Department of Law University of Hong Kong

Copyright and Creativity

LLAW3200, 2023-24

Topic 5
Digital/Internet
Copyright

Dr. Yahong Li
University of Hong Kong
Digital and internet technologies
 Examples of Digital/Internet Technology
v 1. Website
•14. Blogs
v 2. Online Buying and Selling
•15. Social Media
v 3. Smartphones
•16. Gadgets
v 4. Blockchain Technology
•17. 3D Printing
v 5. Cryptocurrency
•18. Self-Scan Equipment
v 6. Artificial Intelligence (AI)
•19. ATM Machines
v 7. Cloud Computing
•20. Digital Cameras
v 8. 5G Data
•21. Cars and Other Vehicles
v 9. Voice Interfaces or Chat-bots
•22. Digital Clocks
v 10. Video Streaming
•23. Robotics
v 11. eBooks
•24. Drones and Missiles
v 12. Digital Music
•25. eBanking and Fin-tech
v 13. Geo-location
4
Music Streaming
 New business models
v The business model in the “age of scarcity”
– hit making, hype and cross-media
promotion -- “the winner takes all” in a “hit-
driven” culture.
v The business model in the “age of plenty” –
wholesale à retail, P2P and social
networking – “exploitation of the long tail”
v “The long tail”: “Non-hit section of the
market”
› Amazon’s half of the book sales are from the
long tail
› Provides consumers with more product variety
v Functions of the “long tail”: (1) aggregators;
(2) niche suppliers and producers; (3)
filtering, searching and finding
DIGITAL/INTERNET
COPYRIGHT LEGISLATION
 WIPO Internet Treaties
v WIPO Internet Treaties = WPPT + WCT (1996)
› WIPO Performances and Phonograms Treaty
› WIPO Copyright Treaty
v Features: the treaties
› ”address the challenges posed by today's digital technologies, in particular the
dissemination of protected material over digital networks such as the Internet.”
› “clarify that existing rights continue to apply in the digital environment.
› “ensure that the owners of those rights will continue to be adequately and effectively
protected when their works are disseminated through new technologies and
communications systems such as the Internet.”
› create new online rights such as the right of making available to the public.
› require “anti-circumvention” and “rights management information” provisions
8
› The term of protection is at least 50 years.
 WIPO Internet Treaties: definitions
v “phonogram”
› the fixation of the sounds of a performance or of other sounds, or of a
representation of sounds, other than in the form of a fixation incorporated
in a cinematographic or other audiovisual work
v “fixation”
› “embodiment of sounds, or of the representations thereof, from which they
can be perceived, reproduced or communicated through a device.”
v “communication to the public”
› making the sounds or representations of sounds fixed in a phonogram
audible to the public.
(WPPT art 2) 9
 WIPO Internet Treaties: rights
v Right of reproduction (WPPT arts 7 & 11)
› The exclusive right of authorizing the direct or indirect reproduction of their
performances fixed in phonograms, in any manner or form.
› The storage of protected works in digital form in an electronic medium
(even temporarily) = reproduction

v Right of distribution (WCT art 6, WPPT art 8):

› “making available to the public of the original and copies of their works
(performances fixed in phonograms) through sale or other transfer of
ownership.”
v Footnote 7: “the original and copies”: refers exclusively to fixed copies that can be put
into circulation as tangible object.”
v Putting a music file in a directory and connecting to the internet à infringing
distribution right? 10
 WIPO Internet Treaties: rights
v Right of rental: yes, determined by national law (WCT art 7,
WPPT art 9 & 13)
v Right to remuneration for broadcasting and communication to
the public
›Performers and producers of phonograms have the “right to a single
equitable remuneration for the direct or indirect use of phonograms
published for commercial purposes for broadcasting or for any
communication to the public.” (WPPT, art 15)
›National legislation can make reservation about this right (WPPT, art
15.3)
11
 WIPO Internet Treaties: rights
v Right of communication to the public (WCT art 8)
“…, authors of literary and artistic works shall enjoy the exclusive right of
authorizing any communication to the public of their works, by wire or
wireless means, including the making available to the public of their works in
such a way that members of the public may access these works from a place
and at a time individually chosen by them.”
› Footnote 7: “It is understood that the mere provision of physical facilities for enabling or
making a communication does not in itself amount to communication within the meaning of
this Treaty or the Berne Convention. It is further understood that nothing in Article 8
precludes a Contracting Party from applying Article 11bis(2).”
v Are ISPs liable for their activities?
v Contracting parties may set conditions for the rights, but these conditions shall not be
prejudicial to the moral rights and the right to obtain equitable remuneration. 12
 WIPO Internet Treaties: rights
v Right of “making available” of fixed performance or phonogram
(WPPT arts 10 & 14) – a right created to implement WCT art 8 (right of
communication to the public).
› Performers and producers of phonograms “shall enjoy the exclusive right of
authorizing the marking available to the public of [the works], by wire or wireless
means, in such a way that members of the public may access them from a place
and at a time individually chosen by them.”
› Performers have exclusive right in (1) broadcasting and communication to the
public and (2) fixation of their “unfixed (live)” performance. (WPPT art 6)
› Question: The delivery of audiovisual work to private computer terminal where
the work can be viewed by a group of people beyond immediate family =
infringing this right or the right of public performance (under Berne Convention art
13
11(1))?
 Right of distribution v. Right of
Communication v. Right of Making Available
v Right of distribution: making available to the public through sale or other
transfer of ownership of the “fixed copies that can be put into circulation as
tangible object.”
v Right of communication to the public: author’s right of authorizing the
making available to the public, by wire or wireless means, of their works “in
such a way that members of the public may access these works from a place
and at a time individually chosen by them.”
v Right of making available of the fixed performances or phonograms to
the public: the phonogram performers or producers’ right of authorizing the
making available to the public, by wire or wireless means, of their works “in
such a way that members of the public may access these works from a place
and at a time individually chosen by them.”
 Anti-Circumvention and
Protection of the Rights Management Information
v Anti-circumvention (WCT art. 11; WPPT art. 18):
› “adequate legal protection and effective legal remedies against the
circumvention of effective technological measures that are used by
performers or producers of phonograms in connection with the exercise of
their rights.
› Universal v. Reimerdes, 111 F. Supp. 2d 294 (2001): D posted DeCSS to
reverse engineer CSS algorithm, allowing decryption of DVDs.
v Right Management information (WCT art. 12; WPPT art 19):
› legal remedies against the illegal acts such as knowingly (1) to remove or
alter any electronic rights management information without authorization; (2)
to distribute, import for distribution, broadcast, communicate or make
available to the public, without authority, performances, copies of fixed
performances or phonograms knowing that electronic rights management 15
information has been removed or altered without authority.
 US Digital Millennium Copyright Act (DMCA)
v Online Copyright Infringement Liability Limitation Act (OCILLA), a part of
DMCA, was codified into 17 U.S.C. s.512 à provides “safe harbor” – ISP is not
liable for:
› transitory digital network communications;
› system caching;
› information residing on systems or networks at the direction of users;
› information location tools.
v ISPs will not be liable for copyright infringement if ~
› not receive a financial benefit directly attributable to the infringing act,
› not aware of the presence of infringing material or know any facts or circumstances that
would make infringing material apparent,
v ISP can be put on notice by: a written notification of copyright holder; or the “red flag” (the
infringing act would have been apparent to a reasonable person in the same or similar situation)
› upon receiving notice from copyright owners or their agents, act expeditiously to remove the
infringing material (“notice and take-down”). 16
 DMCA: Anti-Circumvention Provision
v Criminalize two acts:
› the circumvention of anti-piracy measures
› the manufacture, import, offer to the public, provide, or traffic in any technology
produced for circumventing a tech measure that controls access to a © work.
v Exceptions:
› encryption research, assess product inter-operability, test computer security system
› libraries, archives and educational institutions use under certain circumstances,
› ISPs’ mere transmission of information over internet,
› law enforcement, intelligent and other gov’t acts,
› protection of minors and privacy.
v Exemption: granted by the Librarian of Congress
› If access-control tech. has a substantial adverse effect on the ability of people to
make non-infringing use of copyrighted works, e.g., using videos for film study
› Expires every 3 years
 Beijing Treaty on Audiovisual Performance
v Adopted on June 24, 2012; and entered into force on April 28, 2020.
v To protect performers (singers, musicians, dancers and actors) in their
audiovisual performances.
› The treaty covers the performances of actors in different media, such as film,
television and video, as well as musicians when their musical performances are
recorded in a DVD or any other audiovisual platform on Internet and mobile devices.

v The treaty grants performers the following moral rights:

› the right to be identified as the performer (except where such an omission would be
dictated by the manner of the use of the performance); and
› the right to object to any distortion, mutilation or other modification that would be
prejudicial to the performer’s reputation, taking into account the nature of the
audiovisual fixations.
v The treaty grants a set of economic rights .
› As to fixed performances (e.g., motion picture), the treaty grants performers:
v (i) the right of reproduction; (ii) the right of distribution; (iii) the right of
rental; (iv) the right of making available. And
v (v) the right of authorizing broadcasting and communication to the public.
›However, Member States may instead choose to establish a right to equitable
remuneration for the direct or indirect use of the performance in the audiovisual
fixation. In addition, Member States can also restrict or deny this right by making a
reservation to the treaty.
› As to unfixed (live) performances, the treaty grants performers:
v (i)the right of broadcasting (except in the case of rebroadcasting); (ii) the right of
communication to the public (except where the performance is a broadcast
performance); (iii) the right of fixation
v Transfer of rights: once a performer consented to the audiovisual fixation of a
performance, the above exclusive rights are transferred to the producer of the
audiovisual fixation (unless a contract to the contrary)
› National law or contracts may provide the performer with the right to royalties/remuneration.
 China’s Copyright Law Amendment 2021
v Replacing “cinematographic work and works expressed by a process analogous
to cinematographic works” with the term “audiovisual works,” [art. 3]
› “Audiovisual works” are defined as “cinematographic work, television series and other works
expressed by a process analogous to cinematographic works”
› Which help prevent protect the emerging forms of works like short videos (e.g., TikTok), and
animations.
v Defining “the right of broadcasting” as “the right to publicly disseminate or
rebroadcast works by wire or by wireless means, and to disseminate broadcast
works to the public by loudspeaker or any other similar instruments for
transmitting signs, sounds or images….” [art. 9(11)]
› This right helps preventing illegal sport game live-streaming and online game broadcasting.

v Anti-circumvention of technical protection measures [arts. 49-51]

› With some exceptions 20
 Hong Kong’s Copyright Amendment 2022
v The need for the amendment: regional IP trading center; outdate copyright regime
v Key changes
› Communication right: a tech-neutral exclusive right for copyright owners to communicate
their works to the public through any mode of electronic transmission including streaming.
v Mere provision of facilities for the carriage of signals by parties (such as OSPs) and the daily and reasonable
online behaviours of the general public (such as the mere forwarding of a hyperlink or access to materials
communicated by others) would not be subject to legal liabilities for unauthorised “communication to the public”
› Criminal liability: Applies to the unauthorized communication of copyright works to the
public (a) for the purpose of or in the course of any trade or business which consists of
communicating works to the public for profit or reward; or (b) to such an extent as to affect
prejudicially the copyright owners.
› Copyright exceptions: see the ppt of the last lecture
› Safe harbour: “notice and notice” and “notice and takedown” provided in a Code of Practice
› Additional damages in civil cases: two more factors in deciding additional damages.
› Technical amendments
 EU Directive on © in the digital single market
v Adopted and came into force on 7 June 2019
v Main changes and controversies:
› Art. 3: copyright exception for text and data-mining
› Art. 5: mandatory exception for using works as a part of “digital and cross-
border teaching activities.”
› Art. 15: publishers’ rights for online use of their press publications by
creating a link-tax (publishers can charge fees for sharing link)
› Article 17: “upload filter”
v Platforms are required to get licenses from copyright holders which cover users’ acts,
and
v “made, in accordance with high industry standards of professional diligence, best efforts
to ensure the unavailability of specific works and other subject matter for which the
rightholders have provided the service providers with the relevant and necessary
information; and in any event.” 22
DIGITAL/INTERNET
COPYRIGHT INFRINGEMENT
 A&M Records v. Napster,
239 F. 3d 1004 (2001)
v Contributory infringement:
› “One infringes contributorily by intentionally
inducing or encouraging direct infringement, and
infringes vicariously by profiting from direct
infringement while declining to exercise the right to
stop or limit it.”
› knowledge of the infringing activity + material
contribution à contribute to the direct infringement
› The fact that the tech may be used to infringe
copyright = not enough to impute D’s constructive
knowledge; but Napster knew the infringement,
provided software to users, and failed to remove
infringing material = actual knowledge +
contribution.
 MGM Studios v. Grokster, Ltd.
545 U.S. 913(2005):
v The major difference between Napster & Grokster.
v Why was Grokster held liable for the users’
infringement?
v What are the elements for the liability of
“Inducement of infringement”? Or what had
Grokster done to be held liable for such
infringement?
v Why did the court hold Grokster liable for
distributing its software? Can Sony Safe Harbor
Inducement of infringement
v “One who distributes a device with the object of
promoting its use to infringe copyright, as shown by
clear expression or other affirmative steps taken to
foster infringement, going beyond mere distribution
with knowledge of third-party action, is liable for the
resulting acts of infringement by third parties using
the device, regardless of the device’s lawful uses.”
v “Sony Safe Harbor In Sony Corp. of America v.
Universal City Studios, Inc., 464 US 417,
v “the distribution of a commercial product capable of
substantial non-infringing uses could not give rise to
contributory liability for infringement unless the
distributor had actual knowledge of specific instances
of infringement and failed to act on that knowledge”
 Other P2P cases
v Kazaa case in Australia
v The Pirate Bay case in Sweden
v Oink case in UK
v Winny case in Japan
v ezPeer case in Taiwan
v Alibaba and Baidu cases in China
v BT case in Hong Kong
 ISP Liability and Fair Use Defence
v Perfect 10 v. Google, 508 F. 3d 1146 (9th Cir. 2007)
v How does Google’s search engine work?
v Google’s revenue?
v How did Perfect 10’s images (thumbnail) get into Google?
v Who bears the burden of showing a likelihood of success on the
merit, and to prove “fair use”?
v How did the court decide on the “direct infringement” as to display
right, distribution right, and fair use defence?
v How about the secondary liability such as contributory
infringement, vicarious infringement, and liability under DMCA?
 ISP Liability and Fair Use Defence
v Viacom v. YouTube 676 F.3d 19 (2nd
Cir., 2012)
v Whether YouTube had actual knowledge of
any specific instance of infringement.
v Whether YouTube willfully blinded itself
v Whether YouTube had the "right and ability to
control" infringing activity
v The 2nd Cir. reversed the lower court, and
found for Viacom. Why?
v Judge Stanton held for YouTube again in
2013. But the parties settled in 2014.
 Right to prepare derivative work re AI works
v Sarah Silverman v. Meta (7 July 2023)
v Class action alleged both the LLaMA
model and the output of LLaMA
violated s. 106(2) of US Copyright Act:
infringing the right to prepare
derivative works.
› “because the output of the LLaMA
language models is based on expressive
information extracted” from the
copyrighted works, “every output” is an
infringing derivative work.
 Public distribution v. public communication
Chan Nai-Ming v. HKSAR, [2007] 2 v Section 23(2) HKCO:
HKLRD 48
”Copying of a work means reproducing the work in any
v What constitutes a "copy" capable material form. This includes storing the work in any
of distribution under s118(f)? medium by electronic means.”
› Big Crook’s arguments and v Section 26 of HKCO:
Court’s decision/reasoning? “[T]he making available of copies of a work to the public
v Does Big Crook's conduct amount are to the making available of copies of the work, by wire
to "distribution”? or wireless means, in such a way that members of the
public in Hong Kong or elsewhere may access the work
› Big Crook’s arguments and
from a place and at a time individually chosen by them
Court’s decision/reasoning? (such as the making available of copies of works through
v Should Big Crook be liable under the service commonly known as the INTERNET).
HKCO s.26, rather than under v Section 118 (1)(f) of HKCO:
HKCO s.118(1)(f), so that he could “A person commits an offence if he, without the licence
avoid the criminal sanction? of the copyright owner…distributes to such an extent as
v What caused the difficulty in to affect prejudicially the owner of the copyright, an
deciding the above issues? infringing copy of a copyright work.”
Doctrine of First Sale/Exhaustion on Internet
v UsedSoft v. Oracle
›CJEU held that as long as the author of the computer software
was found to have transferred the software by way of sale,
subsequent use of the software could be freely licensed or sold
without infringement.

v Capitol Records, LLC v. ReDigi, Inc

›Even if the original owner of a digital copy removes the copy, the
new transferee’s acquisition of a copy is an act of reproduction,
therefore infringing the right of reproduction and distribution –
“digital first sale”
 Public performance over Internet
v United States v. American Society of Composers, Authors and Publishers
(ASCAP) et al (2012)
› Download = public performance of the work when the downloaded file is NOT
simultaneously perceptible and audible to the recipient during the transmission of
the download?
v AIME v. The Regents of UCLA (2012)
› P licensed D to “publicly perform” the DVD.
› Streaming = “public performance”?
› Streaming outside of a classroom = out of the educational context = violated the
right of public performance?
v Fox Broadcasting v. Dish Network (CD.Cal, 2015)
› Had D infringed P’s right of public performance when its service could only be used
by the subscribers to get access to their own recordings?
 Public Distribution v. Communication to the public
v Shenzhen Qicediechu 奇策迭出 Cultural & Creative Co., Ltd. v. Yuan Yuzhou Tech
Co. Ltd., Hangzhou Internet Court (2022)
v The right infringed:
› The NFT was made available in an open Internet environment to unspecified public. Each
transaction was automatically executed through a smart contract, allowing the public to obtain
the NFT at a time and place chosen by them. Thus, D’s act constituted infringement of the right
of network information dissemination, rather than the right of distribution as the latter is the
right to provide the original or copy of the work to the public by way of sale or gift." (CL art 10)
v The NFT platform duty of care:
› The platform’s duty of care is not limited to "notice-take down”, but should subject to a higher
duty to conduct a preliminary review of the copyright of the NFT works traded on the platform,
because the platform has the review capabilities and conditions, and obtains direct economic
benefits from NFT digital works.
v For example, when users mint NFT works, they need to purchase "fuel" in advance as the cost of
minting NFT works. And every time a work is traded (including the first sale and resale), the NFT
platform will charge a certain percentage of commission and "fuel" fees from users who mint NFT.
 Infringement Liability Involving AI
v Xmov (魔珐) Tech. Ltd. v. a Hangzhou Internet Co.
v Hangzhou Internet Court held:
› The representation of the virtual digital human, Ada,
constituted an artwork, and the related videos using Ada’s
image constituted audiovisual works and video production
under the Copyright Law.
› Xmov owns the copyright for its employee’s creation of
Ada in the course of his employment.
› D infringed P’s right of communication by releasing two
short videos through its Douyin account, which used the
content related to Ada, replaced P’s logo, and inserted D’s
own marketing info.