COPYRIGHT FLEXIBILITIES IN MALAYSIA ROKIAH ALAVI Department of

COPYRIGHT FLEXIBILITIES IN MALAYSIA ROKIAH ALAVI Department of Economics International Islamic University Malaysia Workshop on Empirical Study of the Social and Economic Benefits of Copyright Flexibilities, 26 th September 2013, American University Washington College of Law, Washington DC

2 Concerns related to copyright flexibilities in Malaysia 1. Malaysia has not taken advantage many of the flexibilities available in the copyright laws: • Some limitations and exceptions not incorporated in the Malaysian national copyright laws. This means copyright owners are granted far more rights than they need to. • In some cases, even though the exceptions are included in the national law, they have never been utilized. 2. Ongoing TPPA free trade agreement –the US is pushing for higher copyright protection – would narrow the flexibilities in the copyright law.

BRIEF OVERVIEW ABOUT MALAYSIA

4 Economic and Social Background • Malaysia is a plural, heterogeneous country. • Independence from British occupation in 1957. • Composition • Ethnic: Malays and Other Bumiputera 67. 4%; Chinese 24. 6%; Indians 7. 3%: Others 0. 7% • Religion: Islam 61. 3%, Buddhism and Other Chinese Religions 21. 1%; Christianity 9. 2%; Hinduism 6. 3% • Malaysian economy has successfully transformed over last 50 years (despite some social tensions). • From a ‘rubber and tin’ economy, it has diversified, industrialized and undergone significant structural change • Upper middle income country, targeting developed status by 2020.

5 GEOGRAPHICAL LOCATION London Toronto Washington DC Los Angeles Miami Mexico City Warsaw Frankfurt Paris Moscow Beijing Chengdu Guangzhou Milan Istanbul Cairo Jeddah Seoul Tokyo Shanghai Taipei Mumbai Hong Kong Dubai Manila Ho Chi Minh City Phnom Penh Chennai Bangkok Singapore Santiago Kuala Lumpur MALAYSIA Sao Paulo Buenos Aires Johannesburg Jakarta Sydney

Malaysia’s Key Economic Indicators 2011 2012 2013 28. 96 29. 34 29. 71 Q 1 GDP (%) Growth (constant 2005) 5. 1 5. 6 4. 1 Q 1 Inflation (%) 3. 2 1. 6 1. 8 Q 1 9, 508 9, 890 10, 526 f 3. 1 3. 0 3. 1 Q 1 Population (million) Per Capita Income (US$) Unemployment (%) Source: Central Bank of Malaysia/Department of Statistics Malaysia/MATRADE

GDP By Industrial Origin GDP Contribution (%) Sector 1970 1990 2000 2011 2012 2013 f Agriculture 33. 6 19. 3 8. 8 7. 3 7. 7 7. 3 7. 2 Mining 7. 2 9. 8 6. 7 7. 0 8. 8 8. 5 8. 3 Construction 3. 8 3. 4 3. 3 3. 0 3. 3 3. 5 Manufacturing 12. 8 26. 5 32. 6 27. 6 25. 1 25. 0 Services 42. 6 42. 1 53. 0 57. 7 54. 2 54. 5 54. 8 f = Forecast Source : Treasury Economic Report 2012/2013 & DOSM

COPYRIGHT LAWS IN MALAYSIA

9 Overview of Copyright Laws • First enacted in 1969 – common law system. • The 1987 Copyright Act governs copyright protection in Malaysia. • Malaysia is a member of: 1. Berne Convention (1990) 2. TRIPs Agreement (1995) 3. WIPO Copyright Treaty (2012) 4. WIPO Performance and Phonogram Treaty (2012)

10 Ownership Rights and Duration in Literary and Artistic Works Category Exclusive Ownership Rights Duration of Protection Literary works Musical works Artistic works Films • • • Reproduction of the work in any material form Performing, showing or playing the work to public Communication of the work to public Distribution of copies to public by sale or other transfer of ownership Commercial rental to public • Same as above • • Sound recordings • • • Broadcasts • • • Source: Kanapathy (2008) Recording Reproduction Rebroadcasting Performance, showing or playing to public in a place where admission fee is charged Right to take still photographs from a TV broadcast • Life of the author plus 50 years If published after death, copyright lasts for 50 years from date of publication If joint authorship, life or author who dies last applies 50 years since first publishing If unpublished, year of recording applies 50 years from year of making broadcast

11 Limitations and Exceptions 1. Parallel Import • Malaysia adopts domestic exhaustion – copyright owners have the right to control importation of works. • Parallel importation of any copyrighted items is prohibited.

12 Limitations and Exceptions 2. Compulsory Licensing • The Berne Convention allows government to issue license for making translation and print - “works published in printed or analog forms of reproduction” – three years after the first publication • Only for the purpose of teaching, scholarship or research. • Section 31(3)(a) of Malaysian Copyright Law - allows CL for translation work to national language – within one year after the first publication of the work (Azmi, 2008). • Never utilized this provision.

13 Limitations and Exceptions 3. Anti-Competitive Practices • Article 40 of TRIPs provides. . ”that national legislation may adopt appropriate measures to prevent or control licensing practices or conditions that may constitute an abuse of IP rights and have an adverse impact on competition in the relevant market” (CI, 2008). • Malaysia did not include this provision in the national legislation (CI, 2008).

14 Limitations and Exceptions 4. Anti-Circumvention • The WCT requires members to “provide adequate legal protection and effective legal remedies against circumvention of effective technological protection measures that are used by authors in connection with the exercise of their rights”. • Malaysia adopted this provision in the copyright law even before it became WCT member (joined only in December 2012)

15 Trans Pacific Partnership Agreement

16 Brief Background • The TPP is a regional free trade agreement that is still being negotiated among 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, US and Vietnam. • Ambitious and comprehensive FTA – aims to liberalize almost areas related to goods and services and intends to go beyond the commitments established in WTO. • 19 th round so far and expected to be concluded by end of 2013.

17 Under TPPA, US has sought increased IP protection. . • US is pushing for “a standard of protection similar to that found in US Law” • Goes beyond TRIPs, WCT and WPPT • Extending protection term by another 20 years plus (+75 years) • Expand National Treatment obligation – full NT • Create new type of rights that are not covered under existing copyright law. • Reduce possibilities of limitations and exceptions • Expand obligations on Technological Protection Measures (TPM)

18 Limitations and exceptions in Malaysian CL therefore are limited … benefit accrues to copyright owners - mostly MNCs • This is alarming because Malaysia is a net importer of copyrighted products and services. • Production and exports of copyrighted products and services are negligible. • Tertiary education sector highly dependent on imported books, journals, databases, software and other educational materials – most affected by narrow flexibilities. • Impact – limits access to knowledge, curtails creativity and productivity and slows down economic growth.

19 COPYRIGHT-BASED INDUSTRIES IN MALAYSIA • The growth of the industry has been outstanding – between 2000 and 2005 (Kanapathy, 2008): • Value-added in real terms grew 11. 1% (surpass national economic growth rate of 6. 6%). • Contribution to GDP increased from 4. 7% to 5. 8% • Employment grew 10. 7% (as result of this, share in national employment rose from 5. 3% to 7. 5%). • Key industries in Malaysia are: 1. Press and literature; 2. Software and databases; 3. Motion and video • These industries accounted for 88% of value added and 91% of total employment of core copyright industries (there are 9 subsectors under the core copyright industries as classified by WIPO).

20 PRESS AND LITERATURE SECTOR • Publishing industry caters for small domestic market, and • • mainly engaged in publication of school textbooks and related materials (70%). (Kanapathy, 2008). In 2004, the publishing industry worth US$405 million (Ng, 2005). In comparison, in US its worth about $30 billion. Copyright infringements especially illegal copying (in the universities and colleges) are common. Copyright awareness is low. Copyright Control Centre (CCC) – medium to control the photocopying of copyrighted works by legitimate photocopying business (Azmi, 2008 –not successful so far.

21 PRESS AND LITERATURE SECTOR • 60% of academic and university books are imported (Ng, 2005). • In 2007, 48% of books were imported from US, UK (17%), Taiwan (8%), China (8%) and HK (4%). • Imported books are distributed by regional distributors, mainly located in Singapore and HK. No direct purchase from foreign publishers is allowed. • This is to control parallel importation. • Foreign publisher do not grant license to publish local reprints or editions – small market. • Impact – limited supply and higher costs.

22 MOTION PICTURES AND VIDEO • Local film industry consists of largely Malay movies for domestic market. • Malaysian market is multilingual – high number of imported films. In 2007, imported more than 9, 000 films. • About 70% of the total collection from films are Hollywood movies, followed by 11% Malay, 10% Chinese and 5% Indian movies. • Incidence of piracy is high but on the declining trend due to improved DVD technology. • Cable TV expensive and limited programmes – high cost.

23 SOFTWARE AND DATABASES • The fastest growing sector in Malaysia – original local • • content in the area of education, entertainment, commerce and industrial activities – both for local and export market (Kanapathy, 2008). Software market worth about US$1 billion. Mostly imported through licensed agents - expensive. Online databases in libraries acquired through licensing agreements – high cost (Azmi, 2008). As a result, libraries have to select only highly demanded databases and discontinue subscription of print version of journals. Sofware piracy rate in Malaysia is relatively high.

24 Concluding Remarks • Studies show that weakening of flexibilities in the copyright laws leads to static and dynamic inefficiencies and reduction in economic welfare. • Lack of awareness on the importance of these flexibilities in Malaysia – public and policy makers. • Reflected in the debates and discussion on the possible impacts of stronger IP protection under TPPA – focus on patent and access to medicine. • There is a need to undertake research on copyright flexibilities – so far there is no economic analysis on this has been done in Malaysia.