"We are a knowledge-based economy, we pride ourselves on innovation and hard work. But the fruits of our intellectual labour must be protected if the creativity and innovation spirit is to flourish," he said.

The Chamber has developed a "Code of Ethics on Protection of Intellectual Property Rights," which contains broad guidelines for businesses to apply in their operations.

The code covers five main areas: computer software, equipment and products, photocopying, dealing with fakes and community responsibility.

"To maintain our status as a first-class international centre for business, it is important for Hong Kong not only to respect IPR but also to develop a reputation of doing so," Mr Tung said.

Efforts in the past few years in IPR enforcement are beginning to pay off, but Mr Tung said more still needs to be done.

"As a champion of IPR rights, the Chamber will be more than happy to work with other organisations on promoting IPR protection. We are a joint organiser of the 'No Fakes Campaign' alongside the Intellectual Property Department, and we participated in the 'Genuine Software Campaign' organised by the Customs and Excise Department. We shall continue this effort. And our effort will be genuine, not false," he said.

Secretary for Commerce and Industry Chau Tak-hay (right) told the audience at the seminar that over the past four years, the government had completely modernised the laws for protecting patents, registered design, copyright and trade marks, bringing them into line with the highest international standards.

In June, the World Trade Organisation (WTO) completed a thorough review of the intellectual property rights laws of Hong Kong.

"I am glad to say that our laws were highly regarded by other WTO members and were considered as being fully consistent with the international standards laid down by the WTO," Mr Chau said.

"However, we are not complacent. We keep our laws under constant review. In June, we enacted new legislation to clarify the Copyright Ordinance to put it beyond doubt that anyone who knowingly uses an infringing copy of copyright work in the course of business commits a criminal offence.

"This means that a company which uses, say, pirated accounting software for its business, or photocopies a book without licence from the copyright owner, may be liable to criminal prosecution."

He said the government plans to bring this new law into effect in 2001 after wide publicity. He also echoed Mr Tung's comments that protection of intellectual property rights requires the full participation of everyone in the community.

The government has also enacted tough legislation to control the manufacture of optical discs to tackle copyright piracy at the production level, as well as to prevent bootlegging. Certain piracy and counterfeiting acts have also been classified as offences under the Organised and Serious Crimes Ordinance, whereby customs officers are given additional powers to tackle them, particularly where criminal syndicates are involved, he said.

In 1999 alone, the government seized some 16.5 million pirated optical discs and 14 production lines worth over HK$360 million, and arrested some 2,700 persons.

On the retail level, last year there were some 1,000 retail outlets of pirated compact discs with some 5 million pirated discs in the market place at any one time. At present, there are fewer than 100 outlets with some 100,000 discs in the market place at any one time. The reduction in volume is about 98 per cent, he said.