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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.
Prior 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-to-peer ("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 ParteForum 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.
Preserving 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.Legal liability for unauthorized uploading and downloading of copyright works
2.Protection of copyright works transmitted to the public via all forms of communication technology
3.Role of Online Service Providers in relation to combating internet piracy
4.Facilitating copyright owners to take civil actions against online infringement
5.Statutory damages for copyright infringement in the cyberspace
6.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). Capcom 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 other 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.