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### Viewing cable 07HONGKONG1779, SENIOR IPR ATTACHE MARK COHEN DISCUSSES PRC AND

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07HONGKONG1779 | 2007-07-05 03:44 | 2011-08-23 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Consulate Hong Kong

`

    VZCZCXRO3241
    PP RUEHCN RUEHGH RUEHVC
    DE RUEHHK #1779/01 1860344
    ZNR UUUUU ZZH
    P 050344Z JUL 07
    FM AMCONSUL HONG KONG
    TO RUCPDOC/USDOC WASHDC PRIORITY
    RUEHC/SECSTATE WASHDC PRIORITY 2183
    INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
    RHEHNSC/NSC WASHDC PRIORITY

` `

    UNCLAS SECTION 01 OF 02 HONG KONG 001779

    SIPDIS

    SENSITIVE
    SIPDIS

    STATE FOR EB/TPP/MTA/IPC/FELSING
    STATE FOR EB/IPE
    STATE FOR EAP/CM
    STATE FOR INR/EAP
    NSC FOR DWILDER, KTONG
    DEPT PASS USTR FOR SMCCOY, ACELICO, RBAE
    DEPT PASS TO USPTO FOR TBROWNING, CWONG
    BEIJING FOR COHEN

    E.O. 12958: N/A
    TAGS: CH ECON ETRD HK KIPR KJUST PINR PGOV
    SUBJECT: SENIOR IPR ATTACHE MARK COHEN DISCUSSES PRC AND
    HONG KONG IP ISSUES WITH LOCAL GOVERNMENT AND STAKEHOLDERS

    REF: HONG KONG 1363

    ¶1. (SBU) Summary:  Legislative Councilor Sin Chung Kai told
    visiting Beijing Intellectual Property Senior Attache Mark
    Cohen and ConGen Hong Kong staff that Hong Kong's amended
    copyright law should generally please copyright owners,
    including U.S. companies, although he noted that a statutory
    "fair use" provision will have to be strengthened later.  The
    recent decision by the Court of Final Appeal to uphold the
    conviction of a Hong Kong resident for illegally uploading
    copyrighted material using BitTorrent software should lead to
    increased enforcement activities against infringement using
    Peer-to-Peer (P2P) software, he added.

    ¶2.  (SBU)  In a subsequent meeting with the Hong Kong Customs
    and Excise Department (CED), Hong Kong government (HKG)
    officials offered mixed responses on Hong Kong's legal status
    regarding accession to the WIPO Internet Treaties (WIPO
    Treaties).  All agreed that Hong Kong's copyright laws
    already met most of the requirements of WIPO Treaties
    provisions.  CED's Intellectual Property Investigation Bureau
    actively conducts enforcement against trade fair violations.
    Cooperation with mainland customs officials is frequent,
    although less regular with mainland police.  Cohen also
    discussed mainland IP issues with AmCham Hong Kong's IP
    committee and with a group of international IP lawyers based
    in Hong Kong.  END SUMMARY.

    ----------------------------------
    Legco and the Copyright Amendment
    ----------------------------------

    ¶3.  (SBU) On June 13, ConGen Hong Kong staff and Embassy
    Beijing Intellectual Property Senior Attache Mark Cohen met
    with Legislative Councilor and Democratic Party Vice Chair
    Sin Chung Kai, who represents the functional constituency for
    the Information Technology sector.  Sin told Cohen that the
    government yielded to some stakeholder concerns, including
    director's liability for software infringement.  As for
    publishers, the amendment introduces a "fair use" concept for
    textbooks.  However, this clause remains controversial for
    stakeholders who argue it is too broad.  Sin noted that this
    provision will likely require further subsidiary legislation.

    ¶4.  (SBU)  NOTE:  The copyright Amendment was passed on June
    ¶27.  The government yielded to stakeholder concerns on the
    circumvention of technical prevention measures and reached a
    compromise with industry on parallel imports.  Although
    included in the amendment, the director's liability clause is
    weaker than what American stakeholders had hoped.  While it
    does make company directors liable for infringement in the
    workplace, it also provides an employee defense, which
    potentially could be used by directors to relieve themselves
    of liability.  Furthermore, this clause will not come into
    effect for approximately six to twelve months, pending a HKG
    education campaign to warn companies of the new law.
    Nonetheless, BSA and Microsoft officials expressed
    satisfaction that some form of director's liability is now
    law.  Regarding fair use, publishers remain concerned that
    the new law is too broad and does not protect rights holders
    from infringement by for-profit educational institutions (of
    which there are many in Hong Kong.)  The HKG responds that
    its fair use provision is based on U.S. copyright law.

    ¶5. (SBU) Sin also stated that Hong Kong amended its copyright
    laws between 1995-1997 to comply with TRIPS and WIPO
    treaties.  Hong Kong already complies with 95% of WIPO rules
    with the sole exceptions being provisions on public
    performance rights and moral rights.  Cohen encouraged the
    HKG to complete remaining legislative formalities.  Regarding
    BitTorrent and P2P file sharing, Sin predicted that CED would
    escalate enforcement operations against this form of
    infringement.  He noted that CED largely waited until the
    Court made its final verdict in the case and now is empowered
    to take more proactive action.

    -----------------------------
    Customs and Excise Department
    -----------------------------

    HONG KONG 00001779  002 OF 002

    ¶6. (SBU) Cohen and ConGen staff discussed enforcement
    activity with CED Intellectual Property Investigation Bureau
    Superintendent Jim Kwok, Divisional Commander Le Kam-kuen,
    Group Head Edmond Cheng, and Senior Investigator Simon Ng.
    Kwok said CED closely monitors trade exhibits for IPR
    violations.  Last year, CED intervened in three or four cases
    for IPR violations at trade shows.  Cohen responded that the
    Commerce Department has a world-wide trade fair enforcement
    initiative and requested further information on Hong Kong's
    practices.  Regarding handling of infringing materials after
    enforcement activities, CED destroys both counterfeit items
    and production lines after successful raids.  Typical
    violations involve watches, handbags, and garments.  Internet
    piracy is growing as well.

    ¶7. (SBU) CED has fast action plans for enforcement and
    accepts affidavits for copyright registration without a
    requirement for personal presence.  In such instances, a U.S.
    copyright certificate could be used to demonstrate ownership
    of copyright.  Kwok said civil IP complaints can be filed
    online, while criminal complaints require that the owner's
    representative be in Hong Kong.  Bonds are not required,
    although evidence is.

    ¶8. (SBU) Kwok added that CED's IP Investigation Bureau has
    200 staff and that they regularly exchange information with
    PRC customs authorities, noting many successful joint
    seizures with the mainland.  Coordination with mainland
    police, however, is infrequent.  Nonetheless, Kwok added that
    frequent information exchange -- including real time exchange
    -- between HKG and PRC officials allows Hong Kong to monitor
    piracy in the Mainland, especially in Guangdong.  Cooperation
    on internet related cases remains limited, however.
    Regarding education in Hong Kong, the HKG's youth ambassador
    projects resulted in thousands of reports of IPR violations.
    CED works with education officials on creating primary and
    secondary school programs to build awareness of IPR.

    -----------------------------
    AmCham and other stakeholders
    -----------------------------

    ¶9. (SBU) Cohen attended the monthly meeting of the American
    Chamber of Commerce's IP Committee.  He provided committee
    members with an overview of the recent WTO case that the U.S.
    filed concerning IP in China, nothing that the case should
    not be taken as an attack against China.  However, he stated
    that China reacted by suspending formal cooperation on IP
    matters with the U.S., including putting off the Joint
    Commission on Commerce and Trade (JCCT) and suspending
    cooperation with the EU and Japan. (Note:  The EU, Japan and
    Mexico joined the U.S. as "observers" in the case.)  In
    response to a question on IPR enforcement in China, Cohen
    suggested it was important not to misallocate resources and
    that foreign companies, including their counsel in Hong Kong,
    should encourage spending on deterrent remedies.  He told the
    committee that using foreign lawyers to pursue administrative
    or trade fair remedies is often quite expensive with minimum
    deterrent effect.
    Cunningham

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