Copyright (Amendment) Bill 2003

The Copyright (Amendment) Bill ("the Bill") was published in the Hong Kong Government Gazette on 7 February 2003. The Bill is the result of the passing of the very controversial Intellectual Property (Miscellaneous Amendments) Ordinance ("the Amendment Ordinance") on 1 April 2001.

The Amendment Ordinance introduced criminal liability for the use of pirated copies of copyright infringement works in business. While the original aim of the amendments was to prevent corporate piracy in computer software and audio-visual works, the public generally considered the scope of the new law excessive and the sanctions severe.

Following the negative reaction from the public, the Government decided on 12 April 2001 to retract the controversial aspects of the Amendment Ordinance. The Copyright (Suspension of Amendments) Ordinance 2001 ("the Suspension Ordinance") was enacted in June 2001 to suspend the amendments except with regard to four categories of copyright works, namely, computer programs, films, television drama and musical recordings ("the Four Categories of Works").

After public consultation, the Government decided in March 2002 to make the suspension arrangement permanent as well as to make some other improvements to the Copyright Ordinance. End user liability in relation to parallel imports is also discussed in the Bill although there was no provision concerning parallel import in the Amendment Ordinance.

The proposals of the Bills include the following:

1. The criminal liability for the use of pirated copies of copyright works in business should be confined to only the Four Categories of Works.
   
   Therefore the photocopying of newspapers, journals and other copyright publications by corporations for internal use should not attract criminal liability but there is still civil liability in so doing.
   

2. The phrase 'in connection with' should be removed from the expression 'for the purpose of, in the course of, or in connection with, any trade or business' where it appears in the Copyright Ordinance. The offending acts should be set out explicitly where possible. For example 'possessing an infringing copy in the course of business with a view to its being used in that business', 'transporting or storing an infringing copy for porfit or financial reward' should be used in defining the offending acts.
   

3. A new defence against criminal liability should be provided for employees possessing infringing copies of works supplied by their employers, and that this defence should take retrospective effect from 1 April 2001.
   
   This defence however should not be available to employees who have functions of management of the business establishment, like, a director or secretary of a body corporate.

4. Criminal sanctions against illicit copy-shops should be tightened. This proposal is not related to the Amendment Ordinance or the Suspension Ordinance. It is a proposed improvement to the present Copyright Ordinance.
   
   Under the present Copyright Ordinance, it is an offence to make infringing copies for sale or hire. Therefore a copy-shop which makes infringing copies of a book for sale commits an offence. However if the copy-shop makes copies according to an order, ie a 'make-to-order' situation, the shop may argue that it is providing copying service instead of selling copies of a copyright work. To close this loophole, 'the making of infringing copies of a copyright work for profit or financial reward' should be an offence.
   

5. End-user liability in relation to parallel imports should be removed. Parallel-importing means the importing of a copy of work without the explicit authorisation of the copyright owner and the copy was lawfully made outside Hong Kong. According to the present Copyright Ordinance, if the making in Hong Kong of a copy so imported would constitute an infringement of copyright or a breach of an exclusive licence agreement relating to the work, the copy is considered as an infringing copy.
   
   The Bill proposes that a person will not incur any civil or criminal liability for parallel importing copies of copyright works, or for possessing such copies, for use in the person's business. However, with the exception of parallel imported computer software, the parallel importing of copies of copyright works for sale, or selling parallel-imported copies will continue to be subject to the existing restrictions.
   
   

6. The term 'business' should include business conducted other than for profit, like government and charitable organizations.
   

The first reading of the Bill took place in the Legislative Council on 12 February 2003. There will be a Second Reading debate and the Third Reading to decide if the Bill should be passed as law.