Malaysia is adamant about tightening intellectual property laws, and sealing off existing loopholes in its fight to curb the piracy threat.

At least three pieces of legislation are likely to be considered at the next sitting of Parliament this month. These include the licensing of commercial manufacturing of copyrighted work on optical disks; the classification of polycarbonate, the raw material used to produce optical disks, as a controlled item; and amendments to the Copyright Act 1987 to enable foreign-based copyright owners, without local representatives, to take legal action against local offenders.

The new laws will give authorities more bite to cut off piracy at its source.

However, new legislation may not be enough to prevent the increasingly central role that the Internet is playing in the illegal distribution of software. Retailers are also cashing in on users' adoption of the PC as an entertainment medium for music and movies. One retailer was caught recently in KL selling PCs pre-loaded with hundreds of songs encoded in MP3, the wildly popular audio format that has incensed music publishers and distributors worldwide.

BSA estimates that Malaysia's piracy rates dropped from 80 percent in 1996 to 70 percent in 1997 but rose slightly to 73 percent in 1998. Losses in retail revenue were estimated at US$79.3 million last year.

One previous study by PriceWaterhouseCoopers estimated that sales of packaged software in Malaysia are projected to grow at an average annual rate of 17.4 percent between 1996 and 2001, reaching revenue of US$664.5 million and stimulating US$1.2 billion in total economic activity by 2001. This is despite the current piracy rates.

The study concluded that an increase in the percentage of legal software used and sold in Malaysia could yield dramatic gains for the nation's economy. If Malaysia, by 2001, can bring its piracy levels to as low as the 25-27 percent levels of the U.S., the Asian country could double total sales for its software industry and generate some 11,628 jobs.

Given the tax revenue that the Government is likely to derive from the spike in sales and jobs, the opportunity would be too tempting to pass up.