Legal Environment
Legal Environment
Intellectual Property Division
Malaysian laws protect the intellectual property rights of computer-related products through the Copyright Act 1987 and the Trade Description Act 1972. Malaysia, since 1989, has been a member of the World Intellectual Property Organization (WIPO). The country is also a member of the Berne Convention and Paris Convention. Although the Malaysian government has taken a proactive role in addressing the issue of software piracy in the country, the practice remains.
The Enforcement Division of the Ministry of Domestic Trade and Consumer Affairs with the assistance of the Business Software Alliance (BSA), has made substantial progress in conducting raids on illegal manufacturers of pirated software.
The BSA represents the leading business software companies; and their role is to increase the legitimate market for software and discourage abuse of copyright protection around the world.
BSA approaches the problem by educating the endures, giving litigation announcements, providing 30 antipiracy hotlines around the world and ensuring that the public is aware that unauthorized use of software is a civil violation. The different types of piracy in the market include end-user piracy, retail/mail order piracy, counterfeiting, bulletin board, rental piracy. Although the BSA's objective is to eradicate software piracy in all sectors - syndicate groups, software retailers, end users, and corporate organizations - the association's focus is on large corporate users. While there are no figures available to indicate the rate of unauthorized software usage among large corporations, it is widely acknowledged that this group is continually growing. It is estimated that about 60 per cent of pirated software comes from the corporate sector.
Software piracy generally centers around popular desktop applications and games software. Products from local software developers are however not excluded from this illegal activity. One local developer of accounting software experienced losses of amounting to US$1.0 million over the last two years.
According to the BSA, the software piracy rate in the country has declined from 98 per cent in 1993 to 89 per cent in 1994. Dollar losses to the industry have however increased by more than 10 per cent from US$87 million in 1993 to US$96 million in 1994. The increase in losses can be attributed to the increased growth and investments in the IT industry. Indonesia at 99 per cent, has the highest piracy rate in Asia, followed by China, Thailand and Vietnam at 98 per cent. Malaysia is placed fifth at 89 per cent.
Recent estimates for 1995/1996 however indicate that Malaysia's piracy rate has continued decrease.
Software Piracy Estimates in Select Countries of Asia
Asia Monetary Piracy Rates Per Year Country Losses in $ 1994 1993 Japan 2 + Billion 67% 80% Korea 545 Million 78 % 78% Taiwan 231 Million 72 % 84% Vietnam 292 Million 98 % N/A Thailand 174 Million 98% 99% Australia 127 Million 37% 47% Indonesia 118 Million 99% 99% Malaysia 96 Million 89% 98%
Source: BSA, Singapore
Illegal copies of ACCPAC software on DOS are the most common in the local market. ACCPAC software is developed by Computer Associates International Inc., and is the top selling software in Malaysia. The popularity and extensive use of the ACCPAC software has led to its high rate of piracy. Although pirated copies are cheaper than the originals, they are of substantially inferior quality.
In order to curb piracy, it will be necessary to change the attitude of Malaysians towards the illegal and unlawful act of producing and using pirated software, and to educate users and software retailers that piracy is in fact theft. The Malaysian government has to play the lead role in informing the public that software piracy is a serious crime. Unfortunately the enforcement resources in the country are taxed in efforts to curb software piracy, as seen by the long delays in court proceedings. Typically a case that goes to court may take about 4 to 5 years before the offender is finally charged and moreover, the low penalties imposed on offenders fail to deter software pirates. Under the Copyright Act, individuals found guilty of piracy face fines of up to US$4,000 (RM10,000) for each infringing copy or a prison sentence of up to five years or both, but this is sentence is rarely imposed.
The following chart is a clear indicator of the piracy problem:
Software raids by the Ministry of Domestic Trade & Consumer Affairs since the Copyright Act of 1987
Year # of Cases Value of Confiscated Software 1987 None 1988 None 1989 6 US$ 1,000 1990 None 1991 5 US$199,289 1992 2 US$ 19,608 1993 8 N/A 1994 7 N/A Total -28- US$ 219,897 Source - BSA Singapore
(* The BSA has secured convictions for 3 of the cases)
BSA has taken steps to increase its efforts against software piracy by introducing in-house training for enforcement officers, increased monetary incentives for its current Hotline Reward Campaign and other efforts involving participation from end-users and the general public.
Overall the situation of piracy remains poor and the government will have to take a stronger role to bring this problem under control in order to grow domestic and international business.
One important difference between Malaysia and Singapore is that Malaysia does not limit the type and domains that consumers/businesses can access. Unlike Singapore, Malaysia does not have a censure on the ISP's and thus more and more people feel comfortable accessing and using the Internet.14
