IBLS Contributor: Juan Cristóbal Guzmán, Esq., Albagli Zaliasnik Chile, www.az.cl
Wednesday, August 27, 2008
In Chile, over 400 million songs are downloaded unlawfully every year. Piracy has consumed 50 percent of the music market, as reported by the International Intellectual Property Alliance (IIPA). A combination of internet piracy, unlawful reproduction of CDs and DVDs, and the growing presence of street vendors eager to make a profit from the sale of pirated music have contributed to significant losses in the sound recordings and musical composition industries. The IIPA reported that, in 2007, the loss amounted to 29.6 million dollars.
The Chilean police have cooperated with music industry officials to crack down on street piracy, by engaging in raids and seizing pirated products. In 2007, the Chilean police engaged in approximately 100 raids, primarily in Santiago and Valparaiso, and seized 168,000 CDs and DVDs, as well as 545 burners, in cooperation with the International Federation of the Phonographic Industry (IFPI) Chile.
In the Chile-United States Free Trade Agreement (FTA) signed in June 2003, parties agreed to grant artists and their successors in interest, the exclusive right to permit or forbid reproductions of their works, on a permanent or temporary basis. The FTA required that parties impose criminal and/or civil sanctions on individuals that engage in copyright infringement.
In May 2007, in efforts to harmonize Chilean laws with the requirements of the FTA, members of the Chilean Congress introduced a comprehensive reform bill (No. 5.012-03) aimed at amplifying intellectual property protection for creators of original works, in light of changes in the technology of piracy. The Chilean government has taken a positive step forward in combating music piracy by proposing to increase criminal and civil penalties. In Colombia, a decrease in piracy is attributable, in part, to the government's incorporation of piracy laws into the criminal code. Chile has not decided to follow Colombia"s example, but nonetheless, it is marching in the right direction.
The reform bill falls short of meeting the demands of the music piracy battle in the digital age for a number of reasons. First, it fails to assign internet service providers (ISPs), the digital age distributors and retailers of music, sufficient responsibility for preventing internet piracy. In 2007, French President Nicolas Sarkozy introduced a plan to revolutionize the way that ISPs deal with individuals who download music illegally. The French government and ISPs joined forces to strip third-time copyright infringers from access to the internet for as long as one year. Curbing internet peer-to-peer file sharing is beneficial for ISPs because it alleviates pressures on their infrastructure. Peer-to-peer file sharing makes up about 80 percent of total online traffic, while merely 20 percent of users engage in peer to peer file sharing. Another way that ISPs can take greater responsibility is to use filters to thwart illegal exchanges of protected material.
Second, the legislation fails to create a digital rights management (DRM) system, which is a bundle of technologies that imposes restrictions on use by consumers of digital products. The FTA requires that each party promote the use of technology designed to control access to protected material. Thus, the reform bill does not go far enough in meeting the standard required by the FTA.
Third, in efforts to facilitate access to protected works for persons with disabilities, legislators made a notable and worthwhile exception. Reproduction, adaptation, distribution, and communication of specially formatted protected works will be allowed, so long as the interest is non-commercial and targeted at individuals with disabilities. Nevertheless, legislators should have included regulations for audio books, a growing industry that reaches individuals with and without disabilities. The absence of such regulations is likely to result in violations of the rights of creators of literary and musical works.
Finally, with respect to protected computer programs, legislators approved reverse engineering, which is a 'deconstruction' process aimed at discovering the technical underpinnings of a system or object. The use of reverse engineering is limited to circumstances wherein the individual, after obtaining the program legally, seeks to achieve operational compatibility or engage in investigation and development. However, to better guarantee that computer software creators are protected from abuses, individuals engaged in reverse engineering should be required to notify the original creator of their findings. The risk associated with reverse engineering is that findings will be used to develop modifications, which goes beyond the lawful uses envisioned by legislators.
While the Chilean government is tuning in to the fight against digital piracy by reforming its intellectual property laws, it must boost its efforts to ensure that Chilean laws are in sync with the requirements of the FTA and developments in the technology of piracy.
 International Intellectual Property Alliance, 2008 Special 301 Report, Chile. P. 21.
 International Intellectual Property Alliance, 2008 Special 301 Report, Chile, P.20.
 IIPA, 2008 Special 301 Report, 21.
 FTA, Article 17.5(1)
 FTA, Article 17.7(5)
 Report from the Economic Commission, modifying law No. 17.336, regarding Intellectual Property. No. 5.012-03. p. 5.
 International Federation of the Phonographic Industry (IFPI), Digital Report 2008, 21.
 "France to Ban Illegal Downloaders from Using the Internet under Three-Strikes Rule" Times Online. June 19, 2008. Available at: <>
 IFPI, Digital Report 2008, 22.
 IFPI, Digital Report 2008, 21.