Copyright - Criminal Liability For Directors And Partners To Come Into Force

An important and controversial amendment to the Copyright Ordinance will come into force on 11 July 2008. The provision introduces criminal liability for company directors and partners in relation to certain acts of copyright infringement committed by the company or partnership.

The amendment covers infringing acts relating to certain types of copyright works - computer programs, TV dramas and musical sound or visual recordings. Under the new s118 (2A) of the Copyright Ordinance, a criminal offence is committed if one of these specified works "is possessed for the purpose of or in the course of trade or business with a view to its being used for that trade or business." The most obvious examples would be the possession of infringing software for use in the business or infringing music videos used in a karaoke bar.

From 11 July, where the company or partnership has committed an infringing act under s118(2A), the directors or partners responsible for the internal management of the company or partnership, at the time the act was committed, will be presumed to have also committed the act unless they can prove that they did not authorise the infringement.

Evidence will need to be adduced to show that the infringement was not authorised including whether the directors or partners had:

• introduced policies or practices against use of infringing copies by the company or partnership;

• set aside financial resources and directed the use of the resources towards the acquisition of a sufficient number of copies of the copyright work to which the proceedings relate or incurred expenditure for the acquisition of authorised copies;

• taken action to prevent use of infringing copies.

Please note that the provisions regarding criminal liability for the dissemination of printed matter are still not in force.

It is essential that businesses take steps to acquire licences or legitimate copies of copyright works used in their business. Copyright practices should be reviewed and suitable policies must be put into place and properly policed. The Copyright Law in Hong Kong is very complex and certain key provisions of the Copyright (Amendment) Ordinance 2007 are not yet in force. If you would like more information on this area please contact us.

For further details, please contact us at ip@deaconslaw.com.