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Criminal Liability for Infringement of Intellectual Property Rights in Hong Kong
03.09.2024

1 Engaging in activities that violate the following two intellectual property rights in Hong Kong carries both civil and criminal consequences:

Copyright infringement (as stipulated in Section 108 of the Copyright Ordinance, Cap. 528)
Infringement of registered trademarks (as stipulated in Section 9 of the Trade Descriptions Ordinance, Cap 362)
2 The department entrusted with the task of conducting criminal investigations and prosecuting infringements of intellectual property rights in Hong Kong is the “Hong Kong Customs and Exercise Department” (HKCED). The HKCED has the authority to initiate proactive communication with the designated Hong Kong agent, also known as the “Agent of Service”, of the registered trademark owner in cases of suspected infringement. Upon receiving such notification, the trademark owner has the option to directly reach out to the HKCED or liaise with them through their appointed Hong Kong agent.

3 The process of reporting registered trademark infringement to the HKCED is comparatively simpler than the procedure for copyright infringement. To initiate an investigation, the trademark registrant is only required to provide the trademark registration certificate, details of the infringer, and relevant information about the infringement to the HKCED. Subsequently, the HKCED will record the complaint and carry out an inquiry. In case a formal case is established, HKCED will independently investigate, apprehend the offender, and, if warranted, initiate criminal proceedings. On the other hand, reporting copyright infringement entails providing additional documentation, such as relevant copyright works (i.e., drawings), copyright information (i.e., author details), and infringement particulars. The HKCED will provide support to the copyright owner in their investigation and enforcement efforts.

4 Irrespective of whether the trademark registrant or copyright owner is a Hong Kong or overseas individual or a company, the HKCED is committed to assisting them. Based on the author’s experience, if the holder is an overseas company, it is often more expeditious and convenient to engage with the HKCED through a Hong Kong-based lawyer, who can facilitate the submission of information and evidence.

5 If a complaint is accepted by the HKCED, they will promptly notify the trademark registrant, copyright owner, or their Hong Kong Agent lawyers, and initiate an investigation. Upon a successful investigation, the HKCED will invite a representative appointed by the trademark registrant or copyright owner to inspect the goods and determine the authenticity of the seized evidence. Therefore, it is essential for the trademark registrant or copyright owner to engage an expert capable of distinguishing genuine and counterfeit products to assist the HKCED in establishing authenticity. If there is sufficient evidence, the HKCED will initiate criminal prosecution against the infringer.

6 The HKCED takes the lead in the legal proceedings against the infringer, while the role of the trademark registrant, copyright owner, or their Hong Kong agent lawyer is supportive. This arrangement benefits the trademark registrant or copyright owner as they can leverage government support to report and punish the infringer.

7 Typically, the prosecution of the infringer occurs in the Magistrates’ Court. Shortly after the HKCED issues a summons, the infringer (defendant) must appear in court and indicate whether they will plead guilty to the charges. If the defendant immediately decides to plead guilty, the Magistrates’ Court judge will immediately deliver a ruling. Since these cases involve criminal offenses, once a ruling is made, the defendant will face fines and obtain a criminal record. In severe cases, such as the seizure of a significant quantity of infringing goods, the defendant may even face imprisonment.

8 If the defendant pleads not guilty to the charges, the Magistrates’ Court judge will adjourn the hearing, arrange for the prosecution to present evidence, and proceed with the trial. If the defendant is found guilty after the trial, the subsequent punishment will be more severe compared to pleading guilty.

9 After the criminal judgment, the trademark registrant or copyright owner can initiate a civil lawsuit against the infringer shortly thereafter. Since both criminal and civil proceedings stem from the same facts, the trademark registrant or copyright owner can rely on the evidence presented in the criminal proceedings to claim against the infringer in the civil proceedings. If the infringer pleads guilty in the criminal prosecution, they are more likely to refrain from contesting the civil claims and may be more willing to reach a compromise with the reasonable demands of the trademark registrant or copyright owner.

10 By utilising the processes outlined above, the author hopes that overseas agents and trademark registrants will effectively utilize the systems provided by the Hong Kong government to combat infringement activities.

Benny Kong & Tsai © 2023
 

Benny Kong & Tsai, Solicitors

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