R. v. NG WAI CHING

M.A. Nos. 1309 & 1310 of 1996

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H E A D N O T E

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Sentence - S.5 Copyright Ordinance Cap.39 possession of 'pirated' Compact Discs - Trade carried out in open defiance of law - Hong Kong's international obligation to stamp out trade in 'pirated' intellectual property - deterrent custodial sentences on 19 years old salesmen with clear records approved.

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REASONS FOR DECISION

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1. These two appeals against sentence were , at the request of the parties heard together because they arise out of very similar facts.

2. YUNG Mo-yiu appeared before a magistrate and pleaded guilty to four charges, of which three Charges (A, B and D) were brought under S.5(1) of the Copyright Ordinance Cap.39 and one (Charge C) was brought under S.9(2) and S.18(1) of the Trade Descriptions Ordinance Cap.362.

3. Charge A alleged possession for the purpose of trade or business of infringing copies of sound recordings in which copyright subsisted. The copies in question were 138 music video Compact Discs.

4. Charge B alleged possession for the purposes of trade or business of infringing copies of literary works in which copyright subsisted. The copies consisted of 31 Compact Discs.

5. Charge C alleged possession for sale of goods to which a forged trade mark was applied, the goods in question being 12 Compact Discs marked 'Microsoft'.

6. Charge D alleged possession for the purpose of trade or business of infringing copies of cinematograph films in which copyright subsisted. The copies were on 88 video compact discs.

7. All the offences took place on the 26th January 1996 at a shop in No. 188 Wanchai Road, Hong Kong.

8. The magistrate adjourned in order to obtain detention centre and training centre reports. At the adjourned hearing the appellant was represented by counsel who addressed the court in mitigation of sentence. The reports stated that the appellant, who was 19 years old, was suitable for Detention Centre. In respect of all four offences the magistrate made a Detention Centre Order.

9. The sole ground of appeal is that the sentence was too severe, having regard to the young age and clear record of the offender and to the fact that he was merely an employee in the shop where, according to him, he had worked for a short time.

10. The appellant NG Wai-ching, another young man aged 19 years, came before another magistrate on the 3rd October 1996 and pleaded guilty to two charges.

11. Charge 1 alleged possession on the 21st October 1995 of 27 Compact Discs, being infringing copies of literary works in which copyright subsisted, contrary to S.5(1) of the Copyright Ordinance Cap.39.

12. Charge 2 alleged possession on the 21st October 1995 for the purpose of trade 14 Compact Discs, to each of which a forged trademark, namely 'Microsoft' was applied, contrary to S.9(2) and S.18(1) of the Trade Descriptions Ordinance, Cap.362.

13. The place where the offences were committed was another shop in 188 Wan Chai Road.

14. After obtaining Detention Centre and Training Centre reports and after hearing a plea in mitigation from the appellant's solicitor, the magistrate made a detention centre order.

15. Here again the appellant was a young man with a clear record and had pleaded guilty.

16. Both magistrates made it clear in their Reasons for Sentence that their experience at Eastern Magistracy has taught them that at 188 Wanchai Road a flourishing illegal trade in 'pirated' compact discs is operating in open defiance of the law.

17. The typical case is one where a young man with no previous convictions is employed to sell the goods from a small shop for a salary. When arrested and charged he pleads guilty and says that he had not been employed there for long. The employers are not brought to justice despite claims in mitigation that the salesman gave as much information as he could to investigators.

18. Persons employed in the trade cannot fail to realise that it is illegal. According to the magistrates, warnings from the bench and an increase in the severity of fines have failed to stem the tide of cases. They have formed the view that deterrent custodial sentences are called for in all but exceptional cases.

19. The victims are the proprietors of the intellectual property whose rights are being violated. There is international pressure upon Hong Kong to stamp out the traffic in pirated goods. Failure to attack the illegal activity which is carried out openly and in defiance of the law in certain notorious locations in Hong Kong would be perceived as a default on the part of the government on its international obligations.

20. Mr. Kripas who appeared for the Crown in the two appeals points out that the legislature sent a clear message when on the 26th May 1995, the maximum penalty for an offence under S.5 of the Copyright Ordinance was increased from a fine of $1,000 and one year's imprisonment to $25,000 and 2 years' imprisonment for a first offence.

21. The two appellants committed their offences after that legislative amendment. I am told by Mr. Kripas that from September 1995 the magistrates at Eastern Magistracy were giving warnings about the new levels of sentence. Offenders such as the two appellants were appearing before the court almost daily from about that time but with one exception it was not until July 1996 that custodial sentences were imposed.

22. It is very unfortunate that, despite their efforts the Customs and Excise appear to have been unable so far to catch the big fish of the trade and can only bring the minnows before the courts. Without their salesmen, however, the big fish cannot operate and so the salesmen must be deterred. Experience has shown that they are not deterred by fines, so that resort needs to be had to custodial sentences, even where the offender is a young person with a clear record.

23. Sad though it is that young men are being deprived of their liberty, I am satisfied that the magistrates are taking the correct line. The offences called for deterrent custodial sentences. I therefore dismissed both appeals.