Heavy jail sentence handed down on illegal set-top boxes sellers in Hong Kong

[Len]

The District Court of Hong Kong handed down sentences varying from 21 to 27 months’ imprisonment against 3 individuals who took part in a scheme that enabled users of the “Maige Set Top Box” (the “Maige Box“) to view pay TV channels for free. This case sets one of the heaviest custodial penalties imposed in Hong Kong for Internet piracy to date.

Copyright Infringement – sharing of decrypted signals

During the 2014 FIFA World Cup, the Hong Kong Customs & Excise Department (“HKCED“) located suspicious webpages promoting the “Maige Box” which claim to enable users to view paid TV channels without having to pay monthly subscription fees. These illegal Maige Boxes were sold in a stall in Sham Shui Po at HKD2,500 (about USD320) each. Once connected to the Internet, the Maige Box streams over 190 channels to users for viewing, among which 11 were paid TV channels. Essentially, these Maige Boxes circumvented the encryption protection that was applied to protect the copyright of the programmes of those paid TV channels.

Three individuals, were arrested and charged with 6 offences including providing a circumvention device or service, conspiracy to defraud and other violations against the Copyright Ordinance (Cap. 528).

One of the defendants was found to have acted upon the request of a Mainland Chinese individual to set up a signal transmission system in Hong Kong by subscribing for 7 paid TV accounts and installing 7 decoders at home. The transmission system then captured and sent decrypted TV channel signals to a server located in Mainland China, which were then streamed to individual Maige Boxes.

Considering the potential substantial loss caused to the paid TV operator (and after factoring in the defendants’ guilty pleas and assistance provided to the prosecution), the Court sentenced the three individuals to 21-27 months’ imprisonment.

Significance of the Case

Charges of “providing a circumvention device or service” and “conspiracy to defraud” are, for the very first time, successfully applied in the criminal prosecution of an online piracy case in Hong Kong. Hopefully, this decision sets the scene for more vigorous enforcement actions against illegal set-top boxes which have been troubling pay TV operators and content owners. It is also worth noting that in addition to or in lieu of criminal charges brought by the HKCED, it is also open for the aggrieved parties to take civil actions to claim and recover losses arising out of the infringement.