Copyright (Amendment) Ordinance 2003

The Copyright (Amendment) Ordinance 2003 (27 of 2003) (the “2003 Amendment Ordinance”) was enacted by the Legislative Council on 2 July 2003 and gazetted on 11 July 2003. Pursuant to section 1(2) of the 2003 Amendment Ordinance, the Secretary for Commerce, Industry and Technology appointed 28 November 2003 as the day on which the Amendment Ordinance shall come into effect and such Commencement Notice was gazetted on 3 October 2003.

Background

On 1 April 2001, the Intellectual Property (Miscellaneous Amendments) Ordinance (the “2001 Ordinance”) was passed to combat rampant piracy in computer software and audio-visual products, making it a criminal offence to use a pirated copy of a copyright work, e.g. music or film recordings, in business. After the passing of the 2001 Ordinance, the public addressed the concerns that the scope of the new law was too excessive and the provisions of the 2001 Ordinance could unduly impede the dissemination of information and teaching activities. As a result of the negative reaction from the public, in June 2001 the Copyright (Suspension of Amendments) Ordinance 2001 (the “2001 Suspension Ordinance”) was subsequently introduced to suspend the relevant provisions except as they applied to four categories of copyright work, i.e. computer programs, movies, television dramas and musical recordings (”Four Categories of Works”).

The 2003 Amendment Ordinance was enacted to make the 2001 Suspension Ordinance permanent as well as to make some other improvements to the existing Copyright Ordinance (Cap 528).

Major amendments

The major amendments of the 2003 Amendment Ordinance are summarized as follows: 

1.          Liberalization of Parallel Importation of Computer Software Products

Under the existing Copyright Ordinance (Cap.528), a copy of a work is an infringing copy if it is parallel-imported into Hong Kong and its making in Hong Kong would have constituted an infringement of the copyright in that work or a breach of an exclusive licence agreement relating to that work. It is a criminal offence to parallel-import a copyright work otherwise than for private and domestic use. There is however no criminal liability for the sale of parallel-imported copies of a copyright work (including a computer software product) that has been published for more than 18 months in Hong Kong or elsewhere.

The most significant effect the 2003 Amendment Ordinance will bring is the relaxation on restriction of parallel importation of computer software products -- both civil and criminal liabilities pertaining to parallel importation of and subsequent dealings in most computer software products will be removed after the commencement of the 2003 Amendment Ordinance (i.e. 28 November 2003). The intention for liberalising the parallel importation of computer software products is to increase competition and availability of computer software products in the market and to benefit consumers.

However, such liberalization on parallel importation is subject to specific exceptions under the 2003 Amendment Ordinance. It provides that if the principal attraction of a computer software product is musical sound or visual recording, movies, TV dramas, e-books or a combination of them, then the restriction on parallel importation will continue to apply.

The 2003 Amendment Ordinance has spelt out tests for determining the principal attraction of a product:

1. A parallel-imported product containing a copy of a computer program and a copy of a movie or a TV drama 
   
   

   1. If the copy of the movie or TV drama is the whole or substantially the whole of the movie or TV drama, then the restriction will continue to apply;
      
      

   2. If the copy in the product constitutes only a part of a movie or a TV drama, then the restriction will apply if:-

• all the copies of all those pasts of the movie or TV drama together constitute the whole or substantially the whole of the movie or TV drama; or

• the viewing time of all those parts exceeds 15 minutes in aggregate in the case of movie, or 10 minutes in aggregate in the case of a TV drama.

2. A parallel-imported product containing a copy of a computer program and a copy of a musical sound or visual recording, movie, TV drama, e-book or a combination of them

If a normal person acquires such product for his own use and he is likely to acquire such product for the purpose of acquiring a copy of musical sound or visual recording, movie, TV drama (other than those that are caught by (a) and (b) in paragraph (i)), e-book, or a combination of them more so than for the purpose of acquiring a copy of computer program, then such product will continue to be subject to restriction on parallel importation.

The 2003 Amendment Ordinance will therefore allow the parallel importation of genuine computer software programs except items which do not pass the “principal attraction” test.

2.          Expanded Geographical Scope of Lawful Users 

A lawful user of a copy of a computer program is entitled to make a back-up copy of the program or copy/adapt the program without infringing the copyright in the program if it is necessary for him to do so for the purpose of his lawful use. Accordingly, such act, that is, the making of a back-up copy or the copying/adapting of computer program will not attract criminal liability under the provisions on criminal offences. 

Under the existing Copyright Ordinance (Cap 528), a lawful user is defined as a person who has a contractual right to use the computer program in Hong Kong whilst under the 2003 Amendment Ordinance, the definition of a “lawful user” is expanded to a person who has contractual right to use the computer program in any place in or outside Hong Kong.

3.          Transitional Provisions 

A schedule containing transitional provisions and savings is added into the 2003 Amendment Ordinance, by which the 2003 Amendment Ordinance shall apply retrospectively in relation to infringing acts committed before its commencement.

 

Civil liability  

It should be noted that notwithstanding the removal of end-user criminal liability for photocopying printed works and downloading information from the Internet under the 2001 Suspension Ordinance, civil liability continues to exist. The publishing industry has established a photocopy licensing mechanism with the education sector, business, government bodies and copy-shops, which allows photocopying of certain contents of printed materials or books to a reasonable extent for the purpose of educational or private study. Members of the business sectors should continue to observe the law regarding the making of copies of copyright works, e.g. newspaper articles, for the purpose of disseminating information or otherwise.