[Viewpoint] Protecting intellectual property rights

The Ministry of Culture, Sports and Tourism released a press statement in September last year stating that practices of violating software copyrights in the public sector have been declining with a piracy rate at below 1 percent. In its survey of 214 public organizations in 2010, use of unauthorized software stopped at 0.7 percent, compared with 1.46 percent in a survey of 461 agencies in 2009.

But the press release is hardly convincing. Even the staff working in the surveyed organizations laughed at the finding. Anyone in the field can testify the data does not reflect the reality. Use of unauthorized software at the Ministry of National Defense, for one, reaches far above 10 percent.

Kathleen Stephens, former U.S. ambassador to Korea, last year demanded a fix as computers with files of unauthorized software can cause disruptions in the security network between the two countries’ military outposts. Many among the government agencies did not even respond to the ministry’s questionnaire in 2010. The Board of Audit and Inspection, Financial Supervisory Commission, Ministry of Environment and the National Customs Service are suspected of bypassing the survey because they had something to hide.

Infringement of copyright laws would have been passable before. But the Free Trade Agreement between Korea and the United States that took effect in March requires the government and public offices to use purchased and authorized software. The culture ministry on Nov. 28 last year issued an act on specific guidelines on copyright violations. Use of unauthorized software, when caught, could exact punitive actions for violating the bilateral trade agreement article. Software piracy is no longer a corporate problem as it can trigger trade friction.

The Korea-U.S. FTA has been effective for more than a month. The main opposition which failed to win a majority in the April 11 legislative election no longer threatens to nullify the trade pact. We should now scrutinize the agreement details to augment the benefits and lessen the damage.

The Presidential Council on National Competitiveness held a meeting on Thursday at the Digital Media Center in Western Seoul. The event chaired by the president aimed to evaluate the country’s status in IT sector ahead of the Science Day on Saturday, IT Day on Sunday and World Intellectual Property Rights Day on Thursday. The agenda included broad issues on the IT sector, including the changes necessary after the FTA.

We call our nation an IT powerhouse. Yet our software piracy rate embarrassingly reaches 40 percent, sharply higher than the 27 percent average among 34 member countries of the Organization of Economic Cooperation and Development. According to a survey by the Korea Software Property Right Council, losses from software piracy amounted to 750 billion won ($658 million) last year, up 25 percent from the previous year. The figure has not counted losses in jobs and tax revenue.

Illegal copying like free downloading of proprietary software caused a loss of 35,700 jobs and tax revenue of 147.8 billion won, according to a study by the Korea Culture Tourism Institute in 2010. Such practices take a toll on productivity, causing losses worth 4 trillion won. The local software industry is placing hopes on reinforced protective actions against infringement of property rights in the wake of the Korea-U.S. FTA.

The government and public sector use unauthorized software mostly out of habit and a tight budget. Local governments with a weak budget base are more prone to illegal software use. But it is hypocritical to insist that piracy rate hovers below 1 percent. It may not be easy for the government to admit to its follies. But hiding them won’t make them go away. The time has come to end unethical bad habits. If the government does not use authorized software, it cannot demand consumers to do otherwise.

Protection of intellectual property rights is a necessity to digitalize the nation. If we are not honest ourselves, we cannot raise claims against other countries like China for infringing on our copyrights and trademarks. The government should first conduct an accurate survey on software use and increase the necessary budget to enforce the legal use of software.

*The author is the director of the JoongAng Ilbo Economic Research Institute.

by Shim Shang-bok