Provisional Legislative Council
PLC Paper No. CB(2) 1405
(These minutes have been
seen by the Administration)
Ref : CB2/BC/8/97
Bills Committee on
Prevention of Copyright Piracy Bill
Meeting on Friday, 27 February 1998 at 10:45 am
in Conference Room A of the Legislative Council BuildingMembers Present :
Hon MA Fung-kwok (Chairman)
Dr Hon Charles YEUNG Chun-kam (Deputy-Chairman)
Hon Eric LI Ka-cheung, JP
Mrs Selina CHOW, JP
Hon CHAN Yuen-han
Hon Howard YOUNG, JP
Hon YEUNG Yiu-chung
Members Absent :
Hon WONG Siu-yee
Prof Hon NG Ching-fai
Hon Henry WU Hon
Hon NGAI Shiu-kit, JP
Dr Hon Ronald ARCULLI, JP
Hon CHAN Kam-lam
Hon Philip WONG Yu-hong
Hon Kennedy WONG Ying-ho
Hon TAM Yiu-chung, JP
Dr Hon LAW Cheung-kwok
Public Officers Attending :
- Miss Elizabeth TSE
- Principal Assistant Secretary for Trade and Industry
- Mr Peter CHEUNG
- Deputy Director of Intellectual Property (Acting)
- Mr Vincent POON
- Assistant Commissioner of Customs and Excise
- Mr K F CHENG
- Senior Assistant Law Draftsman
- Mr Johann WONG
- Assistant Secretary for Trade and Industry
Clerk in attendance :
Staff in attendance :
- Mrs Percy MA
- Chief Assistant Secretary (2)3
- Miss Anita HO
- Assistant Legal Adviser 2
- Miss Flora TAI
- Senior Assistant Secretary (2)3
I.Outstanding issues arising from previous meetings
(PLC Paper Nos CB(2)1095(01), CB(2)1095(02), CB(2)1095(03), CB(2)1095(4), CB(2)1095(05) and CB(2)1095(06))
At the invitation of the Chairman, Principal Assistant Secretary for Trade and Industry (PAS(TI)) continued to brief members on the Administration's response to concerns raised at the meeting held on 23 February 1998 and in the joint submission from Wah Lee Advanced Technology Company Limited and Maytronic Industrial Company Limited (issued vide PLC Paper No. CB(2)1095(01)). The gist of the discussion is summarized in paragraphs 2-11.
Production of manufacturing plants
2.PAS(TI) explained to members that it was not appropriate to guarantee that production of manufacturing plants would not be stopped pending the laying of criminal charges as the circumstances of each individual case must be examined on their own merits. She referred to clause 18(1) and pointed out that an authorized officer would only exercise his powers to seize, remove or detain any machinery, equipment or other things if he had reasons to suspect that any optical discs had been manufactured in contravention of the proposed Ordinance; or any machinery, equipment or other things might contain evidence of an offence under the proposed Ordinance.
3. Members noted a further joint submission from Wah Lee Advanced Technology Company Limited and Maytronic Industrial Company Limited tabled at the meeting (and subsequently issued vide PLC Paper No. CB(2)1095(02)). Mrs Selina CHOW cautioned that some manufacturers had grave concern that Customs powers to detain, seize or remove under clauses 17-18 might cause undue disruption to the production of the manufacturing plants. The Chairman said that he had the same concern if there was no check and balance mechanism over the exercising of these powers. In response to Mrs CHOW ' s enquiry, Assistant Commissioner of Customs and Excise (AC(CE)) explained that offences under the Bill basically related to operating an optical disc manufacturing plant without a valid licence, or the failure to apply for or the forgery of an assigned manufacturer ' s code. Customs officers therefore did not need to go through a complicated process to make judgment on whether an offence had been committed. Charges could be laid against any person involved within a fairly short period of time. In this regard, Acting Deputy Director of Intellectual Property (Ag DD(IP)) reiterated that the acts of Customs officers would have to comply with established procedures in law and the test of "reasonableness".
|4. To address members concerns, PAS(TI) suggested that the Commissioner of Customs and Excise (the Commissioner) could issue internal guidelines for Customs officers to follow. Mrs Selina CHOW maintained that it was not sufficient. She suggested that the Bill should spell out the circumstances under which such powers would be exercised or impose a time limit for any machinery/equipment to be detained, seized or removed under clauses 17-18. Moreover, consideration should also be given to upgrading the rank of public officers empowered to exercise such powers. In this connection, the Assistant Legal Adviser 2 (ALA2) suggested that reference could be made to section 16A(2) of the Trade Descriptions Ordinance (Cap. 362) which stipulated that "If a lock or seal is placed on any premises or container under subsection (1), the period for which the lock or seal is placed shall not exceed 7 days without the consent in writing of the owner of the premises or container, or his authorized agent". At the Chairman ' s request, PAS(TI) undertook to consider Mrs CHOW ' s suggestions and revert to members at the next meeting.
Forfeiture of equipment or machinery seized
5. Members noted that in order to clarify beyond doubt, the Administration would propose amendments to clause 20 to the effect that it would cover the seizure of equipment and machinery. Mrs Selina CHOW asked and Ag DD(IP) confirmed that under clause 20(1), equipment and machinery seized might be forfeited even if no charge had been laid for offences under the proposed Ordinance e.g. when the offender could not be identified. In this connection, PAS(TI) pointed out that the forfeiture procedure as provided for in sections 131 and 133 of the Copyright Ordinance was applicable to this Bill. Mrs CHOW said that as compared to the Copyright Ordinance, the chance of an offender of the Bill not being identified and traced was small. She expressed concern about whether there were sufficient safeguards for forfeiture of equipment or machinery in clause 20(1).
Exemption of criminal liabilities
6. Members noted that the Administration was agreeable to a deputation ' s view that optical disc manufacturers should be exempt from criminal liabilities if they had exercised their best endeavor to protect the rights of the copyright owners. Ag DD(IP) explained to members that the Administration would add an additional subclause to clause 21 to the effect that it would be a defence for the accused to show that he had taken all reasonable steps to avoid committing an offence under the proposed Ordinance. These reasonable steps would be related to the licensing conditions to be imposed by the Commissioner for the manufacture of optical discs. He added that the Court would make reference to the practices in the industry in determining whether the manufacturer had taken all the reasonable steps. Members remarked that checking with a registry of copyright titles, if available, would constitute a reasonable step. While PAS(TI) stressed that the Administration would consider setting up the registry of copyright titles positively, she advised members that many policy and technicality issues had yet to be resolved.
7. On a deputation ' s view that it should be an offence for a person to deceive manufacturers into producing infringing optical discs, PAS(TI) said that it would already be a civil liability for someone to deceive with false copyright claims. The Copyright Ordinance also provided for criminal sanctions against the manufacture or possession of infringing copies of copyright works for purposes of trade or business. In this connection, the Chairman remarked that if a person who deceived a manufacturer into producing infringing optical discs had disappeared after placing the order, the manufacturer would have to face the charge of copyright infringement. AC(CE) pointed out that Custom officers would make efforts to trace everyone involved in the case, and would only institute prosecution action in cases where there were sufficient evidence.
|8. On Mrs Selina CHOW ' s question on whether manufacturers would be able to claim compensation for damages resulting from the enforcement of the Bill by authorized officers, ALA2 drew members attention to the relevant compensation provisions of the Immigration Ordinance (Cap. 115), the Trade Descriptions Ordinance (Cap. 362) and the Consumer Goods Safety Ordinance (Cap. 456). In response, PAS(TI) explained that irrespective of whether specific compensation provisions had been included, Government had a civil liability for any wrongful acts of its servants. She reiterated that a person aggrieved by wrongful acts of authorized officers exercising their powers under the Bill could claim damages from the Government, as reflected in clause 33(4). To add a compensation provision would unduly complicate the Bill. ALA2 pointed out that if a compensation provision was available, an aggrieved person could follow procedures prescribed in the legislation to claim damages, instead of resorting to court action. Ag DD(IP) pointed out that court action was only required if there was a dispute between the two parties. Mrs CHOW maintained that as the Bill had given wide powers to Customs officers in combating copyright piracy, it was important for a compensation provision to be included in the Bill as part of the check and balance mechanism over the exercising of these powers. At the Chairman ' s suggestion, PAS(TI) undertook to consider the matter and revert to members at the next meeting.
Fee for application, renewal or transfer of licences
|9. Referring to Appendix II to PLC Paper No. CB(2)1095(01), PAS(TI) explained the calculations and justifications for the proposed fees for application, renewal or transfer of licences which were set out in Schedule 2 to the Bill. PAS(TI) added that even though the application form for renewal of a licence might be simplified for the convenience of the applicant, applications for renewal or transfer of licences would still had to be vetted thoroughly by the licensing team. The procedures and the amount of work involved would be similar to that of an application for a new licence. However, Mrs Selina CHOW was of the view that the procedure for processing an application for renewal or transfer of a licence should be simplified so as to reduce the level of fees for such applications. At the Chairman ' s request, PAS(TI) undertook to consider views expressed and revert to members at the next meeting.
Conditions for licensing of optical disc manufacturers and
Mechanism for assignment of manufacturer ' s codes
(PLC Paper No. CB(2)1105(01))
10. The Chairman referred to the Administration ' s paper on "Conditions for the Licensing of Optical Disc Manufacturers and Mechanism for the Assignment of Manufacturer ' s Codes", prepared in response to request by members at the last meeting. The paper was tabled at the meeting and subsequently issued vide PLC Paper No. CB(2)1105(01). At the invitation of the Chairman, PAS(TI) briefed members on the paper.
|11. On the conditions for the grant of a licence for the manufacture of optical discs, Mrs Selina CHOW suggested that to ensure the transparency of the licensing system, the general conditions for granting a licence should be set out in the form of a schedule to the Bill. There was however no objection for the Commissioner to impose specific case-related conditions on licensees, if necessary. The Chairman remarked that Mrs CHOW ' s suggestion was reasonable on the grounds that the general conditions for licensing, as advised by the Administration, were not controversial and that the Commissioner would not be precluded from specifying other conditions for granting a licence. PAS(TI) cautioned that it would not be flexible to specify the conditions in the Bill as they were not meant to be exhaustive. However, she undertook to consider Mrs CHOW ' s suggestion.
II.Clause-by-clause examination of the Bill
12. Members continued with the clause-by-clause examination of the Bill starting from clause 30.
13. With reference to clause 2(2) under the heading "Interpretation", Mrs Selina CHOW asked and Ag DD(IP) confirmed that on the basis of the common law principle, a person would only be considered as a optical disc manufacturer, irrespective of his capacity, if that person actually managed and controlled the business in Hong Kong which included the manufacturing of optical discs in Hong Kong.
14. Members raised no other queries on the remaining clauses of the Bill.
III.Draft Committee Stage amendments to be moved by the Administration
(Appendix to PLC Paper No CB(2)1095(01) and Annex to PLC Paper No CB(2)1105(01))
15. At the invitation of the Chairman, PAS(TI) took members through the draft Committee stage amendments to be moved by the Administration. The English version was in Appendix I to PLC Paper No. CB(2)1095(01) and the Chinese version was tabled at the meeting (Annex to PLC Paper No. CB(2)1105(01). At ALA2 ' s suggestion, the Administration would insert the word before in the Chinese text of clause 24(4).
V.Date of next meeting
16. Members agreed that the next meeting would be held on Friday, 6 March 1998 after the House Committee meeting to conclude scrutiny of the Bill.
17. There being no other business, the meeting ended at 12:40pm.
Provisional Legislative Council Secretariat
17 March 1998