Laws Essential for WTO Membership
Fai Sam Ang makes karaoke videos full of bashful women and befuddled men that are played in clubs and homes across the country. But despite their popularity, the videos don’t make much money for him. As soon as he releases a compact disc, illegal copies pop up in the markets.
“It pains me when I see my products copied by competitors in the market,” the disgruntled producer said. “We do not know how to protect our products.”
Protection of intellectual property like Fai Sam Ang’s videos is critical for the Ministry of Commerce and the legislature. Cambodia’s entrance into the World Trade Organization requires seven protection laws that currently don’t exist. Laws for copyrights, trademarks and patents are all in the works, and the National Assembly is expected to pass the first law—regarding company trademarks and acts of unfair competition—in September. The last law is expected to be approved by 2004.
“It is a very important law to provide truth and fair competition and defend [trademark] holders,” said Sok Siphana, secretary of state for the Ministry of Commerce. Having a trademark and the laws to protect it are “assets which will help people be more creative by building a more popular name,” he said.
Intellectual property—ideas, theories, works of art, inventions—has become “the driving force for the development of science technology, economy and trade around the world,” said Ly Phanna, director of the Intellectual Property Department at the Commerce Ministry.
“For Cambodia, compliance with the international standards is a major constraint,” he told a group of lawyers, businessmen and government officials at a globalization conference held last week. “Cambodia must start everything from scratch.”
Indeed, Cambodia still has much to do, especially if it is to handle complex issues like the protection of encrypted satellite signals, integrated circuit designs or hybrid plant species.
Strong laws are necessary to coax investment from foreign companies that would shy away from countries like Cambodia—where video discs of pirated movies are available almost immediately after their theater release, and where any book can be taken to a neighborhood photocopy shop to be duplicated.
“If we have no intellectual property law to protect [investors], they won’t be willing or confident to compete and do business here,” Sok Siphana said.
Because of the lack of laws, disputes are currently handled by the intellectual property division of the Commerce Ministry, which has so far settle six trademark disputes and four unfair competition disputes.
The government has made some attempts to curb obvious intellectual property rights violations. In November, 1999, the government forced the then Pizza Hot restaurant to change its name because it was too similar in name and logo to the US-based Pizza Hut. US embassy officials had asked the government to force the change to Pizza House.
However, problems still exist when it comes to designs and patents.
Mercedes cigarettes, which use the emblem of the German luxury car company on a box that has the same design as British American Tobacco’s “555” cigarettes are still on the market. Even though the “555” design is trademarked, no action has been taken, and likely will not occur until new legislation is passed, Sok Siphana said.
“I don’t think we’ll order them to burn down their products right now,” he said. “We will wait until the law comes out, and use the law to make them change.”
BAT executive Kong Triv said his company has already complained to the court and is upset by the alleged copy. No solution has been reached, he said, but added that he understands the government must do things “step by step.”
“We will not force the Minister [of Commerce] to crack down on competitors of copied designs,” he said. “But we will so do after the law is approved by the National Assembly.”
In a case that illustrates the problems that companies face here—problems that could keep investors away—the Mobitel and Samart phone companies went to court in 1999 over the design and use of pre-paid phone cards. Mobitel first came out with the so-called “scratch card,” which uses a digit code hidden under removable material so that customers can buy calling time on their phones. Samart issued a similar card, and Mobitel cried fowl, saying they had patented the card.
The Ministry of Industry’s patent office said the company had only filed for a patent, which had not been approved. Samart was first forced to shut down their advertising campaign, costing them money, and then made to redesign their card to be different than Mobitel’s.
Samart eventually won the case in the Supreme Court, after losing in both the municipal and appeals courts. In all, the case cost the company as much as $3 million, including lost revenues and legal costs, said Samart CEO Somchai Lertwiset-Theerakul. “This is a big case interesting to every investor,” he said.
Despite such problems, as well as those created by a lack of human resources, knowledge and experience, Ly Phanna said investors are showing some confidence with the government’s ability to enforce intellectual property rights. The number of trademark applications has increased by 36 percent this year over last year, he said.
There are about 15,000 trademarks registered in Cambodia. Fifteen percent of them are from Cambodian companies, he said. With stronger laws, the government hopes both those numbers will increase, reflecting a return of investors to invigorate the economy.
But Fai Sam Ang, the karaoke video producer, isn’t so sure that laws will be enough to help him and others. Cambodia’s track record of weak law enforcement means there will be problems in court. And that hurts his livelihood, he said.
“When they steal from us, they make money,” he said. “We lose everything.”
