Hong Kong: The Copyright (Amendment) Bill 2014

Last Updated: 4 July 2014
Article by Eugene Low and Nicola Kung

Keywords: trade marks, China, copyright amendment bill, Hong Kong, Pharmacy and Poisons Ordinance, URS System, Chinese Postal Bureau, Personal Data Protection Rules

Subsequent to our article "Consultation on Treatment of Parody under the Copyright Ordinance – still ongoing" in our previous newsletter, there has been a significant development in the Hong Kong government's attempt to re-introduce the long-awaited Copyright (Amendment) Bill. On 11 June 2014, the government introduced the Copyright (Amendment) Bill 2014 ("Copyright Bill 2014"). In brief, the Copyright Bill aims to (i) re-introduce the package of legislative amendments already scrutinised and supported during the previous (and lapsed) discussion of the Copyright (Amendment) Bill 2011 ("Copyright Bill 2011"); (ii) introduce new fair dealing exceptions for the purposes of parody, satire, caricature and pastiche, commenting on current events, and quotation; (iii) provide further clarification of the criminal liability for copyright infringement generally.

We set out below the major proposals under the Copyright Bill 2014.

Introducing a new exclusive right for the communication of works to the public

The Copyright Bill 2014 re-introduces a technology-neutral communication right for copyright owners to communicate their works. Unlike the existing copyright regime which confers rights specific to certain methods of communication, e.g., "broadcasting" or including the copyright work in a "cable programme service" (both of which will be replaced by this new communication right), the new communication right is expressed in broad terms and is capable of catching existing and future modes of electronic transmission of copyright works. This new right will enhance copyright protection in the digital environment and assist rights owners in combating emerging forms of infringement, e.g., streaming.

New fair dealing exceptions for parody

The legislative process of the Copyright Bill 2011 was derailed by debates on the treatment of parody when it was tabled before the Legislative Council in 2011-2012. End-user groups expressed concern over the proposals in that Bill, in particular that the new offences under the Bill would create a threat to parody and other user-generated content (UGC) on the Internet. A lot of pressure was exerted to create a special exemption for parody use of copyright works from civil and/or criminal liabilities under the Copyright Ordinance.

Following extensive debates and consultation on the parody issue since July 2013, the Copyright Bill 2014 introduces the following new fair dealing exceptions for parody and other uses that have been the subject of concern to end-user groups:

  • Fair dealing use for the purposes of parody, satire, caricature and pastiche – the precise meaning of parody, etc. is not defined in the Copyright Bill 2014 and will be left to the court to decide;
  • Fair dealing use for the purpose of commenting on current events, provided the copyright work has already been released or communicated to the public and the user sufficiently acknowledges the copyright work;
  • Fair dealing use of a quotation, on the condition that the quotation is no more than is required for the specific purpose for which it is used, and that the copyright work has already been released or communicated to the public and the user sufficiently acknowledges the copyright work;
  • Consistent with the current copyright regime, in determining whether the act constitutes fair dealing, the court will take into account all relevant circumstances, including (i) the purpose and nature of the use (non profit or commercial); (ii) the nature of the copyright work; (iii) the amount and substantiality of the portion used in relation to the copyright work as a whole; and (iv) the effect of the use on the potential market for or value of the copyright work.

The Copyright Bill 2014 does not introduce an exception for UGC despite heavy lobbying by some end-user groups. The government considers that the concept of UGC is too "vague and undefined" and although Canada has adopted a UGC exception, there are doubts as to whether the Canadian regime complies with the TRIPS Agreement. The government is of the view that Hong Kong is not ready for a UGC exception and will adopt a 'wait-and-see' approach.

Criminal sanctions

The Copyright Bill 2014 re-introduces criminal sanctions against the unauthorised communication of the work to the public where the infringing act is conducted either (i) in the course of trade or for profit; or (ii) to an extent that prejudicially affects the copyright owner. As compared to the Copyright Bill 2011, the Copyright Bill 2014 proposes a different threshold for determining when an act of unauthorised communication "prejudicially affects the copyright owner". Under the Copyright Bill 2011, the proposed test for the court was whether "more than trivial economic prejudice was caused" to the copyright owner, taking into account a non-exhaustive list of relevant factors (e.g., nature of the copyright work, mode and scale of distribution). This test has been revised in the Copyright Bill 2014 such that in addition to the non-exhaustive list of relevant factors, the court may in particular assess whether economic prejudice has been caused to the copyright owner by asking whether the infringing act amounts to a "substitution for the work".

This revised test is in response to concerns from certain end-user groups that the meaning of "more than trivial economic prejudice" under the Copyright Bill 2011 was imprecise and too wide, creating a chilling effect on freedom of expression. However, the new threshold of "substitution for the work" is unduly high and is out of synch with the international approach (e.g., the Berne Convention three-step test requires members to confine exceptions to use of the copyright work which does not conflict with the normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the rights holder). This issue could be an area of contention during the discussion of the passage of the Copyright Bill 2014.

Establishing a safe harbour for Online Service Providers (OSP )

The Copyright Bill 2014 retains the safe harbour provisions for OSPs introduced in the Copyright Bill 2011. In brief, to benefit from the safe harbour, OSPs must, after receiving a notice of alleged infringement, notify the service subscriber of the alleged infringement, and remove the allegedly infringing content. In response, the service subscriber may file a counter notice to deny the infringement and request the reinstatement of the content which was removed. OSPs must then reinstate the removed content unless the complainant has informed the OSP in writing that court proceedings have been commenced in Hong Kong. The statutory safe harbour regime will be underpinned by a voluntary Code of Practice which sets out practical guidelines and procedures for OSPs to follow after receiving a notification of alleged infringement.

Conclusion

The government is keen to pass the Copyright Bill 2014 as soon as possible as there is an urgent need to update Hong Kong's copyright regime to catch up with international trends and developments. The proposals in the Copyright Bill 2014 appear to have addressed many of the concerns raised in the previous rounds of consultations and the government should expect less resistance to its passage. The government will certainly hope to avoid a repeat of what happened to Copyright Bill 2011 where the legislative proposal was derailed by last-minute debates on the treatment of parody.

Originally published June 2014

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© Copyright 2014. The Mayer Brown Practices. All rights reserved.

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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