In six shops, customs agents are quick enough to arrest the sellers. But three hours later, while the agents are booking them back at headquarters, a couple of those shops have already reopened. Outside one, young men sit in the cramped hallway, pulling stacks of silver disks out of big cardboard boxes and slipping them into individual plastic wrappers. Why bother to see Oscar winner “Jerry Maguire” in a theater? Buy this video CD and watch it on your computer screen for five bucks.
For consumers, Hong Kong is the pirated-software capital of the world. The CD-ROMs are generally manufactured over the border in China and smuggled in. But China has shut down most of its retail outlets, and Hong Kong has not. That has put some American software producers in the unusual position of welcoming China’s takeover of the British colony on July 1. “I’m rather looking forward to the turnover,” says Valerie Col-bourn of Microsoft. “If you go down to the retail arcades, it’s hard to see how things could get worse.”
In April the U.S. government put Hong Kong on its “watch list” of intellectual-property violators-a distant rumble of trade sanctions that would be extremely damaging to the economy. The Hong Kong government retorted that the move was “most unjustified,” and the Customs and Excise Department promptly conducted a blizzard of confiscatory raids. The government is rushing to push a new, tougher copyright law through the Legislative Council before China dismisses it on July 1.
But obtaining a conviction in Hong Kong isn’t so easy. For one thing, the copyright owner has to stand up in the witness box and identify his or her product. Microsoft, Sega and Sony can do that; others cannot. On raids, customs agents leave behind hundreds of CD-ROMs from smaller American software companies, such as the “Talk to Me” language-learning disks of a Fairfax, Va., company called Globalink. “We are not in a position to trace the copyright holders,” says Calvin Leung, chief of customs’s Intellectual Property Group. Reached by NEWSWEEK, Globalink knew nothing about its piracy problem in Hong Kong. “We can’t spare the resources to patrol the entire world,” said vice president John McCarthy. “Our company has 72 employees, and we’re trying to produce a new generation of product every six months.”
Hong Kong authorities, at this unique time, are loath to initiate a crackdown. Since many people are afraid China will ignore the niceties of legal procedure after it takes over, “this is the wrong time to be harassing people,” said Stephen Selby, director of the government’s interagency Intellectual Property Bureau. Garrie Roman, managing director of KPS Retail Stores, which sells movies in Hong Kong, demands that the Hong Kong government “make the pirates’ life a ‘Nightmare on Elm Street…. he’d like the government to plaster the arcades with signs identifying pirates, get the arcade landlords to evict their tenants and unleash the tax police on vendors. But some Hong Kong residents can imagine China using such methods against democracy activists. That’s exactly what they don’t want their government to do right now. “In Hong Kong, we still believe you are innocent until proven guilty,” says customs agent Danny Such. At this particular moment, that precept is more important to Hong Kong than all the software revenues in the world.
