1ST JAIL TERMS ISSUED UNDER HARSHER PIRACY LAW.

Byline: P.T. Bangsberg Journal of Commerce

The first jail terms have been handed down in Hong Kong for infringement of intellectual property rights since the law was amended last year, substantially increasing the penalties.

Court documents show Yip Chi Hung, proprietor of a shop in the most blatant center for knockoff copies of computer programs, was given three two-month jail sentences and fined 51,000 Hong Kong dollars (about $6,500 U.S.), according to news reports.

Kwok Po, a wholesaler of pirated software on compact discs who supplied Yip with the illegal copies, was given jail sentences amounting to 16 months, all to run concurrently, and fined 308,000 Hong Kong dollars.

Both men had been found guilty of IPR violations previously. They ``showed a blatant disregard for the law,'' said the judge who heard the case. The government had shown by increasing fines that it was determined to stamp out copyright piracy, he said.

``It is time to send a message to infringers that Hong Kong is not a safe haven for pirates, and that the legitimate interests of copyright owners will be respected,'' the judge said. ``These pirates must not be permitted to operate profitable businesses at the expense of Hong Kong's good name.''

Copyright theft is both a criminal and a civil offense in Hong Kong.

The amended legislation raised fines 25-fold for individuals or businesses found guilty of infringing copyright for business purposes. Possible jail terms rose to four years from one.

The number of customs officers is being increased 40 percent, and better coordination between police and customs is being devised, government officials say.

A score of raids so far this year have netted more than 30 people and contraband worth $620,000, customs officials say.

The Business Software Alliance, a Washington-based group of computer program producers, welcomed the outcome of the case, which was decided last week.

``The penalties imposed were far more realistic than anything we have seen in the past,'' said Valerie Colbourn, a vice president of the BSA, in a statement. ``We hope that the courts continue to send a strong message to illegal software dealers that they face increasingly harsher sentences for violating intellectual property rights.''

The BSA, which represents several of the largest U.S. software producers, has spearheaded a high-profile campaign in Hong Kong and elsewhere in the region against counterfeiting. It calculates that piracy in Hong Kong alone costs $130 million or more a year.

In addition to working with local customs officials to pinpoint sites for raids, the BSA operates a reward hotline for tips on illegal software and institutes civil suits against offenders.

Hong Kong this year was named for the first time by the United States in the list of places that fail to adequately protect intellectual property. Officials in the colony protest loudly that they are taking all practical steps, and they demanded detailed evidence from Washington.

One problem, especially with computer programs and compact discs, is the porous border with China. Much of the copying is done there - which threatened to trigger a Sino-American trade war - with the products then smuggled into Hong Kong for shipment abroad. Among principal members of the BSA are Aldus Corp. of Seattle; Apple Computer Inc., Cupertino, Calif.; Microsoft Corp., Redmond, Wash.; the Lotus Development Corp. arm of International Business Machines Co. of Armonk, N.Y.; and Novell Inc., Provo, Utah.