IPR ENFORCEMENT WORKSHOP - "CREATING A STRONGER

UNCLAS SECTION 01 OF 02 HONG KONG 002091

SIPDIS

SENSITIVE
SIPDIS

STATE PASS DOJ
DOJ FOR ASHARRIN
STATE PASS USPTO
USPTO FOR TBROWNING
STATE FOR EB/IPC/EFELSING
BEIJING FOR ECON MCOHEN
BANGKOK FOR DOJ CSONDERBY

E.O. 12958: N/A
TAGS: KIPR ECON CH HK
SUBJECT: IPR ENFORCEMENT WORKSHOP - "CREATING A STRONGER
DETERRENT" HELD IN HONG KONG, MAY 15-16 2006

SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY.


1. (SBU) Summary: Post hosted a successful intellectual
property rights (IPR) enforcement workshop titled, "Creating
A Stronger Deterrent," on May 15-16, 2006. Participants
were particularly interested in the Hong Kong Government's
(HKG) experiences in combating online piracy and in the
discussion on how to establish deterrent sentencing, with
one Thai participant saying that Thailand was interested in
possibly revising its sentencing guidelines as a result of
the workshop. Participants and panel members included law
enforcement officials and judges from mainland China, the
Hong Kong Government (HKG),Macau, Malaysia, Singapore,
Vietnam, Japan, the Philippines, Indonesia, and the United
States. The Hong Kong Customs and Excise Department (CED)
strongly supported the workshop with opening remarks from
CED Commissioner Timothy Tong, a comprehensive presentation
about IPR enforcement in Hong Kong, and a tour of their
advanced anti-internet piracy lab on the second day of the
workshop. Conference participants were able to discuss and
share information on best practices for establishing
deterrent sentencing and on the latest developments in
online IPR protection. End Summary.

Positive Feedback from Participants
--------------


2. (SBU) Participants in the workshop found the Hong Kong
Government's (HKG) experiences in combating online piracy to
be particularly valuable; many participants were especially
impressed by Judge Colin Mackintosh's account of his
experience in presiding over a landmark BitTorrent case and
his reasoning in setting a relatively strong penalty against
the defendant in that case. Participants also appreciated
the discussion on establishing deterrent sentencing, with
one Thai participant saying that Thailand was interested in
possibly revising its sentencing guidelines as a result of
the workshop. Many participants noted that the hypothetical
case small group session was a valuable opportunity for them
to frankly exchange their views on differing regional norms
on IPR enforcement.

Strong Support from Hong Kong Customs
--------------


3. (SBU) Hong Kong Customs & Excise Department Commissioner
Timothy Tong delivered opening remarks emphasizing Hong
Kong's strong IPR record and what he termed to be the well-
placed position of the United States to hold such an event.
Drawing from business management principles, Tong said that
for an organization to take meaningful action, it must have
"VCS": V for value, something worth doing -- which Hong
Kong recognizes in pursuing substantial penalties to deter
IPR infringers; C for capacity, i.e., resources, which Hong
Kong has provided through many enforcement officers as well
as the backing for multiple raids and follow-through with
regard to locations where infringement takes place; and S
for support, which in Hong Kong is unqualified among policy
makers across numerous sectors such as trade, tourism, and
investment.


4. (SBU) Tong made reference to Hong Kong last year handing
down the world's first conviction for the use of BitTorrent
software to facilitate online video sharing. Digital video
uploads subsequently fell by 80 percent. The case is so
well known that the perpetrator polled as "the most
unfortunate person of the year" in a local newspaper. There
is, however, some public sympathy for infringers like this,
which is why the HKG has embarked on youth- focused programs
to generate greater support from the public to take actions
that maintain a high standard of IPR protection here.


5. (SBU) CED Intellectual Property Investigation Bureau
Senior Superintendent Tam Yiu-keung gave a detailed
presentation on Hong Kong's multi-pronged strategy for
effective IPR enforcement: enforcement action, legislation,
international cooperation, publicity and public education,
and a strong partnership with IPR stakeholders.
Participants in the workshop were also treated to a tour of
CED's advanced anti-internet piracy lab, during which CED
officials described the formation of the lab and CED's
Computer Forensic Special Interest Group, Computer Analysis

HONG KONG 00002091 002 OF 002


and Response Team, and Computer Forensic Laboratory. Since
2000, the anti-internet piracy team has processed 57
internet piracy cases and arrested 92 persons involved in
online IPR violations.

IPR Overview, Deterrent Sentencing, Cross-Border Issues
-------------- --------------


6. (SBU) U.S. Patent and Trademark Office (USPTO) Attorney
Advisor Timothy Browning presented an overview of the
current state of IPR protection and discussed the legal
framework upon which international IPR protection is based,
including a thorough discussion of Trade Related Aspects of
Intellectual Property Rights (TRIPs) and TRIPs Plus, which
includes the World Intellectual Property Organization's
(WIPO) Internet Treaties. U.S. Department of Justice (DOJ)
Senior Counsel Andrea Sharrin described the U.S.
prosecutorial framework for IPR cases, including the
statutory and sentencing framework for IPR crimes.


7. (SBU) U.S. DOJ IP Law Enforcement Coordinator for Asia
Chris Sonderby discussed the importance of close cross-
border communications, especially when considering the
complex international nature of recent IPR criminal
ventures. In particular, acting against online IPR
violations requires coordinated efforts against servers and
agents that may be located in several different countries.

Latest Developments in Online IPR Crimes
--------------


8. (SBU) Representatives from Time-Warner, the Motion
Picture Association (MPA),the International Federation of
The Phonographic Industry (IFPI),the Business Software
Alliance (BSA),and Pfizer discussed current trends in
online IP violations and the need for strong deterrent
sentences to combat such violations. Pfizer representative
Donald Shruhan discussed the prevalence of counterfeit
pharmaceuticals being sold through illicit online pharmacies
and presented vivid examples of the health dangers involved
in using such pharmaceuticals, including an example in which
counterfeit pills were coated with lead-based paint to
achieve the look of the genuine product.


9. (SBU) IFPI representative Mayseey Leong discussed the
history of peer-to-peer file (P2P) sharing and described the
operating concepts behind popular P2P programs such as Bit-
Torrent. Since 2001, she continued, music sales in Asia
have dropped by 26%, mostly as a result of P2P file sharing.
In response, IFPI has recently begun an initiative to
aggressively pursue individual online IPR violators. As
part of the initiative, IFPI has successfully asked the Hong
Kong Judiciary to force internet service providers (ISPs) in
Hong Kong to provide individual internet protocol (IP)
addresses in civil cases. Through such industry
initiatives, aggressive government enforcement actions, and
greater public awareness, the overall broadband growth is
now far outstripping the spread of internet piracy.

Cunningham