Information Paper for
LegCo Panel on Trade and Industry
Localisation of the Copyright Law in Hong Kong
Introduction
This paper briefs Members on the legislative proposal for the establishment of an independent copyright regime in Hong Kong before 1 July 1997.
Background
2. The Basic Law provides that the Hong Kong Special Administrative Region (HKSAR) Government shall formulate its own policies on and protect by law intellectual property rights. Agreement was reached with the Chinese side of the Joint Liaison Group in November 1995 on the proposals for localising the copyright law in Hong Kong. In addition, agreement has also been reached on the continued application of international intellectual property treaties to the HKSAR. These treaties in respect of copyright protection include the Berne Convention, the Universal Copyright Convention and the Phonograms Convention. Hong Kong will continue to benefit from participation in these Conventions.
3. The existing copyright law in Hong Kong is mainly based on the copyright law in the United Kingdom. There is a need to establish an independent copyright regime in Hong Kong before 1 July 1997. There is also a need to modernise the copyright law to cater for technological advances, to reflect prevailing international standards of intellectual property protection and to suit local circumstances.
4. The Law Reform Commission (LRC) published a Report on the Law Relating to the Reform of Copyright in January 1994 after extensive public consultation. The LRC recommended that Hong Kong should have its own copyright law modelled on the UK 1988 Copyright, Designs and Patents Act, with modifications to suit local circumstances.
Draft Copyright Bill
5. On the above basis, we have drafted a comprehensive Copyright Bill which was issued together with a consultation paper in early November 1996 to about 100 organisations, including copyright owners and users in the relevant sectors as well as those in the professional and academic fields for their comments. A copy each of the consultation paper and the draft Bill have been circulated to Members for reference.
6. The main legislative proposals of the draft Copyright Bill are set out and explained in the consultation paper. A summary of the main legislative proposals is at Annex A.
Parallel Importation
7. One contentious issue arising from the Copyright Bill which has attracted much debate in the copyright-related industries is on parallel importation. The existing law provides for both criminal and civil sanctions against parallel imports which, broadly speaking, refer to those copyright products (computer programs, books, sound recordings and films) that are lawfully manufactured abroad with the consent of the copyright owner there, but are being imported without authorisation from the copyright owner or the exclusive licensee in the place of importation.
8. We have carefully examined the arguments both for and against regulation on parallel importation and taken account of views expressed on the issue during the deliberations of the Intellectual Property (World Trade Organisation Amendments) Bill at the Bills Committee earlier this year. We note that there is so far no international standard or consensus on the issue of parallel importation. Whilst most developed countries have maintained some form of restrictions on parallel imports, we have observed some de-regulation or liberalisation for the purposes of consumer welfare, competition and free trade. We are conscious of the need to ensure that investment in Hong Kong on the production and distribution of films, sound recordings, books and computer software will continue to prosper and flourish. We believe that total de-regulation (i.e. abolishing both the criminal and civil sanctions against parallel importation), would encourage free-riders to take unfair advantage over the substantial investment of copyright owners and licensees in importation, promotion and marketing in Hong Kong.
9. We concluded that the best way forward for the purpose of public consultation on the draft Bill is to adopt the LRC recommendation to decriminalise parallel importation but maintain civil sanctions. In addition, we have proposed to adopt a provision in the CDPA to clarify the position of exclusive licensees so that exclusive licensees may take civil action against parallel importers who arrange for parallel importation in breach of exclusive licence agreements. We believe that our proposal to maintain the private right to restrict parallel importation will strike a balance between commercial and public interests. An extract from the LRC Report setting out in detail the considerations and arguments leading to the LRC recommendation on parallel importation is at Annex B.
Public Consultation
10. After the issue of the consultation paper and the draft Bill for consultation, we organised two public seminars on 14 and 16 November 1996 to explain and clarify the provisions of the draft Bill. More than 100 participants from 56 organisations attended the seminars.
11. The consultation period expired on 2 December 1996. We are carefully examining the submissions received and will make modifications to the draft Bill where necessary.
Legislative Timetable
12. We intend to introduce the Copyright Bill into the Legislative Council in February 1997. The Bill has been accorded priority by the Government for enactment before July 1997.
Trade and Industry Branch
December 1996
[panel-1]
Annex A
Draft Copyright Bill-- A SUMMARY OF THE MAIN LEGISLATIVE PROPOSALS
Open qualification system - any original copyright works created by any person (natural or legal) or published by any person anywhere in the world would qualify for protection in Hong Kong.
Copyright of commissioned works generally vests in authors unless there is an express agreement providing for the entitlement to the copyright.
Copyright of employees works generally rests with employers but employees will have a statutory right to award from employers.
Duration of copyright remains primarily life of author plus 50 years.
Primary infringements include copying, issuing copies to public, performing in public, broadcasting or including in cable programme service, and making of adaptations of copyright works without copyright owners consent.
Secondary infringements include importing, possessing or dealing with infringing copies, providing means for making infringing copies, permitting use of premises for infringing performance and providing apparatus for infringing performance.
Rental right provided for sound recordings and computer programs but not for films.
New moral rights of integrity right provided in addition to existing moral rights of paternity right and false attribution right.
Expanded rights in performances to enable persons having exclusive recording rights with performers, in addition to the performers themselves, to protect the performers live performances.
Common civil remedies such as injunctions, damages, accounts for profits and delivery up orders maintained. But no conversion damages. Existing arrangement that exclusive licensees must join copyright owners either as plaintiffs or defendants in civil proceedings maintained.
Customs border measures maintained against pirated copyright works only. Not for enforcement against parallel imports. Exclusive licensees, in addition to copyright owners, may invoke customs border measure provisions.
Enhanced penalty provisions against copyright piracy maintained. Additional legal tools to facilitate enforcement and co-operation. Such tools include release of samples of seizures to copyright owners, forfeiture provisions, additional presumption for prosecution, modifications and clarified provisions for use of affidavits.
Decriminalisation of parallel import but civil rights against parallel import maintained. Exclusive licensees may take action against parallel importers who arrange for parallel importation in breach of exclusive licence agreements.
Permitted acts include those for fair dealing, educational purposes, copies kept by or provided by libraries and archives, public administration, and re-transmission of signals.
Re-transmission only permitted under very special conditions where the broadcasters legitimate and financial interests are not unfairly prejudiced, and it is transmitted simultaneously without stripping of advertisement and alteration of the original broadcasts.
Specific permitted acts for computer software to facilitate development of information technology and technology transfer. Such acts include making back-up copies, copying or adapting software for using it, and decompiling software to obtain information to create another computer software.
The legitimate interests of copyright owners protected for copyright works manifested in INTERNET and digital environment. Civil remedies available against persons who knowingly cause or maintain infringing articles in the digital environment for trade or business purposes.
Provisions governing the ownership and administration of Government and LegCo copyright. Government is entitled to copyright in every ordinance and works made by public officers in the course of their duties, but only for a finite period instead of indefinitely for unpublished works under the existing copyright law. Copyright in every bill, other than a Members bill, belongs to the Government, whereas the copyright in a Members bill belongs to the Legislative Council.
Voluntary registration system for collective copyright administration societies to ensure essential information such as scales of royalty charges will be available to public.
Copyright Tribunal comprising members from different sectors of the community to handle copyright licensing disputes to ensure balance of interests. Clarified and expanded jurisdiction for Tribunal.
Better safeguards of public interest :
- Power for Tribunal to deal with disputes involving proposed licensing schemes or licensee.
- Statutory provision setting out factors to be taken into account by the Tribunal when handling copyright licensing disputes.
- Power for Tribunal to award interim payment of royalties by copyright users to licensing bodies, while restricting licensing bodies from applying for interlocutory injunctions.
- Statutory implied indemnity coupled with statutory limited damages.
- Power of Tribunal to award costs to prevent frivolous / vexatious applications to Tribunal to settle disputes, thereby preventing abuse, lowering legal costs and encouraging aggrieved parties to seek redress through Tribunal.
Last Updated on 21 August 1998
