Hong Kong: New Copying and Distribution Offence Against Business End-users Under Copyright Ordinance

Last Updated: 1 June 2010
Article by Kenny Wong and Alan C.W. Chiu
Most Read Contributor in Hong Kong, November 2018

Originally published 28 May 2010

Keywords: copying, distribution offence, copyright ordinance,

The copying and distribution offence (the "Offence") against business end-users under the Copyright Ordinance will come into force on 16 July 2010. The Offence targets at the business end-users who frequently make for distribution and/or distribute copies of books, newspapers, magazines or periodicals.

The Offence was introduced in the Copyright (Amendment) Ordinance 2007, and the numeric limits prescribed for the Offence (the "Numeric Limits") and their methods of calculation were brought in by the Copyright (Amendment) Ordinance 2009. The Offence (together with the Numeric Limits) will come into force on 16 July 2010 as contained in the new Section 119B and the new Schedules 1AA and 1AB of the Copyright Ordinance (Cap. 528).

The Offence

After 16 July 2010, it will be a criminal offence if a person, without the copyright owner's authorisation, makes with a view to distributing or distributes, on a regular or frequent basis for the purpose of or in the course of any trade or business, an infringing copy of a copyright work as contained in books, newspapers, magazines or periodicals, to an extent beyond the Numeric Limits, and resulting in a financial loss to the copyright owner. Converting a printed work into a computer file by scanning or other digital means is regarded as making a copy. Hence, photocopying newspaper articles and distributing the same for the company staffs' internal reference or scanning journals for staff training purpose may be caught under this new offence if such copying is unauthorised and it exceeds the Numeric Limits which are explained below.

Persons who may be liable

The person who makes or distributes the infringing copies of the aforesaid four types of printed works for his trade or business will be liable unless he/she can prove that:

  • He/she has no knowledge that the copies made or distributed are infringing copies
  • Reasonable steps have been taken to buy an authorised copy or to obtain the copyright owner's authorisation or licence though not successful
  • It is impractical to identify or contact the copyright owner

If such making or distribution is done in a company/partnership firm, then the director/partner who is responsible for the internal management of the company/partnership will be criminally liable unless there is sufficient evidence showing that the director/partner did not authorise the making and distribution of infringing copies. To succeed in this defence, the court has to be satisfied that

  • The director/partner has caused the company/partnership to set aside financial resources and has directed the use of the resources to buy a sufficient number of genuine copies or to acquire appropriate licences
  • The company/partnership has actually incurred expenses to buy a sufficient number of genuine copies or to acquire appropriate licences

The Court will also consider other factors including whether the director/partner has introduced policies or practices against, and has taken action to prevent, the making and distribution of infringing copies by the company/partnership firm.

If there is no such director/partner who is responsible for the internal management of the company/ partnership, someone under the immediate authority of the directors/ partners may be liable.

An employee can generally be absolved from liability if he/she makes or distributes the infringing copies in the course of his/her employment in accordance with the instructions of his/her employer and he/she is not in a position to make or influence a decision regarding the making or distribution of the infringing copies.

The Numeric Limits

For magazines, periodicals (other than specified journals such as peer-reviewed scholarly journals) and newspapers, the Numeric Limit is 500 pages of copied materials (calculated on the basis that each infringing page is in A4-size and no size adjustment has been made) within a period of 14 days.

For books and specified journals, (i) the Numeric Limit is a total value of HK$6,000 within a period of 180 days; and (ii) the infringing copies made or distributed have to contain more than 25% of the printed pages of a book/an issue of a journal. If no more than 25% of an issue of a journal has been copied, they have to contain at least one or more complete article(s) of that issue.

Making for distribution or distributing copies of the aforesaid publications exceeding those specified quantity or value of infringing materials within the relevant period will trigger off the offence. Detailed guidance for calculating the total number of infringing pages and the total value of infringing copies is provided in Parts 3 and 4 of the new Schedule 1AA of the Copyright Ordinance.

Coverage of the Offence

The Offence is applicable to individuals, partnerships, companies, organisations and anyone doing a business, whether they are profit-making or charitable. Only non-profit making educational establishments are exempted.

The Offence covers the distribution of infringing copies by electronic means (e.g. email or fax) in addition to the distribution of physical copies.

The Offence can apply to distribution through an intranet or other private network. However, pending further public consultation in relation to the numeric limits applicable to intranet distribution and having regard to the availability of the relevant licensing schemes, the Offence will remain inoperative in respect of intranet distribution.

The Offence does not cover the distribution of infringing copies through the internet (except for distribution by email). However, such distribution is actionable under the civil arm and may also attract criminal liability under Section 118(1)(g) of the Copyright Ordinance if the distribution is made to an extent that prejudicially affects the copyright owner's interests.

Penalty

The maximum penalty for the Offence is four years' imprisonment and a fine of HK$50,000 per infringing copy.

Learn more about our Hong Kong office and Intellectual Property practice.

Visit us at www.mayerbrownjsm.com

Copyright 2010. JSM, Mayer Brown International LLP and/or Mayer Brown LLP. All rights reserved. Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: JSM, a Hong Kong partnership, and its associated entities in Asia; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and Mayer Brown LLP, a limited liability partnership established in the United States. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.

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