Hong Kong may be famed for its deep and sheltered harbour, but prolonged debate over amendments to the Copyright Ordinance have seen ‘safe harbours’ for internet providers sink.

On 8 March 2016, an Editorial in the South China Morning Post mourned for Hong Kong’s amendment, Copyright (Amendment) Bill 2014:

With the legislature becoming increasingly hostile, the passage of government bills and funding requests cannot be taken for granted. The latest victim is the controversial copyright amendment bill. After months of meaningless headcounts for quorum and filibustering by pan-democrat lawmakers to stall the vote, the government has finally given up on the bill for the time being.

The Special Administrative Region’s government has been criticised internationally for the city’s ‘outdated’ Copyright Ordinance; particularly over ambiguities that have hampered efforts to combat online piracy and, conversely, protect internet service providers in an fast and evolving online environment. The latest Bill was a reiteration of a decade of prolonged debate about how to shape copyright in the high-speed and high-rise Asian world city.

What was the Copyright (Amendment) Bill 2014?

In the words of the Hong Kong government, the 2014 Bill was intended to:

  • introduce a technology-neutral exclusive right for copyright owners to communicate their works through any mode of electronic transmission (in Australia, this would be the ‘right to communicate to the public’ – crucial for many internet services);
  • introduce corresponding criminal sanctions against unauthorised communication of copyright works to the public; and
  • expand the scope of copyright exception under the existing law to balance copyright protection and reasonable uses of copyright works for the following purposes in appropriate circumstances: (a) parody, satire, caricature and pastiche; (b) commenting on the current events; (c) quotation; (d) temporary reproduction of copyright works by online service providers; (e) media shifting of sound recordings; (f) giving education instructions; and
  • establish a statutory “safe harbour” for online service providers so that their liabilities for copyright infringement occurring on their service platforms could be limited under certain prescribed conditions; and
  • provide additional factors for the court to consider in assessing damages in civil cases in which infringement has been established

It is a challenging environment in all jurisdictions for both service providers and content makers. The provision of a safe harbour within Hong Kong’s law was argued to be critical in an internet-connected world that increasingly frustrates the raison d’être of copyright. The Government’s brief to the LegCo put it succinctly:

Rapid technological developments (notably the Internet) have been reshaping the information society. The World Intellectual Property Organization’s (WIPO) Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT), commonly known as the “Internet treaties”, were adopted in 1996 to address the challenges of the new digital technologies. In response, and given rapid changes in user behaviours, many overseas jurisdictions have updated their copyright regimes, including the introduction of a communication right to enhance copyright protection in the digital environment and safe harbour provisions to facilitate online service providers (OSPs). We need to stay on par with international copyright developments

What is a safe harbour and what was proposed?

In Hong Kong, safe harbour provisions were intended to limit the liability of an online service provider (OSP) for copyright infringements that occurred on their platform so long as they had complied with certain conditions, including:

  • they must have taken reasonable steps to limit or stop infringement once they had been made aware of the alleged infringement; and
  • they must comply with a Code of Practice that would (eventually) have set out the guidelines for a “notice and takedown”-style regime.

In addition to limiting infringement, safe harbours typically relieve an OSP from any proactive obligation to actively monitor what happens on their platform. The proposal broadly mirrors provisions in countries such as Australia, the United States, Singapore, and Japan.

To prevent abuse of the safe harbour system, complainants are required to provide specifics that substantiate their allegations of infringement. In most safe harbour jurisdictions, a counter notice is available in response. Submit a false statement? You could be liable to both civil and criminal sanctions.

So what happened?

It doesn’t seem it was safe harbours that rocked the boat. Rather, increased regulation of copyright on the internet was at issue. Unfortunately for proponents of the bill, the underlying political climate in Hong Kong – highly concerned with freedoms of expression and free speech – took issue with a perceived government intervention in the online world. Filibusters have been used to delay and stall the Bill’s progression.

Hong Kong’s unique position in Chinese politics means such concerns are taken seriously by stakeholders. Richard Scotford, writing for the Hong Kong Free Press, argued:

In short, the danger is less from this new bill, but more from the potential for future laws to be bundled together in order to quell political opposition.

It is difficult to imagine governments using copyright laws to hamper democratic discussions, but heated political discourse in Hong Kong have driven concern. The 2014 Hong Kong protests did coincide with (and have colluded with) the debate.

The debate has also crossed into the difficult territory of the ongoing debate between adopting fair use or fair dealing; a conflict seen in Australia currently.

To briefly summarise: fair dealing confines fair infringements of copyright to specific categories set out in legislation; for example, research and study, review and criticism, personal use, news reporting, parody and/or satire. A long list of countries, including Australia, the United Kingdom, Canada, India, Singapore, South Africa and Japan, as well as many countries in Europe use iterations of the fair dealing approach.

Fair use, used in the United States, is somewhat more flexible. In the words of the Australian Law Reform Commission:

Fair use is a statutory provision that provides that a use of copyright material does not infringe copyright if it is ‘fair’, and that when considering whether the use is fair, certain principles or ‘fairness factors’ must be considered. The provision also includes a list of ‘illustrative purposes’.

In the United States, those four factors are:

  1. The purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes;
  2. The nature of the copyrighted work;
  3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
  4. The effect of the use upon the potential market for or value of the copyrighted work.

If the ongoing Australian debate between the two regimes is any indication, it’s an issue unlikely to be resolved in Hong Kong easily.

Unfortunately, as a submission of the Law Society of Hong Kong suggests, the consequences could be serious for Hong Kong’s role in the region:

Regrettably, our copyright law now lacks seriously behind international trends, especially in protection in the digital environment. For that reason, it has even been suggested that Hong Kong should be put under a list of “Deserving Special Mention” and “Watch List” in the US Special 301 Report which identifies countries which do not provide “adequate and effective” protection of intellectual property rights.

Being so listed by the American Government would be a significant embarrassment for Hong Kong internationally. As the Law Society argued, Hong Kong already faces intense competition as an intellectual property trading hub from other Asian competitors (such as Singapore and Japan).

The next steps remain to be seen. It could be open to the Hong Kong government to introduce certain amendments separately. But if a debate over safe harbours becomes tied to concerns about freedom of expression and fair dealing/use – it may be sometime before internet providers in Hong Kong can dock safely.