Chan, now 39, was taken to jail after his appeal was rejected Tuesday, and began serving his three-month prison sentence. The judge, Justice Clare- Marie Beeson, rejected Chan's plea for community service.

Chan, who used the online moniker "Big Crook," intends to take his case to the Court of Final Appeal. He is also expected to make a bail application shortly.

Chan was released on HK$5,000 bail after his sentencing last year, pending the appeal.

Last year a Tuen Mun magistrate handed Chan his dubious distinction after he used the online program BitTorrent to upload three movies - Miss Congeniality, Red Planet and Daredevil - and made them available for downloading over the Internet.

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Chan also advertised the movies, and the procedure for downloading the files, on an online chatroom. At the time, the conviction was hailed as a breakthrough in the fight against the illegal sharing of intellectual property.

The magistrate, Colin MacIntosh, had ruled there was not much of a difference between Chan's uploading the movies and someone manufacturing and distributing illegal discs - a view Beeson shared in her verdict Tuesday.

During the appeal hearing in September, Chan's lawyer, Kevin Pun Kwok-hung, argued Chan had never actively "distributed" any "copies" of the movies online - he had only made them available for others to download, like a person who places paper into a photocopier that enables anyone to make a "copy" by pressing a button.

Pun had also argued since Chan's case did not involve any physical copy of the movies, it could not be considered "a distribution of copies in the copyright sense."

But Beeson rejected the arguments, saying MacIntosh was correct to assume the "ordinary meaning" of "distribution" in the original verdict.

Beeson also quoted statements by a former government secretary to show Hong Kong's legislative intent had been to protect copyright, even as technology made new ways of infringement possible. For that reason, she ruled, there was no reason why the "copies" of the movies had to be physical copies.

"The nature and speed of development in communication procedures ... demanded the pursuit of different or new solutions ... which might not necessarily have been envisaged in 1997," she wrote. "I am satisfied that the [copyright] ordinance does, and was intended to cover, copies in digital format."

Beeson also rejected Chan's contention the sentence of three months was "excessive" since it did not take into consideration the fact he did not profit from the file sharing.

Beeson noted MacIntosh, in handing out the sentence, was fully aware of the noncommercial nature of the case, but measured the seriousness of the case by the harm done to the moviemakers - not by the gain made by the offender. Chan, and those in the chatroom, "were aware of the possible criminal implications of uploading films to the system," Beeson wrote.

She also noted the sentence was already drastically reduced, from a maximum of four years, to three months, in order "to reflect the novelty of the conviction."

Beeson seconded MacIntosh in rejecting the argument the movies "were neither current, nor in the `blockbuster' category."

She wrote: "A court was not in a position to assess the quality or value of such material."