Satellite Television Asian Region Ltd v. Alpha Communications Technology Ltd and Others
Read the full judgment text of HCA 3976/2002 on BabelCite. This High Court CFI judgment was delivered on 2 May 2003.
1. This is an application for summary judgment. It stems from a writ brought by the plaintiffs against the seven defendants for breach of copyright. The usual remedies, being injunctions, delivery up of material and inquiry as to damages are sought. Prior to the hearing D1, an incorporated company in Hong Kong, and D2, a director of D1, agreed to submit to final judgment. The application is against the remaining five defendants.
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HCA 3976/2002 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 3976 OF 2002 ____________
____________ Coram: Deputy High Court Judge Gill in Chambers Dates of Hearing: 23-25 April 2003 Date of Judgment: 2 May 2003 ______________ J U D G M E N T ______________ 1.This is an application for summary judgment. It stems from a writ brought by the plaintiffs against the seven defendants for breach of copyright. The usual remedies, being injunctions, delivery up of material and inquiry as to damages are sought. Prior to the hearing D1, an incorporated company in Hong Kong, and D2, a director of D1, agreed to submit to final judgment. The application is against the remaining five defendants. 2.The plaintiffs claim to be the owners, operators and broadcasters of television programmes. P1's are broadcast under the trade marks "STAR Movies" and "STAR World". P2's are distributed under the trade marks "CNN" and "CNN International". P3's are broadcast under the trade mark "Cartoon Network". P4 operates "ESPN" and "STAR Sports". P5's broadcasts are under the names of "Discovery Channel", "Animal Planet" and "Discovery Travel and Adventure Channel". And P6 broadcasts under the names of "Adventure One" and "National Geographic". By virtue of their respective rights to own and operate the plaintiffs' claim copyright in their programmes under the Copyright Ordinance Cap. 528. 3.The plaintiffs control the exploitation of their copyrights by encrypting the signals transmitted during a broadcast, so that the programme can only be viewed by those supplied with a decoder and an SIM card which together are capable of unscrambling the encrypted signals. And only those who, for a fee, subscribe to a distributor authorised by the plaintiffs to retransmit the programmes in a particular territory are entitled to a decoder and SIM card. 4.The territories throughout which an authorised distributor is licenced to operate are defined by national or territorial boundaries. For instance the distributor known for short as PSMI operates under the trade name "Dream" in the Philippines. UBC retransmits in Thailand and MEASAT under the trade name "Astro" rebroadcasts in Malaysia. But because the scope of satellites via which the signals are transmitted extends beyond the territorial limits of a distribution agreement, it is possible for a signal available to, say, subscribers to Dream in the Philippines to be viewed in Hong Kong, using a decoder and SIM card intended for Dream subscribers in the Philippines. As the rights associated with a subscription are strictly non-transferrable and limited for use in the designated territory, the plaintiffs' case is that transfer of a decoder and SIM card intended for use in a territory outside of Hong Kong to a customer for use in Hong Kong is in breach of the plaintiffs' copyright. 5.D3, D5 and D7 are limited liability companies in Hong Kong. D4 is a sole proprietorship. D6 is a director of and runs D5. The defendants are engaged in the supply to customers both commercial (such as bars, karaoke lounges, clubs and the like) and domestic of such equipment as satellite dishes, antennae, decoders and so on to enable their televisions to receive programmes broadcast via satellites. It is the plaintiffs' case that the defendants have been subscribing to programmes through distributors licenced to retransmit outside Hong Kong and have then, for a fee, transferred those rights unlawfully to their own customers in Hong Kong, including the installation of the offshore SIM card. It is this alleged activity which by these proceedings the plaintiffs seek to restrain, and for which compensation and incidental remedies are sought. 6.Whilst the remaining defendants oppose the claims, D6's position is that if D5 is found liable he must also be as a joint tortfeasor because of his close association with D5. 7.The plaintiffs claim to be able to invoke the provisions under the Copyright Ordinance under two heads; namely, as owners of works in which rights of copyright subsist whose rights have been infringed and or in the alternative under section 275, where rights of copyright ownership do not have to be established. Section 275 states in part:-
8.The plaintiffs are variously based in Hong Kong and the United States. Evidence in support of their application for summary judgment has been adduced in various affidavits filed. Predominant as a deponent is one Richard Keady who is a solicitor employed by Messrs Herbert Smith, solicitors for the plaintiffs, and who has conduct of the litigation; he made six in all. As a preamble to each he records he has been authorised by the plaintiffs to make them. And he states in each case:-
9.In his first affidavit based on information including documents received from the plaintiffs, he swears to the truth and accuracy of the statement of claim, whose essential details I have already summarised. He exhibits printouts from the websites of the three distributors which promote and set out the mechanism by which the plaintiffs' programmes under licence are received and then retransmitted to their customers within the authorised territories in each case. He also exhibits sample subscription agreements without which, with attendant monthly payment, a viewer in the appropriate territory is not entitled to receive the broadcast. He produces printouts which reveal that the 'footprints' of the satellites via which the distributors relay the designated programmes encompass much more landmass than the territory controlled by each distributor; in particular, that Hong Kong falls within the footprints, so that unauthorized use of a SIM card and decoder in Hong Kong enables a broadcast to be received and viewed. He produces a printout from the website of the Telecommunications Authority in Hong Kong which lists those entitled to provide pay television in Hong Kong. Dream Astro and UBC are not on the list. 10.He further deposes that Kroll Associates (Asia) Limited, commercial investigators in Hong Kong, were engaged to investigate activities of the defendants relative to suspected illicit activity undertaken by them; he produces copies of the reports prepared. He also produces internet printouts and an SCMP advertisement which indicate that D's 3,4,5 and 7 were continuing to promote activities complained of in the statement of claim even after the writ was filed and served on them. And finally he expresses the belief that there is no defence to the plaintiffs' claims. 11.One Thomas Martin Keaveny deposes to being a vice president of P5. He produces by way of example copies of the agreement by which it gives exclusive licence to broadcast its product in turn to UBC in Thailand and MEASAT (Astro) in Malaysia, redacted to remove sensitive material. 12.In his second affidavit Mr Keady produces by way of example copies of agreements made between P4 and UBC, MEASAT and PSMI in turn granting exclusive licence to rebroadcast in Thailand, Malaysia and the Philippines, but not elsewhere, similarly redacted. 13.In his third affidavit Mr Keady deposes to having been provided with particulars of the works the subject of this litigation, where they were made and by whom, with whom copyright subsists and who the distributors are that are licenced to deal with them. This information was provided him by senior personnel of all six plaintiffs, whose names and titles he lists. 14.In his fourth affidavit Mr Keady produces six letters from senior personnel of each of the six plaintiffs confirming the truth and accuracy of the statement of claim as it relates to the plaintiffs in each case. 15.Next I come to an affidavit of one Francis Cheng, a vice president of P1. He produces by way of example, the following documents, namely:-
16.Then in an affidavit made by one Ian Shane Carroll, described as a attorney of P2 and a director of P3, he produces by way of example copies of a number of agreements which include those made between affiliates of P2 and P3 and UBC, MEASAT and PMSI giving licence to broadcast their products in their respective territories and sample invoices and subscriber agreements, again redacted. 17.Mr Keady's fifth affidavit exhibits translations of those parts of documents hitherto produced which are written in Chinese characters. 18.In his sixth, Mr Keady produces letters from each of the distributors UBC, Dream and Astro. In his own words, he deposes that the letters:-
19.I come next to evidence adduced by a Mr Wong Yat Ching, an investigator employed by Kroll. He deposes that on instruction he attended the business premises of D3, D4, D5 and D7 between June and August 2002. In each case he presented himself as a prospective customer wanting to purchase and install a satellite system being advertised or offered for sale. In each case he spoke to either an employee or, in the case of D4 and D6, the defendant himself. In each case he wore a wire; thus his conversations were recorded. He produces reports which include transcripts of an initial visit and a follow-up. These are the reports first exhibited by Mr Keady in his first affidavit. I come to summarize them in turn. 20.Mr Wong went to the premises of D3 in July 2002. There he noted a television with decoder attached showing satellite TV programmes. There was a pamphlet promoting channels, for inter alia, Thai UBC and Malaysia Astro. 21.One Albert Lui introduced himself as manager of D3 and presented his card. During the conversation, Mr Lui stated that D3 provides the full set of apparatus including a decoder enabling access to various satellite networks. He quoted an annual fee for UBC for which the necessary SIM card would be provided. Asked if the installation was legal he responded -
Asked if D3 had undertaken installations in pubs, bars and saunas, Mr Lui responded:
22.Following that introduction Mr Wong telephoned Mr Lui and asked for a fixed quotation to install a system capable of accessing Thai UBC. At the same time he asked for the names of commercial establishments at which D3 had provided similar systems. He was given examples including the name of the operator of a chain of karaoke lounges. A quote was subsequently faxed. 23.Next Mr Wong visited premises said to be occupied by D4. There he met one Philip Yeung, D4. The premises comprised a shop in which receivers and decoders were displayed. Sales literature for UBC and African TV were also on show. D4 explained they were the two products on offer. Asked to demonstrate, D4 pointed to a television set that was showing a Star TV programme and said that it was transmitted from Thailand by means of a UBC SIM card imported from Thailand. Asked what the difference was between Thai UBC and Cable, D4 responded that Thai UBC has more channels. He said many bars and discos in Sai Kung are his customers. He faxed a quote on request, citing Thaicom as the target satellite. 24.Subsequently D4 was asked if the equipment could be tested before purchase. This was arranged at D4's premises. A staff member, called Miss Chan, assisted. She said the decoder and SIM card had been installed. Mr Wong was given the remote and flipped though the various channels that were on view. These included STAR Movies, ESPN, STAR Sports and Discovery. Then D4 arrived and the transaction was concluded; by this means Mr Wong took delivery of the decoder and SIM card. 25.I come next to the report concerning D5. A company search revealed one Li Ka Siu to be a director and shareholder. Mr Wong visited D5's business premises, which comprised a warehouse and adjoining office. A man introducing himself as Li Kai Siu, D6, was present. D6 said they provided 'the full set of apparatus, installation and maintenance.' Asked what was on offer he mentioned amongst others 'Thai UBC' and 'Philippine Dream'. And he said that they had installed their system in many bars. 26.Subsequently Mr Wong phoned the premises of D5 and spoke to D6 and asked for a quotation for the installation of a system with a subscription to Thai UBC. A quote was sent and with it a list of commercial establishments stated to have been supplied by D5. 27.And so to the investigation of D7. When Mr Wong visited its premises he found it to be a shop containing some televisions and satellite products. Two televisions were showing STAR World. There was promotional material for UBC and Dream. Mr Wong spoke to a man who introduced himself as Chan but who declined to hand over his card. Asked what D7 provided, Mr Chan said 'We provide installation and maintenance services of satellites. We also supply the full set of apparatus including dish satellites, decoders etc'. Asked what products were offered, he said 'Thai UBC, Philippine Dream, South Africa Star and China Broadcasting Television.' And he stated they have experience installing in bars. Subsequently Mr Wong telephoned and asked for a quote for the cost of installing a system for subscribing to the Thai UBC channel. In due course a quote was faxed which incorporated a two-year fee for the UBC smart card. 28.I come shortly to summarising the evidence filed on behalf of the defendants. But before doing so it is pertinent to refer to the timetable of the litigation as it unfolded. The writ was issued on 21 October 2002. The defendants filed acknowledgements of service on 4 November. The plaintiffs' application for summary judgment was filed on 18 November supported by Mr Keady's first affidavit. Next in time the defendants each filed an affidavit in response, in opposition. All are dated 3 December. Then there was a directions hearing on 15 December at which the summons was adjourned to a date to be fixed. The defendants were given leave to file further evidence in opposition within 28 days (by 12 January); the plaintiff had 14 days thereafter to file a response. But there was no further evidence adduced by the defendants. Mr Keady's 2nd , 3rd and 4th affidavits and those of Messrs Cheng & Carroll were filed on 16 January. Mr Wong's, exhibiting his reports, was filed on 20 March. Finally Mr Keady's fifth and sixth were filed on 8 April. 29.It is apparent that the defendants chose to adduce the same evidence; the affidavits are dated the same and are virtually identical. I need thus to summarise only one, and turn to that filed by Miss Czarina Choi, a director of D3. She begins by disputing the appropriateness of an Order 14 application, given what she says are the complicated issues of copyright ownership in satellite transmission and broadcasting, necessitating expert opinion and extensive discovery before adjudication of the issues can be properly undertaken. 30.She also takes issue with Mr Keady having deposed to ownership in works in which copyright is said to subsist for and on behalf of the plaintiffs when, having regard to the complexities and specialist knowledge required, those having direct involvement should have done so. 31.She recites the claims of each plaintiff to ownership in the works and their copyright and complains there is no or insufficient evidence to support that; a bare assertion is not good enough. She queries whether the footprints of the satellites used by Thai UBC and MEASAT cover Hong Kong. She further states that there is nothing to show the distributors Dream, UBC and Astro are prohibited from transmitting to Hong Kong. Speaking of the business of D3 she states at para. 23:-
32.As to the acquisition of SIM cards to enable a customer to receive programmes from Thai UBC, she states that it is not illegal for UBC to sell its SIM cards to Hong Kong. In support of this she exhibits an e-mail from a Miss Luckanaphisate whom she claims to be a sales representative of UBC:-
33.It is pertinent to note that beyond Miss Choi's bare assertion there is nothing to identify the author of the e-mail or to show she had the authority to send it on behalf of UBC, nor is there an explanation for the expression 'Amnesty' or the significance of the months April and May, nor that it amounted to permitting the sale of UBC SIM cards to Hong Kong. 34.She states that D3 never received any subscription agreement from UBC, Astro or Dream and the terms of any subscription agreement if in existence are not known and thus D3 has no reason to believe an SIM purchased is in breach of any copyright. She states that the SIM cards the use of which are said to infringe provide access to channels only a few of which are relevant to these proceedings. Finally she states that the injunctive relief sought is too wide; out of all proposition to such protection the plaintiffs might be entitled to. To grant the injunction as asked for would effectively put D3 out of business when a substantial part of D3's business has no bearing on any rights the plaintiffs claim are breached; furthermore, because it is a complicated case, summary adjudication is not justified. 35.I come now to consider the issues and rule upon them. 36.Under the first limb, the plaintiffs each claim to be the owner of broadcasts in which copyright subsists, relying on the Copyright Ordinance to establish their proprietary rights. Hereafter section numbers I record are of the Copyright Ordinance. Section 8(1) defines 'broadcast'. Section 2 (1)(b) defines copyright as a property right subsisting in works which include broadcasts. Sections 11(1) and (2)(c) and 8(3) define the 'author' of a broadcast to be the person transmitting the programme if he has responsibility to any extent for its contents. 37.The evidence adduced by Mr Keady, in particular, that in his first and third affidavits, is evidence which purports to establish ownership and copyright in the broadcasts packaged and provided under their trade marks as set out in the statement of claim. I have already stated that the defendants challenge this evidence on the basis that it amounts to bare assertions; further that by the nature of the rights claimed the issues are complex and should be provided by deponents having particular, hands-on expertise. But the plaintiffs are entitled to invoke the provisions of section 121, the relevant parts of which are:-
38.Mr Keady's affidavits were made on behalf of the plaintiffs and otherwise comply with section 121(4). There is no statutory or other authority that evidence going to copyright ownership and so on is inadmissible if incorporated in an affidavit made by a solicitor. In his affidavits, he states that they have been sworn with authority and he has provided the source of his material. No notice under section 121(5) was served. In essence the defendants apart from the challenge of bare assertion have stated nothing to rebut the statutory presumption of section 121; indeed there was no evidence adduced after Mr Keady's third affidavit and thus not even a bare denial. 39.I am satisfied thus the plaintiffs have established ownership and copyright in the broadcasts more specifically set out in the statement of claim. 40.Section 22(1)(a) vests in the owner of a copyright the exclusive right, in Hong Kong, inter alia, to copy the work. This is one of the acts exclusively available included in the statutory expression "acts restricted by the copyright". And section 22(2) states that copyright is infringed by a person who without the licence of the copyright owner does or authorizes another to do an act restricted by copyright. 41.Section 23(1) states that copying of the work is an act restricted by the copyright in every description of copyright work. Section 23(2) defines copying as reproducing the work in any material form. Section 23(6) provides that this includes the making of copies which are transient. 42.Section 27(3) states that the playing of a broadcast in public is an act restricted by copyright. 43.Sections 32 and 34 provide for secondary infringement for which knowledge is a prerequisite. 44.Section 32(1) states that copyright is infringed where without licence a person imports or possesses for the purpose of trade or sells or offers for sale an article specifically designed for making copies of the work knowing or having reason to believe it is to be used to make infringing copies. 45.Section 34(2) states that the person who supplied the apparatus used in a broadcast which infringes copyright is liable for the infringement if he knew or had reason to believe that the apparatus was likely to be used in such way. 46.I turn back to the evidence adduced and in particular that of Mr Wong in which he describes his visits to the premises of D's 3,4,5 and 7 and the transcripts of conversations he had with in turn D4 and D6 and representatives of D3 and D7. There is of course no evidence adduced to challenge his commentary of events as they unfolded. In the first instance against attempts to establish the contrary it is apparent from demonstrations he describes that the SIM cards on offer are capable of reproducing channels protected by the plaintiffs' copyright. And of course it would not be otherwise; why promote for sale in Hong Kong equipment that transmits broadcasts not capable of being viewed in Hong Kong? It is also apparent that the defendants have no licence to deal in the plaintiffs' broadcasts. It is no answer for them or those representing them to deny all knowledge of the position as to licences. One is either licenced or not; the defendants are quite obviously not. The e-mail exhibited by Miss Choi in support of the contention that UBD had 'authorized' sale to the defendants of SIM cards does not begin to state to the contrary. There is no evidence as to the status of the sender, no proper explanation of what she is stating and in particular no reference to the use of the card outside Thailand. 47.I find, as a matter of fact and law, that the customers of D's 3, 4, 5 and 7 by use of the SIM cards which enable transmission in Hong Kong of the plaintiffs' broadcasts are infringing their copyright. They are doing so because by displaying them for view, they are copying them under section 23(1), (2) and (6). In addition where the card is used in commercial premises, such as a bar, there is infringement by performance under section 27(3). 48.The defendants and each of them by authorizing the copying, are in contravention of section 22(2). And because I draw an irresistible inference from the primary evidence, I find that they knew they were importing, and possessing and supplying apparatus that was designed to infringe copyright, which makes them infringers under sections 32(1) and 34(2) as well. 49.I come now to the protection and remedies the plaintiffs seek under section 275. 50.By virtue of the undisputed evidence that the plaintiffs charge for the reception of programmes and transmit the same by encrypted signals, the plaintiffs fall within the category of persons in section 275(1) entitled to the same rights and remedies as a copyright owner. Thus they are entitled to protection under section 275(2) against the person who imports ... or sells any apparatus ... designed ... to enable ... persons to receive the programmes ... when they are not entitled to do so. 51.On the evidence adduced I am satisfied that the defendants fall into the category of those referred to in section 275(2) giving the plaintiffs the rights and remedies afforded by section 275. 52.I come finally to the all-important issue; is this a proper claim that may be dealt with summarily under Order 14? 53.I am satisfied it is. The defendants have not shown any triable issue or arguable defence. It has been put to me in evidence and submissions that there are complex issues of fact and law because of the nature of the works in which copyright is claimed requiring expert opinions and extensive discovery. But I beg to differ. Proprietary rights in broadcasts are specifically provided for in the Copyright Ordinance. It is stated by and on behalf of the defendants that specialist material is needed. But there has not been produced anything at all to back that up. The plaintiffs' rights to the protection and remedies afforded by the Copyright Ordinance are readily ascertainable. The defendants' infringing in each case is patent and obvious. 54.The procedure under Order 14 is to avoid unnecessary delay and expense when, notwithstanding illusions of complexity, none exists. This is precisely the situation in this case. 55.Finally the remedies sought. The defendants protest in evidence and submissions that the injunctive relief sought is too far-reaching and will effectively prevent them from operating at all. But this is an application for a final judgment, not an interlocutory one. Principles of 'balance of convenience' and 'undue hardship' play no part. And in my view justice would not be achieved if the injunctive relief were limited to the use of the SIM card. Arguably it is that use which is offensive and must be stopped. But the decoder, satellite dish and so on are part of a complete kit, marketed on the basis that the customer will have access to the broadcasts to which, as I have found, he is not entitled. In the circumstances I am satisfied the injunction granted must encompass not just the SIM card but also the associated apparatus. And the plaintiffs are also entitled as I find to an enquiry into damages, delivery up and particulars of customers supplied. 56.The defendants having been found to have infringed copyright must suffer the statutory consequences. 57.The orders as sought at paragraphs 1 to 7 and 9 are hereby granted. Costs will be nisi at first instance.
Representation: Ms Winnie Tam, instructed by Messrs Herbert Smith, for the plaintiffs Mr H F Leung, instructed by Messrs Ng, Lie, Lai & Chan, for the 3rd-7th defendants |