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### Viewing cable 06HONGKONG4875, HONG KONG PROPOSES UPDATING IPR LAWS TO COMBAT

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06HONGKONG4875 | 2006-12-29 03:58 | 2011-08-23 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Consulate Hong Kong

`

    VZCZCXRO6164
    PP RUEHCN RUEHGH RUEHVC
    DE RUEHHK #4875/01 3630358
    ZNR UUUUU ZZH
    P 290358Z DEC 06
    FM AMCONSUL HONG KONG
    TO RUEHC/SECSTATE WASHDC PRIORITY 9953
    INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
    RHEHNSC/NSC WASHDC PRIORITY
    RUCPDOC/USDOC WASHDC PRIORITY

` `

    UNCLAS SECTION 01 OF 02 HONG KONG 004875

    SIPDIS

    SENSITIVE
    SIPDIS

    STATE FOR EB/TPP/MTA/IPC/FELSING
    STATE FOR EB/IPE
    STATE FOR EAP/CM
    NSC FOR DWILDER, KTONG
    USDOC FOR MCQUEEN
    DEPT PASS USTR FOR ACELICO, RBAE
    DEPT PASS TO USPTO FOR BMCCAFFREY, TWILLIAMS, SLEWIS

    E.O. 12958: N/A
    TAGS: KIPR ECON CH HK
    SUBJECT: HONG KONG PROPOSES UPDATING IPR LAWS TO COMBAT
    DIGITAL PIRACY

    REF: A. A) HONG KONG 4635

         ¶B. B) HONG KONG 4743

    ¶1. (U) SUMMARY:  On December 19, the Hong Kong Commerce,
    Industry and Technology Bureau (CITB) published 'Copyright
    Protection in the Digital Environment' a public consultation
    document to address internet piracy in Hong Kong.  The
    document proposes that the Hong Kong government (HKG)
    institute criminal liability for illegally
    uploading/downloading copyright materials, create a blanket
    clause in the Copyright Ordinance to cover copyright
    infringement using any form of digital technology (current
    and future), mandate Internet service providers (ISPs) retain
    records of their clients, online activities for longer
    periods of time, and hold ISP,s liable if their clients
    commit flagrant online piracy.  It remains unclear what laws
    or regulations, if any, the HKG will put forward after the
    public consultation process period ends in April 2007.
    Representatives from the film and recording industries
    expressed support for the consultation process and urged
    quick implementation of new regulations, but internet privacy
    groups expressed dismay over the potential loss of privacy
    rights.  ISPs criticized the government, claiming that the
    proposals would be too costly and could stifle technological
    creativity, innovation, and information flow.  END SUMMARY.

    ¶2. (U) In announcing this "digital agenda" initiative, Hong
    Kong Secretary for Commerce, Industry and Technology Joseph
    Wong stated that recent technological advances mandate Hong
    Kong once again review its copyright laws as they relate to
    internet piracy.  He noted that a proactive approach to
    internet IPR infringement would improve the city's reputation
    as a trade and commercial center, but the HKG has not yet
    committed itself to any of the internet safeguards proposed
    in the consultation document.  Public statements by Wong and
    other CITB officials underscore the need for careful
    deliberation and a 'balancing' of competing interests, such
    as personal privacy protection, the free flow of information
    online, the development of Hong Kong as an internet services
    hub, and the importance of promoting innovation in Hong Kong.
     (NOTE:  Hong Kong already proposed amending it's copyright
    ordinance, but the existing amendment -- currently under
    debate in the Legislative Council -- does not focus
    specifically on the internet and digital environments.  This
    new public consultation on digital piracy is in addition to
    the existing copyright amendment.  END NOTE)

    -----------------------------------------
    Stiffer penalties and criminal sanctions?
    -----------------------------------------

    ¶3. (U) Stakeholder concerns and the successful BitTorrent
    prosecution (reftel B) have underscored to government and
    industry groups that online pirates increasingly use new
    technologies to mass produce and distribute copyrighted works
    around the world from Hong Kong.  The HKG fears that this
    growth in online piracy could undermine the city,s role as a
    regional entertainment and technology hub.  Therefore, Hong
    Kong is considering whether to criminalize unauthorized
    filesharing of copyrighted works on the internet.  CITB has
    yet to determine the extent of criminal liability for illegal
    filesharing, but proposed three scenarios for consideration:
    1) criminalizing all unauthorized downloading, including
    downloading of songs, movies, articles and photographs; 2)
    criminalizing illegal filesharing using peer-to-peer (P2P)
    technology for songs and movies; and 3) criminalizing only
    large-scale filesharing activities and those that result in
    commercial profit.

    ¶4. (SBU) CITB is also deliberating whether to implement a
    blanket protection for all copyrighted works transmitted
    through digital means.  This clause could lead to either
    criminal or civil sanctions and would apply to P2P
    technology, internet television signals, 3G technology, other
    mobile digital devices, and any future technology.  CITB
    maintains that this blanket approach would ensure that local
    customs, police and court officials always have effective
    tools to combat IPR infringement in a fast-changing
    technological era.

    ¶5. (U) To address stakeholder concerns regarding the high

    HONG KONG 00004875  002 OF 002

    cost of bringing a civil claim to court, the HKG also is
    examining whether to follow the United States and Singapore
    in implementing statutory damages for online copyright
    infringement.  The consultation document proposes that
    statutory damages should depend on the nature of the piracy
    act and the economic benefit gained through piracy.

    --------------------------------------
    Privacy Concerns and the Role of ISPs
    --------------------------------------

    ¶6. (U) CITB also is examining the introduction of civil
    liability for ISPs if they fail to address online copyright
    violations in a proactive manner, such as failing to remove
    infringing materials or not blocking access to infringing
    sites.  ISPs claim that that they cannot and should not
    monitor all the activities of their customers.  They argue
    that such actions would increase costs and make Hong Kong a
    less attractive place for technology and internet companies
    to conduct business.  ISPs and other public interest groups
    also warn that forcing ISP,s to remove or block access to
    material on the internet could limit public access to
    information as the fear of liability could prompt ISPs to
    overzealously block non-infringing material.

    ¶7. (U) As an alternative to introducing civil liability for
    ISPs, CITB is examining new industry guidelines and mandatory
    codes of practice to combat piracy.  One such regulation
    would mandate that ISPs keep a log ) possibly up to two
    years ) of their clients, internet activity, which law
    enforcement and rights holders could access more easily.  As
    part of this program, Hong Kong is exploring creating a
    mechanism for rights holders to request information from ISPs
    on clients who they believe are engaged in online piracy.
    However, CITB has asked for stakeholder and public views on
    how this mechanism should be structured and who (ISPs, the
    government, or rights holders) should bear the costs.  As in
    all the proposals, Hong Kong is examining how other advanced
    economies ) the U.K, Singapore, Australia, Canada, and the
    United States ) handle this issue with much of the focus on
    the Digital Millennium Copyright Act.

    ---------------
    Early Reactions
    ---------------

    ¶8. (SBU) Representatives of the Hong Kong Internet Society
    and ISP Association balked at the proposals for ISPs to
    assume more responsibility in fighting piracy, citing privacy
    concerns and the enormous expense of record keeping.  If
    implemented, they urge the government to develop clear
    guidelines for sharing and safeguarding online activity
    records to protect customer privacy.  They also caution that
    legal liability for ISPs could create a hostile operating
    environment for providers in Hong Kong, and "drag Hong
    Kong,s internet development backward."  The ISP Association
    also feels that the costs of liability and monitoring would
    force providers to increase monthly service fees.  Alice Lee,
    a Hong Kong University intellectual property law professor,
    voiced concern over the blanket protection proposal because
    it would give too much power to copyright holders.  Lee
    claims that Hong Kong can use existing laws to fight the most
    flagrant abusers of intellectual property and that a blanket
    protection to cover future technologies would impede
    innovation and reduce the free flow of information.

    ¶9. (SBU) Ricky Fung of the International Federation of the
    Phonographic Industry (IPFI) urged swift discussion and
    implementation of the proposals, which would improve law
    enforcement ability to keep up with new forms of intellectual
    property theft and help the recording industry recover from
    years of online piracy losses.  Woody Tsung of the Hong Kong,
    Kowloon and New Territories Motion Picture Industry welcomes
    the possibility of criminal sanctions for illegal downloads,
    stating that Hong Kong,s BitTorrent prosecution has reduced,
    but still not squashed, the practice.  Sam Ho of the Motion
    Picture Association concurs that strict penalties are the
    best deterrent for online piracy, which has replaced optical
    disk piracy as the main IP threat to the industry.
    Sakaue

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