21 September, 2007
Digital Content Industry Development Act
Marcus ClinchThe Executive Yuan has approved the Ministry of Economic Affairs's draft Digital Content Industry Development Act. While the Act is in many ways a traditional technocratic to jump start the digital content industry just as the Ministry did with high tech IT manufacturing in the 1990s, it is of special interest to IP legal community because it allows rights holders to use their IP as collateral in secured transactions, sets up an agency to value IP assets so that they can be used as collateral, and permits orphaned works to be claimed by those who would exploit them.
The Act seeks to foster the development of as well as provide a better regulatory framework for Taiwan’s burgeoning digital content industry. And it would, in its present form, significantly alter the digital landscape in Taiwan.
Taiwan identified its digital content industry as one of the two industries for development in its “Two Trillion, Twin Stars” plan first set out in 2002. The “Two Trillion, Twin Stars” seeks to develop the digital content and biotechnology industries into industries with individual annual production values in excess of NT$1 trillion (approximately US$30 billion). The digital content industry, with a production value of NT$340 billion at the end of 2006, seeks to capitalize on the growing regional and global demand for Chinese-language and Chinese-culture digital content.
The Act would see the establishment of a registry system for security interests in copyrighted digital content. Changes to copyright laws over the last two decades have been increasingly seen as a hurdle to the effective exploitation of digital content as local copyright holders currently do not have a means by which to record ownership. Copyright protection would still be granted upon creation under the Copyright Act itself but the proposed security registry would allow for the recordation of the creation, transfer, amendment, expiration, and disposal of security interests in digital content. The owner of a security interest would not be able to assert its rights against a bona fida third-party without first having recorded that interest. The Act also calls for the creation of an agency that would undertake the valuation of intellectual property rights associated with digital content. (This would include trademark and patent rights as well as copyrights.) The government hopes that the establishment of the registry and agency will encourage and facilitate the use of digital content as collateral to secure financing for further development.
The Act also seeks to address the issue of orphaned works and allow for their exploitation in digital form. The Copyright Act currently does not offer a means by which interested parties can make use of orphaned works absent the traditional copyright exceptions for use. The Act would establish a mechanism whereby orphaned works could be utilized if the intended user demonstrates that all reasonable means to obtain authorization from the rights owner have been exhausted. A non-exclusive authorization to use the orphaned work in digital form could then be granted. Authorized users of orphaned works would have to indicate the date, authorization number, and scope of the authorization within the digital work. An authorization itself would stipulate the terms of use, set out a licensing fee that would have to be deposited into a collective fund, and be a matter of public record. The rights owner of the orphaned work would then be entitled to make a claim against the fund if he or she came forward in the future.
