COMP7901 (2021-22)
Legal Protection of Digital Property Suggested Answer to Homework #1
Subject matters in question and why are they copyrightable? (5 marks)
Computer programs are protected as literary works (CO, s.4(1)). Object codes are also DIRECTLY protected as literary works (TRIPS, Art 10(1)) or INDIRECTLY as an adaptation of the source code (CO, s.29)(3)(b), (4). So both SinoCreate and CNCreate are both protected under the Copyright Law in .
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(a) Civil Liabilities of CNSoft (40 marks)
From the given facts, a large portion of CNCreate¡¯s object code is virtually identical to that of SinoCreate, this is strong evidence of copying. SinoCreate has been selling in China and in before CNCreate is created, it is easy for SinoSoft to prove that CNSoft had the opportunity of accessing the object code of SinoCreate. Also object codes are machine generated coding that any identity cannot be due to mere coincidence. This is striking similarity. The court may infer copying in the absence of any satisfactory explanation by CNSoft (Francis, Day & Hunter).
SinoSoft, being the copyright owner of SinoCreate, can sue CNSoft for copying the object codes without consent (CO, s.23). All CDs of CNCreate contain infringing copies of SinoCreate (CO, s.35(2)). In selling CNCreate to software retailers in HK, CNSoft is liable for issuing copies of portion of SinoCreate (contained in CNCreate) for the first time to the public (CO, s.24). CNSoft would also be laible for authorizing their retailers to sell these infringing copies (CO, s.22(2)).
All these are primary infringements for which ignorance is no defence ie. do not require proof of guilt in the infringer’s mind.
In addition, SinoSoft may also sue CNSoft for selling infringing copies (CO, s.31(1)(b)) and distributing infringing copies in the course of trade or business (CO, s.31(1)(c)). If there is evidence that CNSoft still has stock in their possession, it can also be liable for possessing infringing copies in the course of trade or business (CO, s.31(1)(a)). To succeed, SinoSoft has to prove that CNSoft actually knew or had reasons to believe that the CDs (CNCreate) contain infringing copies. This is easily established because to a reasonable man, the fact that a large portion of CNCreate’s object code is virtually identical to that of SinoCreate is a strong reason for him to believe that CNCreate is an infringing copy (LA Gear).
(b) Criminal Liabilities of CNSoft (20 marks)
By selling the CDs to retailers in , CNSoft is liable for making the CDs for sale (CO, s.118(1)(a)), selling the CDs (CO, s.118(1)(d)) and distributing the CDs for business (CO, s.118(1)(e)). If there is evidence that CNSoft still has stock in their possession, it can also be liable for possessing infringing copies with a view to its being sold or distributed in the course of trade or business (CO, s.118(1)(f)).
(c) Civil Liabilities of CompuStore (35 marks)
CompuStore has bought SinoCreate in China with the label ¡°For sale in Mainland China Only¡± and placed them for sale in its shop in . Since SinoCreate is lawfully made in China by SinoSoft, according to CO, s.35A, a computer program will not be an infringing copy for the purpose of CO, s.35(3), if it was lawfully made in the country where it was made. So SinoCreate is not an infringing copy. Even though there is an exclusive licensee in , CompuStore has not infringed any civil nor criminal liabilities under Copyright Ordinance by selling such lawful copies in .
CompuStore has also bought CNCreate from CNSoft for sale in its shop. Customers must make copy of the software when they install or use it in their computers. CompuStore would be laible for authorizing their customers to make infringing copies (CO, s.22(2)) by selling the CDs with a licence to make copies to their customers.
By having the CNCreate CDs displayed in CompuStore¡¯s shop for sale, SinoSoft may sue CompuStore for possessing infringing copies in the course of trade or business (CO, s.31(1)(a)), exposing for sale (CO, s.31(1)(b)) and exhibiting in public for the purpose of trade or business (CO, s.31(1)(c)).
If there is evidence that at least a copy of CNCreate was sold (e.g. receipt of sales), in addition to ¡®exposing for sale¡¯ and ¡®exhibiting in public for business¡¯, SinoSoft should sue CompuStore for selling the infringing copes (CO, s.31(1)(b)) and distributing in the course of trade or business (CO, s.31(1)(c)).
Again to succeed, SinoSoft has to prove knowledge for all secondary infringement. This is rather straight forward because the fact already suggested that staff of CompuStore actually knew that the CNCreate¡¯s object code is virtually identical to that of SinCreate. Thus CompuStore has actual knowledge that they are dealing with infringing copies.
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