The Philippine IT Law Journal

A year ago, the Philippines was on the US priority watch list of international intellectual property protection organizations, notwithstanding government efforts to cut back violation of intellectual property rights (IPR). This was shown in the 2003 "Special 301" annual review which examined the sufficiency and efficacy of intellectual property protection in different countries including the Philippines. ^{[ 1 ]}

The swift increase in optical disk piracy in the Philippines brought about by the pace of change in, and speed and ease of, electronic communication and copying are both threatening to the basic concept of IPR. It was noted that despite concentrated efforts to clear out video pirates, no one was convicted because of the government's lack of operational means to penalize the bootleggers. As such, the Philippine Government intensified its efforts across the board and enacted stronger laws and regulations on the production of optical disk. The clamor to punish not only the street vendors, as well as the manufacturers of sham materials, led to the competent enforcement of law which spells out that there are real costs, genuine deterrence and actual penalties to be paid for piracy.

President Gloria Macapagal-Arroyo recently signed Republic Act No. 9239 known as the "Optical Media Act of 2003." This law was enacted in accord with the Intellectual Property Code of the Philippines to ensure the protection and promotion of intellectual property rights. This act seeks to regulate optical media by imposing stern regulations in the licensing, copying and distribution of optical media such as DVD's, CD's, VCD's, DVD-ROMS, CD ROMS, CD recordables and rewritables.

To implement the new law, the Videogram Regulatory Board (VRB), which was created under Presidential Decree 1987, was reorganized as the Optical Media Board (OMB) under the Office of the President. The board was tasked to institute the means to "regulate the manufacture, mastering, replication, importation and exportation of optical media." ^{[ 2 ]} The OMB shall be composed of four ex-officio members -- composed of secretaries of the Department of Trade and Industry (DTI), Department of the Interior Local Government (DILG), Department of Finance (DOF), and the Director General of the Intellectual Property Office (IPO) or their duly authorized representatives; and five regular member to be appointed by the President. ^{[ 3 ]}

There are two mechanisms provided to protect the intellectual property rights, which serve as gatekeeper systems to address the problems on piracy from the very source. First, the OMB shall have the authority to issue, cancel or suspend licenses of establishments or entities registered with the OMB to engage in business of mastering, manufacture, replication, importation or exportation of optical media. ^{[ 4 ]} The registration and license issued by the OMB are conditions precedent for securing the necessary business permits or licenses from appropriate authorities and shall also be necessary for the release of manufacturing equipment from customs or economic zones. Second, the OMB shall determine, develop and/or adopt a system of Source Identification (SID) codes. These are system of codes embedded in the optical media to identify the source of all optical media mastered, manufactured or replicated by any establishment or entity. The SID codes shall be visible and legible and must conform to such specification as prescribed by the OMB for all persons, establishments or entities registered with and licensed by the OMB. ^{[ 5 ]}

For the purpose of this Act, it is crucial to define a Manufacturing Equipment. Under the law, a manufacturing equipment refer to "any and all equipment, machine or device, now known or to be known in the future, intended or design for the production or manufacture, by mastering and/ or replication of optical media, optical media masters, or production parts thereof, including but not limited to, those which shall be listed in the Implementing Rules and Regulations (IRR) of this Act or as prescribed by the OMB. " ^{[ 6 ]} Optical disc writers and such other devices used in personal computers not for commercial purposes shall not be considered as manufacturing equipment.

As a deterrent to piracy, the Optical Media Act provides stiff penalties on establishments caught violating the provisions of the law. Those engaging in illegal importation, exportation, mastering, manufacture, and replication of optical media shall suffer imprisonment of 3 years in the minimum and six years in the maximum and a fine of not less than five hundred thousand pesos but not exceeding one million five hundred pesos. Violators who will employ armed assistance shall face a stiffer penalty of nine years imprisonment in the maximum and fine not exceeding three million pesos. Those who buy and sell pirated discs shall face at least one year but not more than three years of imprisonment and a fine of not less than one hundred thousand pesos but not exceeding five hundred thousand pesos. Employment of armed resistance will double the imposition of penalty of uniform imprisonment to three years but not more that six years and a fine not exceeding one million five hundred pesos. ^{[ 7 ]}

The large-scale piracy in the country, which completely disregards the rights of the creators and performers of films and musical recording, is a stumbling block to the economic growth of the country. Hopefully, the Optical Media Act will serve as an adequate legal support for the enforcement of intellectual property rights in the Philippines.

1. 2003 Special 201 Report, United States Trade Representative (1 May 2003). Accessed 9 April 2004. http:// www.ustr.gov/reports/2003/ specia1301 htm