The Hong Kong Copyright Ordinance (Cap 528) does not contain any specific provisions that deal with the decompilation or reverse engineering of computer programs. However the Copyright (Amendment) Bill 2006, which is a result of over 2 years of consultation with the public and stakeholder groups and which is still being debated before the Legislative Council, proposes to introduce an exemption from copyright infringement for decompilation activities intended to circumvent copyprotection systems provided the purpose is to achieve interoperability with an independently created computer program.

Current state of the law

Due to pressure from US industry groups, the Hong Kong Government dropped plans in 1997 to adopt a decompilation exception similar to that contained in the UK 1988 Copyright Act. Instead, Hong Kong adopted amendments to its fair dealing provisions with the intention that decompilation activities would be dealt with as fair dealing on a case by case basis.

The Secretary of Trade and Industry's speech before the Legislative Council on 24 June 1997 made it clear that the underlying public policy on decompilation in Hong Kong was to encourage competition in the information technology industry by facilitating timely access to information and ideas underlying computer programs, thereby allowing the independent creation of new products which attach to or compete with the programs under study. However, the overriding test in determining whether decompilation should be allowed was stated to be whether an act conflicts with the "normal exploitation of the work by the copyright owner and unreasonably prejudices the legitimate interests of the copyright owner".

The relevant provision for fair dealing is set out in Section 38(3) of the Copyright Ordinance, which was broadly drawn from Section 107 of the US Copyright Act:

"Research or Study

(1) Fair dealing with a work of any description for the purposes of research or private study does not infringe any copyright in the work or, in the case of a published edition, in the typographical arrangement.

(3) In determining whether any dealing with a work of any description is fair dealing, the factors to be considered include-

(a) the purpose and nature of the dealing;

(b) the nature of the work; and

(c) the amount and substantiality of the portion dealt with in relation to the work as a whole."

It would appear that s.38(3) is wider than Article 6 of the EC Software Directive6 as its scope is not limited to the purpose of interoperability. Since s.38(3) was drawn from Section 107 of the US Copyright Act, it is also arguable that the Hong Kong provision should be interpreted in line with the authoritative case of Sega v Accolade which ruled that the fair use doctrine permitted decompilation not only for the purpose of discovering the information necessary for interoperability but also "where disassembly is the only way to gain access to the ideas and functional elements embodied in a copyrighted computer program and where there is a legitimate reason for seeking such access". Lastly, s.38(3) appears to be wider in scope than section 107 since it omits the phrase, "including whether such use is of a commercial nature or is for nonprofit educational purposes" and so it cannot be presumed that any commercial use, such as decompilation by a profit-making software company, is not fair dealing.

However, as the fair dealing exemption in relation to the decompilation of computer programs does not appear to have been tested in the Hong Kong courts to date, it is difficult to determine its exact scope. A software manufacturer may argue that since the Copyright Ordinance is silent on whether research is restricted to noncommercial research, it is legal to decompile software for the purpose of developing interoperable products. On the other hand, since there is no express provision permitting decompilation (unlike in many other countries such as the US and the UK), it seems that the fair dealing provision should be read narrowly in accordance with the principle that all exceptions to copyright infringement should be interpreted restrictively so as not to prejudice the rights of the copyright owner.

Copyright (Amendment) Bill 2006

In March 2006, the Hong Kong Government submitted the Copyright (Amendment) Bill 2006 to the Legislative Council. The Bill is currently being considered by the Bills Committee.

The Hong Kong Government has been facing mounting pressure from software companies and copyright owners to provide a more rigid framework of protection against activities that circumvent technological protection measures. On the other hand, the educational sector, some organisations and individual members of the public have expressed concern that such additional protection might affect legitimate access to copyright works and hinder scientific research and technological development. In order to meet the reasonable demands of both sides, the Government has proposed a middle way whereby new civil and criminal liabilities for circumvention activities will be introduced but will be balanced by exemptions that fall within a specific set of purposes.

Civil liabilities

At present, it is a civil offence to deal in tools which circumvent copyprotection measures. The government has proposed to extend civil liability to any person who:

• does the act of circumventing a technological protection measure (whether an access control measure or a copy-protection measure);

• makes, imports, exports, sells or lets for hire, offers or exposes for sale or hire, or advertises for sale or hire a circumvention device;

• exhibits in public, possesses or distributes a circumvention device for the purpose of or in the course of any trade or business; or

• provides services to circumvent technological protection measures

Since the Government's intention in introducing anti-circumvention measures is to protect the copyright works rather than the measures per se, liability requires that the person carrying out the above activities knows or has reason to believe that the circumvention will induce, enable, facilitate or conceal an infringement of the copyright work.

Criminal liability

Further, in order to prevent the sale of modified game consoles and other tools which enable the public to pirate copyright works, the Government has proposed to make it a criminal offence to make for sale or hire, import or export for sale or hire, or deal etc in any circumvention device in the course of trade or business or to provide any service in the course of a circumvention business.

A defence will be introduced under the proposed new section 273C for those who do not know that the tools in question enable or facilitate the circumvention.

Exceptions to civil and criminal liability

In order to provide a balance to the stricter civil and criminal liability and to address legitimate user concerns, the Government has proposed exemptions to circumvention activities with the following purposes: -

a) achieving interoperability of an independently created computer program;

b)research into cryptography;

c) identifying and disabling the function of a technological measure to collect or disseminate information which tracks and records the manner of a person's use of a computer network in order to protect privacy;

d)security testing for a computer or computer system/network;

e) gaining access to parallel imported copies of copyright works;

f) preventing access by minors to harmful materials on the internet; and

g) law enforcement.

The new exception for interoperability is set out in s.273D of the Bill and provides that liability will not arise in relation to an act which circumvents an effective technological measure if -

(a) the measure has been applied in relation to a computer program;

(b) the act is done with respect to the identification or analysis of particular elements of the computer program that are not readily available to the person who does the act;

(c)the act is done for the sole purpose of achieving interoperability of an independently created computer program with the computer program or another computer program; and

(d) the copy of the computer program in relation to which the act is done is not an infringing copy.

There is also an exception applying to a person who works collaboratively with another person to identify or analyse particular elements of a computer program for the sole purpose of interoperability of an independently created computer program.

The express provision allowing circumvention activities for the purpose of interoperability has resolved the previous uncertainty over whether or not such activities fall within the ambit of "fair dealing". Since Hong Kong has no competition law, such an exception may be desirable in order to prevent restrictive trade practices and monopolistic conduct on the part of large software and electronics companies and to ensure that the public will not be deprived of choices of computer programs to use.

The Hong Kong Government has attempted to strike a delicate balance between the need to combat circumvention activities for copyright protection and the community's concern that any anti-circumvention measures should not adversely affect consumers' legitimate use of copyright works. It is intended that the additional protection for copyright owners against circumvention of technological measures for copyright protection will encourage copyright owners to develop new sales models in the digital environment, thereby enhancing the development of creative industries. At the same time, the exemption for interoperability will also encourage Hong Kong innovation and creativity by allowing the unrestricted development of new, interoperable computer programs.