Korea's road toward respecting intellectual property rights.
The Republic of Korea is at a crossroad in recognizing the intellectual property rights of software manufacturers. Once a rampant software pirate, Korea is beginning to alter its approach to intellectual property protection.
Korea's transition from software piracy to protector began in 1985 when the United States used the threat of trade sanctions under "Section 301"(1) to force Korea to amend its intellectual property laws.(2) The Korean National Assembly responded to U.S. trade pressure by overhauling its intellectual property laws.(3) On December 31, 1986, the Korean National Assembly passed amendments to its Patent Act,(4) Trademark Act(5) and Copyright Act.(6) On the same day, the Korean Assembly also passed the Computer Program Protection Act(7) ("CPPA"), which recognizes the need for computer program software protection.
U.S. trade pressures and threats resulting from Special 301 were the catalysts that forced Korea to reform its laws and improve enforcement of intellectual property rights.(8) However, as demonstrated by continuing acts of software piracy, enforcement has been a persistent problem.(9) According to one author, who is a critic of current U.S. policy, formal changes in a country's laws that are brought about by external pressure, will not transform traditional attitudes or practices of intellectual property violations.(10) Passing legislation is only the first step toward protecting intellectual property rights, and without widespread understanding, enforcement cannot be achieved.(11)
First, domestic economic factors must be considered to understand the continued problem of enforcement in Korea. Korea's economic policy of rapid development through establishing a close government-business relationship, has worked to inhibit enforcement of the CPPA.(12) This economic policy, that has allowed piracy to persist, has been working in opposition to U.S. pressure to improve intellectual property rights in Korea. Recently, however, through the development of a domestic software industry, Korea has begun to appreciate the negative effects of piracy. Moreover, the structural economic reforms, resulting from the 1997 financial crisis, will sever the past economic policy that promoted economic development over everything else, including property rights. Although external pressure may lead to some improvement in protecting intellectual property rights, significant long-term change will occur only when the Korean government understands the impact of piracy on its own economy.
Part II of this Note will examine the impact of software piracy on the U.S. software industry. Part III will scrutinize the role of international pressure, particularly U.S. Special 301 policy plays on compelling Korea to improve its protection of intellectual property rights. Part IV will explore Korea's economic policy as a means of understanding the underlying problems of enforcement. Lastly, Part V will explain how the development of Korea's software industry and its current financial crisis may produce significant long term changes in software protection.
II. IMPACT OF PIRACY ON THE U.S. SOFTWARE INDUSTRY
Software piracy is generally considered "the unauthorized use or illegal copying of a software product."(13) Although software piracy occurs throughout the world, including the United States, it is rampant in certain countries, such as Korea.(14)
According to the president of Business Software Alliance, Robert Holleyman, "software piracy is the greatest single threat to the advancement of the software industry."(15) The U.S. software industry lost approximately $2.8 billion in 1997 as a result of piracy.(16) Because the U.S. software industry employs more than 2 million people annually, large revenue losses translated into approximately 130,000 lost jobs and $1 billion in lost tax revenue in 1996.(17) Piracy in Asian countries constitutes 29% of the worldwide losses.(18) Therefore, a 25% decrease in piracy in Asia would create "an additional $2 billion ... in potential business software sales for PCs in the region."(19)
The Business Software Alliance ("BSA")(20) and the Software Publishers Association ("SPA")(21) are two leading international associations with members from the computer and software industry. SPA is the software industry's primary trade association, which supports companies that "develop and publish software applications and tools for use on desktop computers, client-server networks, and the Internet."(22) BSA "promotes the continued growth of the software industry through international public policy, education, and enforcement programs in sixty-five countries."(23) Both associations have initiated a massive, worldwide computer software anti-piracy campaign.(24) BSA and SPA also conduct research and initiate litigation for copyright infringement against corporations, computer dealers, individuals, and educational institutions.(25) Both associations use a two-pronged approach of education and enforcement to reduce illegal software piracy in the United States and abroad)(26) These two groups are also actively involved in the United States Trade Representative's ("USTR") naming of "priority foreign countries" and filing recommendations with USTR.(27)
BSA and SPA have both conducted statistical studies through the International Planning and Research Corporation ("IPR") on the effects of piracy on the global software market.(28) In one study, IPR developed a highly accurate, scientific methodology to quantify worldwide losses from software piracy.(29) According to the study, worldwide software piracy losses were estimated at $11.4 billion in 1997,(30) $11.2 billion in 1996, $13.1 billion in 1995, and $12.2 billion in 1994.(31) In 1997, countries with high software piracy rates included Vietnam (98%), China (96%), and Bulgaria (93%).(32) Countries with lower piracy rates included the United States (27%), the United Kingdom (31%), and Australia (32%).(33) The highest regional piracy rate occurred in Eastern Europe, with an average of 77%, while the lowest regional piracy rate arose in North America, with an average of 27%.(34)
According to the IPR study, Korea's piracy rate was estimated at 75% in 1994, 76% in 1995, 70% in 1996, and 67% in 1997, which amounted to worldwide losses of $510,605,000 in 1994, $675,281,000 in 1995, $515,547,000 in 1996, and $582,320,000 in 1997.(35) Korean end-user piracy, where a business buys one copy of a software product and creates multiple unauthorized reproductions for employee utilization, has been the primary piracy concern for American companies and the U.S. government.(36)
III. INTERNATIONAL PRESSURES
A. U.S. Pressure - Special 301
1. Origins and Purpose
In 1988, the U.S. Congress recognized the importance of U.S. intellectual property rights in foreign countries and enacted section 182 of the Trade Act of 1974, commonly referred to as "Special 301."(37) Special 301 directly addresses the United States' concern for violations of its intellectual property rights in foreign countries, and the effects of such violations on U.S. businesses.(38) The provisions of Special 301 require that the USTR place countries on a tiered list, according to their level of infringement of intellectual property rights.(39)
As international circumstances began to change in the mid-1980s, intellectual property issues became more prominent in U.S. foreign policy.(40) Motivation to pass Special 301 stemmed largely from the effects of an economic recession in 1988, the U.S. trade deficit,(41) increases in international trade and reduction of trade barriers, financial losses from acts of piracy, and strong domestic industrial lobbying.(42) Congress recognized that U.S. exports and economic interests were harmed by inadequate intellectual property protection and unfair market access abroad.(43) Congress believed that one way to fix the deficit problem was by reforming Special 301.(44)
Since the United States is a significant export market for many developing countries which lack adequate intellectual property laws, the United States opted to use market access as a weapon against countries that infringed U.S. intellectual property rights.(45) The stated purpose of Special 301 is to promote the "adequate and effective protection of intellectual property rights" by linking the issue of these rights abroad to U.S. trade policies.(46) As a result, many developing countries have created or amended their intellectual property laws to standards comparable to those of the United States and other developed countries.(47)
2. Special 301 Provisions(48)
Pursuant to 19 U.S.C. section 2241, the USTR must submit a National Trade Estimate Report ("NTE Report") to the President and to the appropriate Congressional committees by March 31 of each year.(49) The report must "identify and analyze acts, policies, or practices of each foreign country which constitute significant barriers to, or distortions of U.S. exports of goods or services (including agricultural commodities; and property protected by trademarks, patents, and copyrights exported or licensed by U.S. persons)."(50) The report should estimate the trade-distorting impact of these practices on U.S. commerce, and estimate the value of additional U.S. goods and services that would have been exported if such practices did not exist.(51) The report must also include information relating to actions taken to rectify the problem.(52) Furthermore, the USTR must designate foreign countries for Special 301 treatment within thirty days after the NTE Report is submitted, by identifying those nations that either "deny adequate and effective protection of intellectual property rights, or deny fair and equitable market access to U.S. persons that rely upon intellectual property protection."(53) In the identification process, the USTR must take into account: (1) the country's history and practices in intellectual property protection, which includes prior identification as a "priority foreign country;" and (2) reports of the United States' efforts to bring the country into compliance and the country's response.(54) Among those designated as denying adequate and effective protection of intellectual property rights, the USTR must further identify those that it will designate as priority foreign countries.(55) In order for the Trade Representative to classify a country as a "priority foreign country," that country must engage in "the most onerous or egregious acts, policies, or practices that deny adequate and effective intellectual property rights",(56) those acts, policies or practices must have the "greatest adverse impact (actual or potential) on the relevant U.S. product",(57) and the country must not be "entering into good faith negotiations, or making significant progress in bilateral or multilateral negotiations."(58) In identifying priority foreign countries, the USTR must also consult with appropriate government officers from other agencies and utilize information submitted to the USTR by interested persons.(59)
3. Investigation of Special 301(60)
Initially, the USTR has discretion in determining whether initiation of an investigation would be an effective means of addressing the unfair trade practice.(61) The USTR is not required to begin an investigation if "the investigation would be detrimental to U.S. economic interests."(62) However, once priority foreign countries are identified, the USTR must commence an investigation of the acts, practices, or policies of those countries.(63) The USTR then has six months to complete the investigation and negotiate a bilateral solution.(64) If the practices continue, the USTR is authorized to "suspend, withdraw, or prevent the application of, benefits of trade agreement concessions to carry out a trade agreement ...; [or] impose duties or other import restrictions on the goods of ... such foreign countr[ies] for such time as the Trade Representative determines appropriate."(65)
The first NTE Report did not list any priority foreign countries.(66) Instead, the USTR created a two-tiered "watch list," which named countries whose practices required the USTR to pay special attention to their protection of intellectual property rights.(67) The watch lists do not require an investigation, but serve as a warning that if reforms do not occur, the country could be designated as a priority foreign country.(68) The first tier, the "priority watch"(69) category, requires a country to demonstrate progress within 150 days of the designation.(70) The United States then announces accelerated action plans for each country on the priority watch list and U.S. negotiators conduct discussions with those countries to improve protection of intellectual property rights.(71) The second tier, the "watch"(72) list category, is for less serious offenders and loosely requires countries to improve their intellectual property practices.(73) If any country on the watch list abandons good faith negotiations or fails to make significant progress in negotiations, the country may be subject to an actual investigation under a priority foreign country designation.(74) The priority foreign country and watch lists are compiled by the USTR after consulting with key sectors of the business community, American embassies, United States' trading partners, and the NTE Report.(75)
4. Implementation of Special 301 in Korea
The application of U.S. trade pressures utilizing Special 301 was the catalyst that forced Korea into reforming its intellectual property laws.(76) Korea submitted to pressure exerted by the United States because of its dependency on the United States for military and economic support.(77) Since the U.S. militarily assisted Korea during the Korean War,(78) the United States has stationed tens of thousands of troops in Korea to safeguard against a possible North Korean attack.(79) American economic aid was also a crucial factor in Korea's post-War survival and development.(80) Initially, the U.S. government provided unilateral aid, and granted ready and privileged access to its markets.(81) Later, the U.S. private sector also became involved in the support of the Korean economy.(82) This influx of U.S. funding brought technology and technical expertise into Korea.(83) As a result, Korea became "dangerously dependent" on the export market of the United States.(84)
Due to the enormous amount of foreign economic and military aid, Korea developed rapidly, and in 1986, Korea had its first trade surplus with the United States.(85) Because Korea was indebted to the United States for its role in Korea's dramatic military and economic development, the potential impact of trade sanctions, pursuant to Special 301, was significant.
Prior to the December 1986 amendments, Korea provided "[l]ittle or no protection ... for foreign copyrights."(86) Until 1987, Korea was not a member of either the Universal Copyright Convention ("UCC") or the Berne Convention.(87) On November 4, 1985, the United States initiated a Section 301 investigation into the adequacy of Korea's intellectual property laws and their negative effects on U.S. trade.(88) The United States believed that Korea's policy of denying effective protection to intellectual property rights was "unreasonable and a burden or restriction on U.S. commerce."(89) Negotiations were held from November 1985 to July 1986.(90) On July 21, 1996, the United States and Korea announced a settlement that would "improve protection of intellectual property rights in Korea."(91) On August 28, 1986, both countries signed the Record of Understanding on Intellectual Property Rights ("Understanding").(92) Pursuant to the Understanding, Korea agreed to:
introduce for enactment by July 1, 1987, comprehensive copyright laws explicitly covering computer software; accede to the Universal Copyright Convention and Geneva Phonograms Convention by October 1987; introduce amendments to its patent law to extend product patent protection for chemicals and pharmaceuticals and for new uses of these products; adhere to the Budapest Treaty and extend patent protection to new microorganisms; and remove requirements for technology inducement and exportation previously applied to trademarked goods and to remove restrictions on royalty terms in trademark licenses.(93)
The Understanding also created a mechanism through which the countries could discuss issues related to the implementation of this agreement and other intellectual property protection concerns.(94)
In compliance with the Understanding, the Korean National Assembly enacted the Patent Act,(95) the Trademark Act(96) and the Copyright Act(97) on December 31, 1986. The CPPA was also enacted on this date in accordance with the Understanding.(98)
5. Results of Special 301 on Korea
Special 301 has had an impact on Korea's move toward protection of computer software and away from piracy. Initially, Korea was on the priority watch list in 1989,(99) but it moved down to the watch list in 1990.(100) The move to the watch list was due to Korea's "steady progress" toward improving "intellectual property rights, including the creation of a task force to improve coordination between ministries, ... the designation of special enforcement teams of police and prosecutors, and the `vigorous' search, seizure, and prosecution of violators."(101) However, in 1992, Korea was temporarily placed back on the priority watch list.(102) This was largely due to the prevalence of software end-user piracy.(103) In 1997, Korea's enforcement activities in reducing enduser piracy were commended and it was moved back on to the watch list,(104) and it remains there as of the 1998 Annual Report.(105)
Korea's efforts toward curtailing piracy during the early 1990's were primarily induced by pressure from the United States. In 1992, Korea was on the priority watch list and, to avoid being designated a priority foreign country, the Korean government launched a Special Enforcement Period ("SEP") in 1993.(106) The SEP was "designed to increase the number of enforcement actions" and to avoid the threat of an investigation under Special 301 as a priority foreign country.(107) The increased enforcement activities succeeded and Korea averted an investigation.(108)
Up until the early 1990s, there had not been a single civil litigation case under the CPPA.(109) In 1994, the Korean government amended the CPPA to increase civil and criminal penalties for infringement of computer programs.(110) That year, there were approximately forty end-user cases initiated, mostly against small companies.(111) In 1995, there were more developments in prosecuting violators.(112) For example, the prosecutor raided four architecture firms and filed criminal complaints.(113) The Seoul District Prosecutor also raided individuals and firms suspected of illegally distributing CD-ROMs.(114) BSA has also worked with the prosecutor's office in investigating claims.(115) Although enforcement activities have increased, end-user piracy in large businesses has not been subject to investigation from the District Prosecutor.(116)
Recommendations by the software industry, in 1995 and 1996, to improve Korea's software enforcement record include:
1. [a]llocating more prosecutorial resources to end user piracy cases, and providing training to law enforcement officials.... 2. [d]evelop[ing] consistent nationwide standards for initiating end user cases.... 3. [c]ommitting to aggressive enforcement in end user cases, including targeting large chaebol companies when supported by evidence of end user infringement. 4. [i]mposing ... enhanced penalties.... 5. [e]nsuring better security and more aggressive field investigations by prosecutors, so that evidence of end user piracy can be gathered without tipping off violators.(117)
In 1996, there were at least 129 criminal cases initiated against end-user piracy.(118) The software industry itself completed the preliminary investigative work.(119) In one hundred of these cases, Korean prosecutors executed the raids against end-users based on evidence gathered by BSA members and other software companies.(120) Violators included training institutes, architectural design houses and a variety of small and medium-sized businesses.(121) For the first time, the prosecutor executed raids against Korean chaebol affiliates and distributors.(122)
The fact that Korea presently remains on the watch list(123) demonstrates the limits of Special 301. Special 301 has been an effective tool to pressure Korea to improve its protection of intellectual property rights. However, since Korea's efforts are not voluntary, the improvements are not significant or long-term. For countries who are forced to change due to special 301, improvements are incremental and formalistic.(124) Until a government has the initiative to strengthen its copyright regime, changes will only be superficial as a means of avoiding U.S. retaliation under Special 301.(125)
B. International Pressure - Treaties
Initially, Korea altered its intellectual property laws in response to U.S. trade pressures.(126) However, after enacting its intellectual property laws in 1986, other factors have pressured Korea to become more accountable to foreign intellectual property rights. For instance, Korea became actively involved in the international arena. Korea became a member of the UCC in 1986 as required by the Understanding between itself and the United States.(127) Korea also became a member of the Berne Convention and the World Intellectual Property Organization ("WIPO") of the United Nations,(128) which includes being a signatory of the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS").(129) TRIPS has been, and continues to be, a source of impact on the intellectual property system in Korea.(130) In order to be accepted into WIPO, Korea participated in the Uruguay Round of the General Agreement on Tariffs and Trade and became a member of the World Trade Organization.(131) Korea's membership in these international conventions will enhance accountability and maintain pressure on the Korean government to strictly enforce its intellectual property laws. Korea's membership in these organizations may also promote a better understanding of intellectual property rights issues.
Due to its desire to be a part of the world trading system, Korea must conform to international agreements related to the protection of intellectual property rights. Consequently, enforcement of its intellectual property laws has become an important goal, at least publicly, for the Korean government.(132)
IV. KOREA'S ECONOMIC POLICY
A. Background: Authoritarianism Within the Korean Government
Korea is a Confucian-influenced nation that emphasizes hierarchy in its social and political system. Contrary to claims that Confucianism precludes countries from enforcing intellectual property laws,(133) the hierarchical nature of Confucianism actually contributes to the Korean government's ability to enforce its laws.
The hierarchical nature of Confucianism is comprised of the so-called "Five Relationships" that give guidance to moral and social teachings.(134) The Five Relationships are: "that between father and son there should be affection, between ruler and minister there should be righteousness, between husband and wife there should be proper distinction, between elder and younger there should be proper order, and between friends there should be faithfulness."(135)
Thus, the key to the Five Relationships is not the existence of the relationships but how they are conducted.(136) This leads to a set of values that promotes "reverence for others, harmony, proper order in society and a keen awareness of what people should do for one another."(137) With the exception of the "friends," the relationships involve one party in a superior position to the other.(138) In Korea, there is an emphasis on the need to pay reverence and give deference to others.(139) As a result, Korea is a society that is hierarchical and structured.(140)
In a Confucian society, relationships are structured according to familial concepts.(141) The relationship between ruler and subject is often paralleled with the father-son relationship.(142) The king "was to function as the chief father in a hierarchical system of relationships which reached down throughout the whole society."(143) Traditionally, the family stood at the center of all aspects of life and was thus regarded as the quintessential model for a paternalistic government.(144) Today, despite the infusion of modern Western ideas, strong paternalistic influences in the Korean government remain.(145)
Individuals in a Confucian society represent puppets of government action, not individuals capable of asserting "rights."(146) The State functions as the sole moral authority that is most suited to administer justice, and laws exist to fulfill this governmental purpose.(147) Consequently, the State enjoys limitless authority.(148) Koreans learn not to outwardly challenge the government through protest but instead conform to the traditional societal norms of submitting to authority.(149)
State authority continued during the post-World War II era as Korea saw the domination of dictatorial leaders who controlled society through "an oppressive and systematic authoritarian coalition of political, bureaucratic, economic, and security groups."(150) Although there were tensions between liberal Western ideas and traditional Korean behavior, it is clear that traditional influences continue to contribute significantly to Korea's political behavior.(151)
Two differences between Korean and Western politics are: "(1) the degree of centralization of power and (2) the degree of authority consciousness and dependency on the part of the masses of the people."(152) Unlike the decentralized federal system in the United States, Korea is highly centralized.(153) As a result, laws can be implemented quickly and efficiently, and the high degree of authority consciousness inherent in the system encourages Koreans to accept "events in Korean society--social, personal, political, economic--with relatively little questioning."(154) The citizenry are dependent on centralized authority and the idea of "local initiative" is a foreign concept to Koreans.(155) In large part, Koreans dutifully follow the Confucian saying, "the people should follow established leadership without question, and should not be concerned about the knowledge necessary for the exercise of leadership."(156)
From 1948 to 1987, Korea was under dictatorial and authoritarian rule.(157) Law and force were used as tools to maintain control over the populace.(158) There were two military coup d'etats,(159) frequent uses of martial law,(160) creation of a new constitution that gave the President all embracing powers,(161) and use of physical force and killings to control any opposition to the government,(162) Laws were frequently imposed without public support.(163)
Rhee Syngman was the President of the First Republic of South Korea.(164) He regularly launched campaigns against communists,(165) and was aggressive in his tactics, utilizing intimidation and brutal force.(166) By the spring of 1950, there were nearly 60,000 people in prison, fifty to eighty percent of whom were charged with violating the National Security Law.(167) Using these methods, Rhee had gained near-total control of the political system by the late 1950s.(168) He had no serious political rivals, and the legislature was a "rubber stamp."(169) Nevertheless, opposition was increasing among university students.(170) There were frequent demonstrations in the spring of 1960.(171) Tension increased until police shot 130 students during a major demonstration in downtown Seoul.(172) Rhee then lost his legitimacy and resigned.(173)
Park Chung Hee's presidency, from 1961-1979, originated from a coup d'etat and ended with his assassination.(174) Park governed the country with a strong grip on the populace and used force to control any opposition.(175) In 1972, Park imposed a state of emergency and then created a new Republic, the Fourth Republic, under the Yusin Constitution.(176) Under the Yusin rule, the President had all-encompassing power to rule by decree and no term limits were set.(177) Although Park created an oppressive government, he was able to maintain his influence due to rapid economic growth.(178)
After Park's assassination in 1979, Chun Doo Hwan carried out a coup d'etat in 1980.(179) His government, however, was toppled by the Korean citizens in 1987.(180) Like all previous presidents, he used force to maintain control. Chun lost his legitimacy early in his presidency when he quelled demonstrations in the city of Kwangju by indiscriminately clubbing and bayoneting demonstrators and spectators.(181) National shock and anger at the incident thereafter tainted Chun's presidency.(182) In the 1980s, as attitudes toward government began to slowly change toward Western ideas of democracy, the economy developed and a middle class began to form and have a voice.(183) Abhorrence of Chun's brutal use of force to control the populace grew and opposition groups developed.(184) All of these factors led to the toppling of Chun's rule in 1987.(185)
In 1987, Korea had its first direct presidential election that was democratically fair and free.(186) Ironically, the winner was Roh Tae Woo,(187) a military officer and the chosen successor of President Chun Doo Hwan(188) (the 1988 National Assembly elections were also democratic(189)). Prior to his election, President Roh announced a program of reforms including direct presidential elections, the restoration of civil rights for political prisoners, freedom of the press, local autonomy and, in general, "bold social reform."(190) A new constitution, encompassing these ideas, was adopted.(191) The constitution enjoins the military from engaging in political activity, provides new safeguards against official abuse of civil and human rights, limits presidential tenure to a single five-year term, and substantially reduces the president's power.(192) This constitution is the most liberal in Korea's history.(193) Despite Roh's public support of reforms and new attitudes toward civil rights, however, he also imprisoned political dissidents and quelled opposition in a harsh manner. (194)
In 1992, Korea elected Kim Young Sam, a former dissident, as President.(195) In the initial year of his presidency, Kim carried out a series of bold and unprecedented political and socio-economic reforms.(196) However, the reforms were accompanied by harsh actions against groups that opposed his policies.(197) In 1996, an economic crisis struck Korea, resulting in political scandal, monetary troubles and public unrest.(198)
The current President of Korea, Kim Dae Jung, was elected in December 1997, ousting the political party responsible for the "political-economic chaos."(199) Kim was a long time opposition leader during the military dictatorships and now faces the difficult task of bringing Korea into an era in which its dealings with the United States are concentrated in the areas of trade and economics.(200) Time will tell whether, under Kim's presidency, the authoritarian nature of Korean politics will once again emerge.
Throughout Korea's political history, an authoritarian form of government has always existed, whether under Confucianism or modern Korean politics.(201) "The cultural legacy of Confucianism emphasized patriarchal authoritarianism" in the government.(202) Thus, despite the shift towards democratic rule, authoritarianism continues to play a major role in Korean politics.
When the intellectual property laws were enacted in 1986, "very little private sector support for intellectual property reform existed."(203) As one author notes, "lack of domestic support for intellectual property reform" may undermine Korea's efforts to comply with the Special 301 Understanding.(204) Nevertheless, the government was able to achieve major revisions in its intellectual property laws even though domestic opposition outweighed support.(205) Public support has generally not been required for the Korean government to implement and enforce laws.(206) Due to the authoritarian nature of the Korean government and traditional Confucian attitudes toward government, Korea is able, if it so desires, to enforce its intellectual property laws.
B. Korea's Economic Policies
1. The Government-Business Connection
Korea's economy is marked by an extremely close relationship between the government and the private sector.(207) Korea has "an interventionist industrial policy."(208) Government economic powers "are pervasive and [the exercise of power is] facilitated by a long tradition of political supremacy over economics."(209)
Korea's industrial sector is dominated by huge conglomerates or chaebols, which are family-owned and managed groups of companies that dominate product lines and industries.(210) The government controls the direction of the chaebols by controlling the flow of capital to the chaebol and supervising its operations.(211) Under this system, the Korean government does not base its investment decisions on economics, but rather on which chaebols the government favors.(212) This has led to bad investment decisions, which culminated in the 1997 financial crisis.(213)
This close government-business relationship is common in many developing countries, but Korea is unique in its coherent and consistent policy, which includes "efficient, meritocratic bureaucracies, [and] centralized decision-making structures."(214) This relationship developed in the 1960s when President Park Chung Hee came to power and used the military to transform the Korean economy.(215) Park reoriented economic policy and restructured the basic political and administrative institutions that were crucial for Korea's industrialization.(216)
One key aspect of this policy was "a new alliance with the private sector."(217) Government and businesses cooperate to formulate policy.(218) The relationship is "facilitated by a network of personal ties between businessmen and bureaucrats, and by [the] interchange of personnel between the two sectors."(219) In Korea, the government is the dominant sector.(220) If one were to make a corporate analogy, the President would be the Chairman of the Board, the Ministers would be the Board of Directors, and the businessmen would be the independent managers.(221) The success of the company depends on the managers' performance even though they are not members of the Board,(222) and since the President has the ultimate power, there is speed and coherence in policy-making.(223)
President Park also restructured his government. The Economic Planning Board was established and to preside over the other ministries through control of the fiscal budget and unobstructed access to foreign exchange reserves.(224) The Bureau of International Cooperation controlled the flow of foreign capital and had the authority to extend government guarantees to loans and to oversee the activities of the borrowing firms.(225) Administrative reforms included "elevat[ing] the technocrats within the bureaucracy and expand[ing] the instruments at their disposal."(226)
This tight relationship was one factor that led to Korea's rapid economic growth in the 1960s and mid-1970s. In the 1980s, the relationship remained despite economic reforms,(227) which were implemented when the economy began to falter in the late 1970s and early 1980s.(228) For example, the government undertook to reduce its concentration on big business and be more attentive to small and medium-size firms.(229) Other measures included the implementation of a stabilization policy and liberalization of the financial sector.(230) The implementation of reforms further demonstrates the close relationship between the Korean government and the private sector. Because the Korean government is able to control the concentration of certain industries, it should also be able to translate its authority into implementing intellectual property reforms domestically.
End-user piracy by large conglomerates is the major concern for American software companies, and the primary focus of the U.S. government in Korea.(231) Since the Korean government has control over business policies, it has enough power and influence to be able to enforce its Computer Program Protection Act. Implementation depends on whether the Korean government is willing to enforce the law. BSA has indicated that chaebols have been spared from investigation and recommends that the government target the larger businesses for end-user piracy practices.(232) The failure to investigate large businesses and enforce its own copyright laws demonstrates the Korean government's underlying desire to help Korean businesses.(233)
Publicly, the Korean government has rejected and criticized its prior inadequate protection of intellectual property laws. Privately, however, the prevalent opinion is that Korea is not economically ready to accept these new laws.(334) The threat of U.S. trade sanctions is the main reason why the Korean government reformed its intellectual property laws.(235) Moreover, there is strong domestic resentment against the United States' forced enactment of those laws.(236)
2. Economic Policy of Pirating
In the late 1980s, Korea's economic policy shifted toward developing high-tech industries.(237) Korea's economic growth was previously fueled by cheap labor, first in the textile industry in the 1960s, then in the heavy industries in the 1970s, and finally in the home appliance and automobile industries in the early 1980s.(238) Korea only pushed for development of high-tech industries after losing its competitiveness in other areas.(239) Korea's economic policy has always focused on rapid growth and quick fixes to long-term problems.(240) As a result, Korea was indifferent to software piracy, especially if it made access to information very inexpensive and presented no harm to its economic development.
Developing countries can either view computer software as private property or as an industrial policy tool.(241) In the late 1980s and early 1990s, Korea viewed computer software as a tool for economic development. Therefore, during this period, Korea was indifferent to property rights because software piracy made access to information very cheap and pirating did not harm, but assisted, Korea's economic development.
In the short run, software piracy makes it cheaper for the user, however, in the long run, piracy stifles new product innovation, depletes research and development funds, robs countries of tax revenues and eliminates jobs.(242) Piracy also damages the domestic software industry,(243) and impedes a country's development by inhibiting creativity and discouraging the development of local technology.(244)
Piracy may have assisted Korea in its modernization by gaining access to cheap technology, but, in order to join the ranks of the advanced countries, and to be a creator and producer of high-tech products, Korea must abide by international intellectual property laws. Korea's technological capacity will grow as its economy develops.(245) Eventually, Korea will reach a threshold where "protecting ideas yields a greater benefit than infringing upon others,"(246) and pirating will no longer be beneficial but could potentially weaken Korea's domestic technological capability.(247)
An empirical study, connecting intellectual property with economical and technological data, concluded that Third World countries with low commitment to supporting intellectual property laws ("LOWCOMM") tend to have larger populations, larger economies and are scientifically and technologically more capable than other Third World countries; they patent in the United States more extensively than any other Third World countries and are on the brink of joining the ranks of the industrialized countries.(248) Korea was identified as one of these countries.(249) The LOWCOMM countries are not weak and helpless, but have the technological capability and economic development to support intellectual property rights.(250) The study concluded that LOWCOMM countries will be unable to form a connection with the industrialized countries unless they respect intellectual property rights.(251) Korea must eventually recognize the importance of intellectual property fights if it intends to achieve its goal of becoming an industrialized nation.
The United States has recognized that technology is the key to economic growth.(252) Likewise, Korea has made an effort to increase research and development in different high-tech industries.(253) A country that hopes to remain in the forefront of global economic competition needs a technology sector capable of both innovation and product development.(254) As Korea increases its technological capabilities and recognizes the importance of intellectual property rights, it will voluntarily make efforts to enforce its intellectual property laws.
V. KOREA TODAY
A. Effects of Piracy on Korea's Software Industry
In the early 1980's, Korea's software industry was virtually nonexistent.(255) Korea exported about $3 to $4 million a year of computer software in the first half of the 1980's, compared to $500 million to $1 billion worth of other high-tech exports such as semiconductors and peripheral computer equipment.(256) In the late 1980s, rapid growth in the software industry was expected.(257)
On June 15, 1998, Korea had a glimpse into the importance of intellectual property rights of computer software.(258) Hangul & Computer Company ("H & C"), a domestic software producer that controlled 80% of the market share for Korean word-processing, signed a letter of intent with Microsoft corporation to bail itself out of a $20 million debt.(259) The agreement required H & C to stop marketing its word processing software, Arae-a-Hangul, in exchange for a $20 million investment from Microsoft.(260) The chief cause of H & C's financial failure was widespread piracy by Korean users.(261) It was estimated that 90% of the users of H & C's popular word-processing program used pirated software.(262) Public anger at Microsoft's attempted monopolization of the Korean word-processing market caused the Korean Venture Business Association to launch a fund-raising campaign to save H & C.(263) The Association, which consists of 700 enterprises in the computer and technology field industry, raised $7.1 million.(264) Subsequently, H & C retracted from the Microsoft agreement.(265)
In the aftermath of this incident, the Korean government announced on June 22, 1998, that it would be more stringent on computer software piracy by enacting revisions to the CPPA.(266) As of October 1998, new enforcement provisions included increasing the fines two-fold for illegal software duplication.(267) Other proposed actions include launching public awareness campaigns on the widespread piracy problem, as well as increasing the public sector budget for software procurement in order to eliminate pirated products from government agencies.(268)
The H & C incident served as a wake-up call for Korea. After experiencing the negative effects of piracy in its own software industry, the government voluntarily initiated aggressive enforcement activities.(269) This experience may lead to heightened and permanent software piracy protection in Korea.
B. 1997 Financial Crisis
In 1997, Korea and many other Asian countries plunged into financial crisis.(270) The crisis began when the leading chaebol, Hanbo Steel, collapsed and caused a domino effect that resulted in the collapse of other major chaebols.(271) In 1997, one-fourth of the top 30 chaebols filed for bankruptcy.(272) The mismanagement of government-supported chaebols was the major cause for the Korean financial crisis.(273) Prior to this event, the chaebols received government favoritism by being able to: procure cheap bank loans; garner political support; rely on the government to use measures to protect domestic markets;(274) and depend on the government to bail them out in times of trouble.(275)
In response to the financial crisis, the International Monetary Fund ("IMF") stepped in and committed nearly $57 billion to stabilize Korea's financial system.(276) In exchange for financial aid, Korea agreed to abide by the IMF's stringent reorganization plans, which included structural reform of Korea's corporations.(277) The IMF sought fundamental changes with the way Korean corporations operated, seeking a possible break up of the chaebols and the elimination of the cozy relationship between large businesses and the government.(278) In response, the Korean government has been attempting to diversify its economy by increasing the number of small and medium-sized businesses while chaebols try to reduce their size.(279)
The effects of the reforms from the 1997 financial crisis have yet to be felt. However, significant changes in Korea's economic policy will certainly ensue. Hopefully, these changes will alter Korea's old economic structure - based on favoritism that allowed rampant piracy - and form a new economic structure based on competitiveness and the appreciation of intellectual property rights.
Until recently, Korea has had difficulty enforcing its intellectual property laws. Korea's authoritarian government, which promoted a tight government-business relationship and rapid economic development, has inhibited the enforcement of its intellectual property laws. Although Special 301 was the catalyst for the reform of Korea's intellectual property laws and has been used to pressure Korea to enforce its laws, the effects of Special 301 have been limited. Permanent change in intellectual property protection will not occur when a country is forced by external pressure to alter its laws and policies.
Developing countries, not yet technologically capable, will look to advance their economies by pirating. The rationale is that attaining cheap technology through pirating will lead to cheaper and faster economic growth. Therefore, developing countries will not make voluntary efforts at permanent change until their own technology sector is directly affected by piracy. However, the recent development of Korea's software industry and the 1997 financial crisis have led to a shift in Korea's attitude toward enforcement. Korea felt the impact of its piracy when a Korean software company suffered from financial collapse as a direct result of its own piracy practices. Moreover, the economic restructuring of the tight government-business relationship after the 1997 financial collapse should result in a break from the economic policy that allowed piracy to flourish. Due to these events, the Korean government has voluntarily adopted a stronger stance in promoting intellectual property rights. These events are the beginning of a promising process leading to the permanent protection of intellectual property rights in Korea.
(1.) See Trade Act of 1974, 19 U.S.C. [sections] 2411 (1980) (amended 1988). "Section 301" was a general provision that gave the President power to investigate if a foreign country was harming United States businesses by engaging in unfair trade practices. See id. [sections] 2412. After 1988, unfair trade practices due to violations of intellectual property rights have been investigated under "Special 301." See Omnibus Trade and Competitiveness Act of 1988, 19 U.S.C. [sections] 2242 (1994). For a discussion of Special 301 provisions, see infra Part III.A.2.
(2.) See Initiation of Investigation Under Section 301, 50 Fed. Reg. 45, 883 (1985).
(3.) See R. Michael Gadbaw, Republic of Korea, in INTELLECTUAL PROPERTY RIGHTS: GLOBAL CONSENSUS, GLOBAL CONFLICT? 272, 274 (R. Michael Gadbaw & Timothy J. Richards eds., 1988).
(4.) Patent Act in 5 CURRENT LAWS OF THE REPUBLIC OF KOREA 3001 (Korea Legislation Research Institute ed., 1997).
(5.) Trademark Act in 5 CURRENT LAWS OF THE REPUBLIC OF KOREA 3113 (Korea Legislation Research Institute ed., 1997).
(6.) Copyright Act in 4 CURRENT LAWS OF THE REPUBLIC OF KOREA 2561 (Korea Legislation Research Institute ed., 1997).
(7.) Computer Program Protection Act in 4 CURRENT LAWS OF THE REPUBLIC OF KOREA 2508 (Korea Legislation Research Institute ed., 1997).
(8.) See Gadbaw, supra note 3, at 272.
(9.) Korea is presently on the "watch list" under Special 301. See Office of the United States Trade Representative, Press Release, USTR Announces Results of Special 301 Annual Review 19 (May 1, 1998) [hereinafter USTR Announces Results of Special 301 Annual Review].
(10.) See William P. Alford, How Theory Does--and Does Not--Matter: American Approaches to Intellectual Property Law in East Asia, 13 UCLA PAC. BASIN L.J. 8, 21 (1994).
(11.) See Sang-Hyun Song & Seong-Ki Kim, The Impact of Multilateral Trade Negotiations on Intellectual Property Laws in Korea, 13 UCLA PAC. BASIN L.J. 118, 121 (1994).
(12.) See infra Part IV.
(13.) 1997 Global Software Piracy Report (visited Jan. 4, 1999) http://www. bsa. org/statistics/97ipr.pdf>.
(14.) See id.
(15.) Robert Holleyman, Software Piracy Abroad: Challenges and Opportunities, 453 PLI/PAT 419, 422 (1996).
(16.) Business Software Alliance Software Piracy (visited Jan. 21, 1998) <http://www.bsa.org/piracy/piracy.html>. For doubts on this statistical analysis, see Alford, supra note 10, at 12 (questioning whether piracy is the actual explanation for the trade deficit, and reasoning that this concept is premised on the flawed assumption that, if not for piracy, buyers of unauthorized copies in developing countries would actually purchase the items at full retail price).
(17.) See Business Software Alliance Statistics (visited Feb. 6, 1999) <http:// www.bsa.org/statistics/intro_c.html>.
(18.) See Holleyman, supra note 15, at 422.
(20.) See Business Software Alliance (visited Jan. 4, 1999) <http://www.bsa. org>.
(21.) See Software Publishers Association (visited Jan. 4, 1999) <http://www. spa.org>.
(22.) Worldwide Software Piracy Losses Estimated at $11.4 Billion in 1997 (visited Feb. 6, 1999) <http://www.bsa.org/pressbox/enforcement/e_press _6.16.98_c.html> [hereinafter Worldwide Software Piracy Report]. SPA has 1200 member companies that "account for 85% of US revenue for packaged and on-line software." Id. SPA merged with the Information Industry Association ("IIA") on January 1, 1999 to create a new association named the Software & Information Industry Association ("SIIA"). See Business Software Alliance Statistics, supra note 17.
(23.) Worldwide Software Piracy Report, supra note 22. BSA has filed more than 600 lawsuits around the world against suspected copyright infringers. See id. BSA members include leading publishers of software for personal computers such as Adobe, Apple Computer, Microsoft, and Novell and leading computer technology companies such as Computer Associates, IBM and Intel. See id.
(24.) See id.
(25.) See SPA's Copyright Protection Campaign (visited Jan. 21, 1998) <http:// www.spa.org/piracy/pi_back.htm>.
(26.) See More Than $13 Billion Lost Worldwide to Software Piracy Joint BSA/SPA Survey Reveals (visited Jan. 21, 1998) <http://www.bsa.org/piracy_study95/SPA_BSA.html>.
(27.) See BSA Files Recommendation for Special 301 (visited Jan. 21, 1998) http://www.bsa.org/pressrel/301rec.html>.
(28.) See Overview: Global Software Piracy Report: Facts and Figures, 1994-1996 (visited Jan. 21, 1998) <http://www.bsa. org/piracy/96REPORT.HTML>.
(29.) See id. For a description of the methodology, see BSA/SPA Piracy Study Methodology (visited Jan. 4, 1999) <http://www.bsa.org/statistics/method_c.html>. The studies were conducted for the years 1994 through 1997 and evaluated eighty countries in the six major world regions. See Overview: Global Software Piracy Report: Facts and Figures, 1994-1996 (visited Feb. 4, 1999) <http://www.bsa.org/statistics/overview_c.html> [hereinafter Overview: Global Software Piracy Report].
(30.) See 1997 Global Software Piracy Report, supra note 13.
(31.) See Overview: Global Software Piracy Report, supra note 29. Although software piracy rates decreased in 1997, dollar losses increased that year due to sales growth and stable prices in the software industry. See 1997 Global Software Piracy Report, supra note 13.
(32.) See Overview: Global Software Piracy Report, supra note 29. The piracy rate represents the percentage of installed software products that are pirated. See id.
(33.) See 1997 Global Software Piracy Report, supra note 13.
(34.) See id.
(35.) See id.
(36.) See Excerpt from the IIPA Special 301 Recommendations, February 24, 1997, (visited Feb. 5, 1999) <http://www.iipa.com/html/rbcKorea30197.html>.
(37.) See Omnibus Trade and Competitiveness Act of 1988, 19 U.S.C. [sections] 2242 (1994).
(38.) See id. For legislative history and purpose, see H.R. CONF. REP. NO. 100-418, at 65 (1988), reprinted in 1988 U.S.C.C.A.N. 1547.
(39.) See 19 U.S.C. [sections] 2242.
(40.) See Paul C.B. Liu, U.S. Industry's Influence on Intellectual Property Negotiations and Special 301 Actions, 13 UCLA PAC. BASIN L.J. 87, 88 (1994); William Enger, Korean Copyright Reform, 7 UCLA PAC. BASIN L.J. 199, 211 (1990).
(41.) By the end of 1995, the United States had become a "net debtor for the first time" since pre-World War I. 3 Int'l Trade Rep. (BNA) 872 (July 2, 1986).
(42.) See Liu, supra note 40, at 90; see also Alford, supra note 10, at 12.
(43.) See Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100-418, [sections] 1303, 102 Stat. 1107, 1179 (1988).
(44.) See Roby, infra note 84, at 551.
(45.) See Alford, supra note 10, at 13.
(46.) [sections] 1303, 102 Stat. at 1179; see also Liu, supra note 40, at 95.
(47.) See Liu, supra note 40, at 95.
(48.) See Omnibus Trade and Competitiveness Act of 1988, 19 U.S.C. [sections] 2242 (1994).
(49.) See id. [sections] 2241(b)(1).
(50.) Id. [sections] 2241 (a)(1)(A)(i).
(51.) See id. [sections] 2241(a)(1)(B) - (C).
(52.) See id. [sections] 2241(b)(2).
(53.) Id. [sections] 2242(a)(1)(A)- (B).
(54.) See id. [sections] 2242(b)(4).
(55.) See id. [sections] 2242(a)(2).
(56.) Id. [sections] 2242(b)(1)(A)(i).
(57.) Id. [sections] 2242(b)(1)(B).
(58.) Id. [sections] 2242(b)(1)(C).
(59.) See id. [sections] 2242(b)(2)(A) - (B).
(60.) See id. [subsections] 2411-2419.
(61.) See id. [sections] 2412(c).
(62.) Id. [sections] 2412(b)(2)(B).
(63.) See id. [sections] 2412(b)(2)(A). The investigation must commence within thirty days. See id.
(64.) See id. [sections] 2414(a)(3)(A). If the investigation involved is complex and requires additional time or if the country is "making substantial progress in drafting or implementing legislative" measures or undertaking enforcement measures that will "provide adequate and effective protection of intellectual property rights," the USTR is given nine months to make a determination. Id. [sections] 2414(a)(3)(B).
(65.) Id. [sections] 2411(c)(1)(A) - (B).
(66.) See USTR Fact Sheets on Super 301 Trade Liberalization Priorities and Special 301 on Intellectual Property, Released May 25, 1989, 6 INT'L TRADE REP. (BNA) 715, 719 (1989) [hereinafter USTR Fact Sheets]. The USTR stated that since there was significant progress through negotiation, identification of priority foreign countries was not necessary. See id.
(67.) See id.
(68.) See id.
(69.) See id. Countries listed in the priority watch category are countries that satisfy the requirements for priority foreign country, but are making progress in negotiations, such that they will not be identified as a priority foreign country. See id.
(70.) See id. The Republic of Korea was placed on the first priority watch list. See id. Other countries on this list included Brazil, China, India, Mexico, Saudi Arabia, Taiwan and Thailand. See id.
(71.) See id. The accelerated action plan for Korea consisted of:
[A] Enforcement of Korea's patent, trademark, and copyright laws and administrative measures covered under U.S./Korean agreements, as measured by: 1)Active and effective involvement of Korea's task force on intellectual property in enforcement efforts; 2)Specific and effective actions by Korean enforcement entities; and 3)Concrete evidence of decreased sales of pirated and counterfeit items[,] [and] [B] Constructive participation in multilateral intellectual property negotiations.
Id. at 720.
(72.) See id. at 719. These are countries that are of less concern than those on the priority watch list, but require attention due to some of their violations of intellectual property rights. See id. at 719, 721.
(73.) See id. at 719. Countries included on the first watch list were Argentina, Canada, Chile, Columbia, Egypt, Greece, Indonesia, Italy, Japan, Malaysia, Pakistan, the Philippines, Portugal, Spain, Turkey, Venezuela and Yugoslavia. See id.
(74.) See Theodore H. Davis, Jr., Combating Piracy of Intellectual Property in International Markets: A Proposed Modification of Special 301 Action, 24 VAND. J. TRANSNAT'L L. 505, 523-24 (1991).
(75.) See Office of the United States Trade Representative, Press Release, USTR Announces Results of Special 301 Annual Review, May 1, 1998 (visited Jan. 29, 1999) <http://www.ustr.gov/releases/1998/05/98-44.pdf>. Prior to USTR's annual submission of the NTE report to the President on March 31, the USTR places a Request for Written Submissions in the Federal Register to elicit public responses to designating countries as Priority Foreign Countries, pursuant to Special 301. See id. For information on filing a Request for a Written Submission, see 63 Fed. Reg. 5598-99 (1998). For an example of response to Request for Written Submissions, see International Intellectual Property Alliance, Special 301 Lttr 22497, February 20, 1996 (visited Jan. 29, 1999) <http://www. iipa.com/html/rbi_special_30 l_lttr_ 022098.html>.
(76.) See Gadbaw, supra note 3, at 272; see also EDWARD SLAVKO YAMBRUSIC, TRADE BASED APPROACHES TO THE PROTECTION OF INTELLECTUAL PROPERTY 15 (1992).
(77.) See CARTER J. ECKERT ET AL., KOREA OLD AND NEW: A HISTORY 395-96 (1990).
(78.) See id. at 395.
(79.) See id.
(80.) See id.
(81.) See Jai-Hoon Yang, U.S.-Korean Economic and Trade Relations: Building a New "Special Relationship," in UNITED STATES-KOREA RELATIONS 34, 37 (Robert A. Scalapino &Han Sung-joo eds., 1986).
(82.) See id.
(83.) See id.
(84.) See Jini L. Roby, Comment, Section 301 of the Trade and Competitiveness Act of 1988: Its History and Implications in the U.S.-South Korea Trade, 1989 BYU L. REV. 549, 550 (1989); see also DONALD STONE MACDONALD, THE KOREANS: CONTEMPORARY POLITICS AND SOCIETY 213 (2d ed. 1990). In 1984, Korea became the seventh largest source of imports and the ninth largest market for United States exports. See Yang, supra note 81, at 38.
(85.) See Anna Y. Park, International Trade-Agreement Between the United States and the Republic of Korea Concerning Insurance Market Access and Intellectual Property Protection in the Republic of Korea, July 21, 1986, 28 HARV. INT'L L. J. 166, 173 (1987); see also MACDONALD, supra note 84, at 201.
(86.) Gadbaw, supra note 3, at 273. Intellectual property laws were first enacted after World War II. See Song & Kim, supra note 11, at 120.
(87.) See Song & Kim, supra note 11, at 137. The UCC and the Berne Convention are international copyright conventions. The Berne Convention is the first and oldest international copyright convention among nations and is based on three basic principles: "[(1)] works originating in one of the contracting States ... must be given the same protection in each of the other contracting States as the latter grants to the works of its own nationals; [(2)] [s]uch protection must not be conditional upon compliance with any formality[; and] [(3)] [s]uch protection is independent of the existence of protection in the country of origin of the work." World Intellectual Property Org., International Protection of Copyright and Neighboring Rights, Berne Convention for the Protection of Literary and Artistic Works (1886) (visited Jan. 29, 1999) <http://www.wipo.org/eng/general/ copyrght/bern.html>. Because the Berne Convention focused on the quality of protection and not on the quantity of members, many countries were prevented from joining. See STEPHEN M. STEWART, INTERNATIONAL COPYRIGHT AND NEIGHBOURING RIGHTS 134 (1983). The Universal Copyright Convention, originating from the UN's UNESCO organization, was established in 1952. See id. It aimed at attracting states of all continents, including countries in different stages of economic and cultural development. See id.
(88.) See Initiation of Investigation Under Section 301, 50 Fed. Reg. at 45, 883. The United States cited that Korean laws did not provide copyright protection for computer software. See Determination Under Section 301 of the Trade Act of 1974, 51 Fed. Reg. 29, 445 (1986). The United States was also concerned with the lack of effective enforcement of existing laws. See id.
(89.) Determination Under Section 301 of the Trade Act of 1974, supra note 88, at 29, 445.
(90.) See Office of the United States Trade Representative, Section 301 Table of Cases (visited Jan. 29, 1999) <http://www.ustr.gov/301/301.htm>.
(92.) See id.
(93.) Determination Under Section 301 of the Trade Act of 1974, supra note 88 at 29, 445.
(94.) See id. at 29, 446.
(95.) See Patent Act, supra note 4.
(96.) See Trademark Act, supra note 5.
(97.) See Copyright Act, supra note 6.
(98.) See Computer Program Protection Act, supra note 7.
(99.) See USTR Fact Sheets, supra note 66, at 719.
(100.) See International Intellectual Property Alliance, Korea (visited Jan. 4, 1999) <http://www.iipa.com/...th_Korea_30_198.html>.
(101.) Judith Bello & Alan F. Holmer, "Special 301": Its Requirements, Implementation, and Significance, 13 FORDHAM INT'L L. J. 259, 270-71 (1989-90).
(102.) See Robert Holleyman, Copyright Protection for Computer Software: A Global Overview, 416 PLI/PAT 313, 319 (1995) [hereinafter Holleyman, Copyright Protection for Computer Software].
(103.) See id.; see also International Intellectual Property Alliance, Excerpt from the IIPA Special 301 Recommendations, February 24, 1997, Korea (visited Feb. 6, 1999) <http://www.iipa.com/html/rbc_korea_301_97.html>.
(104.) See USTR Announces Results of Special 301 Annual Review, supra note 9.
(105.) See Office of the United States Trade Representative, Press Release, USTR Announces Results of Special 301 Annual Review (April 30, 1997) (visited Feb. 6, 1999) <http://www.ustr.gov/releases/1997/04/index.html>.
(106.) See Holleyman, Copyright Protection for Computer Software, supra note 102, at 319.
(108.) See id.
(109.) See Michael S. Keplinger, International Protection for Computer Programs, 315 PLI/PAT 457, 488 (1991).
(110.) See Holleyman, Copyright Protection for Computer Software, supra note 102, at 319. Infringement penalties include maximum fines of about $40,000 and imprisonment of up to three years. See id.
(111.) See id. at 320.
(112.) See id.
(113.) See id.
(114.) See id.
(115.) See id.
(116.) See id.
(118.) See id.
(119.) See id.
(120.) See id.
(121.) See id.
(122.) See id. Chaebol is defined as "`family-based industrial conglomerates.'" LEROY P. JONES & IL SAKONG, GOVERNMENT, BUSINESS, AND ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT: THE KOREAN CASE 15 (1980). The chaebol is similar to the Japanese zaibatsu, "`a system of highly centralized family control through holding companies.'" Id. at 259 (citations omitted). For a discussion of the history of chaebol and its attendant issues, see id. at 258-85.
(123.) See Fact Sheet: "Special 301" on Intellectual Property Rights, Press Release, May 1, 1998 (visited Feb. 20, 1999) <http://www.ustr.gov/releases /1998/05/98-44.pdf>.
(124.) Kim Newby, The Effectiveness of Special 301 in Creating Long Term Copyright Protection for U.S. Companies Overseas, 21 SYRACUSE J. INT'L L. & COM. 29, 51 (1995).
(125.) See id.
(126.) See Gadbaw, supra note 3, at 272.
(127.) See id. at 274; Song & Kim, supra note 11, at 124; see also Convention Establishing the World Intellectual Property Organization, (last visited Feb. 4, 1999) <http://www.wipo.org/eng/ratific/c-wipo.htm> [hereinafter Convention Establishing the World Intellectual Property Organization].
(128.) See Convention Establishing the World Intellectual Property Organization, supra note 127. The Berne Convention contains more extensive provisions than the UCC. See Fred M. Gregaurus, 1997 Update: International Legal Protection for Software, 479 PLI/PAT 855, 876 (1997). Provisions include national treatment, "granting certain moral rights to authors with regard to exploitation of their works," granting "economic rights" and "adopting certain minimum terms of protection." Id.; see also Convention Establishing the World Intellectual Property Organization, supra note 127.
(129.) See About the WTO: Members, (last visited Feb. 4, 1999) <http://www. wto.org/wto/about/organsn6.htm>; see also Agreement between the World Intellectual Property Organization and the World Trade Organization, (last visited Feb. 4, 1999) <http://www.wto.org/wto/intellect/intell10.htm>.
(130.) See Song & Kim, supra note 11, at 125. The goal of TRIPS is to "reduce distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade." General Agreement on Tariffs and Trade - Multilateral Trade Negotiations (The Uruguay Round): Agreement on Trade-Related Aspects of Intellectual Property Rights, Including Trade in Counterfeiting Goods, Dec. 15, 1993, 33 I.L.M. 81, 84 (1994).
(131.) See About the WTO: Members, supra note 129.
(132.) See Song & Kim, supra note 11, at 120.
(133.) See WILLIAM P. ALFORD, TO STEAL A BOOK IS AN ELEGANT OFFENSE: INTELLECTUAL PROPERTY LAW IN CHINESE CIVILIZATION 57 (1995).
(134.) See Michael C. Kalton, Korean Ideas and Values, in INTRODUCTION TO THE LAW AND LEGAL SYSTEM IN KOREA 22, 23 (Sang Hyun Song ed., 1983).
(135.) Id. In contrast, the Western view of man is based on the Judaic and Christian belief that emphasizes that each human being is made in God's own image and "has a personal relationship with God and so is endowed with a dignity which sets him apart from other creatures." Id. "Man is human in that he is able to think and make decisions; therefore his freedom is to be respected." Id.
(136.) See id.
(137.) Id. at 24.
(138.) See id. at 25.
(139.) See id.
(140.) See id.
(141.) See David I. Steinberg, Law, Development and Korean Society in INTRODUCTION TO THE LAW AND LEGAL SYSTEM IN KOREA 47, 50 (Sang Hyun Song ed., 1983).
(142.) See id.
(144.) See Kalton, supra note 134, at 27.
(145.) See id.
(146.) See DAE-KYU YOON, LAW AND POLITICAL AUTHORITY IN SOUTH KOREA 17 (1990).
(147.) See id. at 18.
(148.) See id.
(149.) See id.
(150.) ECKERT, supra note 77, at 347.
(151.) Edward R. Wright, Korean Politics in Transition in INTRODUCTION TO THE LAW AND LEGAL SYSTEM IN KOREA 45, 45 (Sang Hyun Song ed., 1983).
(153.) See id.
(154.) Id. at 47.
(157.)See ECKERT, supra note 77, at 347. Rhee Syngman was President from 1948-1960. See id. at 348. Park Chung Hee took control through a military coup and ruled from 1961-1979. See id. at 359. Chun Doo Hwan also took power through a military coup and was President from 1981-1988. See id. at 375.
(158.) See id. at 347.
(159.) See id. at 358-87. The first military coup was executed by Park Chung Hee in 1961 who was assassinated in 1979. See id. at 359. The second military coup occurred in 1980 by Chun Doo Hwan. See id. at 375.
(160.) See id. at 359-87.
(161.) See id. at 365.
(162.) See id. at 378.
(163.) See id. at 365. Park Chung Hee announced the Yushin Constitution in 1972, which was formally approved by public referendum through an intimidated populace and created a legal dictatorship for the President. See id.
(164.) See id. at 348.
(165.) See id.
(166.) See id. at 348-49. In February 1951, one of Rhee's colonels rounded up and massacred about 500 people in the countryside for allegedly harboring communist guerrillas. See id. at 349. Assassinations also eliminated several potential rivals to Rhee. See id. at 351.
(167.) See id. at 349.
(168.) See id. at 351.
(169.) See id.
(170.) See id. at 353.
(171.) See id. at 353-54.
(172.) See id. at 355.
(173.) See id.
(174.) See MACDONALD, supra note 84, at 57-58.
(175.) See id. Park's government abducted and imprisoned Kim Dae Jung, who was a dissident at the time, and who is now the President of South Korea. See id.
(176.) See id.
(177.) See id.
(178.) See ECKERT, supra note 77, at 367.
(179.) See MACDONALD, supra note 84, at 59.
(180.) See id.
(181.) See ECKERT, supra note 77, at 378.
(182.) See id.
(183.) See id. at 380-81.
(184.) See id.
(185.) See id.
(186.) See David A. Leuthold, Further Steps Toward Democracy: The 1996 National Assembly Elections, 28 KOREA OBSERVER 1, 2 (1997).
(187.) See id. The opposition divided into three parties so that the majority of Korean votes for the opposition were split among three opposition candidates instead of just one. See id. at 2. Thus, Roh won the presidential race with only a 37% majority. See id.
(188.) See id. at 1.
(189.) See Leuthold, supra note 186, at 2.
(190.) ECKERT, supra note 77, at 382.
(191.) See id. at 385.
(192.) See id.
(193.) See id.
(194.) See id. at 386. Roh's disregard of civil rights occurred, however, with less frequency and more discretion than under Chun. See id.
(195.) See Leuthold, supra note 186, at 3. Kim Young Sam, a long-time opposition leader, "merged his party with the ruling party in 1990" and "won the nomination of the ruling party." Id.
(196.) See Sunhyuk Kim, State and Civil Society in South Korea's Democratic Consolidation: Is the Battle Really Over?, 37 ASIAN SURVEY 1135, 1140 (1997). For example, Kim's policy of making public the personal finances of government officials and politicians resulted in the forced resignation of many. See id. "[M]ore than 3,000 public officials were arrested, dismissed or otherwise disciplined" as a result of this policy. Id.
(197.) See id. at 1142.
(198.) See Tong Whan Park, South Korea in 1997: Clearing the Last Hurdle to Political-Economic Maturation, 38 ASIAN SURVEY 1, 4 (1998).
(199.) Id. at 5-7.
(200.) See id. at 7-8.
(201.) See Leuthold, supra note 186, at 4.
(203.) Gadbaw, supra note 3, at 276.
(204.) Id. at 277.
(205.) See id. at 276.
(206.) See id. The Korean government passed the Intellectual Property Laws without public support. See id.
(207.) See Stephan Haggard & Chung-in Moon, The State, Politics, and Economic Development in Postwar South Korea, in STATE AND SOCIETY IN CONTEMPORARY KOREA 51, 52 (Hagen Koo ed., 1993). 208. Id.
(209.) MACDONALD, supra note 84, at 200.
(210.) See JUNG-EN WOO, RACE TO THE SWIFT 149 (1991).
(211.) See id. at 150.
(212.) See id.; see also Craig P. Ehrlich & Jay K. Lee, Governance of Korea's Chaebols: Role in Crisis, Coming Changes, 20 E. ASIAN EXECUTIVE REP. 9, 9 (1998); Park, supra note 198, at 1.
(213.) See Park, supra note 198, at 1.
(214.) Haggard & Moon, supra note 207, at 58.
(215.) See id. at 65-67.
(216.) See id.
(217.) Id. at 65.
(218.) See LEROY P. JONES & IL SAKONG, GOVERNMENT, BUSINESS, AND ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT: THE KOREAN CASE 67 (1980).
(220.) See id.
(221.) See id. at 68.
(222.) See id.
(223.) See id. at 58.
(224.) See Haggard & Moon, supra note 207, at 67.
(225.) See id.
(227.) See id. at 83.
(228.) See id.
(229.) See id.
(230.) See id. at 82-84.
(231.) See Office of the United States Trade Representative, USTR Announces Two Decisions: Title VII and Special 301, Press Release (April 29, 1995) <http://www.ustr.gov/releases/1995/04/95-32>.
(232.) See Holleyman, Copyright Protection for Computer Software, supra note 102, at 319.
(233.) Developing countries are inclined to commit acts of piracy because short-term gain outweighs the long term economic reality that only through indigenous research and development can a country achieve economic independence. See YAMBRUSIC, supra note 76, at 9.
(234.) See Gadbaw, supra note 3, at 286.
(235.) See id.
(236.) See Song & Kim, supra note 11, at 119.
(237.) See id.; see also MACDONALD, supra note 84, at 203-206.
(238.) See id.
(239.) See id.
(240.) See id.
(241.) See Byungkwon Lim, Comment, Protection of Computer Programs Under the Computer Program Protection Law of the Republic of Korea, 30 HARV. INT'L L.J. 171, 192 (1989).
(242.) See Frank Emmert, Intellectual Property in the Uruguay Round - Negotiating Strategies of the Western Industrialized Countries, 11 MICH. J. INT'L L. 1317, 1321 (1990).
(243.) See id.
(244.) See Enger, supra note 40, at 213.
(245.) See J. Davidson Frame, National Commitment to Intellectual Property Protection: An Empirical Investigation, 2 J.L. & TECH. 209, 219 (1987).
(246.) Enger, supra note 40, at 211.
(247.) See id.
(248.) See Frame, supra note 245, at 209.
(249.) See id. at 212, 218.
(250.) See id.
(251.) See id. at 218.
(252.) See Mary Lowe Good, Technology and Trade, 27 LAW & POL'Y INT'L BUS. 853, 864 (1996).
(253.) See Song & Kim, supra note 11, at 121; Michael J. Mazarr & Jeffrey G. Lewis, Global Economic Trends and the ROK Economy, 22 KOREA AND WORLD AFFAIRS 23, 41 (1998).
(254.) See Mazaar & Lewis, supra note 253, at 40.
(255.) See Byoung Kook Min & Gary Sullivan, Recognition of Proprietary Interests in Software in Korea: Programming for Comprehensive Reform, 8 MICH. YEARBOOK OF INT'L LEGAL STUD. 49, 60 (1987).
(256.) See id. at 60-61 n. 75.
(257.) See id.
(258.) See Hangul & Computer Withdraws from the Development of Word Processors, KOREA ECONOMIC DAILY, June 25, 1998, available in 1998 WL 13263297.
(259.) See id.
(260.) See id.
(261.) See id.
(262.) See Hangul & Computer Bows to Microsoft, BUSINESS KOREA, July 1, 1998, available in 1998 WL 14378655.
(263.) See Editorial, Hangul Computer Program, THE KOREA HERALD, July 21, 1998, available in 1998 WL 12274167.
(264.) See id.
(265.) See id.
(266.) See James Lim, Korea Promises Tougher Line Against Computer Software Piracy, INT'L TRADE DAILY (BNA), June 30, 1998, at D10.
(267.) See Controls on Software Piracy to be Intensified, THE KOREA HERALD, October 11, 1998, available in 1998 WL 20205275. These provisions also require permission from the copyright holder before software programs can be transmitted. See id. Penalties for failure to obtain permission range from fines of up to 50 million won to imprisonment for up to three years. See id. Further, these provisions also require schools to obtain permission from copyright holders for the use of their software programs, which means that the Korean government, as the overseer of public education, is required to pay the copyright fees. See id.
(268.) See Lim, supra note 266.
(269.) See id.
(270.) See Richard W. Mansbach & Dong Won Suh, A Tumultuous Season: Globalization and the Korean Case, 22 ASIAN PERSPECTIVE 243, 243 (1998).
(271.) See Ehrlich & Lee, supra note 212, at 23.
(272.) See id.
(273.) See Mansbach & Suh, supra note 270, at 243.
(274.) See Mazarr & Lewis, supra note 253, at 37.
(275.) See Ehrlich & Lee, supra note 212, at 23.
(276.) See Park, supra note 198, at 1.
(277.) See id.
(278.) See Mazarr & Lewis, supra note 253, at 38.
(279.) See id. at 37.
Amy Choe, J.D. Candidate 1999, Rutgers School of Law-Newark.3
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|Publication:||Rutgers Computer & Technology Law Journal|
|Date:||Jun 22, 1999|
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