PLC Paper No. LS 82
Paper for the House Committee Meeting
of the Provisional Legislative Council on 23 January 1998
Legal Service Division Report on Prevention of Copyright Piracy Bill
Objects of the Bill
To introduce a licensing system for the manufacture of optical discs and to require the use of source coding on all optical discs produced in Hong Kong.
PLC Brief Reference
2. TIB 09/46/21 dated 13 January 1998 issued by the Trade and Industry Bureau.
Date of First Reading
3. 21 January 1998.
4. Under section 6C of the Import and Export Ordinance (Cap. 60) and the First Schedule of the Import and Export (General) Regulations (Cap. 60 Sub. Leg.) as was amended by the Import and Export (General) Regulations (Amendment of Schedules) (No. 2) Order 1997 (L.N. 529 of 1997) which came into operation on 29 December 1997, no person may import optical disc mastering and replication equipment into Hong Kong except and in accordance with an import licence.
5. Apart from the legislative scheme on controlling import and export of optical disc mastering and replications equipment, there is no registration requirement for optical disc manufacturers in Hong Kong. Customs officers have difficulties in locating the places of manufacture and in tracing the source of optical discs to determine whether they are copyright infringing or not.
6. The Bill seeks to introduce a licensing system for the manufacture of optical discs in Hong Kong (Clauses 3 - 14). Any person who manufactures optical discs in Hong Kong shall apply to the Commissioner for Customs and Excise for a licence at a fee of $5,500. The Commissioner may refuse to grant or renew a licence. Any person who is aggrieved by a decision of the Commissioner may appeal to the Administrative Appeals Board.
7. A licensee shall manufacture optical discs at a place of manufacture specified in the licence. An officer authorized by the Commissioner of Customs and Excise can then inspect these licensed premises at all reasonable times (Clause 17). Any person who manufactures optical discs without a valid licence in unlicensed places commits an offence and is liable to a fine of $500,000 and to imprisonment for 2 years on a first conviction (Clause 21).
8. An authorized officer, with a warrant, may enter and search a place in which he reasonably suspects to be manufacturing optical discs in contravention of the provisions of this Bill (Clauses 18-20).
9. The Bill also provides that optical discs produced in Hong Kong (but not on imported ones) to be permanently embossed or marked with a code indicating their source of manufacture (Clauses 15- 16). Any person who manufactures optical discs without marking with codes commits an offence and is liable to a fine of $100,000 and to imprisonment for 2 years on a first conviction.
10. Further, any person who applies false manufacturers codes, furnishes false and misleading statements in an application for a licence, obstructs authorized officers, and discloses information unlawfully also commits an offence under this Bill.
11. There is a time limit for prosecutions. Once the Bill is passed, no prosecution for an offence under the Ordinance shall be commenced after the expiration of 3 years from the date of commission of the offence or 1 year from the date of discovery of the offence by the prosecutor, whichever is the earlier.
12. In November 1997, the Administration consulted about 80 organisations, including optical disc manufacturers, concerned parties in the copyright industry as well as the legal profession on the draft Bill.
Consultation with PLC Panel
13. The Trade and Industry Panel of the Provisional Legislative Council was briefed on the Bill on 12 December 1997. Members may refer to an extract from the Minutes of that meeting as attached. The Secretary for Trade and Industry has given an undertaking to the Panel to provide a list of proposals received during consultation, indicating whether they were adopted or rejected by the Administration. We are given to understand that the list will be available within this week.
14. The Legal Service Division is still scrutinizing the Bill. A further report on the technical aspects of the Bill will be made should there be difficulties which require Members attention.
HO Ying-chu, Anita
Assistant Legal Adviser
Provisional Legislative Council Secretariat
19 January 1998