Newsletter
The Protection of Intellectual Property Rights under the Draft of OTT Act
I. Introduction
FIFA World Cup Qatar 2022 just drew to a close, but the widely broadcasted matches have once again called attention to the legality of offering audiovisual services via set-top boxes. With the rise of streaming services via audiovisual platforms and the decline of cable TV, the pairing of audiovisual equipment with sources of content has become a must for anyone who wants to tune in to a variety of audiovisual content. Today, the combination of set-top boxes (audiovisual equipment) and over-the-top ("OTT") media services (source of content) has become mainstream.
OTT media services utilize the Internet as a medium for transmitting information to directly provide viewers with media streaming services. Some of the most well-known OTT service operators in recent years include such audiovisual platforms as Netflix, HBO+, Apple TV, Hulu and iQIYI.
While traditional media (e.g. cable, broadcast and satellite TV) require a license to operate, currently many countries do not have laws to regulate OTT service providers. In Taiwan's case, the three broadcasting acts (the Radio and Television Act, the Cable Radio and Television Act, and the Satellite Broadcasting Act) and the Telecommunications Act now in force do not have clear governing rules in place. This has led to controversies in recent years over whether to stipulate a special legislation to regulate these service providers. Whether a special OTT Act can effectively curb piracy and infringement (e.g. whether the audiovisual content offered by OTT service operators is legitimately licensed by the copyright owners of audiovisual works, such as programs and drama series), and whether the draft of such an OTT Act affords sufficient protection to copyright owners, have become a widespread concern.
II. Introduction to Taiwan's draft "Internet Audiovisual Service Management Act"
On 15 July 2020, the National Communications Commission ("NCC") passed the draft of "Internet Audiovisual Service Management Act" (the "draft Act"), often referred to as the "special OTT act" by the Taiwanese media. On 22 July of the same year, NCC announced the draft Act and sought to collect public opinions. On 25 May 2022, NCC passed the framework of the draft Act.
Though well-intentioned, the draft Act immediately sparked controversies upon its announcement. It would appear the draft Act does not properly take into account the workings and regulatory requirements of intellectual property infringement cases in practice. This article offers a brief examination of the issues raised by different viewers:
(i) Failure to control piracy
Some have argued that the protection of owners of intellectual property rights is a core aspect of the legislative purpose of the draft Act, so there should be a stronger focus on curbing piracy than on regulating legitimate operators. Yet, the measure designed to block telecom operators, as provided in Article 12 of the draft Act, only applies to OTT operators with funding from China, but not to businesses infringing intellectual property rights (e.g. illegal websites offering audiovisual content that violates copyright). The draft Act claims to protect intellectual property rights, but it has barely stipulated any provisions to crack down on piracy. Naturally, this raises concerns over legislative imbalance.
(ii) Failure to target social media platform services sharing user-generated content and featuring exchange of information
A tremendous number of intellectual property infringement cases nowadays make use of video services via the Internet—the perpetrators may be OTT service providers or user-generated content ("UGC") providers. Given the current Internet trends, UGC providers are even more likely to infringe intellectual property rights. This is why some have voiced dissenting opinions, calling for any video services provided via the Internet to be considered "Internet Audiovisual Service" under Article 3 of the draft Act. Some have emphasized that a lot of major businesses pay their content creators and dwarf OTT operators in the number of users, market share and economy of scale. Such viewers said that "How is it that businesses with a much greater scale are not being regulated?'' since the draft Act claims to "go after the bigger fish" and "let the smaller fish go."
(iii) Obligations of telecom operators as provided in Article 12 of the draft Act
Article 12 of the draft Act requires that telecom operators may not offer services to OTT service providers who have not obtained permission in accordance with the Act Governing Relations between the People of the Taiwan Area and the Mainland Area (the "Cross-Strait Act"). However, how does a telecom operator determine whether its partner business is in violation of the Cross-Strait Act? Furthermore, under circumstances where the competent authority "notifies" a telecom operator that it should block a certain party or adopt other necessary measures, the telecom operator cannot completely block the party if the party changes its IP address, because the Internet is an open platform and IP addresses are dynamic in nature. And suppose the party's IP address contains other legitimate content, in the event such content is also removed, can the contracted party subject to such damages seek redress from the telecom operator? Or is there a disclaimer clause as stipulated in the Copyright Act in place that enables "takedown upon notification"? It would appear that supplementary measures need to be properly provided, otherwise the draft Act would in effect burden telecom operators with the obligations of preliminary examination.
(iv) The 2022 framework of the draft Act adds a piracy prevention mechanism
Compared with the 2020 draft Act, the 2022 version changed the approach to regulation from voluntary registration to "behavior management"; a hierarchical obligation mechanism has also been adopted. To address the controversy over the 2020 version's insufficient piracy control, the draft Act introduces a new mechanism: where a court has determined that an OTT service provider offers video content in violation of the Copyright Act, NCC may demand that such provider which has engaged in acts of infringement multiple times correct its improper business behavior, such as asking telecom businesses and ISPs to block the provision of services.
III. Conclusion
As the draft Act specifically claims to protect intellectual property rights, then it should have taken into account the nature of businesses and have stipulated provisions to strengthen the regulatory inadequacies of the Copyright Act or any other relevant regulations. In particular, where the obligations of telecom operators are concerned, legislators should write laws that burden telecom operators with the obligation to cooperate in order to afford prompt protection to rights holders.
With the prevalence of OTT services nowadays, copyright owners of audiovisual works have invested plenty of time and resources to produce drama series and programs. Unfortunately, dishonest OTT service providers have furnished consumers with illegal applications that allow them to watch these drama shows and programs for free, significantly reducing the profits earned by their copyright owners. The draft Act seems to fail to completely block the provision of unauthorized OTT services, prompting copyright owners to take legal actions where necessary in order to safeguard their rights and interests.