Keywords

1 Introduction

Once celebrated for its strong cultural identity and dynamism,Footnote 1 the Hong Kong film industry’s popularity has declined since its prime in the 1980s and the early 1990s.Footnote 2 The decline was rooted in various political, economic, and social factors. This chapter shall explore the rise and fall of the Hong Kong film industry as well as Hong Kong’s efforts to revive its film industry and examine the inadequacies of the traditional Hong Kong copyright framework and the role of copyright law in establishing a better future for the Hong Kong film industry.

2 Hong Kong Film Industry: Growth and Decline

The Hong Kong film industry finds its roots in Cantonese opera.Footnote 3 The earliest films – Stealing a Roasted Duck (1909), Right a Wrong with an Earthenware Dish (1909), and Zhuangzi Tests His Wife (1913) – were based on notable operatic scenes.Footnote 4 Later on, Mandarin features from China influenced the local film industry as a result of the Second World War and Chinese civil war (1945–1949).Footnote 5 Under British colonial rule, Hong Kong was deemed a safe haven of “social order and freedom,”Footnote 6 thus attracting capital, talent, and “sophisticated production techniques from the Mainland.”Footnote 7 This led to the development of Mandarin production powerhouses such as the Shaw Brothers and Motion Picture and General Investment Company Limited in Hong Kong.Footnote 8 However, the elaborate production value of Mandarin films proved to be detrimental to smaller local Cantonese films,Footnote 9 resulting in the gradual absence of the latter in the film industry. Despite this, the industry flourished in the 1950s and 1960s “with an average production of over 200 films a year.”Footnote 10

The local film industry experienced a shift in the 1970s. After the stoppage of Cantonese film production in 1971–1973,Footnote 11 the local film industry not only turned around but achieved international fame with the introduction of Cantonese kung fu films.Footnote 12 The introduction of homegrown talents Bruce Lee, Sammo Hung, and Jackie Chan forever changed the landscape of the industry.Footnote 13 It characterized kung fu as the “signature brand of Hong Kong films.”Footnote 14 The late 1970s welcomed “New Wave” directors in the likes of Ann Hui, Yim Ho, Tsui Hark, Patrick Tam, Allen Fong, and Alex Cheung.Footnote 15 This new generation of innovative directors “brought about a fresh, more personal approach”Footnote 16 which vastly improved the quality of domestic films.Footnote 17 It likewise catapulted the industry to international and critical acclaim at film festivals.Footnote 18

The golden age of the industry took place in the 1980s to the early 1990s. During this period, it earned the moniker “Hollywood of the Far East”Footnote 19 by producing an average of 400 films a yearFootnote 20 and surpassing India as the largest exporter of films in Asia.Footnote 21 It experienced rapid commercial success in both local and overseas markets.Footnote 22 It produced immensely popular movies such as The Shaolin Temple (1982), Project A (1983), Police Story (1985), City on Fire (1987), Rouge (1987), A Chinese Ghost Story (1987), The Greatest Lover (1988), Bullet in the Head (1990), Once Upon in China (1991), Full Contact (1992), and Chungking Express (1994). This period likewise saw the rise of independent production companies and domestically focused cinema circuitsFootnote 23 and the emergence of idol-actors who “established a commanding presence at regional box offices.”Footnote 24

However, the mid-1990s witnessed the drastic decline of the industry. In its efforts to meet the skyrocketing demand of the market, the industry sought to appease its principal investors by inhibiting creativity and resorting to unpolished formulaic productions.Footnote 25 This led to overproduced films devoid of any “sensational impact and visceral stimulation,”Footnote 26 thus causing dwindling profits and loss of international acclaim at foreign film festivals.Footnote 27

The industry has yet to recover, as manifested in the fraction of films produced and the drop in box office receipts. Production output declined to 242 films in 1993, 92 films in 1998, and eventually a record low of 55 films in 2005.Footnote 28 In 1992, the total box office receipts reached HK$1552 million, with HK$1240 million contributed by Hong Kong films and HK$312 million contributed by foreign films.Footnote 29 The revenues declined to HK$1051 million in 2007, with HK$831 million from foreign films and HK$220 million from local films.Footnote 30 After a slow recovery, the receipts increased to HK$1558 million in 2012 and to HK$1986 million in 2015Footnote 31 (Fig. 1). The number gradually increased to HK$1947 million in 2016 and HK$1853 million in 2017Footnote 32 (Fig. 2).

Fig. 1
A graph of Hong Kong dollars in millions versus years for the revenue in Hong Kong films and Foreign films. It displays that the revenue of foreign films in 2015 was maximum.

Box office in Hong Kong by film category. (Data sources: Census and Statistics Department and Commerce and Economic Development Bureau)

Full size image
Fig. 2
A table has 2 columns and 3 rows. The table depicts the number of local and foreign films released in 2016 and 2017 along with the total box office receipt.

Number of films released and box office receipts. (Source: Hong Kong Box Office Ltd.)

Full size image

Although the total box office receipts in recent years have been higher than at the industry’s peak in 1992, it should be noted that the increase is attributable to receipts of foreign films, and not domestic films. In fact, foreign films contribute nearly 80% of the total revenue.Footnote 33

The decline in box office receipts is further manifested in the top ten box office results. First Strike, a film produced by Hong Kong-based Golden Harvest movie studio, ranked as the highest-grossing film in the domestic market in 1996. In the same year, four other Hong Kong films placed in the top ten box office list. In contrast, only one Hong Kong film (The Mermaid), co-produced with the Mainland, appeared on the 2016 top ten box office listFootnote 34 (Fig. 3).

Fig. 3
A chart illustrates the top 10 box office hits in 1996 and 2016. The first strike was the top film in 1996 and Captain America in 2016, with revenue of 57.52 and 120.38 Hong Kong million dollars, respectively.

Top 10 box office hits in Hong Kong for 1996 and 2016. (Source: Box Office Mojo, Hong Kong Box Office)

Full size image

The Hong Kong film industry’s performance at international film festivals was likewise affected. The film industry last submitted entries to the Cannes Film Festival in 2009, to the Berlin International Film Festival in 2008, and to the Venice Film Festival in 2011.Footnote 35

The decline is attributable to the core model of the Hong Kong film industry and several external factors. The “conservative and opportunistic outlook”Footnote 36 of the industry inhibits innovation, thus resulting in overproduction. The lack of infrastructure in both productionFootnote 37 and distributionFootnote 38 aspects hinders the development of the film industry from within. Moreover, its “director-centered production system”Footnote 39 causes a drain in technical and artistic talent.Footnote 40 External factors include the political and economic landscape after Hong Kong’s handover to China,Footnote 41 strong competition from foreign films,Footnote 42 and rampant piracy.Footnote 43

2.1 Factors Within the Core Model of the Hong Kong Film Industry

The core model is characterized by a director-centered production system coupled with investor pressure and a weakening industry infrastructure. These factors resulted in the decrease in the quality of local films.

From previously well-established production houses, the film industry production style is now that of “a cottage industry compris[ing] independent productions known for its filmmakers’ frantic work style.”Footnote 44 The director-centered production system results in a form of “guerrilla filmmaking,” in which directors dive into the filmmaking process armed with solely a general plot or storyline.Footnote 45 He or she improvises throughout the process without any completed scripts.Footnote 46 This process undermines the value and the creative integrity of scriptwriters,Footnote 47 which often results in a drain of talent. Directors, investors, and even actors participate in “script-butchering,”Footnote 48 often diluting the storyline. Despite the establishment of the Hong Kong Screenwriters’ Guild (HKSWG) in 1991, scriptwriters remain weak and unprotected due to the absence of the right to collective bargaining.Footnote 49 Famous actors like Chow Yun Fat have vowed never to return to Hong Kong unless the scripts are better.Footnote 50

Additionally, many filmmakers have succumbed to investors’ pressure on decisions over cast and content.Footnote 51 This has proved to be detrimental to the industry, since it has inhibited creativity and resulted in an “over-heated and over-exploited” market.Footnote 52 The pressure to create one blockbuster hit after another has led to lackluster and formulaic films. As a result, the interest of the viewing public has waned, ultimately affecting the demand for Hong Kong films.Footnote 53

The overall poor infrastructure of the industry, particularly in terms of education, production, and distribution, explains the industry’s inability to keep up with their foreign counterparts. Hong Kong lacks educational facilities for film staff,Footnote 54 which leads to brain drain. The production infrastructure is marked by a lack of technical facilities for postproduction and distribution.Footnote 55 This has forced the industry to outsource these services to foreign countries,Footnote 56 thus affecting Hong Kong’s position as a leading film hub. With regard to distribution, the dearth of local cinemas has also greatly spurred the decline of the industry. Cinemas have dramatically declined in number from 119 in 1993 to 47 in 2015 (Fig. 4), and the number of screens available per 100,000 persons ranks second lowest compared to other major Asian cities (Fig. 5).Footnote 57

Fig. 4
A table has 4 columns and 23 rows. The columns are titled year, number of cinemas, number of screens, and number of seats.

Number of cinemas, screens, and seats in Hong Kong from 1993 to 2015. (Source: Legislative Council Brief Facilitating Cinema Development LC Paper No. CB(4)801/16-17(05))

Full size image
Fig. 5
A table has 4 columns and 7 rows. The columns are titled city, number of screens, size of the population, and number of screens per 100,000 persons.

Comparison with some major cities in Asia. (Source: Legislative Council Brief Facilitating Cinema Development LC Paper No. CB(4)801/16-17(05)

Full size image

2.2 External Factors

Apart from issues within the industry, external factors have likewise contributed to the decline. A fundamental reason is the changes arising from the political and economic climate in Hong Kong. Hong Kong’s reunification with China in 1997 signified its access to and economic integration with the Mainland market.Footnote 58 However, the onslaught of the 1998 Asian Financial Crisis and the SARS epidemic heavily affected the Hong Kong film industry, causing an economic crisis.Footnote 59

The Mainland offered to boost Hong Kong’s economy and strengthen trade relations between the two sides and entered into the Closer Economic Partnership Arrangement (CEPA) in 2003 with Hong Kong.Footnote 60 Under CEPA, Hong Kong and the Mainland developed bilateral rules governing the quota limitations and co-productions of Chinese language motion pictures produced in Hong Kong and the Mainland.Footnote 61

Chinese language motion pictures produced in Hong Kong may be imported for distribution in the Mainland on a quota-free basis, after vetting and approval by the relevant Mainland authority.Footnote 62 The benefit does not apply to every Hong Kong film. CEPA defines “Chinese language motion pictures produced in Hong Kong” as those “made by production companies which are set up or established in accordance with the relevant laws of the Hong Kong Special Administrative Region, and which own more than 75% of the copyright of the motion pictures concerned.”Footnote 63 It further requires that more than 50% of the total principal personnel involved in the particular film be Hong Kong residents.Footnote 64

CEPA introduced co-productions between Hong Kong and the Mainland. Co-produced films are considered to be “Mainland motion pictures for the purpose of distribution in the Mainland.”Footnote 65 No limits are imposed on the “percentage of principal creative personnel from Hong Kong.”Footnote 66 However, it requires that “at least one-third of the leading artistes must be from the Mainland.”Footnote 67 It also requires that storylines and main characters to be associated with the Mainland.Footnote 68

The Hong Kong film industry believed that CEPA would revitalize the film industry. While CEPA opened the massive Mainland Chinese market to Hong Kong-produced films, increased investments, and generated more jobs,Footnote 69 it also inhibited freedom in the creative process by means of censorship. This translated to revising plot lines and casting actors appealing to the massive Mainland market, regardless of their allure to the local market.Footnote 70 Ultimately, the appeal of the massive Mainland Chinese market drove some Hong Kong filmmakers to forfeit their artistic integrity and creative freedom, to the detriment of the Hong Kong film industry’s distinct identity.Footnote 71

The ease of co-production improved the business performance of the Hong Kong film industry. At least 50% of Hong Kong films were co-productions with filmmakers from the Mainland, and these co-produced films generated more box office receipts, at HK$234 million.Footnote 72 However, co-production comes with the price of regulation by Mainland film censorship authorities.Footnote 73 This effectively restricted expression and creativity shared through film, diminishing the distinct flavor of locally produced films. Consequently, the interest of local audiences waned due to the absence of cultural relevance and diversity in Hong Kong films.Footnote 74

Another contributing factor is the influx and rising popularity of foreign films from Hollywood, as well as Bollywood and other neighboring countries. On account of Hollywood’s “newly aggressive push…in the Asian market,”Footnote 75 local films had great difficulty in sustaining its market size.Footnote 76 In 2015, 80% of box office receipts were held by foreign films, while only 20% were held by local films.Footnote 77 This demonstrates consumers’ loss of interest in Hong Kong films and increasing appetite for “fast-paced and star-studded Hollywood mega productions.”Footnote 78

The decline is also attributable to piracy. The Hong Kong film industry has been a victim of rampant piracy. Bootlegged VCDs and DVDs collectively contributed to a loss of around HK$300 million to the industry in 1998.Footnote 79 Illegal streaming and peer-to-peer file-sharing platforms, such as BitTorrent, are threats to the film industry.Footnote 80 These internet streaming services resulted in an industry loss of US$308 million in 2012.Footnote 81 Rampant piracy has allowed consumers to easily access films, both classic and newly released, at no cost or for a minimal fee.Footnote 82 If eliminated, it will contribute to a 15% increase in box office receipts.Footnote 83 But if left unchecked, piracy may deter investors, affect the quality of films produced, and cause the ultimate downfall of the Hong Kong film industry.

Overall, the inherent weaknesses of the core model of the film industry and other external factors have gravely crippled the growth of the industry and contributed to the decline in the film industry and the loss of its competitive edge in the global market.

3 The Road to Revival of the Hong Kong Film Industry

The Hong Kong government has played a pivotal role in the revival of the Hong Kong film industry. While it is incumbent upon filmmakers to improve the quality of films and upon viewers to support local film culture, the government is in a crucial position to protect and promote the local film industry. For this reason, the government has developed and institutionalized several policies to promote the creative industries which ultimately affect Hong Kong’s economy and cultural identity.Footnote 84

3.1 Hong Kong Film Development Council

The Hong Kong Film Development Council (FDC) is the government’s arm geared toward the promotion and development of the film industry.Footnote 85 Established in 2007, the FDC acts as an advisory body on various policies and strategies put in place for the sustainable development of the film industry.Footnote 86 Through the FDC, industry stakeholders, primarily producers, directors, and film critics collectively collaborate with the government to revive the film industry.

3.2 Hong Kong International Film and TV Market and Hong Kong International Film Festival

In an effort to promote Hong Kong as a global film production and distribution hub, Hong Kong hosts the Hong Kong International Film and TV Market (FILMART) and the Hong Kong International Film Festival (HKIFF), among other industry highlights. Established by the Trade Development Council in 1997, FILMART promotes linkages across various media and platforms for the industry.Footnote 87 This film and TV marketing exhibition is integral to the industry’s revival since it advances Hong Kong’s status as a core player in the global film industry.Footnote 88 Through FILMART, foreign filmmakers are introduced to Hong Kong as a platform to connect with the global market, including that of the Mainland.

While FILMART focuses on the infrastructure of the film industry, HKIFF dedicates itself to promoting film culture and creativity. Set up in 1977, HKIFF is one of the world’s oldest film festivals.Footnote 89 Through its efforts, HKIFF is now “Hong Kong’s largest cultural event” and is aimed at promoting “international appreciation of Asian, Hong Kong, and Chinese film culture.”Footnote 90 HKIFF is likewise integral to the industry’s revival due to its dedication to promoting Hong Kong film culture to the world and recognizing new talents capable of further developing Hong Kong film culture to its fullest.

3.3 Film Development Fund

To further the growth of the industry, the government established a Film Development Fund (FDF) as means of financing small-to-medium productions and locally produced Cantonese films for distribution in the Mainland.Footnote 91 Through FDF, the government invested HK$300 million in 2007 and HK$200 million in 2015.Footnote 92 Additionally, it infused HK$20 million in 2016 to aid distribution of Cantonese films in the Mainland.Footnote 93 The Film Production Grant Scheme (2015) and First Feature Film Initiative (2013) were launched to further encourage production of Hong Kong films.Footnote 94 The Film Production Grant Scheme awards cash subsidies to films with a budget of $ten million or less in order to reduce the risk of film producers and “create nurturing opportunities for practitioners of the film industry.”Footnote 95 The First Feature Film Initiative offers support to filmmakers without experience in commercial filmmaking by creating jobs for “new on-screen talents and first-timer recruits to film production crews.”Footnote 96 Through these endeavors, the government provides support to filmmakers and equips them with the financial capacity to produce quality films and tap into the Mainland Chinese and overseas markets.

3.4 Create Hong Kong (CreateHK) and Hong Kong Arts Development Council

CreateHK and the Hong Kong Arts Development Council focus on driving the creative and art industries, including film.Footnote 97 CreateHK, a government agency, aims to “build Hong Kong into a regional creative capital” by facilitating creative development.Footnote 98 It assists in film production by coordinating between filmmakers and “over 3,000 organisations on the use of their premises for location filming, and published reference materials on locations for the industry.”Footnote 99 Hong Kong Arts Development Council endeavors “to establish Hong Kong as a dynamic and diverse cultural metropolis.”Footnote 100 It aids art practitioners, including those in the film industry, by granting fund allocations, promoting art through policy and development, and establishing cultural exchanges.Footnote 101

3.5 Closer Economic Partnership Agreement

As previously discussed, the CEPA assists in uplifting the Hong Kong film industry by doing away with quota limitations on the distribution of Hong Kong films in the Mainland and by establishing co-production initiatives between Hong Kong and the rest of China.

4 The Implications of the Hong Kong Copyright Framework on the Film Revival

While the above efforts aiming at the revival of the film industry are laudable, they fail to address the issue at its core. A common thread among the government’s undertakings is the focus on developing infrastructural solutions and improving financial support. However, the means to fully propel the industry to greater heights lies in creating innovative, diverse, and quality Hong Kong films that celebrate the industry’s creativity and ingenuity. Despite the government’s efforts, the current mechanisms to develop state-of-the-art films continue to face legal barriers in the form of stringent copyright protection.

While movies can be easily pirated as intangible intellectual products, their production and distribution require huge investment. Therefore copyright is paramount in the film industry. According to the statistics published by the Motion Picture Association of America (MPAA) in 2007 (the last year in which the MPAA collected this information), the total average budget for releasing a feature film is US$106.6 million.Footnote 102 Compared to creators of other categories of cultural products, copyright holders of films have a stronger demand for copyright that allows them to exclusively exploit their films and to recoup investment. Like other jurisdictions, Hong Kong also includes films in copyright law and grants the copyright owners exclusive rights to copy the work;Footnote 103 to issue copies of the work to the public;Footnote 104 to rent copies of the work to the public;Footnote 105 to make available copies of the work to the publicFootnote 106 to perform, show, or play the work in public;Footnote 107 and to broadcast the work or include it in a cable program service,Footnote 108 among others. These rights expire at the end of the period of 50 years from the end of the calendar year in which the death occurs of the last to die of the following persons: the principal director, scriptwriter, author of the dialogue, or the composer of music created for and used in the particular film.Footnote 109 However, as we will discuss in the following sections, some Hong Kong copyright rules are inconsistent with the nature of the film and impede the development of Hong Kong’s film industry.

4.1 Co-authorship of Films

Hong Kong copyright law regards a film as a work jointly authored/owned by the producer and the principal director,Footnote 110 unless the film is made by an employee in the course of his employment, in which case the employer will be the copyright owner but the producer and the principal director remain the co-authors.Footnote 111 Figure 6 shows how this approach differs from many other major film-producing countries.

Fig. 6
A table has 4 columns and 8 rows. The columns are titled countries, authors of a film, copyright owner, and definition of the film producer.

Comparison of the rules of authorship and ownership in a film

a17 USC § 101 “Motion picture” was introduced to US copyright law in 1912 as a category of made-for-hire work

bLaw for the Protection of Copyright and Neighboring Rights in Italy (2010 amended), article 44

cId. article 46

dId. article 45

eIntellectual Property Code of France (2003 amended), article L113-7

fId. article L132-24

gId. article L132-23

hAct on Copyright and Related Rights of Germany (2017 amended), article 8

iId. articles 89 and 94

jCopyright Law of Japan (2009 amended), article 15(1) and article 16

kCopyright Law of Japan (2009 amended), article 15(1) and article 16

lCopyright Law of the People’s Republic of China (2010 amended), article 15

mCopyright Act of the Republic of Korea (2009 amended), articles 75 (1) and 76

nId. article 2

oCopyright Ordinance of Hong Kong (Cap. 528) (2009 amended), section 12(2) and section 11(2) (b). Copyright, Designs and Patents Act 1988 of UK (Chapter 48) (2017 amended), section 9(2)(ab) and section 10(1A)

pCopyright Ordinance of Hong Kong (Cap. 528) (2009 amended), section 14. Copyright, Designs and Patents Act 1988 of UK (Chapter 48) (2017 amended), section 11(2)

qCopyright Ordinance of Hong Kong (Cap. 528) (2009 amended), section 198. Copyright, Designs and Patents Act 1988 of UK (Chapter 48) (2017 amended), section 178

Full size image

The major difference between Hong Kong and other jurisdictions is that Hong Kong, which follows the British tradition, allows the director to jointly exploit the film with the producer, while in other countries it is the producer who is solely entitled to exploit the film. Despite the difference of authorship rules, many countries including Italy, France, Germany, China, and Korea grant the right of exploitation to the producer exclusively. Though the USA and Japan subject the film ownership to the work-for-hire doctrine like Hong Kong, they concentrate the exploitation right on a single party, often the producer, when the film is not an employee’s work. Under Japanese copyright law, the exploitation right belongs to either the production company in the case of a film made for hire (Art.15) or “the person that makes a creative contribution to the overall shaping of the work through responsibility for its production, direction, staging, filming, art direction, etc.” (Art. 16), which most likely refers to the film producer according to the definition of “producer” in other countries (see Fig. 6). In the USA, if a film does not fall into the scope of a work made for hire, the producer will be regarded as the sole author because of the stringent conditions of joint authors.Footnote 112

In Hong Kong, nevertheless, a film is co-owned by the producer and the principal director unless it constitutes an employee’s work under a contract of service or of apprenticeship.Footnote 113 However, the film labor system in Hong Kong that changed from contract labor (1930–1970), then a mixed mode of contract and noncontract labor (1970–1990), to flexible, noncontract labor (since 1990) might reduce the number of films that can be considered employee works.Footnote 114 Even if there is a contract, it might be between the director and other employees due to the long-standing director-centered production system,Footnote 115 whereas the judges have tended to hold films to be co-owned by the producer and director rather than being an employee’s work owned by the director.Footnote 116 However, joint ownership is prone to conflicts, including conflicts between the interests of the producer and principal director and the conflicts of applicable laws when the joint owners are from different jurisdictions such as in the case of co-production.

Further, joint ownership adds to the difficulties and costs of identifying copyright owners. Neither “principal director” nor “director” is defined under Hong Kong law.Footnote 117 Departing from the definition of “producer” in other countries normally featured by responsibility (Fig. 6), the Hong Kong counterpart, defined as “the person by whom the arrangements necessary for the making of the film are undertaken,”Footnote 118 is confusing in regard of the “necessity” of the arrangements. For example, in Century Communications v Mayfair Entertainment,Footnote 119 a film made in China (under the control of the plaintiff) was held to be produced by a Hong Kong company (the defendant). Despite the plaintiff’s arrangements such as engaging directors and employing actors, the court ruled in favor of the defendant, reasoning that it was the defendant who initiated the filmmaking and paid for it.Footnote 120 In Beggars Banquet v Carlton Television, the court decided that the person directly responsible for finance, rather than the person who paid the money, should be the producer.Footnote 121 In A &M Records Ltd. v. Video Collection International Ltd., the person who initiated the process and contracted conductors, rather than the conductor who booked and paid for the orchestra and the studio, was considered the producer who makes necessary arrangements.Footnote 122

As a special feature of Hong Kong film, the co-authorship, or the co-ownership enjoyed by the producer and director, suited the “director-centered production system”Footnote 123 very well. The advantage of this system was especially evident in the kung fu genreFootnote 124 and brought Hong Kong’s film industry to the golden age from the 1980s to the early 1990s. However, a wide range of films that spawned later, from adventure films and comedies to dramas and musical films, rely heavily on other talents such as scripters and composers, not only directors.Footnote 125 The privilege of directors may hold up the collaborative filmmaking process and may even drive homegrown talent to seek greener pastures in the film industries of foreign countries.Footnote 126 Perhaps concentrating the exploitation right on a single party with a clear definition of ownership can reduce the cost of negotiation, clarify the scope of film copyright, and facilitate co-production with other regions. In fact, the Law Reform Commission in Hong Kong suggested that the producer should become the sole copyright owner of a film, although the proposal failed to be finally adopted.Footnote 127

4.2 Unclear Scope of “Copy” and Insufficient Protection for Secondary Creation

Section 7(4) of Hong Kong Copyright Ordinance explicitly claims that “copyright does not subsist in a film which is, or to the extent that it is, a copy taken from a previous film.”Footnote 128 Undoubtedly, copyright “does not subsist in a copy taken from a previous film” because originality is the basic requirement to attract copyright protection. Disputes arise because of the ambiguity contained in the provision “copyright does not subsist in a film which to the extent is a copy taken from a previous film.” Specifically, “to the extent is a copy” is a gray area between a verbatim, exact copy without any change to the previous film and a derivative, new film which gains copyright protection because of its originality and substantial difference from other works. Hong Kong Copyright Ordinance acknowledges that both copying a whole work and copying any substantial part of the work constitute a copyFootnote 129 but fails to define “substantiality.” Hong Kong case law, although it lacks clear guidance regarding the boundary of substantial taking in the field of films,Footnote 130 indicates that even a small amount of taking, such as taking a short musical snippet from another’s song,Footnote 131 reproducing a smaller version of the front page of a rival newspaper,Footnote 132 and copying a small part of a questionnaire,Footnote 133 will fall into the scope of copyright infringement.

Following this reasoning, a film created from several clips of one or more previously existing films, a remixed film, a colorized or extended version of a film, a director’s cut (namely, an edited version of a film that is supposed to represent the director’s own approved editFootnote 134), or a digitally enhanced or restored print will likely be classified as “a copy” in which copyright does not subsist.Footnote 135 The indiscriminate, bald opposition against copying crucially misunderstands the nature of films. As a transnational cultural product,Footnote 136 a film appeals to its audience by providing a novel experience of a new culture. However, the new product and experience should not be too far away from knowledge that the audience already has. This is a sophisticated balance between similarities and differences,Footnote 137 between unknown cultural secrets and easy accessibility.Footnote 138 As Abraham Drassinower notes, culture is copying, and copying per se is not wrong.Footnote 139 It is copying that makes the connection between similarities and differences, which explains the continual popularity of movie series such as the Harry Potter series and the Marvel series.

Some may argue that this provision merely prohibits the copying of expression, while the idea is still in the public domain, freely available for everyone. But the boundary between idea and expression is as vague as the boundary between copying and recreation. For instance, Steven Chow, the director for Shaolin Soccer, might exclude others from making a similar kung fu soccer film by arguing that he created his own original kung fu expressions based on the idea of soccer playing, but it is also reasonable to regard soccer as an expression (action and speed) and kung fu as an idea (power, strength of will, hard work, and dignity).Footnote 140 The real cultural copying practice is more complex than what is written in copyright law.Footnote 141 Actually, as Laikwan Pang noted, the artificial dichotomy of idea/expression is designed more for satisfying capitalist interests than for promoting creativity and culture.Footnote 142 It enables Hollywood to rapidly and effectively appropriate other cinematic traditions, to remake films, and then to exclude others from exploiting the same stories.Footnote 143 But for the domestic industry, the blurred boundary between idea and expression, along with the difficulty in distinguishing copying and recreation, will obstruct the production of movies of the same style and hinder Hong Kong films from forming a collective identity.Footnote 144

The prohibitive effect of copyright law is even exacerbated by the lack of copyright exceptions providing some breathing space for secondary film creation.Footnote 145 This is extremely crucial in the Internet age, where various kinds of user-friendly tools empower a large number of untrained ordinary people to engage in filmmaking themselves such as DIY cinema, newsreel films,Footnote 146 short films,Footnote 147 and microfilm.Footnote 148 As section 2 of the chapter shows, Hong Kong’s government has made great efforts in promoting filmmaking, both professional and amateur, whereas legal support is still to be desired. Encouraged by the open-ended fair use doctrine in the USA,Footnote 149 the Australian initiative incorporating parody and satire into fair dealing exception, the Canadian exception for noncommercial user-generated content, and the UK fair dealing exception for parody, caricature, and pastiche,Footnote 150 Hong Kong’s Copyright (Amendment) Bill 2014 introduced a safety valve for “parody, satire, caricature, or pastiche.”Footnote 151 Nevertheless, the Hong Kong bill ultimately failed to be adopted into law, mainly because copyright owners insisted on the existing copyright ordinance with no amendment at all and users feared that the government might imprison users who engage in secondary creation other than “parody, satire, caricature, or pastiche.”Footnote 152

In the past, most secondary creations were private and thus remained unregulated by the government or tolerated by copyright holders. However, due to the participatory and hyperconnected web,Footnote 153 a transformation which Henry Jenkins called “from home movies to public movies” occurs, and a much wider audience gets involved.Footnote 154 The popularity of homemade movies and the big business behind them inevitably move those secondary creations, which were originally in the gray area, to the front, directly facing the challenge of copyright law. If the law insists on illegalizing or even criminalizing these uses, these new modes of filmmaking will be stifled, and the potential of mass creativity unleashed by the Internet age will be inhibited.

4.3 Criminal Liability for Copyright Infringement

Hong Kong copyright law imposes harsh penalties, both civil and criminal, on copyright infringement. As the Court of Appeal of Hong Kong has noted, copyright infringement “is not simply a matter of the private interests of the copyright owners” but “a matter of public interest to Hong Kong generally”; hence “the remedies available for infringement of copyright can be extensive.”Footnote 155 Civil remedies include compensation in the form of damages, injunction, an account of profits, and an order for delivery up.Footnote 156 Criminal penalties include a fine of up to HK$50,000 for each infringing copy and imprisonment of a maximum of 4 years,Footnote 157 which specifically pertain to end users who possess, copy, and distribute an infringing copy of certain types of work for the purpose of trade or business.Footnote 158 However, if the distribution is to such an extent as to prejudice the copyright owner, the distributor will be subject to criminal sanction irrespective of the types of copyright works and the purpose of distribution.Footnote 159 These liability rules are not simply written but also efficiently enforced.Footnote 160

The world’s first case imposing criminal liability upon an individual using BitTorrent for P2P sharing, Chan Nai Ming v HKSAR,Footnote 161 occurred in Hong Kong.Footnote 162 The key issue was whether uploading files constitutes “distribution.”Footnote 163 The defendant used the legal loophole that “distribution” is nowhere defined in Hong Kong Copyright Ordinance, claiming that the prosecutor cannot prove that Chan’s act of uploading violates the right of distribution because there is no delivery of “physical copies.”Footnote 164 As a response, Justice Beeton extended “distribution” to “digital dissemination,” reasoning that “‘distribution’ in its ordinary meaning, is clearly capable of encompassing a process in which the distributor first takes necessary steps to make the item available and the recipient then takes steps of his own to obtain it.” Through a liberal interpretation of the Copyright Ordinance, the Court decisively gave the law proper effect in combating piracy. The criminalization of copyright infringement has indeed become an evident character of Hong Kong copyright law. From a case search in Lexis HK,Footnote 165 we found 42 cases addressing film copyright, among which 27 cases involved criminal liability of copyright infringement.Footnote 166

However, rigorous liability and harsh punishment from copyright law have failed to fulfill the goal of eliminating piracy. According to a report from Carnegie Mellon University, in 2017 65.9 million BitTorrent movie and TV programs were downloaded, and a loss of HK$ 286 million was caused to the Hong Kong box office.Footnote 167 Online piracy of films, video clips, music, and animation is leading to a monthly loss of around HK$120 million to Hong Kong’s creative industries.Footnote 168 Penalties alone are insufficient to deter infringement. The deterrent effects of law depend upon two factors, the probability of being caught and the severity of the punishment.Footnote 169 For most private pirates, the probability of being caught is very low because of the high cost of tracing anonymous pirates, each of whom merely causes minimal loss to the copyright owners. As Peter Yu concluded, criminal penalties under Hong Kong copyright law are “likely to be selectively enforced and therefore highly unfair.”Footnote 170

The governance of piracy should take an approach integrating the reasons why piracy originated and became popular. Piracy promises consumers easy access to films, both classic and newly released, at no cost or for a minimal fee.Footnote 171 However, audiences have to bear a long lag time between a film’s first release in theater and the release of pirated DVDs or the release of pirated films online and to endure the low quality of early-release pirated films such as camcorder captures in cinemas.Footnote 172 By contrast, authorized films promise the latest movies immediately upon cinema release, an awesome big-screen experience, and sometimes even film appreciation activities such as a face-to-face encounter with film directors or actors and post-screening sharing sessions.Footnote 173 But consumers need to pay for the movie ticket.

Assuming the price of a movie ticket remains the same, the best way to solve piracy is to improve the movie theater experience. A film is not only a commodity but a complex system of representation and cultural experience,Footnote 174 and this experience highly relies on the equipment. The experience of watching movies with fuzzy images on a small and cheap VCD set or in a small PC screen at home can never compare with the experience of watching HD movies in a cinema with state-of-the-art facilities.Footnote 175 This is why Gabe Newell, the CEO and cofounder of Valve, pointed out that “piracy is a service problem.”Footnote 176 Hong Kong’s government seems to recognize the cinema experience approach to combating piracy, making it a policy to facilitate the construction of movie sets in commercial complexes, such as incorporating a cinema requirement in land leases to give a hardware boost.Footnote 177

Criminal penalties not only have failed to combat piracy but also have become barriers for individual, noncommercial file-sharing activities which might be considered to occur “to such an extent as to affect prejudicially the copyright owner” due to the hyperconnected Internet and the unprecedented scope of distribution. Criminalizing file sharing violates the long-standing principle that punishment should fit the crimeFootnote 178 and will gradually breed disrespect for and distrust of the legal system. This partly explains the public’s fear about the government’s prosecution against users who use online-copyrighted material for secondary creation or mocking politiciansFootnote 179 even though the Copyright (Amendment) 2014 Bill clarified the threshold of criminal liability regarding the existing prejudicial distribution offenses.Footnote 180 Imposing criminal penalties upon file-sharing activities which are common or even popular with the general public also has huge implications for government finance, prison management, and jurisdictional issues.Footnote 181 We therefore concur with many scholars and are of the opinionFootnote 182 that copyright protection for individual, private, and noncommercial online copying and distribution should be decriminalized. Without such a move, the revival of Hong Kong’s film industry will remain a fiction.

5 Conclusion

From its humble beginnings, the Hong Kong film industry catapulted itself to an international film powerhouse status. Through the years, it introduced the world to kung fu films of Bruce Lee, Jackie Chan, and the like. However, a variety of factors ranging from the industry’s director-centered production system, prevailing investor pressure, and weak infrastructure to political and economic conditions, popularity of foreign films, and rampant piracy all led to its decline. In an effort to revive the industry, the government established infrastructural and financial reforms by means of exhibitions, film festivals, and co-productions with the Mainland. While laudable, these efforts remain insufficient to fully propel the Hong Kong film industry to greater heights.

Restoring Hong Kong to its status as the “Hollywood of the Far East” would require the production of innovative, creative, and quality Hong Kong films. However, the traditional Hong Kong copyright framework poses a legal barrier to further innovation and development. The revival of the film industry relies on breaking down these barriers through copyright reform, such as concentrating copyright ownership to a single party who is clearly defined, making copyright exceptions for secondary creation and decriminalizing individual, noncommercial online sharing activities.