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This booklet provides an introduction to the protection of

intellectual property rights for interactive digital entertainment

products in the Hong Kong Special Administrative Region.

It is designed to serve as a guide only and is not intended to

be an authoritative guide to the intellectual property laws in

the Hong Kong Special Administrative Region. The Intellectual

Property Department of the Government of the Hong Kong

Special Administrative Region will therefore not accept any

responsibility for the consequences of any omissions or

inaccuracies appearing in this booklet.

INTRODUCTION

For interactive digital entertainment products, what typesof intellectual property rights does Hong Kong protect?

The Government of Hong Kong is fully committed to protectingall kinds of intellectual property rights (IPRs), including thosein interactive digital entertainment products.

In Hong Kong, many IPRs are protected by way of legislation.Such legislation includes the Copyright Ordinance (Cap 528),Trade Marks Ordinance (Cap 559), Trade Descriptions Ordinance(Cap 362), Patents Ordinance (Cap 514) and the Registered DesignsOrdinance (Cap 522).

Some IPRs are protected under the common law (that is, lawevolved from court cases that are not written in the legislation).For example, unregistered trademarks are protected by the commonlaw action of passing-off , and trade secrets are protected by thecivil action of breach of confidence.

How are the IPRs in interactive digital entertainmentproducts protected by the copyright legislation?

The main protection of IPRs in interactive digital entertainmentproducts is provided under the Copyright Ordinance. Digitaltechnology deployed in interactive digital entertainment productsoften involves the use of a computer program. Under the CopyrightOrdinance, the exclusive rights of a copyright owner of a computerprogram include copying, making available on the Internet, adapting,importing or exporting the computer program. He/She has rightsto seek civil remedies (for example, injunction and damages) fromthe person who infringes his/her exclusive rights without his/herconsent.

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Frequently Asked QuestionsProtection of Intellectual Property Rights for Interactive Digital Entertainment

Products in the Hong Kong Special Administrative Region

In addition, it is an offence for any person to make for sale, import,export, possess in business, or sell an infringing copy of a computerprogram. For example, an Internet café or a networked computergames centre which carries on its business using pirated copies ofcomputer software commits an offence. The maximum penaltyis a fine of US$6,410 per infringing copy and 4 years’ imprisonment.

It is also an offence for any person to make, import, export, possess,or sell an article specifically designed for making infringing copiesof a computer program for sale, for example, a stamper containingpirated copyright works. The maximum penalty is a fine ofUS$64,100 and 8 years’ imprisonment.

Apart from computer programs, other copyright works such asdigital images, films and sound recordings that are found ininteractive digital entertainment products are also protected underthe Copyright Ordinance.

The Prevention of Copyright Piracy Ordinance (Cap 544) regulatesthe manufacturing of optical discs in Hong Kong, so that copyrightpiracy can be combated effectively at the production level.

Under the Prevention of Copyright Piracy Ordinance, a personmust obtain a licence for manufacturing either optical discs orstampers in Hong Kong at the premises specified in the licence.All optical discs and stampers produced must be permanentlymarked with a code unique to each licensed manufacturer. Officersfrom the Customs & Excise Department in Hong Kong (Customs)are empowered to inspect licensed premises without a warrant.The maximum penalty for manufacturing either optical discs orstampers in Hong Kong without a licence is a fine of US$128,200and 4 years’ imprisonment.

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Do I need to register my work in order to get copyrightprotection in Hong Kong?

No. Copyright is an automatic right. It arises when a work is created.Unlike other IPRs such as patents, trademarks, and industrial designs,it is not necessary to register a work in Hong Kong in order to getcopyright protection.

Is there any copyright protection for copyright workscreated in places outside Hong Kong?

Yes. Copyright works of authors from any place in the world, orworks first published anywhere in the world, qualify for copyrightprotection in Hong Kong.

Is there any liability for circumventing copy-protectiondevices in an interactive digital entertainment product?

Under the Copyright Ordinance, a copyright owner can seek civilremedies from a person who knowingly makes or sells devicesspecifically designed or adapted to circumvent a copy-protectiondevice used by the copyright owner. There are recent cases in HongKong showing the successful use of the provisions by the copyrightowners to seek redress in the courts.

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Is parallel importation of digital entertainment productsinto Hong Kong lawful?

Parallel importation of a copyright work usually means theimportation into Hong Kong (without the permission of the copyrightowner) of a copy of that work which was lawfully made in theplace of origin. This is not allowed under the law.

With the amendment of the Copyright Ordinance that took effecton 28 November 2003, restriction on parallel importation no longerapplies to articles which contain a computer program (commonlyknown as computer software products). However, the restrictioncontinues to apply if the principal attraction of a computer softwareproduct is musical sound or visual recordings, movies, televisiondramas, e-books, or a combination of them.

How are the IPRs in interactive digital entertainmentproducts protected by the trade mark legislation?

Trade marks are used in interactive digital entertainment productsand their related services to identify their origin. The Trade MarksOrdinance provides for the registration of trade marks in HongKong. Subject to contrary proof, the registration of a person asthe owner of a trade mark under the Trade Marks Ordinance isevidence of the validity of the original registration of the trademark in all legal proceedings in relation to the mark.

In addition, under the provisions of the Trade Descriptions Ordinance(which deals with counterfeiting on a commercial scale), it is anoffence to sell an infringing copy of an interactive digitalentertainment product to which a forged trade mark has beenapplied.

8 How are the IPRs in interactive digital entertainmentproducts protected by the Patents Ordinance?

Novel inventions can be protected through registration as patentsunder the Patents Ordinance. Products, substances, or processeswhich are new and inventive can be protected. In Hong Kong, thereare two types of patents, namely, standard patents and short-termpatents. The term of protection of a standard patent is up to 20years whereas the term of protection of a short-term patent is upto 8 years. The protection through short-term patents suits, inparticular, those interactive digital entertainment products with ashort commercial viability. Civil action can be taken againstinfringement of a patent pursuant to the Patents Ordinance.

Computer program by itself is not registrable for patent. Forexample, a computer program that merely automates a process thatwas previously done mentally or manually cannot be protected bypatent. However, if an invention involves the use of a computerprogram to solve a technical problem, then the invention may begranted patent protection.

How are the IPRs in interactive digital entertainmentproducts protected by the Registered Designs Ordinance?

A new external feature of shape or decorative design applied to adigital entertainment product can be protected under the RegisteredDesigns Ordinance through registration. Civil action can be takenagainst infringement of a registered design pursuant to the RegisteredDesigns Ordinance.

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What should I do if someone infringed my IPRs? Whomshould I turn to?

The legislation in Hong Kong provides for both criminal sanctionsand civil remedies relating to infringement of IPRs. While therights owners are free to take civil actions against the unauthorizedexploitation of their IPRs, they may refer criminal infringementcases relating to copyright piracy and trademark counterfeiting toCustoms for investigation and prosecution. Report of criminaloffences relating to IPRs infringement can be made to Customs’24-hour hotline (Tel: (852) 2545 6182).

Does Hong Kong have a reward system for informers ofIPRs infringement?

To encourage the public to report offences relating to infringementof IPRs, Customs has collaborated with the copyright industry inoperating an anti-piracy reward scheme since January 1998. Cashrewards will be paid to any person providing Customs withinformation that leads to the seizure of infringing copies of copyrightworks and optical disc replication machines used to produce pirateddiscs. Over the past 5 years, a total cash reward of US$197,436has been paid out to the informers.

Does a copyright owner need to be physically in HongKong to support criminal proceedings in relation to theinfringement of copyright?

To enable Customs to institute criminal proceedings againstcopyright offenders, the copyright owner is required to prove thesubsistence and ownership of copyright in the work in question

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and to give evidence relating to the infringement in court. Usually,proof of copyright subsistence and ownership can be done by wayof affidavits and evidence of infringement can be provided througha competent local representative who is duly authorised by thecopyright owner. Except in rare circumstances where copyrightownership or licensing is in dispute, the copyright owner is notnormally required to be physically in Hong Kong for the criminalproceedings.

What is the penalty for a criminal offence under theCopyright Ordinance? Is there a minimum penalty forsuch an offence?

Under the Copyright Ordinance, it is an offence for any personto make for sale, import, export, possess in business, or sell aninfringing copy of a copyright work. The maximum penalty forsuch copyright offence is a fine of US$6,410 per infringing copyand imprisonment for 4 years.

Hong Kong courts take a serious view of copyright offences, whichis reflected by the heavy penalties imposed by the judges. In recentyears, more than 50% of the offenders have been sentenced toimprisonment on an average term between 6 to 12 months, withthe longest term being 48 months in a 2001 case.

It is also an offence for any person to make, import, export, possess,or sell an article specifically designed for making infringing copiesof a copyright work for sale, for example, a stamper containingpirated copyright works. The maximum penalty is a fine ofUS$64,l00 and 8 years’ imprisonment.

The penalty stipulated in the Copyright Ordinance is the maximumpenalty that can be imposed by the court; there is no minimumpenalty for copyright offences.

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Is the penalty for the second or subsequent infringementof copyright by the same offender higher than that forthe first one?

The courts have a wide discretion in imposing penalty up to themaximum limit stipulated under the Copyright Ordinance. Thecourts normally impose heavier penalty for repeated infringementsby the same offender.

Is it true that the courts in Hong Kong impose a lighterpenalty on young and old offenders for copyright offences?

The level of penalty stipulated in the Copyright Ordinance isapplicable to all offenders, irrespective of their age. Under HongKong law, the minimum legal age for criminal liability is 10.Therefore, young offenders above the age of 10 can be subject toprosecution. In 2002, 163 young offenders below the age of 16were convicted of copyright offences, and 23 of them werecommitted to different forms of detention as penalty (for example,they were put in detention centres or training centres).

In fact, the trend is that more and more copyright offenders aresentenced to jail. Before 1999, only about 26% of convictedcopyright offenders were given jail sentences. The proportion hasrisen to an average of 52% from 1999 onwards. The majority ofthe imprisonment terms are in the range of 6 to 12 months and thelongest term is 48 months which was handed down in a 2001 case.

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Which government departments are responsible forintellectual property protection in Hong Kong?

The Intellectual Property Department of the Government of HongKong (IPD) and Customs provide a focal point for protection ofIPRs.

The missions of IPD include:

(a) to maintain the protection of IPRs to the highest internationalstandards, so that Hong Kong remains a place where creativityand talent can flourish ; and

(b) to promote awareness of IPRs of the individual, and a respectfor the rights of others.

Customs is responsible for the enforcement of the criminal provisionsrelating to the infringement of IPRs in Hong Kong. Customs takesproactive action against infringement of IPRs upon receipt ofcomplaints from the rights owners, or upon intelligence that it hasgathered.

What has IPD done to promote public awareness of theimportance of protecting IPRs in Hong Kong?

IPD maintains a well-planned and targeted public educationprogramme. A total of US$3 million was spent over the 1999-2003financial years. In the financial year of 2003-04, IPD has budgeteda sum of US$869,230 to sustain its publicity and educational efforts.

The activities under the public education programme include year-round school visits, campaigns, media broadcasts, exhibitions,roadshows and TV documentary of anti-piracy programs broadcastthrough television, radio, and in-bus television shows. There are

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also media-star endorsements to promote the use of genuine goodsin the "No Fakes" and "I Pledge" campaigns. There are already121 retailers with 2000 outlets pledging to sell only genuine goods,and over 7500 members of the public pledging to buy only genuinegoods.

Starting from November 2003, IPD and Customs have been workingtogether with the Tourist Association, Consumer Council and retailorganizations to promote trade in genuine trademark and copyrightgoods to tourists from Mainland and overseas.

What steps have been taken to enhance the co-operationbetween the Hong Kong Government and the intellectualproperty owners?

Full co-operation between the Hong Kong Government andintellectual property owners is vital in the battle against copyrightpiracy and trademark counterfeiting activities. From time to time,Customs has held regular meetings with representatives of thecopyright industry (including those in the digital entertainmentindustry) to exchange intelligence and formulate effective anti-piracy strategies. The aim is to promote mutual understanding andenhance enforcement co-operation on intellectual property protection.

Is there anything the digital entertainment industry cando to help the Hong Kong Government to prevent theinfringement of IPRs?

Since prosecution of infringement of IPRs requires the assistanceof the rights owners, the digital entertainment industry can co-ordinate amongst individual players and establish a smooth andco-operative working relationship with Customs to combat piracy

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as a team. It would be most helpful if a competent localrepresentative can be appointed to provide prompt assistance toCustoms in its enforcement action. The digital entertainmentindustry can also consider improving its anti-piracy technologyand measures, for example, by including up-to-date copy-protectiondevices into its software applications to limit the possibility ofinfringement.

Besides taking enforcement action against infringementactivities at the retail level, does Customs have an overallenforcement strategy to suppress piracy activities at thesource of the infringement activities?

Apart from targeting at frontline participants at the retail level,Customs' enforcement actions cover all levels of infringementactivities (including the import, export, manufacturing anddistribution of infringing goods). In a recent successful enforcementcase, 1.34 million pirated optical discs were seized by Customsfrom an outgoing vessel. Customs also has the statutory powerto combat against offences involving syndicates, and the courtscan impose heavier penalties involving distribution/retail syndicates.

Has Customs received any complaints from the rightsowner concerning piracy of digital entertainmentproducts?

Yes. But the number of complaints received from rights ownersof digital entertainment products stands at a very low levelthroughout these years. Customs encourages the rights owners ofdigital entertainment products to lodge complaints about criminal

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infringement activities that they have discovered in Hong Kong,and to provide assistance to Customs in enforcement actions againstthe offenders. Customs is fully committed to combating all formsof copyright piracy and will carry out criminal investigation inresponse to each and every complaint received.

Is Customs taking no action against copyright piracy ofdigital entertainment products given the lack of complaintsfrom the rights owners?

Despite there are few complaints received from the rights owners,Customs is taking proactive actions to seize infringing copies ofdigital entertainment products that are discovered in its routineanti-piracy enforcement operations. In 2002, about 2.7 millioninfringing game discs were seized. While charges could not be laidin respect of most of the seized goods due to the lack of co-operationfrom the rights owners, these goods were nevertheless forfeited.

What new measures have been implemented by Customsto strengthen criminal enforcement actions against piracyof digital entertainment products?

Customs seeks to enhance communication and co-operation withthe copyright industry (including the digital entertainment industry)in its fight against copyright piracy. Regular meetings have beenset up with representatives of the industry to exchange informationon copyright piracy and to discuss enforcement co-operation.

In addition, Customs has strengthened its intelligence function toensure more effective action against criminal offences. In July2002, the Intelligence Bureau comprising some 200 officers was

established to co-ordinate intelligence activities (including thecollection and analysis of intelligence relating to infringement ofIPRs). With enhanced intelligence support, the IPR enforcementteams of Customs are able to devise more effective strategies tofight against copyright piracy activities.

Is there any co-operation among Hong Kong, Macao andMainland in the protection and enforcement of IPRs?

There is close co-operation among the relevant authorities in

Hong Kong, Macao and Mainland in the protection and

enforcement of IPRs.

Customs has established and maintained a coordination mechanism

with its counterpart in the Guangdong Province (which is in the

south part of Mainland and close to Hong Kong) since 1996 for

the exchange of intelligence on cross-border infringing activities.

The two authorities also carry out joint enforcement operations

from time to time. Similarly, Customs holds regular meetings with

the Macao customs authority to exchange information and

intelligence on protection and enforcement of IPRs.

In August 2003, the Guangdong/Hong Kong Expert Group on the

Protection of Intellectual Property Rights was set up to strengthen

co-operation between the two regions in the protection and

enforcement of IPRs. By early 2004, an enforcement task force

will be set up under the Expert Group to coordinate and spearhead

efforts against cross-border piracy and counterfeiting activities.

Hong Kong and Macao have collaborated with Guangdong in

setting up an intellectual property database which is available on

the Internet (http://www.ip-prd.net) to disseminate information on

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their respective intellectual property systems. IPD, the relevant

authority in Macao and the State Intellectual Property Office of

Mainland also take turn to host an annual intellectual property

symposium to have exchanges of the latest developments of

intellectual property in the three places.

Website*ht tp: / /www.info.gov.hk/ ipd

Emai l*enquiry@ipd.gov.hk

Enquiry Hot l ine(24-hour)*(852) 2961 6901

Fax*(852) 2574 9102

Address* 24th Floor, Wu Chung House,

213 Queen's Road East, Wanchai ,

Hong Kong

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Intellectual Property DepartmentThe Government of the Hong KongSpecial Administrative RegionFebruary 2004