To bring Hong Kong's copyright regime closer to technological developments and international norms, the Hong Kong Government launched a 3-month public consultation from November 2021 to February 2022 to update Hong Kong's Copyright Ordinance (Cap. 528) ("CO"). The Government's key legislative proposals in its public consultation paper (the "Consultation Paper") were discussed in a previous article "At Last – Renewed Attempts to Update Hong Kong's Copyright Ordinance" published in our IP & TMT Quarterly Review (Fourth Quarter 2021).
Following the public consultation, the Government published a summary of the views collected and its plans to update the CO. The majority of respondents agree with the Government's proposal to use the Copyright (Amendment) Bill 2014 as the basis for the present amendments and were generally supportive of the key legislative proposals. The Copyright (Amendment) Bill 2022 (the "2022 Bill") was published on 27 May 2022. The 2022 Bill is currently under consideration by the Bills Committee, after which the Legislative Council will debate and vote on it.
As a follow-up to our last article, we look at the views collected on the key legislative proposals, the Government's responses, and key provisions of the 2022 Bill.
Technology-Neutral Communication Right and Criminal Liability
The Government proposed a new communication right for copyright owners to communicate their works to the public on any electronic platform, while stipulating that certain acts do not constitute "communication to the public", such as the mere provision of facilities for enabling or facilitating the communication of a work to the public.
Many copyright owners are of the view that the specified acts are too broad and should be deleted. The Government maintains that the specified acts strike a balance between protecting copyright owners' legitimate interests and public interests and should be retained, subject to appropriate adjustments and clarifications in the drafting.
Accordingly, the 2022 Bill introduces provisions which give copyright owners the exclusive right of communication.1 The "communication of a work" means the electronic communication of the work to the public, including (a) broadcasting of the work; (b) inclusion of the work in a cable programme service; and (c) making available of the work to the public.2 A person is to be regarded as having communicated a work to the public if she has "determined" the content of the communication.
The 2022 Bill does not define or explain how content of a communication is to be "determined". That said, the 2022 Bill clarifies that a person will not be considered as having determined such content only because she has taken steps for the purpose of (a) gaining access to what is made available by someone else in the communication; or (b) receiving the electronic transmission of which the communication consists.3 For instance, a person does not determine the content of a webpage by merely clicking on a link to access the webpage.
The mere provision of facilities for enabling or facilitating the communication of a work to the public does not constitute an act of communication, but "mere provision" does not include the provision of facilities that are primarily designed, produced, or adapted to enable or facilitate direct access to a copyright work without the copyright owner's permission.4
Adding force to this new right, the 2022 Bill seeks to impose criminal liability for unauthorised communications in circumstances where the copyright in the work is infringed: (i) 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 (ii) otherwise to such an extent as to affect prejudicially the copyright owner. However, it is a defence to prove that the defendant did not know and had no reason to believe that, by communicating the work in question in the said circumstances, she was infringing the copyright. The maximum penalty is a fine at level 5 (currently at HK$50,000) and 4-year imprisonment.5
Additional Damages in Civil Cases
The CO currently provides that the Court may have regard to all circumstances in awarding additional damages for copyright infringement, for example, the flagrancy of the infringement and any benefit accrued to the defendant by reason of the infringement. The 2022 Bill proposes to add two factors which the Court may take into account, namely (i) any unreasonable conduct of the defendant after the infringement occurred; and (ii) the likelihood of widespread circulation of infringing copies as a result of the infringement.6
Safe Harbour Provisions
Respondents provided diverse views in relation to the proposed new safe harbour provisions for Online Service Providers ("OSPs") which limit the OSPs' liability for copyright infringement occurring on their platforms. While some copyright owners believe that OSPs should be subject to more conditions in order to benefit from the safe harbour provisions, some OSPs opine that they will be placed under a significant burden under the proposed provisions. In addition, a few copyright users are concerned about the adverse impact of the proposed takedown mechanism on freedom of expression.
The Government is of the view that the proposed provisions balance the interests of different stakeholders, noting that similar provisions are included in copyright legislations of jurisdictions such as Australia, Singapore, the UK and the US. Hence, the Government's position is that the relevant safe harbour mechanism should be first established by statute, and the operational details can be addressed in a voluntary Code of Practice, which may be published to provide practical guidance to OSPs.
In short, the OSPs will not be liable for damages or any other pecuniary remedy for copyright infringement occurring on their platforms if the following conditions are met:7
The 2022 Bill also clarifies that OSPs are not required to monitor their services or actively seek facts that indicate infringing activity, except to the extent consistent with standard technical measures of copyright owners.8
The surrounding provisions include, for example, procedures of giving a notice to OSPs for alleged infringement, the steps that OSPs may take after becoming aware of an infringement, and the counter-notice mechanism for alleged infringers to contest the complaint.8
New Fair Dealing Exceptions
The Government proposed new fair dealing exceptions for the use of copyright works for (i) parody, satire, caricature and pastiche; (ii) commenting on current events; and (iii) quotation of copyright works. Some copyright users opine that the Government should introduce a new exception for secondary creations, while copyright owners believe that the proposed exceptions should be tightened. The Government is of the view that the proposed exceptions have balanced the interests of copyright owners and copyright users, and hence included in the 2022 Bill that:
- Use of a quotation from a copyright work is not infringing, provided that (i) the work has been released or communicated to the public; (ii) the use of the quotation is fair dealing with the work; (iii) the extent of the quotation is no more than is required by the specific purpose for which it is used; and (iv) the use of the quotation is accompanied by a sufficient acknowledgement (unless it is not reasonably practicable to do so).9
- Fair dealing with a copyright work for the purpose of commenting on current events is not infringing, provided that the use is accompanied by a sufficient acknowledgement (unless it is not reasonably practicable to do so).10
- Fair dealing with a copyright work for the purpose of parody, satire, caricature or pastiche is not infringing.11 These terms are not defined in the 2022 Bill. Rather, the Government relied on the definitions of these terms in the Concise Oxford English Dictionary in the Consultation Paper and considered that the definitions are clear and confined.12
For each of the above exceptions, a non-exhaustive list of factors are proposed for determining whether the dealing with a copyright work is fair – this includes (i) the purpose and nature of the dealing; (ii) the nature of the work; (iii) the amount and substantiality of the portion dealt with in relation to the work as a whole; and (iv) the effect of the dealing on the potential market for, or value of, the work.13
The 2022 Bill is long overdue and in line with Hong Kong's commitment to provide a robust IP regime and the Central People's Government's support in its 14th Five-Year Plan for Hong Kong to develop into a regional IP trading centre. Whilst the Hong Kong Government maintains the view that it is unnecessary to introduce specific provisions to tackle illicit streaming devices or to provide for a judicial site blocking mechanism, it does leave the door open for future amendments as the 2022 Bill is hopefully the start of a continuous process to update the copyright regime.
There is no concrete timeline on when the 2022 Bill is expected to be passed. It is hoped that the 2022 Bill will fare better than its predecessor the Copyright (Amendment) Bill 2014, which was shelved in 2016 due to polarizing views, and will be given due consideration by the Legislative Council.
1 New section 22(1)(fa) of the CO under Clause 10(3) of the 2022 Bill
2 New section 28A(2) of the CO under Clause 14 of the 2022 Bill
3 New sections 28A(4) and (5) of the CO under Clause 14 of the 2022 Bill
4 New section 28A(6) of the CO under Clause 14 of the 2022 Bill
5 New sections 118(8B)-(8D) and 119(3) of the CO under Clauses 63(10) and 64 of the 2022 Bill; Cap. 221 Criminal Procedure Ordinance — Schedule 8 Level of Fines for Offences
6 Section 108(2) of the CO; new sections 108(2)(d) and (e) of the CO under Clause 61(3) of the 2022 Bill
7 New section 88B of the CO under Clause 56 of the 2022 Bill. A "service provider" is defined as a person who, by means of electronic equipment or a network, or both, provides, or operates facilities for, any online services (new section 65A(2) of the CO under Clause 47 of the 2022 Bill; new section 88A of the CO under Clause 56 of the 2022 Bill).
8 New section 88B(5) of the CO under Clause 56 of the 2022 Bill 26 New sections 88B to 88J in Division IIIA in Part II of the CO under Clause 56 of the 2022 Bill
9 Amended section 39(2) of the CO under Clause 19 of the 2022 Bill
10 Amended section 39(3) of the CO under Clause 19 of the 2022 Bill
11 New section 39A of the CO under Clause 20 of the 2022 Bill
12 Footnote 11, page 9 of the Consultation Paper
13 Amended section 39(4) of the CO under Clause 19 of the 2022 Bill; new section 39A(2) of the CO under Clause 20 of the 2022 Bill
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