US embassy cable - 05TAIPEI3777

UNCLAS TAIPEI 003777 
 
SIPDIS 
 
STATE FOR EAP/RSP/TC AND EB/TPP/IPE, STATE PASS AIT/W AND 
USTR, USTR FOR WINTERS AND WINELAND, USDOC FOR 
4431/ITA/MAC/OPB/TAIWAN/MBMORGAN 
 
E.O. 12958: N/A 
TAGS: KIPR, TW, IPR 
SUBJECT: P2P OPERATOR KURO FOUND GUILTY IN TAIPEI COURT 
 
REF: TAIPEI 2909 
 
1.  On September 9, Taipei District Court found Peer to Peer 
(P2P) website operator Kuro guilty of enabling users to 
violate Taiwan's copyright law.  Almost two years after 
Taiwan prosecutors filed a criminal case based on complaints 
from the International Federation of Phonographic Industries 
(IFPI), the Court sentenced Kuro President Chen Shou-teng to 
two years in prison and each of his two sons, Chen Guo-hsiung 
and Chen Guo-hua to three years in prison.  The Court fined 
Kuro NT$3 million (about US$93,000).  The Court also 
sentenced Chen Jia-huei, a Kuro user named in the complaint 
for downloading 900 songs, to four months.  Chen Jia-huei's 
sentence can be commuted to a fine of NT$300 per day 
(US$9.24) and three years probation.  Criminal sentences of 
up to six months can be commuted by paying the daily fine. 
 
2. The Taipei District Court decision comes two months after 
the seemingly contradictory June decision of the Shilin 
District Court that P2P file sharing web site EZPeer was not 
guilty of copyright violation for allowing users to use its 
service to download and trade copyrighted materials.  It also 
follows just days after an Australian court ruled that P2P 
pioneer Kazaa was liable for the copyright infringing 
activities of its members. 
 
3.  The decision, while not banning P2P software, cited 
Kuro's primary service as providing paying members with the 
ability to swap copyrighted materials as violating several 
provisions of Taiwan's copyright law.  In differentiating 
between its decision and the decision of the Shilin court in 
the EZPeer case, the Taipei District Court noted that Kuro, 
in its advertisements and on its website, encouraged users to 
engage in illegal downloading of copyrighted materials. 
 
4.  Comment: This is a welcome decision from the Taipei 
District Court and, at first reading, appears to track with 
the recent US decision in the Grokster case which found that 
Grokster was liable for the copyright infringing actions of 
its members in part due to its promotion of 
copyright-violating activities.  The Taiwan Intellectual 
Property Office (TIPO) and IFPI welcomed this decision, 
especially as both were disappointed with the judgment of the 
Shilin court in the EZPeer case.  Kuro, meanwhile, has not 
yet issued a public statement but is virtually certain to 
appeal.  End comment. 
KEEGAN