Clamp Down in Klang Valley


Economic News

22 Jul 2010
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Malaysia has recently stepped up its campaign against software pirates, while hoping in turn to rid itself of a generally negative international image when it comes to intellectual property rights.

With a burgeoning electronics sector and an increasing shift towards computerisation throughout the economy, Malaysia has long been both plagued by and accused of software piracy.

Malaysia is one of 36 countries placed on a copyright violation watch list by US authorities. Pirated software and games discs from Malaysia have turned up in as far-flung places as the Middle East and Africa.

At home, the situation is seen as far worse, with an estimated 61% of all software currently installed in Malaysia having been pirated, according to the Business Software Alliance. This compares to a global rate of 35% and is well above the estimated average of 53% in the Asia-Pacific region as a whole.

However, Malaysia is responding to its critics. On May 3, the Ministry of Domestic Trade and Consumer Affairs (MDTCA) announced it had conducted a series of raids on the offices of various firms that had netted in excess of MYR332,000 ($92,000) in illegal software.

In the raids targeting five firms, 31 computers carrying 211 copies of pirated software were seized. Under the country's beefed up copyright legislation, managers of companies found guilty of using illegal software could face up to five years imprisonment and fines of MYR20,000 ($5500) for each item of unlicensed software uncovered.

According to Iskandar Halim Sulaiman, the MDTCA's deputy director general (operations), one of the firms found with pirated software was a leading technology company based in the Klang Valley that held the prized status of Multimedia Super Corridor technology solutions provider.

"This should not happen, especially from a company of this stature and prestige," Sulaiman told the press in early May. "It is not easy to obtain this status. The ministry views the matter as serious."

The raids were part of Operation Tulen 2006, a campaign originally launched four years ago to rein in the rampant abuse of copyrights. In March, the government announced that it would deploy some 2000 officials to inspect businesses across the country to check for unlicensed software. The recent round of snap inspections and seizures were a part of that programme.

However, despite the four-year long campaign, it was only in November 2005 that the government achieved its first successful prosecution of a firm charged with using pirated software. The company, in the manufacturing sector, was fined MYR120,000 ($33,285) for computer copyright violation.

Until recently, much of the focus on copyright infringement has been on pirated music and movies discs and computer games. Last year alone, Malaysian authorities seized more than 4.8m illegally produced discs, with the figure for the first four months of this year being 1.5m, with a street value of MYR51.3m ($14.2m).

The US, home to some of the world's largest software producers, particularly wants to see the crackdown pursued with vigour. While acknowledging that Malaysia has made progress in recent years, US Deputy Commerce Secretary David Sampson says more needs to be done, especially as Kuala Lumpur is to start free trade negotiations with Washington in June.

"We appreciate that progress", he said during a recent visit to Malaysia, "but clearly, there is a lot more work that can be done, especially in optical discs and pharmaceuticals. Intellectual property rights are a critically important issue to the US government, US businesses and in particular, the US Department of Commerce. It is one of the foundation issues in all the free trade negotiations that we are engaged in."

In another move to discourage software copyright abuse, Malaysia's government is bringing in laws, due to come into effect next year, which will allow charges to be laid against the owners of buildings where pirated materials are seized by authorities or found to be stored or sold.

Domestic Trade and Consumer Affairs Minister Shafie Apdal said that building owners could not plead ignorance if illegal software was found on their premises.

"They must be held responsible for their premises and, hopefully, this will teach them to be more careful about whom they rent the premises to," Apdal said on April 20 while attending a meeting on intellectual property rights co-operation between Malaysian and US officials. "Let no one misunderstand, the Malaysian government is serious about combating piracy and counterfeiting."

Another to hammer home the message was Roslan Mahayudin, the MDTCA's acting director-general of enforcement, who vowed that the fight against software piracy would continue.

"This ministry will now be taking a more aggressive stand in taking action against the senior management of companies who continue to flout the copyright law," Roslan said in a statement issued late April.

Despite initial successes, Malaysia has a long way to go before it can claim victory over copyright abusers. However, armed with new powers and fresh determination, the authorities seem ready to play hardball with the software pirates.

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