Under the proposed law, if a body corporate or partnership has committed an act that causes business end-user criminal liability, the directors or partners responsible for its internal management would be liable unless they can show they have not authorized the infringing act.

If there is no such director or partner, the persons responsible for the internal management of the body corporate or partnership under the immediate authority of the directors or partners would be liable. In other words, the concerned directors, partners or senior officers might be personally liable for corporate misconduct in consequence of the positions they held or the managerial functions they performed in their corporations or partnerships.

Trade association opposition

During the discussion at the Bills Committee of Legislative Council, some trade associations opposed this new offense. They claimed that the new offense is too harsh and imposes a substantial burden on directors and partners. They argued that for SMEs, it is extremely difficult for directors or partners responsible for internal management to have the resources or full knowledge to ensure that their employees do not commit such infringements in the course of business. Nor do they acquire sufficient expertise to develop effective intellectual property management systems against piracy in the workplace.

But are these arguments reasonable?