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To update Hong Kong’s copyright regime and strengthen the protection of intellectual property rights in the digital environment, the Hong Kong Government conducted a public consultation on updating Hong Kong’s copyright regime from November 2021 to February 2022 and proposed significant amendments to the Copyright Ordinance. The amendments are largely based on the Copyright (Amendment) Bill 2014 and comments received during the public consultation. The Copyright (Amendment) Ordinance 2022 (the “Amendment Ordinance”) was gazette on 16 December 2022 and came into operation on 1 May 2023.
The Amendment Ordinance cover the following five key areas:
1. The introduction of technology-neutral exclusive dissemination rights for copyright owners in response to technological developments;
2. The enhancement of criminal liability for infringement;
3. The revision and expansion of the scope of fair use defences to allow the use of copyrighted works for certain activities commonly found on the internet; to facilitate online learning and the operation of libraries, museums, and archives; and to allow media shifting of sound recordings, etc;
4. The addition of “safe harbor” provisions to encourage online service providers to cooperate with copyright owners to combat online piracy and to provide reasonable protection for their actions; and
5. The addition of two statutory factors for courts to consider when deciding whether to award additional damages to copyright owners in civil infringement cases.
These amendments have strengthened copyright protection in the digital environment and will help to combat large-scale online piracy; at the same time, the new copyright exemptions will allow users to make fair use of copyrighted works in many activities commonly found on the internet, such as parody, whilst protecting freedom of expression.
1. Technology-neutral exclusive right to communicate works to the public
The Copyright Ordinance sets out the acts a copyright owner has the exclusive right to do in Hong Kong, including the right to reproduce, broadcast, or include material in a cable program. However, with the advent of technology, there are now more ways to make works/materials available to the public. Still, these methods are not necessarily acts for which the copyright owner had exclusive rights under the old law.
To address the above issues, the Amendment Ordinance created a technology-neutral exclusive right of communication for copyright owners to communicate their works/materials to the public. Under the Amendment Ordinance, copyright owners have the exclusive right to communicate their copyrighted works/materials to the public, including by making the works available by wire or wireless means in such a way that members of the public in Hong Kong or elsewhere may access the works at a place and time of their choice. A typical example is making a work available “by streaming” over the Internet.
However, to avoid an overly broad definition of “communication to the public,” the law specifies that the following three types of conduct are not considered “communication to the public”:
1） To receive what is offered by others in that communication;
2） Receive the electronically transmitted message constituting the communication; or
3） The provision of facilities only to facilitate the communication to the public.
These three acts will not constitute an exercise of the right of communication under Hong Kong law. For example, the Amendment Ordinance does not prohibit the public from clicking on a link to reach a web page containing infringing content. Nonetheless, the Amendment Ordinance provides copyright owners greater flexibility to respond to infringement by others, especially now that streaming has replaced downloading as a common form of interconnection and online piracy.
2. Enhancement of criminal liability provisions
To better protect the interests of copyright owners, the Amendment Ordinance also imposes criminal liability for unauthorized dissemination of copyrighted works to the public in certain circumstances.
Under the new section 118(8B) of the Amendment Ordinance, a person commits an offense if he infringes the copyright in work by:
1） for, or in the course of, any trade or business which involves the communication of the work to the public for profit or reward; or
2） dissemination of the work to the public to the extent that it impairs the copyright owner’s rights.
The maximum penalty for the above offenses is a fine of HK$50,000 for each copyrighted work and imprisonment for four years.
To address public concerns that the Amendment Ordinance may hinder the free flow of information on the internet and to provide greater legal certainty, the Amendment Ordinance offers further guidance on whether an infringer has contravened the second criterion in section 118(8B) (i.e. communicating the work to the public to the extent of prejudicing the copyright owner’s rights). In determining whether the infringer has violated the second guideline, the Court will:
1） consider the overall situation of the case in question; and
2） in particular, consideration may be given to whether the communication causes economic harm to the copyright owner (e.g., whether the infringing work constitutes a substitute for the original work).
Therefore, the court has broad powers to consider all circumstances relating to that infringement, which affects the outcome of the court’s determination of liability under the second limb of section 118(8B) of the Copyright Ordinance.
3. New Fair Use Defences/Exemptions
The Amendment Ordinance has expanded the scope of acts that may be carried out in relation to copyright protected works without incurring civil or criminal liability. The Amendment Ordinance adds the following defences/exemptions to those listed under the old law:
1） used for parody, satire, creating comic relief, or imitation;
2） used to comment on current events;
3） citation for a specific purpose to the extent that the citation is no more than is necessary for that purpose;
4） educational institutions for educational purposes;
5） the service provider uses data caching to enable a recording to be delivered more efficiently over the network; and
6） media transfer formats for private and home use (i.e. copying additional copies from one media format to another).
4. Safe Harbor Provisions
Under the Amendment Ordinance, an online service provider (e.g., a social networking site operator) may inadvertently disseminate a copyrighted work to the public and thereby engage in copyright infringement. For example, suppose someone posts an infringing copy of a copyrighted work on a social networking site. In that case, the site operator may infringe the copyright in that work if it is made available to the public by wireless means.
Under the safe harbor provision, an online service provider will not be liable to pay damages or any other monetary remedy for copyright infringement of a work occurring on its service platform solely because of providing or operating facilities for the online service concerned if it has complied with the conditions set out in the Amendment Ordinance.
The conditions to be observed by the online service provider are as follows:
1) The service provider has taken reasonable steps to limit or stop the copyright infringement as soon as practicable after the occurrence of the following:a. the provider receives a notice of alleged infringement concerning that infringement;b. the provider knows that the infringement has occurred; orc. the provider is aware of facts or circumstances that inevitably lead to the conclusion that the violation has occurred.
2) the service provider does not receive any financial benefit directly attributable to the infringement;
3) the service provider allows the use of, and does not interfere with, standard technological measures used by copyright owners to identify or protect their copyrighted works; and
4) the service provider designates an agent to receive notices of alleged infringement by providing the agent’s name and contact details through the provider’s services, including a publicly accessible location on the provider’s website.
The safe harbor provisions encourage service providers and copyright owners to cooperate proactively in tackling online piracy. Although the regulations impose additional liability on online service providers, they will undoubtedly benefit service providers if they cooperate in good faith with copyright owners. The Amendment Ordinance brings about a significant transformation of Hong Kong’s copyright law. However, the Government acknowledges that it still needs to address specific issues, such as the extension of the term of copyright protection (in particular in relation to sound recordings), the introduction of copyright exemptions for text and data exploitation and developments in Artificial Intelligence (AI).