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To: BillyG who wrote (24743)	11/3/1997 1:07:00 PM
From: DiViT	Read Replies (2) \| Respond to of 50808

Software copying surge expected Factory increase raises piracy fear ANDREW CHETHAM ÿ 11/01/97 South China Morning Post Page 3 (Copyright 1997) ÿ Anti-computer piracy group Business Software Alliance (BSA) says it is worried a dramatic increase in CD-Rom pressing operations in Hong Kong could lead to an upturn in the illegal copying of software in the SAR. Since the beginning of the year, CD (compact disc) production lines have increased from five to about 30, the organisation said. The disclosure comes within a month of US-trade officials reviewing Hong Kong's position on a special watch list of countries that it is scrutinising for intellectual property rights problems. Moving to a higher grade list carries the ultimate threat of trade sanctions. Baker & McKenzie intellectual property lawyer Robert Arnold, the BSA legal counsel, said manufacturers moving into Hong Kong and Macau reflected that conditions for carrying out their business on the mainland were becoming more difficult. "Many of these may well be involved in supplying the legitimate boom in the market for VCD {video compact discs} in China, however, when this boom is over there will be huge over-capacity and they may turn to counterfeiting," he said. The BSA believes about 60 per cent of the software used in Hong Kong is illegal. "This is just staggering compared to the wealth of Hong Kong," Mr Arnold said. The BSA has calculated losses to the industry in Hong Kong through piracy last year were at least US$130 million. In June, a new copyright law came into effect which the Government and industry agreed had improved the situation. Since July, the customs department has undertaken two high-profile operations against the distribution and selling of pirated CDs. The head of the Intellectual Property Investigations bureau of the Customs and Excise Department, Calvin Leung Ho, said the law had allowed it to use different tactics. Instead of simply confiscating the CDs, officers also were taking away all the assets of a business alleged to be selling pirated software, including computers, chairs, desks and cash registers. Up to the end of September his staff of 188 officers had investigated 1,100 piracy cases worth $117 million. Mr Leung said the Government and industry were in discussions over new ways to combat the manufacture of counterfeits in Hong Kong, not previously a problem compared to the large volumes of the goods on sale. "We are considering whether to licence the import and export of CD presses or the forced registering of CD factories," he said. The subject of CD piracy is a touchy one with the Government after the upgrading of Hong Kong on to the US-watch list was met with condemnation from officials last May. Mr Arnold said United States inspectors would want to see results before recommending a downgrade of the status. In his opinion, while the Government was making good efforts to stamp out piracy, illegal software was as easy as ever to get hold of.