In relation to the practical effect of this new provision, all that's really required for the company's management is to establish adequate policies/process against using pirated materials. If firms do that properly, they are protected from the prosecution without undue difficulties under the law. I do not consider that the proposed liability in any way puts an extra burden on directors or partners in compliance with the new legislative requirements.

Enforcement and prosecution experience has revealed that the existing legislation does not have deterrent effect against business end-user piracy problem because it is nearly impossible for the prosecution to establish that the offense had been committed with the consent of or to be attributable to any act on the part of, the director or the partner concerned. Hence, the majority of workplace piracy cases would only result in the company, being a corporate entity, being convicted and subjected to only a fine which is constituted a trivial part in the company's operational cost. Without imposing the threat of criminal liability against personal defendants, the company's management has no incentive to put in place proper measures to ensure that infringing copies would not be used in their business.

Piracy a perennial problem

Software piracy problem is an embarrassment for Hong Kong as an international digital city. But the software piracy problem has not improved over recent years and even deteriorated in 2005. it remains high relative to Singapore or the United States. To strengthen Hong Kong's copyright regulatory framework, the government's proposal is a step towards promoting and incorporating responsible corporate accountability in the area of intellectual property rights.

Corporate governance has been regarded as one of the key elements for Hong Kong's competitive success. While it emphasizes the social responsibility of a company to its stakeholders, including the consumers and the community, the new laws are in tandem with the trend of corporate governance to ensure that the management of companies who authorize or condone copyright infringements is held accountable and responsible.