Legal Aspects of
Software
Sidney Fong
2006-03-18
Disclaimer
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The authors are not lawyers of any
jurisdiction. This presentation does not
constitute legal advice. One should consult
their own lawyers for legal advice.
The authors do not accept any liability for
any loss or damage , whether physical or
financial or otherwise, caused relying on
any information provided herein.
The information presented herein can by
no means be considered complete and
error-free.
Disclaimer (Cont’d)
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By the way, do you know why we need a
disclaimer like this?
The Legal Practitioners Ordinance s46(1):
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Any unqualified person who wilfully pretends to be, or
takes or uses any name, title, addition or description
implying that he is qualified or recognized by law as
qualified to act as, a solicitor shall be guilty of an
offence and shall be liable on summary conviction to
a fine of $500000.
In Tort law, if a person relies on information
given by a specialist and incurs losses, he may
be able to sue the specialist for the losses. Of
course, a disclaimer will be useful here.
About today’s presentation
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I aim to provide some solid legal groundwork
before moving on to more “computer related”
parts that may be more interesting to you.
Therefore:
The first part will be very boring. It may be less
boring if you participate in the discussion.
It may be complicated (this is exactly what I am
supposed to learn as a full time student). It may
be easier to understand if you ask questions.
So please be more active! 
Today’s Features…
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Boring basic stuff in the beginning 
Are EULA’s valid? Are shrink-wrap licenses
valid?
Legality of “BT” and other file sharing
programs?
Legal Basis of Open Source Software
Licenses
Can Open Source Licenses be revoked?
Today’s Presentation
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Introduction to Law
Legal System of Hong Kong
Brief Introduction to Criminal Law
Contract Law
Some Aspects of Property Law
Patent Law
Copyright Law
Software Licenses
Miscellaneous
“Law”
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What is Law?
Why do we have to know about law?
What is the purpose of Law?
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Role of Law in Hong Kong?
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Bring order to society?
What is the effect of Chinese Traditional
culture on the role of Hong Kong
Any alternatives to law?
Moliu topics for discussion
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Case 1:
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Case 2:
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(Adapted from Alan Tam)
You bought a pack of biscuits from supermarket, which gone bad soon.
You want refund, but the back of the receipt reads: “No refund after 7
days.”
(Adapted from Wikipedia)
ULSP is a Xanga visitor tracking service that enable Xanga users to
obtain the visitor's username on Xanga, and IP address, etc. There are
concerns that the use of ULSP may violate privacy and official policies,
as the Xanga terms of use states, "you must agree not to use Xanga's
products or services to... collect or store personal data about other
users". Is ULSP legal?
Case 3:
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Do you know that (theoretically) we cannot use 毫子 to pay more than
$2? And we cannot use coins to pay more than $100? (Coinage
Ordinance)
Preliminary Terms
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Law – 法律 (etc.)
Chief Executive – 行政長官
Legislature – 立法機關
Legislative Council – 立法會
Court – 法院/法庭
Common Law – 普通法
Precedent – 先例
Today’s Presentation
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Introduction to Law
Legal System of Hong Kong
Brief Introduction to Criminal Law
Contract Law
Some Aspects of Property Law
Patent Law
Copyright Law
Software Licenses
Miscellaneous
Basic Law.
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Our “Constitution” – it provides legal basis
for everything in Hong Kong
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Even the government, courts and legislature
derives legal legitimacy from the Basic Law!
Art 43: Chief Executive
 Art 66: Legislature (Legislative Council)
 Art 80, 81: Courts
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Basic Law..
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Our “source of law”:
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Art 8: “The laws previously in force in Hong
Kong, … shall be maintained…”
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This means laws that were applicable before 1997
continues to apply in Hong Kong
(See also Art 18)
Structure of Courts in Hong Kong
Higher
Court of Final Appeal
Court of Appeal
Court of
First Instance
High Court
District Court
Lands Tribunal
Magistrates’ Court
Labour Tribunal
Small Claims Tribunal
Obscene Articles Tribunal
Coroner’s Court
香港法院結構
Higher
終審法院
上訴法庭
高等法院
原訴法庭
區域法院
土地審裁處
裁判法院
勞資審裁處
小額錢債審裁處
淫褻物品審裁處
死因裁判法庭
“Common Law”
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A very “overloaded” term, many meanings:
1. Common Law vs Civil Law
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2. Common Law vs Legislation
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As a system of law
“Judge made law” vs “laws passed in the
legislature”
3. Common Law vs Equity
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You can ignore this unless you (want to)
study law…
Features of Common Law Systems
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Relies on precedents – Lower courts are
“bound” by decisions of higher courts
Many laws are based on precedents
instead of legislation
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eg. Contract law in Hong Kong is mainly
based on cases. If you look at the legislation
you will find very little law relating to general
contracts
Common Law Countries
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Examples of Common Law countries:
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Note that precedents of other countries can be
referred to in Hong Kong
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Hong Kong (obvious), United Kingdom, Canada,
Australia, New Zealand, Singapore, India…
Basically almost all places that had been once under
British rule
USA…?
In particular, many UK cases still represent the law in
HK.
Also note that most movies or shows on TV
reflect the legal system in USA, which may be
quite different in Hong Kong.
What is “the law”?
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We can look at:
1. Basic Law
2. Legislation
3. Common Law: cases of HK and UK
4. Common Law from other countries
5. Common sense and Imagination
Important note: the law is often unclear! (therefore we
have #5)
Remember all laws are subject to interpretation by the
courts! Sometimes even “clear” provisions in legislation
can be interpreted in surprising ways!
In a sense, nobody really knows “what the law is”...
Today’s Presentation
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Introduction to Law
Legal System of Hong Kong
Brief Introduction of Civil and Criminal Law
Contract Law
Some Aspects of Property Law
Patent Law
Copyright Law
Software Licenses
Miscellaneous
Civil vs Criminal Law
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Civil Law
Dispute Resolution
Litigation between normal
citizens
Proof “on the balance of
probabilities”
Possible outcomes:
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Damages (paid to plaintiff)
Injunction
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Criminal Law
Punishment
Procecuted by
government
Proof “beyond reasonable
doubt”
Possible outcomes:
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Fines (paid to govt)
Imprisonment
Note that the same events can lead to both
civil and criminal actions simultaneously
Example
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Scenario: Candy hits and injures Badguy intentionally.
Badguy pays $1,000,000 for medical expenses (eg.
Hospital treatment).
Civil action: Badguy sues Candy for “Trespass Against
the Person”. Candy compensates Badguy’s medical
expenses
Criminal action: Police / HK Govt prosecutes Candy for
“assault occasioning actual bodily harm”, maximum
imprisonment for 3 years. (Offences Against the Person
Ordinance, section 39)
Note that the requirements for the civil action and for
the criminal action can be very different.
Today’s Presentation
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Introduction to Law
Legal System of Hong Kong
Brief Introduction of Civil and Criminal Law
Contract Law
Some Aspects of Property Law
Patent Law
Copyright Law
Software Licenses
Miscellaneous
About Contract Law
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We want to know whether there is a contract,
and what are the contents of the contract.
Question: do contracts have to be written on
paper (i.e. 「白紙黑字」)?
Question: If I tell you “I’ll give you my notebook
for free”, you say “sure”. Is there are contract?
Question: are advertisements contracts?
Question: what happens when you breach a
contract?
General Principles of Contract Law
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A contract must have:
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Contents of the contract:
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Offer
Acceptance
Consideration
Intention to legal relations
The court will give effect to the “intention of the
parties” (freedom to contract)
Implied terms: eg. Sales of Goods – fitness for
purpose, merchantable quality, etc.
Remedies:
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Damages, Recission, Performance
Today’s Presentation
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Introduction to Law
Legal System of Hong Kong
Brief Introduction of Civil and Criminal Law
Contract Law
Some Aspects of Property Law
Patent Law
Copyright Law
Software Licenses
Miscellaneous
Contracts, Property, Licences
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Contract: between two persons
Property: a “bundle of rights” enforceable
against the whole world
Licenses: (in general) somebody else
owns the property but allows you to use it
Example
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Little cx offers to sell Kay his comic book for
$1000. Kay agrees. Whoops, Kay forgot to bring
money. Little cx says, “nevermind, the book is
now yours, pay me back later”. Just after Kay
gets the book, a thief snatches the book and
runs away. Some days later, Kelly found the
book on the floor and picks it up.
What then?
Can cx get $1000 from Kelly? Can cx get the
book from Kelly?
Can Kay get the book from Kelly?
Example (cont’d)
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Contract: Kay still owes $1000 to cx. cx can sue
Kay (probably in small claims court) if he doesn’t
pay. cx cannot sue the thief (even if police finds
him) to pay for the book because he has no
contract with the thief.
Property: Kay still has property rights in the
book. So he can get back the book from Kelly.
License: Kelly likes the book very much and
wants to borrow it from Kay. She must ask Kay
for permission, otherwise she may be liable for
theft.
Property as bundle of rights
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Normal usage of “property”:
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In Law:
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The car is my property. The car is mine.
I have “property rights” to possess, use, sell, destroy
(etc.) my car
What is the difference?
How about if the car is rented?
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The “car owner” has right to sell the car
I do not have the right to sell or destroy the car. I can
only use it for driving.
So the rights can be “split up”
Licenses
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Are Licenses revocable?
Example 1: Si lends Leo a book. (i.e. Si gives a
license to Leo to use it). Can Si have it back at
any time?
Example 2: Si lends Leo a book. Leo pays $100
per month rent. Can Si have it back at any time?
Example 3: Si lends Leo a room to live in. Leo
pays $100 per month rent. Can Si have it back
at any time?
Licenses
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In general:
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Bare Licenses can be revoked
Contractual Licenses cannot be revoked
In some cases where the licensee has relied
on some promise that the license will not be
revoked, then even “bare licenses” cannot be
revoked (proprietary estoppel)
Today’s Presentation
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Introduction to Law
Legal System of Hong Kong
Brief Introduction of Civil and Criminal Law
Contract Law
Some Aspects of Property Law
Patent Law
Copyright Law
Software Licenses
Miscellaneous
Patents
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Patents generally cover ideas. If an idea is
patented, one has to seek the patent
owner to use that idea, even if he came
up with the idea independently
General requirements of patents
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Susceptible of industrial application
Is new / not obvious
Involves an inventive step
Excluded matters (discussed below)
Patents
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“Software patents”?
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Patent Ordinance s93(2) basically says that computer programs
and algorithms are not patentable.
However, s93(3) also says that they are not patentable only if
the patent relates to the subject matters “as such”.
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“but if some practical (i.e. technical) effect is achieved by the
computer or machine operating according to the instructions
contained in the program, and such effect is novel and inventive (i.e.
not obvious), a claim directed to that practical effect will be
patentable, notwithstanding it is defined by that computer program.”
- Merrill Lynch Inc's Application
Software Patents in other parts of the world:
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Europe is/was considering to allow “software patents”
USA obviously allows software patents (eg. RSA, LZW)
Patents
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Formality
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Requires application to the Registrar of Patents
$$ is required
Need to disclose details of the invention
(Generally, you won’t need one for personal uses…)
Duration
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20 years for standard patents
8 years for short term patents
Today’s Presentation
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Introduction to Law
Legal System of Hong Kong
Brief Introduction of Civil and Criminal Law
Contract Law
Some Aspects of Property Law
Patent Law
Copyright Law
Software Licenses
Miscellaneous
Copyright Law
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“Copyright” is a bundle of rights, for
example, the right to:
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Copy, issue copies, rent copies, make
available to public, make “adaptions”.
“Copyright” also includes “moral” rights,
e.g. the right to be recognized as author.
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NOT available for computer programs! 
Basic requirements
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The work has to be “original” i.e. not copied
elsewhere.
No requirement of work to be creative/useful/etc
Copyright protects the “expression” of ideas, but
not the ideas
Short phrases/words not protected by copyright
(but may be protected by Trademarks etc)
No formalities needed (eg. © Copyright Sidney
Fong 2006) But note that some countries
requires this.
What can be under Copyright?
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Copyright subsists in:
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1. Literary, dramatic and musical, artistic works
2. Sound recordings, films, broadcasts or cable
programmes
3. Typographical arrangement of published editions
Computer Programs are classified under “literary”
works. Also, “compilation of data” (eg. names of
all HKOI trainees) are “literary” works.
Unless there is an explicit agreement, an
employer owns the copyright of works by
employees
Copyright Duration
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Literary, dramatic, musical and artistic work: author’s life
plus 50 years
Sound Recording: 50 years from the end of the calendar
year in which it is made, or if during that period it is
released, 50 years from the end of the calendar year in
which it is released
Films: 50 years from the end of the calendar year in
which the death occurs of the last to die of the material
persons
Broadcasts and Cable Programmes: 50 years from first
transmission
Typographical arrangements of published editions: 25
years from first publication
Primary Infringement
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Copying
Issuing copies to public
Renting copies (for computer programs or sound
recordings)
Making available copies to the public
Performing, showing or playing the work in
public
Broadcasting
Making an adaptation
(*without authorization by copyright owner)
Secondary Infringement
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Importing/exporting infringing copy not for
domestic use
Possessing or dealing with infringing copy for
business purposes
Providing means for making infringing copies
Permitting use of premises for infringing
performance
Providing apparatus for infringing performance
Exceptions
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Fair dealing:
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Research and private study
Criticism, review and news reporting
Accidental inclusion
Educational use
Libraries
Back up copy, adaptation of computer programs
(necessarily)
Fonts
Etc. etc.
Civil Remedies
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The copyright owner (or exclusive licensee)
can sue infringers for the following:
Damages - $
Injunctions 
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Order for delivery up
Order to dispose infringing copy
Etc.
Criminal Offences
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The exact criminal offenses are quite
complicated, I will try to generalize the most
common ones into one page:
Infringements in connection with trade or
business
Import/export not for private/domestic use
“distributes (otherwise than for the purpose of,
in the course of, or in connection with, any trade
or business) to such an extent as to affect
prejudicially the owner of the copyright, an
infringing copy of a copyright work. “
Penalties: up to $50000 and 4 years
imprisonment.
Miscellaneous
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More on Copyright can be found in
Copyright Ordinance (Cap 528)
Note that some criminal provisions are
suspended by “The Copyright (Suspension
of Amendments) Ordinance“.
Copyright on the Internet
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Linking to other sites? (Shetland Times
Limited v Wills)
Today’s Presentation
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Introduction to Law
Legal System of Hong Kong
Brief Introduction of Civil and Criminal Law
Contract Law
Some Aspects of Property Law
Patent Law
Copyright Law
Software Licenses
Miscellaneous
Types of OSS Licenses
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In the open source world, there are the
following types of licenses:
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“Proprietary Licenses” (i.e. not open source)
Academic licenses
Reciprocal licenses
Open Source / Free Software
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Open Source Definition
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In essence: Allows free redistribution, provides source
code, allows derived works
Free Software Definition
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The freedom to run the program
The freedom to study how the program works, and
adapt it to your needs
The freedom to redistribute copies
The freedom to improve the program, and release
your improvements to the public
Academic Licenses
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Basically, most academic licenses say “you
can do whatever you want” (including to
use it in proprietary software)
Most include disclaimers
Academic Licenses include BSD, MIT,
Apache License, Artistic License etc.
Note that the BSD license a few years ago
had an “advertising clause”.
Reciprocal Licenses
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Basically, the idea is “if you modify the
code or create derivative works, you must
release them in the same license”
Examples: GPL, LGPL, MPL, CPL
GPL is proposing a version 3! (I have not
looked at it yet)
Moliu “statistics” on OSS Licenses
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Linux – GPL
Mozilla (includes Firefox, Thunderbird) –
MPL/GPL/LGPL
GNOME – LGPL/GPL
Qt/KDE – GPL
Apache – Apache License
GPL
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The (L)GPL is probably the most
complicated (yet most commonly used)
OSS license.
Terms…
Problems of GPL
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“Derivative works” too broad?
“Mere aggregation”?
“Linking”?
Today’s Presentation
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Introduction to Law
Legal System of Hong Kong
Brief Introduction of Civil and Criminal Law
Contract Law
Some Aspects of Property Law
Patent Law
Copyright Law
Software Licenses
Miscellaneous
You should have some idea on this
now…
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Are EULA’s valid? Are shrink-wrap licenses
valid?
Legality of “BT” and other file sharing
programs?
Legal Basis of Open Source Software
Licenses
Can Open Source Licenses be revoked?
How to find the sources yourself
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Law:
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Judiciary website http://www.judiciary.gov.hk
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BLISS http://www.legislation.gov.hk/
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Contains legislation
HKLII http://www.hklii.org
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Contains cases. (you can find the “BT” case there)
Contains legislation and some cases
Intellectual Property (adapted from Alan Tam’s
presentation last year)
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Intellectual Property Department, HKSAR
( http://www.info.gov.hk/ipd )
Customs & Excise Department, HKSAR
( http://www.info.gov.hk/customs )
World Intellectual Property Organization ( http://www.wipo.org )
World Trade Organization ( http://www.wto.org )
Issues for discussion
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Whether Intellectual Property laws (eg.
Copyright, Patents, etc) are useful to
society? Or are they just allow
corporations (eg. Microsoft? MPAA? RIAA?)
to gain a lot of money?
Anything else?
Today’s Presentation
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Introduction to Law
Legal System of Hong Kong
Brief Introduction of Civil and Criminal Law
Contract Law
Some Aspects of Property Law
Patent Law
Copyright Law
Software Licenses
Miscellaneous