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The long-awaited Copyright (Amendment) Ordinance was finally gazetted – what impacts will it bring to various stakeholders?

2023-01-27

Introduction

With an aim to align Hong Kong’s copyright regime with technological advancements, international norms, as well as to meet Hong Kong’s social and economic needs, the Hong Kong government conducted a public consultation on updating Hong Kong’s copyright regime from November 2021 to February 2022. We have previously examined the consultation paper in the March 2022 edition of our Intellectual Property newsletter (read more here).

Following the public consultation, the government introduced substantial amendments to the Copyright Ordinance (Cap. 528) (“CO”), based mainly on the Copyright (Amendment) Bill 2014 (which was unable to proceed due to opposition from the then Legislative Council), but with substantial amendments to address the views of various stakeholders received during the public consultation. This time, the amendment bill was finally passed by the Legislative Council, and the Copyright (Amendment) Ordinance 2022 (the “Amendment Ordinance”) was gazetted on 16 December 2022.

In this article, we will examine the content of the Amendment Ordinance and provide our analysis and insight on what impacts it will bring to various stakeholders, including copyright owners, netizens and online service providers.

Technology-neutral exclusive right to communicate their works to the public

The CO provides a list of acts which copyright owners have the exclusive right to do in Hong Kong, including copying the work, broadcasting the work or including it in a cable programme etc. However, with the advancement of technology, there are now more ways of making a work available to the public and they do not necessarily fall within the list of acts that copyright owners have the exclusive right to do.

To solve the above problem, the Amendment Ordinance introduces a new technology-neutral exclusive communication right for copyright owners to communicate their works to the public. Under the Amendment Ordinance, copyright owner enjoys an exclusive right to communicate the copyright work to the public, which includes “making the work available, by wire or wireless means, in such a way that members of the public in Hong Kong or elsewhere may access the work from a place and at a time individually chosen by them”. A common example is to make works available through the Internet by streaming.

That said, to avoid the definition of “communication of the work to the public” from being too wide, the legislation expressly excludes the following 3 acts from falling under the category of “communicating the work to the public”:

1.       gaining access to what is made available by someone else in the communication; or

2.       receiving the electronic transmission of which the communication consists; or

3.       mere provision of facilities by any person for enabling or facilitating the communication of a work to the public.

Copyright owners should note that the above 3 acts do not constitute an exercise of the right to communication. For instance, any member of the public will not be prohibited by virtue of the Amendment Ordinance from clicking on a weblink to gain access to a webpage even if that webpage contains infringing content. That said, the new Amendment Ordinance provides copyright owners with more flexibility to tackle infringement activities of others, especially in the current age where internet and online piracy no longer take the form of downloading, but rather, streaming.

Introduction of new criminal sanctions

To offer better protection to copyright owners, the Amendment Ordinance also introduces criminal sanctions against those who make unauthorised communications of copyright works to the public in certain situations.

Under the new section 118(8B) of the Amendment Ordinance, a person commits an offence if the person infringes copyright in a work by communicating the work to the public:

1.       for the purpose of or in the course of any trade or business that consists of communicating works to the public for profit or reward; or

 

2.       to such an extent as to affect prejudicially the copyright owner.

 

The maximum penalty for the above offence is a fine of HK$50,000 for each copyright work, and imprisonment for 4 years.

To dispel concerns about the possible negative impacts on the free flow of information across the Internet and to provide greater legal certainty, the Amendment Ordinance provides further guidance in determining whether the infringer is liable under the 2nd limb of section 118(8B)  i.e. the communication of work to the public is made to such an extent as to affect prejudicially the copyright owner.

In determining the 2nd limb, the court:

1.       may take into account all the circumstances of the case; and

 

2.       in particular, may take into account whether the communication had caused economic damage or prejudice to the owner (such as where the infringing work amounts to a substitution for the original work).

 

Hence, owners and netizens should take note of the wide powers of the court to take into account all circumstances surrounding the infringement, which would in turn affect the court’s determination of liability under the 2nd limb of section 118(8B) CO.

New fair-dealing exceptions

The amendments discussed above further strengthens copyright protection in Hong Kong, which is crucial to promote creativity by providing authors and lawful owners with economic incentives. However, fair access to and uses of copyright works by others are also important for dissemination and advancement of knowledge which also promotes creativity.

Hence, to tie with the introduction of the above communication right, the Amendment Ordinance broadens the scope of permitted acts which may be done in relation to copyright works without attracting civil or criminal liability notwithstanding subsistence of copyright. The following new fair dealing exceptions are introduced by the Amendment Ordinance:

1.       use for the purpose of parody, satire, caricature and pastiche (戲仿、諷刺、營造滑稽及模仿);

 

2.       use for the purpose of commenting on current events;

 

3.       use of a quotation, the extent of which is no more than is required by the specific purpose for which it is used;

 

4.       use by education establishments for educational purposes;

 

5.       use by service providers to enable more efficient transmission of the fixation by the provider through a network, i.e. data caching; and

 

6.       use in the form of media shifting (i.e. making of an additional copy from one media format to another), for the purpose of private and domestic use.

 

The Hong Kong government has assured the public in the consultation paper that the new fair dealing exceptions above would cover, in appropriate cases, a wide range of day-to-day Internet activities, so long as they are for the above listed purposes.

Under the Amendment Ordinance, it appears that netizens may now freely express their opinions through secondary creations, as long as such copyrighted materials are used for non-commercial purposes. That said, without any statutory definitions to any of the terms “parody, satire, caricature and pastiche”, and a lack of examples provided in the ordinance or any case law at the moment, it is unclear if the present common uses of copyright works on the internet can fall within the above fair dealing exceptions.

Safe harbour provisions

Under the Amendment Ordinance, an online service provider such as operator of a social networking website may accidentally be involved in communication of copyright works to the public and thus participate in copyright infringement. For instance, if a person posts an infringing copy of a copyright work on a social networking site, the site operator may also be making the work available to the public by wireless means and thus infringing the copyright of the work.

To prevent an online services provider from being innocently mixed-up with a third party wrongdoing and also to incentivise online service providers to take reasonable measures to limit infringing activities on their service platforms, the Amendment Ordinance incorporates safe harbour provisions for the service providers.

Under the safe harbour provisions, if an online service provider has complied with the conditions set out in the Amendment Ordinance, the service provider will not be liable for damages or any other pecuniary remedy for infringement of the copyright in a work that occurs on the provider’s service platform merely because the provider provides, or operates facilities for, online services.

The conditions for the online service providers to comply with are the following:

1.       The service provider has taken reasonable steps to limit or stop the infringement as soon as practicable after the provider:

a.       received a notice of alleged infringement in relation to the infringement;

b.       became aware that the infringement has occurred; or

c.       became aware of the facts or circumstances that would lead inevitably to the conclusion that the infringement had occurred.

 

2.       The service provider receives no financial benefit directly attributable to the infringement;

 

3.       The service provider accommodates and does not interfere with the standard technical measures that are used by copyright owners to identify or protect their copyright works; and

 

4.       The service provider designates an agent to receive notices of alleged infringements, by supplying through the provider’s service, including on the provider’s website at a location accessible to the public, the agent’s name and contact details.

 

The safe harbour provisions encourage the active cooperation of service providers and copyright owners to collectively combat online piracy. Whilst it imposes additional obligations on the part of the online service provider, it would undoubtedly benefit both the service provider and copyright owners, to flush out acts of infringement as well as protect and exempt the service provider from liability.

Conclusion

The Amendment Ordinance has already brought substantial changes to the current copyright regime in Hong Kong, and is slowly catching up with the ever evolving digital environment. That said, the government also acknowledged that there are remaining issues that have not yet been addressed in the Amendment Ordinance, such as extension of copyright term of protection, introduction of specific copyright exceptions for text and data mining, etc. It remains to be seen whether additional amendments would be implemented to address all such issues in the near future.

In case you encounter any legal questions in relation to the updated copyright regime or require any compliance advice, you are advised to consult an intellectual property lawyer.

 


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Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.

Published by ONC Lawyers © 2023


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