IS 24

Issues and Trends in International Studies

Final Exam

An Analysis on Intellectual Piracy in the

Philippines

Submitted by:

ESTRELLA, Tom Lui M.

IS1243
2012423781

March 17, 2016

I. INTRODUCTION
 I am a self-confessed movie buff and music lover. I really love to watch
movies and listen to music. I watch movies at theaters, but I would really want to have
a copy of that movie in which I can watch it over and over again. I heard cool music in
the radio that I liked, and I want to hear it over and over again. What can I do to satisfy
these? The only answer is downloading it. I wait for the movies to come out in torrents,
I pick to highest quality available, and bam. I have my own copy of the movie, in my
viewing convenience. New music comes up, I look at it in YouTube or maybe look the
full album in torrent sites, download it, and bam. I have my own copy of the song or
the album itself, in my listening experience. Sometimes, I brag my copy to my friends
and I let them have a copy of their own for their viewing and listening convenience. I
mean everything’s on the Internet already. I can just wait for the movie or for that
music to come out, only that the silver lining in it, what I’ve been doing lately is illegal.

I haven’t known it back then, but I’ve already practiced piracy. The term
piracy has been used as a synonym for copyright infringement for centuries and based
on Duhaime’s Law Dictionary, it is defined as unauthorized use, duplication and
distribution of protected material, especially material protected by copyright. It refers
to the selling, distributing, and even downloading of intellectual property protected with
a copyright, which is, of course, illegal.

The paper looks at piracy in the perspective of the Philippines, in which it

has been rampant and one of the main issues in the Philippines. Flocking in the streets
of Manila, particularly in Quiapo, pirated CDs and DVDs of movies, music, games, and
even software are sold. In different qualities and sometimes in a collection, the
growing piracy business has made the Philippines one of thirty-one countries that
supposedly have a larger market for illegal software than for commercial software
(International Intellectual Property Alliance 2005). Similar numbers are not available
for the film industry, yet it is safe to assume that media piracy has changed the way
movies in the Philippines are distributed and consumed. The paper will look at the
causes or motivations on why do people settle for pirated copies, the effects in the
industry and how does the government act upon this issue.
II. RESEARCH QUESTION

The research will revolve around the research question. The information
gathered will answer the research question. The question would be:

“How can the piracy business in the Philippines be minimized or ceased?”

III. THEORETICAL FRAMEWORK

The theory being applied in this issue is Marxism, in which the state
throughout history has been a device for the exploitation of the masses by a
dominant class, that class struggle has been the main agency of historical change,
and that the capitalist system, containing from the first the seeds of its own decay,
will inevitably, after the period of the dictatorship of the proletariat, be superseded by
a socialist order and a classless society.

In the perspective of piracy in the Philippines, companies and movie

production studios benefit from all those who support their work. People watch these
movies, buy the original copy of these movies, buy these albums or records, but the
profit from it goes to the producers, the actors, the staff, directors, and us, we’ll just
enjoy their work. Our time and money has been consumed just for us to have fun.
Some people can’t afford these, so their only way for these movies or music to be
easily obtain at a low cost to free, is thru piracy. In this sense, digital information is
very different from physical goods such as crude oil or rice, because with digital
material – unlike with foodstuffs or other raw materials - there is no scarcity. A digital
file can be reproduced and distributed at relatively low costs. Piracy is therefore an
important case in point wherein the price of digital data is challenged. Concepts such
as Free Software or Open Source are not about giving software away for free, but
about finding new ways of compensating the producers of software in a fair way,
while avoiding the approach that companies take, which use their monopoly on the
software market to set prices as they see fit. Companies try to maintain an exchange
value for their products that is different from the cost of its material, the physical
DVD or CD disk. The tendency in the cutthroat competition of the pirate market is to
eventually bring the prize down to the lowest level, where one essentially pays for
the disk, not for its content. Pirated DVDs were on sale for 100 pesos 2002 (Cang et
al 2002); since then the price has dropped to between 50 and 70 pesos, thus making
it affordable for anyone.

IV. DISCUSSION

Concept of Copyright Protection

Copyright protection is above all one of the means of promoting,

enriching and disseminating the national cultural heritage. A country’s development
depends to a very great extent on the creativity of its people, and encouragement of
individual creativity and its dissemination is a sine qua non for progress.

Copyright constitutes an essential element in the development process.

Experience has shown that the enrichment of the national cultural heritage depends
directly on the level of protection afforded to literary and artistic works. The greater the
number of a country’s intellectual creations, the higher its renown; the greater the
number of productions in literature and the arts, the more numerous their so-called
“auxiliaries” (the performers, producers of phonograms and broadcasting
organizations) in the book, record and entertainment industries; and indeed, in the
final analysis, encouragement of intellectual creation is one of the basic prerequisites
of all social, economic and cultural development. Copyright protection, from the
viewpoint of the creator of works, makes sense only if the creator actually derives
benefits from such works, and this cannot happen in the absence of publication and
dissemination of his works and the facilitation of such publication and dissemination.

This is the essential role of copyright in developing countries. There are

several factors influencing intellectual creativity in developing countries, apart from the
pecuniary condition of most of the authors and intellectual creators themselves, who
need to be offered incentives and subsidies. There is the shortage of paper for the
production of textbooks for the process of continuing education (both formal and non-
formal), and for production of prescribed and recommended books as also general
books, which are to be placed within the reach of the common man in these countries.

The subject-matter of copyright protection includes every production in

the literary, scientific and artistic domain, whatever the mode or form of expression.
For a work to enjoy copyright protection, however, it must be an original creation. The
ideas in the work do not need to be new but the form, be it literary or artistic, in which
they are expressed must be an original creation of the author. And, finally, protection
is independent of the quality or the value attaching to the work—it will be protected
whether it be considered, according to taste, a good or a bad literary or musical work—
and even of the purpose for which it is intended, because the use to which a work may
be put has nothing to do with its protection.

Works eligible for copyright protection are, as a rule, all original

intellectual creations. A non-exhaustive, illustrative enumeration of these is contained
in national copyright laws. To be protected by copyright law, an author’s works must
originate from him; they must have their origin in the labor of the author. But it is not
necessary, to qualify for copyright protection, that works should pass a test of
imaginativeness, of inventiveness. The work is protected irrespective of the quality
thereof and also when it has little in common with literature, art or science, such as
purely technical guides or engineering drawings, or even maps. Exceptions to the
general rule are made in copyright laws by specific enumeration; thus laws and official
decisions or mere news of the day are generally excluded from copyright protection.

Practically, all national copyright laws provide for the protection of the
following types of work: literary works: novels, short stories, poems, dramatic works
and any other writings, irrespective of their content (fiction or non-fiction), length,
purpose (amusement, education, information, advertisement, propaganda, etc.), form
(handwritten, typed, printed; book, pamphlet, single sheet, newspaper, magazine);
whether published or unpublished; in most countries “oral works,” that is, works not
reduced to writing, are also protected by the copyright law; musical works: whether
serious or light; songs, choruses, operas, musicals, operettas; if for instructions,
whether for one instrument (solos), a few instruments (sonatas, chamber music, etc.),
or many (bands, orchestras); artistic works: whether two-dimensional (drawings,
paintings, etchings, lithographs, etc.) or three-dimensional (sculptures, architectural
works), irrespective of content (representational or abstract) and destination (“pure”
art, for advertisement, etc.); maps and technical drawings; photographic works:
irrespective of the subject matter (portraits, landscapes, current events, etc.) and the
purpose for which they are made; motion pictures (“cinematographic works”): whether
silent or with a soundtrack, and irrespective of their purpose (theatrical exhibition,
television broadcasting, etc.), their genre (film dramas, documentaries, newsreels,
etc.), length, method employed (filming “live,” cartoons, etc.), or technical process
used (pictures on transparent film, videotapes, DVDs, etc.); computer programs
(either as a literary work or independently). 2.177 Many copyright laws protect also
“works of applied art” (artistic jewelry, lamps, wallpaper, furniture, etc.) and
choreographic works. Some regard phonograph records, tapes and broadcasts also
as works. (WIPO, 2004)

Concept of Piracy and Infringement

An essential part of piracy is that the unauthorized activity is carried on

for commercial gain. This element of commercial gain implies that piracy will often be
carried out on an organized basis, since not only is the unauthorized reproduction of
a work involved, but also the subsequent sale or distribution of the illegally reproduced
work, which will require some form of organized distribution network or contact with
potential purchasers. To the consumer, often only the end of the chain of such a
distribution network will be visible in the form of one sales outlet selling a pirated
product. It is important to bear in mind, however, particularly when addressing the
question of the means of dealing effectively with piracy,nthat behind one such outlet
will often lie a systematically organized illicit enterprise, which illegally reproduces a
copyrighted work and distributes it to the public via a number of such sales outlets.

While piracy is not a recent phenomenon, two developments have

occurred which have caused it to assume alarming proportions, and to threaten the
basis of the copyright system. 2.235 The first has been the advances in the means by
which intellectual works may be communicated. The medium of the printed word has
been supplemented progressively by media for communicating audio and visual
recordings in the form of phonograms, music cassettes, films and videograms.
Similarly, widespread commercialization of the computer has added a further means
of recording and communicating information. Most recently, the advent of digital
technology has had a tremendous impact on the creation, dissemination and use of
works.

The copyright system has responded to these developments by

progressively enlarging the subjects over which the creators of intellectual works are
granted rights. These advances, however, have increased the scope for pirates to
interfere in the control which an author exercises over the dissemination and use of
his works by the public.

Simultaneously with the advances in the means of communicating

intellectual works have been significant advances in the means of reproducing
tangible records of those works. Foremost amongst the latter developments have
been: - the development of the offset technique of printing and of duplicating and
photocopying machines; - the invention of the magnetic tape, the advent of the
compact disc, and the development of higher quality and cheaper cassette recorders
which enable not only the playing of 52 WIPO Intellectual Property Handbook: Policy,
Law and Use pre-recorded cassettes, but also the recording of music from live
performances, radio or gramophone records; and - the invention of the video recorder,
which has extensively enlarged the means by which films and other, principally visual,
works may be received.

One consequence of these advances is the difference in cost

between, on the one hand, the making of the original recording by an author and his
business partners and, on the other hand, the reproduction of such a recording by
others. In the case of a film, a producer must, through his own and his partners
investment, finance the script writer and any other literary author involved, the musical
composer, the actors, the support cast, the cost of location and site facilities, and the
use of sophisticated visual and sound recording equipment. Once a tangible record
has been made of the film, however, particularly if the record is contained in a
 videogram recording, further records of the work can be reproduced with considerable
ease and at little cost. Thus, advances in recording technology have produced the
means whereby pirates can easily produce illegal versions of the original work. Since
the pirate has not made, and therefore does not need to recover the cost of, any
investment in the production of the original work, the pirated copies are usually sold
at reduced prices, thereby undermining the original author’s, performer’s, investor’s
and distributor’s possibility of obtaining a just moral and economic reward for their
work and investment. (WIPO, 2004)

Some of the motives for engaging in copyright infringement are the following:

 Pricing – unwillingness or inability to pay the price requested by the legitimate

sellers
 Unavailability – no legitimate sellers providing the product in the country of the end-
user: not yet launched there, already withdrawn from sales, never to be sold there,
geographical restrictions on online distribution and international shipping
 Usefulness – the legitimate product comes with various means (DRM, region
lock, DVD region code, Blu-ray region code) of restricting legitimate use (backups,
usage on devices of different vendors, offline usage) or comes with annoying non-
skippable advertisements and anti-piracy disclaimers, which are removed in the
unauthorized product making it more desirable for the end-user
 Shopping experience – no legitimate sellers providing the product with the required
quality through online distribution and through a shopping system with the required
level of user-friendliness
 Anonymity – downloading works does not require identification whereas downloads
directly from the website of the copyright owner often require a valid email address
and/ or other credentials

Piracy and the Philippines

The trade with illegal goods is organized along two main

trajectories, which he called the “Muslim Connection” and the “Chinese Connection”.
The “Muslim Connection” operates mainly from the Southern Philippine island of
Mindanao. Mindanao is characterized by its Muslim population and the close
connections that the island has with Malaysia and Indonesia. According to this source,
the movies that come from this region into the rest of Philippines are predominantly
from these two countries – an account that rings true considering the large number of
DVDs that have subtitles in Bahasa Indonesia or Malay available in the Philippines.
This source says that the movies from this region are brought into the country by the
most inconspicuous, humble means.

Often in the boats of fishermen that travel the Mindanao Sea, the
Sulu Sea and the Moro Gulf, the area between the Philippines and Borneo. It seems
that most of the Malaysian pirate movies come from the city of Kota Kinabalu on
Borneo (Joel 2006). This area is very difficult to patrol because it has hundreds of
small islands, many of which are under the effective control of the Moro National
Liberation Front, a Muslim guerrilla organization.

When these fishermen smuggle illicit movies into the country, it is

usually on single disks. Often these disks are hidden in the belly of tuna fish or in
barrels of shrimp to prevent their discovery by customs or other law enforcement
agencies. After such a precious disk has arrived in Mindanao, two copies are made,
generally in the city of Davao. One stays in Mindanao as master disk for other copies
distributed there. Another copy goes to Cebu to for distribution in the Visayas region.
The “original” goes to Manila. From these three “master disks” thousands of copies
that are eventually sold all over the Philippines are made.

The distributors of these disks use public transport to deliver their

goods, most commonly the long-distance busses that cross the Philippines. They
make use of the “RoRo” scheme (“RoRo” stands for “Roll on roll off”), where long-
distance buses leave Mindanao via ferries that take them to other islands, in this case
typically the main island of Luzon, where the capital Manila is located. These trips
take around 24 hours from Davao to Manila. That means that disks that have been
delivered to Mindanao in the early morning will be in Manila the following day. The
disks are usually hidden in coat pockets, backpacks and other pieces of luggage. In
Manila, the duplication of these disks starts as soon as they arrive. Hot spots for
reproduction are the districts of Quiapo, Pasig, Caloocan City and other parts of Metro
Manila. Especially in the neighbourhood of Quiapo, where the biggest pirate market
in all of Manila is located, the duplication machines can only run between 8 am and 6
pm, because otherwise the noise they make might attract unwelcome visitors.

Therefore the first DVDs are typically available on the streets the day
after they arrive in Mindanao. Errand boys deliver the disks complete with covers to
merchant customers. These business relationships are not exclusive. The owners of
the little stalls that sell the pirated disks are free to buy from all the suppliers. Yet
among the distributors, there exists an unspoken agreement that whoever has a film
first, has the exclusive right to distribute this film. They even maintain periodic contact
to make sure that no two suppliers deliver the same movie. This system is based on
a code of honour that is recognized by all the main players in the market.

The existence of such an unwritten “code of honour” was stressed time

and again by this informant. According to Joel the whole piracy market relies
exclusively on these informal, but binding, agreements. For obvious reasons, there
are no written agreements or even contracts between the distributors and merchants,
between the suppliers and the sellers. The number of disks delivered to a seller is
only documented in the notes that the delivery boys keep. It is an entirely informal
economy. This accord usually entails that distributors will supply the sellers with new
DVDs, when their merchandise is confiscated during a police raid. The police in the
Philippines are required to furnish the traders with a list of the disks they confiscate,
and the sellers take this list to their suppliers, who in turn provide them with new
movies. Those who do not honour the rules of this trade face punishment, which can
range from exclusion from the delivery system to more severe forms of retributions
including physical violence.

The “Chinese Connection” in the Philippines operates slightly

differently. Their goods usually come from Hong Kong, sometimes from Singapore.
Often the couriers are unsuspicious looking, young women, coming into the country
as tourists by plane. They typically hide the disks in their luggage, often in bags with
other, legal DVDs and CDs. Another method is to hide the disks in big boxes of second
hand clothes, which are imported into the Philippines. Once these disks reach Manila,
they are manufactured like the ones coming from the “Muslim Connection”.

According to Joel, to buy a “master disk” in Hong Kong can cost the
buyer up to one million HK dollars. Once the disk has been smuggled into the
Philippines, the distributors will sell the copied disks for 20 or 25 pesos, while the
blank DVD usually costs 5 pesos. The vendors in turn offer the disks for a prize from
50 pesos (for a standard movie) up to 70 pesos (for a new or not-yet released movie).
Since the most successful films are distributed in quantities of hundreds of thousands,
there are huge profit margins - both for the distributors and the vendors of DVDs and
CDs - despite the outwardly low price per disk.

In some cases, the suppliers do not just deliver the disks but also
blueprints for the cover design. In other cases, local graphic artists - using pictures
they obtained from the Internet - design these covers. Sometimes this practise can
lead to amusing results. On the covers of some disks one can find pictures, which are
not from the movie in the box, or credits of completely different films (A pirated version
of On the Wings of Desire by German director Wim Wenders lists Van Diesel as one
of the actors!). They might also include lists of special features (such as bonus
material, subtitles in Spanish, Cantonese or Arabic) that are not on the disk.

The plot summaries on the back of the box are typically taken from the
Internet Movie Data Base, and are often reproduced in versions full of typographical
errors or poor English. The practice of using pictures from the web can sometimes
lead to amusing results: Recently a version of Akira Kurosawa´s Dostojevski-adaption
The Idiot (1951) was sold in Manila with a cover from Lars Van Trier´s independent
digital movie The idiots (1998). The English subtitles of pirated DVDs that come from
China usually include inappropriate translations, sometimes even in direct contrast to
the actual dialogue.
 Accounts of DVD covers can read like the following: “The global film
is included completely, broadcast the new feeling superstrongly”. On another DVD
sampler it says: “Unique Color Sensual Desire Cinema”. The copyright notice (!) on
the same box reads: “The copyright owner of the video disc in this DVD only permits
Your Excellency to run the family to show, owner keeps the copyright all one’s life
relevantly in the right, not listing exhaustively… exhibiting in the place such as a club,
station, bar, theatre etc, for instance without permission, forbid hiring out, export or
distributing, copy issue, alter right, will bear civil and criminal responsibility.”

Apart from these language difficulties, the quality of the films that
stem from the “Chinese Connection” are often of better quality than from the “Muslim
Connection”. Moreover, it seems that most of the “quality” art house and the
increasing number of classic American, European and Japanese movies also come
from China rather than from the “Muslim Connection”. A company from Shenzen by
the name of “Bo Ying” produces very sophisticated DVDs, often taken from the
American Criterion Collection, which specializes in top-notch editions of classic films
in flawless transfers and with original bonus material. Yet a visit to the website of Bo
Ying leads to an “Anti-Piracy Statement”! Emails to both TR-Boy and to the Criterion
Collection regarding the copyright situation of these DVDs were not answered. Yet it
is safe to assume that Bo Ying did not obtain the rights to these films, since the
Criterion Collection points out on their website, that they only distribute their films in
the United States.

Some customers of piracy markets in the Philippines have become

very aware of issues of quality. In a number of forums on the Internet, buyers of pirated
movies exchange tips on where to find rare films and how to distinguish quality DVDs
from inferior ones. This type of advice also includes information where rare, sought-
after films were sold. One forum is called TheQ. (Q stands for Quiapo, the
neighbourhood in Manila with the biggest pirate market.) A typical entry is as follows:
“Found Weekend by Jean-Luc Godard in Quiapo in the Muslim Barter Center at Stall
No. 16. Ask for Benjie!” Other forums provide more general advice on how to
distinguish bad DVD copies from good ones. These expert customers go so far as to
identify well-made copies based on the design of the cover and the occasional
manufacturer name. One poster in the “Pinoy DVD” blog explained crucial differences
in manufacturing quality, and pointed out the quality of the releases from a company
that identifies itself with the label “Superbit” on the cover. (PinoyDVD forum in June
2002). Other participants of the forums provided detailed technical analysis of different
DVD versions of the same film, and compared them in terms of picture and sound
quality. These tests were obviously conducted with laboratory equipment and
software used by professional video studios.

Enforcement of the Law

As per the International Intellectual Property Alliance (IIPA),

enforcement of the law has been done to stop piracy in the Philippines. Some of the
measures taken are:

• Ensure search warrants are obtainable on a reasonable and timely basis consistent
with international law and that they are not easily quashed.

• Remedy enforcement bottlenecks, including inquests and preliminary investigations

by the Department of Justice by streamlining signing procedures.

• Develop IP expertise in judges and prosecutors and re-establish specialized IP

courts, with the goals of increasing speeds of dockets and enabling a significant
number of cases, including criminal cases, to move forward in the system.

• Maintain raiding on suspected business software end-user piracy targets; run

surprise and transparent inspections on all (licensed or unlicensed) optical disc plants
and CD-R burning operations in cooperation with industry; take enforcement against
piracy activities in the malls and against pirate book and photocopy shop operations
both on and off university campuses; prosecute cases involving illegal camcording of
movies in the movie theaters; and shut down some of the estimated 800 pirate cable
systems, revoking their licenses or permits.
• Investigate and eradicate P2P and other Internet-based piracy, implement and
improve current laws (like the ECommerce Law), and draft and enact legislation to
facilitate removal of infringing material or services from the Internet through fostering
ISP cooperation and implementing an effective notice and takedown system.

• Issue implementing rules for the penal provisions of R.A. 8792, particularly on piracy.
• Provide funding for OMB verification visits, and allow right holders to participate in
OMB plant visits and other investigations and accompany inspectors.

• Permit voluntary music collective management organizations (CMOs) to

commercially operate without interference from the government.

• Launch measures to reward good and honest government work and work to
eradicate corruption and compromises in IP enforcement (and take action to punish
offenders).

For legislation, IIPA would want to:

• Pass as a matter of first priority an IP Code amendment Bill (SB880) aimed at

implementing the WIPO Copyright Treaty (WCT) and the WIPO Performances and
Phonograms Treaty (WPPT) and making other positive changes.

• Finalize national legislation (HB5699, which passed third reading in February 2009,
and SB3529 which passed third reading in January 2010) to halt illegal camcording
of motion pictures, and promote and support implementation of the law and city
ordinances through training for PAPT officers.

V. CONCLUSION

The mobilization of moving images that both international and Philippine

piracy has set in motion seems unstoppable at the moment. The government lacks
resources - some might argue even the will - to effectively reduce piracy. While the
Philippines was recently dropped from the "priority watch list" of the International
Intellectual Property Alliance (IIPA) because of alleged crackdowns on pirate markets,
these markets continue to thrive. In other countries, the piracy traders eventually use
their considerable distribution muscle for other purposes.

For the time being, filmmakers and film studios in the Philippines
usually condemn piracy and will not deal directly with the pirates. Yet, another
example suggests that these distribution channels can be used for other purposes
than selling pirated Hollywood blockbusters. Whether the illegal distribution channels
of the Philippines will be used for the dissemination of banned material will depend on
the political future of the country.

Necessary steps by the government are made by passing laws and

continuous raids by the police for these piracy connections to be stopped. When this
will stop will remain unknown. As for the succeeding administrations to come, they
must come up of a strong advocacy and legislation for the permanent elimination of
piracy in the Philippines.

VI. REFERENCES
 Tuffnell, N. (2011). Interview: Gabe Newell.
http://www.tcs.cam.ac.uk/interviews/0012301-interview-gabe-newell.html.
Retrieved 03/16/16.

 IIPA. (2010). The Philippines: International Intellectual Protection Agency (IIPA)

2010 Special 301 Report on Copyright Protection and Enforcement.
http://www.iipa.com/rbc/2010/2010SPEC301PHILIPPINES.pdf. Retrieved
03/11/16.

 WIPO. (2004). WIPO Intellectual Property Handbook. WIPO Publication.

Geneva, Switzerland.

 N.A. (2006). The Culture of Piracy in the Philippines. http://www.asian-

edition.org/piracyinthephilippines.pdf. Retrieved 03/11/16.
 http://www.duhaime.org/LegalDictionary/P/PiracyIntellectualProperty.aspx

 https://en.wikipedia.org/wiki/Marxism

 http://www.dictionary.com/browse/marxism

 https://en.wikipedia.org/wiki/Copyright_infringement

 http://www.ncpc.org/topics/intellectual-property-theft/pirated-products