HKG Responds to BSA Study Corrected Copy

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TAGS: KIPR ECON CH HK
SUBJECT: HKG Responds to BSA Study Corrected Copy

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1. (SBU) Summary: Intellectual Property Department (IPD)
Deputy Director Peter Cheung said that the Hong Kong
Government (HKG) was surprised by the negative results of
the Business Software Alliance (BSA) annual software piracy
survey, which reports that Hong Kong's software piracy rate
increased from 52 to 54 percent in 2005. Cheung said that
the HKG was sensitive to the results and was planning to
launch a new package of intellectual property rights (IPR)
initiatives, including a publicity campaign that will be
coordinated with the Customs and Excise Department. Cheung
opined that the study results would also bolster voices in
the Legislative Council (Legco) that are arguing for more
powerful language as Hong Kong deliberates amendments to its
Copyright Ordinance. The BSA study places Hong Kong as one
of 19 economies that registered an increase in software
piracy rates, as opposed to 51 economies where there was a
decline, including Mainland China, which had a 4 percent
drop. Hong Kong Chairperson Belinda Lui told Econoff that
the official unveiling of the study was moved to Hong Kong
this year to reflect the BSA's "extreme disappointment" with
Hong Kong's results. End Summary.

The BSA Report and The HKG Response
--------------


2. (SBU) On May 23, 2006, the BSA released the results of
its third annual survey on software piracy. The survey,
which is conducted by market research firm IDC and is the
largest survey of its kind, reports that Hong Kong's
software piracy rate increased from 52 percent to 54 percent
in 2005. IPD Deputy Director Peter Cheung told Econoff that
he was shocked by the negative results of the survey and
that the HKG would be actively seeking ways to crack down on
software piracy overall and business end-user software
piracy in particular.


3. (SBU) Cheung opined that the survey results would also
weigh heavily on the minds of Legco members currently
deliberating proposed amendments to the Copyright Ordinance.
The survey results may weaken opposition to a proposed new
clause in the Ordinance that would specifically pin
liability for corporate copyright violations upon the
directors or partners of the company. Cheung said that on
May 29 the HKG would officially launch a new publicity
campaign aimed at raising public awareness of IPR issues.
The campaign, which is being coordinated by the Commerce,
Industry, and Technology Bureau (CITB) with IPD and Hong
Kong Customs, will focus on online IPR violations as well as
other forms of digital piracy.

Regional Picture
--------------


4. (SBU) Hong Kong's rising software piracy rate contrasts
with improved figures for other regional economies,
including Singapore (from 42 percent to 40 percent),
Malaysia (from 61 percent to 60 percent),and mainland
China, which dropped from 90 percent to 86 percent. BSA
Hong Kong Chairperson Belinda Lui said that while the
overall software piracy rate in China remains high, the 2005
results show that the country is moving in the right
direction. She expects the mainland will probably see
another drop next year as it moves to ban the use of pirated
software by government departments and as PC manufacturers,
such as Lenovo, adhere to commitments to pre-install only
legitimate software into new models.


5. (SBU) Lui continued that although Hong Kong has an
overall effective enforcement regime, the HKG's continuing
inability to win contested prosecutions in business end-user
piracy cases contributed to the increase in the piracy rate.
She said that BSA decided to move the official unveiling of
the study to Hong Kong to emphasize its view that Hong Kong
is moving in the wrong direction on IPR protection.

CUNNINGHAM