By Susan Cheung and Nicole Chin

Hong Kong, 7 October 2024: The Commerce and Economic Development Bureau and the Intellectual Property Department have jointly published a consultation paper, taking a significant step towards modernising Hong Kong’s copyright regime in response to the rapid advancements in artificial intelligence (AI).

The paper addresses key issues regarding copyright protection and infringement in the context of AI-generated works, suggesting that authorship of such work and liability for copyright infringement involving AI-generated content are fact-sensitive and should be determined on a case-by-case basis.

It was proposed that factors such as the operation of the AI system, the nature of the content generated, the necessary arrangements undertaken to create the content, and the person(s) involved with such arrangements should be considered in determining the identity of the rightsholder of an AI-generated work. Separately, liability for infringement should be determined with reference to evidence, existing legal provisions under the Copyright Ordinance (Cap. 528), and legal and market practices.

Notably, the paper explains that it would not be necessary to make amendments to the Copyright Ordinance to clarify authorship of AI-generated work since the current provision for “computer-generated” works is sufficiently wide to cover AI-generated content.

Exception for text and data mining

A necessary and significant proposal relates to the introduction of a specific exception to liability for text and data mining (TDM) covering both commercial and non-commercial uses, allowing AI developers to use copyright-protected content for computational data analysis and processing without needing explicit consent from copyright owners. The proposed exception would not be absolute, incorporating safeguards for copyright owners such as lawful access requirements, opt-out options, restrictions on further distribution, and proper acknowledgment of original works.

This would bring Hong Kong in line with jurisdictions like the UK, Japan, Singapore and the European Union who have already enacted TDM exceptions, albeit with varying degrees of flexibility.

Implications for stakeholders

Researchers and developers stand to benefit significantly from the proposed introduction of the TDM exception. By allowing greater access to data essential for fostering innovation and enhancing machine learning models, Hong Kong will have the opportunity to enhance its competitiveness in the global AI sector. Similarly, artists and creators would welcome the expanded copyright protections to their AI-generated works.

Although resistance to the introduction of the TDM exception is expected, the corresponding safeguards allowing artists and creators to retain control over the use of their works may help to temper such resistance, striking a balance between promoting innovation and protecting creators’ rights.

On the other hand, the government’s non-uniform approach and decision not to enact legislative reform in the areas of copyright protection and infringement means that its proposals are subject to greater uncertainty. The lack of clear guidelines surrounding the use of copyrighted data may still pose risks of infringement, especially if developers inadvertently cross legal boundaries. Likewise, since infringement would be assessed on a case-by-case basis, smaller developers and operators may struggle to navigate the complexities.

Ultimately, the success of the government’s proposals will hinge on their ability to balance the needs of a rapidly evolving technological landscape with the foundational principles of copyright protection.

Interested stakeholders were invited to submit comments on the consultation paper to the Commerce and Economic Development Bureau by 8 September 2024. In the meantime, the government has engaged a local research centre specialising in generative AI to provide input on rules and guidelines concerning the accuracy, transparency, and information security of AI technology, and will continue to monitor international practices.

Susan Cheung, a Partner in BC&C since 2016, heads the firm’s growing Intellectual Property practice, where she focuses on trademarks, designs, patents and copyright, while she also handles civil and commercial litigation, information technology matters and trade secrets. She can be contacted at susan@boasecohencollins.com.

Nicole Chin joined BC&C as a Trainee Solicitor in 2023 having gained a law degree from the University of Hong Kong the previous year. This was followed by completion of her Postgraduate Certificate in Laws at City University, where she received a Dean’s List award. She can be contacted at NicoleChin@boasecohencollins.com.