| 1. |
What
is the background of the amendments to the Copyright
Ordinance?
In early 1999, we consulted the public on additional
legal tools to combat intellectual property rights
infringements. One of the proposals that gained wide
public support was to combat corporate copyright piracy
activities by criminalizing the use of infringing
products, for example, pirated computer software,
in business. According to an unofficial estimate,
about 50% of all computer software used in business
is pirated. Such an excessive degree of violation
of intellectual property rights has significantly
affected the legitimate interests of copyright owners,
discouraged innovation and investments, and tarnished
the international image of Hong Kong, China.
The Copyright Ordinance was amended to implement the
proposal. The amendments took effect from 1 April
2001.
To address the public concern that the amendments
had hampered the dissemination of information in enterprises
as well as teaching activities in schools, the Legislative
Council passed the Copyright (Suspension of Amendments)
Ordinance 2001 in June 2001.
As a result, the criminal provisions in the recently
amended Copyright Ordinance will continue to apply,
with a slightly narrowed scope, to computer software,
movies, television dramas and music recordings. For
copyright works other than these four categories,
the criminal provisions will revert to the position
before the amendments took effect.
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| 2. |
What
are the effects of the Copyright (Suspension of Amendments)
Ordinance 2001 on criminal liabilities?
The effects of the Copyright (Suspension of Amendments)
Ordinance 2001 on criminal liabilities are as follows
-
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anyone
who possesses an infringing copy of computer
program, a movie, a television drama or music
recording for the purpose of or in the course
of any trade or business may be found guilty
of a criminal offence, unless they can prove
that they did not know and had no reason to
believe that the copy in question was an infringing
copy;
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the
use of a parallel-imported computer program
in business is not a criminal offence [For further
liberalization of parallel importation of computer
program, please see Part II on the Copyright
(Amendment) Ordinance 2003 starting from Q31.]
-
anyone
who deals in (i.e. buying, selling, distributing,
importing or exporting otherwise than for private
and domestic purposes) infringing copies of
copyright works may be found guilty of
a criminal offence, unless they can prove that
they did not know and had no reason to believe
that the copy in question was an infringing
copy; and
-
the
use of infringing copies of copyright works
other than those mentioned in (a) above in business
is not a criminal offence.
The
maximum penalty of the offence for (a) and (c) above
is a fine of $50,000 per infringing copy and 4 years'
imprisonment.
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| 3. |
Will
a teacher face criminal prosecution for using, for
example, an unauthorized photocopy of a newspaper
cutting after the passage of the Copyright (Suspension
of Amendments) Ordinance 2001?
No. In effect, the Copyright (Suspension of Amendments)
Ordinance 2001 suspends the criminal sanctions against
the possession of an unauthorized photocopy of a newspaper
cutting, an unauthorized recording of a television
programme, or an unauthorized copy of a photograph
downloaded from the Internet in the course of business
(which includes teaching activities in educational
establishments).
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| 4. |
Why
are only four categories of copyright works (computer
software, movies, television dramas and music recordings)
included?
These sorts of copyright works are not normally disseminated in enterprises
or schools as "information".
Moreover, these products generally have substantial commercial value.
Piracy of these products, in particular computer software,
in Hong Kong, China and elsewhere is rampant and it
is therefore necessary for the Copyright Ordinance
to provide a higher level of protection to them.
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| 5.
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When does the Copyright (Suspension of Amendments) Ordinance 2001
take effect?
1 April 2001.
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| 6. |
Is there any end date for the Copyright (Suspension of Amendments)
Ordinance 2001?
Section 3 of the Copyright (Suspension of Amendments) Ordinance 2001
provides that the suspension provisions will lapse
on 31 July 2006.
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| 7. |
With
respect to the four categories of copyright works,
are there any concrete examples to illustrate the
position before and after 1 April 2001?
Suppose a company engages in the sale of clothing. The company needs
computer software to support its business activities.
The company then buys one set of computer software
which is licensed for use in one computer only, and
installs the same software in the computer of each
of its 50 employees (or else in a network server for
shared use by its 50 employees).
Before 1 April 2001, it was not absolutely clear whether such acts
amount to criminal acts, as the business of the company
is selling clothing rather than pirated computer software.
After 1 April 2001, it is clear that the company will commit a criminal
offence under such circumstances.
Another example is a barber shop playing music recording or videos
containing television drama or movies for the enjoyment
of customers in the course of its business. If the
music recording or video is played from a pirated
CD or VCD, and the shop owner and the employee responsible
for operating the CD or VCD player know that the CD
or VCD is a pirated copy, they may be criminally liable.
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| 8. |
Will
the employees responsible for the infringing acts
in question 7 be liable?
Depending
on the circumstances of the case, employees responsible
for the infringement may also become liable. For example,
an IT manager of the company who knowingly installs
infringing copies of software on his workplace's computers
may commit a criminal offence. He would not be exempted
from criminal liability because he acted on the instruction
of the company's proprietor. In addition, employees
who know that software installed in their computers
is infringing copies and who continue to use it may
also be liable to criminal prosecution.
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| 9. |
Can
you give some practical guidelines on "dos" and "don'ts"
in order to comply with the amended law?
The following guidelines may be useful -
- Generally
do not buy from unlicensed hawkers or temporary
premises. Legitimate distributors of computer
software, movies, television dramas or music recordings
do not normally authorize such places to sell
their products.
- By
all means seek the best price for the product;
but if the price is no more than a fraction of
the price for which an authorized version of the
product is normally sold, this may be a clue that
the copy may be pirated. If in doubt, approach
the copyright owner for additional information.
- If
you are purchasing computer software for your
business, get a set for each computer that will
run the software, or purchase an appropriate network
software licence.
- Carefully
study the licensing conditions to ensure that
the software installed in your computers is properly
licensed for use in your business. Be sure you
know your rights and obligations.
- Conduct
periodic software auditing to ensure that only
properly licensed computer software has been installed
in any computer in your office.
- Ensure
that all employees in your office are fully aware
of the company's policy and practice on the use
of computer software.
- Do
not play music recording, movies or television
drama videos for your business using pirated CDs,
DVDs, VCDs or videotapes.
- If
you are an employee, do not use computer software
for your job if you know or have reason to believe
it is pirated.
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| 10. |
What
if I honestly believe that the copy of the computer
software, movie, television drama or music recording
that I possess for my business is a licensed copy,
but it turns out to be infringing?
A
person who possesses an infringing copy of computer
software, a movie, a television drama or music recording
for use in his business will not commit an offence
if he or she does not know and has no reason to
believe that the copy in question is an infringing
copy. In case your business were suspected of breaking
the law, showing that you have followed the "dos"
and "don'ts" set out in question 9 could help you
to demonstrate that you did not know and had no reason
to believe that the copy is an infringing copy. The
court will decide ultimately on the basis of all relevant
facts and circumstances.
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| 11. |
After
1 April 2001, will a karaoke bar or restaurant be
criminally liable if it plays music recording using
pirated VCDs/CDs in its premises?
After
1 April 2001, if a bar or restaurant (including a
private club with restricted membership) plays music
recording from pirated VCDs/CDs etc in the course
of its business,( e.g. for the enjoyment of customers),
it may commit a criminal offence.
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| 12. |
Will
Customs conduct routine checks at various business organizations
to see if infringing copies of computer software, movies,
television dramas or music recordings are being used?
No.
Investigations will be carried out in response to
reports lodged, for example, by, copyright owners
or members of the public.
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| 13. |
Will
Customs enter and search the premises of a business
organization upon receipt of a report?
Customs
will not enter or search the premises of a business
organization unless there are reasonable grounds for
suspecting that it has committed an offence. Under
such circumstances, Customs will normally apply to
a magistrate for an entry and search warrant for searching
the premises concerned.
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| B.
Computer Software |
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| 14. |
When
using legitimate software, the computer will automatically
create a copy of the software in its memory. Does
this constitute an infringing act?
No.
According to section 61 of the Copyright Ordinance,
a lawful user of a copy of a computer program may
copy the program without infringing the copyright
in the program if the copying is necessary for his
lawful use.
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| 15. |
To
cater for unexpected failure of computer systems,
it is necessary for enterprises to produce a back-up
copy of all the files in a computer system, including
computer software. Does this constitute an infringing
act?
No. According to section 60 of the Copyright Ordinance,
a lawful user of a copy of a computer program may
make a back-up copy of the program without infringing
the copyright in the program if it is necessary for
him to have the back-up copy for the purpose of his
lawful use. But if the software licensing agreement
prescribes conditions for making back-up copies, users
must follow the relevant conditions.
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| 16. |
Some
people have said that because of the hardware available
in their enterprises, they need to continue using
out-dated versions of software products. If the software
they use is pirated, and that the legitimate copies
of the software are no longer available in the market,
is there any legitimate way to solve this problem?
Enterprises may be able to make use of the "downgrade"
arrangement provided by some software publishers.
According to the Business Software Alliance ("BSA"),
most of its members provide a "downgrade" arrangement
so that users can continue using "pirated" out-dated
versions of the software legally as long as they have
purchased new versions of the software. Users must
contact relevant software publishers directly to make
the necessary arrangements.
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| 17. |
If
an employee installs pirated software in his computer
by himself for office duties, will the employer be
criminally liable?
If
the employee installs the pirated software with employer's
consent, and the employer knows or has reason to believe
that the software in question is an infringing copy,
the employer could also be prosecuted.
Employers
should implement proper software asset management
measures and ensure that all employees are aware of
the requirement that only authorized software should
be used. Companies should also conduct periodic software
asset audit. Such measures will reduce employers'
risk of facing prosecution if their company falls
under suspicion of breaking the law.
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| 18. |
A
company bought a computer and the computer was pre-loaded
with pirated software by the computer vendor. Will
the company be liable?
According
to the amended Copyright Ordinance, if a person knowingly
uses infringing copies of computer software in business,
he will commit a criminal offence. The company should
check with the supplier and request confirmation that
all software installed in the computer is legitimate
and has been properly licensed for business purposes.
All pirated software should be removed. Do follow
up with the supplier if it cannot provide all the
licences of the software pre-loaded onto the computer.
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| 19. |
Can
software be used in business in any manner as long
as it is licensed or legitimate?
Licensed
software must be used according to the terms of the
licence. The installation onto multiple computers
of software licensed for use on a single computer
violates the licence condition. This is the same as
making infringing copies of the software. Possession
of such infringing copies in business may put you
at risk of prosecution.
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| 20. |
Is
it an offence if someone uses infringing software
for private and domestic purposes?
No.
The use of infringing software for private and domestic
purposes is not a criminal offence.
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| 21. |
Is
it an offence if someone uses a parallel-imported
computer software in business?
No.
The use of a parallel imported computer software is
not a criminal offence.
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| 22. |
Will
a person be liable if he installs pirated software
in his home computer so that he can use it to do office
work as well as for private and domestic purpose?
If
someone knowingly installs pirated software in his
home computer for domestic as well as business purposes,
he may commit a criminal offence.
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| 23. |
Does
using "freeware" or "share-ware" downloaded from the
Internet infringe copyright?
Genuine
'freeware' is authorised by the software copyright
owner, and so downloading it will not be infringe
copyright. Note that you should only use 'freeware'
in accordance with the licence conditions. Some "freeware"
and "share-ware" products have a licence condition
that says that they can be used for personal or private
purposes at no charge, but one must pay if it is used
for commercial purposes. Users must therefore read
carefully the licence conditions before downloading.
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| 24. |
How
can I tell whether computer software purchased from
the Internet is pirated or legitimate?
Here
are some useful guidelines:
- Try
to make purchase at well-known and credible web
sites. One can also ask the software publishers
for authorize web sites.
- By
all means seek the best price for the product; but
if the price is no more than a fraction of the price
for which an authorized version of the product is
normally sold, this is a clue that the copy may
be pirated. If in doubt, approach the copyright
owner for additional information or call BSA's hotline.
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| 25. |
How
can I tell whether software freely downloaded from
the Internet is pirated or legitimate?
If
you do not know whether the relevant web site has
permission from copyright owners to provide the software,
you should use reasonable judgement and make some
enquiries. If you possess infringing software but
you did not know and you had no reason to believe
that it is an infringing copy, you would not commit
an offence. Should you for any reason be suspected
of breaking the law, showing that you have used reasonable
judgement and made appropriate enquiries can help
to demonstrate that you did not know and had no reason
to believe that the software was an infringing copy.
The court will decide ultimately on the basis of all
relevant facts and circumstances.
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| 26. |
As an employee, what should I do if I know that my employer has
installed pirated software in my office computer?
Use of pirated software is like using stolen property. Government
encourages employers to adopt proper software asset
management measures. As an employee, you should assist
your company in obeying the law by requesting your
employer to use only properly licensed software. Other
possible actions that you may take include refusing
to use the pirated software and reporting the matter
to the Customs and Excise Department.
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| 27. |
What
steps should I take to ensure that all the computer
software used in my business is properly licensed?
You should adopt proper software asset management (SAM) measures to
ensure that only properly licensed software is used
in your business. Examples of these measures are:
| a. |
appoint
a compliance officer or an officer responsible
for managing software assets to oversee and to
act as a focal point for matters related to SAM
and intellectual property; |
| b. |
promulgate
internal instructions in respect of the proper
management and use of computer software to ensure
that each staff member clearly understands the
requirements; |
| c. |
ensure
general awareness of all staff members to use
only authorised software; |
| d. |
acquire
software legitimately; |
| e. |
keep
software licences; |
| f. |
keep
software inventory up-to-date; |
| g. |
maintain
and implement proper procedures for installing
and distributing software; |
| h. |
conduct
periodic software asset audit; and |
| i. |
confirm
proper licensing and authorization for all software
used. |
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| 28. |
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