Targeting online IP infringement in Southeast Asia

Intellectual property (IP) infringement is perhaps the most common crime in our lives. Using unlicensed software programs or images, consuming and sharing pirated content, buying fake or counterfeit items – these are the things a lot of people may have done, intentionally or unintentionally, regardless of their socio-economic background and the direction of their moral compass. In an everyday situation, it should be clear to anyone that stealing money or other items is morally wrong and illegal. But when it comes to intellectual property, one may argue that nobody really gets hurt. Unfortunately, this is not the case. Counterfeiting and online piracy are often linked to organized crime, which entails other illegal activities and deplorable deeds affecting society, such as forced and child labor. This is also a concern for Southeast Asia, a major target for organized crime syndicates according to a 2019 report by the United Nations Office on Drugs and Crime (UNODC). In recent years, the front line for the fight against IP crime has shifted to cyberspace. Thanks to modern-day technology and the Covid-19 pandemic, there has been a surge of Internet usage and the consumption of goods and services online. According to a study by the Organization for Economic Cooperation and Development (OECD) and the European Union Intellectual Property Office (EUIPO), online retail sales rose by 41% in major economies between 2018 and 2020, compared with less than a 1% rise in total retail sales. Counterfeiters have exploited this opportunity to expand their illegal business. In Southeast Asia alone, the report by the UNODC mentioned estimates that the counterfeit goods market, excluding fraudulent medicines, generates illicit revenues of between around US$33.8 billion and $35.9 billion annually. IP rights violation chiefly happens online in two ways. One is the selling of counterfeits on the Internet, and the other is online piracy. For IP Key South-East Asia (IP Key SEA), an EU-funded technical cooperation project directed by the European Commission and implemented by the EUIPO, these are two important topics on which we have been cooperating with IP offices, brands and other IP practitioners to protect both IP rights owners and consumers.  In the European Union, two voluntary agreements have been facilitated by the EC to combat online IP infringement. These are the memorandum of understanding on the sale of counterfeit foods on the Internet and the MoU on online advertising and IPR. The former, first concluded in 2011, targets the removal of counterfeit products from online marketplaces, while the latter, signed in 2018, strives to disrupt the advertising revenue of websites and apps that infringe IP rights.  In Southeast Asia, Thailand and the Philippines have adopted their own MoUs to curb the online sale of counterfeits, while a code of conduct on e-commerce aimed at tackling the same issue is being negotiated in Indonesia. With regard to advertising on IP-infringing websites and apps, Thailand is currently the only country to have such an MoU in effect.  The implementation of all these MoUs has seen positive results. For example, based on a series of studies on the impact of the MoU on online advertising and IPR, the share of advertisements of EU businesses on IP-infringing websites has dropped by 12% since the signing of the MoU. At recent events organized by IP Key SEA, representatives from the EC, IP offices in Southeast Asia and IP rights owners reported several benefits of these two kinds of MoUs. The advantages include trust and frank conversations between rights owners and the platforms, reduced administrative burden on all parties and speedy action against infringing posts, better management of limited resources in fighting infringement, the protection of privacy of involved parties, and the preservation of reputation of legitimate brands and e-commerce platforms, which warrant consumer trust and confidence. Another strong point of MoUs and codes of conduct is that such soft law is easier to draft and implement than hard law. The cyberworld and online IP infringement have become more and more complex and attempts to resolve the issue requires goodwill and cooperation among all stakeholders, two things that voluntary agreements can help create. Regular meetings between signatories not only facilitate a flow of knowledge but also enhance accountability, enabling each party to do better in their fight against IP crime. Once adopted, an MoU can always be expanded to include new signatories, who will further contribute to improved IP protection and enforcement. A few final words for countries in Southeast Asia hoping to draft similar MoUs to address online IP infringement: Suggestions from the signatories already implementing these MoUs in the region include reducing the barrier to join an MoU but enhancing the signatories’ accountability through k

Targeting online IP infringement in Southeast Asia

Intellectual property (IP) infringement is perhaps the most common crime in our lives. Using unlicensed software programs or images, consuming and sharing pirated content, buying fake or counterfeit items – these are the things a lot of people may have done, intentionally or unintentionally, regardless of their socio-economic background and the direction of their moral compass.

In an everyday situation, it should be clear to anyone that stealing money or other items is morally wrong and illegal. But when it comes to intellectual property, one may argue that nobody really gets hurt.

Unfortunately, this is not the case. Counterfeiting and online piracy are often linked to organized crime, which entails other illegal activities and deplorable deeds affecting society, such as forced and child labor.

This is also a concern for Southeast Asia, a major target for organized crime syndicates according to a 2019 report by the United Nations Office on Drugs and Crime (UNODC).

In recent years, the front line for the fight against IP crime has shifted to cyberspace. Thanks to modern-day technology and the Covid-19 pandemic, there has been a surge of Internet usage and the consumption of goods and services online.

According to a study by the Organization for Economic Cooperation and Development (OECD) and the European Union Intellectual Property Office (EUIPO), online retail sales rose by 41% in major economies between 2018 and 2020, compared with less than a 1% rise in total retail sales.

Counterfeiters have exploited this opportunity to expand their illegal business. In Southeast Asia alone, the report by the UNODC mentioned estimates that the counterfeit goods market, excluding fraudulent medicines, generates illicit revenues of between around US$33.8 billion and $35.9 billion annually.

IP rights violation chiefly happens online in two ways. One is the selling of counterfeits on the Internet, and the other is online piracy.

For IP Key South-East Asia (IP Key SEA), an EU-funded technical cooperation project directed by the European Commission and implemented by the EUIPO, these are two important topics on which we have been cooperating with IP offices, brands and other IP practitioners to protect both IP rights owners and consumers. 

In the European Union, two voluntary agreements have been facilitated by the EC to combat online IP infringement. These are the memorandum of understanding on the sale of counterfeit foods on the Internet and the MoU on online advertising and IPR.

The former, first concluded in 2011, targets the removal of counterfeit products from online marketplaces, while the latter, signed in 2018, strives to disrupt the advertising revenue of websites and apps that infringe IP rights. 

In Southeast Asia, Thailand and the Philippines have adopted their own MoUs to curb the online sale of counterfeits, while a code of conduct on e-commerce aimed at tackling the same issue is being negotiated in Indonesia. With regard to advertising on IP-infringing websites and apps, Thailand is currently the only country to have such an MoU in effect. 

The implementation of all these MoUs has seen positive results. For example, based on a series of studies on the impact of the MoU on online advertising and IPR, the share of advertisements of EU businesses on IP-infringing websites has dropped by 12% since the signing of the MoU.

At recent events organized by IP Key SEA, representatives from the EC, IP offices in Southeast Asia and IP rights owners reported several benefits of these two kinds of MoUs.

The advantages include trust and frank conversations between rights owners and the platforms, reduced administrative burden on all parties and speedy action against infringing posts, better management of limited resources in fighting infringement, the protection of privacy of involved parties, and the preservation of reputation of legitimate brands and e-commerce platforms, which warrant consumer trust and confidence.

Another strong point of MoUs and codes of conduct is that such soft law is easier to draft and implement than hard law.

The cyberworld and online IP infringement have become more and more complex and attempts to resolve the issue requires goodwill and cooperation among all stakeholders, two things that voluntary agreements can help create.

Regular meetings between signatories not only facilitate a flow of knowledge but also enhance accountability, enabling each party to do better in their fight against IP crime. Once adopted, an MoU can always be expanded to include new signatories, who will further contribute to improved IP protection and enforcement.

A few final words for countries in Southeast Asia hoping to draft similar MoUs to address online IP infringement: Suggestions from the signatories already implementing these MoUs in the region include reducing the barrier to join an MoU but enhancing the signatories’ accountability through key performance indicators (KPIs), which allow for the evaluation of progress and success.

Also, inclusion of other government authorities, such as law enforcement, in the MoU membership may be explored for a more coordinated approach with IP rights owners and intermediaries, such as e-commerce platform operators and online advertisers.

It is the mandate of the IP Key SEA Project to support Southeast Asian countries in enhancing their IP protection and enforcement. We stand ready to provide technical assistance should more IP offices and their stakeholders wish to implement similar soft-law solutions to online IP infringement.