Latecomer and Pioneer: The Prospect of Constructing a Fair Online Copyright Regime in Hong Kong by Transplanting the Notice and Takedown Mechanism from United States

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ABSTRACT

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It has been propounded that Internet Service Providers (ISPs) are neutral messengers for internet users’ expressions and thus imposing copyright infringement liability onto them is unfair and will impinge on freedom of expression.[1] With regard to the rapid digital development nowadays, however, this article contends that ISPs should be perceived as undertaking a ‘dual’ role- qua an online expression messenger plus a copyright gatekeeper- as online copyright protection will be infeasible without the ISPs’ dedication. Therefore, it is just to hold ISPs indirectly liable for their failure to perform the gatekeeper role under a range of specific circumstances as long as they are subject to the rigour of a ‘fair’ online copyright regime. Whether such a ‘fair’ regime can be constructed heavily depends on how the Notice and Takedown provisions are drafted and interpreted.

 

This article envisages the need for copyright law to strike a balance looking after the interests of ISPs, Copyright Owners (or infringement ‘Complainants’) and internet service users (‘Subscribers’) concurrently. The Notice and Takedown mechanism is the tool to maintain the stability of the ISPs’ weighting scale. Taking occasion of the imminent legislative reading of the Hong Kong Copyright (Amendment) Bill (HKCAB), this article will compare its drafting similarities with and disparities from the Copyright Act of the United States (USCA)- the predecessor endorsing the Notice and Takedown mechanism. Such a critical comparison will demonstrate that the Notice & Takedown mechanism adopted in HKCAB is designed in a more subtle manner and thence more conducive than USCA in constructing a fair copyright regime. Nevertheless, it will be further suggested that a more balanced protection for copyright and expression can be achieved by wisely harnessing the copyright registration system.

 

INTRODUCTION

 

   The meaning of a ‘fair’ copyright liability realm for ISPs is two-fold. First, in a globalized internet, subscribers’ uploads are innumerable every minute and seldom can the access to and dissemination of the uploaded materials be effectively confined. Thus, the duties imposed on ISPs must be fair and cannot be too stringent. Should ISPs be accused so easily, the internet will grind to a halt. Secondly, the liability regime must be skillfully designed so that ISPs may treat both of their messenger and gatekeeper duties fairly. ISPs can be likened to a weighting scale as they always need to interpose themselves between the potentially conflicting subscribers and copyright complainants. A fair liability regime ensures that the ISPs’ scale will incline to neither side.[2] Only under a reasonable and fair regime of duties can the ISPs commit themselves to protecting copyright and freedom of expression evenly and discharge their dual role fairly.

 

This article will embark on a debate in Part I investigating the pros and cons of holding ISPs legally liable for Subscribers’ infringements. Having affirmed that an ISPs’ liability realm should be justified, the article will go on in Part II to dissect the procedures under the Notice and Takedown mechanism and identify the imperative need for Hong Kong to legislate thereof. In Part III, the Notice and Takedown provisions in USCA and HKCAB will be examined in details and compared for their effects on the ISPs’ liability regime respectively. It will anatomize how the two statutes formulate the two common forms of indirect liability for ISPs- namely, contributory and vicarious liabilities- and will discuss the different conditions they set for ISPs to invoke the safe harbour defence. The importance of judicial interpretations as to the wordings used in the two statutes will also be illustrated. At last, the article will draw to a close in Part IV with detecting the loopholes in the Notice and Takedown mechanism and explore the possibility to plug them via procedural modifications in hopes of strengthening the safeguards for freedom of expression without impairing copyright protection.

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Part I:  A Legal Debate on Whether ISPs Should Be Held Liable for Subscribers’ Copyright Infringements

 

Some think that ISPs are pure platform providers for Subscribers’ uploads and should thus be free from any liability, while some argue that ISPs should bear an obligation to remove any uploads causing infringements. In this part, a succinct epitome of the grounds of the two opposite stances will be provided.

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A.  Propositions to Abolish ISPs’ Liability

 

(a).  ISPs’ Marketing Function

The internet serves as a unique online public discourse forum which facilitates e-commerce. The internet access to the uploaded works might bring marketing effects which will ultimately benefit the Copyright Owners. It would be impossible for the Copyright Owners to fully monetize every bit of enjoyment by the potential customers of the commodities in the cyberspace.[3]

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(b).  Technological Constraints for ISPs

   ISPs usually need to handle billions of uploads daily and there can hardly be an effective filtering system that may cull through all those potentially infringing materials.[4] Even if such a filter is miraculously invented, it can at most detect the similarity between two uploaded items, but hardly can it ascertain whether the similarity give rises to any copyright infringements.[5]

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(c).  Inhibiting Freedom of Expression

   To play for safety, ISPs may enforce exorbitant censorship and purge disputed uploads easily irrespective of the merits of the complaints, which will suppress even the innocent expressions incapable of causing any actual copyright infringements.[6] According to a study by “Chilling Effects”,[7] the grounds of at least 30% takedown requests in US were dubious for their truthfulness and probity.[8] Even if Subscribers are entitled to object to the ISPs’ takedown of their uploads, it is doubtful whether ordinary Subscribers know how to and are willing to take these troublesome procedures.

 

B.  Justifications to Reserve a Realm of ISPs’ Liability

 

(a).  ISPs Bear an Indispensable Role to Stop Ongoing Infringements

After an item is uploaded onto an internet platform, the relevant ISP is the only party capable of removing the disputed item and thus the only one who can quell any further infringements pursuant to the uploading. With the overwhelming speed of dissemination in the internet, once an infringing item is uploaded online, it will be rapidly and extensively viewed by internet users around the world and the damages the Copyright Owner is entitled to may easily climb up to an astronomical figure. Thus, ISPs should be enjoined to act swiftly as soon as it is notified of the occurrence of an infringement.

   

Even if the cause of action for infringement is only awarded to the Copyright Owner against the relevant Subscriber- as the direct infringer- rather than the ISP, the ISP should also bear a duty to disclose the Subscriber’s identity to the Complainant in due course[9] and remove the complained materials tentatively pending the court decision.[10] In default of a Notice and Takedown mechanism demarcating the possible ISPs’ liabilities, the ISPs may derelict without any consequence.

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(b).  ISPs’ Profits are Inextricably Correlated to Subscribers’ Expression

Advertisements serve as the major source of revenue for many ISPs and the amount of subscription of the internet service is the bargaining chip for ISPs in dealing with advertisers. Meanwhile, the amount of subscription of an internet service depends on the attractiveness of the uploads available there.[11] If the uploads are found to be infringing, how can the ISP shuffle all the blame onto the Subscribers while it has been unjustly enriched from the infringing uploads? Since the ISPs make a colossal profit through their online platforms, it is incumbent upon them to make an effort for the cause of copyright protection as a matter of entrepreneurial ethics.The concern towards freedom of expression threats is rather exaggerated. If an ISP really purges the uploads on its platform unselectively, users will lose confidence to it and the loss will eventually fall on the ISP itself as the amount of its subscription will definitely shrink. No sensible ISPs will take any uploads down casually endangering their business except for a legitimate complaint indicating blatant and grave copyright violations.

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(c).  ISPs Are Not Only Neutral Messengers But Also Content Owners

In some cases ISPs are no longer purely neutral messengers and may also become content owners as the ISPs may harness user agreements to co-own the uploads with the Subscribers.[12]  As such, if an uploaded item contains some infringing content, the ISPs may have arguably become a direct infringer rather than a neutral middleman.

 

As regards most ISP-subscriber relationships, the individual subscribers are not as wealthy as the ISP. In Steven Wan’s terms, subscribers are usually ‘judgment-proof’.[13]  However, it would be extremely unfair to the copyright owners if they are to be left uncompensated even for egregious harms solely because the primary infringers are too impecunious to pay the proper damages.

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(d).  Technical and Administrative Difficulties Are No Excuses to Exempt ISPs from Liability

Although no handy technology enables the ISPs to discern infringing uploads, it remains possible for ISPs to offer technical assistance to the copyright holders for detection.[14] More importantly, the Notice and Takedown mechanism does not require ISPs to play a supervisory role to filter infringing materials; instead ISPs are only obliged to react promptly to the requests of Copyright Complainants or Subscribers and the liability will only be imputed to ISPs for their failure to respond. Technology boundary is no bar for ISPs to perform their duties.

 

Convenience for Subscribers to oppose takedown is a matter of administration, but it is implausible to hyperbole the complexity of the opposing procedures as they only require the Subscribers to issue a counter-notice, which can be simply satisfied by sending an email to ISPs.[15]

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With a closer look to the arguments of both sides, the propositions to abrogate the ISPs’ liability regime do not seem tenable. That said, the gatekeeper costs levied on ISPs cannot be unbearable.[16]  The Notice and Takedown mechanism to be elucidated in the next part is the key to allay ISPs’ costs in protecting copyright.

 

Part II:  Contouring the ISPs’ Liability Regime-An Overview of the Notice and Takedown Mechanism

 

The Notice and Takedown mechanism was first adopted by the US in 1998, the procedures of which are set out in s 512 of the USCA.[17]  The US Notice and Takedown mechanism has set up a model legislation locating ISPs’ responsibility for copyright protection in the digital environment for many other jurisdictions.[18]  An overview of how the mechanism operates will be given in this part, followed by an account why the Hong Kong government has been endeavouring to retrofit this mechanism into its copyright legislation.

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A.  A Glimpse of the Operative Procedures

  

Under the mechanism, if one finds the copyright of his or her works infringed by some uploaded materials on an internet platform, he or she may lodge a complaint to the ISP running the platform and demand removal of the disputed materials (‘takedown notice’). Receiving the complaint, the ISP shall expeditiously take the materials down and notify the Subscriber who uploaded them of the removal. If the Subscriber feels aggrieved at the takedown, the Subscriber may report to the ISP about his or her objection to the removal and demand reinstatement of the materials (‘counter-notice’). In this case, the ISP shall inform the Complainant of the counter-notice and restore the removed materials. At this juncture, the Complainant may choose to bring an action against the Subscriber. If so, the Complainant should notify the ISP of the lawsuit and the ISP will be obliged to disable access to the disputed materials again. If an ISP fails to perform its obligation under the mechanism (e.g. removing the complained materials promptly), it may be held liable for copyright infringement.[19]

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B.  The Cogent Need for Hong Kong toDelineate the ISPs’ Liability by Legislation

  

   Having the Hong Kong Copyright (Amendment) Bill 2011 run aground,[20] the Hong Kong government submitted the redrafted HKCAB 2014 with incorporating the Notice and Takedown mechanism in Clause 50 to Legislative Council (LegCo) last year.[21] The reason why the government is so eager to pass this legislation rests on the absence of a clear ISPs’ liability framework- which can mark out how an ISP should discharge its duty qua an expression messenger and a copyright gatekeeper in the digital environment- from the current Hong Kong Copyright Ordinance (HKCO).

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(a).  Shortfall of a Tailor-made Liability System in the ISPs’ Context

Section 22 (1), (2) and s 26 (1) of HKCO designate ‘making available of copies of work’ without the copyright holders’ authorization as an act of infringement while s 26(2) expressly encompasses offering internet access to the work in the definition of ‘making available’.A prejudiced Copyright Owner may bring an action under s 107(1) for the remedies of damages or injunction [s 107(2)]. Simultaneously, s 118 (1) (g) criminalizes ‘distributing’ infringing copies. According to s 119 (1), the punishment for unlawful distribution is a fine of $50,000 plus 4 years’ imprisonment. In Chan Nai Ming v HKSAR[22], the Court of Final Appeal treated the meaning of ‘making available’ and ‘distribution’ as equivalent to each other and held that an infringer would remain liable no matter whether he did so for a commercial purpose or not.[23]

 

Thus, ISPs may be subject to both criminal and civil liability in Hong Kong even though they only make the uploads available as a neutral agent without knowing about their infringing nature. In defect of a Notice and Takedown mechanism, no specifications are made as to how an ISP may exempt itself from the infringement liability by performing its gatekeeper duty.

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 (b).  Dearth of Sensible Defences Available to ISPs

A defence against indirect liability for infringement is enshrined in s 36 of HKCO, but hardly can it avail ISPs. To start with, since it is only stated in s 36 (1) that the defence contained in this section is for the purpose of s 30 and 31,[24] its effects are uncertain towards the accusation stemming from the afore-mentioned s 22, 26, 107,118 and 119.

 

Next, s 36 sets a precondition that to rely on the defence therein, the defendant must have proactively made sufficient enquiries to satisfy itself that the copyright in the work is not infringed. Such a prerequisite looks unfair to ISPs which confront zillions of upload each day.[25]  Therefore, the ISPs are now in a precarious plight under Hong Kong law as there is simply no statutory defence available to them if they are sued for indirect infringement.[26]

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At present, Hong Kong is one of the very few common law jurisdictions which is yet to update its copyright legislations in respect of ISPs’ liability in the digital epoch. Our procrastination draws international denouncements. For example, some US Copyright Owners associations have made several submissions to the Office of the United States Trade Representative (USTR) attacking on the insufficient copyright protection provided by the existing legislation of Hong Kong.[27]

 

While it is incontestably exigent to keep our laws abreast with the cyber-tech development, the ISPs’ liability must be cautiously constructed lest they are pushed to foster copyright protection at the expense of Subscribers’ freedom of expression. By examining the USCA and HKCAB together in the following parts, a comparative analysis will be conducted to see whether the Notice and Takedown mechanisms they espouse can create a fair digital copyright liability regime and which one will offer a more balanced protection for copyright and freedom of expression.

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Part III:  Comparing the Notice & Takedown Mechanisms in USCA and HKCAB

 

In the common law world, there are mainly two limbs of copyright liabilities ISPs may get caught of: contributory and vicarious infringements. Meanwhile, ISPs may be entitled to exemptions if they meet with the eligibility to be a ‘safe harbour’. In this part, the USCA and HKCAB will be compared on the breadth of their provisions about contributory infringement, vicarious infringement and safe harbour defence. And in each section, a summary will be given to reflect which version between the two statutes is drafted more perceptively and what kinds of heuristics Hong Kong may draw from the US experience.

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A.  ISPs’ Liability for Contributory Infringement

 

(a).  Common Law Position and the Relevant Provisions in USCA and HKCAB

It is settled law that an ISP may be held indirectly liable if its acts or omission contributes to a direct copyright infringement.[28] A&M Records v. Napster[29] adopts a two-limb test for contributory infringement: 1) the ISPs’ knowledge of the infringement and 2) whether they have made material contribution to the direct infringement.

 

The USCA codifies the contributory infringement doctrine with focusing on the ‘knowledge’ requirement in s 512 (c) (1) (A), which provides that an ISP shall not be liable if it 1) does not have ‘actual knowledge’ that the material or an activity using the material on the system or network is infringing; 2) in the absence of such actual knowledge, is not ‘aware’ of facts or circumstances from which infringing activity is apparent.

 

The proposed s 88B (1), (2)(a)(ii) and (iii) in HKCAB provide that an ISP is not liable for infringement if it has taken ‘reasonable steps’ to stop the infringement promptly after it becomes ‘aware’ of the infringement or the circumstances that would inevitably lead to the infringement.

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(b).  Elusive Interpretations by US Courts as to ‘Knowledge’ and ‘Awareness’?

The US courts’ interpretation of s 512 (c) (1) (A) of USCA is reprobated for being too board and it may exact too heavy a burden on ISPs.[30]  The controversies therein are exemplified in Ellison v. Robertson and America Online Inc.[31]

 

In Ellison, Robertson uploaded a fiction written by Ellison to the AOL’s server. Ellison then instructed his attorney to e-mail a takedown notice to AOL. Since AOL had recently changed its email address, the notice did not reach AOL. In fact, Ellison’s attorney mistakenly relied on the old address though AOL had already updated the Register of Copyrights and its own web page with the new address. Ellison filed a claim against AOL.

 

AOL was finally held liable on the ground that “AOL should have closed the old e-mail account or forwarded the e-mails sent to the old account to the new one”.[32] The Ninth Circuit seemed to have applied the constructive knowledge and ‘willful blindness’ test [33]: AOL was treated to have knowledge on the basis that it failed to close and forward emails from the old account, which is something that an ISP ‘might do’ so as to turn a blind eye to copyright infringement.

 

However, the interpretation in Ellison contravenes s 512 (c) (1) (A) (i) and (ii), which lay down an objective test whereby an ISP will not be held liable as long as it ‘does not actually know’ and ‘is not aware of the circumstances’ rendering an infringement apparent. It also goes against the ruling in other cases such as Corbis Corp. v. Amazon.com [34], wherein the court held that the proper question in determining (c) (1) (A) was “whether the service provider ‘deliberately’ proceeded in the face of blatant factors of which it ‘was’ (rather than ‘should have been’) aware” and it required evidence that a service provider ‘turning a blind eye to obvious infringement’.[35]

 

In Ellison, AOL ‘was’ not aware of the takedown notice as Ellison’s attorney had only sent the notice once and had not tried any other ways to communicate. It would be controversial to ascribe liability to AOL on the ground of ‘willful blindness’ as well because AOL had actually refreshed its email address with the Copyright Register and on its web page already, which gave evidence for its willingness to open up its ears for any copyright infringement complaints.

 

The interpretation in Ellison has elevated the standard of liability exemption by requiring the ISPs to be free from constructive knowledge rather than merely the actual one, which clearly runs aslant both the wording and intent of s 512 (c) (1) (A) as well as the recognized common law rules of contributory liability.

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(c).  Lessons for Hong Kong

Since the HKCAB is yet to be passed, Hong Kong has no case law regarding the interpretation of ‘awareness’ in the proposed s 88B.

 

Although it is generally recognized that the copyright law of Hong Kong mainly follows the UK,[36] UK cases can cast little light on this front as the UK Communications Act does not adopt similar Notice and Takedown procedures to US and Hong Kong.[37]

 

Therefore, how the US courts interpret the knowledge and awareness elements are deemed highly persuasive to Hong Kong courts. As explicated above, however, not only does the standard adopted by the Ninth Circuit Court in Ellison unfairly prejudice ISPs, but it will also provide Copyright Owners with too easy a ground to claim against ISPs instead of encouraging the owners to prudently serve a takedown notice to ISPs in advance.

 

To fulfill the objective of the Notice & Takedown mechanism, it would be desirable if the Hong Kong courts adhere to the literal meaning of ‘awareness’ and avoid eking in the constructive knowledge test like the ruling in Ellison. An over-board interpretation will only give rise to a suffocating contributory liability framework, wherein ISPs may be driven fastidiously sensitive to eradicate all disputed uploads. Ultimately, Subscribers’ freedom of expression would be jeopardized.

B.  ISPs’ Liability for Vicarious Infringement

 

(a).  Common Law Position and the Relevant Provisions in USCA and HKCAB

Apart from contributory liability, an ISP may also be vicariously liable for direct infringement, subject to a two-prong test laid down in MGM Studios v Grokster Ltd.[38]: 1) whether the ISP declines to control the infringement and 2) whether the ISP derives any ‘financial benefits directly attributable from the infringement’.

 

The doctrine of vicarious liability is entrenched in s 512 (c) (1) (B) of USCA, which provides that an ISP will not be liable for infringement if the ISP does not receive a financial benefit directly attributable to the infringing activity when it is within the ISP’s ability to control such activity.

 

The proposed s 88B (2)(b) in HKCAB stipulates that an ISP is not liable if it ‘has not received’ and ‘is not receiving’ any financial benefit directly attributable to the infringement.

 

In addition, the HKCAB comprises a list of factors in s 88B (4) (a) which courts may take into account in determining whether an ISP receives ‘financial benefit’[39]. Section 88B (4) (b) also stipulates what are to be excluded from the scope of ‘financial benefit’.[40]

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(b).  The US Approach to Interpret ‘Financial Benefit’- Neglecting the Element of ‘Directly Attributable’?

There is a judicial trend among US courts to interpret ‘financial benefit’ broadly. For example, it was ruled in A&M Records (above)[41] that direct financial benefit could be proved even without any evidence of the revenue for the ISP at all. Similarly, a financial benefit was treated to have been derived by the ISP even when a third party‘s infringement enhanced no more than the ‘attractiveness’ of the ISP’s platform to customers in Fonovisa, Inc. v. Cherry Auction, Inc.[42].

 

Conversely, in Tiffany v. eBay[43], although eBay earned a profit from the sale of counterfeit goods by charging sellers fees, eBay was exonerated from any vicarious liability.[44]  The inconsistent interpretations above obscure the definition of ‘financial benefit’ and neglect the element of ‘directly’, tending to suggest that any other kinds of benefits than monetary profits which the infringement might- directly or indirectly- bring to the ISPs will be sufficient to hold the ISPs liable. Such an unconstrained interpretation will place ISPs onto an unfairly vulnerable brink.

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(c).  The HK Approach to Interpret ‘Financial Benefit’- Seemingly More Certain and Cautious

There is no case law in Hong Kong as to how ‘financial benefit’ should be interpreted in the context of vicarious infringement at present. This notwithstanding, the proposed s 88B (4) (a) and (b) are creditable for guiding the court with a basket of referential factors to decide the meaning of ‘financial benefit’ on a more certain and consistent tract and to avert the confusion arising from the US chain of cases. An arbitrary interpretation of ‘financial benefit’ would unfairly prejudice the ISPs’ interests by subjecting them to unreasonable business threats.

 

C.  Exemptions of ISPs’ Liability - The Safe Harbour

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(a).  Common Law Position and the Relevant Provisions in USCA and HKCAB

In the landmark case Sony Corp. of America v. Universal City Studios, Inc.,[45] it was established that the distribution of a commercial product capable of ‘substantial non-infringing uses’ could not give rise to indirect liability unless the distributor had 1) ‘actual knowledge’ of the infringement and 2) ‘failed to act on that knowledge’.[46]

 

As shown in the contributory infringement analysis, the common law canon of safe harbour is largely codified in USCA and HKCAB.[47]   Albeit the statutes might be seen to have tightened up the conditions for ISPs to be eligible for safe harbour by requiring them to prove the absence of ‘awareness’ in addition to ‘actual knowledge’, the adjustment is subtle and the operative principles remain similar.On top of the conditions set in s 512 (c) (1) (A), the USCA poses an extra requirement in s 512 (i) (1) (A) which states that the limitations on liability shall apply to an ISP only if it adopts an exclusion policy terminating the accounts of Subscribers who are identified as ‘repeat infringers’.[48]

 

In contrast, the HKCAB contains no equivalent provision which prescribes an exclusion policy of repeat infringers’ accounts to be a prerequisite for ISPs to invoke the safe harbour doctrine.

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(b).  USCA vs HKCAB: The ‘Conundrum’ of Exclusion Policy against Repeat Infringers in s 512 (i) (1) (A) of the USCA

 

1.  Murky definition of ‘Repeat Infringers’

There are a bounty of doubts as to the meaning of this alias, such as how many times of infringements are counted ‘repeat’ and whether the definition of ‘infringement’ is linked to a court order or takedown notice.[49]   No authority yields an exact definition for this term. Some scholars suggest that the phrase ‘repeat infringers’ should only refer to those Subscribers who are found liable for infringement more than once in legal proceedings.[50]  However, this suggestion may be too draconian for the Copyright Owners and stands at odds with the Notice and Takedown mechanism whose original motive is to protect copyright by the enforcement of the takedown procedures without incurring the costs of lawsuits.

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2.  Deviating from the spirit behind the Sony’s position

Section 512 (i) (1) (A) simply violates the traditional test of safe harbour laid down in Sony, which will only hold an ISP knowing of infringement liable if it ‘fails to act’ properly to deter infringement. However, s 512 (i) (1) (A) now literally aligns the common law standard of ‘failure to act’ with ‘failure to terminate repeat infringers’ accounts’. The common law rules focus on the action of infringement per se rather than the identity of infringers, but now s 512 (i) (1) (A) wrings the pivot and raises the standard by requiring the ISPs to exclude a category of Subscribers instead of merely fixing the infringing activities they have carried out.

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3.  Inherent tension between s 512 (i) (1) (A) and (c) (1) (A)(iii) and (C)

As a result of its deviation from the Sony’s spirit, s 512 (i) (1) (A) fundamentally contravenes (c) (1) (A)(iii) and (C).

 

Section 512 (c) (1) (A)(iii) and (C) expressly state that “a service provider shall not be liable” for copyright infringement as long as it removes any complained materials expeditiously once it knows there is an existing or prospective infringement. However, if this is read together with s 512 (i) (1) (A), the exemption effects of (c) (1) (A)(iii) and (C) would almost be nullified if the ISPs fail to implement an exclusion policy against repeat infringers.

 

To be fair, if an ISP totally complies with s 512 (c) (1) (A) and (C), the Copyright Owners’ interests will have been well protected already. There is no good reason to exacerbate the ISPs’ burden with requiring them to locate which Subscribers are ‘repeat infringers’ and then terminate their accounts in order to qualify as a safe harbour.

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4.  Messy common law interpretations with regard to s 512 (i) (1) (A)

In Ellison[51] (above), the Copyright Owner had only sent the complaining notice once. Although AOL (the ISP) could actually never receive the notice, AOL was held to have not reasonably implemented a policy of exclusion as required in s 512 (i) (1) (A) and thus was not eligible to be a safe harbour.

 

On the contrary, it was held in Perfect 10 v. CCBill[52] that though the service provider had not disabled a user's access subsequent to a number of general infringement notifications, the ISP was still found to have reasonably implemented its policy as required in s 512 (i) (1) (A).

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5.  Feasibility of and threats pursuant to the exclusion policy

In reality, even if the ISP terminates the infringing Subscribers’ accounts, it can hardly achieve a clear-cut exclusion of the particular Subscribers intended by s 512 (i) (1) (A) as those infringers may open a new account afterwards quickly and easily!

 

Furthermore, s 512 (i) (1) (A) threatens freedom of expression as it impels ISPs to terminate the entire account of the accused Subscribers instead of limiting the takedown to the portion of the infringing content in order to ensure itself entitled to the safe harbour defence. Google’s Blogger service is a case in point.[53]

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(c).  Hindsight for HKCAB

The HKCAB draftsmen should be applauded for abandoning the idea of repeated infringers’ exclusion to our bill. Since s 88B (1) and (2) of HKCAB are strikingly similar to s 512 (c) (1) (A) and (C) of USCA, if the exclusion policy requirement was copied to HKCAB, all the afore-mentioned problems would crop up after HKCAB inures.

 

A blanket removal of all the uploads in the accounts of ‘repeat infringers’ by terminating their accounts simply because some of their posted materials bear infringing features is undesirable as it will trigger off a tremendous loss of innocent uploads, which is absolutely an unfair intrusion to the Subscribers’ freedom of expression. Ruling out such a redundant condition will be a much ‘fairer’ solution as it will yield a clear benchmark indicating under what circumstances ISPs may rely on the safe harbour defence. Lawful expressions can be safe from any collateral damage, too.

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Part IV:   An Evaluation of the Notice and Takedown Mechanism

 

Unsurprisingly, some misgivings are induced by the Notice and Takedown mechanism that it may militate against freedom of expression as a side-effect. In this part, a thorough evaluation of the mechanism will be made to sort out its inadequacy for protecting freedom of speech. Next, a proposal will be raised as to what refinements may be carried out for the mechanism in order to strengthen the speech protection. Lastly, it will be elaborated how these proposed solutions may avail Hong Kong in particular– where a copyright registration system is wanting.

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A.  Defects- Squelching Freedom of Expression Preemptively?

 

(a).  Coercion of ISPs to Remove Any Complained Uploads

   Under the current Notice and Takedown mechanism, the claim laid by Copyright Complainants requesting takedown is ‘presumed’ to be true; concurrently, the complained Subscribers are presumed ‘guilty’ and the ISPs are constricted by the procedures to punish the Subscribers with removing their posted speech before they are given any chance to contest the Complainants’ charges.[54]

 

   Therefore, some Subscribers’ expression may be innocently quenched under the Notice and Takedown procedures[55] and the abuse of this mechanism may have even more daunting repercussions along with the prevalence of automated notification systems which may send over thousands of takedown notices inhumanely in a short period.[56]

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(b). Are There Any Currently Available Measures Which May Deter Unlawful and Malicious Complaints?

 

1.  Requirements for the Takedown Notice

   In USCA, s 512 (c) (3) (A) (i) to (vi) stipulates that in serving a takedown notice, the Complainant must ensure that the notice contains the copyright holder’s signature, identification of the copyrighted work being infringed, reasonably sufficient information for the ISP to locate the complained materials, the Complainant’s correspondence, a statement that the Complainant is acting in good faith and a statement under penalty of perjury that information provided in the notice is correct and the Complainant is authorized to act.[57]

 

   For HKCAB, the proposed s 88C (3) mimics the USCA in setting almost the same requirements for a takedown notice.[58] Besides, s 88C (3) (e) and (h) (iii) further require a description of how the complained materials infringe the copyright at hand and a statement confirming the Complainant’s understanding that any false statements in the notice may incur criminal or civil liability.[59]

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2.  Criminal liability for making false complaints

   Section 512 (c) (3) (A) (v) requires a Complainant serving a takedown notice shall make a “good faith” declaration of infringement that is not “knowingly materially misleading”.[60]   Furthermore, s512 (c) (3) (A) (vi) provides that a Complainant putting untrue information in the notice shall be subject to penalty of perjury.[61]

 

   According to the proposed s 88F of HKCAB, any persons making any statements which are false in a material respect in either a takedown or counter notice- knowingly or recklessly- commit an offence and are liable on conviction to a fine at level 2 and to imprisonment for 2 years.[62]

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3.  Countersuit rights against illegitimate complaints

   By virtue of s 512 (f) (1) of USCA, any Complainants who knowingly materially misrepresent in the takedown notice that an infringement has been caused by a certain item shall be liable for any damages, including costs and attorneys’ fees, incurred by the complained Subscribers or the ISPs, who are injured by such misrepresentation.[63]

 

   The proposed s88G (1) of HKCAB stipulates that any person who makes any statements in a takedown or counter notice that the person knows to be false or does not believe to be true in a material aspect is liable in damages to any person who suffers loss or damage as a result of the false statements.[64]

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(c).  Weaknesses of the Above Deterrent Measures in Protecting Freedom of Expression

 

   The operation of the entire Notice and Takedown procedures is to be agitated by the service of a takedown notice. The current measures aim to deter false complaints with presenting the risk being sued or prosecuted. However, in many cases, takedown notices are sent by large corporations such as in Disney Enterprises Inc. v. Hotfile Corp.[65] in a mechanical mode regardless of the validity of their claims. On this front, the Notice and Takedown mechanism does not seem to provide a level playing field as individual subscribers usually have much weaker bargaining power vis-à-vis those corporations.[66]  It is noteworthy that Subscribers also confront the risk being sued within the mechanism as they may be held liable for misrepresentation and be required to compensate the loss and damages the alleged Copyright Owners suffer.[67]

 

   If complained Subscribers refrain from serving counter-notice or exercising their countersuit rights against the fraudulent Complainants, the ISPs will simply have to remove the disputed materials in compliance with the Notice and Takedown procedures without being able to clarify whether the complained materials are actually infringing or not.[68] In fact, the role assigned to ISPs under the mechanism is so passive that they are not empowered to argue with the Complainants about the truthfulness of their copyright claims.[69] Therefore, the Subscribers’ hesitation and reluctance to oppose the takedown notice due to the overwhelming bargaining power wielded by the corporate Complainants will virtually vitiate the deterrent effects of the countersuit rights entitled to the ISPs.

 

One step forward, even if the Subscribers are bold enough to contend with the misrepresenting Complainants and the disputed materials are ultimately allowed by the court to be restored after a lawsuit, is ex-post reinstatement a satisfactory solution? Are there any measures we may interpolate in the procedures to help the ISPs discern the truthfulness of the copyright complaints at the beginning so that the annihilation of the innocent uploads throughout the litigation period can be avoided and the Subscribers’ freedom of expression may be kept intact from start to finish without causing any cumbersome administrative and legal costs?

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B.  Possible Refinements of the Procedures

 

(a).  Empowering the ISPs to Demand Copyright Proof

   The crux of the defects of the current Notice and Takedown mechanism is its conferral of unfettered rights for the Complainants to request removal and its mandatory requirement for ISPs to comply with the takedown notice. Even though the Complainants have satisfied all the afore-mentioned conditions in the takedown notice, it does not assure that they truly own the copyright over the disputed materials. All in all, one simple but credible evidence is missing: the copyright proof.

 

   There is an ingrained system of copyright registration in US.[70]  According to s 408 – 412 of USCA, application for registration should be made to the Copyright Office. Successful applicants will be awarded a ‘certificate of registration’, which will serve as a precondition for any action and remedies for infringement.[71]

 

   It will be desirable for the Notice and Takedown mechanism to inscribe ISPs with a power to require Complainants to submit a certificate of registration as proof of copyright ownership along with the takedown notice. While this seems a slight adjustment, it will generate significant improvements to the whole Notice and Takedown system as it will turn the ISPs from a merely passive middleman receiving ‘orders’ from the Complainants and Subscribers to a more active online manager capable of demanding copyright evidence when they are urged to exercise their takedown power.[72]

 

   It may be inapt to tighten the requirements to Complainants radically by making the registration certificate a compulsory attachment to the takedown notice because sometimes the materials uploaded in dispute may have even not been published by their original authors or owners yet; but at least, the registration certificate should be regarded as a preferable - if not essential - adjunct which can substantiate the truthfulness of the Complainants’ copyright claims. Divergent streams of procedures should be grafted afterwards depending on whether the Complainants can show a registration certificate.

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(b).  Categorizing Complainants According to The Strength of Their Claims

In the modified mechanism, three types of cases may be classified depending on the strength of the takedown notices which will entail different responses from the ISPs.

 

To begin with, if the Complainants can submit clear copyright proof such as the registration certificate, the ISPs should run the subsequent procedures like the current mechanism by removing the complained materials expeditiously and notifying the affected Subscribers of the takedown.

 

Alternatively, if the Complainants cannot even satisfy the basic requirements as set forth in s 512 (c) (3) (A) (i) to (vi) of the takedown notice (e.g. failure to state under penalty of perjury), the ISPs should eject the notice back to the Complainants and request their compliance with the prescribed conditions if they insist on demanding takedown.

 

As for the third type, if the Complainants can satisfy the basic requirements in the takedown notice but cannot submit any concrete copyright proof, it should be seen as a ‘penumbra’ case and the outcome should depend on whether the affected Subscribers oppose the takedown notice or not. At first, instead of removing the disputed materials for a penumbra claim as in the current mechanism, the ISPs should now give the ‘benefit of doubts’ to the Subscribers by ‘maintaining’ the materials online waiting through a ‘buffer period’- say 3 to 5 days- for the Subscribers’ reaction. If the Subscribes do not serve any counter-notice, the ISPs should recognize the penumbra claim and remove the materials; however, if a counter-notice is served, the ISPs should continue with the maintenance of the materials online, notify the Complainants of the Subscribers’ objection and should only take the materials down if the Complainants sue the Subscribers.

 

The Complainants being unable to provide registration certificates should still be allowed to submit other kinds of copyright proof (e.g. assignment or licensing documents)[73] which they find helpful to their claims. The ISPs may fine-tune their responses within the prescribed spectrum above according to the strength of the copyright proof.

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C.  Merits Pursuant to the Amended Procedures

 

As emphasized, under the new procedures the ISPs will no longer be lame ducks and shall only exercise its takedown power in reliance on the legitimate copyright proof rendered by the Complainants, in the absence of Subscribers’ objections or when a lawsuit about the copyright of the disputed materials has been brought. The uploaded expressions will not be preemptively eliminated without any prima facie evidence of infringement.

 

   The amended procedures may also give an impetus for creators of copyrightable works to register their copyright for protection as early as possible. If the Complainants can submit sound copyright proof along with takedown requests, they may have the disputed materials removed expeditiously. In contrast, Complainants without making any or being sluggish in making a registration are viewed to have assumed the risk themselves and would need to wait through a buffer period to see Subscribers’ reaction before the takedown.[74]

 

Disputed materials are still required to be taken down upon Complainants’ legal action to reap triple advantages. First, since the disputed materials will become the crucial evidence of the lawsuit, if they are kept online for public viewing and comments, it may incite social pressure interfering with judicial impartiality. Secondly, provisional takedown may stop any further possible infringement to the works against the Copyright Owners’ interests. Thirdly, with the temporary removal, the Copyright Owners’ loss will not accumulate along with the tardy process of litigation and so the Subscribers being sued will also benefit as the amount of potential damages they might need to pay are to be cut down.

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D.  Applying the Proposed Refinements intoHong Kong’s Context

 

(a).  Hurdles to Application in Hong Kong

   Since the Notice and Takedown mechanism adopted in HKCAB largely mirrors the US version, if HKCAB absorbs my proposed changes, the above merits can be attained in Hong Kong. Nonetheless, there is a big obstacle for us to install the new procedures because Hong Kong does not consist of any copyright registration system!

 

   In fact, most common law jurisdictions offer copyright protection without a registration system because Art 5 (2) of Berne Convention[75] provides that the enjoyment and exercise of copyrights shall not be subject to any formality requirements. All World Trade Organization (WTO) members shall abide by the Berne Convention under Art 1 (3) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). It explains why registration systems for copyright have mostly fallen out of practice around the world nowadays.[76]

 

   Despite this, Art 5 (2) of Berne Convention only applies when copyright protection is claimed outside the country of origin of the relevant works.[77]   According to Art 5 (3), member countries are free to impose formalities in relation to domestic works for copyright protection.[78] Therefore, US can still maintain its registration system though it joined the Berne Convention in 1989.[79]

 

   As such, notwithstanding Hong Kong’s membership in the Berne Convention and WTO,[80] we are at liberty to follow the US’s suit. For the advantages that can be derived from the proposed amendments of the Notice and Takedown procedures above which stress the importance of ‘copyright proof’, should we establish an indigenous copyright registration system?

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(b).  Establishing an ‘Elective’ Registration System in Hong Kong

   The US registration system has incurred withering criticisms for imposing an onerous pre-suit obligation on copyright holders.[81] If Hong Kong directly copies the US registration system, it may suffer from the same reprehension for encumbering copyright owners, going against the international norm and contravening the spirit behind the Berne Convention though it would not amount to an explicit breach of the duties laid down by the treaty.

 

   A trade-off solution for Hong Kong is to establish an ‘elective’ but not prerequisite registration system under which copyright holders may freely choose to register their creations or not. Such an elective system distinguishes itself from the US approach for the consequence of registration. In US, registration is a precondition for the copyright holders to file an action for infringement to court; in my proposed system, however, copyright holders without registration are still entitled to enforce their rights but they will be provided with additional means to strengthen their copyright claims by registration.[82]

 

   The benefits of registration under an elective system would be evident in the Notice and Takedown procedures. If a Complainant has registered his or her creations for copyright and shows the registration certificate along with the takedown notice, then the certificate will serve as a powerful copyright ownership proof and the ISP should remove the disputed materials expeditiously. Even if the Complainant later brings an action for infringement, the registration certificate may also be submitted as a piece of weighty evidence corroborating the Complainant’s copyright ownership before the court.

 

   On the contrary, in default of registration, the Complainant is reckoned to have voluntarily borne the risk and thus- instead of an expeditious takedown- the Complainant will have to wait through a buffer period and the ISP will only be obliged to remove the disputed materials after it confirms that the complained Subscriber has not served any counter-notice by the end of the buffer period. The Complainants may still sue for infringement, but they are seen to have missed the chance to equip themselves with a forceful evidence affirming their copyright ownership in advance.[83]

 

   The chief attraction of this elective registration system is that it can make the Notice and Takedown mechanism a fairer regime to both the Copyright Holders and Subscribers. Setting up a copyright registry will not aggravate the burden of Copyright Holders in claiming protection; in lieu, it only gives them a further layer of protection whose effects will particularly be prominent under the Notice and Takedown procedures. On the other hand, Subscribers are expected to perceive the takedown of their uploads to be more reasonable if the Complainants’ copyright proof is shown to them. Meanwhile, Subscribers’ rights to serve counter-notice will remain unaffected.[84]  In its entirety, the proposed solution here will pave way to a win-win situation.

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CONCLUSION

 

   Internet is analogous to a public road. All road users have freedom of mobility throughout the road, but they are not allowed to steal others’ private vehicles to move along the road. Similarly, although internet Subscribers deserve freedom of expression, they should not be permitted to express their thoughts by poaching others’ copyrighted materials without the Copyright Owners’ consent. ISPs, as the internet managers, should and must bear a double duty to ensure neither the public freedom of expression nor private copyright is to be infringed.[85] The Notice and Takedown mechanism is a set of principal rules for the cyber road use. Hong Kong is now wanting in such rules. There is undeniably a pressing need for us to keep our copyright legislation on par with the global standard.

 

   With the benefits of hindsight, perhaps, the drafting of Notice and Takedown provisions in HKCAB is more conducive for a ‘fair’ online copyright regime than USCA in several main aspects. As to vicarious liability, the HKCAB comprises a range of factors which helps circumscribe the definition of ‘financial benefits directly attributable to ISPs’. In terms of safe harbour, it is praiseworthy that the HKCAB has skipped the controversial requirement for ISPs to adopt an exclusion policy against the so-called ‘repeat infringers’. On top of the legislative draftsmanship, courts are anticipated to eschew unrestrained interpretation of the ‘knowledge’ or ‘awareness’ element for contributory liability and the ‘financial benefit’ test for vicarious liability in order to treat the ISPs fairly.

 

   Despite that the HKCAB version is more preferable, the article proposes that the Notice and Takedown procedures in both USCA and HKCAB can be polished by entitling the ISPs to demand copyright proof from the infringement Complainants who request takedown. For this sake, Hong Kong may inaugurate an ‘elective’ copyright registration system which will conduce to a more balanced protection for both copyright and freedom of expression in the cyberworld.

 

   The facile conflict between copyright protection and freedom of expression can definitely be diminished to a minimum extent with a delicate and nuanced Notice and Takedown mechanism, whereby infringement and misrepresentation liabilities are to be fairly allocated.[86] The gestalt of the ISPs’ dual role- qua messengers and gatekeepers- can only be fashioned in such a fair online copyright regime. It is humbly hoped that the viewpoints in this article could contribute a mite to the blueprint of a more responsible and legitimate internet communication system in favour of all its stakeholders.