HKSAR v. CHEUNG TSANG HUNG ERIC AND ANOTHER

CACC 298/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 298 OF 2004

(ON APPEAL FROM DCCC 333 OF 2003)

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REASONS FOR DECISION

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Hon Tang JA (giving the Reasons for Decision of the court):

1. The 3^rd defendant, Gold Way Enterprises Limited, was an optical disc manufacturer and had been so since 1999.  The 1^st defendant Cheung Tsang-hung, Eric was the 3^rd defendant’s factory manager as well as thelicensee of the 3^rd defendant’s licence numbered ODML078 being “Licence for Manufacture of Optical Discs” issued under section 5 of the Prevention of Copyright Piracy Ordinance, Cap. 544.

2. On 19 February 2002, on a surprise inspection by a party of Customs and Excise officers of the 3^rd defendant’s factory premises on 5/F, Fabrico Factory Building, 78-84 Kwai Cheong Road, Kwai Chung, they found four of the production lines operating and producing VCDs.  From these four production lines and the adjacent storage areas, the Customs and Excise officers found a total of 64,912 VCDs.  These VCDs were the subject of the 1^st charge.

3. In addition, four stampers were in use, five additional stampers were placed in a conspicuous place on the rack in the office and four more stampers were handed by the 1^st defendant to the Customs and Excise officers.  It was an agreed fact that the stampers had been used to make the various VCDs.  These stampers were the subject of the 2^nd charge.

4. On 21 June 2004, the 1^st and 3^rd defendants were convicted of the 1^st and 2^nd charges.  The 1^st and 2^nd charges are reproduced below :

“	1st Charge
	Statement of Offence
Making for sale or hire an infringing copy of a copyright work without the licence of the copyright owner, contrary to section 118(1)(a) and section 119(1) of the Copyright Ordinance, Cap. 528.
	Particulars of Offence
CHEUNG Tsang-hung, Eric, CHEUK Siu-hung and Gold Way Enterprises Limited, on or about the 19th day of February 2002, at 5/F., Fabrico Factory Building, 78-84 Kwai Cheong Road, Kwai Chung, New Territories, in Hong Kong, without the licence of the copyright owner, made for sale or hire 64,912 video compact discs, being infringing copies of copyright works, namely films.
	2nd Charge
	Statement of Offence
Possession of an article specifically designed or adapted for making copies of a particular copyright work which article is used or intended to be used to make infringing copies of the copyright work for sale or hire or for use for the purpose of, or in the course of, any trade or business, contrary to section 118(4)(d) and section 119(2) of the Copyright Ordinance, Cap. 528.
	Particulars of Offence
CHEUNG Tsang-hung, Eric, CHEUK Siu-hung and Gold Way Enterprises Limited, on the 19th day of February 2002, at 5/F., Fabrico Factory Building, 78-84 Kwai Cheong Road, Kwai Chung, New Territories, in Hong Kong, had in their possession 13 stampers which were specifically designed or adapted for making copies of a particular copyright work, namely, film, and were used or intended to be used to make infringing copies of the copyright work for sale or hire or for use for the purpose of, or in the course of, any trade or business.”

5. The 1^st and 3^rd defendants together with the 2^nd defendant were charged initially with five charges.  However, the 2^nd defendant was acquitted of all five charges and the 1^st and 3^rd defendants acquitted of the 3^rd, 4^th and 5^th charges.  So we are only concerned with the 1^st and 2^nd charges.

6. The copyright works in issue were the “Doraemon” (“多啦A夢”) or “Xiao Ding Dang”「小叮噹」cartoons.

7. It was the prosecution’s case that the copyright in those works were owned by five companies, namely

"	(a)	SHOGAKUKAN INC., (Shogakukan) a company incorporated under the laws of Japan and having its registered office at 2-3-1, Hitotsubashi, Chiyoda-ku, Tokyo, Japan, 101-8001; &
	(b)	SHIN-EI ANIMATION CO.,LTD., a company incorporated under the laws of Japan and having its registered office at 14-15, Tanashi-cho, 2 Chome, Nishitokyo-shi, Tokyo, Japan, 188-0011; &
	(c)	FUJIKO PRO CO.,LTD., a company incorporated under the laws of Japan and having its registered office at 4-1-10-704, Nishi Shinjuku, Shinjuku-ku, Tokyo, Japan, 160-0023; &
	(d)	ASAHI NATIONAL BROADCASTING CO.,LTD., a company incorporated under the laws of Japan and having its registered office at 1-1-1, Roppongi, Minato-ku, Tokyo 106-8001 Japan; &
	(e)	ASATSU-DK INC., a company incorporated under the laws of Japan and having its registered office at 16-12, Ginza 7-chome, Chuo-ku, Tokyo, 104-8172 Japan"

8. Further that there were a total of 96 episodes of the cartoon which were produced between April 1979 and March 1980. 

9. At the trial, the prosecution relied on a purported section 121 Affirmation which was affirmed by one Wong King Wai on 7 May 2004.  That Affirmation has been ruled inadmissible by Deputy District Judge J. Lam for non-compliance with the requirements of section 121(1)(a) (see paragraph 53 of the judgment).

10. We are dismayed that notwithstanding the decision of the Court of Final Appeal in Tse Mui Chun v. HKSAR [2003] 6 HKCFAR 601 which was delivered on 19 December 2003, insufficient effort had been made in this case to comply strictly with the requirements of section 121. 

11. However, the prosecution also relied on the evidence of Mr Oshiki Issii (石井壽樹) (PW3).

12. PW3 has been employed by Shogakukan since 1967 and has been the chief producer of its multi-media department since 1997.  As such, he was responsible forlicensing publication of works including Doraemon films in Japan and overseas.

13. It was the prosecution’s case that only Shogakukan could grant licence or consent for the production of the Doraemon cartoons and that Shogakukan had not given consent or licence to the defendants.

14. PW3 dealt with this aspect of the case in his evidence.  This is what he said in chief :

“	問:	呢個咁嘅安排，其他嗰四間公司有冇一啲嘅文件可以畀到小學館證明有一個咁樣嘅安排呢？即係只係小學館可以授權世界發行多啦A夢電影嘅VCD？
	答:	我- -係有，我相信我已經係畀咗你喇，係由四間公司發出嘅委任狀，就係我手上呢一份嘅委任狀，係資料B嚟嘅。”

The authorisation referred to were Exhibits P16 to 19.

15. This is what he said under cross-examination :

“	問:	其實你淨係可以講到小學館係冇授權呢啲公司同埋呢啲人士嘅，你講唔到其他嗰四間公司有冇嘅，同唔同意？
	答:	我哋小學館喺同其他嘅公司有一份委任狀，係證明到淨係委任小學館去做呢啲咁嘅工作嘅。
	問:	個委任狀係咪就係你上個星期呈堂嘅16號至19號證物，抑或第二啲文件？或者畀佢睇番16至19號。
	答:	可唔可以睇下？
	官:	四份，四份？
	MR TSE:	四份，16至19。
	官:	16、17、18、19。
	答:	係，冇錯。”

16. In re-examination, the prosecuting counsel (not Mr William Tam, who appeared before us) sought to adduce evidence of earlier oral authorisation.  That was objected by Mr Joseph Tse who appeared for the defendants.  See page 108C.  We do not believe the prosecution was entitled to introduce such evidence in re-examination and the judge seemed not to have permitted such evidence to be adduced.

17. So it is quite clear that the only evidence relied on by the prosecution that the other four copyright owners had authorised Shogakukan as their exclusive agents for the grant of licence or consent were to be found in Exhibits P16 to 19.  We refer to Exhibit P16a, which is the English translation of Exhibit P16 :

"	3.	As the copyright owner of Doraemon films, our company owns the following rights:Copyright of Doraemon theatrical film and video of television series
	4.	Our company is not engaged in any direct or indirect sales, or distribution of video program outside the country of Japan.
	5.	As the copyright owner of Doraemon films, our company entrusts the aforesaid agency rights within Hong Kong, Taiwan and China to:
		Chief Producer          Toshiki Isii
		Shogakukan Multi-media Bureau, International Copyright Office 2-3-1 Hitotsubashi, Chiyoda-Ku, Tokyo 101-8001"

This was dated 10 May 2002 and given by Shin-Ei Animation Ltd.  The other exhibits were all dated 14 May 2002 and were to similar effect.

18. The prosecution has the burden to prove that the copyright owners of the works in question had not consented to the defendants making copies of the works, i.e. that they had not been granted a licence (see Tse Mui-chun at paragraph 13).  It is something which must be established by the prosecution. 

19. The judge, in deciding that the prosecution had proved absence of consent or licence beyond reasonable doubt, seemed to have relied on the decision of the Court of Appeal in HKSAR v. Elegant Technology Ltd, CACC 448/2003.  However, as explained by the appeal committee, on application for leave to appeal to the Court of Final Appeal, FAMC 58/2004, there was sufficient evidence in that case even though some questions could possibly have been raised had the evidence been challenged, which it was not.  As Bokhary PJ said :

“Merely because an accused does not actively contest a fact so that such fact is in that sense not genuinely in issue, it does not mean that the prosecution does not have to prove that fact.  An accused can, as it is sometimes put, simply fold his arms and leave it to the prosecution to prove that fact if they can.  But even though defence inaction cannot do so, defence action can sometimes reduce the prosecution’s task.  Thus the issues which arise on a plea of not guilty can be reduced by some positive step taken by the defence.  And this can reduce what the prosecution would otherwise be required to prove.”

20. In the present case, the so-called authorisation of Shogakukan had been clearly put in issue.  These documents did not show that Shogakukan had the exclusive right to grant licence or consent from the inception of the copyright or at all.  The evidence of PW3 (even if admissible) failed to show that only Shogakukan had the right to give consent or grant licence.  That being the case, it is unnecessary for us to consider the other criticism of the judgment by Mr Lawrence Lok, SC, counsel for the 1^st and 3^rd defendants.

21. Accordingly, at the conclusion of the hearing of the application for leave to appeal, we granted leave to appeal, treated the hearing of application as the hearing of the appeal, and allowed the appeals of the 1^st and 3^rd defendants.

22. The prosecution applied for a re-trial.  We refused to order a re-trail.  This is a case where on the evidence before the judge, the defendants ought to have been acquitted.  In the circumstances, we did not believe it right to order a re-trial.