COPYRIGHT (AMENDMENT) BILL

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COPYRIGHT (AMENDMENT) BILL: Order for Second Reading read.

The Deputy Prime Minister and Minister for Law (Prof. S Jayakumar): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Mr Speaker, Sir, Members of the House may recall that in June this year, four Bills were enacted to strengthen our intellectual property regime. At that time, I had informed the House that a further set of amendments to the Copyright Act would be proposed later in the year.

Sir, this Bill seeks to amend the Copyright Act to enhance and strengthen our copyright regime, particularly to ensure that our copyright laws remain relevant in an age of rapid technological development. Major amendments to the Act were last made in 1999 to keep pace with the emerging popularity of the online environment and the growth of electronic commerce. Even then, I had said that the amendments would by no means be the last word on the subject.

Today, we all are aware of the rapid pace of technological advancement, particularly in the realm of digital technology. Singapore's information communications technology (or ICT) environment has also correspondingly evolved. In 1999, only 42% of Singapore households enjoyed home Internet access. This has since increased to 65%, or almost two-thirds of all households. More households also have high speed access to the Internet - 40% of households have broadband

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access now compared to only 3% in 1999.

The amendments in the Bill address the needs of both copyright owners and users in this new environment. These changes in the Bill will also further strengthen Singapore's position as an attractive location for copyright-based activities. Several of the amendments in the Bill also relate to our obligations under the United States-Singapore Free Trade Agreement.

The proposed amendments, Sir, are a result of a two-year review of technological and international developments, and were finalised only after extensive consultations with the relevant stakeholders. Since June 2003, the Intellectual Property Office of Singapore, or IPOS, has chaired an IP taskforce in order to obtain well-rounded feedback. The taskforce comprises members from business associations such as the Association of Small and Medium Enterprises and the Singapore International Chamber of Commerce, as well as Government statutory boards such as the Economic Development Board and the Media Development Authority. To complement the IP taskforce, an inter-Ministry committee comprising the relevant Government agencies was also set up to review the proposed amendments.

In proposing these amendments, we have sought to strike a good balance between the interests of copyright owners and those of the copyright users. We have taken into account legislation in other countries including that of the United States, the United Kingdom, Australia and Canada.

We made available a consultation draft version of the Bill on IPOS' website, and IPOS invited further feedback through a public seminar. We received useful feedback from several IP rights organisations, user groups, the Law Society and experts

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in IP law. All feedback was carefully considered and modifications incorporated where appropriate. The Government is also committed to extensive public awareness initiatives.

Let me first deal with the amendments related to enhancing the copyright regime to meet the needs of copyright owners and users in the new digital environment.

The first group of amendments introduces several new rights, in recognition of changing business models in the digital realm.

First, new right of communication for works. Sir, the Internet is becoming an increasingly important platform through which copyright owners promote and disseminate their copyrighted works. Such digital dissemination of works has become the basis for businesses such as home-grown music distributor Soundbuzz. Clause 8 of the Bill introduces a new right to enable the copyright owner to control the communication of his work to the public. This new communication right encompasses both the existing broadcasting and cable programme rights, and also the right to control the dissemination of works on the Internet. This new right will enable copyright owners or other entrepreneurs to fully leverage on the Internet platform as a means to disseminate copyrighted material.

Next, new rights for producers of sound recordings. Likewise, Sir, clause 20 provides, for producers of sound recordings, a new right to publish a sound recording, and the right to make available to the public a sound recording by means of, or as part of, a digital audio transmission. These new rights will enable producers of sound recordings to control interactive transmissions of their recordings, and give them greater confidence in the protection of their IP in this medium.

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Next, let me speak about new rights for performers. Clause 51 provides new rights to performers such as the right to control indirect recordings of their performances, the right to be attributed, the right to publish and the right to communicate a recording of their performance to the public. These rights will enable the performer to control the way his performance is used and exploited in the commercial market. We are confident these amendments will be welcomed by performing artistes in the music and media industry.

But let me say, Sir, that we have been mindful that the introduction of new rights does not lead to an undue restriction of the fair uses of copyrighted material. Exceptions to these rights have therefore been provided, for example, for educational institutions and libraries. These exceptions can be found in clauses 7, 14, 15, 16, 17 and 24. We have also catered for exceptions in specific situations, such as an exception for the digital transmission of sound recordings within a business establishment, as long as such transmission is not the core business of such an establishment. There are also necessary exceptions to cater for technical processes; for example, temporary, transient, incidental copies that could occur as part of making a lawful communication. In the case of non-interactive transmissions such as webcasting, we have provided a limited right to equitable remuneration. These exceptions can be found in clause 26 of the Bill which introduces new sections 107A to 107E.

Mr Speaker, these amendments will bring our copyright framework in line with international standards, embodied in international treaties such as the World Intellectual Property Organisation's Copyright Treaty, the WCT, and the Performances and Phonograms Treaty, the WPPT. With these changes, Singapore will provide a similar copyright regime to

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the 48 other member states party to the WCT, and 45 others that are party to the WPPT.

Let me say something about the removal and alteration of rights management information. The Copyright Act already provides civil remedies for copyright owners to prevent the unauthorised removal or alteration of rights management information, or RMI. RMI refers to information which may identify the work, the author, or the terms and conditions of use of that work. In the digital environment, an example of RMI could be a digital watermark, which incorporates information identifying the author of the work.

For example, RMI enables copyright owners to track usage of their works on the Internet. It also gives users confidence in the authenticity of the source of a work, and certainty as to the conditions of its use. It is thus important to protect RMI and to prevent the distribution of copies where such information has been removed or manipulated in order to induce, enable, facilitate or conceal an infringement.

The Bill enhances protection by providing civil remedies against unauthorised distribution or importation for distribution of altered RMI. It also provides civil remedies against the unauthorised distribution, importation for distribution or communication of works or other subject matter in respect of which RMI has been removed or altered. In addition, the Bill also creates a new criminal offence in cases where any of the prohibited acts in relation to RMI are carried out wilfully and for the purpose of obtaining a commercial advantage.

Next, I turn to technological measures protecting copyrighted works. Sir, the

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advent of digital technology has made it easy to make perfect copies of copyrighted works. This new technology has made effective enforcement of copyright in the digital realm therefore a much more difficult undertaking than for conventional physical works of copyright. So in order to protect their works from being infringed, copyright owners may employ technological measures to protect their works. These technological measures include access control systems such as encryption and copy control systems. These technological measures could also include a measure applied to a tangible copy of a copyrighted work, or used in connection with the exercise of copyright. Copyright owners should reasonably expect their efforts in employing such measures to protect their works from infringement not to be thwarted and not to have those technological measures circumvented.

Accordingly, Mr Speaker, Sir, clause 59 introduces a new Part XIIIA providing civil remedies and criminal penalties for the circumvention of technological measures used by copyright owners in connection with the exercise of their copyright. A copyright owner can bring suit against a person who manufactures or trades in circumvention measures, or offers services related to the circumvention of a technological measure. If the person does these acts wilfully and for the purpose of obtaining a commercial advantage, he may also be guilty of an offence.

We have also built in review mechanisms that will allow our law to be responsive to technological changes. Where it has been determined that a dealing with a work or a class of works does not amount to an infringement, and that the legitimate use of these works has been adversely impaired or affected, the Minister has the discretion to exclude such works from the operation of these provisions which I have mentioned.

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As before, we have provided here exceptions such that legitimate forms of such acts would not be unduly impeded. These are enumerated in new sections 261D and 261E. Briefly, examples of such exempted acts include authorised encryption research and security testing, specific reverse engineering to ensure interoperability, law enforcement, intelligence and other Government activities such as defence and security, amongst others.

Sir, having consulted the relevant stakeholders, we will also exclude public non-profit organisations and institutions such as libraries, archives and educational institutions that routinely come into contact with large volumes of copyrighted works. These institutions have been exempted from criminal liability although they may remain subject to civil remedies for any violation.

Mr Speaker, Sir, these provisions will provide greater assurance to copyright owners and improve their ability to protect their copyrighted works from infringement. We will join the US, UK, Australia, the European Union and Japan in recognising the importance of such measures in protecting copyrighted works from infringement.

Let me turn now to stronger enforcement measures.

Sir, all the rights which I mentioned thus far, would be meaningful if they are backed up by a robust enforcement framework. We have proposed amendments to enhance both the civil and criminal remedies to infringement. Let me touch on some of these changes.

First, changes to civil procedures and remedies beginning with presumption of copyright.

Clause 35 of the Bill, Sir, refines the existing provision under our Copyright Act

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on the presumption of copyright in infringement actions. This refinement is intended to facilitate the process of copyright infringement actions, and to render such actions less onerous for the copyright owner. The presumption in favour of the copyright owner plaintiff, namely, that copyright subsists in the copyrighted work and that he is the owner of the copyright, will apply so long as the defendant does not satisfy the court that he puts these matters in issue in good faith. However, if the defendant, in good faith, puts these matters in issue, the plaintiff may now, by affidavit, assert relevant facts attesting to the ownership and subsistence of the copyright. Such affidavit will serve as prima facie proof of the matters asserted unless, of course, the defendant proves otherwise.

Turning to statutory damages regime, Members would recall that in June this year, when I moved amendments to the Trade Marks Act, we enacted a statutory damages regime as a complement to the current process of assessing damages in an infringement suit. In this Bill, we proposed to introduce a similar regime for the Copyright Act. This provides copyright owners, in an infringement action, the option to choose, in lieu of actual damages suffered, a new remedy of "statutory damages". This will be especially useful in situations where it is difficult for the copyright owner to prove the quantum of actual losses. Instead, the court will assess the quantum of statutory damages, based on compensatory principles, elaborated in new subsection 119(5). This remedy of statutory damages will also be available for the provisions relating to the circumvention of technological measures, rights management information and performances. This provision will serve as an additional deterrent against infringers.

Let me turn to criminal liability for wilful infringement of copyright.

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Sir, if I may first generalise, under the current Copyright Act, two types of acts attract criminal liability. The first involves an act where a person derives benefits by dealing commercially with infringing articles. A person who manufactures, imports, distributes or sells infringing copyright material is guilty of an offence. The second type considers the harm the act causes to the copyright owner. A person who, for non-trade purposes, distributes infringing articles to such an extent as to affect prejudicially the owner of the copyright will also be guilty of an offence.

With the advent of digital technology, the impact of infringement on the interests of copyright owners has, as a result, become very much more severe. For example, Internet technology now makes it possible for syndicates to post movies and software for all to download for free, sometimes in return for nothing more than recognition and notoriety. While these infringers may not directly profit from these activities, their actions may cause substantial harm to the copyright owner, his investments and creative efforts.

The new section 136(3A) provides criminal penalties for wilful copyright infringement, in the case where the extent of infringement is significant, and/or where the person does the act to obtain a commercial advantage. For the first case, the new section lists factors to assist the Court in determining if the extent of an infringement is significant - these include the volume of articles that are infringing copies, the value of these infringing copies, and whether the infringement has a substantial prejudicial impact on the copyright owner. For the second case, new section 136(6B) defines the element of commercial advantage. Since in either case, a significant infringement, or an infringement linked to a business or trade

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is involved, and both the extent of harm and the degree of culpability are sizeable, such infringements will attract criminal penalties. The first-time offender under the new section 136(3A) will face penalties up to a maximum fine of $20,000 and/or imprisonment not exceeding 6 months. Subsequent offenders will face heavier penalties.

Let me turn to limitation of liability for Network Service Providers.

Mr Speaker, Sir, the provisions on Network Service Provider liability in this Bill are intended to make NSPs more pro-active in assisting copyright owners to protect and enforce their rights. In the current Act, NSPs enjoy blanket immunity for acts of infringement of copyright or copyright infringing material on their networks. In other words, NSPs are completely absolved of responsibility for such acts or infringing material that they host or provide access to. The provisions in this Bill serve to create a better balance between the interests of rights owners and NSPs, by ensuring that the benefit of immunity that NSPs can enjoy are now accompanied by certain responsibilities.

In 1999, I noted that NSPs play a vital role in the online delivery of content for both copyright owners and users. Today, NSPs continue to play key roles in the transmission and routing, as well as the provision of connections to and storage of information. Thus, the new provisions provide greater clarity as to the different roles NSPs play, and their associated responsibilities for each role.

Let me stress that these provisions do not mean that an NSP is liable for copyright infringement if it chooses not to meet the requirements to qualify for the immunity. They only mean that in cases where the NSP chooses not to meet the qualifying requirements for immunity, the NSP's liability will be governed by the general provisions of the Copyright Act,

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and the NSP will not be able to rely on the immunity provided by this section.

The new provisions will provide greater certainty for NSPs operating in Singapore, as users and businesses become more sophisticated in their dealings over the Internet. At the same time, the new provisions would also provide copyright owners with a more accessible course of action to enforce their rights in the event of infringement. This is particularly important to protect the interests of up-and-coming local content producers and, ultimately, further our efforts to make Singapore a knowledge economy and a global centre for innovation and creative industries.

Let me now turn to ex-officio and border enforcement.

Clauses 37 to 42 of the Bill align border enforcement powers with those provided in the Trade Marks Act. The new provisions will enable authorised officers to detain infringing imports, infringing goods consigned to a local party and infringing goods that are to be exported from Singapore. In addition, Customs will also have the powers to examine suspected infringing goods, including those in transit. Several other amendments have also been incorporated to make it easier for a copyright owner to initiate the detention of infringing imports by Customs.

Mr Speaker, Sir, I have repeatedly mentioned in my speech the need to strike a balance between the interests of copyright owners and users. Like all our IP laws, copyright laws are intended to be an incentive to create original works through the granting of exclusive rights. This objective can only be achieved if the exchange of information and ideas is not unduly impeded. Therefore, we have put in place specific exceptions in relation to new rights, and for public interest

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organisations such as educational institutions and libraries.

I will now deal with proposed amendments to the general "fair dealing" provisions, which apply throughout the Copyright Act. Where an act is determined to be "fair dealing", it means that it is not an infringement of the Copyright.

Presently, Singapore has a fair dealing system that permits the use of copyrighted material for specified activities, namely, research and private study, review and criticism, and news reporting. While this system provides certainty, it is also restrictive in that it does not cater for other new uses which could fall under the concept of fair dealing.

While the current permitted activities have been retained, clause 9 of the Bill refines our fair dealing system by allowing other acts to be assessed according to a set of factors in determining whether these acts could constitute fair dealing. We have also proposed a new factor for consideration, namely, "the possibility of obtaining the work or adaptation within a reasonable time at an ordinary commercial price". In addition to the new fair dealing amendments, we have provided, in clause 11, new exceptions designed to ensure that computer-related research is not hampered by the enhanced protection for copyright works in the digital environment.

Mr Speaker, these amendments have been proposed after a careful review of the fair dealing provisions in jurisdictions such as the UK, Germany, France and the United States. I believe they will create an environment conducive to the development of creative works, and also facilitate greater investment, research and development in the copyright industries in Singapore.

Overall, Sir, let me say that the Bill also includes transitional provisions to

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ensure that the new rights do not interfere with prior arrangements between contractual parties. Rights under any contracts entered into before the operation of this new law will be governed under the previous copyright law.

In conclusion, let me say that these amendments in the Bill, although fairly complicated and technical, are necessary to update Singapore's copyright legislation to meet the needs of businesses, creators and users in the fast-evolving digital age. It provides enhanced enforcement measures to encourage stakeholders in the creative industries to further engage in high value-added activities in Singapore. It also provides balancing measures to ensure that our copyright laws serve to foster greater creativity in Singapore. In short, the Bill will provide Singapore with a copyright system comparable to those in the most advanced countries in the world.

Sir, I beg to move.

Question proposed.

Ms Indranee Rajah: I rise to speak in support of the Bill. The majority of the proposed amendments are certainly very welcomed. I should also declare my interest as a lawyer and a practitioner. There are three points in respect of which I would like to seek clarification from the Minister. The first relates to statutory damages, second, the criminalisation of infringements which are not for commercial advantage and, third, in relation to the take down requirements relating to transmission, routing and provision of connections by Internet service providers.

I will take the first point, which is the proposed amendment to section 119 that deals with statutory damages and, in fact, statutory damages run through certain other provisions of the Act as well. At

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present, when a copyright owner takes civil action against an infringer and intends to extract compensation, he is required to prove the actual damage that the infringer's act has inflicted on him or, alternatively, he can seek an account of profits made by the infringer in monetary terms. In copyright disputes, however, in practical terms, proving such damage or getting an account of such profits can be difficult. For example, a copyright owner may face difficulty in proving how many copies of his work have been distributed over the Internet. With the introduction of statutory damages, the copyright owner can recover compensation even where the proof of the actual extent of infringement may be difficult. So to that extent, the amendment is welcomed.

However, the provision, as drafted, states that the plaintiff can claim statutory damages amounting to not more than $10,000 for each work or subject matter and not more than $20,000 in the aggregate, unless the plaintiff proves that the actual loss exceeds $200,000. From a practical viewpoint though, I wonder if it might be helpful if the Act could also set out a minimum sum of statutory damages claimed because the intent behind the provision for statutory damages is to make it slightly easier for the copyright owner to recover compensation because of the burden of proof. So to the extent that this is the intent, having a minimum sum or perhaps a form of guidance on the amounts recoverable would be helpful because, if not, the copyright owner is still put in a position of having to prove the actual damage within the $10,000 or $20,000 limit. And the same comment would apply to section 253 of the Act which also provides for statutory damages.

There is another provision which deals with statutory damages. This is section 261 that relates to the removal or alteration of rights management information (RMI). In that provision, section

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261 as well as section 261F, there is a cap on the amount of statutory damages to be awarded. It states that it should be not more than $20,000. However, the Bill does not specify whether it is $20,000 per device or measure or whether it is $20,000 in total. It would be helpful if this could be clarified.

I move on now to the second point which is the proposed amendment of section 136, and that is criminalisation of infringements which are not commercially motivated. At present, Singapore's copyright law only criminalises the commercial manufacture, commercial importation, distribution or sale of infringing copyright material. Where non-trade activities are involved, Singapore's copyright law only criminalises distribution of infringing material that is of a degree that has a severe impact on the copyright owner. The new section 136(3A) extends criminal liability to ordinary users if the infringement of the copyright is wilful and either one of the following: (a) the extent of the infringement is significant; or (b) the person does the act to obtain a commercial advantage.

"Commercial advantage" is defined fairly well in the Act but the word "significant" is still a little loose. The concern here is: what is significant? Because the impact on the ordinary user can be quite great. An innocent user or someone who is not very well informed but acting innocently may inadvertently find himself facing a criminal charge. It is true that new section 136(6A) does give some guidelines as to what may be significant infringement. It cites, for example, the volume of infringing copies. But what kind of volume would attract criminal liability? For example, if one downloads two songs, that may not be significant. But if one downloads three, is that significant? What about the value of the infringing copies? What value would attract criminal liability? And the other guideline is whether the infringement has

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a substantial prejudicial impact on the owner of copyright. But how do you measure substantial prejudicial impact? Some guidelines on the meaning of "significant" would be helpful, particularly since the intent behind this section is to criminalise illegal use by end users, ie, non-commercial exploitation.

The third point that I intend to raise relates to the new proposed section 193B which deals with transmission, routing and provision of connections by Internet service providers. The provisions in relation to new sections 193C and 193D allow for a copyright owner to request an Internet service provider (ISP) to take down offending material. And if the ISP does actually take down the offending material, then the court's options to deal with the ISP are a bit more limited. But in the case of new section 193B, there is no similar provision for taking down of offending material. And I would be grateful if the Minister could clarify what is the rationale for that.

It would also mean in relation to new section 193B that copyright owners must resort to court action to compel the ISP in such a situation to seek relief or remedy. And if some clarification on that could be given, it would be extremely helpful.

With these comments, Sir, I support the Bill.

Mr Ahmad Khalis Bin Abdul Ghani: Sir, I support the Bill. The proposed amendments are indeed extensive. They are so wide-ranging and extensive, as we have heard that one wonders whether the current Act ought to be repealed and replaced by this new digital era version to reflect its significance. A new Act may make it easier for the public and all parties interested in copyright matters.

Sir, first, I need to declare my interest as a lawyer and practitioner.

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The amendments are not just about enhancing the rights of computer software programmers or commercial products. It also enhances the rights of literary, dramatic and artistic works of composers, authors and performers. In this regard, I need to declare my second interest and this time as independent director of COMPASS - not Community and Parents in Support of Schools but Composers and Authors' Society of Singapore. This Society collects royalty from users of artistic publications like musical performances and redistributes them to copyright owners such as performers, recording companies and composers. Therefore, Sir, I feel that such provisions are in line with the vision to make Singapore a culturally creative and vibrant society.

While copyright owners ought to be happy with these amendments, what about the public? Would the public lose out? I think yes and no. Yes, in the sense that one can no longer download music from the Internet, as alluded by the Hon. DPM earlier, and disseminate it by mass mail to, say, 100 friends without running foul of the new section 254A. Yes, they lose out in the sense that the user public can no longer rely on the likelihood that ownership of copyright is difficult to prove or that the amount of damages is difficult to quantify. There are deeming provisions in the Bill that get rid of such obstacles. But, no, Sir, the public does not lose out in the sense that the user public has the defence of fair use or fair dealing. Students in educational institutions can still photocopy pages of red spot books so long as the unauthorised use is not "significant" or for "commercial advantage". My learned friend has commented on the need to clarify the ambiguity arising from these two terms. But I do know that "commercial advantage" does not mean mere savings alone but directly related to the user's

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business. Some guidelines are found in the Bill.

More importantly, the public's gain, I believe, is in the long run. If we accord adequate rights and reward to composers, programmers, designers and innovators, in time, the public will benefit from better products and more useful innovations and thus an improved quality of life. This is the philosophical thrust of the Bill. It is worth reminding ourselves and the public of it.

Will the public suffer higher cost? This is inevitable especially in the short term. However, like the COE, I believe that the market will adjust itself. Copyright owners cannot demand too high a price for their work without the risk of pricing themselves out of the market. It is important that the general public be educated in this regard. I understand that IPOS had conducted useful publicity work in this regard in the last few months.

In addition to educating on the rights and wrongs, I think we should also educate the public and bring them on board in this new venture. It is a venture where we accord the highest value to human creativity and contributions. If the public, especially our young, is with us on this, I believe enforcement will be much less painful.

Sir, one of the most important aspects of this Bill is that it enhances our only national asset - human resources. It does so by enhancing the rights due to those who have exercised their human faculties to create or produce better things that benefit and are enjoyed by others.

May I now touch on a couple of specific aspects of this Bill? One aspect relates to the shifting of the burden of proof. In ordinary cases, it is for the plaintiff or claimant that first has to prove his course of action and substantiate the amount of his claims. Some provisions in this Bill, called deeming provisions, make

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this job easier for the claimant. We see this in sections 16(6), 119 and 130. Deeming provisions, perhaps in copyright law, are quite necessary to enhance the legal rights of claimants in a meaningful way. However, Sir, the use of this enhanced sword, now like a sabre, must be carefully monitored. We do not wish to see over zealous prosecution or abuse of process. The Hon. Deputy Prime Minister earlier alluded to the need to balance between the interest of copyright users and copyright owners. If I may add, there is also a need to balance between the need to protect present intellectual property against the need to develop intellectual property via research on present technology.

I concede, Sir, that the Bill also provides for numerous specific defences against copyright claims. This helps much to clarify the rights of the user. Nonetheless, I urge the Ministry, by itself or through IPOS, to continue to work closely with Copyright Tribunal, the Law Society of Singapore and CASE to monitor our progress in this regard.

Sir, under the new section 254A(9), the court may issue a warrant authorising a police officer to enter and search the premises for articles and documents specified in the warrant. As we know, such searches or raids can cause severe damage to the business run at the premises. In civil cases, in order to obtain documents in a similar way, the applicant is usually required to furnish security for the damages and costs, but not so under new section 254A(9). But this is not a totally new concept. The police are known to make raids upon being issued warrants to do so in other cases. However, it is always useful to remember the way enforcement action against potential damage to otherwise innocent or legitimate enterprise.

The Bill further enables customs officers to investigate suspicious ship-

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ments of copyright works. I seek clarification as to how this would be done. I believe we do not have sniffer dogs for this. I reckon customs officers therefore must be trained for this purpose. Shippers too should be educated on how to protect themselves against dealing with copyright contraband and risk being prosecuted.

I understand, Sir, that much of the Bill is to enable us to comply with the US-Singapore Free Trade Agreement. But as the Minister has mentioned, the Bill also goes beyond such provisions. I wish to ask whether there are any provisions in the Bill which are Singapore's own initiatives. And if there are, why do we want to enact them and what is the basis for the Ministry's belief that these would work?

Subject to my concerns above, Sir, I support the Bill.

Mr Zainudin Nordin: Mr Speaker, Sir, thank you for giving me the opportunity to speak on the important subject of intellectual property protection.

Rather than focusing on physical assets, competition in knowledge-based global economy focuses more on intellectual assets including intellectual property. Singapore's continued economic growth hinges on encouraging and protecting knowledge creation. With globalisation and rapid technological advancement, a strong IP regime will be strategically more important than the traditional strength of geographical location, large domestic market or natural resources in abundance. Because I agree when DPM mentioned a globally relevant IP regime will also enable Singapore to attract more high-value added set-ups to our country, which will in turn lead to creation of new jobs and multiple economic benefits for all Singaporeans.

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In manufacturing alone, there are some 4.7 million patents world wide and 60% are held in the US and Europe. Singapore has to continue to position itself as the launch pad for companies to manage their IP activities in Asia and as a location for these companies to further develop products for the Asian markets.

We are beginning to see the results of our efforts. In 2002, the World Economic Forum ranked Singapore as top in Asia for IP protection. In a more recent survey by the Hong Kong-based Political and Economic Risk Consultancy, Singapore has emerged as Asia's safest place for intellectual property. I quote from the survey:

"Foreign companies feel comfortable about being able to protect their IP in Singapore and the system offers a tightly policed and regulated environment which discourages piracy and a legal system that offers good support to victims of IP abusers."

Under the IP umbrella, copyright protection deserves special focus, as core copyright activities are one of the fastest growing industries in Singapore, outpacing Singapore's economy over a 15-year period from 1986 to 2001.

Based on preliminary findings of a recent research survey in 2001, copyright-based industries generated approximately S$8.6 billion in value added which, in turn, represents 5.6% of Singapore's GDP. These industries also have a strong impact on Singapore's workforce employing a total of about 116,000 persons, equivalent to 5.7% of the total employment.

Furthermore, copyright protection has to keep up with the fast paced developments of the IT sector. To reflect these developments, the Copyright Act of 1987 had been amended in 1994, 1998 and

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1999 and now in 2004, we are looking at another amendment to the Copyright Act. How is this amendment different from the previous ones, Sir? The proposed amendments are intended to keep our Copyright Act relevant in the digital age. I do agree that it also strengthens our position as an attractive location for copyright-based activities. Similarly, I am confident that it will further directly promote our local creative industries such as literary, dramatic, musical and artistic works. It is clearly visible that the proposed amendments offer new and enhanced rights and updated enforcement provisions for the copyright owners. For the copyright users, the amendments put into effect enhanced fair use provisions and specific exceptions.

While I strongly support the intent behind the amendments, Sir, I would like to put forth some of my concerns. One of my main concerns here is ambiguity and the lack of reference to specifics. According to the proposed amendment to our Copyright Act, anyone caught illegally downloading files, using files and benefited from the commercial advantage could face criminal charges, including six months in jail and fines of up to $20,000. At this stage, however, the term "commercial advantage" is rather ambiguous, in my opinion. Where exactly does criminal liability begin? The public needs to know. The issue of home users also comes to mind. The new laws are originally aimed at businesses which make use of pirated materials for financial gain and not meant to put average home users behind bars. I hope not. There is still the issue of file swappers that we need to contend with. We all know that the free Napster is no longer around, but nowadays file sharing or peer-to-peer programmes are still plentiful and all have these unique names like Gnutella, Kazaa, Morpheus and Grokster, and all this while I thought Gnutella is a hazelnut chocolate spread.

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This brings us back to my earlier concern regarding ambiguity. If someone has downloaded one hundred songs, for example, will this be considered "commercial advantage" or "significant"? As a comparison, this is almost equivalent to six audio CDs. Interestingly, a lawyer commented that the ambiguity is deliberate. It may be a good way to keep infringers guessing as a preventive measure. Knowing when criminal liability begins will encourage them to work around the limits. For example, if 500 is defined as "significant", then they will download 499. In a global piracy survey conducted by the industry body, Business Software Alliance, early this year, it was found that about 43% of the software installed in PCs here are illegal. This rate is close to developed economies such as France and Italy which recorded 45% and 49% respectively. We must remember that Bill Gates himself has once mentioned that there is no technically feasible way of preventing copyrighted digital material being replicated. So, it is likely in future that attempts to protect copyright works by solely introducing and implementing increasingly tougher laws will not be economical as well as popular. It is the attitude and the mindset of the users that need to be addressed. And for those die-hard users who are unwilling to pay for software, there is always the alternative free or open source software and materials. I believe the Government could do more to increase awareness and encourage the development of this free or open source software.

In conclusion, I fully support the amendments to the Singapore Copyright Act but would urge the Ministry to clarify some of the areas that I have highlighted. The hope is to ultimately find a win-win solution and create a balance between public domain and copyright-protected materials.

Prof. Jayakumar: Mr Speaker, Sir, I thank Members - Ms Indranee Rajah, Mr

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Ahmad Khalis and Mr Zainudin - for their support of the Bill and for the specific comments that they have raised, which I will do my best to clarify.

I am glad that the Members have recognised that we need to have a good IP regime for the interest of our economy and for our national interest. Because, if we did not have a sound and modern IP legislative framework, we will never be able to get the kind of IP industries to locate here - I doubt very much - for example, whether we would have succeeded in having prominent film industries, like Lucasfilm, to have a presence here. So, a sound IP legal framework is a key infrastructure that we need to put in place.

Mr Zainudin rightly gave a chronology of all our amendments. Will there be more amendments? I do not know. But, given the pace of technology and digital technology, where creators of works are trying to ensure that the copyrights which they own keep in pace with technology as well as those committed to circumventing the technology also keep in pace with the fast-moving developments, so do not be surprised if we have to come back to Parliament from time to time to ensure that we are in tune.

May I first take up the points made by Ms Indranee Rajah, some of which were alluded to by other Members. Her first point was about statutory damages (section 119). Just to recap, as I said, the statutory damages regime should provide an alternative for rights holders to be compensated for losses suffered due to infringements. Where a plaintiff elects for statutory damages, there is no need to prove actual or foreseeable loss of the infringing activity. Her point was: why not have a minimum sum? I think it is possible to conceive that approach, but we have elected for a system of damages based on compensatory principles. And in view of these principles, the court will award an

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appropriate amount based on the evidence and circumstances in each case. We have tried to make the set of guiding factors as comprehensive as possible. The court will look into the nature and purpose of the infringing act, including whether the infringing act was done for commercial purpose; flagrancy of the infringement; whether the party acted in bad faith; any loss suffered or likely to be suffered; any benefit shown to have accrued to the defendant; the conduct of the parties; the need for deterrence; and other relevant factors.

We have not opted for the minimum sum because the situations can be so complex, so diverse and so varied. The works can be varied. The nature of the copyright infringement can also be so diverse and the mitigating factors, if there are any, can also vary. So, we decided that it is best to adopt this approach and see whether it works. And if it works, we can maintain the system. But if experience shows that it might be better to have a minimum sum, then we will have a relook at it. But I take Ms Indranee Rajah's point. The reason why we have opted for it is because, I think, it may be very difficult to work out the minimum sum, as it is not foreseeable with the kind of circumstances of the cases where statutory damages may have to be awarded.

The next point that she made was about the new section 261 on the maximum statutory damages, and whether it is applicable per device. The way the provision is drafted, the maximum statutory damages award is applicable for each action brought by the owner of the copyright against the person who contravenes the relevant provisions, and it is not pegged to the number of devices or measures recommended, although we envisage that this fact - number of devices or measures - can be a relevant

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factor in determining the appropriate award.

Ms Indranee Rajah also spoke about section 136 - the guidelines for the courts to determine whether the extent of the infringement is significant - and I think Mr Zainudin also mentioned that in connection with the other limb of commercial advantage. What we have tried to do in this section, and with parallel sections elsewhere, is to provide guidelines. Because of the concerns of Ms Indranee Rajah and Mr Zainudin that the way it is drafted may catch the odd home user who in good faith innocently downloads some items, I think I should assure them that the way it is drafted is unlikely to have that result. Because, if you look at the guidelines, this end-user criminalisation provision applies where a person infringes a copyright work and the infringement of the copyright is wilful and the extent of the infringement is either significant or the person does it to obtain a commercial advantage. And in determining whether it is siginificant or not, the courts will have a set of guidelines. They look at the volume of the articles. They look at the value of the articles. They will then examine whether that person's infringement has a substantial prejudicial impact on the owner of the copyright. So, you can imagine that, if someone at home is downloading some items for personal use, these guidelines will give sufficient guidance.

For commercial advantage, the person is said to obtain a commercial advantage if the act is done to obtain a direct advantage, benefit or financial gain for a business or trade carried on by him. You have to look at these two limbs in totality to the provision. So, it is really what it is intended to catch and what it is not intended to catch. If someone uploads many popular films, if I may give an illustration, such as the Lord of the Rings or Spiderman II and so on, without the

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authorisation of the copyright owner, and he uploads it into a website, before these films are commercially released so that it pre-empts theatrical release, then, of course, many people will just download the movies and, as a result, the copyright owner suffers because the people do not go to the cinemas or buy the films. While the person who uploaded the films may not have personally benefited, he would have definitely caused substantial impact on the owner of the copyright. But it is not intended to catch a person who commits an infringement by occasionally downloading an article or song from the Internet for his own personal enjoyment.

But let me add that it does not mean that he is scot-free because, legally, that is still an infringement but attracting a civil action. Here, in the Bill, we are talking about criminalisation. That example of downloading some songs for enjoyment is not caught within this provision. So, here, again, we have decided to take this approach of leaving these criteria which, I think, in my view, is sufficiently workable and gives sufficient guidelines. But I realise that I am dealing with lawyers here. Of course, similar approaches are not unknown of in our legal system. For example, in our Penal Code, section 320 designates grievous hurt. It is also using qualitative and quantitative approaches. Because grievous hurt is defined as something which causes a sufferer to be within the space of 20 days to be in severe bodily pain. How do you decide whether the sufferer is in severe bodily pain? It is a question of fact. How much bodily pain must a sufferer suffer before you decide? So you lay the criterion, 20 days' severe bodily pain. It is qualitative and quantitative. You have many other examples. I think we have tried our best to work out the criteria and the mischief which this law is intended to deal with in a way such that one will know that if you do this, it is not a mischief that is going to land you in jail, as Mr Zainudin was worried about.

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On Network Service Providers, I should explain to Ms Indranee Rajah that these provisions actually set out a comprehensive framework. But they are slightly different because they cover the different functions of the NSPs. The different functions, for example, which the provisions deal with are transmitting, routing or storing of materials. For each of these functions, the NSPs are required to comply with different sets of conditions. So not all sets of conditions will apply for every one of their functions. It is pretty technical. I sat down with our people who understand it, and the way I understand it, and I believe it is correct, is that section 193B deals with the NSPs' function in the transmission or routing of materials. In the transmission or routing of materials, it is not appropriate to require the NSPs to take down infringing materials in the course of carrying out that function. However, the court may order the NSPs to take reasonable steps to disable access to an online location or to terminate a specified account. However, where the materials are stored in the NSP's systems, the NSP is in a position to comply with the take down notice. So that is how the provisions have been drafted in that way, which caught Ms Indranee Rajah's attention.

Now, let me deal with some of the points raised by Mr Ahmad Khalis. He asked a question: since we have made significant changes to the copyright regime, should we not enact a new Act? We decided not to repeal and re-enact because the fundamental policy intent or the principles behind the copyright legislation still remain unchanged. Amendments will augment and refine the existing regime. We have not completely overhauled it. I would think the legal fraternity and the industry are already familiar with the present structure in the existing Act.

He spoke about public education, I agree with him, and also about the need

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to create public awareness. The Intellectual Property Office of Singapore (IPOS) has done quite a bit and it will continue to do so. As regards this Bill, it was put up for public consultation. We have held sessions with the key players in the industry. And I take his point about the general public. The reason I agree with him is that all of us, Singaporeans, can easily understand the need to take action against theft of property belonging to somebody, ie, physical property, somebody enters your home and steals the property. There is no quarrel about that. It is a well-established concept. But, somehow, it is not as easily understood that there can be theft of intellectual property which can cause equal harm and damage to the owner of the property. So this is something that we have to work on. Because, as I just said in the beginning, a sound IP regime is absolutely important for future economic growth.

I believe Mr Ahmad Khalis also touched on shifting of the burden of proof. I should clarify that, as I see the provisions, we had not actually shifted the burden of proof. Take section 254, for example, which is really an extension of an existing provision which covers application of search warrant for criminal prosecution for performance rights. This provision actually continues the existing system where an applicant for search warrant needs to satisfy the court that there is a reasonable cause for suspecting the items to be seized within the premises constitute evidence of such offence. Let me assure him that all search warrants, of course, will be executed by the Police and not by the IP rights holders who would use due discretion in exercising the power. The only change is that the rights holder now has a flexibility to list the items to be seized in general categories where it is not possible simply to specify each and every item. By the way, these provisions in the Copyright Act are similar

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to, and actually they mirror, the amendments which were moved to the Trade Marks Act in this House in June. So they are quite different from the civil actions, whether it is the Mareva or Anton Piller remedies.

On border enforcement, Mr Khalis spoke about the need to educate shippers and how we train customs officers. These provisions on border enforcement are also to be found in the amendments to the Trade Marks Act which we adopted earlier. Let me say in reply to him that we will of course continue to work closely - ICA, Customs, MPA, and other relevant agencies - to ensure that shippers and other affected industries are aware of the requirements of these new laws. And IPOS on its part has been working and will continue to work with enforcement agencies, rights holders and other relevant agencies to ensure that there is adequate education and training for enforcement personnel.

Finally, I think there is one more question that Mr Ahmad Khalis asked on whether there is provision here going beyond the US-Singapore FTA, I would say that the main set of provisions, which is not connected with the FTA in this Bill, deals with the fair dealing provisions which I spoke at length during my Second Reading speech. As mentioned earlier, currently, the fair dealing provisions are somewhat restrictive. They deal with specified activities and those specified activities have been retained, but we have also refined the fair dealing regime to allow for other activities to be considered, such as fair dealing based on a set of factors. And I think that is better because they are also in tune with developments in other countries, like the US and Australia. I think it is an amendment which we need because they seek to preserve the unimpeded exchange of information and ideas to create an environment which is conducive to the development of creative works.

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I think I have dealt with Mr Zainudin's points and I have also dealt with the questions raised by Ms Indranee Rajah. I thank the Members for their support and comments on the Bill.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Prof. S. Jayakumar].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 4.35 pm .

Sitting accordingly suspended

at 4.12 pm until 4.35 pm .

Sitting resumed at 4.35 pm

[Mr Speaker in the Chair]

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[Mr Speaker in the Chair]