Intellectual Property Department - What is Intellectual Property?

APEC Industrial Rights Symposium in Tokyo
held on 28 to 29 August 1996

THE IMPLEMENTATION OF TRIPS IN HONG KONG

Presentation by Rayman PERERA
Assistant Director of Intellectual Property , Hong Kong Government

1. This paper deals with the action Hong Kong has taken to comply with its obligations under the World Trade Organisation (WTO) Agreement concluded under the Uruguay Round, particularly the Agreement on Trade-Related Aspects of Intellectual Property (TRIPs).

2. Before going into the details about what the Hong Kong Government has done in connection with TRIPs, I would like to say a few general words about Hong Kong.

3. As is well known, Hong Kong reverts back to China in 1997. However, in accordance with the doctrine of 'one country, two systems' Hong Kong will continue to operate its own intellectual property regime. [See Hong Kong's post-1997 Basic Law Articles 139 & 140] At present its intellectual property regime is, to some extent, dependent on the legislation of the United Kingdom. In summary, this is the current position:

i. Hong Kong has a fully localised trade mark system (i.e. an application for a trade mark is made in Hong Kong under the current Trade Marks Ordinance (Cap. 43). This will continue to be the case after 1997).
ii. Such applications are examined at the Trade Marks Registry (which is part of the Intellectual Property Department of the Hong Kong Government).
iii. However, the Trade Marks Ordinance is now dated (last major revision in 1954) and a new Ordinance is planned. Hong Kong issued a Consultation Paper in 1993 on the modernisation of its trade mark law.

i. The current law is based on the United Kingdom Copyright Act 1956 as extended to Hong Kong (and as amended) and the Hong Kong Copyright Ordinance Cap. 39 (as amended).
ii. Under Article 140 of the Basic Law, the Government of Hong Kong Special Administrative Region shall, on its own, formulate policies on culture and protect by law the achievements and the lawful rights and interests of authors in their literary and artistic creations.
iii. Thus, it will be necessary for Hong Kong to establish its own localised Copyright Ordinance and this is being drafted.

i. This is currently based on the Registration of Patents Ordinance (Cap. 42).
ii. There is no original grant of patents in Hong Kong, which registers United Kingdom Patents and European Patents designating the United Kingdom.
iii. An application for registration in Hong Kong can be made at any time within five years of the grant of the patent in the UK.
iv. Once the patent is registered, the owner of the patent has the same rights as if the patent had been granted in the UK with an extension to Hong Kong. The patent remains in force so long as it is in force in the UK.
v. Under Article 139 of the Basic Law, the Government of the Hong Kong Special Administrative Region shall, on its own, formulate policies on science and technology and protect by law achievements in scientific and technological research, patents, discoveries and inventions.
vi. Hong Kong is at present drafting a new Patents Ordinance.

i. The outward shape of a product may be protected by either a registered design or by the law of copyright.
ii. Under the United Kingdom Designs (Protection) Ordinance (Cap. 44), designs registered in the United Kingdom under the Registered Designs Act 1949 as amended are protected in Hong Kong.
iii. The design owner does not have to register the design in Hong Kong as the United Kingdom Designs (Protection) Ordinance provides that the registered proprietor of the design registered in the UK shall enjoy in Hong Kong the same rights as though the certificate of registration issued in the United Kingdom had been issued with an extension to Hong Kong. The owner of the registered design can take legal action if rights are infringed.
iv. Hong Kong is presently drafting a new Registered Designs Ordinance which will be fully localised.

4. There is therefore a great deal of law drafting going on. The new Ordinances for Trade Marks, Copyright and Patents and Registered Designs will take some time to be brought into law.

1. Although Hong Kong's current regime complies in most respects with TRIPs standards, it was necessary to take immediate action to modify its laws to comply fully with TRIPs without having to await the bringing into force of the new Trade Marks, Copyright, Patents, and Registered Design Ordinances.

2.(i) On the 2nd May 1996, the Hong Kong Government enacted the Intellectual Property (World Trade Organisation Amendments) Ordinance ('WTO Ordinance' which amends the existing Copyright Ordinance, Registration of Patents Ordinance, Trade Descriptions Ordinance and the Trade Marks Ordinance. Some parts of the WTO Ordinance are not yet in force because, e.g., subsidiary rules have to be drafted. It is hoped that all parts will be brought into force by the end of 1996.
2.(ii) Also in connection with TRIPs, two other pieces of legislation are relevant: the Plant Varieties Protection Ordinance (enacted on 8.5.96 but which will come into force later) and the Layout-Design (Topography) of Integrated Circuits Ordinance passed in 1994, which is in force.

TRIPs: S.2: Article 25-21, S.3: Article 22 to 24
WTO Ord: Ss. 18 to 26
[Not yet in force]

i. The definition of mark formerly in the Trade Marks Ordinance is old fashioned: 'mark' includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, or any combination thereof?(S.2, TMO).
ii. Article (15(1) of TRIPs contains the modern standard and talks, inter alia of: 'any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark...'
iii. As a result of TRIPs, Hong Kong has introduced the following definition of mark:

'mark means any sign that is visually perceptible and capable of being represented graphically and may, in particular, consist or words, personal names, letters, numerals, figurative elements or combination of colours, and includes any combination of such signs.' (S.18 of the WTO Ordinance).

a. The words 'visually perceptible' probably means that sound and smell marks may not be registrable.
b. Note that the mark must be capable of being represented graphically (e.g. a drawing, a description).
c. Shapes will be registrable. Evidence will be required for shape marks. It is unlikely that these marks will be considered prima facie distinctive.
d. Some shapes cannot be registered:

S.19 of the WTO Ordinance provides that a sign shall not be registered as a trade mark relating to goods if it consists exclusively of:

a. the shape that results from the nature of the goods themselves.
b. the shape of goods that is necessary to obtain a technical result; or
c. the shape that gives substantial value to the goods.

i. Article 22 to 24 of TRIPs contains provisions relating to the protection of Geographical Indications. Hong Kong has traditionally protected geographical indications by way of Certification Trade Marks. Where large or important areas have been involved, Hong Kong has tended to disclaim the geographical element. This has resulted from the difficulties of deciding when a large geographical area can be said to be 'adapted to distinguish.'

ii. S.23 of the WTO Ordinance has amended the relevant section on certification trade marks in the current Trade Marks Ordinance as follows:

iii. S.23 of the WTO Ordinance puts it beyond doubt that geographical names can be registered as certification trade marks. This does not enable the proprietor of such a mark to interfere with or restrain the use by any person, of any signs or indications which is in accordance with honest practices in industrial or commercial matters.

Hong Kong is obliged under the TRIPs Agreement to extend Convention Priority to parties who have signed the Marrakesh Agreement, but who are not members of the Paris Convention (S.20 of the WTO Ordinance).

Section 27 & 27A of the TMO as amended by the WTO Ordinance enables a proprietor of a trade mark to bring an action against someone using an identical or nearly resembling trade mark on goods or services for which the mark is registered but also in relation to goods or services of the same description. This extends the current rights given in registration under Parts A and B which only give a proprietor rights in relation to specific goods or services for which a mark is registered. (Ss.21 and 22 of the WTO Ordinance.)

A pending application which has not been advertised may be converted so that its registrability can be determined under the WTO Ordinance. To effect this conversion, the applicant must:

i. TRIPs [Article 31] restricts the conditions under which government use of patented inventions can be made without the consent of the patent owner. This is to ensure that the legitimate rights of patent owners will not be unfairly prejudiced.
ii. Hong Kong's existing Registration of Patents Ordinance provides that Government may use a patent without the prior consent of the patent owner for 'the services of the Crown' Hong Kong considers that these provisions are wider than those allowed by TRIPs.
iii. Hong Kong has introduced new provisions allowing for Government use only in periods of declared extreme urgency for securing sufficient supplies and services essential to the life of the community. The Patent owner or any person who holds an exclusive licence respecting the use of the patented invention will be entitled to compensation. If the parties cannot agree, the amount will be determined by the High Court.

i. Copyright owners of computer programs, and sound recordings may prevent others from renting these works without their consent. Any unauthorised rental of these copyright works will become an infringement, and the copyright owner has the right to take civil proceedings for damages.

[N.B. Copyright owners must be domiciled or resident in Hong Kong or in a qualifying country, or the work must be made in Hong Kong or a qualifying country. The governor will designate a qualifying country.])

No rental right has been provided as regards films. The debate centred around Article 11 of TRIPs which provides, inter alia, that 'member shall be excepted from this obligation in respect of cinematography works unless such rental has led to widespread copying of such works which is materially impairing the exclusive right of reproduction conferred in that Member on authors and their successors in title ...'

After a public consultation no evidence of wide spread copying of films was proved. Thus the rental right for films was not put in.

iii. There will however be special transitional provisions as required by TRIPs to ensure that persons who have made an investment in making rentals will not be totally banned from doing so immediately after the commencement of the rental right provisions. In such cases copyright owners are only entitled to equitable remuneration for the rental of their copyright works. Failing agreement this matter will be dealt with by the Copyright Tribunal.

iv. To guard against any possible abuse of rental rights, the Secretary for Trade and Industry can to determine whether a non-voluntary rental licence should be granted.

In making such a determination, the Secretary for Trade and Industry will take into account a wide range of factors including the market dominant position of rental right owners, evidence of abuse, nature of copyright materials in question and any other public interest considerations. Such an administrative determination will be subject to appeal to the Governor in Council.

v. There are proposals to expand the jurisdiction of the existing Performing Right Tribunal (which will be renamed the Copyright Tribunal) to enable it to determine the reasonable level of royalties to the copyright owners for rental of their copyright works.

b. Performer's right
WTO Ordinance: Clause 9 [Not yet in force]
TRIPs : Article 14

i. Under the performer's right provisions, which will be retrospective*, performers of musical, dramatic and literary works may prevent their live performances from being fixed on a record* and broadcast without their consent, and they may also prevent such recordings from being reproduced without their consent.

N.B. : * Under WTO Ord. means fixation by phonogram, but under new Copyright Ord. will include audio and audio-visual 'retrospective' i.e. 50 years.

ii. The term of protection will be 50 years from the end of the calendar year in which the performance takes place. Civil remedies of injunction, damages, accounts for profits and delivery orders will be available to performers.

iii. Performers who are domiciled or resident in Hong Kong or in a qualifying country will qualify for performer's rights. The Governor will designate by regulation WTO Members as qualifying countries. A performance will qualify for protection either if it is given by a qualified performer anywhere in the world or if it has taken place in Hong Kong or in a qualifying country.

iv. Certain acts such as the private use of the performers' recordings, the use of short excerpts for reporting of current events, the recording by broadcasting organisations for their own broadcasts, the use for teaching or scientific research, the use for judicial proceedings, and the retransmission through cable programme services, will be regarded as non-infringing acts. These non-infringing acts will strike the balance between protecting the public interests and safeguarding the legitimate right of copyright owners.

c. Customs border measures
WTO Ord.: S.9/17 [Not yet in force]
TRIPs: Part III S.4 Article 51 to Article 60

i. TRIPs requires contracting parties to provide border measures to assist copyright and trade mark owners in enforcing their rights through civil court proceedings.

ii. The WTO Ordinance adds new provisions respectively in the Trade Descriptions Ordinance and Copyright Ordinance to provide for the border measures to strengthen control against the import of pirated and counterfeit goods.

iii. A Copyright and trade mark owner can to make an application to the High Court for a detention order to ask the Commissioner of Customs and Excise to detain suspected imports of infringing goods, subject to the payment of a security. He must:

satisfy the court with an affidavit that he is the copyright holder or the proprietor of the trade marks
state the grounds for the application and set out a sufficiently detailed description of the article in question to make it readily recognisable by the Customs
provide the Commissioner with the particulars regarding the expected mode of transportation, date of importation and the identity of the importer

iv. The initial detention period is ten days and the applicant may seek the court's approval for extension for at most another ten days. An applicant can inspect the detained goods to facilitate civil court proceedings. If he does not initiate any civil court proceedings within the detention time limit, the goods will have to be released to the importers. If legal proceedings are not taken out, the right owner has to compensate the importer for any loss incurred.

v. Where a detention order is served to the Commissioner of the Customs and Excise Department, the Commissioner will seize or detain any article to which the order applies under normal circumstances. Once the article is seized or detained, the Commissioner notifies all parties concerned.

E. Extra-territorial Accessory Offences
WTO Ord.: S.5 ) IN FORCE
Brought into effect

It is now an offence for any person, who in Hong Kong aids, abets, counsels or procures the commission by another person outside Hong Kong who:

i. makes outside Hong Kong any pirated goods for export to Hong Kong [only copyright];
ii. makes outside Hong Kong any plate for producing pirated goods in Hong Kong;
iii. makes outside Hong Kong or export from Hong Kong any plate for producing pirated goods for export to Hong Kong.

The penalties for this are:
1st conviction: fine of $250,000 and to imprisonment for 4 years
2nd or subsequent conviction: fine of $500,000, and to imprisonment for 8 years.

i. TRIPs [Art. 27(3)(b) provides that: '.. members shall provide for the protection of Plant Varieties either by patents or by an effective sui generis system or by any combination thereof'

ii. (ii) Hong Kong has based its legislation on the model text prepared by the International Union for the Protection of New Variety of Plants (UPOV).

a. Protects the rights of a person who breeds or discovers and develops a new variety of a plant by preventing unauthorised commercial exploitation of that variety.
b. Appoints a Registrar of Plant Variety rights (The Director of Agriculture and Fisheries) and establishes a procedure for consideration of applications for registration.
c. Provides that the grantee of plant variety right has the exclusive right to produce for sale, and to sell reproductive material of the variety concerned for commercial purposes and to authorise any other person to do such things. It also provides that infringement of the grantee's proprietary rights shall be actionable and that the court may award damages.

In 1994 Hong Kong passed the Layout-Design (Topography) of Integrated Circuits Ordinance. Some of the features of this Ordinance are:

i. The Ordinance provides a copyright style regime to protect integrated circuits. There is no requirement for registration or deposit of the layout design.
ii. The Ordinance meets the standards of TRIPs and the Treaty on Intellectual Property in respect of Integrated Circuits (The Washington Treaty, 1989).
iii. A layout design must be original, in the sense that it is the result of its creator's own intellectual effort and is not common place among creators of layout-designs and manufacturers of integrated circuits at the time of its creation.
iv. Only qualified persons are eligible for protection i.e. natural or legal persons (including governments), who are domiciled or ordinarily resident, or who have the right of abode in Hong Kong, or who have a real and effective industrial or commercial establishment in Hong Kong, or in a qualifying country, territory or area as specified in the schedule to the Ordinance.
v. Term of protection is 10 years from date of first commercial exploitation anywhere in the world with the owner's authorisation; or 15 years after the creation of the layout-design.
vi. Civil remedies are available to the qualified owner including damages, injunctions, delivery up.