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Cablegate: Senior Ipr Attache Mark Cohen Discusses Prc And

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.

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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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