Wednesday, July 02, 2008

Shaping Hong Kong's Digital Future

This evening Prof Peter Yu – leading academic expert on intellectual property laws from Drake University – and I spoke at the University of Hong Kong to discuss “the future of digital copyright protection in Hong Kong.” Peter put it very well when he said that Hong Kong's future as a digital hub is at stake, and this is in the end what this round of the digital copyright review is all about.

My basic principles on digital copyright can be summarized as follows. The law should protect the rights of the copyright owners so that they can enjoy the fruits of their investment, research and development, but at a price that is fair and affordable by the consumer public, in a manner that is reasonable and convenient. Copyright is not the same as property right, and the copyright laws should protect both the rights owners and the users, including follow-on innovators. Finally the government and lawmakers should not, or allow others to, “sneak in” extra regulations that are intended for limiting “other things” and thereby undermining fair use (which must be protected in the first place), freedom of speech, privacy or other important matters of public interest, or interests of the public.

The U.S. Constitution Article I, Section 8 on copyright made the concept quite clear: “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right for their respective writings and discoveries.” Progress oriented. Limited time.

Looking back at the current Government proposal on digital copyright amendments, the Administration can be commanded for having listened to the views of the user public, and of course, in the consultation that ended in early 2007, the users had spoken in a much bigger number than before. Obviously the Government is trying to strike a balance between what the rights owners want, and what the users want. But, Peter made a great point when he spoke: what the user gains, are there other irreparable losses? If so, that is not a desirable scenario, and that may hardly be the kind of balance we want to strike.

Then of course, I have to say that I have empathy for the losses suffered by the rights owners. It is understandable that they would do all that they can to protect their rights and “properties.” And there are certainly many users out there that are abusing copyrighted works through piracy, who can hardly be called “follow-on innovators” by any stretch of imagination. These are definitely law breakers and they are not the ones we are trying to protect for these abusive acts they engage in.

In the Government proposal, there is a proposal to introduce “a right of communication covering all modes of electronic transmission for copyright works, with related criminal sanctions against the breach of this right.” It believes “a blanket criminalization of all unauthorized communication might cast the net too wide and entail far-reaching unwanted implications,” so criminal sanctions are proposed against acts of “making or initiating unauthorized communication to the public” in two “defined circumstances,” first, where “communication is made for the purpose or in the course of business,” or second, “where, other than for the course of business, communication is made by 'streaming' the copyright work to the recipients and the communication is made to such an extent as to affect prejudicially the copyright owners.”

But why single out streaming? How would streaming be defined in an ever-evolving technological world? In principle, I am against any legislation that is not technology neutral, unless “proven absolutely necessary and having no alternatives.” The law must be clear also against what type of streaming activities it is trying to curb. For example, P2P streaming services are not popular in Hong Kong, unlike the case in China. The YouTube type of streaming is popular, just like most other parts of the world, but technically the user who uploaded the file to a platform like YouTube is clear uploading, and that act should already be liable under existing law.

The Administration stated that it would like to ensure “that the criminal net would not be cast too wide as to create uncertainty or affect normal sharing of ideas/information through electronic means.” But the singling out of steaming for criminal liability has apparently done what the Administration said it wanted to avoid, by casting the criminal net too wide. As streaming is a new concept just introduced in this phase of the consultation, the Government should not rush itself into legislation.

Another matter in the consultation was the role and obligations of online service providers (OSPs). Instead of putting all the burden on the OSPs, the proposal is to “facilitate the drawing up of a voluntary code of practice for OSPs in combating Internet infringements,” the compliance with which will constitute the OSPs' due diligence in dealing with these infringing activities by the court. A tripartite forum with representatives from OSPs, copyright owners and users will be set up to explore the merits of different systems to deal with takedown procedures and other related operational details. This is in principle welcomed by both OSPs and users.

The Administration's proposal also stated that it would continue to rely on the “Norwich Pharmacal” principles, as opposed to introducing an alternative infringer identity disclosure mechanism that is not subject to scrutiny by the court. This means the copyright owners will still have to go to the court in order to get the identities of the alleged infringing parties revealed for them to pursue civil remedies. Indeed, the Privacy Commissioner was adamant against any “quick and inexpensive” alternative mechanism purely for the benefits and convenience of the copyright owners. This is the also the proper way to go.

But while the Administration shelved the idea of introducing statutory damages for copyright infringement actions, it claims that “the process of proving the extent of actual losses” in the digital environment is difficult, and it proposes to prescribe in law “additional factors” to assist the court to determine additional damages – beyond the current practice of compensatory nature only. This is extremely worrisome as these factors – the defendant's conduct after the act of infringement, possible widespread circulation of the infringing copies via digital transmission, the need to deter similar infringements – are highly arbitrary and may cause unfairness in the singling out of some defendants or relying too much on the inadequate knowledge of the judges in court.

In the current proposal, the Government has put in a “new issue” -- media shifting. This subject was not in the consultation document, but many of the respondents including Internet Society Hong Kong demanded “fair use” to be included in the consultation. This is the good part – we seem to have got what we wanted. But on a closer look, the proposal on media shifting explicitly states that “the new exception should not confer any right to circumvent such technological measures so as to enable copyright owners to develop appropriate business model in face of the proposed new exception.”

In other words, if the copyright owners has put in any DRM (digital right management), then forget about media shifting. So this may render the whole media shifting provision meaningless and useless, as copyright owners will slap DRM on any new releases and bypass this media shifting rights conferred to users. Moreover, most of the DRM used today are not directed against copyright infringements, but used to prevent media shifting itself. So how about that? You see, we asked for fair use, we got media shifting. The user community should continue to insist to get fair use included in the law as an overriding principle, not a watered down media shifting provision with strong limitations.

Once again, this is about Hong Kong's digital future. Our Hong Kong 2.0. Please get your voices heard by the Government by sending in your comments to the current phase of consultation – the easiest way is through email to Legco secretariat at and by copy to the Commerce and Economic Development Bureau at .

Preliminary Proposals for Strengthening Copyright Protection in the Digital Environment


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