OPTICAL MEDIA MANAGEMENT STATUTE DRAFTED

05/01/2001

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In response to accusations of rampant piracy of optical disks in Taiwan, contained in the US annual report on barriers to trade, on 24 April 2001 the Executive Yuan announced its latest draft of the proposed Optical Media Manage-ment Statute. To enhance deterrence, the draft statute defines new criminal offenses. The pre-sent draft comprises 30 articles. To combat the counterfeiting of optical disks, their manufacture will be made subject to a licensing system, and disks produced for sale will have to bear source identification (SID) codes. To facilitate en-forcement of the proposed law, the Bureau of Standards, Metrology and Inspection, Ministry of Economic Affairs (MOEA) has decided that in future the presence of SID codes will be a man-datory inspection item. Customs will prevent the exportation of disks without SID codes, and such disks will also be prohibited from sale within the ROC.

The main content of the draft statute is as fol-lows:

Optical media are defined as readable optical disks, writable optical disks, rewritable optical disks, pre-recorded laser disks, read-only-memory optical disks, digital video disks, read-only-memory digital video disks, laser video disks, mini-disks, and any other physical media announced by the regulatory authority (i.e. MOEA), capable of storing data in digital form and readable by laser means, regardless of whether laser-readable data are recorded thereon and regardless of the purpose of manufacture (Article 2).

A business entity wishing to engage itself in optical media manufacturing must apply with the regulatory authority for an optical media manufacturing license, and may engage itself in such manufacturing only after license documents have been approved and issued (Article 4). In other words, the manufacture of optical media is defined as a licensed activity.

The regulatory authority should not approve a license application where the person in charge of the business entity concerned has been convicted, by a confirmed court judgment, of a criminal offence under the statute or under the Copyright Law, or where an optical media manufacturing license held by the business entity has previously been cancelled or re-voked by the regulatory authority (Article 5). Where it is discovered after an optical media manufacturing license is issued that the ap-plication contained false information or was otherwise fraudulent, the license should be revoked (Article 7).

Any business already engaged in optical me-dia manufacturing before the statute comes into force must apply with the regulatory au-thority for an optical media manufacturing li-cense within three months after the statute comes into force. Those who fail to apply within this period will be subject to the penal-ties for unlicensed manufacture (Article 28).

A business entity may manufacture optical media only after having applied for and re-ceived from the regulatory authority an optical media source identification (SID) code. Op-tical media must be imprinted with a SID code, and fraudulent marking is prohibited. SID codes may not be passed to others for use in marking optical media (Article 10).

Optical media manufacturing equipment may not be imported or exported without authori-zation from the regulatory authority (Article 12).

A business entity may manufacture optical media only at the premises indicated in its optical media manufacturing license docu-ments (Article 9). If manufacturing equipment is sold, loaned, leased, pledged, scrapped, or removed to another location, or its possession is otherwise transferred, the original owner must, within 15 days, report to the regulatory authority the name and the residence, place of business or operating premises of the person or business entity into whose possession the items are transferred, or the location to which the items are removed (Article 13).

A business entity must retain for at least three years customer orders, documents evidencing authorization by rights holders, records of the purchase of manufacturing equipment and raw materials, records of the content of optical media manufactured, and samples of such media (Article 8).

The regulatory authority may at any time send personnel to enter optical media manufactur-ing premises or other related premises to in-vestigate whether there is any breach of the statute, and may order the provision of rele-vant information. The person in charge of the premises, or operatives, may not evade, ob-struct or refuse such an investigation or order. When conducting inspections, regulatory au-thority personnel may request the police au-thorities to dispatch officers to provide assis-tance (Article 14).

Breaches of the statute make offenders liable to prison terms of one to three years and fines of up to NT$3 million, according to the of-fence and its gravity. Manufacturing equip-ment specifically for the manufacture of op-tical media, as well as finished and semi-finished optical media products, may be confiscated (Articles 16 to 25).