation of IP crimes, including Internet piracy.

• Encourage greater cooperation and cross-training between national and state law enforcement agencies and the

creative industries.

• Resume the suspension of the use of domains if based on false or fraudulent Whois information by the National

Internet Exchange of India (NIXI).

Legislation

• Reject the proposal to amend Section 31D of the Copyright Act to broaden the statutory license to cover all Internet

transmissions of sound recordings and musical works, as well as literary works, in breach of India’s obligations

under the WCT, WPPT, and WTO TRIPS Agreement, and reject the 2016 Office Memorandum erroneously

interpreting the current provision to include such transmissions.

• Ensure any ongoing review of copyright law and legislation relating to online liability is used as an opportunity to

bolster IP protections for the online environment and does not result in the weakening of existing protections.

• Reform the Information Technology Act, 2000 (IT Act), particularly if India proceeds with its proposed Digital India

Act, to:

UTV Software Communication Ltd. v 1337x.To et Ors, April 10, 2019, available at

https://indiankanoon.org/doc/47479491/?__cf_chl_tk=2Fw0s2GRi5l_czPzh7h1hTkdcT9UJiFPxl_uWUJe3Hg-1674682018-0-gaNycGzNCqU

M/s Knit Pro International v The State of NCT of Delhi & Anr., Criminal Appeal No. 807 of 2022, Sup. Ct. India, May 20, 2022, available at

https://indiankanoon.org/doc/180042115/

www.IIPA.org

January 30, 2023 2023 Special 301

o amend Section 79 to limit its overbroad safe harbors and to clarify the responsibilities of services eligible for

them, (i) ensuring that there is a clear legal basis for the liability of active online services, (ii) clarifying that

safe harbors apply only to passive and neutral intermediaries that do not contribute to infringing activities,

and (iii) setting out the responsibilities of services eligible for safe harbors, including an obligation on hosting

service providers to remove infringing content expeditiously; and

o encourage all relevant intermediaries to implement “know your business customer” (KYBC) policies to

ensure they keep up-to-date and accurate information about their customers and to allow rights holders to

obtain accurate information to protect their rights against direct infringers.

• Amend the Copyright Act to fully comply with the WIPO Internet Treaties by appropriately defining TPMs, ensuring

sanctions apply to both acts of circumvention and to trafficking in devices, software, components, and services

that circumvent, and providing civil and criminal penalties for violating TPM provisions.

• Amend the Copyright Act to narrow the scope of Section 52(1)(b) and (c).

• Amend the Copyright Act to provide measures demonstrated effective in preventing or restraining infringement.

• Ensure the private or personal use exception under Section 52(1)(a)(i) is compatible with the three-step test.

• Repeal the exception in Section 52(1)(za) of the Copyright Act, which provides for an exception to sound recording

producers’ and other rights holders’ right of public performance “in the course of any bona fide religious ceremony

or an official ceremony held by the Central Government or the State Government or any local authority.”

• Eliminate the over-regulation of private contracts involving sound recordings in Section 39A of the Copyright Act.

• Increase the term of protection for works and sound recordings.

• Enact the proposed Cinematograph Amendment Bill, 2019, that will make it unlawful to possess an audiovisual

recording device to transmit or make a copy of a motion picture (in whole or in part, audio or video) while it is being

performed in a motion picture exhibition facility (i.e., to address the problem of camcording).

• Encourage all relevant intermediaries to implement KYBC policies to ensure they keep up to date and accurate

information about their customers and to allow rights holders to obtain accurate information to protect their rights

against direct infringers.

Market Access

• Eliminate local body entertainment taxes (LBET) imposed over and above national Good and Services Tax (GST).

• Eliminate high tariffs on video game software and hardware.

• Remove revisional powers of the central government in the proposed Cinematograph Bill amendments that would

give the central government the authority to re-examine any certified film that has a valid certificate from the Central

Board of Film Certification (CBFC) under Article 19(2) of the Constitution of India.

• Agree to a further extension of the WTO e-commerce moratorium on customs duties for electronic transmissions.

THE DIGITAL MARKETPLACE IN INDIA

By the end of September 2021, India reached 794.88 million broadband Internet subscribers.

After China,

India is the second largest Internet market by number of users in the world.

India was the 17

largest recorded music

market in the world in 2021 by revenue, maintaining its position from 2020.

After the United States, China and India

were the biggest markets for ad-supported audio streaming in 2021.

India had revenues of US$83 million for ad-

supported audio streaming in 2021.

Recorded music revenues in India increased by 20.3% in 2021, to a total of

US$219 million.

This growth was driven by a 22.5% increase in streaming, which accounted for 86.9% of the market’s

Tanushree Basuroy, Statista, Number of Internet Users in India 2020-2040, July 27, 2022, available at https://www.statista.com/statistics/255146/number-of-

internet-users-in-india/.

Id.

International Federation of the Phonographic Industry (IFPI), 2022 Global Music Report, p. 157.

Id. at p. 79.

Id.

Id. at p. 119.

www.IIPA.org

January 30, 2023 2023 Special 301

overall revenue, up from 85.3% in 2020.

On the audiovisual front, India had almost 40 million households subscribing

with 80 million subscriptions to legitimate video-streaming services in 2021, which is expected to grow to 60 million

households paying for 110 million subscriptions by 2024.

The overall video viewership in India increased by 10% to

reach 497 million people in 2021, and it is estimated this will grow to over 600 million people by 2024.

These

subscriber numbers exclude YouTube, which has crossed 500 million monthly active users by the end of 2021.

Online

gaming will continue to grow and is expected to reach 500 million gamers by 2025.

These figures remain well below

India’s full commercial potential.

Online piracy: Unfortunately, the widespread availability of high-speed Internet has also facilitated the

proliferation of illegal linking, peer-to-peer (P2P) file sharing, video streaming, torrent, and stream-ripping sites, many

of which feature and profit from advertisements, often of legitimate products. In addition, an increasing number of users

are downloading apps that facilitate infringement, and some piracy devices (PDs) come either pre-loaded with apps

that allow users to circumvent subscription services to access infringing content or are accompanied by instructions to

download such apps. While the creative industries have made a dent in online piracy in India, particularly through the

use of site-blocking orders at the Delhi High Court, IIPA notes that overall piracy trends are troubling. IIPA continues

to request an explicit, stand-alone obligation to impose civil and criminal liability and penalties on piracy apps that

provide streaming or direct download access to unauthorized versions of titles on mobile and desktop devices. The

Government of India should also facilitate a standardized enforcement framework to enable the take-down of infringing

apps, which may involve a national-level unit, coordinating with state-level enforcement if appropriate.

Internet piracy is the greatest threat to the copyright industry sectors in India. Major websites providing

unauthorized access to film and television content continue to be popular, including ExtraMovies, TamilMV, and pirate

brands like KatmovieHD.

India-based video-hosting services offering free storage, as well as premium services for

priority encoding, such as Doodstream, are growing in popularity at a global level. DoodStream had 137 million visits

in November 2022, according to SimilarWeb. DoodStream is not only popular with Telegram groups but is also utilized

by many infamous piracy sites wherein site operators can simply embed the DoodStream link within their website. It is

hosted by DDoS-Guard LTD in Russia and by OVH SAS in France. Pikashow is a piracy app which, according to

Motion Picture Association (MPA) analysis, has been downloaded over 10 million times across various mobile

application stores and Telegram. The application sources most of the content directly from the servers of copyright

holders (live TV and video-on-demand (VOD)) by circumventing their TPMs and then hosts the stolen content on third-

party cyberlockers and user-generated content platforms. The operator is believed to be located in India.

In addition to blocking pirate sites, as discussed in greater detail below, MPA is engaged in search engine

delisting with Google, which has been shown to help increase the efficacy of site-blocking actions. The creative

industries have become aware of Telegram’s role in piracy in recent years, and while industry is now engaging directly

with Telegram to request that it better address piracy on its platform, Telegram should be more accountable in relation

to infringements occurring or being facilitated over its service. To date, enforcement actions have been brought

successfully in India requiring Telegram to disclose pirate users’ details, but Telegram is appealing.

While the

Id.

FICCI, EY, Tuning into consumer: Indian M&E rebounds with a customer-centric approach, March 2022, available at https://assets.ey.com/content/dam/ey-

sites/ey-com/en_in/topics/media-and-entertainment/2022/ey-ficci-m-and-e-report-tuning-into-consumer_v3.pdf, p. 12.

Id. at p. 62.

Id.

Id. at 16.

KatmovieHD changes domains frequently to avoid site blocking and tracking. This has resulted in 44 domains currently associated with the website. The most

recent domain, KatmovieHD.rs, had 15.56 million visits with a total of 31.69 million visits over all currently active domains in August 2022, according to SimilarWeb.

KatmovieHD.rs was ranked 4,083 globally and 361 in India in August 2022, according to SimilarWeb. All active domains utilize Cloudflare’s reverse proxy service

to mask their location. The Motion Picture Association (MPA) and other rights holders’ organizations are targeting the sites and their social channels for takedown

in India, Indonesia, and elsewhere.

Telegram is an instant messaging service based in Dubai available on Windows, iOS, Android, and Linux that allows users to create channels and groups, upload

and share content, and run livestreams. Telegram has an active userbase of around 550 million accounts, with particularly significant reach in Russia, India, and

Indonesia. One of its growth drivers is the presence of infringing copyrighted content on the platform and core features that support the sharing and discoverability

of unauthorized files, protect anonymity of uploaders, and make consumption easy and convenient, which supercharges the circulation of infringing content, whether

deliberate or accidental. Telegram’s Terms of Service make no mention of copyrighted content. While there has been improvement in compliance rates for the

www.IIPA.org

January 30, 2023 2023 Special 301

operators of Telegram are sometimes responsive to rights holders’ requests to take action against infringements found

or facilitated over its platform, IIPA recommends that more be done to encourage KYBC disciplines on intermediaries

like Telegram and to encourage operators like them to responsibly cooperate.

Recorded music piracy is also a major issue in India. Despite considerable growth in the use of licensed

streaming services, both domestic (e.g. Gaana, JioSaavn, Wynk) and international (Amazon Music, Apple Music,

Spotify), globally India had one of the worst rates of music piracy in the world.

According to the International

Federation of the Phonographic Industry’s (IFPI) Music Consumer Study for 2022 (MCS), almost three quarters of

internet users (73%) used unlicensed or illegal ways to listen to music in India.

The major piracy issue facing the

recorded music industry in India is stream ripping. The most popular stream-ripping site used by Indian Internet users

is ssyoutube.com, which received more than 200 million visits from India in the third quarter of 2022. The site was the

56th most popular site of any kind in India in September 2022. Other popular stream-ripping services include

Savefrom.net, which received over 66 million visits in the third quarter of 2022 and Y2Mate, which received over 49

million visits from India during the same period, according to SimilarWeb data.

However, stream ripping is not the only piracy problem in India. The most popular domestic music download

site after MXTube is pagalworld.pw (previously pagaworld.mobi), which ranked the 206th most popular web site in

India with more than 43 million visits from India during the third quarter of 2022. The Indian music download site mr-

jatt.im received more than 11.0 million visits from India during the same period.

BitTorrent sites and cyberlockers also remain popular. For instance, the cyberlockers such as AnonFiles and

Zippyshare received over 18 million and over 6 million visits from India respectively during the third quarter of 2022.

India is the largest source of visits worldwide for many major piracy destinations, such as ssyoutube.com, yt1s.com,

masstamilan.in, and proxyrarbg.com. Infringements of rights in sound recordings also are prolific on unlicensed user-

uploaded content short form video apps. Other kinds of infringing mobile apps that are available on mainstream app

stores and are popular in India include stream-ripping apps and MP3 download apps.

For 2021, the video game industry reports that India remained fourth in the world (where it ranked in 2021

and 2020) in terms of the number of connections by peers participating in the unauthorized file sharing of video games

on public P2P networks, as well as in infringement of games for PCs and mobile devices.

Online Book and Journal Piracy: The scale of online piracy of books and journals is likewise a threat to the

publishing industry. Sci-Hub and Libgen, two notorious pirate sites, continue to provide access to millions of infringing

copies of journal articles and books in the country. Despite the Delhi High Court having issued blocking orders against

several notorious online sites engaged in the unauthorized distribution of pirated content, it is curious that a similarly

expeditious grant of injunctive relief against an adjudged pirate site such as Sci-Hub has not yet occurred as

proceedings continue. At the outset of the litigation initiated by two journal publishers in December 2020, the site

operator agreed to refrain from further uploading of purloined articles to the site. Yet, in September 2021, the pirate

operator—in open contravention of the obligation undertaken with the court—uploaded a further 2 million journal articles

illegally obtained from journal publisher databases. To date, Sci-Hub boasts that it has over 88 million articles and

books that it provides for free without permission from the copyright owner. In a positive development, in August 2022,

removal of infringing links and channels, Telegram’s response to takedown notices varies greatly, from almost immediate to no response at all, despite multiple re-

notifications. Furthermore, instances of online piracy accessed through Telegram remain high overall due to the ease with which the same content can be uploaded

to other channels, discovery of infringing content that is facilitated by piracy bots, and inconsistent enforcement of its repeat infringer policy. In 2020, the European

Commission placed Telegram on its Counterfeit and Piracy Watch List. Enforcement actions have been brought successfully in India to require Telegram to disclose

information on alleged infringers, and in Israel and Italy requiring Telegram to block access to infringing content. Telegram continues to be a platform of concern.

See Andy Chatterly, Muso, Discover Piracy by Industry Data Review, 2021, p. 9, available for download at https://www.muso.com/wp6-2021-muso-discover-

piracy-by-industry-data-review.

IFPI, Engaging with Music 2022, p. 25, available at https://www.ifpi.org/wp-content/uploads/2022/11/Engaging-with-Music-2022_full-report-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

a domestic publisher successfully obtained a court order requiring Internet service providers (ISPs) to block access to

four domains of Z-Library, a notorious Libgen mirror.

Unauthorized Book Copying, Digitization, and General Indexes: The publishing industry continues to be

concerned with the unauthorized commercial-scale photocopying

and unauthorized reprint of trade consumer books,

academic textbooks, and professional books (for both the domestic and export markets). While India-only, lower-priced

editions of textbooks are made available in the domestic market to meet domestic needs, these editions continue to

be found in several markets around the world. Customs officials should be empowered to take ex officio actions with

respect to illegal exports of lower-priced textbooks (similar to how imports are addressed). There are also concerns

regarding book scanning and digitization efforts using high-quality book scanning hardware that may provide the

scanned and digitized copies to unauthorized online repositories of infringing digitized book content as well as so-

called general indexes that enable search functionality, which either leads to aforementioned scanned and digitized

books or infringing digital copies of books obtained via online platforms that engage in large-scale commercial level

exploitation of pirated files (e.g. Sci-hub and Library Genesis).

Unauthorized Camcording: Unauthorized camcording of films during their initial release windows is an

ongoing problem in India, and criminal referrals against suspects to date have not resulted in meaningful steps to deter

such activities. For example, in the 2015 high-profile case Rahul Mehta v State of Madhya Pradesh, the Jabalpur police

arrested a piracy syndicate responsible for camcording and distributing Baahubali, one of the highest grossing Indian

movies of all time. The accused were granted bail by the trial court. However, as of 2022, the case remains pending,

and there is no record of any hearings occurring after 2017. Frustratingly, the accused were arrested again in 2017 for

camcording Baahubali 2, the film’s equally successful sequel. Due largely to the pandemic, numbers for 2020 and 2021

are anomalous. The high number of past audio cams reflects the strong demand for local language audio files, which

are sourced for various international release groups. State authorities should undertake efforts to tackle this pervasive

problem. The Government has included anti-camcording provisions in the 2021 Cinematograph (Amendment) Bill,

which awaits clearance in Parliament. India should swiftly enact legislative amendments to outlaw unauthorized

recording of all or part of an audiovisual work in a cinema, which would improve enforcement.

Other Physical and Retail Piracy: Although the growing focus of the copyright industries is on online piracy,

physical and retail piracy continue in India in many forms, including: (i) optical discs, mobile devices, and flash or pen

drives (the “side loading” issue for the recording industry); (ii) the unauthorized sale of video games supported by sales

of TPM circumvention devices or technologies and modification services for consoles; and (iii) unauthorized

reproduction of textbooks (as noted above).

India is hindered by widespread piracy and a challenging enforcement environment, both at the National and

State level. The courts in certain states like Delhi are functioning well, but overall enforcement coordination efforts

throughout the states are uneven and require a more robust and proactive approach to address some of the serious

problems the creative industries face, such as the proliferation of pirate video hosting and pirate infrastructure services

like DoodStream.com and WHMCS Smarters, as well as piracy apps such as Pikashow.

The courts have expanded their reach incrementally, now addressing “proxy portal” sites used principally to

circumvent injunctive orders, and in 2022, the Delhi High Court issued orders to block pirate brand domains and a

cyberlocker that facilitated massive infringement in India. Data indicates that these actions are having a positive impact

in reducing traffic to piracy sites and migrate users to legal VOD services. This said, India remains one of the world’s

most challenging major economies with respect to the protection and enforcement of IP, in no small part due to the

See Aroon Deep, Entracker, Delhi district court behind Z-Library block in India, August 18, 2022, available at https://entrackr.com/2022/08/exclusive-delhi-district-

court-behind-z-library-block-in-india/.

Unfortunately, the 2017 decision in the Delhi University case served only to make more difficult the problem of addressing unauthorized photocopying.

www.IIPA.org

January 30, 2023 2023 Special 301

absence of a centralized and nationally coordinated enforcement department. It is unfortunate that the NIXI ceased

suspending the use of domains if based on false or fraudulent Whois information. The current unavailability of timely

and accurate Whois identifying information, which is in part due to NIXI’s view of General Data Protection Regulation

(GDPR) online privacy obligations imposed in Europe, is now taking its toll on enforcement efforts in India.

Criminal Enforcement and Case Developments: The Telangana Intellectual Property Crime Unit (TIPCU),

which launched in 2016, was unfortunately disbanded in recent years. The Maharashtra IP Crime Unit (MIPCU),

formerly the Maharashtra Cyber Crime Unit (MCDCU), has been active since 2017. MPA was heartened to see

MIPCU’s first enforcement action in July 2021 against a pirate service called Thop TV; however, this remains the Unit’s

only criminal enforcement action to date. MIPCU has also started to invoke Section 160 of the Code of Criminal

Procedure to escalate cases when app operators do not comply with infringement notices. In addition, some practical

hurdles remain in relation to the record industry’s priority services, such as stream-ripping and cyberlocker services

which, so far, have not been subject to any blocking orders.

The lack of enforcement against online piracy operators remains inadequate given the current scale of the

problem. Enforcement agencies’ lack of understanding of IP crimes, a general lack of familiarity investigating and

handling digital forensic evidence, and the sophisticated nature of the pirate criminal enterprises operating notorious

piracy sites and services are all areas that need to be addressed. Additionally, the prospect of seeking criminal

enforcement for IP violations is very daunting due to the absence of a centralized IP enforcement authority, the lack of

effective inter-agency cooperation at the national and state levels, and the overarching lack of prioritization afforded to

IP crimes. For example, while criminal copyright infringement falls under a national criminal code, cybercrime

enforcement and related proceedings fall upon the individual states. India needs to urgently elevate the priority afforded

to IP crimes and to improve the coordination of its enforcement framework against criminal piracy syndicates.

In May 2022, the Supreme Court of India held that offenses under Section 63 of the Copyright Act, 1957 are

cognizable and non-bailable offenses.

Offenses under section 63 being cognizable allows the police to conduct

investigations and register first information reports (FIRs) without the permission of a magistrate and allows arrests of

persons against whom there is an allegation of knowingly committing or abetting copyright infringement without a

warrant, putting the crime of copyright infringement in the category of more serious criminal offenses. Further, the

person cannot be granted bail as a matter of right but will have to approach the court for the same. The decision

essentially gives the police greater ability to respond in an agile manner to copyright infringements being committed

within their jurisdictions. IIPA urges the Ministry of Commerce and Industry to analyze and, as necessary, seek to

amend, any penal provisions or ancillary provisions related to Section 63 that may still lead to conflict with this important

Supreme Court judgment.

In June 2022, the Delhi High Court granted an interim injunction in favor of plaintiffs directing the domain

registrars and ISPs to block access to the infringing Android-based apps and websites that provide .APK (Android

Package Kit) files that enable the sideloading of such apps.

This decision is a positive development in relation to the

availability of injunctions with respect to intermediaries that support the distribution of infringing mobile apps. IIPA hopes

that this case will serve as a precedent to help address the issue of infringing mobile apps, particularly in light of the

large-scale infringement occurring via short form video apps.

IIPA also recommends the following steps: (i) India should focus on inter-state operations of organized crime

units engaged in piracy and establish state-level enforcement task forces that are coordinated, systematic, and

efficient; (ii) India should establish a National Copyright Enforcement Task Force (NCETF), including the Enforcement

Directorate and Central Bureau of Investigation (CBI), that is overseen by the Department for Promotion of Industry

and Internal Trade (DPIIT) and directed at copyright infringement occurring online and on mobile devices; (iii) India

M/s Knit Pro International v The State of NCT of Delhi & Anr., Criminal Appeal no. 807 of 2022, Order dt. May 20, 2022, available at

https://www.livelaw.in/pdf_upload/copyrightinfringementcognizable-418594.pdf

Star India Pvt. Ltd. & Anr. v Ashar Nisar & Ors, CS(COMM) 214/2022, June 4, 2022, available at

https://dot.gov.in/sites/default/files/letter%20to%20ISPs%20dated%2006-09-2022%20CS%20Comm%202.pdf?download=1

www.IIPA.org

January 30, 2023 2023 Special 301

should establish a centralized IP crime unit within the CBI’s Cyber Crime Detective Unit; and (iv) India should focus on

training prosecutors and police officers on the seriousness of IP offenses and their links to organized crime.

Civil Enforcement and Case Developments: In April 2019, the Delhi High Court firmly established

permanent injunctive relief as a remedy to curtail online infringement in India. In UTV Software Communication Ltd. v

1337x.To and Ors,

the court issued “dynamic” orders that allowed for the inclusion of additional domains accessing

the site already blocked. In July 2019, the same court decided Warner Bros. Entertainment Inc. v Hindilinks4u.To, in

which the court created a “doubly dynamic” system wherein domains can be added to an injunctive order while a case

is still being adjudicated. In May 2022, the Delhi High Court issued the first “pirate brand” orders in Universal City

Studios LLC & Ors. v Vegamovies[.]run & Ors., CS(COMM) 265/2022,

meaning persistent infringers who use the

same name or branding can now be blocked. No fault injunctive relief actions are now starting to address some of the

more cutting-edge piracy problems like direct download cyberlockers (notably, MPA obtained orders to block the

cyberlocker mixdrop on October 13, 2022, in Universal City Studios LLC & Ors. v Mixdrop.co & Ors., CS(Comm) No.

663 of 2022),

as well as targeting other streaming video-hosting sites and services.

These positive precedents are

encouraging, but more must be done to ensure pirates cannot simply circumvent the orders by changing domains, and

India should address extremely high levels of piracy more holistically.

In another positive development, the Delhi High Court Intellectual Property Rights Division Rules entered into

force in February 2022. The rules establish an IP Division of the Delhi High Court and seek to ensure that the judges

hearing IP cases are well versed in IP laws and practice. These rules have had a positive impact on the adjudication

of IP cases to date and could provide a model for other states.

However, despite these positive developments, India is home to pirate infrastructure providers that provide

the backbone for piracy turn-key solutions that are used worldwide, such as WHMCS Smarters.

The law remains

unsettled as to whether the commercial provision of infrastructure services to pirate operators, or other PaaS, is

actionable. The jurisprudence is outdated with actual knowledge of a specific infringing act required. This should be

clarified since, to date, operators of almost all turn-key services that provide pirates with the blueprint for their

operations have been able to skirt liabilities. These home-grown providers, including services like WHMCS Smarters,

can be stopped only if Indian laws keep pace by providing appropriate rules on secondary liability, knowledge, and

constructive knowledge.

Domain Registry Outreach: A few pirate sites in India, and many piracy sites around the world, employ the

.in country code in their domains. Since 2017, the music and film industries had good cooperation with NIXI, the agency

in charge of .in domain registrations used by commercial-scale copyright infringers, and the state-based enforcement

units, such as the MIPCU, to suspend the .in domains used by commercial-scale copyright infringers. Registrars like

GoDaddy were also cooperative in cancelling these registrations based on false or fraudulent Whois data. However, a

few years ago, NIXI ceased suspending the use of domains if based on false or fraudulent Whois information. The

current unavailability of timely and accurate Whois identifying information, which NIXI blames on implementation of the

EU’s GDPR, is taking its toll on enforcement efforts in India.

Misinterpretation of Section 31D: Following the 2012 revision to the Copyright Act, the Department of

Industrial Policy & Promotion drafted a 2016 Office Memorandum that sought to extend the Section 31D statutory

license to Internet transmissions. The Bombay High Court held that the 2016 Office Memorandum went too far and

UTV Software Communication Ltd. v 1337x.TO et ors April 10, 2019, available at

https://indiankanoon.org/doc/47479491/?__cf_chl_tk=2Fw0s2GRi5l_czPzh7h1hTkdcT9UJiFPxl_uWUJe3Hg-1674682018-0-gaNycGzNCqU

Universal City Studios LLC. & Ors. v Vegamovies.run & Ors. CS (COMM) 265 of 2022, available at https://indiankanoon.org/doc/106006995/.

Universal City Studios LLC & Ors. v Mixdrop.co & Ors. CS (Comm) No. 663 of 2022, available at https://dot.gov.in/sites/default/files/Letter%20to%20ISPs%2004-

10-2022%20CS%20Comm%20663%20of%202022.pdf?download=1.

For example, MPA was successfully able to block vidcloud9.com in India in 2021.

WHMCS Smarters is an IPTV turnkey solution. Its IPTV software solution offers website design and development, customized apps on several platforms (including

iOS, Android, and Windows), and a billing platform. They also offer an IPTV media player through the IPTV Smarters Pro app. The IPTV Smarters Pro app and

WHMCS Smarters were developed by New Spark Technology, a company based in Mohali, India.

www.IIPA.org

January 30, 2023 2023 Special 301

that Section 31D applies only to television and radio broadcasting and not Internet transmissions.

The decision in

this case was most recently upheld on appeal in September 2022.

Collective Management of Producers’ “Performance” Rights: Following Phonographic Performance

Limited India’s (PPL) reorganization and application for an operating license, DPIIT should re-register PPL as a

collecting society to license public performance and broadcasting rights without further delay. Following the initial and

unexpected denial of its registration by DPIIT, PPL has approached the Delhi High Court asking the court to vacate the

DPIIT decision. The case remains pending; however, DPIIT should reconsider its decision on its own initiative and re-

PPL India is causing confusion in the market and, worse, encourages users to avoid entering licenses for their uses of

recorded music.

Section 31D Royalty Rates: Moreover, on December 31, 2020, the Indian Intellectual Property Appellate

Board (IPAB) handed down its decision on the Section 31D royalty rate to be paid by commercial radio stations for the

broadcasting of sound recordings and the underlying works. While the decision set new “needle hour” rates that

increased the rate from the existing rate of 2% of the net advertising revenue rate, it still undervalues the rights in

question. The decision has therefore been appealed to the New Delhi High Court. The validity of the determined rates

was, however, extended only to September 30, 2021, because in February 2021, a new law was passed dissolving

various tribunals in India, including the IPAB. Its powers and duties were transferred to the High Courts and Commercial

Courts (including related to copyright matters). The process highlights a serious problem with the speed and lack of

commercial certainty related to the statutory licensing and the rate-setting process in India. The recording industry’s

priority is to secure a rate that represents the economic value of the use of sound recordings to broadcasters.

In 2012, Section 31D of the Copyright Act created a statutory license for the use of musical works and sound

recordings for radio and television broadcasting (see above). In July 2021, the Department Related Parliamentary

Standing Committee on Commerce (DRPSCC) Report on Review of the Intellectual Property Rights Regime in India

recommended amending and extending Section 31D of the Copyright Act to include “internet or digital broadcasting”

within the existing statutory licensing for radio and television broadcasting of literary and musical works as well as

sound recordings found within that section. The Government of India held a consultation on the DRPSCC

recommendation to amend Section 31D in September 2021, and IIPA, as well as other industry representatives, filed

comments in opposition.

Since then, the Government of India has regularly convened stakeholder roundtables to

raise the matter, which continues to create uncertainty over the proposed extension of 31D. IIPA is grateful for the U.S.

Government’s intensive engagement with India, including as part of the U.S.-India Trade Policy Forum (TPF) meetings,

the TPF Intellectual Property Working Group, and other bilateral engagement. The proposal to amend the Copyright

Act remains inconsistent with India’s obligations under the WCT, the WPPT, and the WTO TRIPS Agreement. IIPA

urges the Government of India to affirmatively reject the proposal and to provide certainty by committing to not extend

the Section 31D statutory license to Internet transmissions.

In June 2022, the Ministry of Electronics and Information Technology (MeitY) proposed amendments to the

existing Intermediary Guidelines and Digital Media Ethics Code. These proposed amendments were approved as final

on October 28, 2022. In August 2022, MeitY also announced its intention to introduce legislation, the Digital India Act,

which will replace the IT Act and will aim to ensure an open, safe, trusted, and accountable Internet for its users. IIPA

See Tips Industries Ltd. v Wynk Music Ltd. & Anr., N.M(L) 197/2018 in C.S. I.P(L) 114/2018, Bombay High Court (April 23, 2019), available at

https://indiankanoon.org/doc/156695842/

See Wynk Ltd. & Anr. v Tips Industries Ltd., Bombay High Court (Division Bench) (Commercial Appeal No. 424 of 2019)

See IIPA Comments on India’s Review of the Intellectual Property Rights Regime in India by the Department Related Parliamentary Standing Committee

(DRPSC), September 3, 2021, available at

https://www.iipa.org/files/uploads/2021/10/IIPA-Comments-on-Review-of-the-Intellectual-Property-Regime-in-India-

Final.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

urges the Government of India to use these reforms as an opportunity to improve the currently inadequate online

liability framework in India.

On February 25, 2021, MeitY introduced the 2021 IT Rules, extending the scope of obligations on intermediary

platforms. Although the 2021 IT Rules provide increased accountability and obligations on intermediary platforms, they

do not improve the inefficient notice and takedown regime. By way of example, Rule 3(1) of the 2021 IT Rules provides

for a takedown mechanism pertaining to complaints regarding copyright infringement. However, it directs the ISP to

take down infringing content only upon being notified by an appropriate government authority. Further, the 2021 IT

Rules provide a 36-hour deadline for removal, which is too long for infringing content to remain on the internet. Indian

legislation currently provides ample opportunities for digital services, including User Upload Services, to avoid liability

for copyright infringing content on their platforms. The recently adopted 2021 IT Rules have placed increased

obligations on platforms; however, the rules lack clarity. Further, the 2021 IT Rules do not go far enough to address

the flaws in the system. While the National E-Commerce Policy, 2020, includes positive proposals, it is not clear

whether legislative action will follow.

It remains unclear how the Copyright Act and the IT Act interact, which is a cause of legal uncertainty and

results in loopholes in copyright enforcement. In particular, the notice and takedown mechanism should be improved

to prevent the reappearance of the same infringing content. IIPA suggests this should be an opportunity to meaningfully

improve the ISP safe harbor provisions (and online copyright enforcement more generally).

To resolve the situation with the online liability regime, the Indian government should use the ongoing

introduction of the Digital India Act to amend Section 79 of the IT Act, 2000 and corresponding IT Rules to limit its

overbroad safe harbors and clarify the responsibilities of services eligible for them. Such changes are essential to

ensure that Indian content creators and content owners are fairly rewarded and that the legal framework in India

supports the sustainable growth of the digital content market, instead of shielding copyright infringing services in India.

In doing so, the Indian government should (i) limit, to begin with, safe harbor protection to purely technical, automatic,

and passive intermediaries; (ii) have ISPs implement measures that have been demonstrably effective in preventing

or restraining infringement, including, among other things, disabling access to the specific infringing content; and (iii)

enable consultation among industry stakeholders, including creative industries, to make determinations on “Trusted

Entities” (whose complaints are resolved on a priority basis by ISPs) rather than leaving such decisions to the sole

discretion of ISPs as provided under the existing draft. Despite the importance of this issue, no revised drafts or policy

proposals have been seen since.

India is a member of the Berne Convention, the Geneva Phonograms Convention, the WTO TRIPS

Agreement, and the WIPO Internet Treaties. While the Government of India believes its current law is treaties’

compliant, IIPA members believe the law falls short of full compliance in some respects. To fully implement the WIPO

Internet Treaties and to align with international best practices, key changes to the Copyright Act of 1957, last amended

in 2012 (implemented in the Copyright Rules, 2013, in force March 14, 2013) are needed, including:

• Require ISPs to employ measures that have been demonstrated to be effective in preventing or restraining

infringement, including, among other things, disabling access to the specific location of infringing content identified

by the rights holder.

• Amend Copyright Rule 75 sub-rule (3), (Chapter XIV) giving intermediaries 36 hours to take down content in line

with recommendations to more effectively address the speed of distribution of illegitimate content online.

• Section 52(1)(c):

o Section 52(1)(c) establishes that “transient or incidental storage of a work or performance for the purpose of

providing electronic links, access or integration, where such links, access or integration has not been

expressly prohibited by the right holder, unless the person responsible is aware or has reasonable grounds

for believing that such storage is of an infringing copy” is not an infringement of copyright. However, the

provision should be narrowed to be consistent with other jurisdictions and provide certain conditions.

www.IIPA.org

January 30, 2023 2023 Special 301

o Eliminate the requirement that rights holders obtain an injunctive court order to prevent infringing content from

being reinstated within 21 days of submitting a notice of infringement and clarify that service providers

mentioned in Section 52(1)(c) must remove or disable access to the copyright infringing content or links to

such content expeditiously when (i) the material has previously been removed from the originating site or

access to it has been disabled; and (ii) the party giving the notification includes a statement confirming that

the material has been removed from the originating site or access to it has been disabled, not only when a

court orders it.

• Section 65A—WCT Article 11 and companion language in WPPT Article 18, require Contracting Parties to provide

“adequate legal protection and effective legal remedies against the circumvention of effective technological

measures.” These articles establish a right against unauthorized access that is independent from acts of traditional

o Define the phrase “effective technological measure” to expressly cover common TPMs, such as access and

copy controls;

o Expressly prohibit the manufacturing, importing, trafficking, and dealing in circumvention devices and

software, as well as the provision of circumvention services and devices;

o Establish civil and criminal sanctions for acts of circumvention, trafficking in circumvention devices and

software, and offering circumvention services; and

o Eliminate the requirement of proof of a nexus between an act of circumvention and copyright infringement;

o Narrow the scope of the overbroad and vague exception in Section 65A(2)(a), namely “doing anything referred

to therein for a purpose not expressly prohibited by this Act.”

• Section 52(1)(b) establishes that the transient or incidental storage of a work in the technical process of an

electronic transmission or communication to the public is not an infringement of copyright. However, the provision

should be narrowed to include specific conditions.

• Chapter V—As applicable, increase the standard term of protection from life of the author plus 60 years, to at least

life of the author plus 70 years to meet contemporary international standards of protection, and increase the term

of protection for sound recordings and films from 60 to at least 70 years accordingly (The current 60 years is

shorter than the term of protection in the United States, the EU, and in at least 73 countries worldwide).

• Section 39A—Eliminate the over-regulation of private contracts involving sound recordings. This Section appears

to impose contractual limitations for authors established in Sections 18 and 19 on the ability of performers to decide

the terms on which to license or transfer their exclusive rights in sound recording agreements. These limitations

result in unreasonable changes to established practices in the recording industry. Section 39A does make clear

that Sections 18 and 19 shall be applied to performers’ rights “with necessary adaptations and modifications.”

Such “adaptations and modifications” should remove any restrictions on the transfer of performers’ rights in sound

recording agreements.

• Section 52(1)(a)—Ensure the private use exception is compatible with the three-step test codified in the Berne

and WTO TRIPS agreements and the WIPO Internet Treaties.

• Repeal the unjustifiable exception in Section 52(1)(za) of the Copyright Act, which provides for an exception to

sound recording producers’ and other rights holders’ right of public performance in respect of “the performance of

a literary, dramatic or musical work or the communication to the public of such work or of a sound recording in the

course of any bona fide religious ceremony or an official ceremony held by the Central Government or the State

Government or any local authority” (i.e., “social festivities associated with a marriage”). Although it is not

uncommon for national laws to include limited exceptions for the use of certain copyrighted works in religious

ceremonies, this exception extends to purely social festivities associated with a marriage, which are customarily

subject to the public performance right.

• Enact proposed Cinematograph Bill amendments that would make it unlawful to use an audiovisual recording

device to make or transmit an unauthorized copy of a motion picture (in whole or in part, audio or video) while it is

being performed in a motion picture exhibition facility. Such amendments would address the problem of

unauthorized camcording and illegal transmission of unauthorized content through cinemas.

www.IIPA.org

January 30, 2023 2023 Special 301

Information Technology Act and Information Technology Rules (2021 IT Rules): The express inclusion

of IP infringement as a ground for no fault injunctive relief under the IT Act or under the Information Technology

(Intermediary Liability and Digital Media Ethics Code) Rules, 2021 (2021 IT Rules) would represent a major

improvement in the IP enforcement system. It would also further increase the effectiveness of the current system in

which some website blocking orders have been issued, including notable dynamic injunctions by the Delhi High Court,

and would complement the work of law enforcement agencies in the area of domain name suspensions, where Indian

authorities had previously made progress, before NIXI ceased suspensions. However, more progress is needed in

tackling unlicensed services using alternative domain names, which is the most common practice.

MARKET ACCESS ISSUES IN INDIA

The negative economic effects of market access barriers in India cannot be underestimated. Some of the

more egregious market access barriers for IIPA members include:

Local Body Entertainment Tax (LBET): In 2017, India rolled out a unified GST nationwide. Cinema tickets

are subject to 12% and 18% GST rates, depending on ticket price. Effective October 1, 2021, the GST rate for “content

licensing, right to broadcast and show original films” is taxed at a single rate of 18%. However, the LBET collected by

state governments have been left out of the GST, prompting state governments (Madhya Pradesh, Tamil Nadu, and

Kerala) to attempt to tax entertainment products (particularly cinema tickets) over and above GST. Local body taxes

significantly increase the tax cost for exhibitors and work against the principle of “One Nation, One Tax” and the intent

of the GST model, i.e., to remove a multiplicity of high taxes. IIPA urges India to subsume all local taxes on cinema

tickets into the national GST system.

Tariffs: High tariffs on entertainment software and hardware products, including PC video game products,

console video game products, video game console hardware, and video game activation cards. IIPA encourages India

to join the expanded Information Technology Agreement to reduce tariffs on goods that enhance digital trade in India.

Cinematograph Bill: The government should remove the revisional powers of the central government in the

proposed Cinematograph Bill amendments. These powers would give the central government the authority to re-

examine any certified film that has a valid certificate from the CBFC under Article 19(2) of the Constitution of India.

WTO E-Commerce Moratorium: IIPA urges the Government of India to agree to a further extension of the

WTO e-commerce moratorium on customs duties for electronic transmissions.

www.IIPA.org

January 30, 2023 2023 Special 301

INDONESIA

NTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 S

PECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that Indonesia remain on the Priority Watch List in 2023,

due to ongoing serious legislative, market access, and enforcement challenges, including collective management

issues. IIPA also requests suspension or withdrawal of Indonesia’s Generalized System of Preferences (GSP) benefits,

in whole or in part if, at the conclusion of the GSP investigation, the Government of Indonesia has not made adequate

progress remedying the deficiencies identified below.

Executive Summary: Indonesia is an important growth market for the creative industries. Several years ago,

the Government instituted several positive changes to its copyright law and enforcement system and made progress

towards liberalizing Indonesia’s investment framework. More recently, however, the Government shifted, maintaining

screen quota and dubbing restrictions for imported films released theatrically, and contemplating changes that would

weaken existing copyright protections and upend rights holders’ longstanding commercial arrangements. In addition,

rights holders have noticed a slowdown and some uneven results related to disabling access to persistently infringing

websites.

Under the revised Copyright Act and Regulation Nos. 14 and 26 of 2015, rights holders have successfully

petitioned the Indonesian government to disable access to domains associated with piracy websites. These regulations

have led to significant disruptions of piracy in the country, but the Government of Indonesia should improve them by

ensuring faster response times to rights holders that apply through the Directorate General of Intellectual Property

(DGIP) (as rights holders from the motion picture and television industry and the recording industry report recent

significant delays in scheduling “verification meetings”). Those industries also urge the Government of Indonesia to

provide a more efficient mechanism to address “domain hopping,” a common tactic pirates use to evade government-

ordered site blocking. The Government of Indonesia also should do more to improve the efficiency and capacity of law

enforcement in handling digital piracy cases. Highlighting the enforcement shortcomings in Indonesia, criminal groups

behind sites like Indoxxi, lk21, and Nonton, which are notorious for piracy, continue to operate these sites by routinely

“hopping” domains or through hundreds of copycat domains.

IIPA recommends that in 2023 the Government of Indonesia build on past progress and increase efforts to

combat online piracy by updating aspects of its legal framework to add effective remedies and close existing gaps in

protection. The DGIP is considering a partial revision of the Copyright Law focused on exceptions and limitations, film

ownership, and collective management issues, and it is unclear whether this revision will enhance or weaken copyright

protection. It would be timely to revisit the revision of the Copyright Law given that the Indonesian Parliament ratified

the Regional Comprehensive Economic Partnership (RCEP) in August 2022. It is critical that any new exceptions or

limitations are confined to the three-step test, consistent with Indonesia’s international obligations, that existing

problematic exceptions are narrowed or deleted, and that copyright ownership in films resides with the producer unless

there is an agreement to the contrary, in accordance with international norms and best practices. Any revision of the

copyright industries, including by removing the 25-year reversion of rights provision applicable to transfers of rights in

musical works and performers’ rights, removing an overbroad exception to the making available right, clarifying rights

of making available and communication to the public, setting forth clear principles of secondary copyright liability, and

improving protections for technological protection measures (TPMs) and rights management information (RMI). The

government should also extend the copyright term of protection for all categories of works to the life of the author plus

For more details on Indonesia’s Special 301 history, see previous years’ reports at https://iipa.org/reports/reports-by-country/. For the history of Indonesia’s Special

301 placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

70 years, and to at least 70 years for sound recordings and all works for which term is calculated from publication, in

line with evolving global norms. In addition, Indonesia should provide clear guidelines that camcording and live

streaming are illegal and implement measures to reduce instances of these activities.

While the government in 2016 took the very positive step of easing its negative investment list and allowing

100% direct foreign investment in film and sound recording production and film distribution and exhibition, Indonesia

has unfortunately regressed to a protectionist path. Moreover, IIPA is concerned that the Government of Indonesia

continues to threaten to dismantle the WTO e-commerce moratorium and has already issued regulations requiring

importers to file a customs declaration to be made for any import of intangible goods through electronic transmission,

a potential pre-curser to implementing customs duties. Such duties could significantly harm the country’s market for

creative digital content and related services. Indonesia should reverse course and address the many market access

and investment barriers and the discriminatory treatment against U.S. copyright materials that make it difficult for the

U.S. copyright industries to do business and compete in the country.

PRIORITY ACTIONS REQUESTED IN 2023

Enforcement:

• Improve enforcement of the Copyright Law and Regulation Nos. 14 and 26 of 2015 to disable access to piracy

sites and domains, by speeding processing times from application to verification meetings, and by establishing

and implementing an efficient, dynamic, site-specific blocking to cover variants, new primary domains, redirects,

mirrors, and proxy domains and sites; and, develop a comprehensive roadmap for addressing online piracy in

consultation with both domestic and foreign copyright stakeholders.

• Combat unauthorized camcording piracy by enacting regulations or guidelines confirming that this activity is illegal,

followed by implementation of a government program to socialize any amended regulations.

• Monitor the marketplace and take enforcement action to combat the proliferation of piracy devices (PDs) (including

illicit streaming devices/set-top boxes) and piracy apps, as well as piracy syndicates operating sites such as

Indoxxi, lk21LkK21 (also known as Dunia21 and Layarkaca21), and Bioskopkeren.

• Increase the number of enforcement actions against commercial-scale digital piracy services and bring criminal

prosecutions through to convictions.

Legislation:

• Amend or clarify Regulation Nos. 14 and 26 of 2015 on site blocking to speed timeframes from application to

verification meeting, and to prevent “domain hopping” by providing that variants, new primary domain redirects,

mirrors, and proxy sites can be added to the blocking list quickly and easily.

• Any revision of the Copyright Law should include amendments and implementing regulations in line with

international commitments and best practices that repeal the articles on reversion of rights as well as broad

treaty commitments and international best practice; maintain copyright ownership of audiovisual works in the

producer who arranged for the work to be made and is best positioned to exploit the work commercially; provide

clear guidelines or regulations explaining that live streaming and camcording in cinemas are illegal; extend the

to encompass acts of online copyright infringement and to remove the requirement of financial gain.

Market Access:

• Eliminate provisions from the Film Law that serve as barriers to market access and may damage local exhibitors,

such as local screen quotas and the prohibition on dubbing imported films.

www.IIPA.org

January 30, 2023 2023 Special 301

• Remove barriers created by MR 34/2019, which maintained the 60% local screen quota, dubbing restrictions on

imported films released theatrically, and further limited screen time by a single distributor, importer, or producer to

50% and engage international stakeholders in the process.

• Ensure that over-the-top (OTT) regulations comport with Indonesia’s international obligations and international

best practices that protect copyright and related rights, do not interfere with the exercise of these rights, and

promote competition through light-touch regulation on commercial and content review matters, including by not

imposing content review or classification requirements on video-on-demand (VOD) providers and avoiding

localization requirements.

• Improve regulations related to collective management by ensuring that the management of the LMKN is well

represented by music rights holders and eventually eliminate the LMKN, which is an unnecessary extra layer to

the collective management organization (CMO) system.

• Join the expanded WTO Information Technology Agreement (ITA) and eliminate the tariff on physical imported

films.

• Support an extension of the WTO e-commerce moratorium prohibiting customs duties on electronic transmissions.

• Remove the requirement in the Broadcasting Law that any free-to-air TV and pay-TV advertising aimed at the local

market must be locally produced.

THE NATURE OF PIRACY IN INDONESIA

High levels of piracy in Indonesia continue to inflict losses on Indonesian creators, as well as U.S. book,

motion picture and television, music, and video game creators. While the Indonesian government has made some

efforts to fight online piracy, all actions the government takes are based on applications by or information from the

industry. The most significant concern continues to be online piracy, where enforcement action against commercial-

scale piracy websites and services has been limited and has failed to noticeably reduce levels of online piracy or

provided much needed deterrence. Homegrown piracy sites and “brands” such as lk21, Nonton, and Dunia21 have

harmed the creative industry ecosystem for years, and the audiovisual industry is now seeing new phenomena, such

as the use of dedicated Internet protocol addresses that evade domain name-based blocks, as well as the rapid growth

in popularity of international repertoire such as anime, Korean and Chinese dramas (with Bahasa and English

subtitles).

The motion picture and television and recording industries report such sites engage in domain hopping, and

even after administrative site-blocking actions initiated by the creative industries and implemented by the government,

the sites remain available through alternative domains and copycat sites. These industries assert the government

should address this issue of domain hopping by allowing for quick disposition of blocking orders related to the “hopped”

domains and copycat sites and domains. Indonesia should also improve its efforts to address other forms of piracy,

which continue to negatively impact its marketplace for creative content, including the growing problem of illegal

camcording and live-streaming piracy, and piracy devices and apps, which have emerged as a significant means

through which pirated motion picture and television content is accessed.

Internet Piracy and Mobile Network Piracy: Increasing access to the Internet in Indonesia, including through

mobile devices, means enormous potential exists for the legitimate commercial market for online dissemination of

TV, and several other international streaming services now operate in Indonesia. However, infringing cyberlocker, video

linking and streaming sites, direct download sites with pirated content, as well as e-commerce marketplaces through

which pirated content is sold, continue to harm the market in Indonesia, inhibiting legal distribution channels from

reaching their full potential.

Working with the motion picture and music industries (including local associations APROFI (Indonesia

Producers Association) and ASIRI (Indonesian Recording Industry Association)), the government has taken effective

action by disabling access to thousands of piracy websites and domains since the process began in 2016. At the end

Sites like these employ gambling advertising and sometimes pornography to lure users.

www.IIPA.org

January 30, 2023 2023 Special 301

of 2022, Internet service providers (ISPs) were ordered for the first time to block over 100 stream-ripping sites. Many

of the domains that have been the subject of these actions are related to notorious pirate sites like “Indo Twenty One”

(i.e., indoxxi, indoxx1), Nonton, Layarkaca (lk21), or Dunia21. In late December 2019, the operators of Indoxxi

announced plans to cease operations voluntarily, but numerous piracy domains believed to be associated with the

same syndicate have continued to proliferate, and copycats abound.

The rising popularity of anime as well as Korean

and Chinese dramas in Indonesia means sites like anoboy, gogoanime, and 9anime have proliferated, while global top

25 piracy sites like Soap2Day continue to operate. The self-help actions of industry, with cooperation from the

Indonesian government, have resulted in reductions in visits to the blocked audiovisual and music piracy sites, although

most well-known piracy sites employ domain hopping to circumvent the results of site-blocking efforts. Infringing music

apps have also become a problem. For example, two app developers, xyzmedia and 9media, created hundreds of

mobile apps available on the Android market that offer infringing music streaming services to mobile users. The

government should streamline the process for rights holders to ensure access to infringing sites is disabled and to deal

efficiently with the problem of domain hopping. For example, two app developers, xyzmedia and 9media, created

hundreds of mobile apps available on the Android market that offer infringing music streaming services to mobile users.

The government should streamline the process for rights holders to ensure access to infringing sites is disabled and to

deal efficiently with the problem of domain hopping.

Telegram is an instant messaging service based in Dubai, but with particularly significant reach in Indonesia.

Telegram is available on Windows, iOS, Android, and Linux and allows users to create channels and groups, upload

and share content, and run livestreams. Telegram has an active userbase of around 550 million accounts. One of its

growth drivers is the presence of infringing copyrighted content on the platform, core features that support the sharing

and discoverability of unauthorized files, protect anonymity of uploaders, and make consumption easy and convenient,

supercharging the circulation of infringing content, whether deliberate or accidental.

Telegram’s Terms of Service

make no mention of copyrighted content. Enforcement actions have been brought successfully in India to require

Telegram to disclose information on alleged infringers, and in Israel and Italy to require Telegram to block access to

infringing content.

The piracy app LokLok is popular in Indonesia and a major problem for the audiovisual industry. This website

has grown significantly in popularity in Southeast Asia in recent years, in particular in Indonesia, the Philippines, and

Malaysia. It appears the app was developed in China by local operators, who evade local detection and enforcement

action by implementing a China geoblock. According to SimilarWeb, loklok.com and loklok.tv together attracted more

than 3 million monthly visits by more than 800,000 unique visitors in August 2022. Even though it has been taken down

six times in the Google Play Store, listings have quickly reemerged, and three LokLok app listings are still available

there that have been downloaded more than 2 million times.

Music Piracy: Online copyright piracy in Indonesia, like elsewhere, keeps evolving. Piracy is tenacious and

efforts to thwart it must remain powerful and nimble. In recent years, stream ripping emerged as the major piracy threat

to the recorded music industry, and both international and domestic language stream-ripping sites have provided

Internet users with the bulk of illegal downloads. The International Federation of the Phonographic Industry's (IFPI)

Music Consumer Study for 2022 (MCS) found that 80% of those interviewed (a nationally representative sample of

2,000 16- to 44-year-olds in Indonesia) had pirated music in the previous month. This was the second highest piracy

rate in the MCS and significantly above the global piracy average of 30%. Three-quarters (74%) in Indonesia said that

they regularly used stream ripping to illegally download music.

Indo 21 and related brands remain popular for piracy in Bahasa language throughout Indonesia and Malaysia. Notwithstanding Indoxxi’s announcement that it is

shutting down, the Indoxxi group has continued to operate via a network of websites, which are constantly being redirected, including to nameless Internet protocol

addresses, altered, and modified to evade tracking and extensive site-blocking efforts. It is estimated that the “indo 21” brand comprises approximately 45-50

domains, and hundreds of other domains use related piracy “brands” to attract traffic, such as nonton and dunia21. These sites use a U.S.-based reverse proxy

service to mask the location of the websites’ servers. Currently, the most popular of the Indo 21 domains is layarkacaxxi.org, with 1,029,382 visits in August 2020.

At last available update, the site was hosted by India-based Host Palace. Many domains associated with this syndicate have been blocked in Indonesia, Malaysia,

and Australia.

In 2020, the European Commission placed Telegram on its Counterfeit and Piracy Watch List.

www.IIPA.org

January 30, 2023 2023 Special 301

The most popular stream-ripping site in Indonesia was Y2mate.com; according to the MCS, 25.7% of

respondents said they had used the site in the previous month to download music. Data from SimilarWeb supports the

popularity of this site: there were more than 86.7 million visits to Y2Mate from Indonesia alone in the fourth quarter of

2022. The site is the 35th most popular website of any kind in Indonesia. IFPI’s survey also found that 19.9% used

stream-ripping site SaveFrom. Again, SimilarWeb data supports these findings, recording 59.2 million visits to YTMP3

from Indonesia in the fourth quarter of 2022. Stream-ripping sites aimed at an Indonesian audience and focused on

domestic music content were also popular. Downloadlagu321.net had 9.4 million visits from Indonesia in the fourth

quarter of 2022 and metrolagu.site had 13.3 million visits over the same period; 93% of all visits to downloadlagu321

and 63% of visits to metrolagu were from Indonesia. Stream-ripping apps are also popular in Indonesia, as are apps

that impermissibly provide access to music content from streaming searches, such as YouTube.

Indonesia also has a major issue with a number of well-known cyberlockers. IFPI’s MCS found that 49% of

respondents used cyberlockers to download pirated music. Cyberlocker Zippyshare.com remained the single most

popular cyberlocker in Indonesia, visited by 18.5% of the MCS sample. SimilarWeb recorded 72.7 million visits to the

site from Indonesia in the fourth quarter of 2022. More people visited the site from Indonesia than from any other

country in the world.

Unauthorized Camcording: Illicit camcording continues to pose a threat in Indonesia. Because of the

widespread closure of theaters in 2020, 2021, and into 2022 due to the COVID-19 pandemic, illicit camcord data for

the region is anomalous. However, illegal camcording and live-streaming piracy remains a big concern as theaters

have re-opened. The government should issue clear guidelines and regulations on illegal camcording and live-

streaming piracy, including expressly outlawing these activities and prioritizing a decrease in these illegal acts. Further,

the government should seek to strengthen enforcement against illicit camcording by: (i) fostering greater cooperation

with cinema owners to fully uphold and enforce the Law; (ii) taking and supporting targeted enforcement actions; and

(iii) where warranted, proceeding with prosecutions against those engaged in this damaging activity.

Piracy Devices (PDs) and Apps: Streaming devices that run with proprietary infringing apps that enable

access to live channels and VOD content are readily available in Indonesia via online marketplaces, including popular

illicit streaming devices (ISDs) UnblockTech, EVPAD, SVI Cloud (all manufactured in China), and SYBER TV. This

content may be pre-loaded prior to shipment, loaded by vendors upon import and prior to sale as an “after sale” service,

or loaded by the users themselves. Sellers of PDs often do not install the infringing apps and thus claim that the

manufacture or sale of the devices themselves is not illegal. However, in a 2021 survey conducted under the auspices

of the Asia-Pacific Economic Cooperation (APEC) Intellectual Property Enforcement Group, the Indonesian

government expressed that Indonesian law may indeed prohibit the boxes.

IIPA encourages the Indonesian

government to take steps to crack down on piracy apps and on device manufacturers or resellers who pre-load the

devices with apps that facilitate infringement, as well as to take action against key distribution points for devices that

are being used illegally. As mentioned above, the loklok piracy app remains a significant problem for the audiovisual

industry.

Preferably, an express provision would have been added to the Explanatory Memorandum to the 2014 Copyright Law, defining the act of using (or attempting to

use) an audiovisual recording device in cinemas to camcord, record, or transmit a film, in whole or in part, as a strict liability criminal offense. The Asia Pacific

Economic Cooperation (APEC) Ministers and Leaders, including from Indonesia, agreed in 2011 on “Effective Practices for Addressing Unauthorized Camcording,”

and the steps recommended therein should also be taken. These include: (1) educating the public about the problems posed to businesses and the consumer by

unauthorized camcording; (2) working with the private sector to identify and prevent unauthorized camcording in cinemas; and (3) developing and implementing

legal measures to effectively deter unauthorized camcording. Effective Practices for Addressing Unauthorized Camcording, 2011/AMM/014app05, 23rd APEC

Ministerial Meeting, Hawaii, United States, November 11, 2011.

In an Asia Pacific Economic Cooperation (APEC) initiative in 2021, Indonesia participated in an “Intellectual Property Experts Group” (IPEG) survey of laws and

activities designed to obtain information about the domestic treatment of ISDs in APEC economies. The government indicated in that survey that it believes “the

current civil damages and/or penalties provided for in your economy viewed as being sufficient to deter the sale or distribution of ISDs.” See Report on Results of

Survey Questionnaire on Domestic Treatment of Illicit Streaming Devices by APEC Economies Intellectual Property Experts Group, March 2021, available at

https://www.apec.org/publications/2021/03/apec-report-on-domestic-treatment-of-isds

(noting that ISDs are a “serious problem” and noting relevant laws, including

“Joint Ministerial Regulations Between Minister of Law and Human Rights and Minister of Communication and Informatics Number 14 Year 2015, Number 26 Year

2015 Regarding Implementing Closure of Content and /or Access Rights to Use Violations of Copyright and/or Related Rights in the Electronic System.”).

www.IIPA.org

January 30, 2023 2023 Special 301

ENFORCEMENT UPDATES

Although the Indonesian government has taken strides to combat online infringement, notably through

implementation of regulations for disabling access to piracy websites, more should be done to address this significant

problem. The Indonesian video piracy landscape, for instance, is dominated by three syndicates: Indoxxi, Lk21 (also

known as Dunia21 and Layarkaca21), and Bioskopkeren. The government needs to increase the priority afforded

intellectual property (IP) enforcement with specific focus on these three crime groups. Levels of online piracy are

unlikely to decrease unless the government takes meaningful enforcement action against the owners/operators behind

these syndicates.

Indonesia should increase the capacity of its enforcement officials, who generally lack familiarity in

investigating and handling digital forensic evidence and do not understand the ease with which pirates are able to use

anonymizing software and infrastructure to evade detection. With rare exceptions, online piracy operators rarely receive

deterrent-level penalties.

The government should criminally investigate operators of major online piracy services, such

as Indoxxi, and issue penalties strong enough to serve as a deterrent to others. In addition, the government should

develop a comprehensive roadmap for addressing online piracy in consultation with both domestic and foreign

rights holders and a government/industry anti-piracy consumer awareness campaign, with the goal of encouraging

consumers to migrate to legitimate offerings.

Regulation Nos. 14 and 26 of 2015: Under the revised Copyright Act, and Regulation Nos. 14 and 26 of

2015, rights holders have successfully petitioned the Indonesian government to disable access to over 5,000 domains

resolving to sites that primarily infringe or facilitate infringement of copyright, including sites like Fmovies.to, Soap2Day,

and Rarbg.to, as well as those linked to the aforementioned criminal groups running piracy sites like Indoxxi, lk21, and

Nonton. The Regulations have led to disruptions of piracy and can be further improved by ensuring faster response

times to rights holders (as required under the Regulations) who apply to the government and seek verifications from

the government that the sites are suitable for blocking. Rights holders from the motion picture and television industry

and the recording industry urge that these “verification meetings” should occur with due speed (in line with the

Regulations) and should be accompanied by changes to allow rights holders to address “domain hopping” – a common

tactic pirates use to evade enforcement – by implementing dynamic blocking (through further notification, or similar to

that being carried out more efficiently in other markets, such as Korea).

Moreover, other than administrative enforcement, enforcement in relation to online copyright infringement is

generally lacking, and even with administrative enforcement, speed of action appears to have slowed and become

more difficult during the COVID-19 pandemic. Indonesian authorities should act in accordance with the regulations and

with efficiency as the pirates are currently able to adjust quickly meaning any delays in enforcement exacerbate the

problem. It is hoped that authorities will take the further step of criminally investigating and holding to account the

operators of major online piracy services.

Comprehensive Enforcement and Judicial Reform: The National IP Task Force took the first steps

towards the kind of multi-faceted enforcement reform process needed to make significant progress against piracy in

Indonesia. Under the direction of the Task Force and with the oversight of the Anti-Corruption Commission, Indonesia

should undertake comprehensive enforcement reform and implement judicial reforms. IIPA has outlined recommended

steps for such comprehensive enforcement reform and judicial reform in prior filings.

The operator of Dunia21 was arrested in September 2020 and convicted of violating several provisions of the Criminal Code. He received a sentence of fourteen

months imprisonment by the Jambi District Court in April 2021. See Dedy Nurdin, TribunJambi.com, Perpetrator of Spruce Family Film Hijacking Sentenced to 14

Months in Prison, April 27, 2021, available at https://jambi.tribunnews.com/2021/04/27/pelaku-pembajakan-film-keluarga-cemara-dihukum-14-bulan-penjara

See e.g., IIPA 2019 at 151.

www.IIPA.org

January 30, 2023 2023 Special 301

into force in 2014, replacing the prior 2002 law, and Regulation Nos. 14 and 26 of 2015, which sought to implement

key provisions concerning online and digital forms of infringement, including provisions intended to implement

Indonesia’s international obligations under the WTO TRIPS Agreement, the Berne Convention, the WIPO Copyright

Treaty (WCT), and the WIPO Performances and Phonograms Treaty (WPPT).

Concerning Provisions in the Copyright Law: DGIP has considered a partial revision of the Copyright Law,

focusing on copyright ownership and collective management issues, as well as exceptions and limitations. While

revision is welcome in principle as it provides an opportunity to address a number of long-standing concerns of rights

holders, the direction of planned reform is far from clear. The first phase focuses on (1) exceptions and limitations for

education, libraries, and archives, and (2) clarifying copyright ownership in films. In the next phase, DGIP intends to

establish a CMO for films in cinemas and on VOD. It remains to be seen whether this revision will result in enhanced

or weakened copyright protections. The priority for the Indonesian government should be to remedy the concerns listed

by IIPA in its submissions on copyright shortcomings and delineated below. Any new exceptions or limitations (including

mandatory collective management of rights or statutory licenses) must be confined to the three-step test, consistent

with Indonesia’s international obligations (e.g., WTO TRIPS Agreement, Article 13). Imposing collective management

or statutory licenses regarding uses of exclusive rights currently individually licensed would clearly not be consistent

with the three-step test. On copyright ownership in films, in accordance with best international practices, the copyright

should reside with the producer who arranged for the film to be made and is best positioned to exploit the film

commercially, unless there is an agreement to the contrary. Finally, consistent with international best practices, any

CMO must be voluntary, transparent, and governed by rights holders, without interference by Indonesia’s government.

As mentioned, any revision of Indonesia’s Copyright Law should address, in the first place, certain provisions

that raise serious concerns, including, in some cases, clarifying such provisions through implementing regulations.

These provisions include:

Internet Exception: The Law provides a broad exception under Article 43(d) for “making [available] and

disseminating copyright content through information and communication technology media that is non-commercial

and/or non-profit in its effect on the author or related parties, or in which the author has expressed no objection to such

making or disseminating.” Both parts of this provision set an undesirable precedent and, if interpreted incorrectly, would

severely undermine legitimate business models built on the rights to control the manner and means in which rights

holders authorize the making available and disseminating of their content through information and communication

technologies. On its face, this provision collides with Indonesia’s international obligations under WTO TRIPS

Agreement, the Berne Convention, WCT, and WPPT. For these reasons, it should be deleted in its entirety.

Termination of Transfers: Articles 18 and 30 of the Law provide that rights in literary and musical works and

performers’ rights that are transferred pursuant to a flat fee shall revert automatically to authors and performers after

25 years, while Article 122 extends the effect of this rule retrospectively to all transfers before the entry of Articles 18

and 30. This frustrates the freedom to contract and is an unlawful deprivation of property rights, which are protected

by the Indonesian Constitution. It is also unclear how these provisions operate in practice, which has created substantial

legal and business uncertainty. One apparent result of this is that large catalogues of recordings are not available on

digital music services in Indonesia, to the detriment of producers, performers, authors, publishers, and the Indonesian

public. These provisions should be removed.

Clarification of the Making Available/Communication to the Public Right: Article 27 of the Copyright Law

provides equitable remuneration rights to producers and performers for broadcasting and communication to the public

of sound recordings. However, the Law defines communication to the public to include making available. This definition

is inconsistent with Articles 23 and 24, which provide exclusive rights for performers and producers to make available

www.IIPA.org

January 30, 2023 2023 Special 301

their sound recordings in accordance with Article 14 of the WPPT. The definitions in the Copyright Law should be

amended to remove this inconsistency and to ensure the law does not contravene Indonesia’s obligations under the

WPPT.

Criminal Case Structure and Penalties Weakened: For criminal cases, the Law took steps backward from

the 2002 law by making criminal cases complaint-based, rather than prosecuted on an ex officio basis; removing

minimum mandatory statutory criminal penalties; and providing for non-deterrent fines, including for landlord criminal

liability. In addition, Article 95 of the Law is highly unusual in that it appears to mandate “mediation” before a piracy

case can be prosecuted. The purpose and operation of this provision in practice is unclear.

Exceptions and Limitations/Compulsory License: Article 44 of the Law contains a broad exception

defining a number of different uses for a wide array of purposes as not copyright infringement, ranging from education

to criticism to “security and maintenance of government.” On its face, the broad scope of the uses and purposes

contained in this exception appears to go well beyond what is permissible under the WTO TRIPS Agreement, the Berne

Convention, WCT, and WPPT, despite a well-intentioned, but ineffective, attempt to narrow the provision through

inclusion of part of the Berne three-step test. The references in Subsections (1)(a) and (d) to the three-step test omit

the limitations of “certain special cases” and uses that do “not conflict with a normal exploitation of the work by the

the three-step test. IIPA recommends that the Indonesian government clarify the application of the full three-step test

to each use and purpose contained in this exception through amendment of the provision itself or by implementing

regulations. Furthermore, implementing regulations should provide guidance to help prospective users determine

whether their use falls within the appropriate bounds of the three-step test.

In addition, Article 84 of the Law includes a compulsory license provision that applies to “works” and is not

expressly limited to any subject matter. It should be further clarified and narrowed to ensure it is consistent with

obligations under the WTO TRIPS Agreement, the Berne Convention, WCT, and WPPT.

Rights Management Information (RMI) Violations and Technological Protection Measures (TPMs)

Provisions: The Law provides that RMI violations occur only when moral rights are affected. WCT and WPPT clearly

require “adequate and effective legal remedies against . . . acts knowing, or with respect to civil remedies having

reasonable grounds to know, that it will induce, enable, facilitate or conceal an infringement of any right covered by

this Treaty [or the Berne Convention]” (bracketed text in WCT only; emphasis added). The scope of the RMI provisions

should be expanded accordingly. Protections for TPMs should be strengthened consistent with Indonesia’s obligations

under the WCT and the WPPT, and with international best practices, including by ensuring the protection of TPMs that

control access to copyrighted works (i.e., access controls).

Registration, Invalidity, and Recordation Requirement: While registration of copyright remains voluntary

under the Law, the substantive examination for voluntary registration will apparently address whether a work is

“substantially similar” to another previously registered work as a ground for refusal. This substantive examination is

intended to enable the authorities to review and invalidate false applications or registrations to address a concern about

abuse of the voluntary copyright registration process. IIPA suggests introducing a more forceful deterrent, including

fines and penalties, against anyone who knowingly files a false application or applies in bad faith. Additionally, the

registration and recordation system potentially violates the prohibition of formalities under the Berne Convention. Article

83 appears to impose a requirement to record licenses, with lack of recordation meaning a license “shall have no legal

effect on third parties.” This provision appears to be a Berne-prohibited formality if, for example, lack of recordation

was used to deny the exercise of copyright from a particular licensor or licensee. Implementing regulations should

clarify that a failure to record transfers and other changes will not deny copyright protection to the registrant. Moreover,

recordation is not feasible for industries and rights holders that control a large number of works.

Provisional Measures: Under Article 108 of the Law, preliminary (provisional) injunctions take too long to

obtain. Under the Indonesian law, no legal remedies, such as preliminary injunctions, are available to the claimant

www.IIPA.org

January 30, 2023 2023 Special 301

before submitting the claim. In that respect, Indonesian law does not meet the standards of the WTO TRIPS Agreement

(i.e., Articles 41 and 50), which require that countries must make available “fair and equitable” civil remedies and

procedures to stop and prevent infringements, including provisional measures granted inaudita altera parte.

Statutory Damages: Indonesian copyright law does not provide statutory damages. In the case of copyright

infringement, the copyright holder can claim a justifiable amount by way of compensation. Compensatory and punitive

damages are available under the Civil Procedure Code. Judges, however, may grant damages based on only what the

parties request in their claim, and judges are prohibited from granting damages that exceed what the parties previously

requested. The successful party must prove losses with sufficient and actual evidence.

Overly Restrictive Definition of Copyright “Piracy”: Article 1, Subsection 23 of the Law provides an overly

restrictive definition of copyright piracy as “distribution” of unlawfully duplicated “goods” to “obtain economic benefits.”

This definition is also inconsistent with Article 61 of the WTO TRIPS Agreement because it is limited to goods and

requires a showing of financial gain. The definition should be amended to expand the scope to include acts of online

Regulation Nos. 14 and 26 of 2015 (Site Blocking): As noted above, there is currently no efficient way to

prevent domain hopping other than to file a separate application to block the “hopped” domains, which is time

consuming and cumbersome. The regulations should be amended to prevent domain hopping by allowing variants,

new primary domains, redirects, mirrors, proxy sites, and alphanumeric variations to be added to the blocking list

quickly and easily.

This would bring Indonesia’s regulation in line with other countries’ site-blocking provisions or

rulings, which allow for such “dynamic” injunctions (examples include the United Kingdom, Australia, India, and

Singapore).

Other Needed Legal Reforms

Unauthorized Camcording and Live-Streaming of Motion Pictures and Television Content: The

Explanatory Memorandum to the 2014 Copyright Law indicates that the unauthorized use of an audiovisual recording

device in a movie theater (camcording) can be addressed under the reproduction right. Regulations should be

introduced that provide a clear legal basis to prohibit camcording (as well as live streaming) in cinemas and strengthen

enforcement remedies available.

Term Extension: The Government of Indonesia should extend copyright term of protection to the life of the

author plus 70 years for all categories of works, including cinematographic works and video games, and to at least 70

years from publication for sound recordings and all works for which term is calculated based on publication, in line with

international norms. This extension will provide greater incentives for production, give producers a stronger incentive

to invest in local industry, thus spurring economic growth and tax revenues, and enable producers to continue offering

content to local consumers in the latest formats. After the 2014 Copyright Law amendment, the term of protection of

certain categories of works, including books, music, dramas, visual art, and architectural works, are protected for the

life of the author plus 70 years. However, the protection for other categories of works, such as cinematographic works

and video games, remains at life of the author plus 50 years, and the term of protection for sound recordings and all

works owned by a legal entity is just 50 years from publication.

There is no justification for such varied treatment, and

protection should be extended accordingly.

Specifically, new subsection (3) to Article 6 of the Regulations could be amended to provide: “Additional domains, sub-domains, URLs, or other IP addresses

whose sole or predominant purpose is to enable or facilitate access to the same website in the report shall be added to the receipt report register of copyright

infringement and/or related rights, when reported to, and verified by, the Director General of Intellectual Property, from time to time, and subject to the same

recommendation.”

Note that the term of protection has limited practical effect for certain works in view the 25-year reversion of rights regarding literary works, performances, and

musical works, as discussed above.

www.IIPA.org

January 30, 2023 2023 Special 301

Strengthening the Organized Crime Statute: Because many operators of piracy websites are engaged in

other criminal activities, copyright infringement should be included as a predicate crime for remedies under the

Indonesian organized crime law, e.g., as grounds for broader criminal investigations, seizure, freezing of assets, and

asset seizure, etc.

Online Intermediary Regulations: The Indonesian government should seek to improve transparency and

accountability of online service providers and intermediaries. It should encourage certain intermediaries, including

payment providers, domain registrars, and hosting services to implement a “know your business customer” (KYBC)

policy and make sure their resellers do the same. Regulations should: (i) require a public registry for domain registrants

that includes accurate data held by domain registrars, registries, or the Ministry of Communication and Information

Technology; and (ii) create a legal basis for rights holders to obtain details from the Ministry regarding certain online

service providers known as “private scope Electronic System Administrators,” which would allow rights holders to take

direct action. The regulations should also include a “duty of care” on all intermediaries that requires them to take

reasonable steps to limit, stop, and prevent online copyright infringements if they have actual or constructive knowledge

of infringing content or links on their services or networks, including expeditious takedown of infringing content and

other measures demonstrated effective in preventing or restraining copyright infringement. Non-compliance should

result in liability and fines for those intermediaries that have actual or constructive knowledge of infringing content or

links on their services or networks.

MARKET ACCESS AND RELATED ISSUES

While the government in 2016 took the very positive step of easing its negative investment list and allowing

100% direct foreign investment in film and sound recording production and film distribution and exhibition, Indonesia

has unfortunately regressed to a protectionist path. Indonesia should reverse course and address the many market

access and investment barriers and the discriminatory treatment against U.S. copyright materials that make it difficult

for the U.S. copyright industries to do business and compete in the country.

Negative Investment List (NIL): In May 2016, the Government of Indonesia issued Decree No. 44, removing

film and recording studios from the negative investment list (NIL) and enabling 100% foreign direct investment in film

and sound recording production, as well as film distribution and exhibition. The Indonesian government should follow

this very positive move by issuing clear guidelines on the implementation process of the decree and removal of market

barriers. In addition, many media sectors remain on the NIL, preventing direct foreign investment in other Indonesian

media industries.

While the removal of the film industry sectors from the NIL is a positive step, broader investment in

the distribution structure for all media sectors would benefit local and foreign-based producers alike in creating more

legitimate channels over which to distribute films, music, and other copyright materials. The same investment access

opened to the film industry should be afforded to the radio and television broadcasting service sectors.

Problematic Provisions in the Film Law and Regulations: In September 2019, without official notice,

“Ministerial Regulation (MR34/2019) Concerning the Procedure for the Distribution, Exhibition, Export, and Import of

Film” was issued. While these regulations have yet to be enforced, they maintain the 60% local screen quota and

dubbing restrictions and add further limitations on screen time by a single distributor, importer, or producer to 50%. In

recent years, domestic films have accounted for a growing and substantial share of the market and local films are

seeing greater investment without the imposition of heavy-handed regulations. Moreover, these restrictions undercut

Indonesia’s laudable 2016 decision to remove the film sector from the NIL.

Furthermore, the 2009 Film Law and regulations therein include some ambiguous provisions that purportedly

aim to limit unfair trade practices or monopolistic conduct, such as restrictions on vertical integration and arbitrary limits

on vertical supply between content distributors and theatrical exhibitors. Indonesian authorities should remove these

provisions because they could have unintended consequences, such as restricting foreign participation in the market

The Broadcast Law allows foreign ownership up to a 20% cap, and IIPA understands that the Broadcast Law overrides the Presidential Decree.

www.IIPA.org

January 30, 2023 2023 Special 301

and curbing business efficiency. Indonesia should amend the Film Law and incorporate international best practices,

notably recognizing the exclusive rights of copyright owners to determine whether, how, and where their works are

made available. Doing so will avoid creating new barriers that could undermine Indonesia's plan to attract foreign direct

investment in the film sector.

Over-the-top (OTT) Regulations: The Ministry of Communication and Information Technology (KOMINFO)

issued MR5, which came into effect in late 2020. MR5 requires domestic and foreign OTT service providers to register,

comply with content takedown requests from authorities, and grants law enforcement authorities access to electronic

systems and data. KOMINFO subsequently set a deadline for all platforms operating in Indonesia to comply with MR5

by the end of July 2022 or be blocked. Such requirements have the potential to stifle business development and add a

significant barrier to market entry.

While a constitutional court case brought by two Indonesian broadcasters arguing that VOD services should

be regulated under the Broadcasting Law (No. 32 of 2002) was ultimately unsuccessful, a long-anticipated revision of

the Broadcasting Law could still be undertaken in 2023. IIPA remains concerned that a future revision of the

Broadcasting Law could seek to extend existing problematic content quotas, content censorship (conducted by the

Indonesian Broadcasting Commission – KPI), and ownership restrictions on television services (which collectively,

have raised costs, created barriers to entry, and reduced consumer choice in the Pay-TV sector) to VOD services.

Collective Management Organizations (CMOs): A December 2018 amendment to the Regulation for

Collective Management Institutions (Regulation No. 36/2018) has not improved collective licensing issues faced by the

music industry. Certain CMOs for musical works and sound recordings continue to be placed under the single-window

LMKN as a “national CMO” that adds an unnecessary extra layer to the collective licensing system. The government-

appointed LMKN sets the tariff, collects the remuneration (through agents) and decides how the collections are split

among different groups of CMOs. However, the management of LMKN is not adequately represented by the rights

holders whose rights it purports to represent. As a result, those rights holders involved have little control over LMKN’s

governance and operations, including the setting of tariffs, which are fixed and set extremely low. Even though LMKN

delegates the collection function to some of the CMOs, the regulation permits LMKN to deduct 10% from the collections

as operation costs at the expense of rights holders’ interests. Further, the problem of the existence of numerous CMOs

to manage the same categories of rights remains, which has caused unnecessary confusion and inefficiencies in

collective licensing.

CMO regulations, including Implementing Regulations of Government No. 56 of 2021, “Government

Regulation on the Management of Copyright Royalties of Songs and/or Music,” should be amended such that entities

falling within the definition are owned or controlled by their member rights holders as well as confirming the non-profit

nature of the organization, which are essential characteristics of a CMO. Further, CMO regulations should be

introduced in accordance with international good practices and cover issues of transparency, accountability, and good

governance. It is also essential that the tariffs set for the use of the collectively managed rights reflect the economic

value of their use in trade.

Advertising Restrictions: Indonesia’s Broadcasting Law includes a requirement that any free-to-air TV and

pay-TV advertising aimed at the local market must be locally produced. Although regulations issued in 2007 provided

a series of exemptions, KPI’s 2015 statements regarding implementation raised concerns. If implemented, such a

burdensome rule would be harmful to consumers, who would likely absorb the additional associated costs. As noted

above, the timeline for revising the Broadcasting Law remains unclear.

Customs Valuation: Indonesia imposes a tariff on imported films that is based on the running time of the

film, resulting in high duties for many U.S. feature films. Indonesia should join the expanded ITA to address this issue

and to stay consistent with international best practices.

www.IIPA.org

January 30, 2023 2023 Special 301

Customs Duties on Electronic Transmissions: Indonesia’s Ministry of Finance issued a new regulation

(Regulation No. 190/PMK.04/2022) requiring importers to file a Customs declaration to be made for any import of

intangible goods through electronic transmission. This burdensome requirement severely disadvantages creative

content seeking to enter the Indonesian market. Moreover, in creating new tariff lines for digital products that are

transmitted electronically, which includes a threat of imposing customs duties on those products, Indonesia has set a

troubling precedent that raises serious concerns with respect to the WTO e-commerce moratorium on customs duties

for electronic transmissions. Heightening this concern, the Government of Indonesia has indicated that it may not agree

to further extensions of the moratorium. These actions could significantly harm the country’s market for creative digital

content and related services, including VOD services.

GENERALIZED SYSTEM OF PREFERENCES (GSP)

In January 2020, USTR, pursuant to the 2012 investigation, held a public hearing to review country practices

in Indonesia regarding intellectual property rights (IPR) and market access issues and to determine whether Indonesia

still qualifies for beneficiary status under the GSP. Under the statute, the President of the United States must consider,

in determining whether a country should continue to be designated as a GSP beneficiary country, “the extent to which

such country is providing adequate and effective protection of intellectual property rights,” and “the extent to which

such country has assured the United States that it will provide equitable and reasonable access to the markets . . . of

such country.”

While the Indonesian government has made past progress towards meeting the GSP criteria, these

efforts have stalled in recent years and regressed in some respects. IIPA urges the Government of Indonesia to make

further progress to remedy the deficiencies outlined in this report to avoid suspension or withdrawal of Indonesia’s GSP

benefits, in whole or in part.

COMPLIANCE WITH EXISTING OBLIGATIONS TO THE UNITED STATES

While passage of the Copyright Law of 2014 made progress toward fulfilling Indonesia’s obligations under the

WTO TRIPS Agreement, the Berne Convention, WCT, and WPPT, several provisions of the Copyright Law raise

serious concerns under these agreements. As set forth in more detail above in the “Copyright Law and Related Issues”

section, the broad exceptions and compulsory license provision, provisions regarding civil and criminal remedies,

limited RMI violations provision, definitions of making available and communication to the public, and recordation

requirement appear to be out of compliance with Indonesia’s international obligations. In addition, as set forth in the

“Market Access” section, the Government of Indonesia may fail to provide equitable and reasonable market access to

foreign rights holders in certain areas, as set forth in the GSP criteria.

19 U.S.C. §§ 2462(c)(4) and (5).

www.IIPA.org

January 30, 2023 2023 Special 301

MEXICO

INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 SPECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that Mexico be placed on the Priority Watch List in 2023.

Executive Summary: Since 2020, the Government of Mexico has made significant improvements to the

country’s intellectual property (IP) regime as part of the government’s endeavors to implement its obligations under the

U.S.–Mexico–Canada Agreement (USMCA), which entered into force on July 1, 2020. These improvements include

revising its Copyright Act and Criminal Code, as well as the Federal Protection of Industrial Property Act. Although

Mexico ratified the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT)

(collectively, the WIPO Internet Treaties) in 2002, the country did not implement these treaties until 2020. Two

significant 2020 reforms include the addition of protection against the circumvention of technological protection

measures (TPMs) and protection for rights management information (RMI)—key components of the WIPO Internet

Treaties that gave rise to content delivery models like streaming and on-demand services. These developments are

very positive, but insufficient because, in the absence of these provisions, the growth of the digital marketplace in

Mexico has been significantly hampered by an IP legal framework that is decades behind international norms. One of

the main problems in Mexico is not only the lack of implementing regulations for the 2020 reforms and other needed

legislation, but also the lack of enforcement of existing laws.

Obstacles remain in compliance with high-level international standards for the recognition and protection of

intellectual property rights (IPR), particularly those related to the digital environment and enforcement procedures. The

2020 reforms have not been translated into concrete results for the protection of IPR. Moreover, Mexico implementing

the WCT, the full implementation of the WPPT, and the USMCA, with its reforms to the Federal Copyright Act and the

Federal Criminal Code, is endangered by the constitutional challenges that were filed by the National Human Rights

Commission and a minority of the Mexican Senate. Parts of the 2020 legal reforms are being challenged in court on

constitutional grounds. Although the new laws remain in force in the interim, the challenges generated a chilling effect

on practical implementation of the reforms, because authorities are not willing to address cases based on a law that

has been questioned. Moreover, as of today there are no regulatory provisions, even when said provisions are

necessary to fully implement the 2020 reforms. Furthermore, in 2021 and 2022, a series of legislative initiatives were

developed to counteract the reforms made in the Mexican Copyright Act, with proponents of these initiatives claiming

that the reforms unlawfully restrict freedom of speech. However, considering that the reforms to the Copyright Act were

grounded in the new obligations of the USMCA, the challenges and initiatives to overturn them should be rejected. If

the constitutional challenges or the legislative initiatives were to succeed, it would create a significant setback for IP

rights holders and make Mexico less globally competitive. IIPA calls on the Mexican government to take the necessary

actions to ensure that existing laws are fully enforced. IIPA also urges the Government of Mexico’s executive and

legislative branches to robustly defend the 2020 Copyright Reform from the constitutional challenges and bills that

endanger Copyright Act key provisions. This task is crucial to secure the progress achieved. Moreover, these new laws

will need to be properly enforced and adjudicated, with proper staffing and resources.

For a long time, criminal enforcement activity pertaining to IP infringement in Mexico has been uncoordinated

and generally weak, slowed by procedural and structural deficiencies, a lack of prosecutorial initiative, and a lack of

adequate resources. Unfortunately, the legal reforms of 2020 did not fully address these deficiencies. Under existing

law, success in a criminal case still depends on proving a “direct economic benefit” to the infringer, instead of focusing

on the harm caused to a rights holder by infringement (the exception—the result of a 2020 reform—is for criminal

For more details on Mexico’s Special 301 history, see previous years’ reports, at https://iipa.org/reports/reports-by-country/. For the history of Mexico’s Special

301 placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

prosecutions against camcording). The “direct economic benefit” for criminal cases (unique to Mexico) is a difficult

hurdle to overcome for a prosecutor willing to commence a case in a country already short on resources for such cases.

The Criminal Code, Copyright Act, and Federal Protection of Industrial Property Act need to be amended to delete “for

profit” provisions and replace them with “acts carried out for commercial advantage or financial gain” and “significant

acts not carried out for commercial advantage or financial gain that have a substantial impact on the interests of the

infringements without a direct economic benefit.

Due to the lack of political will to prosecute IP crimes, enforcement in this area has become non-existent.

Additionally, budget cuts in recent years, including in several key IP enforcement agencies, particularly the Attorney

General’s Office (FGR), have led to reductions or curtailments in effective enforcement activities, seizures, and

campaigns. In many cases seized materials are not destroyed, and instead re-circulate into the marketplace.

Even though the Mexican Institute of Industrial Property (IMPI) has consistently ordered the destruction of

infringing goods, the Federal Industrial Property Protection Law should be amended to ensure that in all cases that

infringing goods be destroyed without unwarranted delay at the right holder’s request, and to clarify and simplify the

existing procedures. Currently, the law requires an agreement between the parties to decide the destination of the

infringing goods. Mexico should amend its current laws to require, at the rights holder’s request, that infringing goods

be destroyed in all cases, and the IP-related laws be expanded to include that courts may order the destruction or

disposal outside of commerce of “materials and implements that have been used in the manufacture or creation of the

infringing goods” as stated in Article 20.81 of the USMCA.

Additionally, in late 2022, the president began the militarization of customs as a way to combat corruption,

drugs, and smuggling. As of today, this action has not hindered customs functions. However, such militarization of

customs in Mexico may lead to higher prices in international trade processes, by slowing administrative functions.

Civil cases in Mexico are expensive and difficult for rights holders (especially small businesses) to undertake

and are slowed by procedural hurdles. In a positive development, 2020 saw the enactment of new laws that mandate

compliance with notices to remove infringing content, with measures to prevent infringing content from being uploaded

again, as well as providing safe harbors for services and platforms that comply with the notices. However, these

amendments have not been in practice in Mexico’s legal regime due to the constitutional challenges before the

Supreme Court of Mexico, as well as the lack of implementing regulations of the said amendments. The IP legal regime

in Mexico is still missing some of the basic tools to address online infringements, including by spurring cooperation

between rights holders, website owners, and service providers. For example, the current law specifies only general

liability instead of a clear principle of secondary liability for those inducing or promoting copyright infringement, which

would incentivize Internet service providers (ISPs) to take preventive actions.

PRIORITY ACTIONS REQUESTED IN 2023

IIPA recommends that the Government of Mexico prioritize the following legal reforms and enforcement

measures for 2023:

Legal Reforms

• The Secretary of Culture and the Copyright Office (INDAUTOR) should publish the implementing regulations of

the 2020 Copyright Act amendments. These regulations are a key element of the full implementation of numerous

important provisions from the legislation based on the USMCA provisions.

• Implement all legal reforms required under the USMCA and other treaty obligations—in the Copyright Act, as well

as in the Industrial Property, Criminal, and Criminal Procedure Codes by:

o Ensuring full compliance with the reforms required under the USMCA, which remain incipient;

www.IIPA.org

January 30, 2023 2023 Special 301

o Removing the proof-of-profit (“direct economic benefit”) requirement as a prerequisite to criminal liability

(including for satellite and cable decryption); adding aiding and abetting criminal provisions for both physical

and online piracy; removing the for-profit limitation on the making available right, and clearly including a

violation of making available in the Criminal Code;

o Implementing the presumption of copyright protection arising from copyright notices, exceptions to the

circumvention of TPMs, and providing civil remedies for satellite and signal piracy;

o Granting Customs inspectors ex officio powers to detain and seize infringing imports, and clarifying that the

FGR and Customs can and will act against so-called “goods in transit”;

o Amending the Civil Code to add pre-established remedies and to recover costs and attorney’s fees; current

law does not provide compensatory damages, including lost profits or sufficient monetary damages, nor costs

or fees (Mexico needs to amend its Copyright Act to provide for “pre-established” and/or “additional damages”

consistent with the USMCA Article 20.82.6 that are “an amount sufficient to constitute a deterrent to future

infringements and to compensate fully the right holder for the harm” as set forth in Article 20.82.8);

o Enacting legislation to provide clear modern rules establishing secondary liability for copyright infringement,

including for parties contributing to, inducing, or promoting infringement of copyright and related rights, along

with proper injunctive relief and incentives for efficient and effective notice and takedown systems with ISPs,

and including repeat infringer measures.

• Reject a draft bill to reform the General Health Act (GHA) to include videogames as a General Health Issue.

• Clarify the scope of the Federal Law for the Protection of the Cultural Heritage of Indigenous and Afro-Mexican

Peoples and Communities, in a manner that brings greater legal certainty for all stakeholders.

• Reject the Draft Decree repealing Section IX of Article 223 of the Federal Telecommunications and Broadcasting

Law that aims to regulate translation contracts.

Criminal Actions, Raids, and Prosecutions

• Fully implement the USMCA enforcement obligations by:

o Implementing a strategic national ex officio anti-piracy campaign with a consistent focus on major targets,

emphasizing coordination of police and prosecutorial resources, and prominently using (and properly

resourcing) the Specialized Unit on Investigation of Crimes Committed Against Industrial Property and

o Improving the FGR forensic standards for digital enforcement and eliminating the required experts and

mandated registrations (as a practice, if not a legal requirement) for criminal cases;

o Addressing the importation of circumvention devices used in video games that are entering Mexico in small

consignments and via courier packages (and enhancing penalties against repeat importers); the reform does

not clearly cover in civil laws “trafficking in devices or services or software” that circumvent TPMs and does

not include proper sanctions in civil or criminal law for these activities as required by the USMCA;

o Ensuring timely destruction of illegal goods seized in criminal and administrative actions to prevent their entry

into the market;

o Eliminating the welfare marketplaces initiative; and

o Using ex officio authority to enforce the new anti-camcording criminal penalties.

Administrative Enforcement

• Fully implement the USMCA enforcement obligations by providing the IMPI with sufficient resources, improved

coordination with the Federal Police, and coordinated investigative and other support from the Scientific Police (in

the National Guard).

• Providing INDAUTOR (Mexican Copyright Office) with more resources to increase and strengthen its mediation

capabilities, including appointing a Director General, a position that has been vacant since October 2020.

• Encouraging the administrative bodies that enforce IP to cooperate with rights holders to effectively enforce IP in

the digital realm.

www.IIPA.org

January 30, 2023 2023 Special 301

Prosecutions, Judges, and Courts

• Encourage prosecutors to take ex officio actions against online piracy and hard copy piracy, focusing on online

service operators and seeking deterrent sentences, including jail time and fines;

• Initiate actions against entities failing to provide remuneration for the public performances or broadcasting of sound

recordings; there are very serious concerns that rule of law problems render actual royalty collections currently

both unsafe and ineffective; and

• Investigate and prosecute IP infringement cases absent proof of actual lost profits.

THE COPYRIGHT MARKETPLACE IN MEXICO

As online access, as well as mobile phone and smartphone use have grown exponentially in Mexico in recent

years, legitimate online markets have developed, but their growth has been hindered by weak enforcement and

outdated laws. A wide variety of popular pirate services compete with legitimate digital markets in Mexico, including

stream-ripping services; sites offering unauthorized downloading and streaming of music, film, and video games; MP3

search engine sites that provide links to enable the downloading of film, music, and video game content hosted on

cyberlocker platforms; BitTorrent index sites; and online markets offering video game-related digital goods, including

usernames, passwords, and user account information. The COVID-19 crisis has increased the consumption of

unauthorized materials, and, to a lesser extent, it has also driven traffic to legal sites. Although some large pirate

websites are hosted locally, many infringing sites and services routinely accessed by individuals in Mexico are hosted

outside of the country (e.g., in Peru, Chile, Colombia, Argentina, Germany, and France, among others).

A major concern that inhibits the growth of healthy legal markets is the increased availability of piracy devices,

also referred to as illicit streaming devices (ISDs), including media boxes, set-top boxes, or other devices that allow

users, in combination with illegal software applications (apps), to stream, download, or otherwise access unauthorized

content from the Internet. The motion picture industry reports that subscription television piracy and the use of piracy

devices are the two fastest growing piracy challenges in Mexico. The use of hardware devices and apps to pirate

television programming, including subscription streaming services, is sophisticated and ubiquitous, with these devices

widely available in Mexican illegal and grey markets. This type of piracy includes the use of web browsers and video

apps to allow playback of films and television programming. These devices are part of a sophisticated online ecosystem

facilitating access to pirated audiovisual materials; they are advertised as facilitating easy access to remote online

sources of unauthorized entertainment content. The devices are imported into Mexico pre-loaded with the apps, the

apps are added as an after-sale service, or users can easily obtain the apps themselves to access infringing content.

For recorded music, the vast majority of legitimate revenue in Mexico is from digital music services, including

subscription services. Although music industry revenue continues to increase, per capita music revenue in Mexico is

only US$2.17 per year, compared with US$29.45 per capita in the United States.

At the same time that music

streaming services are developing, the most widespread source of music piracy is stream ripping. The International

Federation of the Phonographic Industry's (IFPI) Music Consumer Study for 2022 (MCS) found a music piracy rate of

53% in Mexico, one of the highest in the world. The study showed that 49% of Internet users said they used a stream-

ripping website or mobile app to download pirated music in the previous month, while 23% reported using a cyberlocker

site to obtain pirated music in the same period. Reinforcing the popularity of pirate site y2mate, 9.3% of all Internet

users aged 16 to 64 in Mexico said they had visited the site to download music in the last month. Popular stream-

ripping sites include y2mate.com (34.3 million visits), mp3y.download (10.8 million visits), and savefrom.net (9.1 million

visits) in the third quarter of 2022 based on SimilarWeb data. Cyberlockers are also widely used: Mega.nz received

32.5 million visits from Mexico in the same period, 1Fichier.com received over 9.7 million visits, and Zippyshare.com

received more than 5.4 million visits, all during the same period, based on SimilarWeb data.

International Federation of the Phonographic Industry (IFPI) Global Music Report 2022, p. 164 and 188.

www.IIPA.org

January 30, 2023 2023 Special 301

The Entertainment Software Association (ESA) reports that in 2022, Mexico ranked 13th globally for the

number of peer-to-peer (P2P) detections of infringing console-based video game files. The widespread availability of

circumvention devices and technologies in many markets, and, increasingly, from online auction and e-commerce sites,

underpins and facilitates the growing problem of online infringement of entertainment software in Mexico.

Circumvention is accomplished by installing “modification chips” (“mod chips”) in consoles, which bypass the

technological protections embedded in the hardware and enable the play of pirated video games, or by modifying the

video game platform’s operating system to facilitate the play of pirated video games (so-called “soft modding”). Online

communities, such as Team Xecuter FB on Facebook, further promote chip installation. Circumvention devices are

typically manufactured overseas and shipped in component pieces that are then assembled in Mexico. Sellers on

online marketplaces offer infringing goods and circumvention devices, including via some new marketplaces that have

entered the region, and notably on shopee.com.mx, mercadolibre.com.mx, linio.com.mx, and clasf.mx. Top sellers on

certain online platforms offer a wide variety of mod chips and mod services, and sell thousands of units of each, an

indication of their high-volume business. ESA members report that sellers on online marketplaces offer loaded game

cards with pirated games sold for between MXN$8,000 and MXN$10,000 (approximately US$390 - US$500) and

circumvention devices for approximately MXN$599 (approximately US$30). Members, however, also report very high

compliance rates with these marketplaces, including Mercado Libre, for the removal of these listings. One video game

company reports having conducted 1,641 enforcements in Mexico in 2022, 82% of which involved circumvention

devices.

Members generally report very high compliance rates with these marketplaces for the removal of these

listings. However, an increasing concern is the appearance online of “plug and play” systems, on which copyrighted

content is loaded but difficult to identify, because the online sellers are removing information about the games included

within. Platforms then reject enforcement requests without evidence of sample purchases for each product, a costly

and lengthy exercise for rights holders due to the volume and ease of manufacturing these products. Until the 2020

amendments, enforcement actions against distributors of circumvention devices have not been available, because

Mexican criminal law prohibited only the domestic manufacture of such devices, but not their distribution. The 2020

laws correct this deficiency by shutting off the supply of devices and systems, not only if domestically manufactured,

but also if imported into or distributed in Mexico. IMPI has indicated it will now proactively engage in this type of online

enforcement, which is encouraging.

Arcade pirated consoles have become increasingly popular in online marketplaces, making their way into

legitimate online marketplaces, such as Mercado Libre and Walmart, as well as in physical markets, including several

popular department stores. Piracy is exacerbated by the presence of organized crime, and the lack of enforcement

from criminal prosecutors. As an emerging and harmful form of piracy, digital streaming has been identified as a

growing threat to video game rights holders that has superseded other sources of online infringing activities, such as

downloads and cyberlockers. Furthermore, video game piracy is not only a challenge with respect to physical devices,

such as counterfeit preloaded gaming consoles, modification, or circumvention devices, and other infringing video

game accessories, it is also a major concern with respect to digital goods, such as cheats, hacks, and illegal primary

and secondary game accounts.

Camcord Piracy: Criminal enforcement against illicit camcording has historically been ineffective in Mexico

for two reasons: (1) inadequate laws and (2) weak and infrequent enforcement of the existing laws. One of the 2020

amendments adopted to comply with the USMCA corrects the legal regime deficiency. New Article 424bis of the

Criminal Code criminalizes camcording, and, in the only exception in the Code, deleted the for-profit motive as a

prerequisite for criminal infringement, which had thwarted effective prosecutions of camcording. However, the new

provision does require a rights holder to file a claim. Until the 2020 change, the few camcording criminal convictions

that had been successful were the result of prosecutions based on an array of crimes other than camcording. As

reported in prior IIPA filings, in recent years, many Motion Picture Association (MPA) member films have been sourced

from illicit camcords in Mexican theaters. Following the 2020 theater closures due to the COVID-19 pandemic,

camcords have resurfaced as a piracy problem in Mexico upon theaters reopening in 2021, and it is hoped the new

laws and improved enforcement will properly address this problem. The independent sector of the film and television

www.IIPA.org

January 30, 2023 2023 Special 301

industry (namely, the Independent Film & Television Alliance (IFTA)) is especially concerned about Internet piracy

because of its harm to the legitimate online distribution platforms and services that provide revenue for financing the

development of new creative works worldwide.

Satellite and Cable Issues: Satellite and signal piracy remain a major concern in Mexico. Another positive

development in 2020 was the adoption of two amendments to the Criminal Code (Federal Penal Code) to: (1) impose

criminal sanctions for infringers receiving or distributing encrypted programs transmitted via satellite signals without

authorization from the legal satellite distributor (Article 168bis); and (2) criminalize the modification and distribution of

devices or systems intended for signal theft (Article 426). Prior to these changes, the Criminal Code covered only

encrypted-program-carrying satellite signal theft. The new provisions also include penalties for those aiding or abetting

these activities. 2020 also saw Mexico amend the right of public communication in the Copyright Act to include the

making available of works through wire or wireless means (as required by the USMCA), so there is clear protection for

both cable and satellite dissemination. Thus, Mexico provides limited criminal sanctions for the manufacturing,

importation, sale, or lease of devices or systems carrying satellite signals, but not for carrying cable signals. It also

provides limited sanctions for acts of interrupting or interfering with cable and satellite signals and for decrypting satellite

signals, but only if undertaken “for profit.” In accordance with the USMCA Article 20.86.3, Mexico should provide civil

and criminal remedies for cable piracy, as well as satellite piracy. Additionally, Mexico needs to amend its Criminal

Code to eliminate the “for profit” requirement for acts of decryption of satellite signals and include cable systems in the

decryption laws.

Hard Goods Piracy: Although the copyright industries have prioritized the fight to stem digital piracy, hard

goods piracy continues to present a challenge on the street and at physical markets. Three physical markets were on

the U.S. government’s Notorious Markets 2021 List (released in February 17, 2022).

The first two have been on the

list since 2012: (1) El Tepito in Mexico City, an open-air 80-square block market in the middle of Mexico City selling

counterfeit goods, video games, modified consoles, and game TPM circumvention devices; and (2) Mercado San Juan

de Dios in Guadalajara, the largest indoor market in Latin America, with close to 3,000 vendors selling pirated films,

music, video games, and video game TPM circumvention devices (sold by an estimated one-third of all of the market’s

vendors). A third market, La Pulga Rio in Monterrey, which was added in 2020, has 300 stalls selling video games (as

well as counterfeit apparel and products). One video game company reports that Mexico’s customs authorities seized

over 35,000 units of preloaded consoles with unauthorized video games in 2022, most of which would have been sold

via online marketplaces or informal markets.

The piracy situation in Mexico has gotten worse in the past year. Budget cuts in recent years, including in

several key IP enforcement agencies (e.g., IMPI), have led to reductions or curtailments in effective enforcement

activities. One of IIPA’s long-recommended enforcement measures is the development and adoption of a high-level

national anti-piracy plan to target major online piracy and counterfeiting operations and to coordinate federal, state,

and municipal enforcement activities. This plan would help in many regions of the country where state and municipal

government anti-piracy efforts continue to be weak overall, including local authorities that rarely work on combating

piracy at all. Instead of a centralized coordinator for copyright enforcement, three federal agencies are engaged in

takes administrative actions under the Industrial Property and Copyright Act. INDAUTOR is responsible for registering

copyrights and can conduct mediation proceedings for aggrieved rights holders. In addition to these federal-level

agencies, the Scientific Police (part of the Federal Police) of the Secretary of the Interior (Secretaria de Gobernacion)

have assisted rights holders by providing information on illegal software websites and seizing the domain names of

infringing sites. On the other hand, the president announced the militarization of customs as a way to combat corruption

and for improving the fight against drugs and smuggling. Such militarization of customs in Mexico has led to higher

USTR, 2021 Review of Notorious Markets for Counterfeiting and Piracy, February 17, 2022, available at

https://ustr.gov/sites/default/files/IssueAreas/IP/2021%20Notorious%20Markets%20List.pdf

www.IIPA.org

January 30, 2023 2023 Special 301

prices in international trade processes by slowing administrative functions. Besides the costs, the delays may run

contrary to the effort at the regional and multilateral levels to facilitate trade as provided in Chapter 7, Customs

Administration and Trade Facilitation, of the USMCA and the Trade Facilitation Agreement of the World Trade

Organization (WTO), where there are international commitments for the facilitation and clearance of goods, including

those in transit.

Criminal Enforcement

Since Mexico transitioned to an adversarial justice system in 2008, despite the availability of ex officio action

in the Criminal Code, in practice prosecutors no longer prosecute criminal copyright cases without the filing of a

complaint against an infringer. This change has resulted in prosecutorial delays of IP-related crimes, including at FGR.

A complicating element in combating piracy in Mexico is the cumbersome requirement (by FGR) that each copy of an

infringing product must be accompanied in prosecution files by a physical copy of a legitimate original for comparative

examination by experts (peritos). This requirement is followed as a general practice, even though the law does not

explicitly require it. This complicates online or digital matters where no hard goods are involved. Furthermore, it is

crucial that prosecutors understand that expert opinions are not required in every case to analyze genuine and

counterfeit specimen. Under the existing system, when the comparison involves multiple copies of the same infringing

game, music, or film, rights holders must submit an equal number of legitimate game, music, and film DVD copies to

the experts for comparison. The result is delays and, in some cases, investigations have been dropped due to

undertrained prosecutors, leading brand owners to re-introduce actions often against repeat offenders. The peritos’

reports are a formalistic requirement that take much too long to complete, and the peritos are insufficiently trained in

digital issues and often reluctant to cooperate with investigations and prosecutions. Rights holders then must appeal

those decisions through a Control Judge, adding to the expense and delay of effective enforcement.

Additionally, although Article 5 of the Copyright Act refers to copyright registrations as only voluntary

(“recognition of copyright and neighboring rights does not require registration”), in practice, the FGR and courts require

registrations to commence a criminal case. This is an additional formalistic practice of Mexican authorities that is

contrary to the main purpose of international commitments on IP recognition and protection. The USMCA (Article

18.72.1) requires Mexico to provide clear presumptions of ownership in civil, criminal, and administrative matters, based

on the copyright notice appearing on the work, or on a screen, and, without the need for a mandatory and certified

registration. Mexico needs to make this change to its Copyright Act for all works (it exists for sound recordings), even

after the 2020 amendments.

Lastly, Mexican courts generally do not consider file sharing via online networks to be a serious legal violation;

this is a continuing obstacle to effective criminal enforcement. Consistent with its WTO TRIPS obligation, Mexico should

have “effective” criminal remedies,

including “imprisonment and/or monetary fines,” available in cases of “willful . . .

Unfortunately, Mexico’s remedies for commercial-scale piracy have not been

effective and are hampered by the noted procedural hurdles.

Under the current Administration, FGR and UEIDDAPI have been reluctant to prosecute IP crimes, and there

have been very few criminal enforcement actions regarding piracy and counterfeit goods, both in the online and physical

realms. There exists a general understanding in all government offices that few to no actions against piracy and

counterfeit goods are taken. Also, inside the UEIDDAPI is a general order to not perform any search warrants for these

types of cases. Notwithstanding the significant and commendable progress made by the Government of Mexico in its

efforts to strengthen the country’s IP regime consistent with its obligations under USMCA, there does not appear to be

any political will to prosecute IP crimes in Mexico at this time.

The WTO TRIPS Agreement, Article 41.

Id. at Article 61.

www.IIPA.org

January 30, 2023 2023 Special 301

Structural Reforms and Jurisdictional Issues: IIPA continues to recommend several detailed “structural”

reforms and agency actions to improve criminal enforcement that have been detailed in previous submissions.

IIPA

urges the Government of Mexico to undertake, and to prioritize, the implementation of a national ex officio anti-piracy

campaign. Another recommendation is for FGR to significantly improve its criminal enforcement actions against digital

piracy. The piracy situation is getting worse in Mexico.

Mexico’s “welfare marketplace” (in Spanish: “tianguis del bienestar”) initiative, which takes goods that have

been seized by the authorities and offers them to the general public, is problematic from a consumer health and safety

standpoint,

and it clearly violates the “effective protection” clauses in the USMCA, the WTO TRIPS Agreement, and

more than 30 trade agreements to which Mexico is a party.

A third structural recommendation is to coordinate municipal, state, and federal government criminal

enforcement actions (across Mexico’s 32 states and 2,400+ municipal governments). Also, another long-standing IIPA

recommendation has been for enforcement agencies to adopt clear and consistent policies for the expeditious

destruction of seized infringing goods. Another of the positive 2020 amendments (in the Federal Industrial Property

Act) gives IMPI the authority to order the destruction of infringing goods 15 days after a final court decision, which is

an accelerated timetable. The copyright industries have also successfully utilized the Ley Federal de Extinción de

Dominio (Federal Law for Property Forfeiture) in piracy cases, but materials seized in the FGR enforcement operations

continue to find their way back into the black market. A fourth recommendation that is important to those industries still

confronting hard copy piracy is for PROFECO to use its ex officio powers for consumer protection, and its resources

against street market piracy.

Intellectual Property Rights (IPR) Expertise in the Judiciary: A continuing weak spot in Mexican IP criminal

enforcement is the judiciary. Training to improve IPR expertise among judges is an ongoing need—especially training

on technology, digital distribution and piracy, and the use of circumvention technologies. Other weaknesses include

the absence of specialized IP judges and courts and non-deterrent sentencing in most criminal cases, where sentences

are rare. Mexico should consider mandatory sentencing regulations for criminal copyright cases or have the Supreme

Court issue recommended guidelines to assist judges with the imposition of deterrent sentences and the award of

damages (reparación del daño). The Supreme Court should also issue an advisory to criminal judges nationwide to act

expeditiously on search warrant applications. Additionally, Mexico should provide sufficient resources for the IP

magistrates within the Tax Court and consider creating specialized IP administrative circuit courts.

Civil Enforcement

The 2020 package of amendments adopted notice and takedown procedures, defined ISPs, and provided

legal remedies and safe harbors to ISPs providing mere conduit, caching, and storage and information location tools,

by limiting monetary damages—but not injunctive relief or administrative sanctions—for ISPs that respond properly

and timely to notices (Copyright Act, new Article 114 Octies). The changes add specific provisional measures to order

the suspension, stay down, blocking, or removal of content, and the cessation of acts that are infringing or unauthorized.

The new provisions also require ISPs to have repeat infringer policies and counter-notification procedures (requiring

rights holders to commence judicial, administrative, or criminal actions within 15 days of notification by an ISP). The

new Mexican law compels an ISP receiving a notice of infringement to comply and there are administrative penalties

(fines) for non-compliance with notices. However, Mexican law should also require an ISP with actual knowledge of an

infringement or that is aware of facts or circumstances from which infringement is apparent (so-called “red flag”

knowledge), to take down material. Moreover, these amendments are subject to constitutional challenges before the

See, e.g., IIPA 2019, 46-47, available at https://iipa.org/files/uploads/2019/02/2019SPEC301MEXICO.pdf; IIPA 2022, p. 68-69, available at

https://www.iipa.org/files/uploads/2022/01/2022-SPEC301-3.pdf.

See the U.S. Department of Homeland Security’s (DHS) Immigration and Customs Enforcement's characterization of counterfeit goods as a danger to public

safety here: https://www.ice.gov/features/dangers-counterfeit-items

. See also, the DHS report from 2020 here:

https://www.dhs.gov/sites/default/files/publications/20_0124_plcy_counterfeit-pirated-goods-report_01.pdf. Finally, see the United Nations Office on Drugs and

Crime Fact Sheet on counterfeit goods here: https://www.unodc.org/documents/counterfeit/FocusSheet/Counterfeit_focussheet_EN_HIRES.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

Supreme Court that are still pending for final resolution, and the Mexican government has not issued domestic

regulations to the Copyright Act to allow an effective implementation of the USMCA commitments.

The Mexican legal system includes general liability principles contained in the Civil and Criminal Codes, but

it does not include explicit secondary liability for copyright infringement for ISPs and similar parties in the Civil Code.

The safe harbors imply that such potential secondary liability exists, but IIPA urges the Government of Mexico to make

such liability explicit in its law. The USMCA (Article 20.88) requires Mexico to implement “legal incentives for Internet

Service Providers to cooperate with copyright owners to deter the unauthorized storage and transmission of infringing

materials or, in the alternative, to take other action to deter the unauthorized storage and transmission of copyrighted

materials.” While notice and takedown and related provisions are a strong first step, ISPs need further encouragement

to meaningfully cooperate with all rights holders (large and small) to deter the unauthorized storage, transmission, or

making available of copyrighted materials.

In addition, specific provisions in the Telecommunications Law prohibit ISPs from disclosing a customer’s

personal information to rights holders seeking civil recourse against alleged infringers (although Article 189 of the

Telecommunications Law, as amended in 2014, does allow an ISP to cooperate with an order from any competent

authority). Additionally, ISPs have been reluctant to include clauses in their subscriber agreements to permit termination

of service contracts if subscribers infringe IPR. ISP contractual practices thus compound the difficulties of obtaining

access to information necessary for seeking civil remedies. For file sharing, the two major ISPs (Telmex Infinitum,

which has about 70% of the domestic broadband connections in Mexico, and ALESTRA) have, to date, been reluctant

to take any actions.

In general, Mexico’s three-tiered civil procedure system makes civil litigation very complicated, time

consuming, and costly for rights holders, even against obvious infringers. The Copyright Act allows rights holders to

seek damages in civil courts even before an administrative infringement decision is issued (or becomes final), but the

law does not provide for statutory damages (e.g., additional or pre-established damages), and the USMCA-related

amendments implemented in 2020 did not address this deficiency. Rights holders can seek 40% of the gross sales

revenues from infringing products as damage awards. There are other problematic procedural formalities to

commencing cases in Mexico, including burdensome steps to prove copyright ownership in lieu of presumptions of

ownership (which, as noted, is an unfulfilled USMCA obligation). Mexican law grants full validity to electronic documents

and discovery, although some judges are unfamiliar with these rules. The Civil Code also provides ex parte measures

to avoid the destruction of evidence, but these provisions have never been fully implemented.

Border Enforcement

FGR and UEIDDAPI have ceased executing border measures to detain containers with pirated goods,

including counterfeit video game consoles, controllers, and merchandise bound for the local market or stop in-transit

shipments and trans-shipments. IMPI and Customs have created an effective partnership to fill in the void. These

agencies have delivered timely and decisive results in the border measures field. In 2020, the video game industry

brought seven suits with IMPI regarding border measures. As a result, approximately 40,030 miscellaneous infringing

items were seized, most of which are illegal gaming consoles. Although the Customs Code was amended in 2018, the

changes did not provide the necessary ex officio authority for Customs officials to conduct independent seizures of

infringing goods and components—a USMCA obligation (Article 20.84).

Under the current code, Customs’ authority

is unclear regarding seizures and retention of infringing materials. There are unnecessary, formalistic, and onerous

requirements to initiate border actions. For example, absent an official order from IMPI, Customs authorities will not

seize infringing products entering the country or detain them for more than a few hours, even where the material is

infringing. Nonetheless, as of today IMPI has effectively addressed this issue through expeditious communications with

customs to seize infringing goods.

USTR, United States-Mexico-Canada Agreement (USMCA), Article 20.84, available at

https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/Text/20%20Intellectual%20Property%20Rights.pdf

www.IIPA.org

January 30, 2023 2023 Special 301

Mexico was a signatory and, in 2002, acceded to the WIPO Internet Treaties (although it did not publish its

ratification of those treaties with the Agreed Statements), implementing its treaty obligations in 2020.

Federal Law on Copyright (1996, as amended): The 1996 Copyright Act was significantly revised by the

2020 amendments. It was last amended in 2018 with the addition of preliminary injunctive relief, and before that, was

amended in 2003. The full list of legal reforms adopted in 2020 has improvements, including the notice and takedown,

safe harbor, and related provisions; protection for TPMs and RMI; explicitly provide a making available right and right

of communication to the public for works and recordings, as well as adaptation or transformation of the phonogram and

rent of the original or copies of the phonogram; and sanctions for camcording, as well as against satellite and cable

signal theft. However, more revisions are needed:

• Article 232bis limits liability and excludes certain activities relating to the manufacturing of, or trafficking in,

circumvention devices or technologies (including so-called “no mandate” language), and additionally, provides

many exceptions and limitations that are problematic, including those to-be-determined by INDAUTOR.

• While the reforms explicitly provide a making available right and right of communication to the public for works and

recordings (see above), the Copyright Act should be amended to the extent Article 131, applicable to sound

recordings, does not currently cover electronic reproductions of copies (i.e., phonograms) of sound recordings.

The Copyright Act should also be amended to provide a reproduction right for performances.

For all the laws that were enacted, INDAUTOR is now preparing draft implementing regulations; unfortunately,

this process is proceeding slowly for these much-needed new changes. This delay is very troubling considering the

constitutional challenges underway, as well as the vocal opposition from many copyright opponents already seeking to

weaken amendments to laws not yet implemented in an attempt to undermine the new reforms.

Some of the other key reforms that are needed, but were not achieved through the 2020 changes include:

• Establish explicit secondary liability;

• Raise civil penalties to deterrent levels—and including statutory, pre-established, or “additional” damages and the

recovery of costs and attorney’s fees;

• Amend the Criminal Code to delete the “for profit” provisions (with the exception of the fix already adopted for

camcording), and replacing them with “acts carried out for commercial advantage or financial gain or that result in

substantial harm to rights holders”;

• Amend the Forfeiture Law to cover copyright infringements undertaken by organized crime syndicates;

• Amend the Administrative Code, Tax Code, and Criminal Code to (i) provide tax crime prosecution of copyright

infringement (when it implicates tax liability) and (ii) increase administrative sanctions;

• Create presumptions of copyright ownership in civil, administrative, and criminal cases;

• Add criminal provisions to enforce against the production or distribution of piracy devices; and

• Severely restrict or eliminate exceptions to infringement for certain public performances where retransmission is

not “for profit-making purposes” (Article 150, transmissions of works) and “no direct economic benefit is sought”

(Article 151, neighboring rights). These exceptions are too broad, exceeding what treaties permit.

Federal Law for the Protection of the Cultural Heritage of Indigenous and Afro-Mexican Peoples and

Communities (Cultural Heritage Law): On January 17, 2022, the “Federal Law for the Protection of the Cultural

Heritage of Indigenous and Afro-Mexican Peoples and Communities” (the Cultural Heritage Law)

was published in the

Ley Federal de Protección al Patrimonio Cultural de los Pueblos Indígenas y Afromexicanos, January 17, 2022, available at

https://www.diputados.gob.mx/LeyesBiblio/ref/lfppcpcia.htm

www.IIPA.org

January 30, 2023 2023 Special 301

Federal Official Gazette. The Law entered into force on January 18, 2022. The regulations to this law should have been

issued within the 180 days following its publication. However, INDAUTOR asserts that the law can be enforced even

in the absence of secondary regulations. The Law aims to register, classify, and document the traditional cultural

expressions (TCEs) of indigenous communities, while also broadening their scope of protection, acknowledging their

economic rights, and introducing an enforcement scheme. Although some of its objectives are aligned with WIPO’s

stance on the protection of indigenous peoples’ traditional knowledge and TCEs, the way the Law is drafted creates

legal uncertainty for a range of creative industries, given the absence of guidelines for the granting of authorization,

the lack of clarity as to which communities are associated with a particular expression, and the fact that some

expressions could be removed from the public domain.

The law also lists a catalog of administrative infringements that are unclear and ambiguous and establishes

fines that range from US$2,240.00 to US$224,000.00. The law also establishes criminal penalties for the improper use

and exploitation of the elements of cultural heritage of indigenous and Afro-Mexican communities or peoples, and for

the cultural appropriation of elements of the cultural heritage of indigenous communities or peoples. Criminal penalties

range from two to 10 years of imprisonment (double if the conduct results in “cultural ethnocide”). The U.S. Government

should encourage Mexico to implement this initiative with transparency, broad stakeholder engagement, and

adherence to good regulatory practices and USMCA commitments.

General Law of Libraries: On June 1, 2021, the General Law of Libraries (GLL)

was published in the

Federal Official Gazette. The law establishes the Legal Deposit of Publications and mandates that copies of works

(including audiovisual works) and phonograms need to be deposited with the Library of Congress, the Library of Mexico,

and the National Library, in the case of materials other than press works (audio and audiovisual) and delivered to the

Library of Mexico. A draft bill amending Articles 33, 39, and 43, and adding Article 34bis to the General Law of Libraries

was presented before the House of Representatives on February 1, 2022. Instead of curing issues with the GLL that

IIPA has delineated in previous filings,

the draft bill introduces new issues, such as requiring the delivery of works

within 90 calendar days following the date of their commercial distribution.

Bill to Amend the Federal Copyright Act: On February 15, 2022, a draft bill, which adds Chapter VIII,

"Literary Translation Contracts," to Title III of the Federal Copyright Act, and Articles 76bis to 76sexties was introduced

in the House of Representatives. The Bill aims to regulate translation contracts from the perspective of literary creation

and as a tool for the dissemination of culture and knowledge, and it could have implications for dubbing and subtitling

of audiovisual productions. The Bill provides that any remuneration paid to the translator shall be proportional to the

income obtained from the exploitation of the work, and in the event that the translator chooses to receive a fixed and

determined consideration and this proves to be inequitable with the income obtained from the exploitation of the work,

the translator may demand compensatory remuneration. This Bill also prohibits the publication of the translated work

with alterations, additions, deletions, or any modification made without authorization of the translator.

Decree Repealing Section IX of Article 223 of the Federal Telecommunications and Broadcasting Law:

A Draft Decree repealing Section IX of Article 223 of the Federal Telecommunications and Broadcasting Law was

introduced in the Senate on February 10, 2022. The decree proposes to repeal a provision that could infringe freedom

of expression principles, so it is positive for creative industries.

Case Law

Constitutional Challenges to Copyright Act Reform: Soon after the Copyright Act reform passed, two

constitutional challenges were filed seeking to repeal key provisions of the amendments. The first challenge was filed

by the National Commission of Human Rights, seeking to repeal provisions related to notice and stay down and

protection for TPMs. The second challenge was filed by a group of around 30 senators from opposition parties in

General Law of Libraries (Ley General de Bibliotecas), June 1, 2021, available at http://www.diputados.gob.mx/LeyesBiblio/pdf/LGB_010621.pdf.

See, e.g., IIPA’s 2022 Special 301 submission on Mexico (“IIPA 2022”), p. 72-73, available at https://www.iipa.org/files/uploads/2022/01/2022-SPEC301-3.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

Congress and based on similar grounds as the first challenge. In both cases, AMPROFON, IFPI’s national affiliate in

Mexico, INCAM, and some other relevant stakeholders, filed amicus curiae briefs defending the amendments.

Numerous support letters from industry bodies in many countries were also delivered to the Supreme Court in support

of the notice and stay down provisions adopted in 2020.

At the same time, two additional challenges were filed in lower courts, seeking judicial protection for individual

plaintiffs. One of these lawsuits was filed by Televisa (the biggest broadcasting conglomerate in the country). A second

challenge seeking individual protection from the amendments was filed by the Authors and Composers Society

(SACM), arguing that the 2020 copyright amendments equalized the protection of neighboring rights with that of

MARKET ACCESS ISSUES

Pay-TV Advertising Limits: Pay television is an important outlet for foreign programmers and continues to

be subject to more stringent advertising restrictions than free-to-air broadcast television, which is supplied by domestic

operators. Pay television programmers have long been allowed to follow the industry practice of inserting up to 12

minutes per hour for advertising without exceeding 144 minutes per day, a practice upheld by Mexico’s court in 2015

as consistent with Mexico’s statutes. In February 2020, the industry regulator abruptly reversed course, stating that

pay-TV channels must adhere to a strict six-minute per hour advertising limit, including during primetime. This change

significantly reduces advertising revenue for foreign (e.g., U.S.) film and television program producers and raises

concerns about the non-discriminatory provisions and principles in the USMCA.

Foreign Ownership Restrictions: A second market access concern is the 49% limit placed on foreign

ownership of broadcast networks, which is further reduced to the share permitted for Mexican broadcasting investment

in the company’s country of origin. However, this reciprocity does not extend to countries with a higher permissible

foreign investment share, including the United States, where the Federal Communications Commission permits foreign

entities to own 100% of broadcast networks (subject to case-by-case reviews), creating another instance of

discriminatory treatment.

Local Content Quotas: On a regular basis, Mexican lawmakers and policymakers propose protectionist

policies, such as the imposition of local content quotas in both theatrical and streaming, over-the-top (OTT) windows,

as well as limits to the number of screens in which a given movie can be exhibited or regulating the dubbing of the

features regardless of the market preferences. If adopted, such measures would severely limit the exhibition of U.S.

films in Mexico and would potentially contravene Mexico’s USMCA commitments. Instead, Mexican policymakers

should encourage open markets, investments, and collaborations that would result in job creation, knowledge transfer,

and the internationalization of the alignment of local industry with international best practices for the benefit of both

Mexican and U.S. industries.

Investment Obligations: There are several legislative efforts establishing performance requirements to

investments in the form of a financial contribution in favor of the Mexican audiovisual industry. If adopted, such

measures would be discriminatory and harmful to the audiovisual services platforms that operate within Mexico and

may be contrary to USMCA commitments.

Bill to Reform General Health Act (GHA): Additionally, on July 6, 2022, a bill to reform the General Health

Act (GHA), was introduced before the House of Representatives to include videogames as a General Health Issue.

The Bill aims to amend Article 3, Section XXI of the GHA to include a matter of general health in the design and

implementation of public policies and actions to prevent, treat, and control the problematic use of and addiction to video

games.

www.IIPA.org

January 30, 2023 2023 Special 301

Cooperation and Training

IMPI has entered a Memorandum of Understanding (MOU) with ESA to enforce and protect video games' IP.

IMPI seems to be committed to creating IP enforcement activities, including infringement referrals, online inspection

visits, and investigations, and promoting the importance of IP to creative and innovative industries. Practical efforts to

execute the MOU have already begun, including ESA-led training for over 60 members of the IMPI enforcement team

on issues specifically impacting the video game industry. IMPI has further engaged in training with the motion picture

and recording industries on issues related to those industries.

www.IIPA.org

January 30, 2023 2023 Special 301

RUSSIAN FEDERATION

NTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 S

PECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that the Russian Federation be retained on the Priority

Watch List in 2023.

Executive Summary: This submission is provided against the backdrop of Russia’s invasion of Ukraine, the

attendant sanctions against Russia by the U.S. and its allies, the suspension of operations in Russia by many U.S.

companies, and a disturbing trend in Russia to ignore the intellectual property rights (IPR) of companies that have

withdrawn from the market. Regarding the discussion of Russia’s legal framework, this submission largely draws from

IIPA’s submissions from prior years.

The Government of Russia recently has introduced several problematic proposals that would weaken existing

intellectual property (IP) protections, including plans for a compulsory licensing scheme to permit exploitation of a

copyrighted work if a partner from an “unfriendly state” (including the United States) partially or completely unilaterally

repudiated the license agreement on grounds not related to the violation of such contract by a licensee. If Russia

follows through on these proposals, it would be tantamount to state-sanctioned piracy on a massive scale. This would

be an unprecedented step for a WTO member, contravening the rule of law and serving as a de facto expropriation of

U.S. IP.

Further, the draft law that would convert the anti-piracy Memorandum of Understanding (MOU) between key

Russian Internet companies and rights holders from a voluntary procedure into an obligation has stalled since its

introduction in June 2021. An addendum to the MOU, MOU 2.0, that provides for several new measures to stop search

engines from providing easy access to infringing services is subject to adoption of the draft law and has not been

enforced.

Russia has addressed online piracy with civil, not criminal, enforcement measures and streamlined processes

to require websites, and now apps, with infringing content to comply with rights holders’ takedown notices. These

measures include allowing Russian courts (in particular, the Moscow City Court) to disable access to infringing material,

including clone, proxy, and mirror websites containing infringing content and requiring online search services to exclude

infringing websites identified in the court orders from search results. An additional recommended legal reform is for

Russia to clarify its Civil Code on the legal liability of Internet service providers (ISPs), including that any safe harbors

apply to only passive and neutral intermediaries that do not contribute to infringing activities.

While these civil and procedural reforms have disabled or slowed access to some major infringing sites and

services, unfortunately these procedures are being directed predominantly against infringing activities of users in

Russia, not against Russian sites and services that undermine foreign markets by catering to users outside the country.

As a result, Russia presents a substantial and persistent online piracy problem with no borders, as users in major

markets outside of Russia access infringing content from sites and services located in or operated from Russia.

Russia’s actions to take down infringing content have little lasting deterrent effect without civil, and especially criminal,

prosecutions directed at operators and owners of piracy sites.

Two other industry-specific problems persist in Russia. One is the need to address the long-standing problems

with collective management of music rights in Russia that have caused revenues to be a fraction of what they should

be for a market the size of Russia. The state-accredited Russian collecting societies are not currently operating with

For more details on Russia’s Special 301 history, see previous years’ reports, at https://iipa.org/reports/reports-by-country/. For the history of Russia’s Special

301 placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

transparency or good governance rules consistent with international norms. The other enforcement priority is to address

the camcording of motion pictures that results in many American feature films being illegally copied in theaters and

migrating online worldwide. Furthermore, law enforcement should take steps to prevent or disrupt proliferation of illegal

screenings of films in Russian theaters that has occurred in 2022.

PRIORITY ACTIONS REQUESTED IN 2023

• Continue to resist efforts to implement state-sanctioned IP theft, which would have serious, long-term implications

for Russia’s economy and creative ecosystem.

• Improve enforcement against online piracy by:

o Increasing the number and effectiveness of criminal copyright digital piracy cases, especially deterrent criminal

actions directed against organized criminal syndicates, including against those parties involved in piracy retail

chains that continue to sell pirated entertainment software, music, and movies.

o Enacting the draft legislation to convert the MOU into law, making it applicable to all copyrighted works and all

rights holders, with legally mandated obligations for ISPs and appropriate sanctions for non-compliance.

o Enforcing the addendum to the MOU that provides several new measures to stop search engines from

providing easy access to infringing services.

o Amending the Civil Code, the Copyright Law, or other relevant law to address the issue of “domain hopping”

that occurs after the Moscow City Court issues an initial content-removal order to expedite applications for

additional relief against repeated copyright infringement.

• Implement regulations on the operation of collective management organizations (CMOs) that confirm that rights

holders have the legal and practical ability to determine how to exercise their rights, including whether to choose

to entrust licensing to any CMO, and if so, which one, as well as to delineate the rights for such collections.

• Amend the Civil Code, Part IV, to:

o clarify the basis for liability for providers of online services that induce, encourage, or facilitate the infringement

of copyright and related rights and do not take reasonable steps to prevent such activities to prevent knowing

facilitators from enjoying these safe harbor benefits; and

o clarify the eligibility requirements to qualify for safe harbor protections, to benefit only passive and neutral

intermediaries that do not contribute to infringing activities.

• Amend the Civil Code in Article 1299 to provide civil liability for commercial trafficking in circumvention devices

(including circumvention software), as well as for acts of circumvention.

• Amend the Criminal Code to establish criminal liability: (i) for the unauthorized camcording of motion pictures; and

(ii) for the importation of and commercial trafficking (by distribution, making available, etc.) in circumvention devices

(including circumvention software), as well as for acts of circumvention. Also, amend the Administrative Code to

sanction camcording.

• Amend the Administrative Code by eliminating the for-profit requirement in Article 7.12 (Administrative Offenses),

raise administrative penalties to deterrent levels by implementing higher fixed fines for violations by legal entities

and individuals, and increase enforcement under this provision.

• Take action to prevent or disrupt the unauthorized screenings of the motion pictures in cinemas.

THE COPYRIGHT MARKETPLACE IN RUSSIA

Internet Use and Piracy: The overall situation with online piracy remains the same when compared to 2021.

Russia remains host to several illicit sites that cater to English-speaking audiences, negatively impacting markets

worldwide. Many pirate sites have moved to foreign hosting locations after several legal reforms that allow rights

holders to seek injunctions through the Moscow City Court. However, the lack of explicit liability provisions for hosting

providers creates a supportive environment for infringing services to use the infrastructure in Russia. Infringement on

Russian social media and hosting platforms such as VK, OK, Telegram, and DDoS-Guard remains a significant concern

for rights holders.

www.IIPA.org

January 30, 2023 2023 Special 301

Internet access, including mobile phone access, continues to grow in Russia. Despite the civil law reforms

intended to mitigate online piracy, Russia remains home to many of the most popular illegal services in the world.

These include commercial-scale infringing websites, such as web-based, peer-to-peer (P2P) downloading and

streaming sites, stream-ripping sites, linking sites, and cyberlockers, offering access to unauthorized music, film, video

games, books, and journal articles. Another problem is the significant movement of pirated content to mobile apps,

such as Telegram. Russia remains first globally when it comes to P2P piracy for the video game industry. Many of

these sites cater to English-speaking and other non-Russian users. Some BitTorrent and other pirate sites have

reportedly moved their sites to foreign hosting locations in response to the new enforcement measures or court-ordered

injunctions directed at sites within Russia. The development of technologically advanced pirate cloud systems (e.g.,

piracy as a service, often consisting of content delivery network-based video providers that are accessible to only pirate

streaming website operators), which provide Russian streaming websites with pirate video content, likewise continues

to grow.

Although the civil law reforms have improved enforcement by the courts, absent these court orders, most ISPs

and website operators do not comply with takedown notices; instead, they merely forward notices to users without

taking down infringing material. Often, as a delaying tactic, the Russian websites insist on proof of copyright ownership

before even considering compliance with takedown requests. Following Russia’s invasion of Ukraine, certain platforms

hosting user-generated content demonstrated low compliance with takedown notices. For example, VK’s compliance

reportedly decreased to 10-20%. On the other hand, OK continues to comply at a high rate, up to 90%. The advertising

agencies and payment processors that financially support infringing sites continue to resist cooperation with the

March 2023, between some ISPs and certain local rights holders regarding delisting of infringing sites from search

engines.

Examples of the types of large-scale online piracy problems that persist are evident in the annual Notorious

Markets List, and in the IIPA’s past filings with the U.S. government. Many commercial-scale sites in Russia, including

those sites on the Notorious Markets List, operate without deterrence, offering unauthorized copies of films, TV

programs, music, books and journal articles, and video games. In February 2022, the U.S. government included six

Russian online sites on its Notorious Markets List, including Sci-Hub, Libgen (and its related sites), VK.com (vKontakte),

and MP3juices.

The motion picture and television industry is particularly concerned about VK.com, which is one of the most

popular sites in the world and the most popular social network in Russia, along with OK, which is also an infringement

hub. On these social media platforms, users illegally distribute thousands of unlicensed motion picture files (even

though VK.com negotiated licenses a few years ago with some of the music companies for its use of music). VK.com

has demonstrated improvements over the past few years in their responsiveness to takedown notices and has limited

access to third-party apps, thus making it more difficult for users to download content directly. Dozens of groups

dedicated to movie and TV piracy with millions of users have been illegally uploading and sharing infringing content on

VK.com for several years, despite multiple removal requests from rights holders. The publishing industry (particularly

trade book publishing) is similarly affected by e-book piracy on the site. Although the site responds to notifications of

infringement, piracy remains unabated given the ease with which the site’s users can continuously upload and make

available pirated e-books and audiobooks. In 2021, VK.com was still one of the main platforms for promoting video

game piracy sites and marketplaces. Social networks have improved their responsiveness to take-down notices from

the video game industry. These sites promptly remove any infringing material, including cheats and other unauthorized

digital goods (UDGs).

However, video game piracy remains a significant problem in Russia and fuels piracy in other

markets.

See USTR, “2021 Review of Notorious Markets for Counterfeiting and Piracy,” available at https://ustr.gov/sites/default/files/IssueAreas/IP/2021%20Notorious%20

Markets%20List.pdf. The February 2022 report also included three physical markets in Russia, all of which are on the list for the prevalence of counterfeit materials.

Unauthorized digital goods (UDGs) are unauthorized sales of in-game digital items. They have become a growing concern for the video game industry. Closely

related to these in-game items are software products (collectively known as “cheat software”) that enable the unfair and rapid collection and aggregation of virtual

www.IIPA.org

January 30, 2023 2023 Special 301

The video game industry reported that P2P websites remain the main search request and method of content

distribution for video games for PCs and consoles. Mobile games are distributed mainly through forums, cyberlockers,

and direct download sites. Since the 2018 anti-piracy MOU does not include the video game industry, links to pages

with infringing content are available without the option of delisting, except through direct takedown notices. The video

game industry reports overall very weak compliance with takedown notices from these sites, and the very quick

reposting of materials that are taken down. In general, BitTorrent sites remain the main sources for downloading illegal

copies of video games. However, action by the courts and injunctive relief related to mirror sites has reduced the traffic

to these sites by at least 40%. In 2021, direct download sites, cyberlockers, and legitimate cloud storage services (such

as cloud.mail.ru or yadi.sk) continue to be actively used primarily by pirate sites with a narrow audience. For example,

pirate server sites use third-party sites for hosting their game and patch files. Wider audiences have direct download

sites with mobile games, cheats, and other small gaming files. In 2021, more than 350 pirate video game sites were

blocked, which consists of more video game sites blocked since the enactment of the anti-piracy law in 2013. One of

the main drivers of piracy in Russia is the continued lack of a culture of legal video game consumption and an

awareness regarding the threats of distributing unauthorized content, such as malware and phishing. In 2021, the

compliance rate of hosting providers to takedown notices from video game providers is only approximately 41%.

The market for recorded music should be much stronger than it is for a country the size of Russia. According

to a 2022 industry report, the per capita music revenue in Russia is only US$2.25 per year, compared with US$29.45

per capita in the United States.

The most prominent forms of music piracy in Russia are the use of BitTorrent sites

and stream ripping. The most popular BitTorrent site in Russia is rutracker.org (having received over 44 million visits

from Russia in the three months between June and August 2021). Visits to the site remain high as Russian users are

circumventing the permanent block imposed on the site to access the large amounts of both English and Russian

content available on it. The continued popularity of the site is demonstrated in its position as the 123rd most visited site

of any kind in Russia. The most popular stream-ripping sites in Russia are savefrom.net and Y2Mate.com (with the

sites having received over 27.3 million and 6.9 million visits from Russia respectively during the three months prior to

August 2021, according to SimilarWeb). Russia remains home to many services supporting large-scale infringing

websites, including web-based and P2P downloading and streaming sites, linking sites, stream-ripping sites, BitTorrent

sites, and cyberlockers that operate globally. For example, Newalbumreleases.net is a popular linking site that has a

large library of newly released popular music available, and Music.Bazaar.com and mp3va.com are sites that have the

look and feel of legal music sites like Amazon or iTunes but sell downloads at a considerable discount. These sites

undermine the sale of licensed music on legitimate platforms and remain targets for action.

Most concerning to book and journal publishers are the Russian-operated online book and journal piracy

websites. Sci-Hub.io (formerly Sci-Hub.org) continues to be the most problematic site for journal publishers. Infringing

journal articles purloined by the site’s operator are likewise available on a network of sites collaborating under the

“Library Genesis Project” (now libgen.io). As of November 2021, Sci-Hub claimed its servers hold nearly 88 million

and numerous other

mirror sites.

goods, such as bots, hacks, and “cheats,” or which otherwise tilt the scales in favor of one player over another. The rise of UDGs and cheat software have a

negative impact on video game companies and consumers in the following ways: (1) sellers of unauthorized digital goods and cheat software divert significant

revenue away from video game developers and publishers; (2) sales of digitally delivered items, like in-game digital items, have the potential for consumer fraud

(such as stolen payment methods or compromised accounts) and the facilitation of money laundering schemes; (3) the unchecked sales of cheat software can

threaten the integrity of game play, alienating and frustrating legitimate players; and (4) video game publishers and developers are forced into a perpetual virtual

“arms race” to update their products and security technology before the sellers can update theirs.

International Federation of the Phonographic Industry (IFPI) Global Music Report 2022, p. 191.

In November 2022, Z-Library domains were seized by the Department of Justice, and the network of some 244 sites taken offline. The alleged operators, two

Russian nationals, were also arrested in Argentina and await extradition. See

https://www.justice.gov/usao-edny/pr/two-russian-nationals-charged-running-

massive-e-book-piracy-website.

Sci-Hub provides access to nearly all scholarly literature. See https://www.insidehighered.com/news/2020/01/17/universities-ignore-growing-concern-over-sci-

hub-cyber-risk.

www.IIPA.org

January 30, 2023 2023 Special 301

To further its infringing activities, Sci-Hub gains unauthorized access to university systems and publisher

databases, typically through compromised user credentials obtained through phishing schemes. Through this

unauthorized access, Sci-Hub illegally harvests copyrighted journal articles and books, which it hosts on its own server

network and simultaneously makes these copies available to the Libgen network of mirror sites.

Sci-Hub is an

adjudged pirate entity, with two Association of American Publishers (AAP) members securing judgments against the

site and its operator in 2017 and 2015 in two U.S. courts, resulting in injunctions requiring U.S. domain name registries

to suspend the site’s U.S. administered domains.

In October 2018, publishers successfully sought an injunction to

block the sites’ primary domain in Russia. In 2019, a permanent block issued against Libgen.org, while a permanent

injunction against several Sci-Hub mirrors in Russia, took effect in 2020.

In addition to these large-scale book and journal piracy platforms, Russian Internet users use P2P file-sharing

services. An AAP member has registered 2.8 million P2P downloads of their pirated books by Internet users in Russia

since May 2021, with 1.5 million of those downloads by Internet users in Moscow. Finally, publishers have identified

more than 70 pirate platforms (including VK, Rapidgator, Vdoc.pub, Takefie.link, and Documen.pub) hosted in Russia

that either host pirated books or link to pirated content. DDOS-Guard also plays a prominent role in hosting at least

seven highly popular book piracy platforms.

The independent segment of the film and television industry (IFTA) reports that online and physical piracy

remain a significant export constraint for small- to medium-sized businesses that cannot engage in lengthy and

expensive civil enforcement. Independent producers partner exclusively with authorized local distributors to finance

and distribute films and television programming. As a result of the piracy, legitimate distributors cannot commit to

distribution agreements, or alternatively, offer drastically reduced license fees that are inadequate to support the

financing of independent productions. Revenue from legitimate distribution services, which are licensed country-by-

country, is critical to financing the development of new creative works worldwide. Because Internet piracy in one

territory affects other markets instantly, this type of infringement not only undercuts anticipated revenue from the

distribution of a particular asset, it also harms the ability of independent producers to secure financing for future

productions.

The motion picture, music, video game, and book and journal publishing industries want Russia to take steps

to keep infringing content on sites permanently down. Effective enforcement means focusing criminal enforcement

actions against the owners and operators of sites engaged in large-scale infringing content, which is causing significant

economic harm to all rights holders. The Government of Russia has outstanding commitments to take such action

against digital piracy. In the 2006 U.S.-Russia Bilateral WTO Market Access Agreement Side Letter on Intellectual

Property Rights (2006 IPR Side Letter), Russia agreed to combat the growing threat of Internet piracy “with the objective

of shutting down websites that permit illegal distribution of content protected by copyright or related rights” (and

especially for websites registered in Russia’s .ru domain name, or whose servers are situated in Russia), and “to

investigate and prosecute companies that illegally distribute objects of copyright or related rights on the Internet.” When

Russia joined the WTO in 2012, as part of its WTO accession, Russia pledged that it would “continue to take actions

against the operation of websites with servers located in the Russian Federation that promote illegal distribution of

content protected by copyright or related rights, such as phonograms (sound recordings), and investigate and

prosecute companies that illegally distribute objects of copyright or related rights on the Internet.”

Also in 2012, Russia

agreed it would take “enforcement actions targeting piracy over the Internet” and more specifically it would, inter alia:

Id.

In a 2015 case brought by an Association of American Publishers (AAP) member company, Sci-Hub.org, the Library Genesis Project (Libgen), and their operators

were found by a court of the Southern District of New York to have engaged in infringing activity, for the unauthorized reproduction and distribution of journal articles

and to have violated the Computer Fraud and Abuse Act for Sci-Hub’s intrusions into publisher databases. Damages in the amount of $15 million were awarded,

and a permanent injunction issued. In November 2017, following another case brought by another AAP member company, a district court in Virginia issued a

second default judgment against Sci-Hub (then at Sci-Hub.io) of $4.8 million, enjoining Sci-Hub and “those in active concert or participation with them” from infringing

the publisher’s copyright, and also ordered “any person or entity in privity with Sci-Hub and with notice of the injunction, including Internet search engines, web

hosting and Internet service providers (ISPs), domain name registrars, and domain name registries, cease facilitating access to any or all domain names and

websites through which Sci-Hub engages in unlawful access to, use, reproduction, and distribution” of the publisher’s trademarks or copyrighted works.

WTO Working Party Report (paragraph 1339).

www.IIPA.org

January 30, 2023 2023 Special 301

Take measures in order to disrupt the functioning of websites that facilitate criminal copyright

infringement, and provide for takedown of infringing content….Take actions against the creators and

administrators of websites through which intellectual property crimes are committed….Conduct

meaningful consultations with rights holders to target and to take action against high-priority infringing

websites.

The Government of Russia should fully and properly implement these obligations.

Civil Enforcement Against Online Piracy: Civil judicial and administrative remedies have improved over the

years (with legal reforms in 2013, 2014, 2017, and 2020), but enforcement difficulties continue.

The civil injunctive

relief mechanism continues to allow rights holders to enjoin notoriously infringing sites, but critical gaps remain. These

include the lack of relevant laws targeted at online piracy, “domain hopping” of pirate sites that occurs after the Moscow

City Court issues an initial content-removal order, and the liability of hosting providers. Current regulations were

designed in the offline environment, and some provisions are difficult to apply to diversified online piracy, particularly

regarding timelines, evidence fixation, and damages calculation.

Moreover, pirates have found tools to navigate around the content protection tools provided in recent legal

reforms. Part of the problem lies in how Yandex, the major search engine in Russia, indexes sites. Neither internal

Yandex policy nor laws oblige Yandex to improve search and retrieval algorithms to reduce the number of pirate sites

and links to infringing content. Yandex algorithms instantly or even automatically include updated mirror sites. Another

tactic is to use an empty site with a relevant domain name for search engine results, which redirects to a site with

infringing content. Significant changes and improvements in the piracy situation will require adoption of anti-piracy laws

and policies that are relevant to the current issues affecting the creative industries.

In addition, court practice related to title-specific civil injunctions has worsened. The Moscow City Court, under

the influence of the first appellate court, changed its approach to decisions in title-specific civil injunction cases.

Previously, the court prohibited a site from using the title on the site in general. Now, the court prohibits the use of the

title on only the page on which it was captured. Thus, any change of the URL allows the site to avoid enforcement

under the court decision.

In June 2021, legislation was proposed in the Duma to convert the ISP-rights holder MOU into legislation. The

Duma was to consider the bill in February 2022 but has not taken any action. The legislation should provide sanctions

for non-compliance with takedown notices and should be applicable to all platforms and search engines and all

copyrighted works. An addendum to the MOU, MOU 2.0, was signed in December 2021, but it is subject to the adoption

of the legislation and has not been enforced. MOU 2.0 provides for several new measures to stop search engines from

providing easy access to infringing services. New measures include removal of repeat offender sites from search

results, removal of sites displaying over one hundred links to infringing content from search results, and measures to

defeat “domain gluing.”

The deadlines for the removal of pirated links from search results by search engine operators

will also be reduced.

Overall, the results of the reforms to civil laws and procedures have been positive. Some sites have seen

dramatic decreases in traffic right after such court orders, and some sites have even moved out of the country.

Unfortunately, without the deterrence of criminal prosecutions against the owners and operators of notoriously

infringing sites and services, many simply resurface in new guises.

U.S.–Russia Intellectual Property Rights (IPR) Action Plan (2012).

Prior IIPA filings have detailed the 2013, 2014, 2017, and 2020 legal reforms, which implemented ISP liability and safe harbors and injunctive relief against

infringing content online. See, e.g., IIPA 2022 at 79-80.

Domain gluing” is a process used by operators of infringing services allowing them to return to the same search ranking from which they were removed by “gluing”

pages together.

www.IIPA.org

January 30, 2023 2023 Special 301

While civil measures are not capable of providing the requisite level of deterrence against large-scale digital

piracy, they can be a useful tool for some industries or in some instances. For independent creators, however, such as

independent film and television producers, civil lawsuits are not viable because they are too time consuming and too

costly to pursue. For those creators or producers who are able to pursue civil enforcement, many inadequacies remain.

The list includes: (i) remedies limited to the seizure of specific copies of works that are the object of a lawsuit; (ii) failure

to award preliminary injunctions (although 2013 changes made some improvements) or to freeze assets and evidence;

(iii) low damages awards, which, like all awards, are also very difficult to enforce; (iv) burdensome evidentiary

requirements, including rights ownership information; (v) the absence of personal liability for the directors of infringing

companies or enterprises (the only way to bring proceedings in cases where bogus companies operate); (vi) the

absence of the notion of clear contributory liability under the Russian civil law system dealing with copyright

infringements; and (vii) the absence of judicial guidelines on civil search practices, including provisional measures

consistent with the WTO TRIPS Agreement requirements.

There is a troubling, long-pending proposal to lower fines (i.e., statutory damages) from their current levels,

below the minimum levels set in the Civil Code (approximately US$140 per infringement). Awards imposed by the

courts are already too low; further lowering the permissible levels would not be a deterrent. This proposal, which had

a first reading in the Duma in 2017 and a second reading in 2018, remains under consideration for final passage to

amend Article 1252 of the Civil Code. It should not be adopted, and instead, damage awards should be increased.

Criminal Enforcement Against Online Piracy: Russia needs to increase its enforcement activity beyond

current levels to provide adequate and effective enforcement against IPR violations, including deterrent criminal

penalties. A critical element of the 2006 IPR Side Letter is Russia's obligation to provide effective enforcement of IPR

online. Currently, criminal cases for online piracy do not reach courts due to outdated provisions of the Criminal Code

that are hard to enforce for online infringements, specifically, the definition of the "value of the crime" that sets the

threshold for liability. The copyright industries continue to report high levels of piracy and declining levels of criminal

enforcement, continuing a trend of the past several years. Official statistics of the Ministry of Interior demonstrates a

continuous decrease in the number of registered copyright-related crimes, dropping from 423 cases in 2020 to 317

cases in 2021, a 22% decrease, and as of August 2022, there were zero copyright infringement cases in 2022.

To be effective, IPR enforcement in Russia needs a clear nationwide governmental directive with a particular

focus on online piracy. Without coordination and a high-level directive, criminal and administrative enforcement

practices have varied considerably from region to region and have had little deterrent effect. A coordinated nationwide

campaign should focus on ex officio criminal actions targeting large-scale commercial enterprises, improving

investigations and digital tracking, and strengthening administrative penalties that to date have been largely ineffective.

The agencies that can commence criminal cases—including the Investigative Committee of Russia, the

Investigative Department of the Ministry of Internal Affairs (MVD), the Federal Security Service of the Russian

Federation (FSB), and Customs—should coordinate their efforts with the police. Because the General Prosecutor’s

Office has supervisory authority over investigations and prosecutions, it should work with the Investigative Committee

of Russia and the Investigative Department of MVD to develop an updated and detailed methodology for investigations

of digital copyright infringements. Such coordination would help to increase the quality, effectiveness, and consistency

of IPR enforcement activities. Work on a draft methodology was suspended years ago.

IIPA continues to recommend that the Government of Russia create a dedicated digital IPR enforcement unit

to focus on online piracy. For example, combatting copyright violations on the Internet, such as the dissemination of

music through illegal pay-per-download sites and illegal P2P or streaming services, does not clearly fall within the

current jurisdiction of the Computer Crimes Department (Department K) within the MVD, even though they have

occasionally acted on such cases in the past. Department K’s authority and responsibility to act in all cases of online

infringement should be clarified and strengthened. In addition, Department K should be adequately staffed, equipped,

and resourced, and other such units within the MVD should be formed to deal exclusively with IP Internet cases and to

train officers on how to combat these copyright crimes, including the maintenance of evidence. It also should be clarified

www.IIPA.org

January 30, 2023 2023 Special 301

that actions can be brought under the Code of Administrative Offenses against commercial actors involved in the

massive distribution of infringing material, even where the enterprise does not charge a direct fee.

Changes to criminal procedure that placed copyright infringement cases into the category of serious crimes

have enabled Russian law enforcement agencies to conduct thorough and comprehensive investigations against

owners and operators of piratical operations, at least in theory. However, deterrent criminal penalties have rarely, if

ever, been imposed against operators or owners of commercial Internet operations. In recent years, police and

prosecutors have had difficulty applying the criminal law thresholds to Internet crimes and especially have had difficulty

proving intent and identifying the individuals responsible for criminal activities. As a result, few such cases are ever

brought and even fewer are tried to a conclusion. The problem has been an inability of police and prosecutors to adopt

a unified formulation for how to apply the thresholds for online crimes. An intensification of criminal investigations and

criminal convictions against principals of organized commercial pirate syndicates is sorely needed. The status quo only

further corroborates the lack of political will or incentives by government agencies to act against large-scale copyright

infringers.

For the past several years, the quality and quantity of criminal raids and police activity against IP infringers in

general has declined, especially against large-scale online infringers. The decline in police activity in general is the

lingering result of the major reorganization of the police force in 2011 and the consequent reduction in resources, as

well as changes in government priorities and an unwillingness to pursue large-scale online infringers. Though rare,

Russian courts have imposed some deterrent sentences, including a handful aimed at serious repeat offenders.

The Government of Russia should also examine and redress the lengthy criminal investigative process,

particularly at the provincial level. As the government continues to rely on its own experts in investigating, examining,

and prosecuting IP violations, it should take measures to increase the number of experts and consider the appointment

of a specialized unit of investigators and prosecutors, adequately trained and provisioned to effectively address IP

crimes. Due to the lack of adequate staffing and the high volume of work, examinations of seized products take months.

The video game industry continues to report delays in examination reports from government experts, because of a lack

of technical expertise. For the video game industry, enforcement efforts are also complicated by other issues, including

new legislation, changes in jurisdiction, or new law enforcement personnel. Enforcement is also hampered and trials

delayed by the requirement that exemplars be collected only with the participation of state officials and by a statutory

reliance on government expert reports. Delays also result from a lack of subject-matter expertise in some cases, as

well as a reluctance to use or rely on rights holder expertise on forensic matters. The Government of Russia should

modernize the rules so that industry experts can be more effectively integrated into the judicial process. One way to

accomplish this integration would be for the Supreme Court to issue new guidelines on the admissibility of the testimony

of private experts. Some courts reportedly will accept private expert testimony, but a uniform rule would be more

effective.

Improvements should also be made with respect to court procedure. The criminal procedures generally permit

a rights holder to request the destruction of the seized goods or to move for recovery of damages in a separate

proceeding before the Arbitration Court (a court of general jurisdiction). However, the criminal courts are reluctant to

order these remedies and instead, treat these cases as civil law matters. The copyright industries recommend that the

Supreme Court clarify guidelines on the destruction of goods and the calculation of damages in online cases for the

purpose of meeting the minimal criminal damage thresholds established under the revised Article 146 of the Criminal

Code, which increased such thresholds.

Another recommended measure to increase the efficiency of IP criminal investigations is the appointment of

IP special prosecutors, investigators, and police officers at both the federal and regional levels throughout Russia. IIPA

recommends that Russia establish an official uniform methodology for the investigation and prosecution of copyright

and related rights infringements, focused on digital enforcement. In 2013, a specialized IP court in Skolkovo (an

innovation center) was launched with 30 trained judges. This development was a positive step in IP enforcement but

www.IIPA.org

January 30, 2023 2023 Special 301

is limited to patent cases. These courts should be created in other cities and regions across Russia and the jurisdiction

broadened to handle copyright, as well as patent cases.

Finally, Russia’s Criminal Code should be amended to allow for corporate entities to be held criminally liable

for infringement. At present, only a natural person (usually a corporate director) can be found criminally liable and only

upon a showing that he or she had a direct intent to commit the infringement. It is extremely difficult to meet this burden

of proof, so many cases are suspended without any penalty.

Administrative Enforcement: In addition to criminal enforcement, the relevant administrative agencies

should target large illegal distribution enterprises, such as the large-scale unlicensed services responsible for most of

the illegal distribution of music and film in Russia. The Administrative Code (Article 7.12) provides a range of fines for

infringement by natural persons (1,500 to 2000 rubles, US$20 to US$27), the owners or managers of legal entities

(10,000 to 20,000 rubles, US$133 to US$266), and legal entities themselves (30,000 to 40,000 rubles, US$400 to

US$533) and permits the confiscation and destruction of pirated products. The police or agencies file administrative

cases, but the courts of general jurisdiction levy fines. Imposing significant administrative fines on legal entities would

have a deterrent effect, especially in instances when criminal cases are terminated for failing to meet the high

evidentiary burdens. Unfortunately, current administrative procedures are inadequate because of the very low level of

fines imposed, as well as the inability to reach commercial enterprises that distribute infringing content. Moreover,

enforcement under the Administrative Code has been ineffective due to the lack of enforcement actions. In 2021, there

were 676 cases under this article, in which only 449 cases included fines for a total of 5,129,000 rubles (approx.

US$70,000).

Camcord Piracy: A long-standing problem in Russia is the camcording of motion pictures. Traditionally,

Russia has been the source of many feature films being illegally copied in theaters and migrating online. Piracy

operators obtain their source materials for infringing copies by camcording films at local theaters, and then upload

these copies onto the Internet and sell illegal hard copies. Russia remains the home to some of the world’s most prolific

criminal release groups of motion pictures.

In August 2021, the Government adopted a Decree establishing the rules for film exhibition in theatres that

cover the rights and obligations of both exhibitors and viewers. The Decree replaced the older document from 1994

and extended the exhibitors' rights to remove from the screening room viewers who disregard the exhibition rules,

including those who attempt to record the film illicitly. While the Decree provides an explicit framework to address

viewers who illicitly attempt to record a film in the theater, it does not resolve the issue of lack of liability for camcording.

To adequately address the camcording problem requires changes in the Russian legal framework, as well as

dedicating sufficient resources and government willpower to engage in effective enforcement. Owing to the complex

burden of proof procedure that the Administrative Code requires for copyright infringements, law enforcement is

reluctant to investigate camcording incidents. Separate provisions addressing illegal recording in theaters and tailored

to that specific form of infringement, could enhance enforcement. The Government of Russia should amend the

Administrative Code to add liability for camcording to the general liability provisions on copyright infringements (Article

7.12) and to provide criminal law penalties as well. In 2020, the Government of Russia prepared changes to a new

Administrative Code to address camcording, but the timing for revising the Code is unclear. The new rules, if adopted,

would explicitly prohibit video or audio recordings of films in theaters and would allow theater owners to act to stop any

such recordings, including removing the offending party from a theater. The proposed new law would also add

administrative sanctions for camcording. While this is a step in the right direction, unfortunately, no proposals exist to

amend the Criminal Code or to add any criminal sanctions for camcording pursuant to Russia’s WTO and bilateral

obligations. In addition to these needed legal reforms, IIPA recommends that the Government of Russia properly

resource enforcement actions and undertake more effective enforcement against illegal camcording of motion pictures.

Unauthorized Theatrical Screenings: As noted above, after Russia’s invasion of Ukraine in February 2022,

the U.S. film industry, along with many other industries, suspended operations in Russia. Unfortunately, third-party

www.IIPA.org

January 30, 2023 2023 Special 301

operators have recently begun organizing illegal screenings of U.S. films in theaters throughout Russia. The theaters

do not advertise the screenings openly, referring to them as “private club” events, and have escaped enforcement by

claiming that renting out their premises for a fixed fee to a third-party waives liability for any unlawful actions during the

rental period. The content shown at these illegal screenings are sourced from pirated Digital Cinema Packages (DCP)

that are illegally distributed online. Moreover, there is evidence of camcording occurring at these illegal screenings,

compounding the harm.

Collective Management of Rights: The long-standing problems concerning the collective management of

music rights in Russia needs to be addressed properly. The ability to exercise one’s rights through proper collective

management is a WTO TRIPS Agreement obligation, and Russia made specific commitments on these issues as part

of its accession to the WTO. In the Working Party Report, Russia assured its trading partners it would “review its system

of collective management of rights in order to eliminate non-contractual management of rights within five years after

Part IV of the Civil Code entered into effect,” to bring the management societies in line with international standards on

governance, transparency, and accountability.

That commitment had a deadline of 2013. The 2006 IPR Side Letter

had similar obligations to correct this problem.

After years of missed deadlines, Russia adopted new legislation in 2017 (in force, May 2018) that instead of

fixing the collective management system in Russia, did not address key relevant issues and created even more

problems. The new collective management system denies transparency to rights holders and good governance

consistent with international norms, as well as best practices for CMOs as required by Russia’s WTO accession

obligations. The 2017 law amended the Civil Code and the Administrative Code to revise the make-up and activities of

collective rights management organizations (RMOs). One obvious failure of the 2017 law regarding transparency is

that it does not allow rights holders to see how much money their RMOs collect or distribute to their members.

Moreover, in terms of a lack of good governance, the law does not allow rights holders to control their RMOs.

The so-called “fiscal control improvements” in the new law, including regular audit reports, will not improve

accountability because the audit obligations are for reports only to the government for taxation purposes, not to rights

holders. The new law creates “supervisory boards” for each of the various authors’ CMOs (the Russian Authors Society,

the Russian Union of Right Holders, and the All-Russian Intellectual Property Organization) consisting of members of

each RMO, but also including government representatives and “user” group representatives. This structure does not

allow rights holders to be involved in the selection and management of the organizations that purport to manage their

rights. Proper management would allow for a supervisory board of rights holders to oversee the internal management

of the RMO and would include international rights holders with local representatives on the board. Instead, partial

control of RMOs by the Government of Russia deprives rights holders of their ability to control the licensing and

collection of monies for their works and recordings and is resulting in less, not more, money flowing to authors and

producers and certainly less money than should be collected for a market the size of Russia.

To develop properly functioning music broadcasting and public performance payment systems via collective

management, the Government of Russia should re-visit the 2017 law to ensure that rights holders are able to control

and manage their own RMOs or can effectively opt out of collective management. This change would result in fair

representation characterized by direct representation of rights holders on the board in a manner that is proportionate

to relevant market share and reflects commercial realities, with no conflicts of interest in the governance structures.

Many models for proper governance of RMOs exist, including WIPO best practices, international rights holder group

best practices, as well as U.S. and European Union (EU) existing practices. Instead, the existing regulations and state

accreditations have institutionalized a system that is neither transparent, nor well governed with accountability for

authors, record labels, and performers, who have no other option except for the state CMOs.

On August 23, 2022, Webwatch reported a partial capture of Top Gun: Maverick from Moskva Cinema in Moscow.

WTO Working Party Report (Paragraph 1218).

www.IIPA.org

January 30, 2023 2023 Special 301

DEFICIENCIES IN THE RUSSIAN LEGAL REGIME

Since its invasion of Ukraine, Russia has introduced several troubling legal reforms that would negatively

impact the copyright industries. For example, on May 27, 2022, the Russian President issued Decree #322 regarding

the payment of remuneration to foreign rights holders from “unfriendly” countries (i.e., the countries that imposed

sanctions against Russia in response to its invasion of Ukraine). The Decree orders that Russian persons (including

the Russian authorities, organizations, companies, and residents) make payments for the use of IP to foreign rights

holders in rubles to a special O-type bank account opened in the name of the foreign rights holder. Russian entities

have no obligation to make payments to foreign rights holders until the rights holder agrees to the new method and

rights holders may not transfer funds from O-type bank accounts outside of Russia without government permission.

The Decree restricts the rights holders subject to the Decree from receiving license payments other than under

Governmental approval.

On May 30, 2022, the Russian Government terminated the application of the MOU between the Russian

Federation and the United States on the principles of cooperation in the field of culture, humanities, social sciences,

education, and mass media. The MOU, signed in 1998, included a provision encouraging the parties to facilitate the

establishment of contacts between interested governmental and non-governmental organizations to develop programs

and joint projects in fields of mutual interest that help strengthen bilateral ties. The MOU listed TV, film, and audiovisual

materials. Although it had no direct impact on IPR protection, the MOU was a positive step towards establishing a

proper legal framework. Termination of the MOU illustrates a general trend in Russia to deprioritize international

obligations.

In mid-April 2022, Russia began drafting legislation that, if enacted, would drastically undermine exclusive

rights. This unprecedented bill would allow a Russian licensee of a copyrighted work to apply to the court for a

compulsory license to exploit a copyrighted work if a partner from an “unfriendly state” (including the United States)

partially or completely unilaterally repudiated the license agreement on grounds not related to the violation of such a

contract by the licensee. As U.S. industries have suspended operations in Russia in the wake of Russia’s invasion of

Ukraine, such a bill, in effect, would legalize piracy of copyrighted materials owned by U.S. rights holders, in clear

violation of Russia’s WTO obligations—essentially amounting to state-sanctioned IP theft. On August 19, 2022, the

first version of the draft was submitted to the State Duma. However, after the pushback from the local industry

association, the sponsor of the bill stated the bill would be withdrawn and an alternative version would be drafted. The

amended text will reportedly cover only compulsory licensing for theatrical distribution of audiovisual content, leaving

out over-the-top (OTT) and TV services, but this would still violate Russia’s obligations under international treaties,

including the Berne Convention.

IIPA and its members continue to note three major overarching concerns in the Civil Code, as amended: (a)

a lack of clarity on numerous provisions, especially on exceptions and limitations; (b) administrative law principles

throughout the Civil Code that likely cannot be enforced by civil or criminal procedures; and (c) the absence of clear

liability rules for online websites and services that induce or encourage infringement, as well as the applicability of safe

harbors for such services. Even after the recent amendments, the law does not define ISPs and the various services

they provide, nor does it link liability and safe harbors in a manner that will encourage cooperation with rights holders

to effectively deal with Internet piracy. Lastly, Russia’s law does not define secondary liability. The law should be

clarified regarding the liability of online infringing websites and services, including that those safe harbors should apply

to only passive and neutral intermediaries that do not contribute to infringing activities. Further, it is critical that Russia

amend its regime to allow for civil injunctive relief that is quick and effective and applicable to all works.

Article 1299 of the Civil Code prohibits the commercial distribution (i.e., trafficking) in circumvention devices

and services that circumvent technological protection measures (TPMs). The law should be expanded so that liability

applies to the commercial trafficking in all variety of circumvention devices (including software) and services. In addition,

commercial trafficking in circumvention devices, including by importation, should be criminalized. IIPA also

www.IIPA.org

January 30, 2023 2023 Special 301

recommends improving Article 1252(5) of the Civil Code, which currently includes remedies for the seizure and

destruction of materials and equipment used in infringements, by deleting the exception for the sale of materials by the

state for “income” and by making corresponding changes in the respective procedural codes.

MARKET ACCESS ISSUES

While U.S. industries have largely suspended operations in Russia, significant market access barriers remain,

including a discriminatory VAT; foreign ownership restrictions in broadcasters, mass media entities, and OTT services;

and an advertising ban on Pay-TV. In 2022, in response to sanctions imposed on Russia following the invasion of

Ukraine, the Russian government adopted several restrictive measures targeting foreign investors from unfriendly

jurisdictions. The measures include an obligation for the foreign shareholders of the Russian joint-stock and limited

liability companies to obtain governmental approval for any deals involving their shares.

In addition to these barriers, the video game industry also faces significant market access issues in Russia.

For example, Russia imposes customs duties on the royalty value of some imported audiovisual materials, including

some video games, rather than solely on the value of the physical carrier medium, contrary to standard international

practice. Furthermore, on June 17, 2021, the State Duma adopted a law mandating foreign Information Technology

(IT) companies with a daily audience over 500 thousand users to open a branch, a representative office, or an

authorized legal entity in Russia, which could potentially affect the video game industry.

www.IIPA.org

January 30, 2023 2023 Special 301

SOUTH AFRICA

NTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 S

PECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that USTR place South Africa on the Priority Watch List

in 2023.

IIPA further recommends that through the ongoing Generalized System of Preferences (GSP) review, the

U.S. government continue to indicate that the Copyright Amendment Bill (CAB) and the Performers’ Protection

Amendment Bill (PPAB) as they currently stand are fatally flawed and to work with the South African government to

remedy the deficiencies in South Africa’s legal and enforcement regimes, including by redrafting the bills to address

the serious concerns detailed below and in IIPA’s previous submissions. If, at the conclusion of the review, South Africa

has not made requisite improvements, the U.S. government should suspend or withdraw GSP benefits to South Africa,

in whole or in part.

Executive Summary: South Africa’s current copyright protection and enforcement framework fails to meet

the challenges of the digital age. New technologies are providing South Africa’s consumers with increasing access to

legitimate creative content and exciting opportunities for the growth of the copyright industries and all creators.

Unfortunately, South Africa’s inadequate response to persistent piracy enabled by these same technologies threatens

to impede increased access to creative content. As an important emerging market and a dominant economy in sub-

Saharan Africa, South Africa is uniquely positioned to demonstrate how a modern copyright regime can contribute to

the growth of creative industries in an era of rapid digital and mobile expansion throughout the country and the region.

At a time when South Africa’s economy must rebound from the economic impacts of the global pandemic, it is more

important than ever to maintain and expand proper incentives for investment in the creation of original material—motion

pictures, music, video games, books and journals in all formats—by ensuring that: (i) rights holders enjoy, in law and

practice, exclusive rights that enable them to securely disseminate their content and develop new legitimate services;

(ii) these rights are not subjected to unjustifiable exceptions and limitations; and (iii) rights holders are able to transfer,

license, and otherwise exploit their rights freely and without regulatory interference.

IIPA is encouraged that South Africa’s government has stated its commitment to protecting intellectual

property (IP) and its desire to bring its laws into compliance with international treaties and commitments. However,

IIPA remains seriously concerned about the pending CAB and PPAB. In June 2020, South Africa’s President referred

the bills back to the National Assembly given reservations regarding the bills’ compliance with South Africa’s

Constitution and its international commitments. The National Assembly’s Portfolio Committee on Trade, Industry, and

Competition (Portfolio Committee) subsequently made minor revisions to the bills without addressing the major

concerns, and the National Assembly adopted the revised bills in September 2022. The bills are currently under

consideration by the National Council of Provinces (NCOP).

The revised bills remain inconsistent with the WIPO Copyright Treaty (WCT) and the WIPO Performances

and Phonograms Treaty (WPPT) (collectively, the WIPO Internet Treaties) and, if enacted, would also violate South

Africa’s obligations under the WTO TRIPS Agreement and the Berne Convention, potentially violate South Africa’s

Constitution, and move South Africa even further away from international norms. These bills raise many concerns,

including that they undermine the potential of the modern marketplace, because they fail to establish a clear legal

framework—particularly in the digital arena where the potential for growth is most evident. Many of these defects stem

from an approach that focuses on regulatory restraints on the ability of rights holders to freely transfer, license, and

otherwise exploit their rights, rather than on laying a foundation for a vibrant free market in creative content. Moreover,

For more details on South Africa’s Special 301 history, see previous years’ reports at https://iipa.org/reports/reports-by-country/. For the history of South Africa’s

Special 301 placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

the bills’ inadequate protections for copyrighted works and sound recordings in the digital environment would render

South Africa’s law incompatible with the very standards the government has stated an intention to implement.

The bills require substantial redrafting, not only to address their fundamental deficiencies as has been

repeatedly outlined by the overwhelming majority of stakeholders (local and international) and by independent copyright

law experts, including the South African Institute of Intellectual Property Lawyers (SAIIPL), since the bills were first

introduced, but also to reduce ambiguity and thereby establish greater certainty in the law for rights holders and users

alike. Provisions that are not compliant should be redrafted or deleted from the bills, and any redrafting should be

based on a meaningful economic impact assessment study (which the Department of Trade, Industry and Competition

(DTIC) still has not produced as required) and the advice of independent and qualified copyright and constitutional law

experts and practitioners. As currently drafted, the bills would harm U.S. exports and put South African creators and

artists at a serious disadvantage relative to their counterparts in other countries.

As South Africa is an important market in sub-Saharan Africa that other countries in the region may seek to

emulate, the stakes are very high. Considering the importance of the task of modernizing South Africa’s Copyright Act

and Performers’ Protection Act and the degree of concern raised by the creative industries with the current bills, IIPA

recommends that the U.S. government continue to emphasize that the bills remain fundamentally flawed and that South

Africa’s Parliament should not rush its reconsideration and make only minor revisions. Instead, consistent with the

President’s directives, South Africa’s Parliament should reassess the bills in their entireties for compliance with South

Africa’s Constitution, its international obligations, and best practices. As it stands, the bills fail to meet these standards

and threaten the health of the creative economy in South Africa, both for U.S. exports and the local creative sector.

IIPA is hopeful that the process of reconsideration by the NCOP on the bills in their entirety will provide an opportunity

to remedy these deficiencies.

PRIORITY ACTIONS REQUESTED IN 2023

• Redraft the CAB and the PPAB to ensure compatibility with international agreements, commitments, and best

practices, based on an independent economic impact assessment study as required by the government’s Socio-

Economic Impact Assessment System (SEIAS) guidelines and in consultation with stakeholders and independent

IP law experts.

• Engage in effective enforcement against online piracy, including by providing effective mechanisms and statutory

remedies to address services that infringe domestic and foreign content, such as Fazaka.com, appointing

cybercrime investigators, and developing a cybercrime security hub recognizing copyright as a priority.

• Ratify and fully implement the WIPO Internet Treaties.

• Improve enforcement education and capacity commensurate to the increased threat of online piracy.

Significant reforms are needed to South Africa’s Copyright Act and Performers’ Protection Act to bring the

country’s laws into compliance with international agreements, including the WTO TRIPS Agreement and the WIPO

Internet Treaties.

As previously reported, in 2018, the South African Parliament adopted the first major revision of the

country’s copyright and related laws in decades.

While the intent of South Africa’s copyright reform process was to

bring the country’s laws into compliance with international agreements, the bills that ultimately passed fell far short of

international norms for the protection of copyrighted works in the digital era. Moreover, the copyright reform process

failed to consider whether the proposed changes would be compliant with South Africa’s Constitution and international

obligations. Further, as part of its required SEIAS process, the government did not publish a SEIAS report to adequately

measure the economic impact of the bills on South Africa’s creative sector.

South Africa’s Cabinet has approved the country’s accession to the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT)

(collectively, the “WIPO Internet Treaties”), and the Beijing Treaty.

See IIPA’s 2020 Special 301 Report on South Africa, https://www.iipa.org/files/uploads/2020/02/2020SPEC301SOUTHAFRICA.pdf at 76.

www.IIPA.org

January 30, 2023 2023 Special 301

In June 2020, South Africa’s President referred the CAB and the PPAB back to the National Assembly based

on reservations regarding the bills’ compliance with South Africa’s Constitution and its international commitments. The

National Assembly concurred with the President’s assessment that the bills were processed incorrectly under the

Constitution and recommended that the bills be referred to the Joint Tagging Mechanism Committee to re-tag the bills

for processing under the proper constitutional provision (Section 76), which requires the provincial governments to

consider the bills as well. In 2021, the Portfolio Committee held public hearings and received written submissions from

stakeholders and the public on certain provisions. During the hearings, the SAIIPL observed that the Institute’s

compliance concerns. SAIIPL and other stakeholders also requested release of the economic impact assessment study

on the CAB. Unfortunately, the Portfolio Committee failed to address the core problems plaguing the bills, making only

minor revisions, and on September 1, 2022, the National Assembly adopted both revised bills. The bills are currently

under consideration by the NCOP where the majority of provinces must approve for the revised bills to go back to the

National Assembly before being transmitted to the President for his assent. At that point, the President would have the

option to refer the bills to the Constitutional Court to adjudicate any remaining constitutional concerns.

Enactment of the bills in their current form would place South Africa out of compliance with international norms,

the obligations of the WTO TRIPS Agreement, the WIPO Internet Treaties, and the Berne Convention, as well as the

eligibility criteria of both the GSP and the African Growth and Opportunity Act (AGOA) regarding IP.

It is critical that

South Africa’s Parliament does not rush this process nor make only cosmetic revisions; instead, consistent with the

President’s directives, South Africa’s Parliament should reassess the bills in their entirety for compliance with South

Africa’s Constitution and its international obligations. Provisions that are not compliant should be redrafted or deleted

from the bills, and any redrafting effort should be based on a meaningful economic impact study, as required under the

government’s SEIAS protocols (which to date has not been produced by DTIC), and the advice of independent and

qualified copyright and constitutional law experts and practitioners. At a time when South Africa’s economy must

rebound from the economic impacts of the global pandemic, the stakes are extremely high for the Parliament to redraft

these bills to avoid destabilizing the creative industries and to support a thriving copyright sector, which contributes so

significantly to economic and job growth in the country, and which has potential for substantial growth under the proper

conditions.

AMENDMENT BILL (PPAB)

The bills contain many provisions that lack clarity, risk major negative disruption of the creative industries, and

pose significant harm to the creators they purport to protect. Major issues of immediate and primary concern to the

submissions from local stakeholders, are the following:

• The bills would severely restrict the contractual freedom of authors, performers, and other rights holders,

which is a key factor for the healthy growth of the entire creative sector. These restrictions would

fundamentally impair the value of copyrighted materials by depriving rights holders of the ability to freely

license and otherwise derive value from their copyrighted works, performances, and sound recordings. For

example, as explained below, both the CAB and the PPAB limit certain assignments of rights to a maximum

See IIPA’s comments and post-hearing brief on South Africa’s Generalized System of Preferences (GSP) eligibility in the 2019 annual GSP review, available at

http://www.iipa.org/files/uploads/2020/01/2020-01-17-IIPA-South-Africa-GSP-Review-Written-Comments-and-Notice-of-Intent-to-Testify.pdf

and

https://www.iipa.org/files/uploads/2020/03/SOUTH-AFRICA-IIPA-GSP-Post-Hearing-Brief.pdf; and IIPA’s comments on the 2022 African Growth and Opportunity

Act (AGOA) Eligibility Review, available at https://www.iipa.org/files/uploads/2022/06/International-Intellectual-Property-Alliance-Comments-on-2023-AGOA-

Eligibility-Review.pdf.

According to a study conducted by the Department of Trade and Industry (the DTI) and the World Intellectual Property Organization (WIPO) in 2010 using data

from 2008, the South African copyright-based industries contributed 4.11% to gross domestic product (GDP) and 4.08% to employment. See WIPO, Economic

Contributions of Copyright Based Industries in South Africa, available at

https://www.wipo.int/export/sites/www/copyright/en/performance/pdf/econ_contribution_cr_za.pdf

www.IIPA.org

January 30, 2023 2023 Special 301

of 25 years, and both bills provide ministerial powers to set standard and compulsory contractual terms for

contracts covering seemingly any transfer or use of rights.

• The bills would create an overbroad amalgamation of copyright exceptions that includes an expansive “fair

use” rubric (not in line with the U.S. doctrine) appended to a large number of extremely open-ended new

exceptions and limitations to copyright protection (on top of the existing “fair dealing” provision), resulting in

an unclear thicket of exceptions and limitations.

• The bills would unjustly interfere with and over-regulate the relationship between creative parties, including

mandating the mode of remuneration for audiovisual performers (requiring payment of royalties), which would

destroy producers’ ability to finance content, and would block the ability of rights holders to exercise exclusive

rights in their copyrighted works and sound recordings. Instead, the bills should provide a flexible and robust

legal framework for the protection of creative content and investment in production, enabling private parties

to freely negotiate the terms of their relationships and the exploitation of copyrighted works and sound

recordings.

• The bills would not provide adequate criminal or civil remedies for infringement, including online piracy, and

would deny rights holders the ability to effectively enforce their rights against infringers, thus thwarting the

development of legitimate markets for copyrighted works and sound recordings.

• The bills’ provisions on technological protection measures (TPMs) are inadequate, falling short of the

requirements of the WIPO Internet Treaties, and the over broad exceptions to prohibitions on the

circumvention of such measures would further impinge on the ability of legitimate markets for copyrighted

materials to further develop.

These provisions are inconsistent with South Africa’s international obligations, for example, by far exceeding

the scope of exceptions and limitations permitted under the WTO TRIPS Agreement (Article 13) and the Berne

Convention (Article 9). Moreover, aspects of both bills are incompatible with the WIPO Internet Treaties. The provisions

are also inconsistent with other established international legal norms and commercial practices, posing a significant

risk to investments in South Africa.

Beyond their individual failings, the two bills suffer from fundamental systemic failings that are not amenable

to discrete fixes, nor correction through implementing regulations.

Without a fundamental course correction of its

and align its laws with international standards and practices. South Africa would be better served by providing clear

and unencumbered rights (subject only to targeted and clearly delineated exceptions and limitations that are justified

by a clear evidentiary basis and comply with the three-step test), without unreasonable restrictions on contractual

freedoms, to allow the creative communities to increase investment in the South African economy to meet the growing

demand for creative works of all kinds, in all formats, at all price points. This is particularly important in light of the

President’s clear objective to improve levels of domestic and foreign direct investment, as well as the imperative to

improve the lives and legacies of South Africa’s own artists and creators.

It is important to note that the CAB and PPAB are extremely broad-reaching legislation. IIPA’s comments in

this filing are not comprehensive, but instead highlight some of the major concerns for the U.S. copyright industries. It

should also be noted that the bills, when read together, are incoherent. For example, Section 3B of the PPAB purports

Regulations cannot cure fundamental problems with the bills because a basic legal principle adhered to in South Africa is that regulations must be confined to the

limits of the law itself and cannot fundamentally alter primary legislation. See Executive Council, Western Cape Legislature and Others v President of the Republic

of South Africa and Others 1995 (4) SA 877 (CC) (holding by the South Africa Constitutional Court that while “detailed provisions” are necessary to implement laws,

“[t]here is, however, a difference between delegating authority to make subordinate legislation within the framework of a statute under which the delegation is made,

and assigning plenary legislative power to another body. . .”). Furthermore, the number of provisions in the bills that require future regulation are very limited and

do not relate to the vast majority of the problematic issues raised by IIPA in this and previous submissions.

www.IIPA.org

January 30, 2023 2023 Special 301

to set out the nature of copyright in sound recordings, which would be already enumerated in the Copyright Act, as

amended by the CAB. Thus, in addition to the very significant flaws in the bills described below, from a technical

perspective, the bills are inadequate and risk introducing widespread uncertainty into South African law.

1. Unjustified Interference into Contractual Freedom

Several provisions in the CAB and the PPAB constitute unjustified interference into private contractual

relations. As such, these provisions restrict how private parties can collaborate to facilitate the public’s access to

copyrighted works, threatening well-established market practices that underpin domestic and foreign investment in

artists and creative content, including books, films, sound recordings, musical works, music videos, and video games.

A. Limitation on term of assignments: Sections 22(3) of the CAB and 3A(3)(c) of the PPAB limit the

term of assignments for literary and musical works and performers’ rights in sound recordings, respectively, to a

maximum term of 25 years from the date of assignment, and in the case of performers’ rights in sound recordings,

provide for automatic reversion of rights to the performer after that period. These provisions raise serious concerns by

proposing to limit the term of contracts between performers and copyright owners to a maximum term of 25 years,

which would detrimentally disrupt the well-established practices of the recording industry in South Africa for the creation

and use of sound recordings. These provisions also would risk serious harm to the recording industry, performers, and

other creators in South Africa, because a major incentive for investment would be removed as the term of assignment

of recordings effectively would be halved from 50 years to 25 years.

In effect, these provisions would make it impossible to clear rights in many works and sound recordings after

25 years, rendering this content unusable, with no one able to receive any revenues from such works and sound

recordings. For example, sound recordings typically involve performances from a large number of performers. The

featured artist but is far less likely to have such a relationship with, for example, a performer who entered into a one-

off agreement to provide the backing vocals or other musical performances in the sound recording. Under the PPAB,

each such performer would have rights that, according to Section 3A, would be transferred to the copyright owner (the

record company in most cases) to enable the copyright owner to license the use of the sound recording by third parties.

Yet Section 3A provides that the record company would cease to have those rights after 25 years, meaning that the

record company would need to seek out thousands of performers (with whom, in the case of session or “backing”

musicians, the company often has no long-term relationship) to obtain their mutual consent to an extension of the 25-

year term. The inability to locate just one session musician involved in a sound recording would render the sound

recording unusable, ending the revenues that come to record companies, performers, authors, or publishers from the

exploitation of that recording. That cannot be the intent of this legislation.

The 25-year limitation is described in the CAB’s memorandum of objects as a “right of reversion,” but a

reversion right is substantially different from a fixed time limit on all assignments of copyright in literary and musical

works. Section 22(3) of the CAB is therefore fundamentally flawed. While the Copyright Review Commission in 2011

proposed a right of reversion to be considered in certain special cases in the music industry, highly sophisticated legal

mechanisms are required to address bespoke situations where such reversions may be needed to address highly

specific market failures. Without any economic impact assessment, legal study, or other assessment of the perceived

industry problem that Section 22(3) seeks to address in the first place, the enactment of a general limitation of all

assignment terms would certainly result in a series of negative, unintended, and completely avoidable consequences.

While there is a provision in U.S. law on termination of transfers, that provision contains key differences that mitigate these harms. First, the South African provision

broadly applies to all literary and musical works and sound recordings and is automatic. Under U.S. law, by contrast, termination rights do not apply to works made

for hire; as a result, many works, including most audiovisual works (with potentially dozens or hundreds of contributing “authors”), or similar multiple-contributor

works (sound recordings, video games, etc.) cannot be terminated. This gives certainty to the producers of those works of their ability to exploit the works without

clearances from the numerous contributors. Second, termination under U.S. law is subject to notice (up to ten years prior to termination) and exceptions, allowing

derivative works to continue to be exploited. The South African bill has neither of these provisions. Third, the U.S. termination right applies only where the grant

was made by the original author, not by successors or assignees. The South African proposal includes no such limitation; it is broadly applicable to all literary and

musical works and sound recordings.

www.IIPA.org

January 30, 2023 2023 Special 301

Section 3A would have a broader negative effect on performers. Introducing new artists to the market and

promoting their careers require large upfront investment from record companies, with no certainty of when, if ever, the

investment will be recouped. Limiting the term of agreements between record companies and artists would increase

the economic risk even further and would likely reduce the revenues available to invest in new talent. The provision

should be removed to avoid the serious harm that it risks causing to all participants in the South African music industry.

While audiovisual works are specifically excluded from the CAB provision limiting assignments to 25 years, they are

arguably not excluded from the ambit of Section 3A of the PPAB, which states that any performer whose performance

is fixed in a sound recording will benefit from the reversion of performers’ rights. Accordingly, performers who “make

an audible sound” in an audiovisual work or contribute to a voice-over in an animated work may be able to claim that

they should also benefit from the reversion of rights under Section 3A of the PPAB. This provision would increase legal

uncertainty and introduce a disincentive against film companies’ acquiring literary and musical properties for adaptation

into film and TV shows. As such, Section 3A would ultimately inhibit financing of film projects and would jeopardize film

production in South Africa.

B. Sweeping ministerial powers to set contractual terms: Section 39 of the CAB and Section

3A(3)(a) of the PPAB create ministerial powers to prescribe “compulsory and standard contractual terms,” including

setting royalty rates regarding “uses” of copyrighted works and across any form of agreement covering authors’ and

performers’ rights. Furthermore, the proposals would impose unwarranted contractual formalities on all contractual

partners. These provisions are not only unjustified but are seemingly premised on a lack of understanding of the myriad

contractual relationships that underpin the creation of copyright content, which often comprises many different rights

from various parties, and which are licensed for use by third parties in a variety of ways. Empowering ministers to

impose contractual terms risks imposing a degree of rigidity into the South African creative economy that will stifle

investment and innovation. It would also introduce the unnecessary legal risk of impermissibly delegating executive

legislative authority to the Minister by permitting the Minister to unilaterally determine the manner in which trade and

investment in South Africa’s creative sectors can occur, without the required Parliamentary oversight if future legislative

amendments are deemed necessary to address any properly assessed and clearly determined market failure.

For example, these provisions would unfortunately restrict the flexibility in transfer agreements between sound

recording performers and producers. That flexibility is needed to address the varying relationships between performers

and copyright owners. The relationship and contractual agreement between the featured artist and the copyright owner

will differ substantially from that between a performer appearing as a one-off session musician and the copyright owner.

Neither performers nor copyright owners would benefit from prescribed contracts, which would inevitably fail to meet

the differing needs of performers depending on their respective roles in a sound recording. There is simply no evidence

of a market failure that would justify this extensive interference into contractual relations.

C. Mandating the mode of remuneration for audiovisual performers: The CAB includes a proposal

(Section 8A) to regulate the remuneration terms of private contractual agreements between performers and copyright

owners. Even though it proposes a significant interference into private contractual arrangements, to the particular

detriment of certain performers, the substantive provisions of Section 8A were never published for public consultation,

rendering it constitutionally flawed.

Section 8A(5) has since been found to bring about arbitrary deprivations of property

rights, and the Portfolio Committee resolved to remove it. The result is a proposal that would substantially undermine

the economics and commercial practices concerning the production of audiovisual works. While Section 8A may be

intended to provide appropriate remuneration to performers, in practice, the proposal would undermine the feasibility

of productions and cause substantial harm to performers.

Section 8A was not included in the text of the first draft of the CAB that was the subject of the August 2017 public hearings. Instead, it was written into the text of

the bill after the public hearings by the Portfolio Committee under the previous Parliament, without being subjected to an economic impact assessment or full public

consultation, which has constitutional implications. This fundamental procedural irregularity was raised by numerous stakeholders during the August 2021 public

hearings.

www.IIPA.org

January 30, 2023 2023 Special 301

Section 8A, combined with the contract override provision in Section 39B(1) discussed below, prescribes a

compulsory statutory royalty remuneration mode that practically removes the possibility of lump-sum payments.

Rather than benefitting performers, this provision would in fact result in many performers, who otherwise would receive

remuneration from performing in an audiovisual work, receiving little or nothing from the exploitations of the work. This

is because many creative projects are loss-making for the producer. Under proposed Section 8A, performers would no

longer enjoy being paid a lump sum immediately in return for their one-off performances and would instead have to

wait to be remunerated on a royalty basis, which would happen only if the work in question actually succeeded in

generating revenues. The current commercial practices avoid that outcome by paying performers on a lump-sum basis,

irrespective of whether the works in which they perform succeed. Audiovisual works are comprised of performances

by lead/featured performers and extra/non-featured performers. Lead/featured artists are remunerated in accordance

with the terms they have negotiated with the producer, and these terms almost invariably are on a lump-sum basis.

Extra/non-featured performers, in particular, are remunerated by way of lump-sum payments given their minor roles.

Section 8A risks a direct negative impact on investments in South African productions and a reduction in the number

of South African “background” performers engaged to perform in audiovisual works. Furthermore, for certain modes of

distribution, such as subscription video-on-demand (VOD), where revenue is received in return for access to an entire

catalogue of works, it is not possible to allocate specific revenue to specific works. Therefore, the possibility of paying

a share of any such revenue to any stakeholders in individual works (performers or otherwise) is not feasible.

The penalty clauses introduced by Sections 8A(6) and 9A(4) of the CAB may also have constitutional

implications due to the disproportionate nature of the penalties prescribed for the failure of rights holders and licensed

users of audiovisual works and sound recordings to submit timely reports to all performers featured in such works and

sound recordings regarding each commercial activity relating to the use of such works. Criminal liability and fines of up

to 10% of a company’s annual turn-over are prescribed for a failure to comply with the new reporting obligations. By

unnecessarily raising the legal risk of doing business in South Africa, these penalties could discourage investment in

new content production projects. The manner of reporting to all performers is not prescribed in the CAB, and no impact

assessment was performed to determine whether this proposal would be even practically feasible or capable of being

operationalized without undue risk of liability arising for parties who make legitimate and licensed commercial uses of

audiovisual works and sound recordings in South Africa.

D. Prohibition on contractual override: The risks posed by the CAB are further compounded by the

prohibition on contractual override in Section 39B(1), which prohibits any contractual terms that deviate from the

provisions of the bill or waive any rights provided by the bill, thereby removing the possibility for parties to determine

their own contractual arrangements in a manner that avoids the harm caused by certain provisions of the bill. The

provision also presents a significant risk of compelling contractual parties to follow rigid standardized contractual terms,

thereby inhibiting a competitive and innovative marketplace, and requiring terms that may be overly onerous and

disadvantageous to the contractual parties in light of the specific circumstances.

2. Inadequate Protection of Performers’ Rights

South Africa’s intention to ratify the WIPO Internet Treaties is welcome, and full implementation would

represent a significant step towards establishing an appropriate legal framework. Regrettably, several provisions in the

bills, including the level of protection afforded to certain performers’ rights, are incompatible with the treaties.

Section 5 of the PPAB sets out the rights granted to performers. In the PPAB, performers’ rights are also

enumerated under Section 3. The amendments to Section 5 are therefore, in part, duplicative of Section 3. More

importantly, though, Section 5(1)(b) downgrades the performers’ exclusive rights of distribution and rental to mere

remuneration rights, a proposal that would be incompatible with WPPT (and the WIPO Beijing Treaty), which do not

permit these rights to be diminished to the level of mere remuneration rights. Furthermore, providing mere remuneration

Section 8A, on its face, states that performers have a statutory right to royalties. Combined with the contractual override provision of Section 39B(1), this statutory

right to royalties is not waivable, even in instances in which the performers concerned might prefer an alternative remuneration model.

www.IIPA.org

January 30, 2023 2023 Special 301

rights with respect to distribution and rental, subject to rate setting by the Tribunal (Section 5(3)(b)), would prejudicially

devalue these performers’ rights. Experience in South Africa, and internationally, shows that Tribunal-set remuneration

falls well below the commercial value of the rights licensed.

Section 5(1)(b) would also substantially and detrimentally disrupt the sale and rental of sound recordings and

audiovisual works, because one set of rights would be subject to private negotiation (the producers’ rights), and the

performers’ rights would ultimately be subject to Tribunal rate setting. The consequence would be a transfer of value

from those who create and invest in recorded performances to the licensees of those performances, the latter likely

ending up paying less, resulting in reduced revenues for producers to invest in South African performers.

3. Fair Use

The CAB drastically expands the exceptions and limitations to copyright protection in South Africa’s law. The

broad exceptions, which are duplicated in the PPAB, will create a disproportionate imbalance against creators and

producers of copyright-protected works and undermine the predictability needed to support a robust marketplace for

copyrighted works. Additionally, they appear to far exceed the scope of exceptions and limitations permitted under

South Africa’s international obligations, namely under Article 13 of the WTO TRIPS Agreement (and Article 9 of the

Berne Convention and the corresponding provisions in the WIPO Internet Treaties).

While the proposed “fair use” provision may resemble certain aspects of the fair use statute in U.S. law, it is

inaccurate to contend, as some have suggested, that South Africa is proposing to adopt the U.S. fair use doctrine.

South Africa’s proposed broader fair use provision, along with the other proposed exceptions and limitations to

copyright protection, are blatantly inconsistent with the three-step test, which is the internationally recognized standard

that confines the scope of copyright exceptions and limitations.

The fair use provision, which is supported and

entrenched further by the contract override provision (Section 39B(1)), is inconsistent with the three-step test for the

following reasons:

• First, South Africa lacks the rich body of case law that, in the United States, helps to mitigate the inherent

uncertainty of the scope or applicability of the fair use exception. Without the foundation of a well-developed

body of case law, South Africa’s untested, broad fair use provision would result only in uncertainty for both

rights holders and users on the parameters of permissible uses (since U.S. fair use is determined on a fact-

intensive, case-by-case basis). Compounding this shortcoming is that high legal fees and protracted

timeframes for cases in South Africa will deter and undermine efforts by rights holders to access the courts in

hopes of more clearly establishing the parameters of this broad exception.

The International Center for Law

& Economics, analyzing whether the United States should require trading partners to adopt U.S.-style fair use,

concluded that “the wholesale importation of ‘fair use’ into other jurisdictions without appropriate restraints

may not result in a simple extension of the restrained and clearly elaborated fair use principles that exist in

the U.S., but rather, something completely different, possibly even a system untethered from economics and

established legal precedents.”

• Second, the South African proposal includes language broader than the U.S. fair use statute, which further

heightens the uncertainty discussed above, and the risk that an unacceptably wide range of uses in South

Africa will be considered “fair” and non-infringing. For example, the proposal includes several additional

See, e.g., Article 13 of the TRIPS Agreement and Article 9 of the Berne Convention.

While some have suggested that South Africa could look to case law in the United States, or elsewhere, South African judges are not bound by the decisions of

U.S. courts, and such decisions carry virtually no legal weight in South Africa. It is very unlikely that South African courts would, or even could, wholesale adopt

U.S. precedents, especially considering South Africa’s very different and unique legal history. In addition, while a handful of countries have recently enacted fair

use provisions, IIPA is not aware of any significant case law that has been developed under the fair use statutes in any of these countries. South Africa’s existing

jurisprudence on fair dealing will also not be helpful because the fair use proposal is much broader than the fair dealing provisions in the current law and, therefore,

whatever case law exists interpreting the existing, narrower fair dealing provisions would have very little relevance.

See Geoffrey A. Manne and Julian Morris, International Center for Law & Economics, Dangerous Exception: The Detrimental Effects of Including ‘Fair Use’

Copyright Exceptions in Free Trade Agreements, (2015), p. 15, available at http://laweconcenter.org/images/articles/dangerous_exception_final.pdf

www.IIPA.org

January 30, 2023 2023 Special 301

access and use purposes that are absent from the U.S. fair use statute. These include: “personal use,

including the use of a lawful copy of the work at a different time or with a different device;” “illustration, parody,

satire, caricature, cartoon, tribute, homage or pastiche;” “preservation of and access to the collections of

libraries, archives and museums;” and “ensuring proper performance of public administration.” Extending fair

use to such undefined access and use purposes that are not included in the U.S. statute adds to the

uncertainty of how South Africa’s judges will apply fair use, and the risk that they will apply the fair use doctrine

well beyond the scope of its application in the United States.

In addition, unlike the U.S. fair use statute, the

South Africa proposal states that the “the purpose and character of the use” should include consideration of

whether “such use serves a purpose different from that of the work affected.”

The South Africa proposal also

includes an affirmative requirement to consider “all relevant factors,” which is not in the U.S. statute. It is

unknown how South African judges would interpret these provisions, which heightens the risk that a broader

range of uses in South Africa will be considered “fair” than those permitted under U.S. law. Therefore, rather

than proposing to adopt a U.S.-style “fair use,” South Africa has proposed a new copyright exception,

borrowing certain statutory language from the United States, while adding new and broader language, and

without the corpus of U.S. jurisprudence that is integral to defining the scope of U.S. fair use and its

interpretation.

• Third, in addition to the new expansive “fair use” exception, the legislation also retains South Africa’s existing

“fair dealing” system, while expanding the impact of fair dealing exceptions by effectively removing the limiting

standard of “fair practice.” It also introduces several extremely broad new exceptions and limitations to

texts, sound recordings, locally distributed works, and online works in general. A 2017 study by

PricewaterhouseCoopers looked at the impact of these broad exceptions on the South African publishing

industry and predicted “significant negative consequences” would result from the adoption of the proposed

fair use provision and the other broad exceptions.

Taken alone, the “fair use” and the “fair dealing” aspects

of the proposed bill are each too broad. Taken together, the proposed “hybrid” model creates an

unprecedented mash-up of exceptions and limitations that will deny copyright owners the exclusive rights and

fundamental protections that enable licensing of their copyrighted works and sound recordings, and, because

the provision is drafted so unclearly, will also deny users certainty regarding which uses of a work are

permissible without a license.

As detailed above, the proposed fair use provision is overly broad (significantly broader than the U.S. fair use

doctrine), and its scope and application are uncertain due to the lack of supporting case law, new and broader

language, and the “hybrid” combination with the existing fair dealing system. As a result, the proposed provision is not

limited to “certain special cases,” and there is a substantial risk that it would be applied in a manner that conflicts with

the normal exploitation of a work or unreasonably prejudices the legitimate interests of the right holder. Thus, the

provision clearly falls outside the limits of the three-step test. If the proposed legislation is enacted, South Africa’s legal

framework for exceptions and limitations to copyright protection would violate South Africa’s international obligations,

Many of these additional access and use purposes in the South African proposal are in fact broader than exceptions permitted under U.S. law. For example,

regarding the “personal use” language, there is no general “personal use” exception in U.S. law and “format shifting” is not always held to be a fair use. In addition,

the “preservation of and access to the collections of libraries, archives and museums” is not a fair use in the United States. Rather, Section 108 of the Copyright

Act establishes specific instances and limits pursuant to which libraries and archives may make copies of works for preservation purposes. It is unclear what

“ensuring proper performance of public administration” encompasses, but nothing in the Copyright Act or U.S. case law establishes such use to be a fair use.

Requiring South African judges to consider whether “such use serves a purpose different from that of the work affected” would broaden the U.S. judge-made

notion of “transformative use.” The Supreme Court has defined “transformative use” as one that “adds something new, with a further purpose or different character,

altering the first with new expression, meaning, or message.” See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994). South Africa’s provision would

establish a lower bar for the permissibility of a use than U.S. law because it appears to require that a use merely serve a “different” rather than a “transformative”

purpose. See Infinity Broad. Corp. v. Kirkwood, 150 F.3d 104, 108 (2d Cir. 1998) (“difference in purpose is not quite the same thing as transformation, and Campbell

instructs that transformativeness is the critical inquiry under this factor.”)

See PricewaterhouseCoopers, The expected impact of the ‘fair use’ provisions and exceptions for education in the Copyright Amendment Bill on the South

African publishing industry, July 2017, available at

https://publishsa.co.za/pwc-report-the-expected-impact-of-the-fair-use-provisions-and-exceptions-for-education-

in-the-copyright-amendment-bill-on-the-south-african-publishing-industry/. The study notes that a 33% weighted average decline in sales would likely occur, with

concomitant reductions in GDP and VAT and corporate tax revenue collections. Some 89% of publishers surveyed noted that the CAB, if adopted in its current

form, would negatively impact their operations, likely resulting in retrenchments and possible business closures.

www.IIPA.org

January 30, 2023 2023 Special 301

would be inconsistent with international treaties it has stated an intent to join, and would further erode the already

inadequate level of copyright protection in the country.

In addition, the uncertainty that will be caused by the proposed hybrid model is particularly problematic in

South Africa, because its legal system lacks statutory and punitive damages, which rights holders in the United States

rely on to deter and remedy infringement, and enforcement in South Africa has been historically inadequate.

In South

Africa, civil damages may be claimed for copyright infringement only after a rights holder meets a statutory requirement

to first prove that an infringer had “guilty knowledge” of infringement. As a result, in most instances damages would be

claimable for infringing acts committed by a defendant only after a court has determined that the defendant cannot rely

on the fair use defense. As a result, bad actors in South Africa would be undeterred from taking advantage of the

uncertainty created by these exceptions to infringe copyrights. A copyright system that consists of open-ended and

unclear exceptions, weak affirmative rights, and non-deterrent enforcement is the archetype for inadequate and

ineffective protection of IP rights.

Finally, the risks posed by the fair use provision, and the other unclear and very broad exceptions discussed

below, are further compounded by the prohibition on contractual override in Section 39B(1) (discussed above), which

renders unenforceable any contractual term that prevents or restricts a use of a work or sound recording that would

not infringe copyright under the Copyright Act (as amended by the CAB).

4. Exceptions and Limitations

In addition to the proposed introduction of “fair use” into South African law, the following new or expanded

statutory exceptions contained in the CAB are likewise of concern, and many clearly exceed the bounds of the

longstanding international standard confining exceptions and limitations to copyright, the three-step test:

A. Sections 12B(1)(h) and 12B(2) allow individuals to make copies for “personal uses.” These broad

exceptions in effect allow for private copying without any remuneration for rights holders, which is out of step with

international norms (a similar proposal was challenged successfully in the United Kingdom where the High Court

quashed a private copying exception that did not compensate rights holders for the harm the exception would cause).

Such private copying exceptions are typically accompanied by a remuneration (or “levy”) system by which rights holders

are compensated for the private copying of their works. Section 12B(2)(c) also permits copying in an “electronic storage

medium,” which is highly unusual and risks undermining existing licensing practices for digital content services. This

exception violates the three-step test, because it is not limited to “certain special cases” and does not include any

requirement to consider whether such copying would conflict with a normal exploitation of the work or unreasonably

prejudice the legitimate interests of the rights holder.

B. Section 12B(1)(e) grants an exception for making translations for the purpose of “giving or receiving

instruction.” The scope of this proposed exception could be interpreted too broadly, particularly as it allows for

communication to the public, albeit for non-commercial purposes. Though the bill attempts to limit the scope by defining

its purpose, it would undermine the author’s translation rights, which warrant just compensation and which South Africa

is required to protect under the Berne Convention and the WTO TRIPS Agreement.

Enactment of this exception

would therefore disrupt the significant market for authors’ and publishers’ translation rights. As a result, this exception

Section 24(3) of South Africa’s Copyright Law, which states that courts may “award such additional damages as the court may deem fit,” does not provide for

statutory or punitive damages. Statutory damages allow plaintiffs to recover damages without showing proof of harm to the rights holder or gain to the infringer. In

contrast, the “additional damages” provision of 24(3) permits a judge to take into account the flagrancy of the infringement and the benefit to the infringer, but rights

holders must still prove the harm and the gain to the infringer. Regarding punitive damages, IIPA is not aware of a case in which these “additional damages” have

been actually quantified and awarded, and there is nothing in South Africa’s law or practice to suggest that the purpose of the “additional damages” provision is to

punish or deter infringement. In addition, criminal damages in South Africa are ineffective for deterring infringement due to limited criminal prosecutions, the high

burden of proving and collecting damages, and the higher burden of proof in criminal cases (which would be exacerbated by the new vague and open-ended

exceptions in the copyright reform proposal).

See Berne Convention Article 8, and WTO TRIPS Agreement Article 9, incorporating the Berne Convention, Article 8.

www.IIPA.org

January 30, 2023 2023 Special 301

falls outside the bounds of the three-step test, because it fails to account for the need to avoid conflict with a normal

exploitation of the work or unreasonably prejudicing the legitimate interests of the rights holder.

C. Section 12C provides an exception for temporary reproduction of a work “to enable the transmission

of the work in a network between third parties by an intermediary or any other lawful use of work; or . . . to adapt the

work to allow use on different technological devices . . . as long as there is no commercial significance to these acts.”

This provision also allows copying for reformatting, where such copies are an integral and essential part of a technical

process if the purpose of those copies or adaptations is to enable a transmission. Such language could hinder efforts

to work with online intermediaries to stop piracy. If any such exception is to be included, IIPA recommends that the

word “lawful” be replaced by “authorized,” so that this provision meets its principal objective (ensuring that incidental

copies made in the course of a licensed use does not give rise to separate liability) without frustrating enforcement

efforts where the “incidental” reproduction within the jurisdiction of South Africa is the only justiciable act in a claim

against an unauthorized transmission.

D. Section 12B(1)(a) provides a broad and circular exception for quotation, permitting use of any

quotation provided that “the extent thereof shall not exceed the extent reasonably justified by the purpose,” but without

enumerating the permitted purposes such as, for example, criticism and review, and without limiting the use to avoid

conflict with the normal exploitation of the work or unreasonable prejudice to the legitimate interest of the rights holder.

The result is an exception that appears to permit quotations in virtually all instances, which risks causing substantial

harm to rights holders and renders the proposed exception incompatible with the internationally recognized three-step

test for copyright exceptions and limitations. Without clear limits to the extent and purpose of a quotation, the exception

fails to meet the three-step test limitation of “certain special cases” and would potentially lead to a conflict with the

normal exploitation of the work and unreasonably prejudice the legitimate interest of the rights holder.

E. Section 12D permits the copying of works, recordings, and broadcasts for educational purposes with

very few limitations. Section 12D(7)(a) on open access for “scientific or other contribution[s]” is overreaching and will

likely undermine the rights of authors and publishers and deny authors academic freedom. Section 12D(4)(c)

specifically authorizes the copying of entire textbooks under certain conditions, even textbooks that are available for

authorized purchase or licensing, if the price is deemed not to be “reasonably related to that normally charged in the

Republic for comparable works.” The likely impact of these provisions on normal exploitation of works for educational

markets would far exceed what is permitted under international standards. Permitting copying of entire textbooks that

are available for authorized purchase or licensing clearly is not confined to certain special cases. Such unauthorized

uses would also clearly conflict with publishers’ normal exploitation of the work and unreasonably prejudice their

legitimate interest.

F. Section 12B(1)(b) introduces an unreasonably broad so-called “ephemeral exception” for the

reproduction of sound recordings by a broadcaster. To ensure that this exception is properly confined by the three-

step test, reasonable limits should be introduced including: (i) the time limit must be such that it limits the copies made

to truly “ephemeral” copies (e.g., copies may not be kept for longer than thirty (30) days); (ii) copies must not be used

for transmission more than three (3) times; and (iii) the exception should not allow broadcasters to use it to create

permanent databases of copyright works for use in their broadcast activities.

G. Section 19D provides an exception for persons with disabilities, which is defined as, essentially,

disabilities that relate to the ability to read books. This provision would benefit from tighter drafting. While South Africa

is not a signatory to the Marrakesh VIP Treaty, it would be prudent to bring provisions designed to facilitate access for

visually impaired persons in line with the Treaty by including the requirement that the exception may apply only to

authorized entities.

www.IIPA.org

January 30, 2023 2023 Special 301

5. Exclusive Rights of “Communication to the Public” and “Making Available”

The CAB would add Section 9(f) to the Copyright Act, confirming that sound recording producers have the

exclusive making available right set out in WPPT, Article 14. This provision is a positive clarification, as this right

underpins the digital music industry. However, the wording of proposed Section 9(e) regarding sound recording

producers’ exclusive right of communication to the public omits an express reference to “public performance,” as

provided for in the WPPT definition of “communication to the public,” which explicitly “includes making the sounds or

representations of sounds fixed in a phonogram audible to the public.” To avoid ambiguity in the legal framework, IIPA

submits that the new Section 9(e) should expressly refer to public performance. (Existing Section 9(e) in the Copyright

Act provides sound recording producers with an exclusive right of communication to the public.)

Furthermore, the meaning of proposed Section 9A(aA) (and equivalent provisions in relation to exploitation of

other categories of works, and in the PPAB with respect to performers’ rights) is not clear. While it is understood that

these provisions are intended to ensure accurate reporting of authorized uses of works, to the extent they could be

interpreted as providing a legal license for such uses, they would be wholly incompatible with the WIPO Internet

Treaties, while undermining the economic feasibility of South African creative industries. These provisions should

therefore be clarified to avoid any such confusion.

6. Technological Protection Measures (TPMs)

TPMs are vital tools for the copyright-based sectors in the digital era, enabling creators and rights holders to

offer consumers their desired content, at the time and in the manner of their choosing, while also empowering rights

holders to explore new sectors opened up by current and emerging technologies. It is welcome that the CAB introduces

provisions (and the PPAB incorporates them by reference) on TPMs. Unfortunately, these provisions are completely

inadequate, and therefore fall short of the requirement of Article 18 of WPPT and Article 11 of the WCT that contracting

parties provide “adequate legal protection and effective legal remedies against the circumvention of effective

technological measures.”

This issue is of paramount importance when considering the central role of digital distribution to the current

and future economics of the creative industries. While the recorded music industry in South Africa is now predominantly

a digital industry, piracy remains a serious obstacle to continued growth in this area. The introduction of adequate

provisions on TPMs is therefore essential to protect against piracy and enable the development of new business

models. Moreover, many film and television producers are seeking to respond to consumer demand by establishing

online platforms to provide content to consumers or licensing film and television programming to online services. TPMs

are essential to the functionality of these platforms and to the licensing of this high-value content.

First, the definition of “technological protection measure” in Section 1(k) is problematic because it refers to

technologies that prevent or restrict infringement, as opposed to technologies designed to have that effect or control

access to copies of works. The plain reading of this definition would be that a TPM that is circumvented is therefore

not one that prevents or restricts infringement (because it has not achieved that aim), and therefore the circumvention

of it is not an infringement. The provision should be clarified to ensure that a protected TPM is one that effectively

protects a right of a copyright owner in a work, or effectively controls access to a work. Furthermore, paragraph (b) of

the definition should be removed; that a TPM may prevent access to a work for non-infringing purposes should not

have the effect of removing its status as a TPM. This provision is furthermore inconsistent with the proposed exception

of Section 28P(2)(a), which is intended to enable the user to seek assistance from the rights holder in gaining access

to the work for a permitted use. As it stands, paragraph (b) of the definition would be open to abuse and would provide

a charter for hacking TPMs. In this respect, see also IIPA’s comments below with respect to Section 28P(1)(a).

Second, IIPA also recommends that the definition of “technological protection measure circumvention device

or service” be amended to include devices or services that (a) are manufactured, promoted, advertised, marketed, or

sold for the purpose of circumvention of, or (b) have only a limited commercially significant purpose or use other than

www.IIPA.org

January 30, 2023 2023 Special 301

to circumvent TPMs. This would ensure that the definition encompasses a broader range of harmful TPM circumvention

devices and services, consistent with best international practices.

Finally, the exceptions in Section 28P regarding prohibited conduct with respect to TPMs (in Section 28O) are

inadequately defined, therefore rendering them incompatible with international norms and substantially reducing the

effectiveness of the protections afforded by Section 28O. Under Section 28P(1)(a), it would be extremely burdensome,

if not impossible, for rights holders to establish that the use of a TPM circumvention device or service by a user was

not to perform an act permitted by an exception.

Additionally, a provider of an unlawful circumvention technology

(e.g., device or service) could rely on Section 28P(1)(b) to claim it is acting lawfully merely by showing that the

technology can be used to access a work to perform a permitted act. There is a substantial risk that this provision would

be abused by those providing circumvention technologies for unlawful purposes. The same is true of Section 28P(2)(b),

which permits assisting a user to circumvent TPMs after a “reasonable time.”

7. Penalties for Infringement

The revised CAB amends section 27 to include (5A), (5B), and 5(C) to provide liability for online infringement

and violations of protections for TPMs and copyright management information. This is in keeping with Article 18 and

Article 19 of the WPPT, which require adequate legal protection and effective legal remedies against the circumvention

of effective technological measures and infringement of electronic rights management information. However, (5B)(a)(i)

should be amended to clarify that the offering and other dealing with circumvention devices or services are already

illegal, without the need to show that the illegal device is subsequently used to infringe copyright. The current wording,

“knows that the device or service will, or is likely to be used” to infringe copyright in a work protected by an effective

technological protection measure, sets the bar for liability so high such that it would render the entire provision

ineffective. Moreover, given the scope and scale of the problem of online piracy, which remains a persistent and

growing threat to the creative industries, there is a serious need for more mechanisms to combat infringement and

further remedies for rights holders.

IIPA reiterates its recommendations to introduce enforcement provisions that are effective in the digital age

and protect the online marketplace, such as: (1) ensuring online platforms do not make or allow unauthorized use of

copyrighted works on their platforms; (2) preventing the unauthorized distribution of electronic formats of copyrighted

works; (3) alleviating the burden of proof on claimants with respect to technical allegations in claims that are not in

dispute; and (4) providing for appropriate and adequate damages for online infringement.

8. Intellectual Property Tribunal

Proposed amended Sections 29A through 29H in the CAB would establish an Intellectual Property Tribunal

to replace the existing Copyright Tribunal. The Tribunal’s purpose would purportedly be to assist the public in the

transition to the new copyright regime by resolving disputes and settling the law, particularly in relation to the proposed

“fair use” and other exceptions. This assumes that the Tribunal will be staffed with qualified professionals, adequately

resourced, and accessible to the parties it is intended to serve, though none of these things is required by the bill, nor

do the proposed provisions sufficiently delineate the Tribunal’s scope. Indeed, the CAB adds a Schedule 2 to Section

22(3), which would allow any person to apply to the Tribunal for a license to make a translation of a work, including a

broadcast, or to reproduce and publish out of print editions for “instructional activities,” with few limitations. To the

extent that a revitalized Tribunal is to be considered, it would best serve the South African market with a much more

limited mission, confined to copyright matters related to collective licensing. Further, it should be clarified that rights

holders may elect to bring claims to the Tribunal or to the Courts, and that the Tribunal shall hear and determine matters

referred to it expeditiously.

In this regard, see the discussion above regarding the proposed “fair use” and other unclear and overly broad exceptions proposed in the bills, which would

compound this problem.

www.IIPA.org

January 30, 2023 2023 Special 301

Another significant concern with these provisions is the lack of benchmarks for how the Intellectual Property

Tribunal should determine royalties in the event of a dispute between a collective licensing body and a user. It is

imperative that the legislation set out that rates should be determined with reference to the economic value to the user

of the rights in trade and the economic value of the service provided by the collective licensing body. Licensing rates

should reflect the price that would be agreed in a free-market transaction based on a willing buyer and a willing seller

standard. If creators are not rewarded at market-related rates, even the best copyright regime in the world will not

achieve its objectives.

9. Collective Management of Rights

IIPA is concerned by proposed Section 22B in the CAB, which may be understood to preclude a Collective

Management Organization (CMO) representing, for example, both copyright owners and performers. Such an

interpretation could prohibit the existing collaboration between performers and producers in the SAMPRA CMO, which

administers “needletime” rights on behalf of both recording artists and record labels. This interpretation would be

inconsistent with industry standards and contrary to the interests of those rights holders, the users (licensees), and the

public at large. Joint sound recording producer and performer organizations operate in some 40 territories. By working

together on the licensing of rights, performers and producers save costs, increasing the proportion of revenues returned

to them. This also reduces transaction costs to users, who can take a license from one CMO that covers both

performers’ and producers’ rights. The provision should be clarified.

As a general point, and as referred to in section 8 above, it is also vital that any rates set by the Tribunal for

performance rights (including needletime) reflect the economic value of the use of recorded music in trade. This would

be consistent with international good practice (i.e., the “willing buyer willing seller” standard applied by the U.S.

recorded music.

10. State Intervention in Private Investments and the Public Domain

The CAB contains concerning provisions that revert rights to the government in situations that could

discourage investment, while unnecessarily diminishing the public domain. The proposed Section 5(2) transfers to the

state all rights in works “funded by” or made under the direction or control of the state. This provision could be broadly

interpreted to include works developed with a modicum of government involvement and may well diminish incentives

for public-private cooperation in creative development. Section 5 also empowers the Minister to designate “local

organizations” to be vested with all rights of copyright in works made under the direction or control of such

organizations. This could result in designated local organizations being vested with full rights of copyright in works of

South African authors without agreement between the parties to this effect. This departure of the standard rules of

engagement as established for copyright transfers in the Copyright Act may have constitutional implications and result

in arbitrary and unjustifiable deprivations of property rights and unwarranted restrictions on the freedom to trade.

11. Term of Protection

At present, sound recordings receive a term of protection of only 50 years from the year in which the recording

was first published, and for literary, musical, and artistic works, the term of protection is 50 years from the author’s

death or 50 years from publication if first published after the author’s death. The CAB should be revised to extend the

term of protection for copyrighted works and sound recordings to at least 70 years, in line with the international

standard. This will provide greater incentives for the production of copyrighted works and sound recordings, and also

provide producers with a stronger incentive to invest in the local recording industry, spurring economic growth, as well

as tax revenues, and enabling producers to continue offering works and recordings to local consumers in updated and

restored formats as those formats are developed.

www.IIPA.org

January 30, 2023 2023 Special 301

12. Certain Definitions Incompatible with International Treaties

The definitions of “broadcast,” “producer,” and “reproduction” in Section 1 of the PPAB are inconsistent with

corresponding definitions in the international treaties including the WPPT.

• The definition of “broadcast” is extended beyond wireless transmissions to include transmissions “by wire,”

which is incompatible with the definition of “broadcast” in international treaties including the WPPT (as well as

Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting

Organisations). “Broadcast” is defined in the WPPT as limited to “transmission by wireless means.”

• The definition of “producer” should be clarified to ensure that it covers both natural and legal persons as

provided for in Article 2(d) of the WPPT.

• The definition of “reproduction” should be clarified to confirm that it means the copying of the whole or a part

of an audiovisual fixation or sound recording, consistent with Article 11 of the WPPT.

MARKET ACCESS ISSUES IN SOUTH AFRICA

Broadcast Quota: In 2014, the Independent Communications Authority of South Africa (ICASA) began the

“Review of Regulation on South African Local Content: Television and Radio” and published local program quotas for

licensed broadcasters of television content in March 2016. In May 2020, ICASA published a new regulation, fully

exempting “television broadcasting service licensees” from compliance with the local television content quotas during

the National State of Disaster (NSD) and allowing a three-month grace period from the end of the NSD. Non-domestic

media service providers licensing content to local broadcasters are exempt from the program quotas and, in 2018,

ICASA clarified that this exemption also applies to non-domestic, over-the-top (OTT) services. IIPA recommends

removing these quotas to ensure that businesses have the freedom to determine content programming according to

their business models and relevant consumer demands.

Online Value-Added Tax (VAT): In May 2014, South Africa published regulations relating to registration and

payment of value-added tax (VAT) on all online transactions conducted in, from, or through South Africa. Currently

levied at 15%, this onerous tax includes online selling of content such as films, TV series, games, and e-books.

Furthermore, since April 2019, income on business-to-business services provided by foreign providers to South African

businesses is also subject to VAT. This tax should be removed.

“Must Provide” Requirements: In April 2019, ICASA published its draft findings on the “Inquiry into

Subscription Television Broadcasting Services” and proposed a new licensing regime that would severely impact the

contractual freedoms of rights holders to license their content in South Africa, thereby undermining their exclusive

rights. Unfortunately, the report’s methodology, and therefore its conclusions, are flawed because ICASA failed to

consider the impact of OTT media services on the market, nor did it consult with rights holders on who the proposed

measures would affect. IIPA encourages the U.S. government to engage with the South African government to ensure

that any regulatory interventions into the pay-TV market are informed by international best practices and current market

realities and preserve the contractual freedoms of all parties concerned, while developing a legislative and regulatory

framework that promotes investment and growth.

Video-on-Demand (VOD) Quotas: In October 2020, The Department of Communications and Digital

Technologies (DCDT) published a Draft White Paper, “Audio and Audiovisual Content Services Policy Framework: A

New Vision for South Africa 2020,” which seeks to adapt South Africa’s content regulatory framework to the online

marketplace and unfortunately recommends the imposition of a local content quota up to 30%. IIPA understands that

the DCDT will publish a Second Draft White Paper after its deliberations conclude.

www.IIPA.org

January 30, 2023 2023 Special 301

Creative sectors in South Africa are growing but face the challenge of illegal services competition. Improved

infrastructure and accessibility to broadband Internet has changed the landscape of copyright piracy in South Africa

over the last decade. Physical piracy (e.g., sale of pirated CDs and DVDs) is not as prevalent as it used to be. The

dominant concern in South Africa is increasing piracy in the digital environment.

Internet Piracy: Although South African consumers have increasing options available to stream legitimate

creative content, online piracy continues to grow in South Africa and has worsened since the outbreak of the COVID-

19 pandemic. Growth in bandwidth speeds, coupled with lax controls over corporate and university bandwidth abuse,

drive this piracy. Statistics released by software security and media technology company Irdeto earlier this year show

that Internet users in five major African territories (South Africa, Kenya, Nigeria, Ghana, and Tanzania) made a total of

approximately 17.4 million visits to the top 10 identified piracy sites on the Internet.

Of the African countries that were

tracked during this survey, South African Internet users made the second-most visits to the Top 10 tracked pirated

sites (around 5 million, almost double that of Nigeria and Ghana, and only trailing Kenya where 7 million users accessed

these sites).

South Africa also has one of the highest rates of music piracy worldwide. According to a 2022 music consumer

study, nearly two-thirds (65.4%) of all Internet users in South Africa between 16-64 admitted downloading pirated

music, a piracy rate below only Nigeria, India, China, and Indonesia.

Stream ripping was the major music piracy issue

in the country, with 61% of all users and 74% of 16- to 24-year-olds saying they had downloaded illegally via stream

ripping. Twenty-one percent of users stated they had downloaded pirated music from BitTorrent in the prior month from

sites such as ThePirateBay and 1337x, and 32% had downloaded from cyberlockers using sites such as Mega and

Zippyshare. Local piracy sites were also popular. MP3 download sites such as Fakaza.com (used by 26.5% of all

Internet users) and Zamusic (used by 10.0% of users) deliver pirated copies of South African and wider African music

to many visitors from South Africa. An Association of American Publishers (AAP) member publishing house also

reported that 2,348,973 books have been downloaded via P2P file-sharing platforms by South African Internet users

since May 2021.

Easy access to pre-released film and television content through international torrent, linking, and cyberlocker

sites also fuels online piracy in the country. As South Africa lacks effective injunctive relief for rights holders, especially

against foreign defendants who do not own assets in South Africa against which judgements can be executed and

South African courts’ jurisdiction can be confirmed to hear infringement matters, consumer access to these infringing

sites continues unabated.

To combat online piracy, South Africa needs a legal framework that enables rights holders

to address unauthorized use in all ways, and, as discussed below, the Government of South Africa should increase

consumer education and awareness programs and improve enforcement.

Piracy Devices (PDs) and Apps: Set-top boxes and memory sticks pre-loaded with infringing content or

apps continue to grow in popularity in South Africa. Consumers use these devices to bypass subscription services or

to consume unauthorized copyrighted content such as music, movies, TV series, or sporting events. These devices

are most commonly sold to South African consumers online. Some companies develop devices pre-loaded with

See Benjamen Emuk, ChimpReports, Piracy Hits African Creative Industries as Millions Find Illegal Content Online, https://chimpreports.com/piracy-hits-african-

creative-industries-as-millions-find-illegal-content-online/.

Id.

International Federation of the Phonographic Industry (IFPI), Engaging with Music 2022, available at https://www.ifpi.org/wp-content/uploads/2022/11/Engaging-

with-Music-2022_full-report-1.pdf.

While South Africa’s current law allows for an “interdict” (or injunction) under certain circumstances, in practice, this remedy is limited and extremely difficult to

obtain. Lower courts have jurisdiction to grant an interdict, but only if the “value of the relief sought in the matter” does not exceed a limit of ZAR400,000

(~US$30,000) or if the actual economic harm that the injunction is sought to prevent or restrain can be projected under that limit. It is also often difficult in IP cases

to establish the required showings of “urgency” and “irreparable harm resulting if the order is not granted.” Compounding this problem, judges in South Africa have

little to no experience in IP infringement cases, further diminishing the utility of this remedy. As a result, in practice, the interdict remedy is not effective for rights

holders in South Africa. Moreover, the proposed copyright reform legislation will further diminish the utility of this remedy because the ambiguous and overbroad

exceptions could make it more difficult to establish a prima facie case of infringement on which to base an interdict order.

www.IIPA.org

January 30, 2023 2023 Special 301

infringing music content for use in various stores, pubs, and taverns. Many examples of enforcement and consumer

education programs that are effective in other markets could be replicated in South Africa. It is critical for South Africa

to gain more understanding of these approaches and to work proactively with experts from the applicable creative

industry sectors to localize and implement similar programs.

Parallel Imports: The Copyright Law does not protect against parallel imports. As a result, the motion picture

industry has sought protection under the Film and Publications Act. The lack of protection against parallel imports

raises concerns and interferes with rights holders’ ability to license and protect their IP rights.

Enforcement: South Africa’s enforcement framework is not up to the challenge of its counterfeiting and piracy

problems. Border enforcement is inadequate because of a lack of manpower and lack of ex officio authority, which

places a burden on the rights holder to file a complaint and institute costly proceedings to ensure that goods are seized

and ultimately destroyed. Civil enforcement is not a practical option, because a High Court application or action

currently takes two to three years to be heard, costs are high, and damages are low because, as noted above, South

Africa lacks statutory damages or punitive damages and proving actual damages and the amount of economic harm is

notoriously difficult in copyright cases. In addition, criminal enforcement suffers from a lack of specialized prosecutors

and judges equipped to handle IP cases. A particular problem for South Africa is infringing services that are impossible

to locate or are hosted outside of the country, which undermine the legitimate online marketplace. South Africa needs

a mechanism for no-fault injunctions that is narrowly tailored with appropriate processes to halt services that are built

on, facilitate, and/or encourage infringement. Around 45 jurisdictions around the world have developed approaches to

halt illegal services from being accessed from across their borders. For example, the European Union (EU) has

addressed this problem through Article 8.3 of the EU Copyright Directive, which is the basis for injunctive relief against

intermediaries to remove access to infringing content. There are also numerous examples in Asia and Latin America

that could be a reference point for South Africa.

South Africa has a specialized unit tasked with financial crimes and counterfeiting (known as the “HAWKS”

unit), but it does not appear to be adequately resourced or have a suitable remit to take effective action against digital

piracy. There is also a need for ongoing training and education for South Africa’s police and customs officials to improve

the process for detention and seizure of counterfeit and pirated goods. In particular, law enforcement officials should

better understand the arduous procedures and timelines in the Counterfeit Goods Act (which prohibits rights holders

from getting involved in many of the required actions), including that non-compliance will result in the release of

counterfeit and pirated goods back to the suspected infringer. The Electronic Communications and Transactions Act

(ECTA), read with the Copyright Act, is the law that rights holders rely upon for title, site, and link takedowns. The lack

of cybercrime inspectors continues to limit the full potential of this law. To facilitate a healthy online ecosystem, South

Africa should appoint cybercrime inspectors and develop a cybercrime security hub recognizing copyright as one of its

priorities.

The enactment of the Films and Publications Amendment Act, No. 11 of 2019, which extends application of

the Films and Publications Act to online distributors of publications, films, and video games, could be a positive step

for enforcement, because it establishes an Enforcement Committee for investigating and adjudicating cases of non-

compliance with any provision of the Act. South Africa’s government should implement the Act to improve enforcement

against online piracy.

IIPA is hopeful that the implementation of the Cybercrimes Act (CBA) No. 19 of 2020 will increase awareness

and stricter enforcement of piracy issues, although it has not yet yielded enforcement improvements. The CBA focuses

on cyber-related crimes, including copyright infringement through peer-to-peer networks. Justice and Constitutional

Development Minister, Robert Lamola, whose office is responsibility for implementation of the Cybercrimes Act,

pronounced in March that the government is intent on increasing collaborations with the private sector to assist the

www.IIPA.org

January 30, 2023 2023 Special 301

fight against content piracy.

While there appears to be an interest within the Department to combat content piracy,

no concrete actions have been taken yet.

The Interpol Intellectual Property Crime Conference held in 2019 in Cape Town provided local law

enforcement with information on best practices and resources for combatting IP theft, including access to the Interpol

Intellectual Property Investigators Crime College (IPIC). Law enforcement should take advantage of these initiatives,

including the IPIC training courses to assist with local and regional training of new and existing units.

GENERALIZED SYSTEM OF PREFERENCES (GSP)

In November 2019, USTR opened an investigation, including holding a public hearing in January 2020, to

review country practices in South Africa regarding IP rights and market access issues, and to determine whether South

Africa still qualifies for beneficiary status under the GSP. Under the statute, the President of the United States must

consider, in making GSP beneficiary determinations, “the extent to which such country is providing adequate and

effective protection of intellectual property rights,” and “the extent to which such country has assured the United States

that it will provide equitable and reasonable access to the markets . . . of such country.” IIPA requests that through the

ongoing GSP review, the U.S. government continue to send a clear message that the proposed CAB and PPAB as

they currently stand are fatally flawed, and work with the South African government to remedy the deficiencies in South

Africa’s legal and enforcement regimes, including by redrafting the bills to address the serious concerns detailed above

and in IIPA’s previous submissions. If, at the conclusion of the review, the Government of South Africa has not made

the requisite improvements, IIPA requests that the U.S. government suspend or withdraw GSP benefits to South Africa,

in whole or in part.

See https://businesstech.co.za/news/media/571472/government-to-clamp-down-on-pirated-movies-and-shows-in-south-africa/.

www.IIPA.org

January 30, 2023 2023 Special 301

VIETNAM

NTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 S

PECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that Vietnam should be elevated to the Priority Watch List

in 2023.

Executive Summary: Vietnam is an important emerging market in Southeast Asia for the creative industries,

but its market for creative works remains severely stunted due to worsening piracy and debilitating market access

barriers. Vietnam has become a global exporter of piracy services and Vietnamese operators have been associated

with some of the world’s most popular piracy websites, which cause significant damage to both the local and

international marketplaces. The Government of Vietnam should recognize that securing the country’s “first” criminal

and provide rights holders with a better understanding and assurance regarding the required criminal process.

Deterrence against infringement in Vietnam is lacking due to the unwillingness of Vietnamese authorities to

follow through and implement the Criminal Law and the Criminal Procedure Code to mete out deterrent penalties

against blatant piracy operators located in the country. Greater deterrent penalties are also needed for administrative

Information and Communication (MIC), and the Ministry of Culture Sports and Tourism (MCST) took a step forward

and began enforcing a decree to disable access to hundreds of infringing copyright websites in Vietnam (albeit limited

to live sports sites), unfortunately disablement in Vietnam does not stop Vietnam-based piracy services and operators

from harming overseas markets, including the U.S. market. Moreover, for U.S. rights holders, enforcement is hampered

by procedural difficulties and other deficiencies, including: (1) the government’s unwillingness to follow through on

criminal referrals, regardless of how much evidence is provided by foreign governments and industry of blatant digital

copyright piracy (e.g., the Phimmoi criminal case); (2) the lack of transparency and objective criteria for the Vietnamese

government to prosecute a criminal case; (3) restrictions on foreign investigations; and (4) the unavailability in general

of John Doe civil suits.

Amendments to the IP Code, passed in June 2022, entered into force on January 1, 2023, and contain

improvements, including certain measures that may allow rights holders to seek civil or criminal relief against online

infringers. The implementing regulations are currently being drafted, and we encourage the government to continue to

incorporate feedback from rights holders to ensure enhanced procedural transparency and smooth implementation of

the improved intellectual property (IP) Code. The Government of Vietnam should now take steps to fully implement the

WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT) (collectively, the WIPO

Internet Treaties) at the earliest opportunity, extend the term of copyright protection in line with evolving global norms

and its obligations under the Bilateral Trade Agreement (BTA) with the United States, and further improve its

enforcement framework to address online piracy including, for example, bringing the definition of “commercial scale”

into line with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and evolving

global norms. The government should also address deficiencies with the Copyright Office of Vietnam (COV), which

has not taken any action to reform the dysfunctional collective management organization (CMO) for the music industry.

Vietnam’s piracy problems would also be mitigated if its restrictive market access barriers were removed.

Vietnam should make good on its political commitments and international obligations to improve copyright protection

in the digital environment, confront its enormous piracy challenges, and remove the remaining barriers to U.S. creative

content.

For more details on Vietnam’s Special 301 history, see previous years’ reports, at https://iipa.org/reports/reports-by-country/. For the history of Vietnam’s Special

301 placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

PRIORITY ACTIONS REQUESTED IN 2023

Enforcement:

• Ensure enforcement officials, including the MIC, the Ministry of Culture, Sports, and Tourism’s (MCST)

Inspectorate, and the Ministry of Public Security (MPS) Intellectual Property Rights (IPR)/High-Tech Police and

related police units increase the number of effective enforcement actions and critically bring criminal prosecutions

through to convictions and apply objective criteria against commercial-scale digital piracy services. This would

include: addressing notorious piracy sites like Fmovies, BIPTV/BestBuyIPTV, Abyss.to, Fembed, 2embed.to,

Phimmoi, MyFlixer, and Chiasenhac; issuing criminal sanctions for commercial-scale infringement cases that are

sufficient to deter online piracy; and ensuring administrative orders for non-commercial-scale piracy cases are

properly enforced and penalties provide appropriate deterrence.

• Clarify the rules and procedures regarding enforcement of related regulations on content to disable access to

infringing websites in Vietnam, ensuring that the technical measures used to disable the infringing websites are

effective and that there are no costs associated with such actions.

• Clarify the availability of John Doe civil relief in Vietnam when enough information can be ascertained regarding

the piracy service (e.g., the domain, registrar contact details, etc.) to address the problem of pirate operators

evading detection by providing false identity and contact information.

Legislation:

• Make necessary changes to laws and implement Resolutions, Decrees, and Circulars, including the Criminal Code

and the IP Code, to ensure Vietnam is in full compliance with the WIPO Internet Treaties, the BTA, the WTO

TRIPS Agreement, and other international obligations and evolving global norms, including by:

o Adopting a Resolution that clearly defines and interprets “commercial scale” consistent with Vietnam’s

international obligations including:

 criminalizing “significant acts, not carried out for commercial advantage or financial gain, that have a

substantial prejudicial impact on the interests of the copyright or related rights holder in relation to the

marketplace” (and noting that “the volume and value of any infringing items may be taken into account in

determining whether the act has a substantial prejudicial impact on the interests of the copyright or related

rightsholder in relation to the marketplace”); and

 taking into account peer-reviewed studies to ensure that the monetary thresholds can realistically be met

by applying an appropriate substitution rate to effectively criminalize the main piracy sites operating in

Vietnam.

o Introducing an express provision to allow rights holders to apply for no-fault injunctions requiring

intermediaries to disable access to infringing websites (both those hosted in Vietnam and hosted or operated

in other countries but available in Vietnam), as well as clear and deterrent penalties for Internet service

providers (ISPs) that fail to comply with such orders.

o Ensuring that safe harbors under the amended IP Code apply to only passive and neutral services that do not

contribute to infringement, and that strong incentives are provided for neutral intermediaries to work with rights

holders to address infringement on their services.

o Providing sound recording producers with exclusive rights for broadcasting and communication to the public,

or, at minimum, implementing Article 33(1) of the IP Code in a manner consistent with Vietnam’s international

obligations, for example along the lines of WPPT, Article 15. This includes making sure the implementing

regulation does not limit remuneration rights by exempting certain users of music from payment, nor make

interactive uses subject to a mere remuneration right.

o Eliminating the legal and procedural impediments, providing greater procedural transparency, and easing the

evidentiary requirements, all of which interfere with the ability to take effective action against piracy websites,

live-streaming piracy, and Internet protocol television (IPTV) piracy and applications.

www.IIPA.org

January 30, 2023 2023 Special 301

o Extending the term of protection for all copyrighted works, including sound recordings, in line with the

international trend of 70 years after the death of the author, or, when the term is calculated based on

publication, at least 75 years (or 100 years from fixation) as required by BTA Article 4.4.

o Ensuring that certain shortcomings on collective rights management regarding governance, tariff setting, and

distribution of collected monies are addressed to bring them in line with international best practices.

o Closing certain gaps in the IP Code, notably regarding certain definitions and the scope of certain exceptions,

to align them with those of international treaties. For example, implementing regulations should clarify that all

forms of interactive on-demand transmissions, including acts such as stream ripping, are covered under the

making available right.

o Provide clear criminal liability for the act of circumvention of technical protection measures (TPMs) and

trafficking in circumvention devices or services.

Market Access:

• Ensure that amendments to Decree 71 (the former Decree 06 amendments) remove the local presence

requirement and do not impose additional barriers to e-commerce.

• Ensure that implementation of the recently amended Cinema Law and related Decrees is not more onerous than

necessary, including by ensuring that the decree for the Cinema Law eliminates foreign investment restrictions,

screen quotas, and broadcast quotas and adopts a business-friendly video-on-demand (VOD) self-classification

system.

• Eliminate caps on the number of foreign pay-TV channels in pay-TV regulations; requirements for local

advertisement insertion that severely impede the growth of the pay-TV industry; and other entry barriers with

respect to the production, importation, and distribution of copyrighted materials.

• Deregister the Recording Industry Association of Vietnam (RIAV) and engage with local and foreign music

producers to set up a new collecting society to enable all music producers to effectively manage rights that are

subject to collective management in Vietnam. As part of this, elimination of all restrictions and limitations for foreign

and joint venture entities and their involvement in CMOs is required.

PIRACY AND ENFORCEMENT UPDATES IN VIETNAM

Challenges Facing the Growing Online Marketplace: A significant percentage of the Vietnamese

population is online, and a growing number of licensed, legal content providers offer huge potential for the creative

industries. However, market access barriers and weak enforcement are preventing this potential from being realized.

Online piracy is rampant in Vietnam.

Vietnamese piracy operators have been associated with some of the world’s

most egregious websites and piracy services, like fmovies, 123movies, BestBuyIPTV, piracy-as-a-service (PaaS)

fembed,

and Chiasenhac, which cause significant damage to the local and international marketplaces and make

Vietnam a piracy haven.

The criminal enforcement path available against these sites and their operators remains

excessively long and lacks transparency. Illegal content generally can be accessed via online and mobile network

Media Partners Asia 2022 study on creative industry losses in Vietnam caused by online piracy is summarized here: https://nhandan.vn/hop-tac-ngan-chan-vi-

pham-ban-quyen-truc-tuyen-tai-viet-nam-post706584.html?zarsrc=31&utm_source=zalo&utm_medium=zalo&utm_campaign=zalo.

“Piracy as a service” (PaaS) offerings constitute a suite of off-the-shelf services that make it easy for would-be pirates to create, operate, and monetize a fully

functioning pirate operation. PaaS providers lower the barriers to entry into commercial piracy. They include: (i) website templates that facilitate setup of streaming

websites; (ii) content management systems (CMS), which are databases providing access to tens of thousands of infringing movies and TV series, in exchange for

the payment of a fee or a cut of the advertising revenue; (iii) dashboards that allow an illegal Internet protocol television (IPTV) operator to oversee the infrastructure

of their service (including monetization, content-hosting servers, and user interactions); (iv) hosting providers that provide a safe haven for pirates because they

do not respond to DMCA notices of copyright infringement; (v) video hosting services that obscure links to infringing content (i.e., instead of providing a single

weblink for each piece of content, a PaaS video host may break up the content and host it across dozens of random links to inhibit its takedown, without inhibiting

its access via a streaming site that pieces the content back together); and (vi) decentralized streaming software that acts as a third-party tool between a streaming

site and a cyberlocker or video host, allowing for quicker upload of content with a large variety of cyberlockers and video hosting services. PaaS is a subset of the

larger threat of Cybercrime-as-a-Service identified by Europol and shows the scale, sophistication, and profitability of modern online commercial copyright

infringement.

In addition, several globally popular stream-ripping sites are operated from Vietnam, including Y2mate.com. Enforcement efforts in Vietnam by the music industry

against Y2mate proved futile.

www.IIPA.org

January 30, 2023 2023 Special 301

piracy, such as streaming sites, linking sites, apps, video hosting sites, download sites, peer-to-peer (P2P) networks,

stream-ripping sites, search engines, and social media platforms. Piracy service operators often take advantage of free

platform file hosting resources, including those from Facebook and Google, to store and share pirated content and

stream the infringing content via piracy sites and apps.

Stream ripping was the most popular form of music piracy in Vietnam, with more than 30 million visits from

Vietnam in Q4 2022. The five most popular stream-ripping sites alone received well over 23 million visits in the same

period. The ecosystem was dominated by Y2Mate.com (13 million visits from Vietnam in Q4 2022 and the most popular

single piracy site of any kind), but sites like y2meta.com (4.2 million visits from Vietnam during the same period),

ssyoutube.com (2.8 million visits), and savefrom.net (2.6 million visits) were also widely used. These sites all offer the

ability to illegally download music from YouTube as an MP3. The music industry has also seen an increasing problem

of stream-ripping sites operated from Vietnam.

Cyberlockers were also a popular piracy method. Mega.nz remained the most visited cyberlocker in the

country (4.3 million visits from Vietnam in Q4 2022) with rapidgator.net (0.85 million visits during the same period) and

zippyshare.com (0.50 million visits) also key sources of pirated music content. Long-standing domestic Vietnamese

language websites focused on pirated music content were also major threats. For example, chiasenhac.vn had 1.8

million visits in Q4 2022 and was the sixth most popular piracy site of any kind in Vietnam. Apps that impermissibly

source content from streaming platforms such as Youtube, and MP3 download apps are also popular in Vietnam with

many MP3 download apps targeting domestic artists.

Streaming and IPTV piracy remains the most common type of online piracy in Vietnam. The operator of the

notorious streaming piracy network of sites Fmovies has over 60 associated domains, many of which are known pirate

brands such as Bmovies, 9anime, Putlocker, and Solarmovies, provides unauthorized access to popular movies and

TV series, and is domiciled in Vietnam.

In August 2021, the alleged founder and two employees of the notorious piracy

site Phimmoi were identified and called in for questioning by the Vietnamese police.

The administrative action taken

by the MPS was widely covered in the media.

The Phimmoi domains were subsequently taken offline; however,

Phimmoi copycat sites soon appeared, some of which have become very popular in a short period of time.

Despite

outreach efforts by the rights holders, including a letter to the Minister of the MPS, there has been no government

feedback in the intervening 18 months regarding what action the government took against the Phimmoi operators and

employees following the August 2021 interdiction.

Vietnam is also home to notorious markets IPTV piracy service BestBuyIPTV, which has over 10,000 live TV

channels from 38 countries and an estimated 20,000 VOD titles in multiple languages. BestBuyIPTV is particularly

popular in Europe.

Vietnam also hosts emerging PaaS businesses such as, 2embed.to, a versatile PaaS that had 691

million combined visits in November 2022 and remains a key threat to the global piracy landscape. The service recently

revived its Android app under a new name “OnStream,” which offers full movies for free and can be downloaded directly

from sites based on the 2embed content management service (CMS). In November 2022, 2embed also spun-off a live

sports website 9goal.tv. IIPA is also aware that 2embed is used to provide content to MyFlixer, a ring of popular ad

revenue streaming sites that provide streams of film and television content to a global audience for free.

According to SimilarWeb, in October 2022 Fmovies had a global ranking of 798 and had 84 million global visits. The site has been blocked in many countries,

including India, Australia, Denmark, Malaysia, Indonesia, and Singapore. Its former domain, Fmovies.se, was blocked in nine countries.

The Phimmoi website, which offered thousands of unauthorized feature films and television series from the United States and all over the world, was one of the

most popular pirate websites in Vietnam. At its peak of popularity between June 2019 and June 2020, Phimmoi was the 22

most popular site in Nigeria.

According to the MCS, 43% of Internet users downloaded pirated music from trendybeatz.com (the 38th most popular

site in the country) and 39% from justnaija.com (the 93rd most popular site). By providing free pirated downloads of

MP3s, these sites harm primarily domestic and African artists and restrict the growth of the local music industry.

There is no formal framework for cooperation between ISPs and rights holders in Nigeria. The NCC issued a

guideline for the Provision of Internet Services, which mandates ISPs to ensure that users are informed of any

statements of cybercrime prevention or acceptable Internet use published by the Commission or any other authority,

and that failure to comply with these acceptable use requirements may lead to criminal prosecution, including for

violations of intellectual property rights (IPR).

The Government of Nigeria should raise awareness among ISPs around

effective policies to prevent piracy, with a view to building the foundations of cooperative efforts between ISPs,

enforcement entities, and rights holders.

Enforcement: Nigeria has taken some positive steps recently to address its piracy problems, including

several administrative enforcement actions undertaken by the NCC.

In August 2022, the NCC signed a memorandum

of understanding (MOU) with the Federal Airport Authority of Nigeria to curb hard goods piracy.

In addition, the

government recently developed a National Intellectual Property Policy that aims to, inter alia, drive training, education,

and awareness and strengthen institutional frameworks for administration, management, and enforcement of IPR.

Nevertheless, more must be done by law enforcement, local registry and registrars, and ISPs to shut down

pirate online services.

Several enforcement deficiencies and limitations negatively impact intellectual property (IP)

protection and enforcement in Nigeria, including:

• high levels of corruption;

• bureaucracy within government agencies—including Nigerian police, IP registries, and other related agencies—

that impedes access to justice and undermines protection of IPR by obstructing rights holders’ ability to make

criminal complaints against piracy and other forms of infringement or to seek to protect their IPRs;

• protracted litigation and case backlog in courts that impede speedy access to justice and non-deterrent outcomes,

all of which create little disincentive against piracy, enabling locally operated pirate sites to thrive and proliferate;

• insufficient technical capacity of IPR officials;

• lack of funding for IPR Registries in the country, resulting in an ineffective IPR protection system; and

• poor utilization of technology by the IPR Registries leading to inefficient administrative systems.

See https://www.ncc.gov.ng/docman-main/legal-regulatory/guidelines/62-guidelines-for-the-provision-of-internet-service/file.

For example, in October 2022 the NCC seized 1,600 copies of pirated books worth over N2 million from four bookshops in the Federal Capital Territory, FCT,

Abuja. In September 2022, the NCC conducted an anti-piracy action against a digital television station, Real Summit Television, for allegedly intercepting and

stealing the program contents of other digital Satellite transmitting stations like DSTV and StarTimes, impounding illegal digital cable networks worth N250 million.

See “NCC impounds illegal digital cable network worth N250m in Enugu,”

https://www.vanguardngr.com/2022/09/ncc-impounds-illegal-digital-cable-network-worth-

n250m-in-enugu/. Furthermore, a recent Court of Appeals decision, Ugochukwu v. Nigerian Copyright Commission (2022) LPELR-57970(CA), interpreted the

See https://www.worldstagenews.com/2022/08/10/nigeria-faan-ncc-sign-mou-to-curb-piracy-at-nations-airports/.

See World Intellectual Property Organization (WIPO), “Nigeria Validates National IP Policy and Strategy,” https://www.wipo.int/about-

wipo/en/offices/nigeria/news/2022/news_0002.html.

Many piracy sites, both operated from within Nigeria and overseas, make use of the .NG country code Top level Domain (ccTLD). Accordingly, Nigeria should

take action against piracy sites that use the .NG and .COM.NG ccTLDs. Unfortunately, the music industry did not receive a substantive response from the domain

registrar WEB4AFRICA.NG in response to a complaint filed in 2018.

www.IIPA.org

January 30, 2023 2023 Special 301

Nigeria needs to more effectively enforce against the numerous unlicensed online music and audiovisual

services that operate in Nigeria, which are harming many markets inside and outside of Nigeria. If passed, new criminal

provisions in the CB, discussed below, should be used by the NCC as the basis for enforcement actions against piracy

services. Moreover, more resources are needed for the NCC online enforcement unit to adequately engage in

sustained efforts to combat piracy in the country, including to ensure authorities have critical resources such as

electricity and Internet access. In addition, the Government of Nigeria should take the following steps to improve

enforcement:

• The judiciary should fully maximize the current IP legislation (discussed below) to protect rights holders, and take

the following actions:

o build up case precedents that promote the rights of creators and reinforce confidence and trust in the law and

the judiciary by borrowing from case law interpretation in foreign jurisdictions that provide adequate and

effective protection and enforcement of copyrights;

o form specialized cybercrime courts and prosecution units;

o designate specialist courts and specialist IP judges within states that have large creative ecosystems;

o increase reliance on expert witnesses in the requisite IP fields; and

o partner with reputable academic institutions for regular updates on IP laws, consultations, and training on IP

to improve IP expertise among judges.

• Provide for adequate statutory and punitive damages in cases of copyright infringement and online piracy.

• Ensure that rights holders’ enforcement of their rights is not impeded due to protracted litigation.

• Provide sufficient resources and enhance engagement by enforcement authorities to ensure IP cases can be

investigated and prosecuted efficiently and at scale.

• Ensure the NCC, in collaboration with other relevant IP agencies in the country, develops an awareness policy to

educate rights holders on available IP protection mechanisms.

• Increase judicial and prosecutorial training in IPR cases, with a focus on anti-piracy enforcement matters.

Collective Management: An additional concern in Nigeria is the absence of an accredited CMO for music

rights holders to manage their public performance and broadcast rights. This absence is the result of a dispute between

the NCC and COSON, which was responsible for managing performance rights in musical works and sound recordings,

but whose operating license was withdrawn by the NCC. Since then, working with rights holders, steps were taken to

improve COSON’s transparency and governance. As a result, IIPA recommends COSON should be reinstated, subject

to a satisfactory audit to ensure appropriate good governance and operational practice. Additionally, legislation is

needed to define CMOs and their proper governance to ensure that CMOs should exist only if they are owned or

controlled by their member rights holders and are non-profit organizations. With these provisions in place, as well as

improved enforcement as noted above, CMOs would be able to license effectively in Nigeria.

Nigeria ratified the WIPO Internet Treaties in 2017 but has not fully implemented the treaties. As a result,

Nigeria’s legal regime has fallen short of international copyright norms in several key respects. A draft copyright bill,

first circulated in 2017, was re-circulated as an Executive Bill, alongside a Private Member Bill in 2021. Following a

public consultation, including positive engagement by the U.S. Government, the two bills were ultimately merged –

resulting in the CB. Although the CB has not been officially released to the public, IIPA understands that the legislation

addresses some of stakeholders’ concerns with the Executive Bill, including providing definitions for technological

protection measures (TPMs) and broadcasting that are consistent with the WIPO Internet Treaties, removing the

registration requirement to exercise exclusive rights, and providing for expeditious takedowns and provisions to

address repeat infringers. The CB was passed by the National Assembly in 2022 and was sent to the President for

assent. However, because the President did not give his assent by the required deadline, the CB was subsequently

returned to the National Assembly. It remains unclear whether Parliament will adopt an amended bill before elections

take place in February 2023.

www.IIPA.org

January 30, 2023 2023 Special 301

The CB would introduce several reforms, including: an exclusive right of making available; improvements to

the enforcement framework, including procedures for blocking websites and criminal penalties for online infringements;

improved protections for TPMs; and obligations for ISPs to ensure their networks do not facilitate piracy, including to

“expeditiously” take down infringing content, institute a repeat infringer policy, and ensure infringing content that has

been taken down remains off their networks. Unfortunately, there remain several significant deficiencies in the CB that

should be corrected for Nigeria to properly implement the WIPO Internet Treaties and meet its international obligations

and evolving global norms, including the following:

• Section 35 of the CB introduces a compulsory license scheme that is arguably incompatible with Nigeria's

international obligations, including under the Berne Convention and the WCT. Under this provision, the NCC could

bypass the copyright owner and authorize the use of a copyrighted work "by any person for the purpose of rectifying

the abuse of a dominant market position or to promote public interest." The provision would undermine rights

holders' ability to assert their rights in or license their works because any user could request that the NCC bypass

the copyright owner and authorize or prohibit certain uses of a work based on the mere allegation that the user

"made a reasonable effort to obtain permission from the owner of copyright on reasonable commercial terms and

conditions and that the effort was not successful." Hence, Section 35 undermines contractual freedom and legal

certainty and is inconsistent with Nigeria’s international obligations, including under the Berne Convention and the

WCT. The section is outside the scope of the compulsory licenses set out in the Berne Convention and its

Appendix, which cannot be applied to the right of making available or beyond the narrow uses set out therein.

Moreover, the Section reduces the scope of the exclusive right of making available, thereby running afoul of the

bill’s objective to implement the WCT by compromising its milestone right.

• The CB includes a proposal to add extended collective licensing (ECL) in Nigeria. An ECL system is appropriate

only in well-developed collective rights management systems, where organizations represent a substantial number

of rights holders for each segment of the collective marketplace, and only in well-defined areas of use where

obtaining authorization from rights holders on an individual basis is typically onerous and impractical to a degree

that makes a license unlikely. As noted above, Nigeria's collective management system is inadequate. In addition,

the provision is overly broad. For these reasons, such a system is not appropriate in Nigeria.

• The CB appears to provide for a hybrid fair use-fair dealing provision that is substantially broader than the U.S.

fair use doctrine for several reasons. First, the provision includes additional broad purposes that are not present

in the U.S. statute, including "private use" and "private study." Second, U.S. fair use is determined on a fact-

intensive, case-by-case basis. Without the foundation of a well-developed body of case law, Nigeria's untested,

broader fair use provision would result in uncertainty for both rights holders and users on the parameters of

permissible uses. The additional broad purposes listed in the text adds to the uncertainty and risk that Nigerian

judges, none of whom have ever adjudicated a fair use case and would be doing so without any binding precedent

to guide them, will find an unacceptably wide range of uses to be non-infringing. Third, the expansive new "fair

use" exception is included as part of a "fair dealing" system that includes several overly broad new exceptions, as

discussed below. This unprecedented hybrid approach further adds to the uncertainty and risk that the fair use

provision will deny copyright owners fundamental protections on which they rely to license their works and sound

recordings. Therefore, the proposed broad hybrid fair use-fair dealing provision is inconsistent with the three-step

test because it is not limited to certain special cases and there is a substantial risk that it would be applied in a

manner that conflicts with the normal exploitation of a work or unreasonably prejudices the legitimate interests of

the rights holder.

• An exception for archives, libraries, and galleries, is broader than the exception in U.S. law and inconsistent with

the three-step test, because it would permit these institutions to make and distribute "copies of works protected

under this Bill as part of their ordinary activities" without limitation, and it would also permit lending such copies to

users.

www.IIPA.org

January 30, 2023 2023 Special 301

• The CB also would provide for compulsory licenses for translation and for reproduction of published works. This

provision should be revised to ensure it is calibrated according to the terms of the Berne Convention Appendix,

which currently it is not.

• While the CB includes an exclusive right of distribution, extraneous language has been added that appears to limit

the right of distribution "for commercial purposes" and for works that have "not been subject to distribution

authorized by the owner." IIPA is concerned that this language could be interpreted to extend the concept of

exhaustion of rights to distributions of digital content.

• While the broadcast right is granted as an exclusive right in Section 12, it is then downgraded to a mere

remuneration right in Section 15. Sound recording producers’ broadcast right should be maintained as an exclusive

right without being downgraded to provide the fair market conditions in which right holders can negotiate

commercial terms that reflect the economic value of uses of recorded music to broadcasters.

• The CB would propose draconian criminal sanctions, including imprisonment, for rights holders who fail to keep

proper records of the disposition of their rights. This proposal is unprecedented and disproportionate to any

intended purpose and should be deleted from the bill.

• The overbroad quotation exception should be revised to limit the use of a quotation to purposes of criticism or

review.

• Private copying exceptions, and with them, provisions for levies, should apply only to content that is lawfully

acquired—the exceptions should not be misused as a license to legalize piracy—and ensure that rights holders

receive adequate shares of collections made, deductions are kept to a minimum, and compensation is payable

directly to rights holders.

• The term of protection for sound recordings should be extended to 70 years from fixation or publication (and the

same for juridical entities), and, for works, to the life of the author(s) plus 70 years.

• Eligibility for safe harbors from liability should be limited to only passive and neutral intermediaries that do not

contribute to infringing activities.

COMPLIANCE WITH EXISTING OBLIGATIONS TO THE UNITED STATES

Nigeria’s enforcement framework is deficient, lacking effective remedies to combat pervasive online piracy,

which is inconsistent with Nigeria’s obligations under the WTO TRIPS Agreement enforcement provisions, including

Articles 41 and 61. As noted above, certain provisions of the CB, notably the compulsory licensing provision of Section

35, would put Nigeria out of compliance with its obligations under the WTO TRIPS Agreement, the Berne Convention,

and the WIPO Internet Treaties.

www.IIPA.org

January 30, 2023 2023 Special 301

PERU

INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 SPECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that Peru remain on the Watch List in 2023.

Executive Summary: Peruvian authorities, especially the Instituto Nacional de Defensa de la Competencia

y de la Protección de la Propiedad Intelectual (INDECOPI) and the courts, have made highly commendable efforts to

improve enforcement against several major infringers by issuing injunctions for Internet service providers (ISPs) to

block copyright infringing websites. However, the proposed Proyecto de Ley 878/2021-CR (the General Internet Bill)

currently being discussed in the Peruvian Congress, as well as the proposed amendments presented by the

Supervisory Body of Telecommunications Private Investment (OSIPTEL) to the Net Neutrality Regulation, risk depriving

INDECOPI of this power. Additionally, the General Internet Bill introduces a safe harbor mechanism that is not in line

with international standards nor in keeping with Peru’s international obligations under the U.S.-Peru Trade Promotion

Agreement (U.S.-Peru TPA). IIPA urges the Peruvian government to withdraw or, at the very least, clarify the General

Internet Bill to ensure that these problems are addressed. Online and physical piracy continue to be serious problems

in Peru that undermine the market for legitimate content in the country and across the region.

In fact, Peru should make more use of its existing judicial and administrative powers to address its evolving

piracy problem and to properly protect the legal digital market. For instance, INDECOPI, the agency charged with

promoting and defending intellectual property rights (IPR), has proven to be a very efficient entity in the fight against

piracy, and IIPA encourages the Government of Peru to give it greater powers and the necessary human and economic

resources to continue with this work so that it conducts even more effective administrative enforcement operations

against online infringing sites. Moreover, it is essential that the Peruvian Congress reject the provisions from the

General Internet Bill, and any other legislation or regulation, that will hinder the administrative site-blocking efforts

developed by INDECOPI. Additionally, the Peruvian government should create a task force among the multiple

prosecutors’ offices with jurisdiction over intellectual property (IP). Finally, the Government of Peru should not rely on

expansive interpretations of exceptions in the Copyright Act to avoid paying for licenses for music. Instead, it should

serve as an example of the importance of respecting copyright.

PRIORITY ACTIONS REQUESTED IN 2023

Enforcement

• Devote significantly more resources and political support to combat digital piracy.

• Increase INDECOPI’s funding and powers so that it can build upon the recent positive examples of IP enforcement

against piracy website operators in the country.

• Pass legislation criminalizing the unauthorized camcording of films without the need to prove an intent to profit.

Legislation

• Retain the current legal basis for no-fault administrative injunctions, including website blocking relief (a currently

effective tool to reduce online piracy).

For more details on Peru’s Special 301 history, see previous years’ reports, at https://iipa.org/reports/reports-by-country/. For the history of Peru’s Special 301

placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

• Reject any provisions in the General Internet Bill (Proyecto de Ley 878/2021-CR), such as Article 51, that would

interfere with administrative site blocking or undermine copyright enforcement in the country.

• Eliminate Articles 48, 49, 50, and 51 of the General Internet Bill, which address online service providers (OSP)

liability.

• Ensure Article 57 does not invalidate the vital copyright licenses upon which digital content providers rely to

distribute products in Peru.

• Reject the proposed amendments presented by the Supervisory Body of Telecommunications Private Investment

(OSIPTEL) to the Net Neutrality Regulation, which would undermine INDECOPI’s enforcement efforts.

• Repeal Decreto Legislativo No. 1391 of September 4, 2018, or, at a minimum, amend the law to remove the "one

member, one vote" governance system from collective management organizations (CMOs) that prevents more

equitable voting systems based on the amount of distributions to members.

• Pass legislation to introduce clear secondary liability principles for online copyright infringement and establish

measures demonstrated effective in preventing or restraining infringement.

• Improve the efficiency and effectiveness of the judicial system, including through raising greater awareness among

judges about international best practices on copyright protection and online enforcement.

• Create a task force among the multiple prosecutors’ offices with jurisdiction over IP.

THE DIGITAL MARKETPLACE IN PERU

Internet connectivity is growing in Peru. Fixed broadband subscriptions in Peru was reported at 3,044,000 in

2020.

Peru’s music market grew by 23.6% in 2021 to US$31 million, driven mainly from an 86.6% growth in streaming.

Revenue in the video-on-demand (VOD) market is expected to show an annual growth rate of 6.15%, resulting in a

projected market volume of US$189.90 million by 2027.

The number of VOD users is expected to amount to 7 million

users by 2027, and user penetration will be 18.1% in 2022 and is expected to hit 19.9% by 2027.

The video game

market will rise with an annual average of 20%, generating US$147 million by 2023.

While legal means of accessing

copyrighted content online are growing, legitimate content is still competing with illegal sources.

Online Piracy: Online and physical piracy continue to be serious problems in Peru that undermine the market

for legitimate content in the country and across the region. Individuals based in Peru operate many websites that profit

from selling advertising and user data and offer vast movie and music catalogs to stream and/or download. These sites

are highly popular in places such as Argentina, Mexico, and Chile, where they attract hundreds of thousands, and for

some countries millions, of visitors. The most relevant form of piracy in Peru is via illegal downloading from licensed

online streaming platforms, such as YouTube. Seven of the top ten piracy sites in Peru during the second quarter of

2022 were stream-ripping sites and three others were cyberlockers. The most popular stream-ripping sites recorded

millions of individual visits, such as NoTube.site (13.6 million visits from Peru in Q3 2022), OnlineVideoConverter.pro

(3.3 million visits), SaveFrom.net (2.6 million visits), and Y2Meta.com (1.2 million visits). The most popular individual

site for piracy was the cyberlocker Mega.nz with 11.8 million visits during the third quarter of 2022, but 1fichier.com

(2.0 million visits) and Zippyshare (1.1 million visits) were also widely used. Data from CET.LA shows that, from 2019

to 2020, the 100 most popular illegal domains in Peru received over 280 million visits, 82% of which were directed to

illicit streaming websites.

The illegal websites received 88% more visits than the legal ones.

Illegal Internet protocol

Trading Economics, Peru - Fixed Broadband Internet Subscribers, available at https://tradingeconomics.com/peru/fixed-broadband-internet-subscribers-wb-

data.html.

International Federation of the Phonographic Industry (IFPI), 2022 Global Music Report, p. 170.

Statista, Video Streaming (SVoD) – Peru, available at https://www.statista.com/outlook/dmo/digital-media/video-on-demand/video-streaming-svod/peru.

Id.

Gaming and Media, Peru: A promising market for Video Games and Esports, August 12, 2020, available at https://g-mnews.com/en/peru-a-promising-market-for-

video-games-and-esports/.

CET.LA, Dimension and impact of online piracy of audiovisual content in Latin America, October 12, 2020, p. 63, available at https://cet.la/estudios/cet-

la/dimension-e-impacto-de-la-pirateria-online-de-contenidos-audiovisuales-en-america-latina/.

Id.

www.IIPA.org

January 30, 2023 2023 Special 301

television (IPTV) offers are also present in Peru, but on a smaller scale: 10% of the e-commerce offers regarded illicit

devices, while 90% were licit.

Unauthorized Camcording: Unauthorized camcording is a persistent challenge for rights holders in Latin

America. Peru remains one of the leading sources of unauthorized camcords in the region. Fifteen illicit audio and/or

video recordings of MPA member films were sourced from Peruvian theaters in 2019, up from ten in 2018. Professional

cammers feel safe to conduct this activity in Peru because criminal convictions require proof that the recording was

made with an economic intent, which makes it virtually impossible to obtain a conviction. Peru needs to enact legislation

that would effectively criminalize unauthorized camcording of films without the need to prove an intent to profit.

INDECOPI and the courts have made evident efforts to improve enforcement against several major local sites

infringing music and film copyrights. For example, in July 2022, INDECOPI ordered ISPs to block 147 illicit websites

that illegally provided copyrighted content.

Since 2019, INDECOPI has also developed an agreement with La Liga to

identify infringing websites and to prevent the illegal transmission of sport events.

It is also clear that website blocking

works in Peru. In November 2020, the most popular stream-ripping site in the country was Y2Mate, which received an

average of 138,000 visits from Peru each day. The site was then blocked by ISPs in the country starting in December

2020; by March 2021, daily visits from Peru were down to just 22,000, a reduction of 84.1% compared to prior to the

blocking. The action also had an impact on overall stream-ripping levels, which were 20.4% lower in February 2021

than in November 2020.

However, the General Internet Bill currently being discussed by the Peruvian Congress could, if approved,

halt these successful initiatives as it creates several new requirements and deterrents to online enforcement of

copyrights. Moreover, Peru has yet to implement the necessary high standards of copyright protection to meet its

international trade obligations and to further develop the country's digital and creative economy. For example, Peru's

law lacks a provision that provides statutory damages for civil copyright infringement. In addition to necessary legal

reforms, IIPA urges Peru to make more use of its existing judicial and administrative powers to address its evolving

piracy problem and to properly protect the legal digital market. For instance, the Government of Peru should increase

the funding for INDECOPI, the agency charged with promoting and defending IPR, so that it can expand on its success

in administrative enforcement operations against online infringing sites. More personnel are needed in the copyright

enforcement area, along with additional support and structure for technical training and inspections.

General Internet Bill (Proyecto de Ley 878/2021-CR): The General Internet Bill proposes to introduce

damaging changes to the current framework. These changes would roll back the progress the government has made

against piracy, negatively impact the legitimate market for copyrighted content, and severely hamper the ability of rights

holders and INDECOPI to enforce copyright in Peru. Specifically, Article 51 is particularly troubling because it appears

to require a judicial order to intervene against an Internet access service and services provided on the Internet. As a

result, IIPA is concerned that under Article 51, OSPs would not be required to address infringing content unless a court

issues a judicial order. Therefore, if approved, this article could put an end to the current administrative site-blocking

regime as well as to procedures that allow rights holders and OSPs to remove infringing content in an efficient and

timely manner. Currently, the administrative procedure implemented by INDECOPI has full transparency and provides

any involved party the ability to appeal to its internal commission and to a civil court.

Id. at p. 23.

More information available at: https://www.gob.pe/institucion/indecopi/noticias/630376-golpe-a-la-pirateria-digital-indecopi-bloquea-147-webs-ilegales-que-

explotaban-obras-y-producciones-protegidas-por-el-derecho-de-autor.

More information available at: https://newsletter.laliga.es/global-futbol/laliga-collaborations-bring-down-pirates-in-brazil-and-peru and

https://newsletter.laliga.es/global-futbol/laliga-reducing-access-to-pirated-content. See also, https://www.gob.pe/institucion/indecopi/noticias/627440-el-indecopi-y-

laliga-group-international-renuevan-convenio-para-luchar-contra-la-pirateria-digital.

www.IIPA.org

January 30, 2023 2023 Special 301

Article 51 also seems to conflict with other provisions contained in the General Internet Bill. Articles 49.2 and

50.2 both mention the possibility that administrative authorities could order the removal of infringing content. This is

apparently inconsistent with Article 51’s requirement that any intervention is only by judicial order. Additionally, Articles

40 and 71 state that OSPs (including those that provide access, search, and caching in Article 40 and domain rental

in Article 71) cannot be held responsible for user-generated content, if, among other things, they did not refuse to

comply with a judicial or administrative order requiring removal. Therefore, the General Internet Bill is inconsistent on

its face and, if approved in its current form, it will introduce significant uncertainty into Peru’s copyright enforcement

legal framework.

The General Internet Bill would introduce an inadequate and highly damaging OSP liability framework that

appears to require a judicial or administrative order before OSPs can be held liable for and required to remove or

disable access to infringing content on their services. According to Articles 49.1 and 50.1, OSPs cannot be held liable

for user-generated content if they do not have “effective knowledge” that the content is illegal, or if they have effective

knowledge and they act diligently to take it down or block access. Under Articles 49.2 and 50.2, such “effective

knowledge” appears to require receiving an order from an administrative or judicial authority to remove or disable

access to the illegal content. Conditioning “effective knowledge” on a declaration from a judicial or administrative

authority would provide unacceptably inadequate legal incentives for OSPs to cooperate with rights holders to take

down infringing content, in violation of Article 29 of the U.S.-Peru TPA, as discussed further below.

IIPA acknowledges that both Articles 49.2 and 50.2 state that the requirements for “effective knowledge” are

“without prejudice to the procedures for detecting and removing content that providers apply under voluntary

agreements and other means of actual knowledge that could be established.” While this indicates that other methods

of proving effective knowledge may be possible, that is far from clear. It is also concerning that the General Internet

Bill does not include remedies against the abuse of safe harbor provisions. Although Article 42 of the General Internet

Bill states that restrictions to OSP services can be made for the purpose of protecting IPR, the article requires either a

judicial or a legislative measure to do so. Moreover, Article 42 does not mention administrative measures, which again

raises questions regarding the sustainability of the current administrative site-blocking regime.

Because the General Internet Bill appears to require a judicial or administrative order for OSPs to remove or

disable access to infringing content on their services, enactment would likely place Peru in violation of the U.S.-Peru

TPA. Article 29(b) of the U.S.-Peru TPA requires Peru to implement an effective notice and takedown mechanism that

requires OSPs to “expeditiously” takedown infringing content “on obtaining actual knowledge of the infringement or

becoming aware of facts or circumstances from which the infringement was apparent, such as through effective

notifications of claimed infringement.” The General Internet Bill’s requirement that rights holders must wait for a judicial

or administrative order is clearly inconsistent with this obligation.

In addition, Article 16.29(a) of the U.S.-Peru TPA requires Peru to provide “legal incentives for service

providers to cooperate with copyright owners in deterring the unauthorized storage and transmission of copyrighted

materials.”

To ensure adequate legal incentives for cooperation between service providers and rights holders, Peru

should implement secondary liability principles to hold OSPs responsible for infringements carried out by third parties

using their services. In U.S. law, secondary civil liability doctrines (under vicarious, contributory, and inducement

theories of law) provide the legal incentives for cooperation and are a deterrent to the unauthorized storage and

transmission of copyrighted materials.

The General Internet Bill appears to hold OSPs liable for third-party

infringements only upon a judicial or administrative order, which provides inadequate legal incentives for cooperation

between OSPs and rights holders to combat online piracy. In fact, instead of weakening incentives for OSPs, Peru

U.S.-Peru Trade Promotion Agreement (U.S.-Peru TPA), available at

https://ustr.gov/sites/default/files/uploads/Countries%20Regions/africa/agreements/pdfs/FTAs/peru/16%20IPR%20Legal.June%2007.pdf

In addition to secondary civil liability, an effective online liability regime should also provide criminal liability for aiding and abetting criminal copyright piracy.

www.IIPA.org

January 30, 2023 2023 Special 301

should pass legislation to introduce clear secondary liability principles for online copyright infringement and establish

obligations for service providers to apply measures demonstrated effective in preventing or restraining infringement.

Finally, Article 57 creates additional uncertainty for digital content, proposing an inalienable right for

consumers to seek a refund for electronic transactions. While the type of transactions covered by the provision is

unclear, the provision risks invalidating the vital copyright licenses upon which digital content providers rely to distribute

products in Peru.

The General Internet Bill would dramatically weaken protection for creative works and impact the ability of

rights holders and INDECOPI to continue their efforts to enforce copyright online, thus effectively depriving rights

holders of the fundamental right to copyright protection included in Article 2.8 of the Political Constitution of Peru. The

Explanatory Memorandum of the General Internet Bill makes several references to fundamental rights, implying that

access to the Internet should be one of them. However, while access to the Internet is currently not recognized as a

fundamental right in the Political Constitution of Peru, copyright protection is. The General Internet Bill does not seem

to take this into account. These provisions should be withdrawn and reconsidered. Peru should not create a legal

framework that would make copyright enforcement on the Internet onerous, as would be the case if these provisions

are included in this General Internet Bill.

Ignoring the inconsistencies, the General Internet Bill appears to propose an approach that relies on judicial

orders for copyright enforcement. Such an approach would completely congest the judicial system of Peru due to the

sheer number of infringing sites that rights holders and enforcement authorities regularly face and would render the

mechanisms, an approach like the one proposed by the General Internet Bill congests the judicial system of a country,

rendering the fight against infringing content on the Internet virtually ineffective. It would also prevent rights holders

and OSPs from pursuing out of court agreements to monitor and tackle copyright infringement. In the very isolated

examples of countries that followed the same approach as proposed in Peru—Spain until the implementation of the

Sinde Law in 2014 and, more recently, Chile in 2010—anti-piracy efforts have been dramatically reduced, leading to

the proliferation of unlawful activity in the region.

IIPA requests the current legal basis for no-fault administrative injunctions, including website blocking relief

(a currently effective tool to reduce online piracy), should be retained and any provisions in the General Internet Bill,

such as Article 51, that would interfere with this tool, should be eliminated from the General Internet Bill. Moreover,

Articles 48, 49, 50, and 51, which address OSP liability, should be eliminated.

Net Neutrality Regulation: OSIPTEL has also presented amendments to the Net Neutrality Regulation with

the same goal: preventing the blocking of copyright infringing websites unless there is a court order. However, the

judicial system in Peru is not designed to deal with the ever-changing landscape of online copyright infringements and

lacks the efficiency required to mitigate the damages from this type of piracy.

years, but there is one provision in the Peruvian Copyright Act that has been proven to be particularly problematic. IIPA

is concerned about the reliance of state-owned or state-funded operators on certain exceptions of the Copyright Act to

avoid obtaining licenses for the use of music, which sets a particularly negative example in the market in terms of

respect of copyright. For example, Article 41(b) of the Copyright Act allows for the use of “small fragments” of works

during official events, without a license or payment, provided that none of the participants receive remuneration for

their participation. Yet, local rights holders have seen how state-owned entities, notably state-funded broadcasters and

public events organizers, consistently rely on this exception to avoid obtaining a license for the use of music. Among

those unlicensed companies, there is one TV nation-wide broadcasting company (Channel 7), a national radio chain

(Radio Nacional), and many governmental offices and official entities that regularly sponsor music events without any

www.IIPA.org

January 30, 2023 2023 Special 301

INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023

SPECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that Poland be placed on the Watch List in 2023.

Executive Summary: Internet piracy is a significant problem in Poland, severely hampering Poland’s market

for legitimate sales of film and television content, music, books, and entertainment software. In the experience of the

copyright industries, all indications are that the situation has worsened in recent years. In June 2017, Deloitte published

a report that found that in 2016 Internet piracy cost Poland over 3 billion PLN (US$757 million) of lost GDP, 836 million

PLN (US$211 million) of lost tax revenues, and 27,500 lost jobs.

According to the report, in 2016, 51% of Internet

users in Poland (more than 12 million Poles) used websites offering illegal access to content, and illegal websites in

Poland received revenues of 745 million PLN (US$188 million). Recent data, including from the International Federation

of the Phonographic Industry’s (IFPI) Music Consumer Study for 2022 (MCS) and APP Global’s Piracy Landscape Report

from December 2019, demonstrates that the rate of Internet piracy has continued to grow.

The Government of Poland has so far failed to provide adequate and effective enforcement mechanisms to

combat online piracy, raising questions regarding compliance with the enforcement provisions of the WTO TRIPS

Agreement. Poland should make clear that its national legislation is in line with European Union (EU) law by

implementing Article 8(3) of the EU 2001 Copyright Directive (2001/29/EC), which ensures that no-fault injunctive relief

is available against intermediaries whose services are used for piracy. The Polish Government chose not to implement

this provision, despite an obligation to do so, under the assumption that the prescribed injunctive relief is already

available in Polish civil law. However, Polish courts have held that Polish civil law does not provide no-fault injunctive

relief as required by Article 8(3). The Polish legislature should clarify the issue by finally implementing into national law

Article 8(3), which dates back to 2001.

Although Poland has failed to institute best global practices for Internet service provider (ISP) liability, including

failing to properly implement Articles 14 and 15 of the EU E-Commerce Directive (2000/31/EC), the situation could be

remedied through proper application of the EU Digital Services Act. Regarding the 2019 EU Digital Single Market

(DSM) Copyright Directive (2019/790) and SatCab Directive (2019/789), the Polish transposition is still ongoing.

Unfortunately, the most recent draft legislation includes several concerning provisions that deviate to some extent from

the Directives.

Finally, Poland’s enforcement officials do not take sufficient effective actions against online piracy under the

existing law, and Poland maintains several market access barriers that limit consumers’ access to legitimate content.

Poland should address the deficiencies in its enforcement framework, including the lack of adequate and effective

mechanisms to combat online piracy.

PRIORITY ACTIONS REQUESTED IN 2023

• Ensure adequate and effective enforcement against online piracy, including by correctly implementing Article 8(3)

of the EU Copyright Directive.

• Ensure Poland’s ISP liability regime is consistent with global best practices.

• Fully implement the DSM Copyright Directive.

• Take effective enforcement actions against unlicensed services, including sites that link to pirated content, in

For more details on Poland’s Special 301 history, see previous years’ reports, at https://iipa.org/reports/reports-by-country/. For the history of Poland’s Special

301placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

A summary of the 2017 Deloitte report on Internet Piracy is available in English at http://zpav.pl/pliki/aktualnosci/Deloitte/Broszura_piractwo_EN_Final.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

accordance with EU case law.

• Improve criminal enforcement by following through on more criminal investigations and issuing deterrent

sentences against infringers.

THE COPYRIGHT MARKETPLACE AND ENFORCEMENT IN POLAND

Online piracy is a serious problem in Poland. A 2019 APP Global report found that operators of known

infringing sites, such as Filman.cc, operate in the open and enjoy a positive perception by the public.

Many piracy sites

even are permitted to maintain the appearance that they are legal businesses. For example, cda.pl is listed on the

Warsaw Stock Exchange and Chomikuj has filed defamation claims for being referred to as pirates, even though the

site has been structurally infringing for many years and was declared directly responsible for copyright infringement by

the Polish Supreme Court in May 2022.

The piracy landscape is dominated by piracy streaming services that hinder

the growth of legitimate streaming services in the country. According to the APP Global report, a selection of 156

websites that provide access to infringing content generated 193 million visits from Poland in December 2019. The

majority (90%) of the visits to these sites were to local Polish sites.

Poland also has seen recent growth of pirate Internet

protocol television (IPTV) services, which provide bundles of illegal retransmissions of linear channels, often via a

dedicated set top box or simply via an app. These services are typically subscription-based and examples include

weeb.tv, and polbox.tv. In addition, according to the video game industry, in 2022 Poland ranked eighth globally in the

number of connections by peers participating in unauthorized file sharing of video games of all kinds on peer-to-peer

(P2P) networks (up from ninth globally the prior year), as well as of incidents of P2P infringement of games on personal

computers.

According to IFPI’s 2022 MCS, Poland had the highest music piracy rate out of eight EU countries included in

the study, with 38.5% of Internet users from Poland (and 50.5% of 16-24-year-olds) having pirated music at least once

in the previous month. According to the Study, the most popular piracy destinations in Poland were domestic-run

cyberlockers that targeted a Polish audience. For example, Chomikuj had been used by 12.5% of users age 16-64 to

download music in the previous month and had 19.4 million visits from Poland in Q3 2022. The Study highlights that

stream ripping is the key music piracy threat in Poland. 30.9% of Internet users said they had used stream ripping to

illegally download music, while 24% had obtained pirated music from cyberlockers like Chomikuj and Ulub, and 13%

had downloaded from BitTorrent sites like ThePirateBay and 1337x. The most popular stream-ripping websites

received millions of visits according to data from SimilarWeb, including 2convert.net (2.2 million visits from Poland in

Q3 2022), mp3y.download (2.0 million visits from Poland in Q3 2022), savefrom.net (1.3 million visits from Poland in Q3

2022), and Polish language site Pobieracz.net (1 million visits from Poland in Q3 2022).

Poland also suffers from other forms of piracy, including instances of illegal camcording (with two new cases

reported in 2022) and hard goods piracy. Poland is flooded with imports of toys and other goods, illegally bearing

trademarks owned by producers of audiovisual content, hindering their ability to exploit these marks in Poland. Despite

efforts of the customs administration, illegal goods manufactured in Asia are easily accessible in Poland.

Enforcement against online piracy is inconsistent and inadequate. The operators of websites that post

infringing hyperlinks, whether text links or embedded streaming links, try to avoid responsibility by arguing they are

merely linking to external content that has already been made available to the public. The creation of specialized

intellectual property (IP) courts in 2020 has not brought about needed improvements. Moreover, the Polish press

recently reported that the IP courts have refused to allow plaintiffs to demand names of physical persons (private

See APP Global piracy landscape report, December 2019.

In 2015, Polish film makers obtained a court order against the Chomikuj.pl content hosting platform related to the availability of infringing copies of Polish movies,

requiring that Chomikuj implement various measures to prevent the availability of infringing content. After a lengthy appeals process, in May 2022 the Supreme

Court finally ruled that platforms sharing illegal content from their users are indirect infringers and thus should be held liable for abetting. According to the decision,

the illegal content must disappear from Chomikuj.pl and the portal must pay compensation to the creators in the amount of 540,000 PLN. However, it is important

that Chomikuj.pl has an active role in content sharing activities. While this is a positive development, the length of time for these proceedings illustrates how these

delays can undermine effective civil enforcement.

See id.

www.IIPA.org

January 30, 2023 2023 Special 301

individuals) engaged in infringing activities, unless they are engaged in a registered business activity. The practice has

been that the names of such individuals could be obtained through a court order. Recently, however, the Circuit Court

in Warsaw issued a refusal and the Court of Appeals hearing the case in the second instance directed an official judicial

question to the Supreme Court, which decided not to respond to the question, so justification of this decision has yet

to be obtained. Civil actions against pirate services are generally ineffective due to the slowness of the legal process

in Poland. Finally, as discussed below, the Government of Poland has not implemented Article 8(3) of the EU 2001

services free to continue operating and growing unencumbered in Poland.

Poland’s legal framework is inadequate, leaving copyright owners unable to effectively protect and enforce

their rights online in the face of piracy. Poland lacks adequate enforcement mechanisms against online piracy because

it has not implemented Article 8(3) of the EU Copyright Directive, which requires Poland to provide for no-fault injunctive

relief against intermediaries whose services are used for infringement.

In addition, Poland’s ISP liability framework

falls short of global best practices and EU law. Amending Poland’s copyright enforcement laws to provide a legal basis

for injunctive relief and to improve its ISP liability framework were among the recommended conclusions of the 2017

Deloitte report on Internet piracy.

To address its escalating Internet piracy problem, Poland should enact enforcement

mechanisms that are adequate and effective to combat online piracy, including by implementing Article 8(3) of the EU

Directive is done faithfully.

Lack of Injunctive Relief: Article 8(3) of the EU Copyright Directive requires Member States to ensure that

injunctive relief is available “against intermediaries whose services are used by a third party to infringe a copyright or

related right.” Unfortunately, Poland has not implemented this provision. Since accession to the EU, the Government

of Poland has claimed that its existing legal tools are sufficient to achieve the goals set by the Directive and, therefore,

implementation of this Article is unnecessary. Yet, as discussed above, piracy remains a significant problem in Poland

and existing tools are inadequate for rights holders to effectively enforce their rights online. The lack of injunctive relief

remedies is particularly problematic given the popularity of local, Polish language pirate sites.

Due to the refusal of the Government of Poland to enact effective online enforcement mechanisms, domestic

and international rights holders lodged complaints against Poland with the European Commission (EC) for failure to

implement Article 8(3) of the Copyright Directive (complaint reference CHAP(2015)02644). In response, the

Government of Poland asserted that there is no evidence that its legal system is not in line with Article 8(3) and that its

current legal regime has achieved the Article’s objective, pointing to Articles 422 and 439 of the Civil Code and Article

11 of the Enforcement Directive. Among other things, rights holders responded that while the Civil Code provisions

regulate aspects of civil enforcement, the provisions do not provide a legal basis for no-fault injunctive relief against third

parties. A 2017 Warsaw Court of Appeals decision held that Article 8(3) was not implemented into Poland’s legal system,

although the court dismissed the application to disable access to an infringing service (Chomikuj.pl) on other grounds—

that the application did not properly name the parties against whom injunctive relief was sought—and the part of the

decision relating to the implementation of Article 8(3) was not central to the holding. In May 2022, the Polish Supreme

Court finally rendered a long-awaited decision in the Chomikuj.pl case. Although the Supreme Court finalized the

judgement of the Court of Appeals, affirmatively declaring Chomikuj.pl directly responsible for copyright infringement,

the case did not clarify whether no-fault injunctive relief is available under Polish law

No-fault injunctive relief refers to injunctive relief consistent with Article 8(3) of the EU Copyright Directive 2001/29, (Copyright Directive), which requires that

injunctive relief is available “against intermediaries whose services are used by a third party to infringe a copyright or related right.” As discussed in Recital 59 of

the Copyright Directive, “In many cases such intermediaries are best placed to bring such infringing activities to an end.” Accordingly, injunctive relief should be

available “against an intermediary who carries a third party’s infringement of a protected work…even where the acts carried out by the intermediary are exempted

under Article 5.”

See supra fn. 2.

www.IIPA.org

January 30, 2023 2023 Special 301

In sum, there is confusion because the Polish government and the Courts disagree on the state of the law.

The Government of Poland can easily clarify the situation by taking the necessary steps to implement Article 8(3) to

provide rights holders with a mechanism for adequate and effective enforcement against online piracy, which continues

to grow unabated.

Internet Service Provider (ISP) Liability Framework Fails to Meet Global Best Practices: Poland’s ISP

liability framework is inadequate because it does not meet global best practices for notice and takedown and does not

provide for other measures demonstrated to be effective in preventing or restraining infringement. Poland has

incorrectly implemented Articles 14 and 15 of the EU E-Commerce Directive, which provide the minimum requirements

for the ISP liability framework in the EU. Poland’s Act on Providing Services by Electronic Means (E-Services Act),

which implements Articles 14 and 15 of the EU E-Commerce Directive, has various shortcomings that have made it

extremely difficult for rights holders to effectively enforce their rights. In a complaint to the EC (case EU-Pilot

8165/15/CNCT), rights holders raised these shortcomings, including the following: (i) a service provider is required to

take action only if it has actual knowledge of the infringement, not if there is “awareness of facts or circumstances from

which the illegal activity or information is apparent,” as required by the E-Commerce Directive; (ii) the law only requires

“disabling access to infringing content” as opposed to “to remove or to disable” it, as required under the Directive; and

(iii) there is no legal basis to seek injunctions against service providers, as required by Article 14(3) of the Directive,

Article 8(3) of the 2001 EU Copyright Directive, and the 2004 EU Intellectual Property Rights (IPR) Enforcement

Directive (2004/48/EC). The Polish government responded to the allegations by, in effect, arguing that these

shortcomings were to some extent already addressed and remedied by case law. The situation remains unclear and,

to avoid commercial and legal uncertainty, the law should be changed to comply with international and EU standards.

However, the Digital Services Act entered into force in November 2022, and the incorrect implementation of Articles

14 and 15 of the EU E-Commerce Directive will no longer be relevant once the Digital Services Act becomes applicable

in February 2024.

Draft legislation to amend Poland’s e-commerce legislation to address these deficiencies has been pending

since April 2012, but no progress has been made since then. In June 2016, the Council for Digitalization, an advisory

body to the Minister of Administration and Digitization, proposed a resolution to resume work on the amendments to

the e-commerce legislation under the current government. However, the advisory body is no longer active, and the

matter currently rests with the Ministry of Digitization, with no discussions currently pending regarding the amendment

of Poland’s e-commerce legislation, despite continued encouragement by rights holders.

Implementation of the 2019 EU Digital Single Market (DSM) Copyright Directive (2019/790) and SatCab

Directive (2019/789): The Ministry of Culture published a bill in June 2022 to amend the Copyright Act to implement

both the DSM Copyright Directive and the SatCab Directive.

Subsequent versions of the bill, after public consultations

and inter-governmental consultations, were published in November 2022 and January 2023. The governmental phase

is close to completion and the draft should be submitted to Parliament during the first quarter of 2023.

The draft legislation includes several concerning provisions. For example, regarding the transposition of

Article 17 (concerning the use of protected content by online content sharing service providers) of the DSM Copyright

Directive, the Polish draft notably limits automated blocking to obvious and indisputable infringements. Poland had

been critical of Article 17 for several years and filed a complaint against Article 17(4)(b) and (c) following the adoption

of the Directive.

In addition, the revised draft bill proposes a non-waivable remuneration right, subject to mandatory collective

rights management, for music performers, authors, and performers in respect of on-demand use of audiovisual works,

including video-on-demand (VOD) use. The remuneration must be paid in addition to the contractual remuneration

received by co-authors and performers in both sectors. This remuneration would make licensing more complicated as

SatCab Directive is Directive (EU) 2019/789 of the European Parliament and of the Council of 17 April 2019 laying down rules on the exercise of copyright and

related rights applicable to certain online transmissions of broadcasting organizations and retransmissions of television and radio programs, and amending Council

Directive 93/83 [2019] OJL130/82.

www.IIPA.org

January 30, 2023 2023 Special 301

digital services and streaming platforms would need to negotiate separately with the various collective management

organizations (CMOs) representing performers and authors. This remuneration right, coupled with the requirement of

the intervention of CMOs adds additional unnecessary burdens, both financial and administrative, on digital music

services, complicating their launch in Europe and chilling the launch of streaming services in Poland in particular. This

scheme impedes proper functioning of the digital single market, the primary objective of the DSM Directive. CMOs

mandated by law to exercise remuneration rights interfere with individual licensing and negotiation of compensation

arrangements with authors and performers, ultimately undermining their ability to negotiate primary compensation,

including up front lump-sum compensation and additional compensation tied to the success of musical or audiovisual

works. Such compensation may be reduced in anticipation of remuneration demands on their behalf by CMOs

throughout the exploitation chain. In addition, the rules for CMOs are not clear regarding on-demand use of audiovisual

works, adding market uncertainty and potential financial burdens on digital services and authors and performers.

There is no evidence justifying this remuneration right in Poland. Such a right would conflict with the normal

exploitations of the content and undermine the free exercise of exclusive rights and contractual freedom, thus running

afoul of international copyright norms. Moreover, the provision conflicts with a key objective of the U.S.-EU Trade and

Technology Council that, as provided in the Inaugural Joint Statement, “the European Union and the United States

intend to work to identify and avoid potential new unnecessary barriers to trade in products or services derived from

new and emerging tech, while ensuring that legitimate regulatory objectives are achieved.”

For the reasons described,

the additional right would in fact contravene this objective, creating a barrier to the cross-border provision of online

content services and constituting a disproportionate limitation on the freedom of the online distributors of content to

conduct their business, which is particularly egregious considering digital service providers have already negotiated

licenses for the rights.

The bill also proposes that the right to a work or performance may be revoked if a contract includes an

obligation for the distribution of the work or performance and the work or performance is not distributed within the

timeframe as set forth in the contract. If the contract does not provide for a timeframe for the distribution of the work or

performance, the right may be revoked after 10 years, provided that an additional six-month term for the distribution of

the work or performance is granted.

Finally, the bill would implement “direct injection” as a part of the definition for broadcasting. On the notion of

the direct injection, IIPA proposes that in line with Recital (20) of the SatCab Directive, the Polish legislation makes it

clear that participation of a broadcasting organization and a signal distributor in the single act of communication to the

public should not give rise to joint liability on the part of the broadcasting organization and the signal distributor for that

act of communication to the public.

Private Copying Levy: The Polish government introduced a bill in 2022 amending the private copying levy

regulations. In particular, the bill would increase the scope of devices subject to the copying levy and the entities obliged

to make the payment and increase the levy from three percent to up to four percent of an amount due from the sale or

market value. The specific percentage relating to the specific types of the devices and carriers will be determined by

the Minister of Culture, by an ordinance, guided by the findings of a report prepared by the Polish Chamber of Artists

on the of fair use of rights in Poland. Unfortunately, these changes will increase prices without accomplishing its main

purposes, which is to compensate rights holders for losses suffered due to private copying. That is because a large

portion of the proceeds from the levy is directed to a social fund for artists.

MARKET ACCESS

Broadcast quotas: Effective January 1, 2022, non-Polish EU broadcasters over a certain size are required to

contribute 1.5% of revenues from the Polish market to the Polish Film Fund of Polish Film Institute (PISF). Also effective

See U.S.-EU Trade and Technology Council Inaugural Joint Statement, September 29, 2001, available at https://www.whitehouse.gov/briefing-room/statements-

releases/2021/09/29/u-s-eu-trade-and-technology-council-inaugural-joint-statement/.

www.IIPA.org

January 30, 2023 2023 Special 301

in January 2022, broadcasters established in Poland are required to devote at least five percent of their quarterly

transmission time to European programming produced by independent producers in the period of five years prior to

broadcasting, excluding news services, advertising, teleshopping, sports broadcasts, text broadcasts, and game shows.

However, the broadcasters of specialized television channels indicated in an ordinance of the National Broadcasting

Council (the Polish broadcasting authority) are required to provide a lower proportion of European programming

produced by independent producers over a period of five years prior to broadcasting. There are additionally programming

quota requirements for broadcasters that require domestic broadcasters to dedicate at least 33% of their quarterly

broadcasting time to programming produced originally in Polish and at least 50% of their quarterly broadcasting time to

European programming.

Video-on-demand (VOD) quotas: Effective in January 2022, VOD service providers established in Poland are

required to devote at least 30% of the catalogue to European programming, including those originally produced in Polish,

and ensure the appropriate programming prominence of such programming in the catalogue. The basis for calculating

the percentage is the amount of programming made available in the catalogue in a given calendar quarter. One season

of a series is considered as one piece of programming. Per the July 2020 Act of Cinematography, VOD service providers

over a certain size are also required to contribute 1.5% of revenues from the Polish market to the Polish Film Fund of

the PISF.

Foreign ownership restrictions: Pursuant to Article 35 of the 1992 Radio and Television Law, Poland limits

ownership in broadcasting companies to 49%. IIPA appreciates President Duda’s veto of an earlier effort to undermine

foreign investment and encourages vigilance against any future such efforts.

Regulatory uncertainty: In October 2022, Poland appointed new Commissioners to the National

Broadcasting Council. Some of these Commissioners appear to want to limit the reach of commercial broadcasters to

favor public television, including by delaying license renewals.

COMPLIANCE WITH EXISTING OBLIGATIONS TO THE UNITED STATES

The deficiencies in Poland’s enforcement framework, including the lack of effective remedies to combat

pervasive online piracy, are inconsistent with Poland’s obligations under the WTO TRIPS Agreement enforcement

provisions, including Articles 41 and 61.

www.IIPA.org

January 30, 2023 2023 Special 301

SWITZERLAND

NTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 S

PECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendations: IIPA recommends that Switzerland be placed on the Watch List in 2023.

Executive Summary: For more than a decade, rights holders in Switzerland have been deprived of the ability

to enforce their copyrights in civil and criminal cases involving the online environment. In 2013, the Government of

Switzerland embarked upon a legislative process to revise the Copyright Act, ostensibly to provide more effective

enforcement mechanisms and bring Swiss copyright law closer in line with international norms. That process resulted

in the enactment of an amended Copyright Act that largely maintains the troubling status quo and does not address

the most glaring enforcement problems in Switzerland.

IIPA urges the U.S. government to convey to the Government of Switzerland that the amended Copyright Act

does not sufficiently comply with Switzerland’s obligations to provide for effective and deterrent remedies against any

act of copyright infringement, especially with respect to civil claims. The enforcement deficit remains deeply

problematic, particularly within the context of our otherwise strong bilateral trade relationship with Switzerland. IIPA

further urges the Government of Switzerland to consider additional amendments to the Copyright Act to bring it in line

with its international treaty obligations, current best practices in Europe, and international norms.

PRIORITY ACTIONS REQUESTED IN 2023

•

Amend the Copyright Act to provide sufficient tools to combat all types of piracy, regardless of technical details

and including cross-border piracy. This should include the ability of rights holders to use Internet Protocol (IP)

address evidence in connection with civil claims, and effective remedies regarding intermediaries or Internet

service providers (ISPs), including no-fault injunctions against ISPs whose services are used by third parties for

•

Amend the Copyright Act to affirm that Switzerland’s private use exception permits single copies for private use

only if they derive from a legal (authorized) source. Further, limit catch-up TV services that are not authorized by

content owners, a problem resulting from an overly broad interpretation of the private use exception, or do away

with the remuneration caps for catch-up TV.

•

Stop the extended collective licensing (ECL) regime from moving forward. However, should the ECL regime move

forward, ensure that it is clearly delineated, applies only to acts of exploitation that are onerous to license on an

individual basis, and provides for clear and practically effective opt-out mechanisms that can be exercised by rights

holders at any time.

•

Strongly encourage data centers and ISPs to implement and enforce better “know-your-business-customer”

(KYBC) protocols.

•

Permit effective enforcement against ISPs based in Switzerland and hosting infringing services and introduce a

legal framework for combating copyright infringements, both via civil and criminal means.

•

Clarify those areas of the Swiss Film Act that currently negatively affect the distribution of audiovisual works in

Switzerland to apply only to distributors or platforms located in Switzerland, including limiting the requirement

(under Article 19 par. 2) that rights holders must exclusively control all language versions exploited in Switzerland

(and the accompanying reporting obligations).

For more details on Switzerland’s Special 301 history, see previous years’ reports, at https://iipa.org/reports/reports-by-country/. For the history of Switzerland’s

Special 301 placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

• End the unfair treatment of neighboring rights under collective rights management by modifying the 3% cap in

Article 60(2) of the Copyright Act, which remains below other European countries and substantially below the cap

of 10% for authors.

•

Improve the ordinances of the Telecommunications Act (TCA) to facilitate rights holders’ access to information

about domain name registrants and operators of infringing websites.

THE NATURE OF PIRACY IN SWITZERLAND

Switzerland suffers from high domestic piracy rates for music, film, and video games. Moreover, the country

is becoming an attractive base of operations for some ISPs dedicated to piracy on a global scale. In particular, there is

a serious problem with host and data centers based in Switzerland that provide hosting services to other ISPs, including

pirate services, often without checking the identities or businesses of their customers. As discussed below, the

uncertainties of the recent Copyright Act amendments are further worsening the situation.

Piracy continues to undermine and disrupt the growth of the legitimate digital content market and leads to less

willingness to pay for legitimate offerings. Although the Swiss music market has been growing for the last three years,

it still accounts for less than one-third of the revenue it generated 20 years ago. Thus, it is as important as ever that

the Government of Switzerland strongly enforce against piracy that could disrupt the growth of the legitimate market.

The main methods of music piracy remain cyberlockers, stream-ripping, and BitTorrent indexing sites.

The use of cyberlocker services for storage and sharing of illegal files continues to be a concern. The notorious

cyberlockers rapidgator.net and uptobox.com attract a significant number of visits from Switzerland, with rapidgator.net

receiving 730,770 visits and uptobox.com receiving over 806,751 visits during the last quarter of 2022, according to

SimilarWeb. A newer site, Ddownload.com, also received over 378,000 visits during that same period, according to

SimilarWeb. In a positive development, however, the popular cyberlocker Uploaded.net was found liable for copyright

infringement by Germany’s Federal Court of Justice (BGH) in 2021 and was subsequently shut down in December

2022.

The music and motion picture industries report several host and data centers based in Switzerland that provide

hosting services to other ISPs, often without any review to ensure their customers do not include pirate services.

Panama Connection, a Switzerland-based “bulletproof” ISP, offered “no questions asked” hosting services and was

also involved in other criminality, before it was removed by RIPE, an entity that controls the allocation of IP addresses

in Europe.

Following the removal action by RIPE, the company dissolved. Some ISPs that purport to be based

elsewhere, for example in the Seychelles, in fact, have data centers in Switzerland. Private Layer, which provides

hosting services for numerous copyright infringing sites, is routinely used by both pirate sites and users that operate

virtual private networks (VPNs) to mask their identities. Despite being apparently based in Panama with no known

operation in Switzerland, Private Layer offers dedicated servers in Switzerland and appears to use Swiss telephone

numbers. These distributors of pirated content rely on and refer to Switzerland’s legislation that places high value on

privacy protection to shield their facilitation of illegal activity. Swiss authorities should act to ensure that these ISPs and

data centers operate meaningful KYBC policies and take action to have these policies enforced.

Stream-ripping sites and applications, which permit users to create an unauthorized local copy of streamed

content, are still widely used, and there is currently no effective solution in Switzerland. According to SimilarWeb’s

data, there were 3.32 million visits to stream-ripping sites from Switzerland during Q3 of 2022 that were explicitly for

the purposes of downloading copyright protected music. Mp3y.download was the most popular stream-ripping service

in Switzerland with 2.6 million visits from Switzerland during the twelve months prior to the end of Q3 2022, based on

See https://torrentfreak.com/cyando-kills-uploaded-net-before-copyright-quagmire-drowns-it-221129/.

Some hosting providers are referred to as “bulletproof” because their terms of service allow their customers to upload and distribute infringing content without

consequence.

www.IIPA.org

January 30, 2023 2023 Special 301

SimilarWeb data. Four other sites received more than 1m visits from Switzerland over this same period: ytmp3.cc,

y2mate.com, yt1s.com, and savefrom.net.

Illegal streaming platforms operated from remote or unknown jurisdictions continue to be highly popular in

Switzerland and carry copyrighted material that undermines the legitimate market. This is facilitated by the notion that

private use of copyrighted works from illegal sources is legally permitted. Peer-to-peer (P2P) BitTorrent activity for

sharing infringing material remains popular. Downloading and streaming of unauthorized content for private use are

likewise viewed by many as legal in Switzerland as long as no uploading occurs. According to SimilarWeb data

gathered in the last quarter of 2022, bs.to is the most popular pirate site in Switzerland receiving over 10.5 million visits.

Several BitTorrent indexing sites, including thepiratebay.org and 1337x.to, are also very popular in Switzerland.

Thepiratebay.org received over 802,884 visits from Switzerland and 1337x.to received over 1.309 million visits during

this same period.

While the Government of Switzerland has demonstrated a willingness to pursue pirate sites on the .ch domain

(the Swiss country code top-level domain (ccTLD)), numerous copyright infringing sites that have been adjudicated as

illegal in other countries rely on the .ch domain, such as yggtorrent.ch, kickass2.ch, wootly.ch, movierulz.ch, project-

free-tv.ch, and torrentdownload.ch. IIPA recommends that the Government of Switzerland expand its enforcement

actions, as its jurisdiction is not necessarily limited to sites with a .ch domain in Switzerland.

Switzerland lacks meaningful remedies and effective enforcement against online copyright infringement, and

implementation of the Copyright Act, as adopted, may well cement a low level of protection. Copyright industries in

Switzerland have made efforts to resume criminal and civil actions against online infringement under Swiss law, which

had almost entirely ceased in the aftermath of the 2010 Logistep decision of the Swiss Federal Supreme Court.

Prosecutors—who voiced their own frustration with the situation—interpreted the Logistep precedent as a de facto ban

barring the collection and use of any IP address data identifying defendants in criminal copyright cases. The Copyright

Act amendments confirmed that IP address data is available in connection with criminal claims, but not civil claims,

creating a de jure ban on the use of such evidence in civil actions. Prosecutors have historically tended to consider

to be seen. It took the legislature 10 years to remedy this enforcement gap and yet it only provided a partial solution.

The use of IP addresses in civil procedure (e.g., to obtain injunctions) remains unlawful in many cases.

Two major copyright cases that concluded in 2019 do not engender confidence in the government’s ability or

will to engage in effective copyright enforcement. A criminal trial against the notorious cyberlocker Cyando/Uploaded,

which facilitates rampant infringement, ended in March 2019 with the government’s announcement that it found “no

real ties” to Switzerland, despite the parent company Cyando AG’s apparently blatant ties to Switzerland. And, in

February 2019, the Swiss Federal Supreme Court found, in a case that had been pending since 2015, that Swisscom,

a major ISP, could not be required to block access to copyright infringing websites because of the absence of any

provision of law specifically dealing with access providers’ responsibilities. According to the court, the pirate site

operators were the only parties that could be held liable under the law because users who downloaded infringing

content using these services could rely on the broad private use exception.

Unfortunately, rights holders in Switzerland often have very little recourse against piracy sites, particularly

those operated or hosted outside Switzerland. Therefore, better cooperation from intermediaries is crucial to effectively

tackle the problem of illegal content in Switzerland. Such cooperation should include providing for no-fault injunctions

against ISPs whose services are used by third parties for copyright infringement, as required under the European Union

(EU) Copyright Directive, and the law should be changed to reflect that. Further, while the amended Copyright Act

permits collection of IP address data for criminal copyright cases, as noted above the amendments did not change the

status of IP address collection for civil cases. Barring any further amendments, rights holders therefore remain

www.IIPA.org

January 30, 2023 2023 Special 301

proscribed from collecting and analyzing the IP addresses of suspected infringers (individuals or website operators) for

purposes of establishing the existence of an underlying direct infringement, or as part of a secondary liability claim.

The practice of mandatory collective licensing of rights implicated in catch-up TV recording and making

available services, in place for nearly a decade, has been reconfirmed again by approval of a new tariff for remuneration

regarding these services. These catch-up services offer 24-hours per day, 365 days per year full recordings of TV

programs from several hundred channels, making several tens of thousands of hours of televised content available to

the public. The new tariff provided for improved conditions in favor of broadcasters, and litigation proceedings

previously brought by them have been settled. The mandatory tariff effectively eliminates exclusive rights implicated

by these services, offering only de minimus remuneration for these audiovisual exploitation rights and precluding direct

licensing by rights holders. This undermines the opportunity for rights holders to secure fair market value for works,

including in licenses to broadcasters and platforms. In addition, the extension of the private copy exceptions to these

catch-up TV and other making available services (such as a network Personal Video Recorder (nPVR)) compromises

the exclusive making available right, and thus, is inconsistent with Switzerland’s international obligations, including

under the WIPO Copyright Treaty (WCT). Unfortunately, the Copyright Act contains no provisions limiting time-shifting

and catch-up TV services (see discussion below on the private copy exception), and the parliament expressed strong

support for this practice during its debates.

As explained in more detail below, the Copyright Act includes a “stay down” provision for certain hosting

providers that create a “particular danger” of copyright infringement (Article 39d). For the past several years, hosting

providers have purported to take down infringing content, subject to notification, while “sharehosters,” (also known as

cyberlockers) have practiced takedown, but have not prevented (and have even supported) the re-upload of the

infringing content. It remains to be seen how these new provisions in the Copyright Act will be implemented and

enforced.

Switzerland also has never introduced reliable rules for considering ISP liability and has not adopted practices

that have become standard elsewhere in Europe. KYBC policies for ISP hosting services are needed to prevent ISPs

from providing hosting services to online platforms that facilitate infringing activity. The government should amend the

such policies, which reflect the basic duty of care applicable to businesses operating in this area. Swiss law also still

allows circumvention of technological protection measures (TPMs) for purposes of uses permitted by law, including the

over-broad scope of the private use exception. In combination, these protection deficits leave the Swiss marketplace

largely unprotected against cross-border piracy services.

It remains critical that the Swiss government come into compliance with the Berne Convention, WTO TRIPS

Agreement, the WCT and WIPO Performances and Phonograms Treaty (WPPT) (collectively, the WIPO Internet

Treaties), and internationally acceptable enforcement standards. Necessary minimum changes include: (1) ensuring

broader liability under Swiss law for parties who facilitate, encourage, and profit from widespread infringement; (2)

engaging ISPs, including access providers, in the fight against online piracy; (3) affirming that current law does not

permit copying from unauthorized sources; and (4) implementing adequate civil and criminal enforcement tools.

The 2020 Copyright Act amendments unfortunately fell short of implementing the full Working Group on

As discussed below, further

amendments or other legislation are needed to adequately address rights holders’ concerns and to ensure adequate

The copyright amendment legislation was prepared by the Working Group on Copyright (AGUR12) in 2013. For a full description of the AGUR12 process, see

prior years’ IIPA Special 301 reports, at https://iipa.org/reports/reports-by-country/

www.IIPA.org

January 30, 2023 2023 Special 301

and effective copyright protection and enforcement. Most importantly, the law’s affirmation that private use of illegal

sources is permitted is a blow to rights holders, inconsistent with Switzerland’s international obligations, and impairs

cooperation with intermediaries.

Revisions to Article 77i were meant to address the de facto ban on the use of IP address evidence in civil and

criminal copyright actions arising out of the 2010 Logistep case. However, the amended law did not solve the problem

Logistep created and in many ways puts rights holders in a worse position than they were in following the Logistep

decision. While the Copyright Act may allow rights holders to use personal information (including IP addresses) to file

criminal complaints, it does not allow for collection or processing of this information solely to bring civil claims. This

needlessly limits rights holders’ ability to enforce their rights and essentially forces rights holders to rely exclusively on

criminal enforcement. However, criminal enforcement alone is grossly inadequate because prosecutors rarely bring

criminal cases against piracy due to resource constraints and a general reluctance. To properly address the privacy

concerns raised in the Logistep case, the provision should be amended or modified in implementing legislation or

regulation to only limit data collection to that which is reasonably necessary for the pursuit of violations of law (this

would mirror the standing opinion of the Federal Data Protection and Information Commissioner (FDPIC), as well as

the recommendation of the AGUR12).

The Copyright Act provides a limited “stay down” obligation that applies to certain hosting providers that create

a “particular danger” for copyright infringement, such as those that incentivize illicit uploads and undermine take down

efforts (Article 39d). Unfortunately, the legal requirements remain unclear, particularly the required evidence for

showing that a hosting provider created a “particular danger” for copyright infringement through its technical features

or its business model. This provision will require potentially intricate and lengthy pilot proceedings to become

enforceable.

The Copyright Act includes a compulsory collective right to remuneration for authors and performers for

exploitation of their audiovisual works on video-on-demand (VOD) online platforms. This mandatory collective

remuneration scheme applies only if a film is of Swiss origin or produced in a country that provides a similar collectively

enforced right of remuneration.

While the provision excludes certain rights holders from claiming remuneration, it is

not clear whether audiovisual works from countries that do not offer a comparable remuneration scheme could

nevertheless be subject to remuneration demands from Swiss collective management organizations (CMOs). It should

therefore be clarified in the law that works from countries whose rights holders cannot claim remuneration will not be

subject to CMO payment demands.

Other potentially problematic provisions in the Copyright Act as adopted include:

(i) Extended collective licensing (ECL), i.e., collective licensing schemes including non-affiliated

rights owners, with a case-by-case opting-out option (Article 43a). Although the provision was

purportedly motivated by the desire to make difficult-to-license content, such as large archive stock,

more accessible, the provision’s scope is overbroad. This creates a risk that extended collective

licenses could be applied in areas where they undermine the enforcement and exercise of exclusive

and individual licensing. The opt-out provision does not render an ECL voluntary, and the language

of the provision suggests that opting out must be declared for each individual license. There is,

therefore, substantial risk that ECLs applied in the online space devalues the market value of the

work, setting a tariff “norm” that could undermine exclusivity and licensing terms for rights holders

who choose to opt out and exercise their exclusive rights. An initial tariff was agreed upon and

became effective in 2022. In addition, requiring a rights holder to opt out to exercise exclusive rights

A standing opinion of the Federal Data Protection and Information Commissioner (FDPIC) made in the wake of the Logistep decision—even as it stood by the

Federal Court’s opinion—underscored, in the context of online piracy cases, that “we still believe that there is an overriding interest involved which would justify a

violation of privacy rights as a result of the data processing.”

The Memorandum accompanying the adopted Copyright Act states that the Government of Switzerland anticipates to “grant” reciprocal rights to foreign authors

of audiovisual works from: Argentina, Belgium, Bulgaria, France, French-speaking Canada, Italy, Luxembourg, Monaco, Poland, and Spain.

www.IIPA.org

January 30, 2023 2023 Special 301

could constitute a formality prohibited by international law, including the Berne Convention and the

WTO TRIPS Agreement. In short, ECLs, even with opt-out rights, are wholly inappropriate with

respect to services that are already licensed directly around the world.

(ii) An orphan works provision (Article 22b), including compulsory licensing of extended orphan

works. This provision allows works to be considered “orphan” after “research performed with

appropriate thoroughness.” The dispatch on this article produced during the legislative process

troublingly noted that “this responsibility is considered fulfilled if [the users] have consulted the

relevant databanks for the corresponding work category.” A better standard would be the

requirement for a “diligent search,” as set out in the EU Orphan Works Directive. A recordation

requirement for rights holders to protect their works could constitute a formality prohibited by

international law, including the Berne Convention and the WTO TRIPS Agreement.

Also, the provision does not specify that the institution (such as a public or publicly accessible library,

school, museum, collection, archive, or broadcaster) possessing the orphan work copy must be

domiciled in Switzerland; it requires only that the copy is created, copied, or made available in

Switzerland, including, potentially, copies made available from foreign sources. As a result, the

provision could be applied to content hosted outside of Switzerland.

(iii) A free reproduction license for scientific research (Article 24d), meant to cover “text-and-data

mining.” There is a potential for this license to exceed its intended purpose. For example, it is

possible this provision could be combined with other exceptions such as the existing, unusually broad

private use exception, which can apply to commercial organizations.

(iv) Protection of photographs regardless of their “individual character” or level of creativity

(Article 2, paragraph 3bis). In keeping with international norms, all types of photographs should be

protected under the same standard generally applicable to other copyrightable works (e.g., music,

film, literature). Under Swiss law, photographs that “do not necessarily have an individual character”

are protected for just 50 years after their publication (or production). This dual standard for

photographs should be eliminated and the term of protection for all copyrighted photographs should

be 70 years.

On December 17, 2021, the Federal Council issued a report (requested in 2019 by the Council of States) on

the effectiveness of the 2020 amendments to the copyright law. The report holds, inter alia, that the new stay-down

provision (Art. 39d) had not been tested in courts so far. Rights holders understand that this will likely require a long

and expensive test case litigation. Also, the report confirms that few criminal proceedings have been reported and,

thus, the effects of the new data processing permission (Art. 77i) cannot yet be fully assessed.

Additional Concerns Under the Copyright Act and Related Laws

IIPA continues to have other long-standing concerns with certain aspects of Swiss laws related to copyright,

which are further detailed below.

Private Copy Exception: Another long-standing priority of the creative industries is to narrow the private

copying exception, which is overbroad and exceeds the limits of the three-step test. The exception has been interpreted

to allow the making of copies of works or phonograms that come from unlawful sources. This broad private copying

exception, together with the inadequate protection accorded to TPMs (see below), constitute significant hurdles for

protection against stream-ripping services that dominate the list of top pirate services, as well as other infringing

services. Moreover, the Swiss Federal Arbitration Commission relies on the private copy exception to permit cable and

over-the-top (OTT) providers, including major telecom corporations, to offer seven-day “catch-up” services on integral

recordings of hundreds of TV programs, imposing a government-approved collective remuneration tariff in these

www.IIPA.org

January 30, 2023 2023 Special 301

services. This system abolishes exclusivity of audiovisual works and precludes direct licensing by rights holders, which

limits their right to maximize and exclusively control these significant primary rights, including the use by the initial

broadcaster, on a platform-by-platform basis. This extension of the private copy exception to these catch-up TV

services undermines the exclusive making available right, and thus, is inconsistent with Switzerland’s international

obligations, including under the WCT.

Circumvention of Technological Protection Measures (TPMs): Swiss law allows acts of circumvention of

TPMs “for the purposes of a use permitted by law” (Article 39(a)(4)). This exception is far too broad and inconsistent

with Switzerland’s obligations under the WIPO Internet Treaties, which require “adequate legal protection and effective

legal remedies” against circumvention of TPMs.

Moreover, given the inappropriately wide scope of the private copy

exception (discussed above), this exception to the circumvention of TPMs could be interpreted to permit individuals to

circumvent access or copy controls that protect copyrighted content and disseminate that content widely. As a result,

circumvention devices and software are widely available in Switzerland. Furthermore, the country’s Monitoring Office

for Technological Measures is currently evaluating country restrictions that affect the cross-border portability of

This appears to be in service of assessing the possibility of legislating the portability of

audiovisual content, similar to and inspired by the EU’s Portability Regulation.

This consultation is particularly troubling

in light of the broader “Digital Switzerland” Strategy, currently underway.

Provide Neighboring Rights More Fair Treatment: Article 60(2) of the Swiss Copyright Act continues to

cap the remuneration payable to rights owners at 10% of the licensees’ income for authors and 3% for owners of

related rights. In 2010, Swissperform, the Swiss CMO for performers and producers, initiated arbitration proceedings

against this cap, but in 2014 the Federal Supreme Court upheld the cap. The Court acknowledged that the

remunerations for performing rights are, in fact, higher in other European countries, but decided not to intervene on the

merits. Instead, the Court ruled that it is up to the Swiss legislature to set these caps based on a political assessment.

Unfortunately, the legislature declined to address this issue in the recent Copyright Act amendments. This unusual and

unjustified discrimination against neighboring rights owners should be ended and replaced with a fair and equitable

remuneration for both performing artists and producers.

IIPA notes that there are no independent broadcasting and

public performance rights for sound recording producers under current Swiss law, as producers merely have an

entitlement to receive a share of artists’ remuneration.

Criminal Sanctions Needed for Distribution that Prejudices the Public Performance Right: Article 12

Section 1bis of the Copyright Act states that copies of audiovisual works may not be distributed or rented if the

distribution or rental prejudices the rights holder’s public performance right—e.g., if a motion picture audiovisual work

is still in the theaters. An explicit criminal sanction for the violation of this principle is needed to deal effectively with an

influx of French-language DVDs imported from Canada and freely distributed while those motion pictures are still

playing in Swiss cinemas.

Amendments to the Telecommunications Act (TCA): The Federal Council enacted amendments to the

ordinances of the TCA that entered into force in January 2021. The ordinances may create a further obstacle for anti-

piracy activities because the ordinances will make it harder for rights holders to gather information about the domain

name registrants and operators of infringing websites. While registrars will have to identify “holders” (i.e., registrants),

(i) publication of such domain registrant's identification and contact details in WHOIS is banned for individuals and is

not an obligation even where the registrant is a legal entity; and (ii) there is no obligation for registrants to provide and

update all information, which is needed for enforcement purposes. While free-of-cost access for rights holders to non-

See Article 11 of the WCT and Article 18 of the WPPT.

See https://www.ige.ch/en/protecting-your-ip/copyright/monitoring-office-otm.html.

Regulation (EU) 2017/1128 of the European Parliament and of the Council of 14 June 2017 on cross-border portability of online content services in the internal

market.

See https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-80379.html.

Moreover, as discussed above, it is inappropriate and detrimental that the government has created additional collectively managed rights in the Copyright Act

without first addressing the fundamental unfairness in Switzerland’s collective management system—namely, the discrimination against neighboring rights holders.

This discrimination is fundamentally contrary to the important U.S. policy of not establishing a hierarchy of rights and should be ended by modifying the cap.

www.IIPA.org

January 30, 2023 2023 Special 301

public domain registrant data is provided in principle, its quickness and effectiveness will depend on the access

proceedings and the required level of substantiation, unilaterally defined by the registrar.

SWITZERLAND’S COMPLIANCE WITH EXISTING INTERNATIONAL OBLIGATIONS

Switzerland is a member of the Berne Convention, WTO TRIPS Agreement, WCT, and WPPT. Switzerland

is thereby obligated under these international agreements to provide “effective” remedies to prevent and deter

infringement. For example, under Article 41(1) of the WTO TRIPS Agreement (and similarly WCT Article14(2) and

WPPT Article 23(2)), it is required to “ensure that enforcement procedures . . . are available under their law so as to

permit effective action against any act of infringement of intellectual property rights covered by this Agreement,

including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further

infringements.” Switzerland is not currently doing so, and as explained in this report, the amended Copyright Act does

not bring Switzerland in line with its existing obligations. In addition, as noted above, Switzerland is not presently

providing “adequate legal protection and effective legal remedies” against the circumvention of TPMs, as it is required

to do under Article 11 of the WCT and Article 18 of the WPPT.

MARKET ACCESS BARRIERS IN SWITZERLAND

Film Act Amendment: Effective since 2016, a Film Act provision known as the “unique distributor clause”

has been extended to all forms of exploitation, including DVD/physical home entertainment and all forms of VOD/online

distribution, with the exception only of linear television (broadcasters’ ancillary on-demand rights are excepted only for

seven-day catch-up). Exploitation of a film in any media in Switzerland now requires control over all language versions

in Switzerland, to the extent actually exploited, in the hands of a single distributor. This is accompanied by laborious

registration and reporting duties, which address foreign entities owning and exploiting rights in Switzerland. Despite a

revised guideline published by the Federal Office in 2020, the provision still lacks clarity regarding the extent of

“grandfathering” protection for existing contractual fragmentation of film rights: output deals made prior to 2016 lost

“grandfathering” treatment as of 2019. In sum, this amendment interferes with internationally established licensing

practices.

Investment Obligations and Streaming Services Quotas: Another amendment to the Swiss Film Act,

adopted in May 2022, introduced an investment obligation for streaming services in Swiss film productions and quotas

for streaming services. All audiovisual services providing film content (commercial broadcasters, foreign broadcasters

with publicity windows to Switzerland, transactional video-on-demand (TVOD) and subscription video-on-demand

(SVOD) platforms as well as telecom services) must invest in Swiss film production or its promotion. The investment

obligation amounts to four percent of their annual gross income generated in Switzerland. If they fail to do so, they

must pay a subsidiary levy after a period of four years. The revised Film Act also sets a new 30% quota of European

films on streaming services and regulates public access to films that have received federal funds. The provisions

implementing the amendments are scheduled to enter into force on January 1, 2024. These amendments interfere with

contractual freedom and were adopted without a proper impact assessment to determine if the market is capable of

absorbing any such investment. The Swiss Federal Council has opened a consultation on these regulations that will

close in mid-February. If implemented, the obligations should be assessed against the benchmarks of flexibility,

proportionality, predictability, and non-discrimination. The obligations should be re-evaluated every two years from

entry into force and provide a maximum of flexibility. Switzerland is not required to implement these amendments by

international agreements.

Broadcasting Quotas: The Federal Act on Radio and Television obligates broadcasters to reserve half of

their transmission time for European works, where practicable. This obligation should be removed to ensure a level

playing field for U.S. audiovisual works.

www.IIPA.org

January 30, 2023 2023 Special 301

TAIWAN

NTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 S

PECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that Taiwan be placed on the Watch List in 2023.

Executive Summary: The Government of Taiwan has recently taken some positive steps to improve its digital

marketplace for legitimate audiovisual content, including outlawing piracy devices (PDs) and apps in 2019 and then

taking enforcement actions over the past few years. This includes against certain notorious piracy sites, such as

8maple.ru (and related domains), as well as advancing legacy cases against ChuangYi TV box and QBox (or Chien

Hsun TV Box), although, unfortunately, in both cases prison sentences were commuted to non-deterrent fines.

However, continuing online piracy; concerning recent enactments that maintain, and proposed amendments that would

further establish, some legal framework deficiencies; and other barriers continue to stifle the potential of the Taiwanese

market and limit market access for the U.S. creative industries. To further its stated interest in negotiating a bilateral

trade agreement with the United States, Taiwan’s government should address the copyright protection, enforcement,

and market access concerns discussed in this report. At minimum, Taiwan should ensure its enforcement framework

and its copyright legislation comply with its obligations under the WTO TRIPS Agreement, including ensuring its civil

procedures effectively result in deterrence, and that the scope of any exceptions and limitations under its Copyright

Act are narrowly tailored and specific.

PDs, websites, and apps, especially those operated or based outside of Taiwan, continue to be problematic

for rights holders by facilitating unauthorized streaming, including live broadcasts, and stream ripping. Illegal theatrical

camcording remains a concern. E-book piracy and the making available of copyrighted teaching materials without

authorization on university digital platforms likewise remain problematic.

A positive development was enactment of the 2019 amendments to the Copyright Act that provide a clear

legal basis to combat the proliferation of piracy apps and devices, but sentences against pirate operators in legacy

cases are too low to deter piracy; it is hoped that ongoing investigations and cases will lead to more deterrent outcomes.

Taiwan’s government should further improve the legal framework for copyright protection and enforcement to combat

remaining and growing online piracy problems. For example, Taiwan should provide an effective remedy, such as no-

fault injunctions available through the specialized Intellectual Property (IP) court, against piracy sites, preferably

through a Copyright Act amendment. Unfortunately, the amendments to the Copyright Act passed in May 2022 fail to

address deficiencies in Taiwan’s legal framework and continue to raise questions regarding Taiwan’s existing

international obligations.

The Government of Taiwan should move swiftly to remove market access barriers negatively impacting the

audiovisual sector, and Taiwan should refrain from imposing any new barriers, including those in the proposed

regulations of over-the-top (OTT) services and in the proposed intermediary platform regulations. IIPA urges the

Government of Taiwan to take the steps necessary to address the persistent threats to the creative industries, which

contribute so significantly to Taiwan’s economy and culture.

For more details on Taiwan’s Special 301 history, see previous years’ reports at https://iipa.org/reports/reports-by-country. For the history of Taiwan’s Special 301

placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

PRIORITY ACTIONS REQUESTED IN 2023

Enforcement:

• Ensure that the Criminal Investigation Bureau (CIB), Telecommunication Police Brigade (TPB), and Criminal

Investigation Brigade (CIBr) continue to investigate and prosecute more online piracy cases (including those

involving PDs and apps under the amended Copyright Act), with the goal of seeking deterrent-level punishment

against commercial piracy operations.

• Take effective action to deter unauthorized theatrical camcording incidents, including issuing deterrent penalties.

Legislative:

• Enact legislation to:

o Provide a clear legal basis for rights holders to obtain no-fault injunctions to order Internet service providers

(ISPs) to disable access to infringing content on websites, including foreign websites (and including, as

necessary, amendments to the Civil Procedure Code and the Intellectual Property Adjudication Act to overcome

potential civil procedure restrictions);

o Make all criminal copyright infringement, including Internet piracy, “public crimes” to permit ex officio action

against infringement;

o Clarify the ISP liability framework to ensure that all intermediaries are properly incentivized to act against online

piracy and that safe harbors apply only to passive and neutral intermediaries that do not contribute to infringing

activities; that such intermediaries fulfill certain conditions, including adoption and implementation of a repeat

infringer policy, with encouragement to institute a “know your business customer” (KYBC) policy; and that, upon

obtaining knowledge of infringement (including a notice) or otherwise becoming aware of circumstances from

which infringement is apparent, intermediaries promptly take steps to limit, stop, and prevent further

infringement, including expeditious takedown of infringing content and other measures demonstrated effective

in preventing or restraining infringement;

o Further amend Article 87 of the Copyright Act to: (1) clarify that the list of acts setting out “an infringement of

ripping; and (2) remove the pre-condition for liability that infringers “receive benefit” from the infringement;

o Extend term of protection in line with international best practices (to 70 years after the death of the author, or

in cases in which term is calculated based on publication, to the term of 95 years, but in any case, no less than

70 years);

o Make unauthorized camcording of motion pictures in theaters a criminal offense;

o Enhance Article 88 of the Copyright Act by removing restrictive language on calculating damages and the NTD1

million limit; and

o Correct Taiwan Intellectual Property Office (TIPO) collective management practices to allow a royalty rate

based on a fair market rate and eliminate delays in fixing the rate in dispute settlement cases.

o Ensure sound recordings are treated the same as literary, musical, and dramatic or choreographic works,

including but not limited to providing exclusive rights for public performance and retransmissions of sound

recordings.

• Issue implementing regulations ensuring that recent amendments to the Copyright Act can be read in a way that

is consistent with Taiwan’s WTO TRIPS Agreement and Berne Convention obligations, namely, to ensure new

educational exceptions meet the three-step test.

• Recognize a commitment to comply with the WIPO Copyright Treaty (WCT) and the WIPO Performances and

Phonograms Treaty (WPPT) (collectively the WIPO Internet Treaties) irrespective of formal accession, which might

not be politically possible.

www.IIPA.org

January 30, 2023 2023 Special 301

Market Access:

• Eliminate market access barriers that discriminate against U.S. audiovisual content (including investment

restrictions in the Cable Radio and Television law, the rate cap for basic cable TV service, and local discriminatory

content quotas on television content; and ensure that any new OTT regulations (e.g., the Internet Audiovisual

Services Act (IAVSA)) or any regulations on intermediary platforms (e.g., the Digital Communications Act) do not

disincentivize foreign investment by, for example, requiring foreign OTT service providers to register, set up local

permanent establishments, disclose sensitive commercial information, and comply with a rating system that is

potentially inconsistent with international standards, or mandating local content obligations.

TAIWAN’S ONLINE MARKETPLACE

The creative industries make significant contributions to Taiwan’s economy. Taiwan is the 28th largest music

market in the world in 2021 by revenue, down three places from last year.

However, Taiwan is still a hub of music

production for the Chinese-speaking world and a major exporter of “C-pop.” Recorded music revenues for streaming

increased by 6.8% to US$67.6 million in 2021.

The total market size for music in 2021 was US$88 million.

Additionally,

nearly 9 million Taiwanese subscribed to video-on-demand (VOD) services in 2020, and 56% of Internet users in

Taiwan use VOD at least once a week.

In 2021, Taiwan's cinema industry was estimated to generate a revenue of

US$177 million, showing a decrease compared to US$184 million in 2020.

The revenue of both 2020 and 2021 was

affected heavily by the COVID-19 outbreak, and the figure was projected to be US$439 million in 2026.

In 2022, the

annual revenue of the video games and eSports market in Taiwan was projected to reach US$3.87 billion, showing an

increase for six consecutive years.

Unfortunately, Taiwan’s online marketplace permits unhampered access to

unlicensed services, which compete with and undermine legitimate digital services. Prior IIPA reports on Taiwan

contain detailed discussions of piracy and enforcement issues. This report serves only as an update to those prior

reports and should not be considered an exhaustive review of all concerns.

Online Piracy: Online and mobile device piracy in Taiwan continued in 2022. Foreign websites that provide

illegal content remain a significant problem and undermine the ability of rights holders and legitimate services to

distribute copyrighted content and prevent rights holders from seeing their investments reach their full potential in

Taiwan. Streaming and linking sites that aggregate and index links to pirated content stored on other sites continue to

make up a large amount of piracy consumption in Taiwan. For example, the highly popular Chinese language Gimy

pirate website family now redirects to Gimy.app (the main domain), Gimytv.com, Gimy.cc, and Gimy.one. Gimy’s global

SimilarWeb ranking is 2,149 but has a local rank of 42 in Taiwan. The Gimy website/domains had an aggregate of 35

million monthly visits in August 2022, a 52% increase in traffic year-on-year, according to SimilarWeb. A criminal referral

was made in Taiwan in December 2020, and there was a raid in early 2021. Despite this enforcement action, which

resulted in several key Gimy pirate domains going offline, Gimy has re-emerged with the domains noted above, and

the case remains in the evidence-gathering phase with Taiwan prosecutors.

Another popular infringing website is gimyvod.cc, unrelated to Gimy discussed above. Gimyvod.cc is believed

to be operated by an individual in China, but this website is not accessible in China. This site was previously at

International Federation of the Phonographic Industry (IFPI), 2022 Global Music Report, p. 183.

Id.

Frontier Economics, The Economic Impact of Video-on-Demand Services in Taiwan, 2021, p. 2, available at https://www.mpa-apac.org/wp-

content/uploads/2021/11/TW-Frontier-The-Economic-Impact-of-VOD-in-Taiwan.pdf.

Statista, Annual revenue of the cinema industry in Taiwan from 2017 to 2021, with forecasts until 2026, available at

https://www.statista.com/statistics/1194461/taiwan-total-revenue-of-cinema-

industry/#:~:text=In%202021%2C%20Taiwan's%20cinema%20industry,million%20U.S.%20dollars%20in%202020.

Id.

Statista, Annual revenue of video game and eSports market in Taiwan from 2017 to 2021, with forecasts until 2026, available at

https://www.statista.com/statistics/1194527/taiwan-annual-revenue-of-video-games-and-esports-market/

See, e.g., IIPA, Taiwan, 2022 Special 301 Report (January 31, 2022), available at https://www.iipa.org/files/uploads/2022/01/2022-SPEC301-3.pdf and IIPA,

Taiwan, 2021 Special 301 Report (January 28, 2021), available at https://www.iipa.org/files/uploads/2021/01/2021SPEC301TAIWAN.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

gimyvod.com and is one of the most popular streaming Chinese language websites in the Asia region. It offers a vast

library of motion picture, television, anime content, and Asian dramas. Gimyvod.cc uses Cloudflare to mask its IP

location, which hinders rights holders’ ability to identify the site’s precise host and location of the website’s server.

Notorious piracy sites Dytt8.net, Dy2018.com, Dygod.net, and Ygdy8.com allegedly have their servers located in

Taiwan.

While these sites remain under investigation, Taiwan should take effective action by imposing deterrent-level

punishments against the operators of these sites and services, as discussed below.

The long-standing forum site Eyny.com also remains a primary piracy concern in Taiwan. There are more

than 17 million visits per month to Eyny from Taiwan from users seeking to download music, film, television episodes,

and software and video games. Cyberlockers such as Katfile.com and Mega.nz receive more than 4 million visits

between them from Taiwan each month while stream-ripping destinations such as Y2Mate (1.0 million visits per month)

and BitTorrent portals like Rarbg (1.1 million visits) are also widely used to obtain pirated content.

Stream ripping, where users of legitimate online platforms use tools, such as an app or a website, to illegally

“rip” the streamed audio or video content, is a growing problem that first impacted the music industry but is now

beginning to impact other creative industries as well. The legal framework in Taiwan presents challenges for taking

action against persons who facilitate this activity (i.e., the app developer or website operator). In other jurisdictions,

courts have found such services to infringe the reproduction or making available rights, and to unlawfully circumvent

technological protection measures (TPMs), but in Taiwan no such cases have been brought, in part because operators

are located outside Taiwan. As discussed below, Article 87 of the Copyright Act should be further amended to expressly

confirm that it can be used against foreign-based services.

A newer form of piracy involves a mobile app for use with karaoke machines that allows consumers to access

and download content from a cloud database located overseas. The app provides access to a vast amount of

unauthorized karaoke audiovisual content. A recent case in Taiwan concerned a karaoke audiovisual content cloud

database that is believed to be legally licensed for only the China territory. However, the database was accessed and

used by Taiwanese consumers who were able to download the karaoke content via an app provided by the owner of

the cloud database. Rights holders of those karaoke audiovisual content in Taiwan suffered a significant loss from this

issue but are unable to pursue either the machine manufacturer or the Taiwanese distributor under Article 87-1-8 of

the new OTT legislation because those audiovisual content are believed to be legally licensed in China.

Social media platforms have also become a popular way to share pirated content. Apps for PDs and mobile

devices, such as Mixerbox 3,

have become a significant platform for disseminating illegal content. Prior to the

pandemic, Taiwan had also seen an increasing amount of unauthorized camcording. Illicit camcord data for 2020-2022

remains anomalous because of the widespread closure of theaters in 2020, 2021, and into 2022 amid the COVID-19

pandemic. In addition to improving the legal framework (discussed below), the government should take actions under

current law, including issuing deterrent-level penalties, and work with industry to persuade exhibitors to provide staff

with more training and to take proactive security measures.

The resumption of normalcy in movie-going attendance

provides an important opportunity to “reset” on this key issue.

USTR identified Dytt8.net in its 2021 Review of Notorious Markets for Counterfeiting and Piracy (February 2022), available at

https://ustr.gov/sites/default/files/files/Press/Releases/2020%20Review%20of%20Notorious%20Markets%20for%20Counterfeiting%20and%20Piracy%20(final).p

df (“2020 Notorious Markets Report”). The related sites Dytt8.net, Dy2018.dom, Dygod.net, and Ygdy8.com are consistently high ranking with recording more than

23 million monthly visits in mainland China in August 2022, according to SimilarWeb. With a very user-friendly interface and the provision of direct links to third-

party storage providers, this website remains a particular threat to legitimate services in greater China. These sites are under investigation.

Mixerbox.com is a website that allows users to watch embedded YouTube clips stripped of advertisements, providing a service similar to a streaming service

like Spotify or KKBOX, except with unlicensed content. Mixerbox.com, which has seriously disrupted the local music streaming market, has 623 thousand monthly

visits, with 91.71% of its traffic from Taiwan. The website also disseminates the popular mobile app Mixerbox 3, which also provides unauthorized music video

content streamed from YouTube, stripped of advertisements.

It has been reported that actions against camcording as “unauthorized duplication” have been brought and sustained under Article 91 of the current Copyright

Law; nevertheless, it is important that Taiwan adopt sui generis provisions specifically covering the act of camcording.

www.IIPA.org

January 30, 2023 2023 Special 301

Book Piracy: While unauthorized photocopying remains a concern, the availability of unauthorized copies of

textbooks on online sites has overtaken this problem. Online shopping forums, such as www.shopee.com and

www.ruten.com/tw host numerous vendor accounts that sell or re-sell unauthorized copies of textbooks, test banks,

and solutions manuals in both PDF and print form.

The shopee.com platform, in particular, continues to be

problematic, with reports of infringing content, i.e., counterfeit versions of textbooks and unauthorized ebooks, on the

site remaining high. Unfortunately exacerbating the problem, the process for reporting infringing content is cumbersome

and responses to takedown notifications have been inconsistent.

Piracy Devices (PDs): Notwithstanding specific legislative reforms, the proliferation of PDs remains a

problem in Taiwan, and enforcement against PD operators has been insufficient.

Streaming devices that run with

proprietary infringing apps enable access to live channels and VOD content and are readily available online and in

physical marketplaces. Popular illicit streaming devices (ISDs) include UnblockTech, EVPAD, and SVI Cloud (which

specifically target users in Taiwan and are all manufactured in China). Sellers of streaming devices try to distance

themselves from the installing of infringing apps by claiming that the manufacture or sale of the boxes themselves is

not illegal and that resellers instead provide a code for their customers to install infringing apps.

The 2019 amendments to Articles 87 and 93 of the Copyright Act provide a clear legal basis for enforcement

against the dissemination of certain piracy apps and the manufacture and trafficking of PDs and piracy apps. To ensure

the law accomplishes its goal of deterring the sale of PDs in the marketplace, IIPA is hopeful that recent enforcement

actions will result in increased deterrence against the manufacturers and distributors of PDs and piracy apps, as well

as against resellers of devices that do not have piracy software or apps pre-loaded (but who are well equipped by the

manufacturer or by middleware providers to install illicit software or apps). In light of the amended law, local

associations, including the Taiwan OTT Media Services Association, continue to ask the government to set up a

specialized enforcement unit to handle cases involving unlawful PDs. The local audiovisual industry has recently

worked well with enforcement authorities (including CIB, TPB, and CIBr) on PD cases, and IIPA is hopeful enforcement

authorities continue to pursue such cases, using the amended law to its maximum extent.

ENFORCEMENT UPDATES IN TAIWAN

Taiwan’s Internet users often obtain unauthorized content primarily from websites located overseas.

Unfortunately, Taiwan’s legal framework to address overseas infringements remains inadequate. No-fault injunctive

relief directing ISPs to stop providing access to infringing content on piracy websites does not appear available under

current law (or any procedure for that matter, whether civil, criminal, administrative, or voluntary), although an

unpublished Taipei District Court case, as well as the Gimy criminal action (see below), may pave the way for an

approach by Taiwan Network Information Center (TWNIC) to disable access to sites engaged in illegal activity.

However, since that is a criminal process and applies only to the defendant domains identified, there is no dynamic

impact, and pirate operators can easily evade orders that are not permanent. Taiwanese government officials and

stakeholders have had discussions with ISPs about the severe problem of online piracy. While ISPs are generally

sympathetic, they require the government to direct them or courts to order them to act. Meanwhile massive online

piracy continues to cause significant damage to American creators and businesses, which have invested in production,

distribution, and exportation of copyrighted content.

The government has been more proactive in combating piracy websites when the operations have a clearer

nexus to Taiwan. A criminal referral was made in Taiwan related to Gimy in December 2020, and there was a raid in

Vendors on these online forums purchase DVD-ROMs containing pirated content from vendors on Taobao (China) or download infringing copies from other high

traffic piracy sites (such as Libgen or ThePiratebay) and upload the infringing copies to their seller accounts.

Piracy Devices (PDs) refer to media boxes, set-top boxes, or other devices and their corresponding apps and services. Mostly originating from China, PDs are

available openly throughout Taiwan, including at so-called “3C” shops, and via online retailers, and facilitate unauthorized streaming of motion pictures and

television content through apps that direct users to pirated content. These devices often contain, or can connect to, a hard disk to store the downloaded content,

and may have an SD card slot, which helps novices connect to foreign piracy sites. More than 30 different brands of such devices are now available in the

marketplaces in Taiwan. Manufacturers of popular PDs in Taiwan include Unblock Tech, EVPAD, and SVI Cloud.

www.IIPA.org

January 30, 2023 2023 Special 301

early 2021. Despite this enforcement action, Gimy has redirected to new domains, including Gimy.app (the main

domain), Gimytv.com, and Gimy.cc and continues to be very popular. The case remains under investigation by

Taiwanese prosecutors. More actions should be taken against the new domains to cease infringement by Gimy. A

Taiwan court also delivered a verdict in a February 2021 criminal case involving the Chuang Yi TV box, in which the

defendant was found guilty of breaching Article 92 of the Copyright Act for public transmission of a copyright work

without authorization. Unfortunately, while the defendant initially received a sentence of 6 months imprisonment, it was

commuted to a fine, so the result is less than deterrent.

Taiwan has a mechanism to report and ensure permanent removal or blocking of content that facilitates illegal

activities such as child pornography, human trafficking, and defamation/cyber-bullying. Government involvement and

support is essential to expand this cooperation to content that infringes copyrights. Without such a remedy, Taiwan is

becoming an outlier in Asia, as many other countries in the region (and elsewhere in the world) are taking active steps

to address rampant online and mobile piracy.

Furthermore, civil remedies are inadequate. Article 88 of the Copyright Act includes restrictive language on

calculating damages and limits damages to NTD1 million in cases where actual damages cannot be clearly determined.

Due to the nature of much copyright piracy, and the lack of available data to rights holders, in most cases, actual

damages cannot be clearly determined, which is why the United States has deterrent-level statutory damages. Article

88 should be enhanced by removing these impediments. Without overall effective remedies, online piracy

investigations suffer, and piracy proliferates. The music industry reports that CIBr actions against music piracy have

been significantly reduced, in part because domestic takedown notice recipients have become more responsive, but

also because most piracy websites are hosted outside Taiwan, where CIBr does not have jurisdiction.

Many reports from copyright and other IP rights holders indicate that civil court procedures in Taiwan remain

expensive, inefficient, and time-consuming, and that criminal prosecutions are drawn out and generally do not result in

deterrence (although the “Response Policy Zone” process has led to some temporary disabling of access of domains

associated with criminal online copyright infringement on a couple of occasions). In the criminal context, prosecutors

have settled for “suspension of indictment” in digital piracy cases, and judges have commuted prison sentences to a

fine or suspended punishment altogether. The Judicial Yuan would benefit from and may be receptive to trainings for

judges and prosecutors on specific issues related to IP infringements, focusing on the following: 1) technical

particularities of Internet and new technology-based copyright infringement cases; 2) aspects of the civil and criminal

system that are not operating smoothly for rights holders; and 3) ways the creative industries have evolved over time

and rely on effective and expeditious enforcement in the digital environment.

The Government of Taiwan has failed to provide for legal remedies and procedures that would enable effective

copyright enforcement online, and the legislative proposals in previous years have been going in the direction of diluting

the level of copyright protection and weakening the enforcement framework even further.

Amendments to the Copyright Act: Taiwan has in recent years introduced only minor amendments to its

This legislation followed 2018 guidance from the TIPO that streaming devices are prohibited under the Copyright Act

and an August 2018 IP Court decision confirming this interpretation. Revised Article 87 maintains the condition that

violators must “receive benefit” from their actions. This requirement should be removed, since in some cases the

“benefit” may be indirect and difficult to prove. It should be clarified that the list of acts setting out “an infringement of

Also, the requirement to prove the offender’s knowledge that the broadcast or transmitted content was copyright

infringing may make this new provision unenforceable when the content is licensed to broadcast or transmit in a specific

territory but then broadcasted or transmitted beyond the licensed territory. Moreover, this amendment is of limited

www.IIPA.org

January 30, 2023 2023 Special 301

practical relevance to rights holders given that the majority of services potentially caught by its scope are based in and

operated from outside of the Taiwanese jurisdiction and no mechanism exists for rights holders to bring action in Taiwan

against such services.

Other longstanding draft copyright amendments unfortunately propose many changes that would weaken

rather than strengthen the scope of substantive copyright protection. In April 2021, TIPO proposed a draft bill amending

the Copyright Act (Draft Bill), which was passed from the Executive Yuan to the Legislative Yuan for review in May

2021. The Draft Bill is largely based on earlier proposals. Unfortunately, the Draft Bill contains problematic provisions

for rights holders, including a broadly drafted exception that allows public presentation of works using home-style

equipment for non-recurring and non-profit purposes that risks including audiovisual works released through VOD

services and does not address many of the criticisms IIPA raised in comments on the previous drafts that TIPO had

released for public comment. As of December 2022, the majority of the Draft Bill remains under consideration by the

Legislative Yuan. Of note, in May 2022 the Legislative Yuan passed a small portion of the Draft Bill focused on broader

education exceptions in the Copyright Act that may result in weakened protection for copyright.

Prior IIPA submissions have detailed the flaws in the draft amendments.

As noted, while many of the online

services built on infringing activities or facilitating infringement are located outside of Taiwan, a significant amount of

infringing activity occurs within Taiwan and should create a nexus for action. In prior communications with industry,

ISPs in Taiwan have indicated a willingness to address the problem of flagrantly infringing websites but insist they

would do so only upon being ordered by a court or the government. It remains unclear whether the current legal

framework could be interpreted to enable ISPs to do more or whether it inhibits them from doing so. Several dozen

jurisdictions around the world have remedies in place to halt copyright infringing websites from being accessed by

users. IIPA believes the Taiwanese government should propose legislation to provide an appropriate remedy that is

narrowly tailored with appropriate processes to halt services that are built on, facilitate, or encourage infringement. It

is unfortunate that no such proposals have been included as part of the copyright reform process. Governments in the

region, including Australia, South Korea, Singapore, India, Indonesia, Malaysia, Thailand, and Vietnam have adopted

or refined approaches that provide a remedy requiring ISPs to disable access to infringing sites.

Moreover, the

amendments fail to address several deficiencies in Taiwan’s existing legal regime, including the need to:

• Provide a clear mechanism to address the problem of foreign hosted piracy websites that target users in Taiwan

through the availability of no-fault injunctions to disable access to pirated content;

• Clarify the ISP liability framework to ensure that all intermediaries are properly incentivized to act against online

piracy and that safe harbors apply only to passive and neutral intermediaries that do not contribute to infringing

activities and that such intermediaries fulfill certain conditions, including adoption of a repeat infringer policy, with

encouragement to institute a KYBC policy, and that, upon obtaining knowledge of infringement (including a notice)

or otherwise becoming aware of circumstances of which the infringement is apparent, intermediaries promptly take

steps to limit, stop, and prevent further infringement, including expeditious takedown of infringing content and other

measures demonstrated effective in preventing or restraining infringement;

• Deem all criminal copyright infringement, including Internet piracy, “public crimes” (as was so successfully done

regarding optical disc piracy), which would be an effective deterrent and would benefit all rights holders, including

those who cannot afford to pursue civil enforcement actions;

• Extend the term of protection for copyrighted works, including sound recordings, in line with the international trend,

i.e., to 70 years after the death of the author, or in cases in which term is calculated based on publication, to the

term of 95 years, but in any case, no less than 70 years;

See prior IIPA, Taiwan, 2019 Special 301 Report (February 7, 2019), pp. 83-84, available at

https://www.iipa.org/files/uploads/2019/02/2019SPEC301REPORT.pdf

IIPA also encourages Taiwan to look at how Europe has addressed this problem, in particular through Article 8.3 of the European Information Society Directive,

which is the basis for injunctive relief against intermediaries to remove access to infringing content.

To the extent necessary, additional legislative changes should be made to overcome potential civil procedure restrictions, such as amending the Civil Procedure

Code and Article 22 of the Intellectual Property (IP) Case Adjudication Act.

www.IIPA.org

January 30, 2023 2023 Special 301

• Make it a criminal offense to engage in unauthorized camcording of motion pictures in movie theaters or of live

musical performances;

• Correct problematic TIPO practices regarding tariff setting and tariff dispute resolution for uses managed by

collective management, as well as other collective management related issues;

and

• Ensure sound recordings are treated the same as literary, musical, and dramatic or choreographic works, including

but not limited to providing producers and performers exclusive (rather than mere remuneration) rights for public

performance and retransmissions of sound recordings.

In addition, like earlier proposals, the Draft Bill contains several provisions that are inconsistent with evolving

international norms and raise questions regarding compliance with Taiwan’s existing international obligations, including

the following:

• Numerous broad exceptions and limitations to protection, including fair use,

which would call into question

Taiwan’s compliance with its WTO TRIPS Agreement obligations;

• A reduction of criminal liability standards (e.g., requiring participation in collective management organizations

(CMOs) as a prerequisite for criminal enforcement, exempting a broad range of uses of copyright works from

criminal liability, and removing the minimum prison sentence of six months for making and distributing infringing

copies);

and

• Requiring rights holders to file a formal complaint rather than providing ex officio authority for law enforcement to

take action against criminal acts of infringement.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Implementation:

Taiwan also passed its Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

Implementation Law in 2022 that purports to implement the CPTPP standards.

The CPTPP requires compliance with

the WIPO Internet Treaties. However, the changes Taiwan will introduce to the Copyright Act will come into effect only

if Taiwan joins the CPTPP or when otherwise specified by the Executive Yuan. There is no specific timeline for this

process so far. CPTPP members are required to ratify the WIPO Internet Treaties, an important step in improving

protection and enforcement. However, the law does not mention the required accession to the treaties or even

recognize a commitment to comply with the treaties irrespective of formal accession, which might not be politically

possible. The Government of Taiwan should recognize a commitment to comply with the WIPO Internet Treaties

irrespective of formal accession.

Additionally, the law does not contain anything on term extension. While term of protection is a “suspended”

provision in the CPTPP and not mandatory, this substantive issue was discussed in the copyright reform process in

The music industry reports that infringement through camcording live concerts is increasing.

Corrections should include allowing the setting of fair market based rates for collectively managed rights (instead of tariffs determined by the Taiwan IP Office

(TIPO)); establishing judicial dispute resolution mechanisms in lieu of the requirement to have Collective Management Organizations (CMOs) tariffs reviewed,

revised, and approved by TIPO; and eliminating TIPO’s authority for setting a “joint royalty rate” and appointing a “single window” for collection. The 2010

amendments to the Copyright Collective Management Organization Act leave in place overbroad authority with TIPO to fix royalty rates for both the broadcast and

performance of music and sound recordings and allow for delays in fixing the rate, thus interfering with the ability of rights holders to collect royalties. A detailed

discussion of the shortcomings of the Act appears in previous IIPA filings.

Article 65(1) of the draft states that all of the enumerated exceptions (Articles 44-63) are subject to fair use without any requirement that they be confined to the

fair use factors outlined in Article 65(2). Article 65(2) instead appears to function as an additional “catch all” fair use exception. As a result, the draft sets out a

sweeping exception regime that is largely exempt from the safeguards set out in Article 65(2), which was originally intended to confine the enumerated exceptions

to the three-step test. All of these exceptions should be expressly confined to the three-step test (e.g., WTO TRIPS Agreement, Article 13) to ensure compliance

with Taiwan’s international obligations.

Other problematic exceptions include an exception for using “common domestic reception appliances” to retransmit works publicly that have been publicly

broadcast, and a broad exception for public performance of works for “nonprofit” activities. To ensure compliance, the three-step test should be made explicitly

applicable to all relevant exceptions and, where it has been removed from existing law, the “reasonable scope” limitation should be retained.

The draft mandates that rights holders participate in a CMO to benefit from criminal enforcement against some infringing re-broadcasts or public communications,

which impinges on the contractual freedom of creators and raises serious questions of TRIPS compliance. Parallel imports should not be decriminalized, because

the government needs appropriate means to address the fact that many piratical imports are labeled as legitimate goods, which undermines Taiwan’s legitimate

marketplace. Also, the exemptions from criminal liability set forth in Article 37 are too broad, covering, for example, exploitation of digitized karaoke machines or

jukeboxes, which contain reproductions of musical works for public performance and re-transmission.

See, e.g., IIPA 2019 at 84-85.

www.IIPA.org

January 30, 2023 2023 Special 301

Taiwan and is very important to U.S. rights holders. The implementation law revises the list of copyright infringement

offenses that qualify as a “public crime” (i.e., a crime capable of ex officio enforcement).

Some of the amendments

are positive (e.g., both the concepts of unauthorized public transmission and unauthorized reproduction and distribution

in digital format are included under “public crime”), but the scope of these changes are limited by the inclusion of the

requirements that the “whole” work is exploited “for consideration,” and the minimum damage threshold is set at NTD1

million. This threshold is far too high and does not address goods that have a low market price. It appears that the

damage threshold would be applied on a per infringement basis, but this should be clarified by the TIPO. Furthermore,

reconsideration of a reasonable minimum damage threshold is needed.

Collective Management Organization (CMO) Act: In 2022, Taiwan recently amended its Collective

Management Organization Act (CMO Act), but it still presents shortcomings that affect the establishment of new CMOs,

such as the obligation for half of the promoters of a new CMO to be residents in Taiwan and obstacles for rights holders’

associations and current members of a CMO to be promoters of a new one, and their governance, such as the

introduction of term limits for management-level positions and internal control, which are difficult to apply to CMOs in

which a reduced number of rights holders hold significant shares of the market.

Draft Internet Audiovisual Services Act (IAVSA): In May 2022, the National Communications Commission

(NCC) released a draft “legal framework” for the revised IAVSA, which has been undergoing drafting since 2020. The

“framework” for the IAVSA would obligate foreign OTT service providers to register with the NCC, appoint a local agent,

comply with a rating system that is potentially inconsistent with international standards, and potentially disclose

sensitive commercial information. Although the NCC states that they are primarily concerned with regulating OTT

services and promoting “legal” copyrighted streaming content, such requirements, if applied to all OTT services, would

stifle business development and add a burdensome barrier to market entry. The draft legal framework also suggests

local content prominence obligations and associated penalties for noncompliance. The full revised draft of the IAVSA

has not been released to date.

Unfortunately, some local stakeholders have pointed to the significant problem of piracy originating outside of

Taiwan (as discussed above) to advocate for local registration requirements. While local registration requirements

would discriminate against legitimate services, such requirements would be ineffective against the problem of illicit

piracy services located outside of Taiwan that target the Taiwanese market. As noted above, Taiwan needs effective

remedies to address this problem, such as no-fault injunctions to block access to foreign-hosted piracy services.

Draft Digital Information Services Act (DISA): A Digital Information Services Act (DISA) put forward by the

NCC was met with widespread disapproval from stakeholders and was shelved in September 2022. The issues of

greatest concern were the breadth of definitions, remedies proposed with respect to certain intermediaries,

transparency reports, and description of user rights. IIPA understands the draft was shelved, and there is no interest

on the part of the government in re-introducing it any time soon (particularly now in light of the results of the recent

elections).

MARKET ACCESS UPDATES AND RELATED ISSUES

Local Content Quotas: In January 2017, the NCC issued regulations that included significant local content

requirements that limit the broadcasting of U.S. audiovisual content on terrestrial and satellite television.

These

Unfortunately, to qualify as a public crime, the “whole” work must be exploited “for consideration” and the infringement value must exceed NT$1 million (about

US$32,000). These are unnecessary obstacles that should be removed, particularly the high threshold, because calculating the value of infringement is fraught

with uncertainty and the high bar does little to deter online infringement and may actually encourage it.

The Administrative Regulation for the Terrestrial TV Stations Broadcasting Local Production Programs and the Administrative Regulation for the Satellite TV

Channels Broadcasting Local Production Programs require terrestrial TV stations to broadcast at least 50% of locally produced dramas between 8 pm and 10 pm

and local satellite TV channels to broadcast at least 25% of locally produced children’s programs between 5 pm and 7 pm and at least 25% of locally produced

drama, documentaries, and variety programs between 8 pm and 10 pm. These regulations require 40% of these locally produced programs to be new productions.

Furthermore, cable TV services must broadcast at least 20% of local programming.

www.IIPA.org

January 30, 2023 2023 Special 301

discriminatory conditions limit consumer choice, undermine the growth of the pay-TV sector in Taiwan, restrict U.S.

exports, and should be repealed.

Additional Barriers Against Audiovisual Content: Taiwan maintains several other discriminatory barriers

against U.S. audiovisual content. The Cable Radio and Television law limits foreign direct investment in a domestic

cable television service to 20% of the operator’s total issued shares. Foreign investment in satellite television

broadcasting services is also restricted to no more than 50%. In 1990, Taiwan set a rate cap for cable TV service of

NT600 (US$20) per month per household, which has never been adjusted to keep up with inflation. Other restrictions

on television services include a mandatory carriage requirement of 90-100 channels in the basic cable package and,

for all Internet Protocol TV (IPTV) offerings above the basic level cable TV services, only à la carte pricing is allowed.

Such investment restrictions and rigid regulations of retail cable rates by the central and local government have

hindered the development of the cable TV industry, satellite operators, and content providers.

COMPLIANCE WITH EXISTING OBLIGATIONS TO THE UNITED STATES

The deficiencies in Taiwan’s enforcement framework outlined above—including inadequate civil procedures

that do not result in deterrence and a judicial system that does not take piracy cases seriously, resulting in non-deterrent

criminal sentences—are inconsistent with Taiwan’s obligations under the WTO TRIPS enforcement provisions,

including Articles 41, 42, and 61. Furthermore, as noted above, should Taiwan adopt the proposed draft amendments

to the Copyright Act without significant revisions, Taiwan’s copyright laws will run afoul of a number of its WTO TRIPS

obligations including, in particular, those under TRIPS Article 13 on exceptions and limitations.

www.IIPA.org

January 30, 2023 2023 Special 301

THAILAND

NTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 S

PECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that Thailand remain on the Watch List in 2023.

Executive Summary: The Royal Thai government continues to struggle with the fight against piracy, and a

recent government reshuffle raises further questions about the long-term stability of its intellectual property (IP) policies.

Though amendments to the Computer Crime Act (CCA) establishing a no-fault judicial remedy to disable access to

infringing content gave rights holders hope of improving efforts to combat rampant online piracy in the country, the

mechanism has faced difficulties and has had inconsistent and mostly ineffective results to date. Cases should proceed,

upon rights holders’ election, to the Intellectual Property & International Trade (IP&IT) Court and result in full blocking

orders (as opposed to Uniform Resource Locator (URL)-specific orders) properly implemented by Internet service

providers (ISPs) in Thailand. Otherwise, enforcement against piracy remains largely non-deterrent, although

cooperation with the Police Cyber Taskforce (PCT), the Royal Thai Police Economic Crimes Division (ECD), and the

Department of Special Investigations (DSI) has been good, resulting in some enforcement actions against several

piracy sites in the past couple of years. Unfortunately, these enforcement actions have not resulted in deterrent

outcomes against pirate operators and, as a result, there have not been significant reductions in piracy or needed

deterrence. Thai-language piracy sites and services continue to dominate the online ecosystem, unfairly competing

with legitimate rights holders.

The Royal Thai government enacted amendments to the Copyright Act in February 2022. The amendments,

which entered into force in August 2022, include some helpful improvements to the intermediary liability framework and

the protection of technological protection measures (TPMs). In 2022, Thailand officially acceded to the WIPO Copyright

Treaty (WCT), following through on the government’s longstanding promise to join this treaty, and it is now time for the

government to join the WIPO Performances and Phonograms Treaty (WPPT). Unfortunately, the recently enacted

amendments did not address certain deficiencies in Thailand’s legal framework. IIPA urges the Government of Thailand

to better address copyright piracy by improving the legislative framework, addressing remaining shortfalls regarding

provisions on intermediary liability and protections of TPMs, ensuring that other important provisions, such as term of

protection of copyright, align with current international standards and best practices, and providing a clear legal basis

to disable access to copyright infringing content.

Moreover, certain 2019 amendments to the copyright law in the name of Marrakesh Treaty implementation

created new problems because of the erroneous inclusion of sound recordings in the scope of certain exceptions. To

address the continued operation of rogue collective management organizations (CMOs) that undermine music rights

holders and users, the Royal Thai government should also promulgate legislation to bring order to music collecting

societies that are distorting the market, including measures addressing the establishment and governance of CMOs.

The Royal Thai government should also remove market access barriers, including screen quotas in the

amendments to the Motion Picture and Video Act, and refrain from imposing any new barriers in over-the-top (OTT)

regulations. IIPA welcomes recent stakeholder engagement by the Royal Thai government, particularly the Department

of Intellectual Property (DIP), and looks forward to continuing close coordination.

For more details on Thailand’s Special 301 history, see previous years’ reports, at https://iipa.org/reports/reports-by-country/. For the history of Thailand’s Special

301 placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

PRIORITY ACTIONS REQUESTED IN 2023

Enforcement

• Ensure enforcement units, including the PCT, the ECD, and the DSI, increase the number of enforcement actions

against commercial-scale digital piracy services, and critically bring criminal prosecutions through to convictions.

This includes taking enforcement action against commercial-scale streaming piracy sites such as 123-hd.com,

037hdmovie.com, Kseriestv.com, and Siambit.me.

• Clarify the criminal prosecution process, which remains excessively lengthy and lacks transparency, against

commercial-scale piracy websites.

• Take action against rogue CMOs and combine this enforcement action with regulatory reforms to change the

criteria for CMO registration.

• Ensure proper implementation and application of CCA Section 20(3) regarding actions to combat pirate websites,

including ensuring expeditious and non-burdensome procedures, proper adjudication by the IP&IT Court, and full

and fast compliance by Thai ISPs with court orders for full website blocking to disable access to infringing sites.

Legislative

• Introduce changes to Thailand’s copyright protection and enforcement framework, including further amendments

to the Copyright Act, to:

o ensure copyright offenses are non-compoundable so that ex officio enforcement may ensue;

o ensure that measures addressing camcording effectively prohibit possession of an audiovisual recording

device in an exhibition facility with the intent to make or transmit an audiovisual work, in whole or in part, and

provide that exhibition facilities have standing to bring complaints;

o extend the term of copyright protection consistent with international best practices to 70 years from the death

of the author, or for sound recordings (and performances) or other subject matter calculated from publication,

at least 70 years from publication;

o address shortfalls on intermediary liability to clearly establish a basis for liability of online service providers for

infringements carried out by third parties using their services, clarify the eligibility criteria for safe harbors to

ensure that appropriate repeat infringer policies are an additional condition for eligibility rather than the only

necessary condition, and ensure the eligibility criteria includes a requirement for ISPs to implement other

measures demonstrated effective in preventing or restraining infringement;

o ensure that exceptions to TPMs protections are appropriately narrow, for example, to ensure access to content

is limited to licensed institutions assisting disabled persons or non-profit educational institutions;

o reduce the number of, and bring order to, the multitude of CMOs currently active in the market to protect rights

holders and users from rogue CMOs, including measures addressing the establishment and governance of

CMOs; and

o while rights holders consider action to utilize the CCA, provide a clear legal basis to enable courts to order

online service providers to disable access to infringing websites.

Market Access

• Remove foreign ownership restrictions like the National Broadcasting and Telecommunications Commission

(NBTC) rules restricting media mergers, acquisitions, and cross-media ownership.

• Delete Section 9(5) (and the related Section 68) of the 2008 Motion Picture and Video Act (MPVA), which allows

the Film Board to establish ratios and quotas against foreign films, and amend the MPVA to avoid onerous film

censorship and classification provisions, as such policies would create new barriers and reduce consumer choice.

• Remove the NBTC-approved “must carry” provisions, since they could, if improperly interpreted or misunderstood,

restrict the companies’ contractual freedom to license.

www.IIPA.org

January 30, 2023 2023 Special 301

• Avoid onerous OTT regulations, e.g., that could require streaming operators to set up a local presence or to subject

online content service providers to mandatory network usage fees.

PIRACY AND ENFORCEMENT UPDATES IN THAILAND

Prior IIPA reports on Thailand contain a more detailed discussion of piracy and enforcement issues. This

report serves only as an update to those reports and is not to be considered an exhaustive review of issues.

Overall,

piracy in Thailand, especially online piracy, continued to cause major damage to legitimate rights holders and licensees

in 2022. Although rights holders have some good cooperation with Royal Thai government authorities, enforcement

action against commercial-scale piracy websites and services has been limited and has not significantly reduced levels

of online piracy nor provided much-needed deterrence.

Online Piracy: Notwithstanding the expanding availability of legitimate services for music and audiovisual

materials,

increasing access to broadband Internet, particularly on mobile devices, has led to escalating piracy of

recorded music, motion pictures, television and streaming content, video games, published materials, and broadcasts.

Legitimate services find it difficult or impossible to compete with pirate offerings, and some longtime licensed operators

have been driven out of business due to intractable piracy.

Both U.S. producers and distributors, as well as local Thai producers and services, are profoundly harmed by

Internet pirate platforms, which specifically target Thai users with Thai-language sites. Streaming unauthorized content

is the most popular form of piracy, whether through streaming websites, apps, piracy devices, circumvention devices

or software, or even through social media. Many websites serve as portals that allow users to download apps that

provide access to pirated content, including the latest theatrical run motion pictures, television content, sporting events,

and live streamed pay-per-view events and concerts. The most popular streaming sites in Thailand are home-grown

and operated from within the country, including 123-hd.com (40.6 million visits in Q4 2022, according to SimilarWeb),

037hdmovie.com (37.6 million visits during the same period), and Kseriestv.com (32.3 million visits during the same

period). BitTorrent indexing and tracker sites, cyberlockers, and BBS/forums also remain problematic. The popularity

of peer-to-peer (P2P) networks remains. Many of the top piracy sites in Thailand are domestic BitTorrent sites:

Siambit.me (18.6 million visits in Q4 2022 according to SimilarWeb), dedbit.com (3.9 million visits during the same

period), and tt-torrent.com (7.3 million visits in the same period).

Popular stream-ripping services include ssyoutube.com (2.6 million visits from Thailand in Q4 2022 according

to SimilarWeb), y2mate.com (2.2 million visits in the same period), and savefrom.net (1.9 million visits in the same

period). Some of these services have been subject to website blocking orders or other litigation in some jurisdictions,

yet no action has been taken in Thailand. Cyberlockers that egregiously or primarily facilitate access to infringing

materials also remain a problem in Thailand, such as Mega.nz (6.2 million visits from Thailand in Q4 2022) and

4shared.com (1.8 million visits in the same period).

In 2022, enforcement action against commercial-scale piracy sites was limited, and the criminal prosecution

phase continues to be extremely slow moving and lacks transparency. In May 2022, industry worked well with the PCT,

the ECD, and the DSI resulting in the closure of streaming site We-Play.live and the arrest of the site’s owner. In June

2022, a successful enforcement action resulted in the shutdown of the PGLiveTV application, which had been in

operation since early 2021 and provided access to live channels (including live sports) and VOD content. These raids

should now be followed up with prosecutions to achieve permanent reductions in piracy and establish needed

deterrence. Legitimate online services are harmed by the increasing threat from copyright infringing websites, and

some longtime licensed operators have stopped doing business as a direct result of this intractable piracy. Both U.S.

See, e.g., IIPA, Thailand, 2022 Special 301 Report, January 31, 2022, at https://www.iipa.org/files/uploads/2022/02/IIPA_2022-Spec-301_Thailand-1.pdf.

Legitimate services in Thailand for content include iTunes, Google Play Store, Hollywood HDTV, Prime Time, iFlix, HOOQ, Doonung, ZABMOVIE, Deezer, KKBox,

Spotify, YouTube, AIS, GTH Movie Store, AIS Movie Store, HTV (from True Visions), and Clickplay TV, among others.

www.IIPA.org

January 30, 2023 2023 Special 301

producers and distributors, as well as local Thai producers and services, are profoundly harmed by Internet pirate

platforms that specifically target Thai users with Thai language sites.

An example of the need for a more efficient prosecution process is Movies2free,

which was shut down by

the DSI in November 2019. After the enforcement action, the DSI announced that the piracy site was one of the largest

in Thailand and had been generating USD$160,000 per month in advertising revenue alone.

However, the Public

Prosecutors Office is still waiting to receive the site owner’s pleadings to the charges, more than 3 years after the

enforcement action.

Piracy continues to take its toll on the market for legitimate creative content. Illegal apps on smartphones,

readily available from Apple and the Google Play stores, are popular among Thai users seeking to access vast amounts

of pirated content either for free or at a very low cost. These include apps for downloading infringing MP3 content.

Increasingly, piracy websites are using content delivery networks and cloud services such as Google Drive, making

identification of website operators and server locations very difficult.

The provision of the amended CCA that enables disabling of access to infringing websites has been a

promising reform, although results with its use in practice have been mixed. In recent years, the Ministry of Digital

Economy & Society has forwarded cases to the Criminal Court as opposed to the IP&IT Court, resulting in cases being

combined with other criminal matters and decisions resulting in URL-specific blocks that are ineffective. While hundreds

of these orders have been issued, the blocks are URL-specific, so they do not result in full website blocking. ISPs are

capable of implementing full website blocking, and industry seeks a process whereby the applicants may elect the civil

route to obtain full website blocking. Orders should be directed to disable access to entire domains, as opposed to

specific URLs, and be dynamic to address sites that “hop” to another domain to circumvent the original order. Full

domain site blocking orders should then be properly implemented by ISPs.

Theatrical Camcorder Piracy: Thailand continues to represent a potential risk for illicit theatrical camcording,

particularly in relation to illegal Thai audio tracks. Although 2020, 2021, and 2022 numbers were anomalous due to

COVID-19-related theater closures, in 2019, 18 audio files and three video files of MPA member titles were forensically

traced to theater locations in Thailand. If effectively implemented, the Copyright Act provision that deems camcording

an infringement of copyright could help, but this provision should be strengthened to adequately address the problem.

Piracy Devices (PDs) and Apps: Piracy devices (PDs) include media boxes, set-top boxes or other devices

that allow users, through the use of installed piracy apps and software, to stream, download, or otherwise access

unauthorized content from the Internet. Such devices are still being purchased in malls and on e-commerce websites

but are rarely sold with pre-installed infringing applications, making enforcement action and takedowns more

challenging. The number of piracy devices being overtly sold in retail outlets has declined over the last 12 months.

Reforming the Market for the Collective Management of Rights: The music industry is concerned that

many operators of restaurants, bars, shops and other commercial establishments have been harassed by “rogue”

entities, despite having obtained licenses from legitimate CMOs and paid royalties for the use of sound recordings

played on their premises. A proliferation of these “rogue” entities has caused serious market disruption, directly harming

music rights holders, legitimate CMOs, as well as users in Thailand.

Movies2free was the 15

most popular site in Thailand with 34 million visits in Q3 2019.

See https://torrentfreak.com/police-shut-down-thailands-most-popular-pirate-site-following-hollywood-request-191108/

www.IIPA.org

January 30, 2023 2023 Special 301

CCA Amendment: In a significant development, the 2016 Amendment to the CCA B.E. 2550 (2007) added

IP infringement as a predicate crime in Section 20, permitting injunctive relief against ISPs to disable access to

infringing websites hosted outside of Thailand. The Amendment entered into force in July 2017. Since then, there have

been many requests for blocking or disabling access to intellectual property rights (IPR) infringing content or activities.

However, in only a dozen or so cases have the Courts issued full website blocking orders, and in the majority of other

cases, the orders were to disable access to specific content identified in the URLs. IIPA encourages clarity on IP&IT

Court jurisdiction to ensure that the Court is prepared to address structurally infringing websites and issue orders for

full website blocking (as opposed to URL-specific orders). Upon rights holders’ election, cases should proceed to the

IP&IT Court and result in full blocking orders properly implemented by ISPs in Thailand.

force in August 2022. The amendments include improvements to Thailand’s intermediary liability framework and the

protection of TPMs. On July 13, 2022, Thailand officially acceded to the WCT, effective October 13, 2022. It is now

time for Thailand to accede to the WPPT. The following are critical issues that remain with the amended Copyright Act

that should be addressed in implementation or further amendments to ensure that the Royal Thai government achieves

its stated goals of modernizing its copyright law, complying with its international obligations, and fully implementing and

adhering to the WCT and WPPT (collectively, the WIPO Internet Treaties).

• Infringement a Non-Compoundable Offense: IIPA urges the Royal Thai government to amend the Copyright

Act to ensure that IP infringement becomes a non-compoundable state offense, thus enabling the police to act on

their own initiative (i.e., ex officio) without any requirement of a formal complaint from rights holders. In the age of

online piracy, this ability for authorities to take ownership of investigations and cases is critically important.

• Service Provider Liability Amendments: The amendments include helpful improvements to the intermediary

liability framework, including requiring an effective notice and takedown mechanism and repeat infringer policies.

Nevertheless, further improvements are still needed. First, the law should clearly establish an initial basis for

liability of online service providers for infringements carried out by third parties using their services. This secondary

liability provides legal incentives for online service providers to cooperate with rights holders to deter the

unauthorized storage and transmission of copyrighted materials on their services. Without a clear basis for

secondary liability, safe harbors (granting exemptions for such liability) would be unnecessary. Second, the

eligibility criteria for safe harbors should be clarified to ensure that appropriate repeat infringer policies are an

additional condition for eligibility, rather than itself giving rise to an exemption to liability. Finally, the eligibility

criteria for safe harbors from liability should include, in addition to the notice-and-takedown requirement, a

requirement for ISPs to implement other measures demonstrated effective in preventing or restraining

infringement.

• Technological Protection Measures (TPMs): TPMs are critical for the success of services that are providing

legal content to users in Thailand today, and they need to be protected. The amendments and related

implementing regulations made several improvements to TPMs protections in Thailand, including prohibiting acts

of circumvention of TPMs and trafficking in circumvention technologies, devices, components, and services (e.g.,

enabling actions against stream-ripping websites or other such services). We request the government issue further

regulations or guidelines on the provisions for TPMs to make it clear that service, promotion, manufacture, sale,

or distribution of PDs and applications/software/add-ons available thereon violate TPMs protections.

In May 2022, the Supreme Court of India held that offences under Section 63 of the Copyright Act, 1957 are cognizable and non-bailable offences. M/s Knit Pro

International v The State of NCT of Delhi & Anr., CRIMINAL APPEAL NO. 807 of 2022, Sup. Ct. India, May 20, 2022. Thailand should follow India’s lead on this

issue to fully modernize its system and provide enforcement apparatus the tools necessary to tackle online piracy.

www.IIPA.org

January 30, 2023 2023 Special 301

• Rights Management Information: Exceptions to protections for rights management information are overly broad

and should be narrowed. For example, the blanket exclusion of educational institutions, archives, libraries, and

non-profit broadcasting organizations from violating the rights management information protections are

inappropriate and unjustified.

• No-Fault Injunctive Relief: To improve the effectiveness of enforcement against online copyright piracy, the draft

amendments should be amended to provide for no-fault injunctive relief in copyright piracy cases, enabling courts

to order online service providers to disable access to copyright infringing websites (analogous to the CCA remedy,

which applies to all IP crimes).

• Theatrical Camcording Provision Should Be Revised: Thailand enacted anti-camcording legislation in 2014.

However, the anti-camcording provision falls short because it requires a link between the act of theatrical

camcording and a copyright infringement, instead of criminalizing the camcording act itself. Criminalizing the act

of camcording, including audio-only captures, without requiring a link to copyright infringement, would empower

law enforcement to intercept illegal recordings before they enter the online pirate ecosystem. Preferably, these

provisions will be revised to ensure that the possession of an audiovisual recording device in an exhibition facility

with the intent to copy or transmit a whole or part of an audiovisual work (including the video, the soundtrack, or

both) is prohibited, and that exhibition facilities are given standing to bring complaints. Those engaging in the act

proscribed should be subject to interdiction by cinema employees and the police, immediate seizure and forfeiture

of the equipment used and any unlawful copies made, as well as civil and criminal penalties.

• Collective Management Provisions: The current collective management and collection system for music is

unwieldy and remains unclear, with many collecting bodies operating in the market. IIPA welcomes indications

from DIP that it is keen to resolve this issue. However, the DIP proposal at this stage is only to introduce a voluntary

code of conduct for CMOs, which is not a sufficient response to the long-standing challenge in the Thai market.

As of August 2022, the number of CMOs decreased from 40 to 19, with 8 of the 19 confirmed to have applied

DIP’s code of conduct. Although DIP intends to certify and promote these qualified CMOs, there is no policy to

prevent new CMOs from registering. The Copyright Act should therefore be amended to include provisions setting

out certain principal conditions for CMOs to operate in Thailand, such as complying with a code of conduct that

requires good governance, transparency, fair and accurate distribution, and of course actually representing the

rights holders it claims to represent. Regarding the latter point, IIPA recommends that the Copyright Act be

amended to provide that an entity wishing to act as a CMO must be registered with the Ministry of Commerce,

must be authorized by rights holders, and must comply with the code of conduct. Registration criteria should be

fair, objective, transparent, and reasonable and include the requirement for the CMO to operate in a transparent

and non-discriminatory manner and in accordance with principles of good governance. In deciding whether to

grant permission to a CMO to operate (i.e., register a CMO), the Ministry should consider the number of members,

as well as the size of the catalogue of titles and rights under management, and should be entitled to refuse any

application for registration or revoke any registration if the CMO does not satisfy such conditions. However, the

Thai Government should resist proposals to create, by government dictate, a single collection body. While

voluntary cooperation between CMOs can be cost-effective and beneficial for participating CMOs and rights

holders, experience shows that mandatory single collection bodies lead to inefficient and unaccountable

structures.

• Exception for the Visually, Hearing, Intellectually, or Learning Impaired: Copyright Act Number 4 B.E.2561

(2018) was published in November 2018 and entered into force in March 2019. The Act permits persons with

disabilities who do not have access to copyrighted work due to impairment in vision, hearing, movement, intellect

or learning, or other deficiencies to have equal opportunities to other persons to access, make copies, modify, or

An example of a well-functioning voluntary joint organization is MPC Music Co. in Thailand, which is a joint licensing agency formed by two collective management

organizations (CMOs), Phonorights (Thailand) Co., Ltd. (PNR) (for sound recording rights) and Music Copyright (Thailand) Co. Ltd. (MCT) (for musical works

rights).

www.IIPA.org

January 30, 2023 2023 Special 301

distribute the copyrighted work. DIP has issued a Ministerial Regulation on the details of authorized or recognized

entities and how such copies may be distributed. The Thai exception goes well beyond the mandate of The

Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or

Otherwise Print Disabled, which creates a limitation and exception for the benefit of the blind, visually impaired,

and otherwise print disabled. That exception will be mandatory for individual WIPO members that ratify the Treaty.

From the music industry’s perspective, in accordance with the Marrakesh Treaty, sound recordings should not be

covered by the exception at all, and in the alternative, the exception should be properly defined and restricted in

scope to apply solely to specific acts regarding specific works for the benefit of specific individuals, with adequate

safeguards, and with equitable remuneration payable to rights holders. This exception should be amended or

implemented in such a way that it faithfully implements the Marrakesh Treaty and does not conflict with the “three-

step test” of the Berne Convention, WTO TRIPS Agreement, and WIPO Internet Treaties.

• Inadequate Term of Protection: Thailand should extend its term of copyright protection to align it with the

international trend of 70 years after the death of the author, or, in cases in which term is calculated based on

publication (such as sound recordings), to at least 70 years from publication. Unfortunately, the most recent

amendments to the Copyright Act do not change the term of protection, which remains at 50 years. In the case of

sound recordings, there are now at least 73 countries worldwide that provide for a term of protection of 70 years

or more. Further, if the term of protection is not extended in time, some Thai classics from the 1970s—including

the classics of Soontaraporn, Suraphol Sombatcharorn, and Paiboon Buth—will soon fall out of copyright

protection, even though they are still widely consumed by the public. This will have a negative effect on local artists’

income, especially those who have retired and rely on the royalties for a living. Further, Thailand should be urged

to catch up with the new international standard of protecting sound recordings for at least 70 years because,

otherwise, the development of the Thai music market will lag behind a vast number of countries in North America,

Europe, and APAC.

• Section 32 and Fair Use Guidelines: IIPA also continues to call for a narrowing or clarification of Articles 32(6)

and (7) of the Copyright Act, and to ensure administrative guidance on fair use is kept within the legal bounds of

existing exceptions and that affected publishers and stakeholders are afforded the opportunity to provide input into

the guidelines.

MARKET ACCESS UPDATES IN THAILAND

Screen Quota and Film Classification: Section 9(5) of the 2008 MPVA allows the Film Board to establish

ratios and quotas against foreign films. If implemented, such restrictions would create new barriers to foreign film

distribution, discourage cinema infrastructure investments, and reduce consumer choice. Since 2017, the Ministry of

Culture has been considering amendments to the MPVA (which, as of late 2022, we understand may proceed via a

new Film & Games Act). The motion picture industry continues to urge the Ministry to delete Section 9(5) and the

related Section 68, because such limitations, if implemented, could adversely affect Thai distributors and exhibitors,

impede the development of the local film industry, limit the variety of entertainment available to Thai consumers, and

exacerbate piracy. The MPVA also imposes onerous classification (ratings) requirements on films, music videos, and

live performances, as well as censorship requirements on films, audiovisual products, and video games. Thailand

should remove onerous ratings requirements, including the 15-day period for obtaining ratings and censorship

approval, the associated high costs for film ratings, and the severe penalties for failure to comply. In a positive

development, in 2019 the Film Ratings Office removed the requirement for submissions of Digital Cinema Packages

with open encryption keys, which would have otherwise raised significant content security risks.

Must Carry Requirements: In 2012, the NBTC hastily approved “must carry” provisions requiring all platforms

to carry public and commercial free–to–air television channels nationally, on an equal basis. The regulations, which

have not been clearly drafted, raise important IPR issues, i.e., they call into question the ability of rights holders to enter

into exclusive distribution arrangements in Thailand.

www.IIPA.org

January 30, 2023 2023 Special 301

Over-the-top (OTT) Regulations: Various government agencies, including the NBTC and the Electronic

Transactions Development Agency (ETDA), have considered policies on OTT services, including requiring streaming

operators to set up a local presence to respond to government requests around content that the government finds

objectionable (a form of mandatory content moderation). The NBTC has also made public comments suggesting forcing

content providers to pay for network usage fees. Such regulations, if extended to OTT services, would impose

burdensome requirements on foreign content service providers, stifle innovation and the development of a thriving OTT

ecosystem in Thailand, and raise costs, particularly in the absence of a robust enforcement regime to protect digital

delivery of content.

Investment/Ownership Restrictions in Media Sector: In January 2015, the NBTC issued rules governing

media mergers, acquisitions, and cross-media ownership. The rules require prior NBTC approval when a television

license holder seeks to invest more than 25% directly, or more than 50% indirectly, in another licensed company. This

rule severely limits investment and creates unnecessary barriers to entry for U.S. companies.

COMPLIANCE WITH EXISTING OBLIGATIONS TO THE UNITED STATES

Many of the deficiencies in Thailand’s enforcement framework described above—including inadequate efforts

to combat piracy, burdensome and inefficient civil and criminal procedures, and inadequate and non-deterrent civil and

criminal remedies—run afoul of Thailand’s obligations under the WTO TRIPS Agreement enforcement provisions,

including Articles 41, 42, 45, and 61.

www.IIPA.org

January 30, 2023 2023 Special 301

UNITED ARAB EMIRATES

NTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA)

2023 S

PECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT

Special 301 Recommendation: IIPA recommends that the United Arab Emirates (UAE) be placed on the

Watch List in 2023.

Executive Summary: Despite one of the top ten highest gross domestic product (GDP) per capita levels

worldwide, the copyright sector in UAE struggles because of weak enforcement that allows diverse methods of piracy

to persist, sub-par copyright protection in its laws, and crippling market access barriers. The UAE recently improved its

legal framework, enacting Federal Decree-Law No. 38 of 2021 on Copyright and Neighboring Rights (“Decree-Law No.

38”) and Executive Regulation No. 47/2022 on the Implementing Regulation of Federal-Decree Law No. 38/2021 on

Copyrights and Neighboring Rights (“Executive Regulation No. 47”), which provide rights holders with important

exclusive rights to protect their works and sound recordings in the digital environment. Notwithstanding this legislation,

the Government of UAE should further amend its copyright law to fully implement the WIPO Copyright Treaty (WCT)

and the WIPO Performances and Phonograms Treaty (WPPT) (collectively known as the WIPO Internet Treaties) and

ensure UAE’s standards for copyright protection and enforcement meet international norms and best practices.

It has been 19 years since the UAE first passed federal legislation providing for the possibility of collective

management of rights. Despite this, the music industry’s repeated attempts to establish a market for the collective

management of broadcasting and public performance rights have remained frustrated by the government’s failure to

permit music rights holders to establish a collective management organization (CMO) and to commence collective

licensing activities. The government has provided positive indications of progress on this front in the last year, including

a May 2022 memorandum of understanding (MOU) between the International Federation of the Phonographic Industry

(IFPI) and the UAE Ministry of Economy to work together to support local recorded music. THE MOU provides that the

parties will work together to create a copyright framework that aligns with international standards, and enforces and

protects the rights of record producers and that allows the music industry to commence collective licensing. However,

concrete progress is still needed. The UAE is a major hub for tourism and retail and is a regional hub for legitimate

music services and sold-out concerts. Yet, the widespread use of music in shopping malls, hotels, and other public

settings, with no ability to license it from a CMO, denies American and other foreign rights holders the opportunity to

effectively exercise their rights and undermines the rule of law in the country. This inability to license substantially

reduces the revenues available to invest in the development of a robust local industry that can advance local talent

and increase jobs in the entertainment sector. The government needs to end its delay, immediately work with music

rights holders, and allow rights holders (whether local or foreign) to establish a CMO and control the exercise of their

rights in accordance with international best practices in transparency, accountability, and governance. The government

should also issue an operating license to such a CMO to enable music rights holders to start licensing and collecting

royalties. The government’s inaction constitutes a direct market access barrier for international music rights holders.

PRIORITY ACTIONS REQUESTED IN 2023

•

Take immediate action to enable rights holders (whether local or foreign) to establish a music CMO in UAE and to

control the exercise of their rights in accordance with international best practices of transparency, accountability,

and governance, and to permit such CMO to commence operations in the UAE so that music rights holders can

finally begin collectively licensing their broadcast and public performance rights under the UAE copyright law.

For more details on UAE’s Special 301 history, see previous years’ reports at https://iipa.org/reports/reports-by-country/. For the history of UAE’s Special 301

placement, see https://www.iipa.org/files/uploads/2023/01/2023APPENDIXBSPEC301-1.pdf.

www.IIPA.org

January 30, 2023 2023 Special 301

• Revise the copyright law to implement the WIPO Internet Treaties and to harmonize the copyright term with the

international norm of life of the author plus 70 years and 70 years for sound recordings.

•

The Telecommunication and Digital Government Regulatory Authority (TDRA) should engage with domain name

registrars and other intermediaries, such as advertisement providers, payment providers, help desk support

services, and virtual private networks (VPNs), encourage them to cooperate with rights holders, and require them

to take effective action to prevent their services from being used by infringers.

•

Encourage more transparency from enforcement authorities.

•

Adopt high standard remedies that support the creative industries’ current business models, including remedies

that effectively respond to current challenges and reflect international best practices, such as the introduction of a

clear legal basis for no-fault injunctions against online intermediaries to complement the existing website blocking

program operated by the government.

•

Encourage customs authorities to ban the importation of illicit streaming devices (ISDs).

Online and mobile device piracy in the UAE remains a problem, including websites that provide illegal access

to music, movies, television content, video games, reference books, online journals, and trade books of top publishers.

Piracy of copyrighted content affects not only rights holders, but also harms content creators and owners, cinemas,

producers, and other legitimate content providers that invest significant sums to license content and develop business

models in the region. These legitimate efforts contribute to the economic development of the country, fund production

of local content, create jobs, and generate revenue for advertising and auxiliary industries. Dubai is a commercial hub

for the region and may affect legitimate markets in surrounding countries—including India, Iraq, Iran, and the Gulf

Cooperation Countries—by exporting copycat products and digital piracy equipment, such as ISDs.

Unlawful Public Performance and Broadcasting of Music: At present, because of the impossibility of

licensing public performance and broadcasting by rights holders collectively, most of the music that is used in such a

way is de jure unlawful in the UAE. This lack of ability to license collectively is due to the government’s 19-year hold

out in issuing an operating license to a music CMO, as discussed below. The absence of meaningful progress so far

on licensing a music CMO raises questions regarding the UAE’s compliance with the WTO TRIPS Agreement. Simply

put, the UAE’s regulatory inaction means that the existing law has limited effect, and no remedy exists for the ongoing,

country-wide infringement of music public performance and broadcast rights. Furthermore, there is a risk that due to

the absence of a genuine CMO, unscrupulous operators would start licensing third-party rights without any mandate to

do so. As such, music rights holders are denied revenues from the widespread use of their works and recordings.

Online Piracy and Social Media: Several notorious online piracy sites are heavily accessed in the UAE,

including cima4u.ws, a streaming website that embeds popular movies and series content from third-party

cyberlockers. SimilarWeb also reports that movie piracy websites fmovies.to (streaming) and yts.mx (torrents) are

among the top 100 most popular websites in the UAE. The motion picture industry noted that in recent years, Telegram

has become a full-fledged global piracy hub for films and that the presence of copyrighted content on Telegram acts

as a growth driver. While there has been improvement in compliance rates for the removal of infringing links and

channels, Telegram’s response to takedown notices varies greatly, from almost immediate removal to no removal

despite multiple re-notifications. Furthermore, the motion picture industry reports that discovery of infringing content is

facilitated by piracy bots, and Telegram lacks a transparent and appropriate procedure for handling repeat infringers.

In 2017, the TDRA reported that it had blocked approximately 473 websites for intellectual property (IP) violations.

However, the TDRA stopped publishing the number of blocked websites thereafter.

According to IFPI, stream ripping has become the most dominant form of music piracy in the UAE, with rates

considerably higher than the global average. A May 2022 IFPI study found that more than two-thirds (69%) of Internet

users in the UAE said they illegally downloaded music from YouTube. Popular stream-ripping sites include

www.IIPA.org

January 30, 2023 2023 Special 301

Savefrom.net (1.5m visits from the UAE in Quarter 3 2022 according to SimilarWeb), SSyoutube.com (1.3m visits from

the UAE during the same period), Y2Mate.is (1.2m visits from the UAE during the same period), Y2mate.com (1.1m

visits from the UAE during the same period), and YT1s.com (0.8m visits from the UAE during the same period).

SnapTube, TubeMate, and VidMate are among the most widely used unlicensed mobile stream-ripping apps focused

on YouTube access. Cyberlockers and direct download sites are an additional popular source of pirated content in the

UAE. Cyberlocker Mega.nz (2.2m visits from the UAE in Quarter 3 2022 according to SimilarWeb) and BitTorrent sites

1337x.to and The Pirate Bay (1.4m visits and 1.1m visits, respectively, during the same period) are also popular. Sites,

such as Sm3ha and Ghanely, which offer MP3 downloads in Arabic, are also widely used.

Internet Protocol TV (IPTV) Piracy and Hybrid Set-Top Boxes: Recently, the number of mobile applications

that enable illegal showings of copyrighted TV programs or exclusive TV has increased. Access to the pirated content

on Internet Protocol TV (IPTV) services is generally provided via an application that can be installed on consumer

hardware or downloaded directly to a user’s device, such as a smartphone or tablet. Pirate IPTV services are extremely

difficult to monitor, as a subscription to access the service is required. Thus, discovering and monitoring these services

takes substantial resources.

The use of ISDs is an ongoing concern for copyright owners in the UAE. These devices can be used either to

receive the free-to-air (FTA) channels—which is a legal act—or to receive the pirated TV channels or access pirated

video-on-demand (VOD) by installing certain IPTV applications. These illicit streaming devices (ISDs) and the channels

or content they carry are marketed, promoted, and illegally sold to consumers in high volumes through several sales

channels, such as door-to-door, small retailers, Internet sales, or over social media accounts. Because the hardware

of the device itself is not necessarily illegal, it is often difficult to prevent the importation and sale of these devices in

the UAE. Importation of the hardware is subject to approval from TDRA. In practice, offenders often install infringing

IPTV applications on devices after importation. However, the TDRA and the customs authorities do not conduct

inspections on these devices after importation. Examples of these ISDs are the ones known and used for UKTV Abroad,

King-iptv.net, and Kingiptv.org.

Pirate Free-to-Air (FTA) Channels: Pirate FTA channels remain a problem for the motion picture and

television industry. The FTA channels are clear, unencrypted channels that can be received and viewed without a

subscription. They are uploaded from many different locations across the region to satellites that have region-wide

reach. The MENA Broadcast Satellite Anti-Piracy Coalition, a group of stakeholders in the Middle East satellite

television industry, has a goal of preventing FTA channel piracy and addressing IPTV and ISD piracy more broadly.

Voluntary collaboration among rights holders and satellite operators in this anti-piracy coalition has been effective at

helping to control FTA channel piracy in the UAE, although this problem requires continued attention.

Raids and Piracy Prevention Efforts: Industry sectors report that unjustified delays have impeded

enforcement in the past three years, and the UAE police and economic departments are hesitant to consider serious

actions against infringers.

While the Dubai Police has created a dedicated platform on their website to file criminal

complaints against IP violating websites,

Internet service providers (ISPs) normally ask rights holders to contact the

TDRA (the governmental body that monitors the operations of the ISPs in the UAE) for enforcement actions. The TDRA

investigates and may take action on the rights holder notice or alternatively may request more information or reject the

For example, in February 2022, King Printers Company Limited, the UAE-based company and copyright holder of website www.printarabia.ae, filed a criminal

complaint with Dubai Police against the website astuae.com for infringing upon its copyrighted website content. Dubai Police refused to receive the complaint and

instead, requested it be accompanied with a report from a registered IP expert analyzing the elements of infringement. While the copyright holder complied with

this request and filed the complaint under No. 4277/2022, the request of Dubai Police was unjustified because it delayed the prosecution process and imposed

additional costs on the copyright holder. The Dubai Police request signals a potential new practice that could deter copyright holders from filing criminal cases and

ultimately further weaken enforcement procedures in the UAE.

The dedicated platform is titled eCrime, and is accessible at the following site:

https://www.dubaipolice.gov.ae/wps/portal/home/services/individualservicescontent/cybercrime

www.IIPA.org

January 30, 2023 2023 Special 301

notice entirely. The TDRA may order ISPs to implement the website blocks based on copyright violations or based on

censorship. Dubai Police perform similar functions as the TDRA, ordering ISPs to block websites based on criminal

offenses or complaints from rights holders. The Criminal Investigation Department (CID) has been working closely with

rights holders and licensees to stop sales of hybrid ISDs. Unfortunately, these types of operations require arrangements

between different departments, which slows down investigations. For example, the electronic crime unit is not permitted

to correspond with organizations outside of the UAE, such as social media service providers, without a court order.

Correspondence between the TDRA and CID is also relatively slow, which impedes the collection of information and

evidence in piracy investigations.

The government also has an important role to play in promoting piracy prevention efforts and needs to

encourage the ISPs to restrict access to illegal IPTV services and intermediaries that facilitate the operation of such

services, such as (i) domain name registrars, (ii) advertisement providers and payment providers; (iii) websites that

offer gift cards or redeemable vouchers to buy or refill personal accounts to illegal IPTV services; (iv) helpdesk support

numbers for these illegal services; and (v) illegal VPN Internet protocol addresses dedicated to streaming content to

hybrid set-top boxes. Additionally, ISPs need to be encouraged to act more expeditiously. While the ISPs provide

platforms for reporting IP violations, they act slowly on complaints. The ISPs or the TDRA also need to publish statistics

on the blocked violating websites. Addressing these areas would greatly improve the enforcement environment in the

UAE. Etisalat and Du, the two primary ISPs in the UAE, have cooperated with rights holders to a limited degree by

responding to notice and takedown requests. These ISPs currently have special platforms on their websites for

reporting IP violations,

but they do not publish any statistics related to the takedown rates. Moreover, it takes the

special platforms far too long, around 10-14 days, to take down violating websites after receiving a complaint from a

rights holder.

Judicial and Case Law Developments: Over the past few years, the judicial system in the UAE has shown

signs of improvement. Prosecutors have been analyzing the facts in IP cases and referring cases to the courts on the

grounds of violations of IP or cybercrime-related laws. Also, the Higher Criminal Court in Dubai issued a judgment in a

case against an administrator of the torrent website called arabscene.org. The court decided to block the website, as

it exhibited exclusively licensed TV channels without permission. In addition, the administrator was fined and deported

out of the country. The judgment was enforced in 2021. The case is significant because it involved a website that was

hosted outside the UAE, setting a strong precedent for other similar offenders. In addition, the criminal courts of Abu

Dhabi and Sharjah have found defendants guilty in cases relating to piracy through IPTV apps.

Enforcement in Free Zones and Areas Outside City Limits: Enforcement in Free Zone areas is limited to

criminal actions by police based on complaints by the copyright owner. People import a high volume of goods into the

Free Zone areas and often use the territory as a regional hub for goods in transit. The administrative authorities in the

Department of Economic Development (DED) do not have jurisdiction over those areas, and therefore, no one performs

regular or random inspections of the facilities therein. The UAE should ramp up its efforts to enforce against pirate and

counterfeit traffickers with deterrent enforcement actions and enhanced customs controls.

Customs Piracy Prevention: The Ajman Customs authorities activated their IP department in 2017, and they

can now act against copyright and trademark infringers. In 2017, Dubai Customs began to recycle counterfeit products

instead of re-exporting such products. Recycling means that the products are sent to a local recycling company that

destroys the products, and the raw material is thereafter used in various industries. Previously, Dubai Customs would

re-export the counterfeit products to the country of origin instead of destroying or recycling such counterfeit goods,

risking that they would end up back in the market. Abu Dhabi Customs also extended the protection for recorded

trademarks from one year to ten years, in line with other local customs authorities in the UAE. A continuing challenge,

however, has been that customs authorities have not been acting against counterfeit and pirated goods unless they

The special platforms for reporting IP violations include https://www.du.ae/surfsafely and https://www.etisalat.ae/en/generic/contactus-forms/web-block-

unblockn.jsp.

www.IIPA.org

January 30, 2023 2023 Special 301

first receive a complaint from a rights holder. The law has recently been amended to provide ex officio authority so that

customs authorities may take actions even in the absence of complaints by rights holders.

Training Programs: In 2022, the Brand Owner’s Protection Group (BPG) organized virtual educational IP

awareness sessions in association with IP authorities and customs authorities in the UAE on one side, and with IP

owners on the other side. The goal of these sessions was to provide the authorities with technical information about

existing IP rights and ways to identify violations to those rights. Those educational sessions were co-hosted by the

Emirates IP Association, INTERPOL, Dubai Customs, Dubai Police, and all Economic Development Departments

(EDE) in the UAE.

The past four years, Emirates IP Association and INTERPOL co-hosted an IP awareness session with Dubai

Customs, Brand Protection Group, Dubai Police, and Ministry of Economy. The session hosted many speakers from

the private and public sectors that shed light on various IP violations. These organizations continue to conduct events

to combat IP crime and illicit trade.

Ensuring Consistent Enforcement: For some time, enforcement authorities were reluctant to act, but then

the Prime Minister called on officials to cooperate as much as possible with companies to encourage investment. This

call was misunderstood, however, and the effect was that enforcement authorities waived or reduced fines against IP

violators, including the Dubai DED, which reduced fines by up to 50%. IP rights holders would like to see this reduction

applied to complainants (the brand owners) instead of infringers. Additionally, the Dubai DED’s failure to inspect

markets absent a complaint from copyright holders encouraged infringers to trade in illicit products, including ISDs

containing IPTV apps for pirating paid TV channels.

OTHER COPYRIGHT LAW AND RELATED ISSUES

On January 2, 2022, Decree-Law No. 38 entered into force, and on May 11, 2022, the Executive Regulation

No. 47 implementing Decree-Law No. 38 was issued. While Decree-Law No. 38 and Executive Regulation No. 47 make

some improvements to UAE’s copyright framework, concerns remain, as discussed below.

Decree-Law No. 38

Decree-Law No. 38 introduced several improvements to UAE’s copyright legal framework, including

criminalizing the acts of storing electronically illegal copies of copyrighted works (Article 40(c)), which should allow for

actions against cyberlockers hosted in UAE. Consistent with the WPPT, Article 18 of Decree-Law No. 38 provides

producers of sound recordings with exclusive rights of reproduction, distribution, rental, and making available to the

public. Further, Article 18(5) provides sound recording producers with the exclusive rights of broadcasting and

communication to the public. However, to ensure that the UAE’s copyright legislation is fully compliant with the WIPO

Internet Treaties and other relevant international copyright standards, the government of the UAE should make the

following amendments to its copyright legal framework:

• Extend the term of protection for works and sound recordings: Increase the term of protection for

works and sound recordings in Article 20 from life-plus-50 years to life-plus-70 years for works or in cases

in which term is calculated based on publication, to the term of 95 years (but in any case, no less than 70

years) and for sound recordings from 50 years to at least 70 years from the date that the recording is made

or, if published, from that date, in keeping with international norms.

Decree-Law No. 38 of 2021 on Copyright and Neighboring, Article 38(1)(“ Subject to the legislation in force in the country, the customs authorities may, on their

own or at the request of the Author, the right holder, their successors, or their representatives, may order by a reasoned decision not to clear customs - for a

maximum period of twenty (20) days - in respect of any items in violation of the provisions of this Decree-Law.”).

www.IIPA.org

January 30, 2023 2023 Special 301

• Provide a clear legal basis for injunctions against intermediaries: To complement the existing website

blocking program operated by the government, introduce a clear legal basis for injunctions against

intermediaries to enable rights holders to apply to the courts for injunctions requiring online intermediaries

to prevent or disable access to infringing websites (both those hosted in the UAE and those hosted in

other countries but available in the UAE) to help tackle piracy and support the growth of the market for

copyrighted works and sound recordings in the UAE.

• Limit the scope of copyright exceptions and limitations: Confine the exceptions and limitations

outlined in Article 22 to the three-step test of the Berne Convention and the WTO TRIPS Agreement,

including the following: the private copying exception, libraries and archives exception, the exception for

performance of a work in meetings with family members or by students in an educational institution, and

the transient and incidental copies exception.

• Provide adequate protections for technological protection measures (TPMs) and electronic rights

management information (RMI): Article 40 provides for civil and criminal liability for “[u]nlawfully

disrupting or impairing any technical protection or electronic data aiming at regulating and managing the

rights prescribed by this Decree-Law” and increased penalties for repeat offenders. While this is a

welcome step, to meet the obligations of the WPPT, UAE should add provisions, including definitions for

“technological protection measures” and “rights management information,” to its law that ensure adequate

protections for TPMs and RMI.

• Clarify that registration of copyright works is voluntary: Article 4 states that “registers of the Ministry

shall be considered a reference for the data of the Work and its ownership.” It should be clarified that the

registration of works is voluntary and not a formal requirement, consistent with international treaties

including Article 5(2) of the Berne Convention and Article 20 of the WPPT, which prohibit formalities on

both the enjoyment and the exercise of rights.

• Clarify the jurisdiction of the Grievances Committee for Copyrights and Neighboring Rights

(Grievances Committee): Pursuant to Article 37, the Grievances Committee, which is established under

the Ministry of the Economy, has jurisdiction to “adjudicate grievances filed by the interested parties

against the decisions issued by the Ministry.” In practice, the Grievances Committee—which consists of

one specialized judge and two specialists—is entitled to look into challenges from copyright holders

against the decisions issued by the Ministry of Economy. However, the Article states that the Grievances

Committee’s decisions can be challenged only before the “Competent Court,” which is defined in Article 1

as the “Federal Court of Appeal,” instead of the First Instance Courts. Article 37 should be clarified to

ensure: (i) the scope of jurisdiction of the Grievances Committee is limited to disputes between a CMO

and its members and/or its licensees; (ii) the Grievances Committee shall hear and determine matters

referred to it expeditiously; and (iii) parties may appeal the decisions, on procedural grounds, to the First

Instance Courts.

Executive Regulation No. 47/2022 on Implementing Federal Decree-Law No. 38/2021

While the Executive Regulation No. 47 contains several provisions addressing collective management, these

provisions and some other articles should be amended consistent with international standards and best practices,

including:

• Amend the definition of Collective Management Organizations (CMOs): Amend the definition of

“collective management organizations” in Article 1 to ensure: (i) CMOs are non-profit and owned or

See Articles 18 and 19 of the WPPT requiring “adequate legal protection and effective legal remedies” against the circumvention of TPMs and the removal or

alteration of RMI without the permission of right holders.

www.IIPA.org

January 30, 2023 2023 Special 301

controlled by their member rights holders (whether local or foreign), so that rights holders are able to

control the exercise of their rights and to ensure that the CMO is operating according to good standards

of transparency, accountability, and governance; (ii) rights holders are able to, without restriction,

determine the scope (rights, uses, repertoire, and territory) and character (exclusive or non-exclusive) of

the rights mandates they give to the CMO; (iii) CMO tariffs are determined by the CMO in negotiation with

users (or their representatives), reflecting what would be negotiated between a willing buyer and willing

seller; and (iv) rights holders have fair and balanced voting powers in their CMOs that reflect the value of

their rights under management.

• Extend the time for renewal of CMO permits: Under Article 15(6), CMO permits are to be renewed

annually. To provide the legal certainty that justifies the substantial investment and allows for the long-

term planning required to set up a CMO, permits should instead be renewed only every 3 years, at a

minimum.

• Ensure CMO members have the power to determine CMO operating costs: Article 15(10) states that

a CMO “may deduct a percentage of the total funds collected in return for managing the collection and

distribution of the financial remuneration for use, provided that the deduction percentage does not exceed

25% of the total amounts collected. This percentage is only for administrative expenses, and the Ministry

may reduce this percentage whenever it deems so.” However, it should be up to CMO management to

budget, plan, and obtain the agreement of rights holders regarding acceptable and reasonable spending

at the outset.

• Clarify registration of copyright works is voluntary: Clarify Article 2 on copyright registration to ensure

that the registration of copyright works is voluntary and not a formal requirement, consistent with

international obligations that prohibit formalities on both the enjoyment and the exercise of rights, including

Article 5(2) of the Berne Convention and Article 20 of the WPPT. Further, the data and documents

requirements for an application of registration of a copyright work in Article 2(6), particularly the

requirement for “a copy of the passport or identity card of each applicant, author, and transferee” in

subsection h, should be removed, because they are burdensome and interfere with the enjoyment and

exercise of rights.

• Remove formalities regarding the importation and distribution of works: Article 5 contains

burdensome requirements for the importation and distribution of copyright works, particularly that the

related therein, including the document proving their rights to import or distribute works in the country, and

data relating to their activities and the authorities that authorized them to import or distribute works as set

out in the Register.” Such requirements should be removed, because they are incompatible with the WIPO

Internet Treaties and the Berne Convention.

• Ensure compulsory licenses for the reproduction or translation of copyright works for educational

purposes are appropriately narrow: Article 7 states that “Any person may apply to the Ministry to obtain

a license to reproduce or/and translate a work protected by law, in order to meet the needs of education

of all kinds and levels, or the needs of public libraries or archives, and in accordance with the conditions

set forth in this Decision.” Such a broad compulsory license violates rights holders’ exclusive rights,

interferes with contractual freedoms, undermines legal certainty, and is outside the scope of the three-

step test governing exceptions and limitations to copyright protections. Any compulsory license for

reproduction or translation should be appropriately narrow and strictly conform to the Berne Convention

Appendix.

In 2004, when the UAE joined the Berne Convention, the government availed itself of the Berne Appendix. See “Berne Convention Members,” World Intellectual

Property Organization, available at http://www.wipo.int/export/sites/www/treaties/en/documents/pdf/berne.pdf

www.IIPA.org

January 30, 2023 2023 Special 301

Prevention of Music Rights Holders’ Exercise of Legal Rights: In May 2022, IFPI and the UAE Ministry

of Economy signed an MOU to work together to support local recorded music, including by creating a copyright

framework that aligns with international standards and enforcing, collecting, and protecting the rights of record

producers. However, the establishment of a CMO remains a work in progress. Revenue generated by CMOs through

the licensing of broadcast and public performance rights is an essential element in supporting the development of local

artists and in developing the UAE as a hub for music production in the region. Yet, due to government inaction to

accredit a CMO, no monies are currently being collected, substantially undermining the capacity of companies in the

UAE to invest in promoting local artists and building artists’ careers. Moreover, without an accredited CMO, U.S. music

exported to the UAE cannot be monetized when broadcast or performed publicly, and various UAE businesses use

music without making any payments to rights holders, despite neighboring rights protection recognized in the UAE

By way of background, for 19 years after enacting federal legislation providing for the possibility of the right of

reproduction by means of a reprographic process and to engage in digital uses of editions, the Government of the UAE

did not accredit a single CMO, leaving rights holders with no means to manage their rights collectively. However, in a

positive development, in March 2022, the UAE Ministry of Economy granted permission to the Emirates Reprographic

Rights Management Association (ERRA) in Sharjah to establish a book publishing CMO to administer and manage the

collective rights of copyright owners for their paper and online book publications in the UAE.

The establishment of a book publishing CMO is welcome, and the music sector also expects that the UAE

government will make progress at long last on licensing a truly representative music CMO. The UAE should take

immediate action to enable rights holders to establish a music CMO in the UAE, in accordance with international best

practices of transparency, accountability, and governance and to permit that CMO to commence operations in the UAE,

enabling music rights holders to finally begin collectively licensing their broadcast and public performance rights under

the UAE copyright law.

Countering Rumors and Cybercrimes Decree-Law Should Include IP: The Cyber Crime Law of 2012

(updated in 2018) was repealed by Federal Decree-Law No. (34) of 2021 on Countering Rumors and Cybercrimes

(Decree-Law No. 34). The new law does not expressly include criminal offenses relating to copyright infringement or

intellectual property rights (IPR) infringement, but it implies that copyright infringement offenses are included. For

example, Article 50 punishes, with imprisonment or monetary fines, those who use or help third parties use

communication services of audio or video broadcast channels unlawfully using an information network or any

Information Technology (IT). Article 53 punishes, with imprisonment or monetary fines, those who use, store, make

available, or publish illegal content and do not remove it or prevent access to its content within a period specified in the

orders issued to them. Article 59 states that upon rendering a judgment of conviction of any crimes stipulated in the

Decree-Law, the court may decide to take any of the following measures: (i) order that exploiter be placed under

electronic supervision or monitoring; (ii) close down the violating site completely or partially for the duration decided by

the court; or (iv) punish the exploiter with imprisonment or monetary fine. While Decree-Law No. 34 implies that

offenses relating to copyright infringement. Moreover, Decree-Law No. 34 does not include ISP liability for IP

infringement carried out through the ISP. The UAE should issue implementing regulations to clarify that Decree-Law

No. 34 applies in cases of IP infringement.

MARKET ACCESS

Music Licensing: The failure to implement a collective management regime in the country effectively

prevents producers and performers from licensing large parts of the market (as noted above), which serves as a market

access barrier. This inaction is also protectionist and discriminatory, considering that various UAE families, as well as

www.IIPA.org

January 30, 2023 2023 Special 301

the state, have stakes in most shopping malls, hotels, restaurants, and other such establishments that require licenses

to play music. It is imperative that the music licensing problem be solved without any further delay.

UAE Copyright Registration Requirement: Dubai DED requests UAE copyright registration certificates

before allowing rights holders to proceed with any action for copyright infringement. This requirement is a detrimental

change from its old policy, which permitted a copyright infringement case to be heard if the plaintiff had a copyright

registration certificate in any country that is a member of the Berne Convention, and, as applied to Berne member

authors and producers, is a violation of Article 5(2) of Berne and equivalent provisions, such as Article 20 of WPPT.

Such restrictions limit the power of rights holders to protect themselves from infringement and hinder their ability to

thrive in the UAE market.

Administrative Fees: The UAE Ministry of Culture (previously the National Media Council) imposes

administrative fees to imported copyrighted works, such as US$270 for theatrical releases and US$108 for TV

programming. The Economic Department and Customs authorities impose administrative fees of US$7,500 to file

complaints against copyright violators.

APPENDIX B

CHART OF COUNTRIES’

PECIAL 301 PLACEMENT (1989-2022)

IIPA’S

2023 SPECIAL 301 RECOMMENDATIONS

Issued January 30, 2023

www.iipa.org

APPENDIX B: CHART OF COUNTRIES’ SPECIAL 301 PLACEMENT (1989-2022)

AND IIPA 2023 SPECIAL 301 RECOMMENDATIONS

IIPA 2023 SPECIAL 301 RECOMMENDATIONS AND USTR 301 PLACEMENT 2022-2006

(AS OF APRIL/MAY OF EACH YEAR)

COUNTRY

IIPA

RECOMMENDATION

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

ALGERIA

PWL

ARGENTINA

PWL

ARMENIA

AUSTRALIA

AUSTRIA

AZERBAIJAN

BAHAMAS

BAHRAIN

BARBADOS

BELARUS

BELIZ

PWL

BOLIVIA

BRAZIL

WL +

OCR

PWL

BRUNEI

BULGARIA

OCR

CANADA

PWL

WL +

OCR

CHILE

PWL

WL +

OCR

Issued January 30, 2023

www.iipa.org

COUNTRY

IIPA

RECOMMENDATION

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

CHINA (PRC)

PWL

+306

PWL

+306

PWL

+ 306

COLOMBIA

PWL

WL+

OCR

WL+

OCR

COSTA RICA

CROATIA

CYPRUS

CZECH REPULIC

OCR

DENMARK

DOMINICAN

REPUBLIC

ECUADOR

PWL

EGYPT

PWL

EL SALVADOR

OCR

ESTONIA

EUROPEAN

UNION

FIJI

OCR

FINLAND

GEORGIA

GERMANY

GREECE

GUATEMALA

HONDURAS

OCR

HONG KONG

HUNGARY

INDIA

PWL

OCR

PWL

Issued January 30, 2023

www.iipa.org

COUNTRY

IIPA

RECOMMENDATION

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

INDONESIA

PWL

GSP

PWL

OCR

IRELAND

ISRAEL

PWL

(9/12

WL)

PWL

Pending

PWL +

OCR

PWL+

OCR

PWL

ITALY

WL +

OCR

JAMAICA

JAPAN

JORDAN

KAZAKHSTAN

KENYA

KUWAIT

PWL

OCR

PWL

WL+

OCR

KRYGYZ

REPUBLIC

LATVIA

WL +

OCR

LEBANON

PWL

LITHUANIA

LUXEMBOURG

MACAU

MALAYSIA

OCR

MEXICO

PWL

MOLDOVA

NAMIBIA

Issued January 30, 2023

www.iipa.org

COUNTRY

IIPA

RECOMMENDATION

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

NETHERLANDS

NEW ZEALAND

NICARAGUA

NIGERIA

NORWAY

OMAN

PAKISTAN

WL+

OCR

PWL

WL +

OCR

PALESTINIAN

AUTHORITY

PANAMA

PARAGUAY

WL +

OCR

WL +

306

OCR

306

PERU

PHILIPPINES

WL +

OCR

WL +

OCR

WL +

OCR

POLAND

WL +

OCR

PORTUGAL

QATAR

ROMANIA

RUSSIAN

FEDERATION

PWL

OCR

PWL

GSP

SAN MARINO

SAUDI ARABIA

PWL

OCR

PWL

WL +

OCR

WL +

OCR

SERBIA AND

MONTENEGRO

SINGAPORE

Issued January 30, 2023

www.iipa.org

COUNTRY

IIPA

RECOMMENDATION

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

SLOVAK

REPUBLIC

SLOVENIA

SOUTH AFRICA

PWL

SOUTH KOREA

SPAIN

OCR

SWEDEN

SWITZERLAND

TAIWAN

(then

OFF

due to

OCR)

TAJIKISTAN

OCR

WL+

OCR

THAILAND

PWL

OCR

PWL

OCR

PWL

TRINIDAD &

TOBAGO

TUNISIA

TURKEY

PWL

TURKMENISTAN

WL+

OCR

UNITED ARAB

EMIRATES

UKRAINE

PWL

301

PFC

PWL

GSP

PWL

URUGUAY

UZBEKISTAN

VENEZUELA

PWL

VIETNAM

PWL

YEMEN

Issued January 30, 2023

www.iipa.org

USTR 301 PLACEMENT 2005-1989

(AS OF APRIL/MAY OF EACH YEAR)

COUNTRY

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

ALGERIA

ARGENTINA

PWL

ARMENIA

AUSTRALIA

PWL

AUSTRIA

AZERBAIJAN

BAHAMAS

PWL

WL +

OCR

BAHRAIN

BARBADOS

BELARUS

BELIZ

BOLIVIA

BRAZIL

PWL

PFC

PWL

BRUNEI

BULGARIA

PWL

CANADA

WL +

OCR

CHILE

CHINA (PRC)

PWL

306 +

OCR

306

PFC

PWL

COLOMBIA

PWL

Issued January 30, 2023

www.iipa.org

COUNTRY

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

COSTA RICA

WL +

OCR

PWL

CROATIA

CYPRUS

CZECH REPULIC

DENMARK

DOMINICAN

REPUBLIC

PWL

ECUADOR

PWL

EGYPT

PWL

EL SALVADOR

ESTONIA

EUROPEAN

UNION

WL +

OCR

PWL

FIJI

FINLAND

GEORGIA

OCR

GERMANY

GREECE

PWL

GUATEMALA

PWL

HONDURAS

HONG KONG

OCR

HUNGARY

PWL

INDIA

PWL

PFC

PWL

INDONESIA

PWL +

OCR

PWL

PWL +

OCR

PWL

IRELAND

ISRAEL

PWL

WL +

OCR

PWL +

OCR

PWL

Issued January 30, 2023

www.iipa.org

COUNTRY

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

ITALY

PWL +

OCR

PWL

JAMAICA

JAPAN

OCR

PWL

JORDAN

KAZAKHSTAN

KENYA

KUWAIT

PWL

KRYGYZ

REPUBLIC

OCR

LATVIA

LEBANON

PWL

LITHUANIA

LUXEMBOURG

MACAU

PWL

MALAYSIA

WL +

OCR

PWL

OCR

MEXICO

OCR

PWL

MOLDOVA

NAMIBIA

NETHERLANDS

NEW ZEALAND

NICARAGUA

NIGERIA

NORWAY

OMAN

PAKISTAN

PWL

Issued January 30, 2023

www.iipa.org

COUNTRY

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

PALESTINIAN

AUTHORITY

OCR

PANAMA

PARAGUAY

306

PFC

PWL

PERU

PWL

PHILIPPINES

PWL +

OCR

PWL

PWL +

OCR

PWL

POLAND

WL +

OCR

PWL

WL +

OCR

PWL

PORTUGAL

QATAR

ROMANIA

RUSSIAN

FEDERATION

PWL +

OCR

PWL

WL +

OCR

SAN MARINO

SAUDI ARABIA

WL +

OCR

PWL

SERBIA AND

MONTENEGRO

SINGAPORE

SLOVAK

REPUBLIC

SLOVENIA

OCR

SOUTH AFRICA

SOUTH KOREA

PWL

WL +

OCR

PWL

SPAIN

SWEDEN

SWITZERLAND

TAIWAN

PWL +

OCR

PWL

PFC

PWL

TAJIKISTAN

Issued January 30, 2023

www.iipa.org

COUNTRY

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

THAILAND

WL +

OCR

PWL

PFC

PWL

TRINIDAD &

TOBAGO

TUNISIA

TURKEY

PWL

TURKMENISTAN

UNITED ARAB

EMIRATES

OCR

UKRAINE

PFC +

OCR

PFC

PWL

URUGUAY

PWL

UZBEKISTAN

VENEZUELA

PWL

VIETNAM

YEMEN

KEY:

301: 301 Investigation

306: Section 306 Monitoring

PFC: Priority Foreign Country

PWL: Priority Watch List

WL: Watch List

OO: Other Observations (an informal listing formerly used by USTR)

SM: Special Mention

OCR: Out of Cycle Review to be conducted by USTR

GSP: GSP IPR Review ongoing, except Ukraine and Indonesia where

GSP IPR review initiated June 2012

DS: Dispute Settlement