IPR Protection: Pillar of a Robust Economy Douglas H. Paal, Director, American Institute in Taiwan Taiwan-U.S. Seminar on IPR Protection and Enforcement

PR0365E | Date: 2003-12-09

Minister Lin, Chairman Siew, distinguished guests, ladies and gentlemen. It is truly a pleasure to be here today to welcome you to the Taiwan - US Seminar on IPR Protection and Enforcement.

I would especially like to thank Vincent Siew and his fine staff here at the Chunghwa Institute for Economic Research. Without their many efforts, this event would not have been possible. Let me also note that representatives of international knowledge-based industries are in attendance. They are here because Taiwan plays a key role in the business strategies of corporations around the globe.

This seminar offers all of us an opportunity to reflect on the connection between strong IPR protection and economic resilience. Over the past six months, Taiwan's stock market has risen more than 40%. Economic growth rates have been revised upward. Key knowledge-based industries such as semiconductors are operating at nearly full capacity. Much of this good news, of course, reflects the upturn in the overall global economy. But if you talk to the experts, they will tell you that it also reflects the way Taiwan's own corporations work so well with their counterparts abroad. Enhanced protection of intellectual property rights is a means for Taiwan to solidify and deepen that trust.

Over the next few days, government officials, scholars, and the private sector will have the occasion to analyze the importance of knowledge-based industries to Taiwan's long-term prosperity. These discussions will naturally give rise to ideas about how Taiwan can best expand IPR protection to fully guard the innovations that belong to its people and the foreign partners they work with.

The dialogue that will occur at this seminar is timely. As I noted, Taiwan's recent economic news is grounds for optimism. But there is no denying that the current upswing has come amidst profound economic transition. Because Taiwan is now a highly developed economy -- with high salaries and education levels to show for it -- cheaper labor in China and Southeast Asia is attracting manufacturing investment that, in the past, would have come here. For Taiwan to expand its current prosperity, the island must gravitate to, as everyone here knows, higher-value knowledge-based industries.

This means that the primary challenge Taiwan faces today is how best to respond competitively to a changing global economy. Protecting intellectual property rights is fundamental to meeting that challenge. This is because a strong IPR regime transforms the talents and skills of Taiwan's people into marketable assets.

Taiwan made a major commitment to IPR protection when it joined the WTO. The terms of Taiwan's WTO accession include adherence to the Agreement on Trade Related Aspects of Intellectual Property Rights - better known as TRIPS. TRIPS commits WTO members to protect intellectual property rights, for example, by enacting penalties for IP theft that are severe enough to deter would be pirates. And by providing protection for data required by the government for certifying a product's effectiveness and safety. Unfortunately, the amendments to the copyright law passed by the Legislative Yuan at the end of the last session seriously weakened copyright protections, especially in regard to penalties for pirates. And Taiwan has yet to enact data exclusivity protections for pharmaceutical products.

Taiwan's trading partners are looking to the island to fulfill its IPR-related WTO commitments. Taiwan and foreign investors also seek a stronger IPR regime. They want to have the confidence that Taiwan's legal system will protect them if their intellectual property is stolen or misused. Foreign direct investment has declined significantly in recent years. To attract new investment and to create new jobs, Taiwan will need a business climate that is friendly to investors in knowledge-based industries.

Many people in Taiwan are already working diligently to improve IPR protections here. We have recently seen stepped up enforcement efforts. Raids and inspections have increased over the past year. A special police force has been expanded. Warehouses have been opened to store infringing goods and equipment. These are positive steps. And Taiwan will hopefully continue to build on these recent moves forward.

Unfortunately, the cleverness of IP criminals gives law enforcement no time to rest. Knowledge pirates are technologically advanced and often well funded. The battle against piracy is constantly moving to new arenas, like the Internet and the drug store. Taiwan's government and rights holders associations must therefore work together to forge a common purpose: to protect IPR in order to guard the island's future prosperity.

Because IP pirates will only get smarter and bolder, Taiwan will have to make a permanent commitment to constantly improve its IPR regime if it is to keep the criminals at bay. Recent enforcement success is not a substitute for needed legislative changes. Taiwan should aim to have an IP protection regime equal to any in the world. It must aim for more than short-term tactical success; there can be no substitute for a long-term record of adequate protection. If Taiwan can overcome the damage that piracy has done to its investment reputation, the island will see increased foreign investment and new knowledge-based jobs to replace the traditional manufacturing that is being lost to lower-wage competitors.

This seminar is an opportunity for Taiwan. Your presence here today suggests that you already understand the importance of IPR to Taiwan's economic future. I urge you all to find ways to work together to take concrete steps to improve intellectual property protection in Taiwan. By doing so, you will demonstrate Taiwan's determination to address this crucial issue. By doing so, you will strengthen the Taiwan economy and help to create a prosperous future for Taiwan's people.

Thank you.