Policy Statement & Submission

Introduction

1. The Hong Kong General Chamber of Commerce welcomes the opportunity to comment on the consultation document on copyright protection in the digital environment. The Chamber agrees that Hong Kong should establish an appropriate regime to combat Internet piracy through a suitable legal framework, public education, effective enforcement and cross-sectoral cooperation.

2. The following paragraphs describe the Chamber's comments on the six specific issues outlined in the consultation document.

Issue One: Legal liability for unauthorized uploading and downloading of copyright works

3. The Internet has become part of daily life in modern society. Regulation of online behaviour should be minimal and if necessary, a light-handed approach is preferred. In the case of copyright protection, there is indeed a case for some tightening up of legislation but the scope should be limited and criminalisation should not apply except for cases with demonstrable criminality.

4. In considering whether legal liability should apply, and the extent to which they should apply, the overriding principle must be that of reasonableness. In line with the previous paragraph, we believe it would be reasonable to subject most cases of unauthorized downloading to civil liability only. Criminal liability should be reserved only for cases of rampant piracy, such as those resulting in direct commercial advantage or are significant in scale.

Issue Two: Protection of copyright works transmitted to the public via all forms of communication technology

5. Provided that the legal liability is not onerous – that is, it is limited in most cases to civil and not criminal liability – we support the creation of an all-embracing right for copyright owners to communicate their works to the public. As a technologically neutral provision, it will help promote the development of the digital industry.

Issue Three: Role of online service providers in relation to combating Internet piracy

6. The role of the Online Service Provider (OSP) is a contentious issue in the regulation of copyright protection in the digital environment. OSPs should not turn a blind eye to illegal activities; on the other hand, their role is passive and they are not regulators of their clients' behaviour. A workable and business-friendly solution will need to be developed.

7. In the consultative document, the concept of a “notice and take down” system is described as one way to help both copyright owners and OSPs, providing a step for problem resolution before the matter goes to court. To balance the interest of end-users and website operators, such a system may also include provisions for “notice and restore”, i.e. to allow website owners to restore content of website previously removed. In either case, all parties (copyright owners, the OSPs, website owner/users) will benefit from the intermediary mechanism thus leaving only genuine unresolved cases to the litigation process in the court.

8. For such a system to be effective, the rules and procedures must be clearly specified and carefully balanced so as to reflect the rights and obligations of the parties concerned. This can only be achieved through a joint effort by various stakeholders including the copyright industry, the users, and the telecommunication operators. The Government's role as a facilitator will be critical.

9. In some jurisdictions, this notice and takedown system is provided for as part of the legal regulatory regime. In the case of Hong Kong, one way to proceed would be for government and industry to first join hands to develop a self-regulatory system, and to introduce legislation only if self-regulation does not work. On the other hand, a legislative provision will provide a useful back-up to the notice and takedown system and may therefore render the self-regulatory framework more effective. We are inclined to support a non-legislative route, but we remain open-minded to the possibility of legislation.

Issue Four: Facilitating copyright owners to take civil actions against online infringement

10. The Chamber's longstanding position on regulation of business practices is that legislation should not be prescriptive of corporate behaviour in the normal course of business, and rules and procedures should not be more burdensome than necessary.

11. Given that a mechanism already exists under the current Copyright Ordinance to request Internet Access Service Providers (IASP) to disclose the identity of clients, we do not support a legislative route to require Internet Access Service Providers to keep records of clients of online communication; it will only bring about additional bureaucracies and procedures and is a very uncreative method of regulation unbefitting of business in the digital era. Copyright protection will be better facilitated through a self-regulatory approach, by developing guidelines that are mutually acceptable between copyright owners and IASPs.

Issue Five: Statutory damages for copyright infringement

12. The Chamber supports introducing statutory damages. The magnitude will not be easy to determine, but statutory damages will provide certainty and enhance efficiency of the legal process, hence we support providing for such remedies under the law.

Issue Six: Copyright exemption for temporary reproduction of copyright works

13. The temporary reproduction of copyright works is a matter of course in the very act of online communication. It should not in itself create any serious problem in copyright infringement. Hence we are in favour of an exemption to be applied generally to temporary reproduction of works in digital devices, and specifically to cover caching undertaken by OSPs.

Conclusion

14. In conclusion, while supporting legislation for certain aspects of copyright protection of works transmitted through the Internet, we would emphasise that the Internet is part of modern living, and legislation is not the solution to regulating “way of life”. While the need for intellectual property rights protection should be re-affirmed, the ultimate protection lies in the promotion of international cooperation, good business practices and end-user education – intellectual property rights is a matter of behaviour and attitude, not just legislation. The consultation paper itself did not address the need for education; this is an omission which should be rectified.