Speeches and Articles by Former Consul General James B. Cunningham

"Protecting Intellectual Property is Protecting Your Interests"
by U.S. Consul General James B. Cunningham
May 17, 2006

(The Chinese version of this article was published by Hong Kong Economic Times on May 17, 2006, and this article is not for commercial use.)

It was not so long ago that Hong Kong was known as a place to buy fake watches and pirated DVDs. This was not unusual in Asia, where most of the fake products resembled European or U.S. brands. In the late 1990s, however, Hong Kong authorities began a systematic crackdown. The Legislative Council passed new copyright and trademark laws that enabled the Hong Kong Customs & Excise Department to go after the supply chain that fed both the production of illicit goods and the end-users of infringing products. Hong Kong Customs formed dedicated intellectual property rights (IPR) protection units to gather intelligence and conduct raids. The Hong Kong Government launched an educational campaign to reach the general public. Reflecting those accomplishments, the Office of the U.S. Trade Representative had not cited Hong Kong since 1999 in its "Special 301" Annual Report on Intellectual Property Rights, which it uses to convey serious concerns about problems in named countries.

Intellectual property does not belong only to foreigners. The Hong Kong movie industry and local emerging high-value services companies need protection in the same way as firms in Hollywood and Silicon Valley. Creative industries across Asia will not develop without solid intellectual property protection. Hong Kong authorities and local industry have made genuine progress in support of strong intellectual property protection, and we are glad to see that more local voices are speaking out. The recent Canto pop stars' production of a song against illegal music downloads is just one example of local artists' concern for intellectual property rights protection.

Protection of intellectual property is important because it encourages investment, attracts talent, creates jobs and expands economies. Hong Kong's crackdown on piracy thus advanced its own interests. It also demonstrates determination to abide by its international commitments, including the World Trade Organization obligation to provide criminal procedures and penalties sufficient to deter counterfeiting and piracy on a commercial scale.

In recognition of the importance of intellectual property protection throughout Asia, this week the U.S. Consulate General in Hong Kong organized a regional workshop on the theme, "Intellectual Property Rights Enforcement: Creating a Stronger Deterrent." Judges and enforcement officials from Hong Kong, mainland China, Macau, Singapore, Japan, Korea, Malaysia, Indonesia, Thailand, the Philippines and Vietnam met May 15-16 to share best practices for creating effective deterrents to intellectual property violations, particularly within the legal system.

The discussion at the workshop made clear that it is not enough to simply make piracy a crime even if an economy also actively pursue pirates. The penalties pirates face must be severe enough to act as a deterrent; they cannot be discounted as just "a cost of doing business". Hong Kong has set a laudable example with the first conviction anywhere in the world of an individual for illegally uploading movies to the Internet using the popular "Bit-Torrent" software. With over seventy percent of Hong Kong households connected to the Internet (the majority via broadband), this October 2005 ruling was important. The Hong Kong Customs and Excise Department estimated that copyright violations using Bit-Torrent fell by 80% in the ten months between the arrest and conviction in this case, showing its deterrent effect.

In view of Hong Kong's positive record in protecting IPR, we are keenly interested in the draft of its new Copyright Ordinance, the current version of which expires in July. My government hopes that the new ordinance will further strengthen Hong Kong's standard and maintain Hong Kong as a leader in the field. There are still concerns. For example, the annual Business Software Alliance survey indicates that over fifty-two percent of Hong Kong businesses engage in software piracy, well above the average in many developed countries. The new ordinance should create stronger barriers to infringement inside businesses, not impediments to enforcement. "Fair dealing" provisions for educational and public institutions in the draft are similar to fair use provisions in U.S. law, but the concept is new to Hong Kong. We encourage continued Hong Kong Government efforts to educate the public to ensure that the users of the copyrighted works do not abuse the provisions to engage in large scale unlicensed use of works.

The discussions from our workshop also showed that when legislators, prosecutors, judges, and law enforcement officials work together to create an environment where society stands up to infringers with deterrent sentencing, all law-abiding citizens benefit. Our workshop this week is part of a continuing dialogue that we hope will help bring all countries in the Pacific Rim together on this important issue. As economies become increasingly focused on higher value goods and services, they need to strengthen protection of one of their most valued commodities: their creativity. We look forward to continued close cooperation with Hong Kong and our other regional partners.

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