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IP Newsletter, December 2006

The conviction of the first person in the world charged with using BitTorrent technology to infringe copyrighted materials was upheld recently by the Hong Kong High Court. In HKSAR v Chan Nai Ming, HCMA 1221/2005 [2006], Chan Nai Ming uploaded movies to the Internet allowing others to download. An officer from the Customs and Excise Department, the Hong Kong agency in charge of criminal enforcement of copyright laws, downloaded three films Mr Chan made available to a newsgroup. Since his IP address was part of the BitTorrent file, they were able to locate his computer and raid his home.

Charged, tried and convicted of three counts of attempting to distribute infringing copies of the films and sentenced to concurrentthree months imprisonment for each charge, Mr Chan appealed. His lawyers argued that Mr Chan did not initiate the downloading; indeed, he played no part in the actual downloading. All he did was to make the films available online for downloading.

Is it distribution?

His lawyers claimed that ‘distributing’ requires an active physical transfer to a recipient. Mr Chan’s was merely a passive role. He made the files available but did nothing more. The files were digital, not physical, and remained in Mr Chan’s computer so there was no physical transfer to the downloaders. It follows that simply making the files available was not distributing.

The court was not convinced. Mr Chan met the criteria for distribution said the judge. He put the movies onto his computer, converted them to BitTorrent files, published the files on the Internet and stayed online long enough so others could download the complete movie onto their computers – a process that required him to remain online for hours. He did everything required to effect distribution. The court also noted that Hong Kong’s Copyright Ordinance intended to cover copies of works in digital format and that the film files were not physical could not save Mr Chan from conviction.

Someone must pay

Mr Chan did not gain financially by uploading the films. He simply shared the films with others and probably thought no one was harmed by his altruism. But the court noted that the copyright owner was a victim deprived of lost revenues from the films. Since this type of crime was hard to detect and difficult to control, a message must be sent that such action would not be treated leniently. Thus, Mr Chan’s prison term was proper and his appeal was dismissed.

Mr Chan disagrees and his lawyers just filed an appeal to the Court of Final Appeal, Hong Kong’s highest court.

Government action

The Hong Kong Government also weighed in. In a just-released consultation paper, the government calls for extending criminal prosecution to downloaders of copyrighted materials. Secretary for Commerce, Industry and Technology Joseph WP Wong said that copyright laws must meet the challenges facing Hong Kong in the digital era. Responding to concerns of copyright owners, the government notes that peer to peer technology has made it possible for large scale copyright infringements to occur instantly. So, the government has to consider expanding criminal liability to cover unauthorized downloading of materials from the Internet. The government indicated its resolve to take rigorous enforcement action to combat online piracy.

It is too early to see if the government’s proposals will be adopted by the Legislative Council. There are other considerations including the use of the Internet to disseminate information, intrusion of government into private use of the Internet, excessive regulation of the use of the Internet and its effect on Hong Kong’s reputation and other issues. One thing is clear: the government will side with copyright owners. So downloaders, beware.

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