Background

The long-awaited update to the Hong Kong copyright regime has crystallised in the form of the Copyright (Amendment) Ordinance ("Amendment Ordinance") after two unsuccessful attempts to introduce the legislation in 2011 and 2014.

The Amendment Ordinance will come into effect on a date to be announced.

The Amendment Ordinance brings five key areas of updates:

• Exclusive technology-neutral communication right for copyright owners in light to allow for technological developments in the future.
• Criminal sanctions against infringements relating to the new communication right.
• Expanded scope of copyright exceptions, in particular to cater for use of copyright works in certain common Internet activities.
• Safe harbour provisions to provide incentives for online service providers (OSPs) to co-operate with copyright owners in combatting online piracy.
• Two new statutory factors for the court to consider when assessing whether to award additional damages in civil copyright infringement cases.

Communication right

The Amendment Ordinance introduces a new technology-neutral exclusive communication right for copyright owners to communicate their works to the public through any mode of electronic transmission (including streaming). To limit the broadness of the new right, certain acts such as the "mere provision of facilities" for enabling the communication of a work to the public will not constitute an exercise of the right.

To safeguard the communication right, criminal sanctions are introduced to penalise those who make unauthorised communication of copyright works to the public (a) for the purpose of or in the course of any trade or business which consists of communicating works to the public for profit or reward; or (b) to such an extent as to affect prejudicially the copyright owners.

The government has indicated that the enforcement priorities with regards to the new criminal sanctions are aimed at "large scale" infringement activities, such as streaming illegal films to an audience.

Expanded copyright exceptions

The current Copyright Ordinance contains over 60 clauses setting out permitted acts in relation to copyright works. The Amendment Ordinance expands the scope of copyright exceptions by introducing the following additional permitted acts:

• Fair dealing with copyright works for the purposes of parody, satire, caricature and pastiche.
• Fair dealing with copyright works for the purpose of commenting on current events and quotation of copyright works under certain circumstances such as online discussions.
• Communicating copies of certain copyright works (including for example by way of online communication) by an educational establishment for certain educational purposes, e.g. giving instructions.
• Data caching by online service providers.
• Media shifting (e.g. converting a media format) for private and domestic use.

It is envisaged by the government that the new fair dealing exceptions would cover sufficient day-to-day internet activities by end users to address concerns that the new communication right would be overly in favour of copyright owners.

Safe harbour

OSPs are afforded a degree of protection from new safe harbour provisions which exempt them from liability stemming from infringing works on their service platforms, if prescribed conditions are met. The new safe harbour provisions in the Amendment Ordinance and accompanying Code of Practice (draft to be finalised) provide a dual "notice and notice" and "notice and takedown" procedures which, if complied with, will exempt an OSP from liability for copyright infringement. At a high level, these procedures require OSPs to give notice to users suspected of having committed copyright infringement; and/or require OSPs to remove suspected infringing materials in order to benefit from an exemption of liability.

Additional factors for the court to consider when assessing additional damages in infringement cases

The existing regime provides for statutory factors to aid the court when assessing additional damages, such as the flagrancy of the infringement and the infringer's gained benefit. The Amendment Ordinance includes two additional factors to facilitate the assessment of additional damages (especially for online infringement cases), namely, (a) the unreasonable conduct of an infringer after having been informed of the infringement; and (b) the likelihood of widespread circulation of infringing copies as a result of the infringement.

Commentary

Bringing the Hong Kong copyright regime in line with international standards

With respect to the communication right, many overseas jurisdictions have long ago enacted the same or similar rights into their copyright regimes, these include Canada (2012), New Zealand (2008), Singapore (2005), United Kingdom (2003) and Australia (2001). The introduction of a communication right should therefore be a positive update for copyright owners.

A facilitator of online commerce

The introduction of safe harbour provisions is also a step to align Hong Kong's copyright regime with that of other jurisdictions such as the United States and the United Kingdom which have implemented similar "notice and takedown" provisions.

Questions unanswered?

While the Amendment Ordinance is a positive step to modernise the Hong Kong copyright regime, we believe, and the government has acknowledged, that certain areas are currently left unaddressed. For instance, the Amendment Ordinance has not addressed the use of automated techniques to analyse data (i.e. data mining) and whether that may constitute a copyright exception. Further, whether Artificial Intelligence-created works can be protected by copyright remains an issue which generates much debate.