VZCZCXRO4872
PP RUEHCN RUEHGH RUEHVC
DE RUEHHK #4743 3480928
ZNR UUUUU ZZH
P 140928Z DEC 06 ZDK
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC PRIORITY 9799
INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
RUEHJA/AMEMBASSY JAKARTA PRIORITY 1653
RUEHKL/AMEMBASSY KUALA LUMPUR PRIORITY 7117
RUEHML/AMEMBASSY MANILA PRIORITY 3170

UNCLAS HONG KONG 004743 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB/TPP/MTA/IPC/FELSING 
STATE FOR EB/IPE 
STATE FOR EAP/CM 
NSC FOR DWILDER, KTONG 
DEPT PASS USTR FOR ACELICO 
 
E.O. 12958: N/A 
TAGS: KIPR ECON CH HK
SUBJECT: HONG KONG COURT UPHOLDS WORLD,S FIRST BITTORRENT 
IPR CONVICTION 
 
 
 ¶1. (SBU) SUMMARY:  On December 12, the Hong Kong Court of 
Appeals upheld the 2005 conviction and three-month jail 
sentence of a 39-year old Hong Kong man for distributing 
illegal copies of American films on the internet.  The man 
used the BitTorrent peer-to-peer (P2P) file-sharing system to 
upload films to the internet where they could be downloaded 
illegally by other internet users.  Local representatives of 
the Motion Picture Association (MPA) expressed support for 
the decision, noting that internet piracy is replacing 
optical disks as the major source of piracy in developed 
economies.  MPA noted that last year,s conviction serves as 
a deterrent and explains why internet piracy is not as 
pressing a concern in Hong Kong as it is in other developed 
Asian economies. 
 
¶2. (U) BACKGROUND:  On October 24, 2005, a Hong Kong court 
convicted Hong Kong resident Chan Nai-ming of violating Hong 
Kong's Copyright Ordinance for distributing illegal copies of 
the Hollywood films "Daredevil," "Miss Congeniality," and 
"Red Planet" using the popular BitTorrent peer-to-peer (P2P) 
file-sharing software.  As a first-time offender, he was 
sentenced to three-months in prison.  This case was 
reportedly the first BitTorrent-related conviction in the 
world.  At the time, local stakeholders and Hong Kong Customs 
and Excise Department said that the conviction offered a 
strong deterrent against the use of P2P software to share 
pirated digital content in Hong Kong.  The arrest and 
subsequent conviction of Chan resulted, according to Hong 
Kong,s Commerce, Industry and Technology Bureau, in a 
significant drop in Hong Kong of instances of posting 
copyrighted materials on the internet using BitTorrent. 
 
¶3. (U) During the appeal, Chan,s lawyers argued that his 
action of uploading copyrighted materials to the internet was 
different from actively &distributing8 the files to others. 
 His lawyers stated that uploading was simply the passive act 
of making the material available, while those who actively 
downloaded the material should be held accountable as the 
true infringers.  Lawyers also argued that the Copyright 
Ordinance applies only to "tangible materials," not 
electronic distribution of data or files.  Court of Appeals 
Justice Clare-Marie Beeson rejected both arguments, agreeing 
with the lower court judge that uploading films to a public 
forum was a form of copyright infringement.  She also 
concurred with the lower court that the Copyright Ordinance 
covers digital distribution. 
 
¶4. (U) The Court also rejected Chan's contention that the 
three-month sentence was excessively harsh, noting that he 
could have received up to 4 years in prison.  The judge 
stated that those using BitTorrent are aware of the criminal 
implications of uploading films and that the net harm done to 
the copyright owners outweighed the fact that BitTorrent 
uploaders do not profit from their actions.  Chan began 
serving his prison term on December 12, but is expected to 
file an appeal to the Court of Final Appeal, Hong Kong,s 
highest court. 
 
¶4. (SBU) Sam Ho of the Motion Picture Association (MPA) 
applauded the court,s decision, noting that MPA cooperated 
with the Hong Kong Intellectual Property Department on this 
case.  He noted that internet piracy is replacing optical 
disk piracy as the primary form of IPR theft in the region. 
The Court of Appeals decision to uphold the conviction and 
prison sentence &helps Hong Kong combat the issue.  Internet 
piracy now is less of a problem for Hong Kong than it is for 
other places in the world, particularly Taiwan, where the 
practice remains widespread.8 
 
Cunningham