Hong Kong: File Sharing Debate Reaches Hong Kong

Last Updated: 23 June 2005
Article by Gabriela Kennedy and John Tai

On 27 April 2005, the Hong Kong Government announced that it had brought criminal charges against a Hong Kong man for illegally sharing three files containing Hollywood movies on the Internet using BitTorrent technology. The man was arrested in January 2005 and subsequently released until the criminal charges were formally laid in April 2005.

Under the Copyright Ordinance, a person who distributes an infringing copy of a copyright work without authorisation commits an offence. If convicted, the maximum penalty carries a fine of HK$50,000 per infringing copy and four years' imprisonment. The man pleaded not guilty at the first court appearance on 28 April 2005.

Around the same time, on 27 April 2005, the Hong Kong and Kowloon Motion Picture Industry Association announced the launch of a campaign against Internet users engaging in illegal sharing of local movies over the Internet. This campaign was spurred by the discovery that a large number of files containing two Cantonese films, the House of Fury and The Eye:10 were being illegally shared over the Internet shortly after their commercial release in Hong Kong over Easter.

With such actions, Hong Kong has joined a growing rank of jurisdictions in which music and movie industry stakeholders are campaigning against file-sharers. The stakes are high. The Motion Picture Industry Association estimates that over US$50 million in revenue was lost in 2004 due to illegal copying and sharing of local movies over the Internet.

Although actions have been taken against file-sharers in many countries, because of variations in different provisions in national copyright laws the decisions rendered so far have varied. For example, in Canada, the Federal Court in BMG Canada Inc. and others v. Doe and others, 2004 FC 488 held that downloading of a song for personal use does not amount to infringement under Canada's Copyright Act, while in the UK where there is no personal use exemption, and the private study or research exemption does not apply to films and sound recordings, the British Phonographic Industry has recently made headlines with its actions and victories against file-sharers, and court orders requiring ISPs to disclose the identities of suspected file swappers.

Issues for Hong Kong

The adequacy of provisions in the Copyright Ordinance when it comes to file-sharing is yet to be tested. Some of the legal and evidential issues likely to be faced by Hong Kong courts when dealing with file-sharing cases under the Copyright Ordinance include the following:-

  • Do unauthorised uploading and downloading of copyrighted works on file-sharing networks constitute copyright infringement attracting civil and criminal liability?
  • Is there any "fair dealing" exemption available as a defence to the act of file-sharing ?
  • Can a causal connection between an IP addresses, a user's pseudonym and a potential defendant be established ?
  • Could Internet Service Providers ("ISPs") be compelled under the law to disclose information related to their customers ?
  • Could ISPs be held liable for infringement of copyright?

Uploading and downloading

The act of unauthorised copying of a copyright work including the reproduction of such work in whole or in part in any medium by electronic means is restricted under the Copyright Ordinance. The unauthorised uploading and downloading of music, movies or software files via Internet file-sharing networks constitutes copyright infringement and attracts civil liability under the Copyright Ordinance.

File-sharing technology such as BitTorrent works in such a way that as one downloads a file, the downloader simultaneously uploads a part of the downloaded file to all other users who are requesting that file on the same network. The significance is that the downloader is strictly speaking "distributing" part of the downloaded file to other users and consequently, the downloader may be subject to criminal liability in addition to civil liability.

The Canadian Federal Court in BMG Canada Inc. and others v. Doe and others, 2004 FC 488 commented that the making of a copy so that it is accessible on a shared file directory for others to download is not the same as "distributing" per se. It is accepted that Canadian copyright legislation is different, but the file-sharing technology considered in that case was also different from the BitTorrent technology used by the Hong Kong man arrested in January 2005.

When using BitTorrent technology, an initial uploader (or seeder) must first perform a positive act of creating on a web server a .torrent file containing information about the music or movie file and a link to a "tracker" which enables downloaders to connect to each other in order to download the file. This setup is not required in other file-sharing systems such as KaZaa and iMesh which were the systems at issue in the BMG Canada Inc. case. It is arguable that the creation of a ".torrent" file and its posting on a web server indicates an uploader's positive act of distribution.

Are exemptions available?

In Hong Kong, fair dealing exemptions are only available for research, private study, educational and library archival purposes. Unlike in the Canadian Copyright Act, there is no "private use" exemption under the Hong Kong Copyright Ordinance and therefore, the unauthorised downloading of movie or music files for private use is illegal.

Unlike in the UK, in Hong Kong the private study or research exemption does apply to all categories of copyright works and therefore includes films and sound recordings. Although the exemption is recognised to be very narrow in scope, some defendants in file sharing actions are likely to try to rely on it in any event.

Disclosure by ISP and causal connection between IP addresses, the users' pseudonyms and infringers

A practical issue for rights owners is that while it is relatively easy to obtain IP addresses of file-sharers, as plaintiffs they will need more than that in order to be able to bring either a criminal or a civil action. Rights owners need the assistance of ISPs to match an IP address with an actual legal person. In most countries, copyright legislation does not impose an obligation on ISPs to disclose such information to rights owners. In common law countries, rights owners may seek an order requiring the disclosure of identity of a defendant from a third party. Such an order is commonly referred to as a Norwich Pharmacal Order. Its principles are based on the English case Norwich Pharmacal Co. v. Customs and Excise Commissioner [1974] A.C. 133 which dealt with the issue of pre-action discovery by a plaintiff to ascertain the identity of a defendant.

The Canadian Federal court held in BMG Canada Inc. and others v. Doe and others, 2004 FC 488 that the test for granting an order compelling ISPs to disclose information about an alleged unknown infringer is as follows:-

  1. the applicant must establish a prima facie case against the unknown alleged wrongdoer;
  2. the person from whom discovery is sought must be in some way involved in the matter under dispute, he must be more than an innocent bystander;
  3. the person from whom discovery is sought must be the only practical source of information available to the applicants;
  4. the person from whom discovery is sought must be reasonably compensated for his expenses arising out of compliance with the discovery order in addition to his legal costs; and
  5. the public interests in favour of disclosure must outweigh the legitimate privacy concerns.

Whilst requirements 1, 2 and 4 should not be difficult to meet, satisfying requirements 3 and 5 is likely to be practically more difficult. For requirement 3, rights owners would need to explain why the identity of an unknown infringer identified by an IP address cannot be obtained from other sources. As far as requirement 5 is concerned, the court would need to balance a defendant's privacy rights against the rights of rights owners and the public interest.

It was noted in BMG Canada Inc. that there has not been any case in which privacy or other concerns outweighed the interest of a plaintiff in obtaining documents and information necessary to identify the defendants. In other words, privacy cannot be used as a shield to protect a person from civil or criminal liability.

The recent court orders in the UK granted to the British Phonographic Industry for the disclosure by ISPs of identities of file-sharers, are likely to hold some authority in Hong Kong.

As a further practical point, rights owners are advised to bring their applications as soon as possible after having obtained the IP addresses as such a request may be refused by the court if there is delay on the grounds that the data supplied may no longer be reliable and could lead potentially to the erroneous identification of defendants. Added to this, there is the risk that ISPs may not necessarily hold sufficiently detailed information to associate a particular customer to an IP address at any particular time as there is no legal obligation for ISPs to keep such information.

Rights owners would also need to provide detailed information on how an infringer's pseudonym was linked to a particular IP addresses. Without such information, the court may consider that the particular IP addresses provided by the plaintiff are not reliable.

Can ISPs be held liable for copyright infringement?

As long as infringing copies of movies and sound recordings are merely transmitted through an ISP's facilities and are not stored on its servers, an ISPs can rely on the defence in Section 26(4) of the Copyright Ordinance. This defence is simply that the mere provision of physical facilities which enable the making available of copies of works to the public does not of itself constitute an act of making available of copies of works to the public.

This deals with primary infringement. Would ISPs be liable for secondary infringement in Hong Kong? Section 32(2) of the Copyright Ordinance provides that a person may be liable for copyright infringement, if it transmits a copyright work by means of a telecommunication system if it has knowledge that infringing copies of such work will be made by means of reception of such transmission. This provision will no doubt cover the action of the "seeder" of illegal files and may well be found sufficient to attract liability for an ISP that has been put on notice of the acts of a particular "seeder" and which chooses not to do anything about it.

In such situations ISPs may well decide to block the Internet access of "seeders" or suspected infringers. This in turn poses interesting issues relating to contractual risks for ISPs who might be challenged by customers if their Internet access is blocked. To guard against such risks, ISPs would need to revisit their contractual arrangements. See Goetz Trading Ltd v Pacific Supernet Ltd [2004] HKEC 1218 DCCJ 5427/2002.

The upshot of all this is that while an ISP will not be held liable for primary infringement of copyright for making available infringing copies to the public an ISP is exposed to the risk of secondary infringement of copyright if it continues to allow a "seeder" or a customer identified by the relevant IP address as having engaged in infringing activities, to have access to the Internet once the ISP has been notified of the infringing activities.

Conclusion

The adequacy of the provisions in the Copyright Ordinance in Hong Kong when it comes to illegal P2P file-sharing activities over the Internet is to be tested in the coming year.

In the meantime, various industry groups have lobbied the Government for the inclusion of provisions in the legislation requiring ISPs to retain records that enable the matching of IP addresses to legal persons.

On 29 April 2005 the Hong Kong Government announced that it had been holding discussions with ISPs concerning certain voluntary guidelines to deal with the disclosure of information by ISPs. This signals a compromise position with no changes to the legislation as such but rather the adoption of certain guidelines for ISPs, a move which will no doubt attract both praise and criticism from different quarters.

© Gabriela Kennedy and John Tai

The authors are partner and solicitor respectively practising in the IP/TMT Group of Lovells in Hong Kong and can be contacted by e-mail at gabriela.kennedy@lovells.com and john.tai@lovells.com respectively.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions