Transplanting the Canadian UGC Exception to Hong Kong: Part 1

In July 2013, the Hong Kong government conducted a public consultation on the treatment of parody under the copyright regime. Building on two earlier consultations on digital copyright reform in December 2006 and April 2008, this latest consultation identified three legislative options: (1) clarifying the threshold for criminal copyright infringement; (2) introducing a specific criminal exemption for parody, satire, caricature, pastiche or similar work; and (3) introducing a fair dealing exception for these types of works.

As part of this consultation exercise, I submitted a position paper on behalf of the Journalism Media Studies Centre of the University of Hong Kong. This paper, which was repeatedly cited in the government’s recently-released discussion paper, made three main assertions. First, none of the three identified options alone can adequately address the needs, interests and concerns of internet users in Hong Kong. Because each option serves a different purpose and has varying strengths, the government should consider adopting a combination of all three identified options.

Second, both civil and criminal exceptions, with appropriate qualifications, should be created for parodies, satires, caricatures and pastiches. Although the creation of a fair dealing exception is highly welcome, a separate criminal exception will still be needed even if that exception is to be adopted. After all, an internet user could be exempted from criminal sanctions even though the court did not find his or her dealing with the copyright work fair.

Finally, in addition to the three identified options, the government should consider adopting a fourth option not identified in the consultation paper – an exception for predominantly noncommercial user-generated content (UGC). This option is badly needed because even a broad, unlimited copyright exception for parody, satire, caricature or pastiche would not cover most of the derivative creations generated by internet users. Examples of these creations are modified photos, altered lyrics and home-made videos of music performances.

The proposal for this UGC exception is of particular interest to IPilogue readers, because it draws heavily on section 29.21 of the Canadian Copyright Modernization Act. For reasons ranging from shared legislative experiences to protection against international isolation, the proposal calls for a virtually verbatim transplant of the Canadian provision. Specifically included are the provision’s three key qualifying conditions: identification of the underlying work, legality of the work or copy used, and the absence of a substantial adverse impact on the original work.

The only substantive change made was the replacement of the word “solely” with “predominantly” in the remaining qualifying condition concerning noncommercial purposes. Although this change has arguably broadened the exception to cover a wider array of UGC works, it was made primarily to clarify situations where the UGC in question does not fall squarely within the area of noncommercial UGC. A case in point is when the UGC developer has received inconsequential advertising revenue from an internet or social media platform.

Legal commentators generally disfavor the unadapted transplant of foreign copyright laws, due largely to their ineffectiveness and insensitivity to local conditions. Nevertheless, the proposed transplant would provide an important compromise needed to advance the digital copyright reform debate in Hong Kong. A UGC exception is also badly needed considering the government’s hitherto inadequate response to the needs and interests of internet users. Because users will play an increasingly important role in internet development, the proposed transplant would further strengthen Hong Kong’s knowledge-based economy while transforming the region into an internet service and information technology hub.

Notwithstanding these many benefits, the transplant effort is fraught with challenges. In anticipation of the potential criticisms from policymakers, copyright owners and their industry groups, the position paper explains in detail why the proposed UGC exception would comply with the TRIPS Agreement (in particular its provisions on the three-step test and criminal intellectual property enforcement). The paper also addresses additional questions concerning the lack of case law in regard to the Canadian UGC exception, the potential complications of rights in the underlying works and the loophole the proposed exception might create for commercial pirates.

Peter K. Yu, an affiliated scholar of IP Osgoode, holds the Kern Family Chair in Intellectual Property Law at Drake University Law School in the United States. Born and raised in Hong Kong, he serves as the general editor of The WIPO Journal published by the World Intellectual Property Organization and chairs the Committee on International Intellectual Property of the American Branch of the International Law Association.

One Comment
  1. It is interesting to consider the interests at play from the proposed transplant of Canadian copyright legislation into another jurisdiction such as Hong Kong. I agree that amending the non-commercial purpose of s 29.21(1)(a) from “solely” to “predominantly” is a much more rational approach. This would permit the UGC (the work of concern) in general to not be deemed infringing because of inconsequential commercial gains where the free dissemination of the UGC is allowed anyway. Even in recognizing that arguments of fair dealings (solely or in conjunction with UGC exception claims) are able to garner income generating revenue unlike UGC alone, the ability to successfully argue fair dealing when disseminating a derivative work can be difficult. Adding “predominantly” allows the benefits of broader “use” under s 29.21(2) when having little if any commercial intention yet still fractionally benefitting from the incidental gains of the popularity that large intermediary disseminators like Youtube, Facebook and/or Google are able to fully capitalize on.

    An analogy from tax law similarly focuses in on the intention to profit versus gaining unintended profit. For example, an individual won’t be taxed if every once in a while he or she happens to come across an unclaimed/unowned $20 bill and pick it up, rather than making a business out of searching for money.

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