APAA COPYRIGHT COMMITTEE
Hong Kong
Report to the Copyright Committee
55th Council Meeting in Singapore
October 19, 2008
By : Alice Chan, Douglas Clark and Anita Leung
The following is the report of the Hong Kong APAA Copyright Committee. The report covers the
following areas:
1.
Development of Hong Kong Copyright Law
2.
Recent Cases
3.
Special Topic Report – Online Copyright Issues
1.
DEVELOPMENT OF HONG KONG COPYRIGHT LAW
There have been two major developments in Copyright Law in Hong Kong inn 2008. These are:
1.
The coming into force of provisions substantially re-writing the law relating to
circumvention devices including making dealings in circumvention devices a criminal
offence;
2.
The issuance of a consultation paper by the the Government on development of
Copyright Law.
Circumvention devices
The law relating to circumvention of copy protection measures has been substantively re-written.
The new definition of "effective technological measure" subject to protection has been clarified to
include access control measures. Exclusive licensees (in addition to copyright owners) have right
of action against those who provide "relevant devices" or "relevant services". Such devices and
services include those which are promoted, advertised, or marketed for the purpose of
circumvention; which have only a limited commercially significant purpose or use other than to
circumvent; or which are primarily designed, produced or adapted for the purpose of enabling or
facilitating circumvention of effective technological measures.
Criminal offences have also been introduced in relation to dealings in circumvention devices. It is
defence to the criminal offence if the accused can show that he did not know and had no reason
to believe that the relevant device or service enabled or facilitated the circumvention of the
effective technological measure.
Hong Kong Customs has conducted raids on a number of shops selling modified consoles and
mod chips. No prosecutions have been finalised as yet.
Consultation paper
The Commerce of Economic Development Bureau ("CEBD") in Hong Kong issued Preliminary
Proposals for Strengthening Copyright Protection in the Digital Environment (the "Proposals") in
April 2008, which will amend the existing copyright legislation to better reflect the requirements of
an increasingly digital environment.
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-2Prior to publication of the Proposals, the government sought consultation from the public in
December 2006, to which it received over 600 responses. Since formulating the proposals,
stakeholders are being consulted through Tri Parte Forums, and the CEBD is expected to further
consult on the current proposals before submitting a draft bill before the Legislative Council in late
2008 or early 2009.
This following outlines a number of the proposals and how they will affect copyright owners,
OSPs and users of the digital media.
Criminalising infringing acts of communication
The Proposals include the introduction of a broad right of communication to the public, to cover all
modes of electronic transmissions, thereby obviating the need to change the law in line with
future technological developments. New criminal sanctions would be introduced to catch acts of
unauthorised communication, in situations where it was (i) made for the purpose or in the course
of business, or (ii) by streaming the copyright work to the recipients and to such an extent that it
prejudicially affects the copyright owner.
However, the Proposals do not go as far as to create specific criminal sanctions for unauthorised
file sharing or downloading. Under existing legislation, criminal liability is imposed on upstream
infringers, namely those who distribute infringing copies of copyright works in a trade or business
context or to such an extent as to prejudicially affect the copyright owner's interests. As such, the
distribution of infringing copies by uploading them onto an online service platform or a peer-topeer ("P2P") file sharing network is caught by this provision. In CEBD's view, the purchase and
use of infringing hardcopies of copyright works is not illegal under existing copyright law,
therefore internet downloading of infringing copies does not need to be criminalised.
"Caching" (temporary reproduction) exemption for OSPs
An exemption has been proposed to cover caching activities, whereby an online service provider
("OSP") would not infringe copyright by temporary reproduction which is transient or incidental in
nature, and is technically required for the transmission process to function efficiently. The
exemption will only apply to a non-infringing communication of the copyright work, which does not
modify the original version, and in any event would be subject to express prohibitions by the
copyright owner or licensee.
Voluntary Code of Practice for OSPs to combat internet piracy
The first meeting of the Tri Parte Forum to discuss the proposed Code of Practice for OSPs in
Protecting Copyright in the Digital Environment (the "Code") was held on 16 July 2008. It
provided a forum for CEBD representatives, OSPs, copyright owners and users to explore the
merits of different systems and formulate a workable system to be implemented. The definition of
OSPs, the nature of their role and the scope of responsibilities in combating online copyright
infringement was discussed between the stakeholders at the first meeting, with the next meeting
scheduled for September 2008.
Under the Proposals, the law would be amended to incentivise OSPs to comply with the Code, by
deeming it a factor the court should take into account in determining whether an OSP authorised
copyright infringement committed on its service platform.
A timetable was set to finalise and submit a draft Code by the beginning of 2009. CEBD
representatives indicated that, failing general agreement between the stakeholders on the content
of the Code within this timeframe, legislation was a likely outcome. Members of the public will
also be given an opportunity to express their views on the Code.
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-3Preserving the court's scrutiny under Norwich Pharmacal orders
Identifying online infringers is often a costly and time-consuming process for copyright owners.
Under existing law, a copyright owner must apply to the court for a "Norwich Pharmacal order" to
compel an OSP to provide the information which reveals the identity of the infringer.
A more expedient mechanism, such as the subpoena system adopted in the States (where
information on an alleged infringer can be obtained without scrutiny by the court provided the
stipulated conditions are met), has been blocked for privacy reasons. The Privacy Commissioner
for Personal Data expressed concern that the mere need for a "quick and inexpensive alternative
mechanism to facilitate effective enforcement of civil rights is not a sufficient justification for the
invasion of personal data privacy". The CEBD therefore maintains that any streamlining of the
disclosure mechanism or means to help copyright owners take civil actions against online
infringers would have to remain subject to the court's scrutiny, and should not compromise the
protection of personal data privacy.
Preserving the court's discretion in awarding damages
In order to be compensated in a copyright infringement action, a copyright owner is required to
prove the loss it has suffered and show that the infringement caused that loss. The burden
therefore lies with the wronged party to prove actual loss.
The CEBD has rejected numerous copyright owners' requests for the introduction of statutory
damages to relieve this burden. On the basis that statutory damages are not available for other
tort actions under Hong Kong law, the CEBD is not willing to fetter the court's discretion in
awarding damages on a case-by-case basis. It also foresees substantive difficulties in specifying
a range of damages that could be justified to cover the myriad of copyright infringement activities.
However, it recognises that proving the extent of loss is a burden to copyright owners, therefore
additional factors will be introduced to assist the court in determining additional damages. For
instance, the conduct of the infringer (such as attempts to hide infringing activity) and the
potential widespread circulation of infringing copies (in cases of internet piracy) will be taken into
account by the court.
Submissions by APAA
APAA Hong Kong Group has submitted our comments thereto:
1.
2.
3.
4.
5.
6.
Legal liability for unauthorized uploading and downloading of copyright works
Protection of copyright works transmitted to the public via all forms of communication
technology
Role of Online Service Providers in relation to combating internet piracy
Facilitating copyright owners to take civil actions against online infringement
Statutory damages for copyright infringement in the cyberspace
Copyright exemption for temporary reproduction of copyright works
Different groups have different opinions and it may be a long process for our Legislative Council
to debate on the passing of the relevant laws.
2.
CASE REPORTS
Capcom Co Ltd v. Pioneer Technologies Ltd 2655/2007
The Plaintiff is the copyright owner of a video game named “MONSTER HUNTER PROTABLE
2nd” (“Game”) and its charts and data. It claimed that the Defendant, Pioneer, had reproduced
“images” identical or substantially similar to the copyright work without authority, and had used
“different composite frames and charts” in their magazine “[Chinese characters]” (Magazine).
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-4Capcom focused its claim against Pioneer on the copyright infringement in the Game as a film
comprising all the visual images incorporated in the Game.
Pioneer does not dispute its importation of images identical or substantially similar to frames from
film, but claims that such importation and inclusion in the Magazine was “for the purpose of
criticism or review”, constituting fair dealing within the meaning of section 39 (1) of the Ordinance.
Thus the main issue in this case is whether Pioneer has an arguable defence of fair dealing.
Further facts of the case are as follows: The Game is extremely popular and Capcom has a
successful ancillary business of publishing and licensing others to publish “game strategy guide
books”. The Magazine updates readers on the latest information and news of video games,
review and comments on games, reviews hardware and accessories of computers and video
games. The Magazine features video games of different manufacturers. Pioneer published an
Article which claimed to be a report on the “combined experience [Chinese characters]” acquired
by the Editors in playing the Game.
The court considered that the question whether the defence of fair dealing is available to Pioneer
is a question of degree, or of fact and impression. It depends on a consideration of all the facts
and circumstances of use of the copyright work, including the degree and extent of such use by
reference to the purported “criticism or review” and in the context of the contents of the article
complained of, and the purpose of use.
On the facts of the case, and taking into consideration the fact that Capcom does not rely on its
copyright in any strategy guide book for the Game in its claim of infringement made against
Pioneer in these proceedings, and the extent of use of the frames or images in the context of the
contents of the Article, it was held that the Article was as a whole was made for the purpose of
review. Judging by the objective standard of a fair-minded and honest person, the court was
satisfied that Pioneer’s use of the frames and images in the Article amounted to fair dealing.
Accordingly, Capcom’s claims against Pioneer was dismissed.
Gold Source Jewellery Ltd v. Jewel Arts Ltd 2708/2006
There are two summonses in this case. One is by the plaintiff for interlocutory injunction, and the
other is by the defendant for a discharge of an interlocutory injunction granted.
The plaintiff is in the business of design, manufacture and sale of jewellery. It trades in wholesale,
retail and export of jewellery of its own design. The defendant is also a jewellery designer and
trader. It also trades in wholesale and export of jewellery of its own design.
The plaintiff participated in the Hong Kong Jewellery and Watch Fair. The defendant was found to
be offering for sale 4 rings which were identical or substantially similar to the plaintiff's rings. The
plaintiff then purchased 5 rings from the defendant which included the 4 rings in question and
obtained a proforma invoice by which the defendant offered 28 rings to a customer.
The
proforma invoice showed a clear frontal/aerial view of each of the 28 rings. Amongst the 28 rings,
the aerial views of 21 of them looked identical/substantially similar to the aerial views of 21 of the
plaintiff's rings. The plaintiff also found that the defendant had advertised some of the rings in
magazines.
The plaintiff claims that the defendant has infringed its copyright in the design drawings of 24
rings and applied for an interlocutory injunction against the defendant. Deputy Judge Muttrie
granted the application accordingly.
In relation to the Defendant’s application for a discharge of the interlocutory injunction, the
following points were noted:
On the point of material non-disclosure of any urgency for the injunction, it was held by the Court
of First Instance that the judge was simply impressed by the overwhelming case of copying by the
defendant. The defendant did not hint at the defence of independent design. What he said
amounted only to a case of copying with modification though he did not admit having copied from
the plaintiff. It was therefore reasonable to grant the injunction.
On the point of the alleged failure of the plaintiff's counsel to advise the Judge that the plaintiff
had only purchased 4 rings from the defendant and was not in a position to demonstrate that 19
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-5other rings were all identical, it was held that, if the aerial views of 19 (or 21 including DA and DB)
rings on the proforma invoice should appear the same or substantially the same as the aerial
views of the plaintiff's corresponding ones, common sense would conclude an overwhelming
case of copying of the ring designs.
On the point that the plaintiff's counsel’s failure to tell the Judge that the defendant's goods would
not flood the market as they were purchased in small quantities, it was held that the designs in
question were of jewellery products, not cheap plastic toys and hence they would obviously be
traded in small quantities. The Deputy Judge enjoined the defendant because of the extensive
copying, not because of the flooding of the market.
Since evidence of copying by the defendant is overwhelming, the court dismissed the defendant's
application to discharge.
Manufacturer Ltd v. Sunlight Electronic Toys Manufacturing Co Ltd 90/2007
In this case, the Plaintiff claimed infringement of copyright in 15 drawings and the alleged
copyright in the Plaintiff’s handsample.
The facts of the case are as follows: the Plaintiff decided to make a pinball game, first making the
handsample and then the drawings. It gave samples of the game to MGA, but failed to secure
any business with MGA. Later, Plaintiff discovered that MGA had been dealing with pinball games
which were infringing copies of its game. The Plaintiff sued MGA for copyright infringement, and
obtained summary judgment in November 2000.
It then emerged that MGA had approached the Defendant with a mock-up of a pinball game,
inviting them to manufacture it incorporating fictional characters which MGA was licensed to use.
The Defendant manufactured the games in Mainland and they were shipped overseas. Some
shipments were made through Hong Kong but none entered the Hong Kong market. The Plaintiff
brought proceedings against the Defendant for infringement of copyright. The Judge of First
Instance held that the handsample was a work of artistic craftsmanship, ruling that the Defendant
was liable for secondary infringement of the Plaintiff’s copyright because of their constructive
knowledge of copyright, and granted an injunction . The Defendants appealed.
In relation to the handsample, the Court of Appeal held that it did not in fact constitute a work of
artistic craftsmanship. First, the Plaintiff had adduced no evidence of the artistic aspect of the
work. Second, the article was only intended to be used as a step in a commercial operation and
had no value of itself and hence it was unlikely to be considered as a work of artistic
craftsmanship.
As regards to secondary infringement of copyright, the Court of Appeal held that there was no
basis for the May 2000 date being the date upon which the Defendant would have constructive
knowledge that the pinball machines were infringing copies of any copyright works. There was no
evidence that the Defendant in this case was ever given a copy of the Writ in the MGA action or
even been told about it at the time the Writ was served. Therefore, the appeal was allowed and
the judgment set aside.
Given the fact that the finding of infringement is set aside, there would be no basis for an order for
delivery up. Accordingly, the Court of Appeal held that an order for delivery up of the moulds in
the Mainland should not have been made.
Lee Yuen Housewares Co Ltd v. Hui Chung Hing 1149/2007
The Plaintiff claimed against the Defendant for copyright infringement and breach of duty owed to
the Plaintiff. The Defendant was an ex-employee of the Plaintiff and was said to have, during his
employment with the Plaintiff, set up a competing business I.C.P. Company ([Chinese
characters])("I.C.P.") and had infringed copyright of certain photos of the Plaintiff whilst marketing
for its new business.
The Plaintiff commenced the present action on 9th March, 2007. On 9th October, 2007, the
Plaintiff sought summary judgment against the Defendant. The Defendant only offered to give an
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-6undertaking shortly before the call over hearing of the present application. The Defendant
contended that it is trite law that a consent order made on such an undertaking and an injunction
are, in effect, the same thing. Since the remedy for breach of an undertaking is the same as for
breach of the injunction, there is no need for the Court to grant an injunction order.
The Court however decided that a plaintiff, whose copyright is infringed, has a right to an order of
the Court restraining the infringement and is not prevented from exercising his rights by an offer
of the infringer before action that he will promise not to do it again and will pay such damages as
may be agreed upon. Therefore, there is no special reason in this case not to grant an injunction.
As to the issue whether leave should be given to the Plaintiff to use the documents, affidavits,
information etc. obtained as a result of discovery orders made herein for protection of the rights of
the Plaintiff in Hong Kong or elsewhere, the Defendant argued that the proposed order was
oppressive and unreasonable, and that general leave to the Plaintiff to use the information and
documents anywhere in the world was also too wide.
The Court, however, do not see how the discovery exercise could be effective and worthwhile if
the Plaintiff is not given leave to use the information obtained for the protection of his rights in
Hong Kong or anywhere in the world. There is no justification for any geographical demarcation in
the right of the Plaintiff to use the information in further protection of his rights. Accordingly, the
Court did not find the order oppressive or unreasonable, and thus the order was granted.
3.
SPECIAL TOPIC REPORT
A Splendid World with an Exhilarating Copyright System! –
A Global Insight on Copyright Issues Ranging From P2P to Wikipedia
A Peer to Peer (P2P) computer network and open content projects like Wikipedia is a worldwide
trend to foster the growth of creativity and sharing of information on a global basis.
There are uprising issues on copyright protection while maintaining free and fair use of
information and non-copyright work in the public domain. It also shed new light on our traditional
view of copyright protection where at one pole is a vision of “total control” – a world in which every
use of a work is regulated in which “all rights reserved” is the norm and creators want their
copyright work being protected, whereas at the other pole is “freedom” – a world which creators
enjoy a wide range of freedom and like their copyright work being shared and benefit the
worldwide population.
A peer to peer (P2P) computer network uses diverse connectivity between participants in a
network and the cumulative bandwidth of network participants rather than conventional
centralized resources where a relatively low number of servers provide the core value to a service
or application. P2P networks are typically used for connecting nodes via largely ad hoc
connections. It allows sharing content files (i.e. file sharing) containing audio, video, data or
anything in digital format.
On the other hand, Wikipedia is one of the largest open content projects. Open content describes
any kind of creative work published in a format that explicitly allows copying and modifying of its
information by anyone, not exclusively by a closed organization, firm or individual. Contents can
be either in the public domain or under a license which allows re-distribution and re-use, such as
Creative Commons Attribution and Atribution-Sharealike licenses or the GFDL.
Whether it is P2P, Wikipedia or Creative Commons, there are four characteristics: “openness,
peering, sharing and acting globally”. Openness means communicating honestly and lowering or
eliminating boundaries, as with open-software platforms.
“Peering” refers to working
collaboratively, not hierarchically, for instance, directly contacting someone instead of going
through formal channels. “Sharing” means making it easy to share digital information. Sharing
your information with the world is a global act that requires relinquishing any isolationist
tendencies. More people are creating and working for the joy of it.
A balance must be struck amongst three areas (1) protecting copyright owners who want
copyright protection; (2) respecting the freedom of copyright owners who want no or limited
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-7copyright protection and want their work to be shared globally; and (3) the free and fair use of
information in the public domain.
Legal issues involved in file sharing in the internet and open content projects like Wikipedia and
Creative Commons include:
(a)
ambiguities in the interpretation of the copyright law and in particular the interpretation of
secondary infringement in the cyberspace where “knowledge” and “control” are involved;
(b)
difficult to identify the place of the infringement activities and under which jurisdiction. For
instance, in some countries, there is a concept like contributory copyright infringement but in
others there is none.
(c)
rapidly developing new technologies and users and the change in copyright law cannot
cope with such a fast pace;
(d)
difficulty in accessing the numbers of copies of infringement in the cyberspace and to
provide evidence on damages
At present, in Hong Kong, the Copyright Ordinance (Cap.528) contains provisions dealing with
unauthorized uploading and downloading of copyright works over the internet. For primary
infringement, it is covered by Sections 22 to 29 of the Copyright Ordinance where there is no
requirement to prove “knowledge” of the infringers. For secondary infringement, it is covered by
Sections 30 to 34 where “knowledge” (i.e. “which he knows or has reason to believe to be an
infringing copy of the work”) must be proved. Civil remedies and, in some circumstances,
criminal sanctions are provided against such unlawful activities. Our legislative measures are
backed by vigorous enforcement action. The Customs and Excise Department monitors the
Internet round-the-clock and takes prompt action against suspected piracy activities.
Alice Chan
Douglas Clark
Anita Leung
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