HONG KONG GOVERNMENT SURVEYS HIGHLIGHT IPR

UNCLAS SECTION 01 OF 02 HONG KONG 000868 SENSITIVE SIPDIS STATE FOR EAP/CM AND EEB/OMA DOC PASS AWILSON E.O. 12958: N/A TAGS: ECON ETRD KIPR HK CH SUBJECT: HONG KONG GOVERNMENT SURVEYS HIGHLIGHT IPR IMPROVEMENTS REF: A. HONG KONG 754 ¶B. HONG KONG 382 ¶1. (U) Summary: The Hong Kong government's Intellectual Property Department (IPD) recently announced survey results indicating a high degree of intellectual property rights (IPR) awareness among local businesses and the general public. Only 8.5 percent of Hong Kong residents expressed willingness to purchase pirated or counterfeit goods - the lowest level since IPD's survey began in 1999 - but challenges remain in the digital realm. Of Hong Kong residents who use the Internet at least once per week, almost 79 percent said they will "probably not" or "definitely not" legally purchase copyrighted content from authorized websites during the coming year. Meanwhile, 94 percent of local business establishments consider it "very" or "quite" necessary to protect IPR in Hong Kong, and almost half of Hong Kong's businesses are aware of new criminal penalties for directors of companies that use pirated software. End summary. ¶2. (SBU) Comment: IPD's latest survey results were well-publicized through press conferences that enabled IPD to further raise awareness about the importance of protecting IPR. The department's multi-faceted IPR education and protection efforts have reduced levels of IPR infringement among local businesses and residents. While Hong Kong is in many respects a world-class model for IPR protection (especially with regard to youth education programs and physical piracy enforcement efforts),at least two major challenges remain. Business software piracy remains high, compared with other developed economies in the region such as Singapore, Taiwan and South Korea. And Hong Kong still lacks a legislative framework governing IPR protection in the digital realm. We expect to see measurable progress in both of these areas over the next 12-18 months, based on IPD's proactive moves to address them (refs A and B). Background -------------- ¶3. (U) IPD is responsible for promoting IPR protection policies and practices in Hong Kong. The department has surveyed the general public and local businesses every year since 1999 and 2004, respectively, concerning IPR protection behaviors, attitudes and opinions. IPD recently released the results of its 2008 surveys. General Public Survey Results -------------- ¶4. (U) IPD commissioned a local consulting firm, Mercado Solutions Associates Ltd. (MSA),to conduct its 2008 IPR survey of the Hong Kong general public. During November, MSA interviewed 1,003 randomly selected individuals aged 15 and above. Data collected from the survey were weighted to align with relevant characteristics of Hong Kong's population (e.g. age, sex, etc.),resulting in findings approximately representative of the opinions of all Hong Kong residents. The survey's margin of error is plus or minus 3.5 percent. ¶5. (U) Almost all respondents (96.3 percent) considered it necessary to protect IPR in Hong Kong. Only 8.6 percent of respondents would often or sometimes buy pirated or counterfeit goods, compared with 15.0 percent in 2005. The primary reasons provided for purchasing infringing products included: "genuine goods too expensive" (68.5 percent); "personal greediness and lack of self discipline" (26.4 percent); and "unethical businessmen (i.e., the copyright holders) reaping excessive profits" (19.6 percent). ¶6. (U) Despite the population's growing IPR awareness and general unwillingness to purchase pirated or counterfeit goods, the survey identified areas of concern in the digital realm. Of the 63.9 percent of respondents who use the Internet at least once per week, 78.6 percent said they will "probably not" or "definitely not" purchase copyrighted content from authorized websites during the coming year. Of these respondents unwilling to purchase legitimate content over the Internet, 47.0 percent considered Internet purchases "too troublesome"; only 15.8 percent cited cost as the primary factor. IPD Director Stephen Selby publicly announced on April 7 that his department would use the survey to "focus on new trends, including the downloading of files from the Internet." HONG KONG 00000868 002 OF 002 ¶7. (U) Most respondents (56.1 percent) agreed that the IPR protection measures imposed by the HKG over the past two years reduced IPR infringement in Hong Kong. However, only 34.4 percent of respondents thought the HKG should play the dominant role in controlling IPR infringements, compared with 47.1 percent in 2003. In 2008, 24.9 percent of survey participants thought the general public should play the dominant role, compared with 18.7 percent in 2003. Business Survey Results -------------- ¶8. (U) MSA also conducted the IPD's 2008 IPR survey of Hong Kong businesses. During November, MSA collected questionnaires from 1,001 randomly selected businesses. Data collected from the survey were weighted to align with relevant characteristics of Hong Kong's business establishment population (e.g. employee total, industry sector, etc.),resulting in findings representative of the opinions of all Hong Kong businesses. The survey's margin of error is plus or minus 3.1 percent. ¶9. (U) Similar to results from prior years, 93.7 percent of respondents considered it "very" or "quite" necessary to protect IPR in Hong Kong. The majority of business establishments responded that IPR protection helped enhance the development of local creative industries (84.5 percent), create business opportunity and wealth (77.6 percent),and contribute to the overall development of Hong Kong's economy (72.3 percent). ¶10. (U) Nearly half of the respondents (49.5 percent) were aware of amendments to Hong Kong's Copyright Ordinance that allow company directors to be held criminally liable, if their firms use pirated software. Regarding the most effective means to reduce IPR infringement in Hong Kong, the top four suggestions were identical to previous survey results: "lower price of genuine goods" (69.0 percent); "raise awareness and strengthen education" (63.8 percent); "increase penalties" (36.7 percent); and "full-scale enforcement action against the sale of pirated and counterfeit goods" (36.3 percent). As part of its efforts to reduce business software piracy and raise IPR awareness, IPD recently established a free intellectual capital management consultancy service targeted at approximately 30,000 local small and medium-sized enterprises (SMEs). DONOVAN