The government's desire to promote Hong Kong as a bastion of intellectual property protection led to the world's first trial and conviction of a BitTorrent user last week as Chan Nai-ming was found guilty on three counts of distributing infringing copies of copyrighted movies on the internet. The government wants to be seen to be taking steps that will convince companies that Hong Kong is a safe place to develop intellectual property and that wrongdoers will face criminal prosecution, unlike other territories where civil litigation is the norm for file-sharing cases. 'Online piracy by way of BitTorrent came as a fast attack to the copyright industry at the beginning of 2004,' Tam Yiu-keung, head of the Intellectual Property Investigation Bureau, said. 'Hong Kong Customs watched the development closely and maintained frequent dialogue with industry representatives to see what could be done to stop the growing trend of BT infringement.' While those industry representatives are no doubt pleased with the verdict, it is difficult to see how the ruling will have a long-term impact without further action on the part of the government or industry. Government figures indicate that the number of seed files created in Hong Kong fell by 80 per cent following Chan's arrest, a fact widely quoted as proving the effectiveness of the criminal proceedings. But the figure reflects only half of the story. Woody Tsung Wan-chi, chief executive of the Hong Kong, Kowloon and New Territories Motion Picture Industry Association, said: 'Following this ruling, I don't think anyone would dare seed a BT file in Hong Kong any more. 'But arguably the problem of downloaders is even more significant [than uploaders] in the Hong Kong context. 'Whether last week's verdict can also be applied to non-seeders is difficult to predict. 'But even if it can't, the government should extend the existing copyright legislation to penalise downloaders, because otherwise this problem will not go away.' In fact, last week's ruling ignited a debate on whether BitTorrent's function of simultaneous downloading and uploading could not also be regarded as 'distribution', leaving an even greater proportion of Hong Kong's population at risk of criminal prosecution. The customs department said it would continue to prosecute only seeders such as Chan, based on its position that 'so long as [BitTorrent] activities are involved, the person who provides the original BT torrent file and seed of a copyright work ... is clearly committing an offence under the Copyright Ordinance in terms of both actus rus and mens reas'. But the department acknowledged that prosecutions alone would not end Hong Kong's piracy problem. There is a significant gulf between the law and a practice deemed acceptable by a large number of Hong Kong internet users, which is at least partly explained by the policy of copyright holders to resist digital distribution lest it cannibalise CD and DVD sales. Rightly or wrongly, local file sharers are voting with their clicks in favour of digital distribution of content to fill their video iPods and multimedia devices, and the industry, especially in Hong Kong, is failing to respond with legitimate content with which to do so. Akash Sachdeva, a Hong Kong-based intellectual property lawyer at Allen & Overy, said: 'You could argue that if record labels or other rights owners don't get their act together to provide legitimate alternatives to illegal downloading, then they lose the moral high ground in protesting about such illegal downloads, although this has no impact on legality or otherwise of unauthorised downloads.' From a content owner's perspective, it may be a case of chicken and the egg. William Pfeiffer, chief executive of Celestial Pictures, the Hong Kong company that owns the Shaw Brothers movie catalogue, said: 'With our video-on-demand deals the main issue has always been security. 'If there wasn't such a propensity to copy and steal, all these deals could be accelerated, but you simply can't have a physical shop that is based on an honour system, and that remains the case in the online world.'