LEGISLATIVE COUNCIL ─ 4 February 2016 4867

OFFICIAL RECORD OF PROCEEDINGS

Thursday, 4 February 2016

The Council continued to meet at Nine o'clock

MEMBERS PRESENT:

THE PRESIDENT THE HONOURABLE JASPER TSANG YOK-SING, G.B.M., G.B.S., J.P.

THE HONOURABLE ALBERT HO CHUN-YAN

THE HONOURABLE LEE CHEUK-YAN

THE HONOURABLE JAMES TO KUN-SUN

THE HONOURABLE CHAN KAM-LAM, S.B.S., J.P.

THE HONOURABLE LEUNG YIU-CHUNG

THE HONOURABLE EMILY LAU WAI-HING, J.P.

THE HONOURABLE TAM YIU-CHUNG, G.B.S., J.P.

THE HONOURABLE ABRAHAM SHEK LAI-HIM, G.B.S., J.P.

THE HONOURABLE TOMMY CHEUNG YU-YAN, G.B.S., J.P.

THE HONOURABLE VINCENT FANG KANG, S.B.S., J.P.

THE HONOURABLE WONG KWOK-HING, B.B.S., M.H.

THE HONOURABLE JEFFREY LAM KIN-FUNG, G.B.S., J.P.

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THE HONOURABLE ANDREW LEUNG KWAN-YUEN, G.B.S., J.P.

THE HONOURABLE WONG TING-KWONG, S.B.S., J.P.

THE HONOURABLE CYD HO SAU-LAN, J.P.

THE HONOURABLE STARRY LEE WAI-KING, J.P.

THE HONOURABLE CHAN HAK-KAN, J.P.

THE HONOURABLE CHAN KIN-POR, B.B.S., J.P.

DR THE HONOURABLE PRISCILLA LEUNG MEI-FUN, S.B.S., J.P.

THE HONOURABLE WONG KWOK-KIN, S.B.S.

THE HONOURABLE IP KWOK-HIM, G.B.S., J.P.

THE HONOURABLE MRS REGINA IP LAU SUK-YEE, G.B.S., J.P.

THE HONOURABLE PAUL TSE WAI-CHUN, J.P.

THE HONOURABLE LEUNG KWOK-HUNG

THE HONOURABLE WONG YUK-MAN

THE HONOURABLE CLAUDIA MO

THE HONOURABLE MICHAEL TIEN PUK-SUN, B.B.S., J.P.

THE HONOURABLE JAMES TIEN PEI-CHUN, G.B.S., J.P.

THE HONOURABLE NG LEUNG-SING, S.B.S., J.P.

THE HONOURABLE STEVEN HO CHUN-YIN, B.B.S.

THE HONOURABLE FRANKIE YICK CHI-MING, J.P.

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THE HONOURABLE WU CHI-WAI, M.H.

THE HONOURABLE YIU SI-WING, B.B.S.

THE HONOURABLE GARY FAN KWOK-WAI

THE HONOURABLE MA FUNG-KWOK, S.B.S., J.P.

THE HONOURABLE CHARLES PETER MOK, J.P.

THE HONOURABLE CHAN CHI-CHUEN

THE HONOURABLE CHAN HAN-PAN, J.P.

THE HONOURABLE CHAN YUEN-HAN, S.B.S., J.P.

THE HONOURABLE LEUNG CHE-CHEUNG, B.B.S., M.H., J.P.

THE HONOURABLE ALICE MAK MEI-KUEN, B.B.S., J.P.

DR THE HONOURABLE KWOK KA-KI

THE HONOURABLE KWOK WAI-KEUNG

THE HONOURABLE DENNIS KWOK

THE HONOURABLE CHRISTOPHER CHEUNG WAH-FUNG, S.B.S., J.P.

THE HONOURABLE SIN CHUNG-KAI, S.B.S., J.P.

DR THE HONOURABLE HELENA WONG PIK-WAN

DR THE HONOURABLE ELIZABETH QUAT, J.P.

THE HONOURABLE MARTIN LIAO CHEUNG-KONG, S.B.S., J.P.

THE HONOURABLE POON SIU-PING, B.B.S., M.H.

THE HONOURABLE TANG KA-PIU, J.P.

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DR THE HONOURABLE CHIANG LAI-WAN, J.P.

IR DR THE HONOURABLE LO WAI-KWOK, S.B.S., M.H., J.P.

THE HONOURABLE CHUNG KWOK-PAN

THE HONOURABLE CHRISTOPHER CHUNG SHU-KUN, B.B.S., M.H., J.P.

THE HONOURABLE TONY TSE WAI-CHUEN, B.B.S.

MEMBERS ABSENT:

DR THE HONOURABLE LAU WONG-FAT, G.B.M., G.B.S., J.P.

THE HONOURABLE FREDERICK FUNG KIN-KEE, S.B.S., J.P.

PROF THE HONOURABLE JOSEPH LEE KOK-LONG, S.B.S., J.P., Ph.D., R.N.

DR THE HONOURABLE LAM TAI-FAI, S.B.S., J.P.

DR THE HONOURABLE LEUNG KA-LAU

THE HONOURABLE CHEUNG KWOK-CHE

THE HONOURABLE ALAN LEONG KAH-KIT, S.C.

THE HONOURABLE ALBERT CHAN WAI-YIP

DR THE HONOURABLE KENNETH CHAN KA-LOK

THE HONOURABLE KENNETH LEUNG

DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG

THE HONOURABLE IP KIN-YUEN

LEGISLATIVE COUNCIL ─ 4 February 2016 4871

PUBLIC OFFICERS ATTENDING:

THE HONOURABLE GREGORY SO KAM-LEUNG, G.B.S., J.P. SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT

MR GODFREY LEUNG KING-KWOK, J.P. UNDER SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT

CLERKS IN ATTENDANCE:

MS ANITA SIT, ASSISTANT SECRETARY GENERAL

MISS FLORA TAI YIN-PING, ASSISTANT SECRETARY GENERAL

MR MATTHEW LOO, ASSISTANT SECRETARY GENERAL

4872 LEGISLATIVE COUNCIL ─ 4 February 2016

BILLS

Committee Stage

CHAIRMAN (in Cantonese): Good morning, Members. Council continues to consider the Copyright (Amendment) Bill 2014. We continue with the first debate, the theme of which concerns the amendments proposed to add sections relating to provisions for restriction on contract override in respect of copyright exceptions.

COPYRIGHT (AMENDMENT) BILL 2014

(Mr Gary FAN stood up)

MR GARY FAN (in Cantonese): A quorum is not present in the Chamber now. Please do a headcount.

CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

CHAIRMAN (in Cantonese): Ms Emily LAU, please speak.

MS EMILY LAU (in Cantonese): Chairman, I rise to speak in support of the amendments proposed by Mr CHAN Kam-lam on behalf of Mr Dennis KWOK, which seek to impose restriction on contract override, so that no contract can preclude netizens from enjoying the exceptions, including the several exceptions proposed by the Government in the Copyright (Amendment) Bill 2014 (the Bill).

Chairman, on 28 January, we had a debate on an adjournment motion because we hoped that the authorities could have more time to handle this issue. In his speech back then, the Chairman of the Bills Committee, Mr CHAN Kam-lam, proposed that a four-party meeting could be convened while lobbying LEGISLATIVE COUNCIL ─ 4 February 2016 4873 support from the copyright owners, the pro-establishment camp and the Government for the fair use doctrine. This is what he said on 28 January. Subsequently, there were certainly discussions among Members and the netizens also discussed this with great enthusiasm, because we all thought that if Mr CHAN Kam-lam could convene a four-party meeting, this debate could end earlier and the situation that happened just now, which must have put you, Chairman, and colleagues on tenterhooks, would probably arise less frequently.

Chairman, on 31 January, the Keyboard Frontline ― Chairman, you may have heard of it, which is a very active netizens' organization established in 2011 with the objective of defending Internet freedom. Back then when this organization was set up, we were scrutinizing the Copyright (Amendment) Bill 2011 which was already referred to as "Internet Article 23" then. This organization has very seriously read and studied what Mr CHAN kam-lam said on that day. Chairman, they issued a press release on 31 January, stating that they had all along put up only three demands in respect of the Bill. They hope that the Bill will clearly provide that the offence of "accessing to computer with criminal or dishonest intent" under the Crimes Ordinance does not apply to cases of copyright infringement. They also demand the inclusion in a new exception the contract override provision under discussion now, so that contractual terms restricting the copyright exceptions will be unenforceable, thereby providing genuine exemption from civil liabilities. They also hope that open-ended exceptions can be introduced, namely fair use and the user-generated content (UGC) exceptions, so that creation would not be limited to several approaches and hence, the interest of copyright owners can be balanced while the freedoms of creation and expression can be protected.

Chairman, it has all along been the concern of many Members and the authorities that the Keyboard Frontline insisted on the acceptance of the three demands altogether, but as they clearly said in their statement on 31 January, the three demands are not indispensable wholesale. Therefore, they are happy to hear Mr CHAN Kam-lam say that he is willing to do something about fair use. Chairman, they said that they very much wished to see a four-party meeting convened by Mr CHAN as soon as possible and that they would take part in this meeting with the aim of creating the conditions for breaking the impasse. They hope that Mr CHAN Kam-lam can provide a list of joint signatures by the pro-establishment Members in support of the amendment on fair use and that there will not be any new amendment or condition attached to the amendment on fair use. Besides …

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CHAIRMAN (in Cantonese): Ms LAU, fair use is grouped under the next debate.

MS EMILY LAU (in Cantonese): Chairman, what I am saying is that if we can reach an agreement on fair use, we probably do not have to argue with each other in this discussion today. So, Chairman, please be a little more patient and let me finish saying just a few more words. Please take a look at your colleagues here. How they are listening with that look of interest.

Besides, the Keyboard Frontline said that the Government and the copyright owners should openly agree to accept this amendment on fair use. Chairman, you may find this very annoying, just as many people do. But if I do not express these views, we will only be discussing continuously these matters relating to contract override and in the end, the amendment, though proposed by Mr CHAN Kam-lam, may probably be negatived and then we will have to go on with the discussion. We very much welcome the expression of views by all sides freely. The netizens also very much wish to express their views. But in the meantime, all sides (including the Keyboard Frontline) wish that a solution can be identified. Chairman, we are very grateful to your good self for being so supportive of Members in expressing their views, but we all the more wish to find a way out. Chairman, the Keyboard Frontline issued this statement on 31 January, but I do not see any response made openly by Mr CHAN Kam-lam in any way. They said that the three demands are not indispensable wholesale and they can even accept the exclusion of this amendment on contract override. Can some Honourable colleagues show support for it, so that we can move on?

Yesterday I seemed to have seen Mr CHAN press the "Request to Speak" button but he has yet spoken so far. I very much wish to hear and see if he could really do what he vehemently vowed to do in his speech on 28 January. At the meeting, I had repeatedly pointed out that there were three amendments, one of which being related to contract override, but are they definitely indispensable wholesale? Now the Keyboard Frontline have said that they are not. The Keyboard Frontline are humble as they think that they may not be representative of everyone and that they only wish to state their own views. They hope that if an agreement can be reached among all sides, disregarding whether the meeting is held between four parties or how many parties, positive progress can be made for the entire issue. This has also been the way that I, Emily LAU, have gone by in my work in this Council for over two decades. I hope that a consensus can be LEGISLATIVE COUNCIL ─ 4 February 2016 4875 reached, so that we can make some proactive progress. However, Chairman, if this cannot be achieved, many amendments will follow, including the one on contract override and many others. They will come flooding in. Moreover, actually not only Mr CHAN Kam-lam is championing this, but also Mr CHUNG Kwok-pan is busy working for this, and I always say to him, "May the force be with you". I hope we can all do our part properly.

Contract override certainly warrants discussion, Chairman, because during the initial scrutiny of the Bills Committee, Mr Dennis KWOK already suggested that since the Bill is copied from the British law and as several exceptions are provided in the United Kingdom, why do we not also copy the contract override provision and write it into our legislation as well? The Government refused to do so, and this is why things have come to such a sorry state. Therefore, I have to express these views and what I have said was actually already mentioned by other Honourable colleagues in their speeches, but this is indeed where the problem lies.

Some people said that this is already included in the Bill, so why should this give any cause for concern? And, some people told me that a Disneyland, which Hongkongers love, will be completed in Shanghai soon and it is going to snatch business from us, so I wonder if the Secretary will be busy dealing with this. What will we find if we enter the website of the Disneyland? First, there is the Terms of Use, which prohibit the use of content, products and services that are branded Disney for the purpose of parody. What should they do if this provision is introduced? Many people entering the website of the Disneyland do not read these terms, as they care only to find out what they can play, how they can buy tickets and how much they cost, the information on hotels, and so on. But Chairman, actually the first line of these terms already gives a warning. It says, "NOTE: By accessing or using this Web Site, you agree to be bound by our Terms of Use, which limit our liability and your permitted usage." This is why everyone is worried. What are they worried about? In fact, be it the Keyboard Frontline or other netizens or members of the public, when they browse the Disneyland website ― of course, Disney has enormous creativity ― what do some people wish to do? To produce works of secondary creation. However, contract override will deprive them even of the chance to engage in secondary creation, and this explains why we feel concerned. Moreover, as Members have pointed out, these Terms of Use are often lengthy and set out in small fonts. Do people read them in detail? From the Lehman Brothers incident back then, we found that nobody would bother to read such terms of use. What we are dealing 4876 LEGISLATIVE COUNCIL ─ 4 February 2016 with now is not the Lehman Brothers incident. It is about the wish of netizens to engage in secondary creation and "kuso" with their freedom of creation. Chairman, they do not mean to hurt other people's commercial benefits or take away other people's money. They only wish to have some fun. Frankly speaking, if their works are good, this can, in turn, be helpful to the copyright owners. Why? Because many people will share their works and everyone will ask what that is and then everyone will know. But if we do not support this amendment proposed by Mr CHAN on Mr KWOK's behalf, these effects would not be achieved.

Therefore, the first step is to support this amendment. This four-party meeting suggested by Mr CHAN is the best idea. I hope that Mr CHAN will walk his talk, and this can also respond to the concern raised by us earlier on. Now the netizens said that they would not be worried if Members can really accept the amendment on fair use. As for the arguments of the authorities in opposition to this amendment, my colleagues already expressed a lot of views yesterday. The Government's arguments all boil down to freedom of contract, and as a number of Honourable colleagues pointed out in their speeches, Hong Kong is an international commercial city and certainly, freedom of contract must be respected. But should public interest and public policy be equally respected? Therefore, this is not absolute. The Secretary said that restriction of contract override can be found only in the United Kingdom but we can see that there are similar provisions imposing certain limits in other places too. Chairman, in Australia there is the Copyright Amendment (Computer Programs) Act 1999, which stipulates: "Agreements excluding operation of certain provisions: An agreement, or a provision of an agreement, that excludes or limits, or has the effect of excluding or limiting, the operation of certain subsections, has no effect." So, do not tell us that this is not going to work.

Chairman, we have also noticed that in other countries (including Ireland, New Zealand and Singapore), there is a similar statutory restriction under their copyright regime. Therefore, unlike what Members have said, the freedom of contract by private parties is not overriding. Chairman, the Secretary went further to say that the current copyright exceptions can achieve the desired effect, but let us look at just one thing, that is, what do the copyright owners think? They opposed our amendments, but what about the amendments proposed by the authorities? Chairman, they said that they would accept them in tears. Actually, the authorities have also proposed some exceptions in their amendments ― even though legal definitions are lacking for several things ― but LEGISLATIVE COUNCIL ─ 4 February 2016 4877 they would accept them in tears. It seems that they have let the cat out of the bag, and this makes people worry that they can restrict the operation of the exceptions by contracts signed with users.

Chairman, the options are already placed on our table. Should we let this debate on the dozens of amendments drag on endlessly and continue after the Chinese New Year and Easter holidays, or should Mr CHAN Kam-lam convene a four-party meeting to find a way out for the Legislative Council and for Hong Kong? The options are placed in front of us now.

With these remarks, I support the amendments.

MR CHUNG KWOK-PAN (in Cantonese): Just now, Ms Emily LAU mentioned that I had been bustling about. Actually, I have recently stopped bustling about, why? In the previous debate on the adjournment motion, I mentioned that some conditions ― not necessarily conditions ― had been proposed by netizens in the hope of reaching a consensus with copyright owners in order to resolve the matter promptly. To put it clearly, the request made by the netizens at that time or the Keyboard Frontline, among others, is that they would already feel satisfied if one of the three amendments proposed were passed. The amendment concerning restriction on contract override is placed at the very end, which means that it does not matter even if it is not passed. Hence, even if this amendment is negatived today, a major controversy involving netizens is basically not expected to arise.

Chairman, during this period, I had tried to look up the webpage of the British Parliament for the debates conducted at that time on restriction on contract override because the topic was highly controversial, and I wished to find out the pros and cons of such restriction. I have also tried to find out the final voting result, but it was not published on the website. I am still enquiring with a British Member of Parliament (MP) about the actual situation at that time and waiting for a formal reply. Now I would like to share with Members the pros and cons of the arguments advanced by the two sides during the debate conducted by the British Parliament at that time. One of them supported the doctrine of freedom of contract. In particular, the business sector held the position that both contractual parties should have reached a consensus before signing a contract but, all of a sudden, it was found that the contract signed could be overturned by a 4878 LEGISLATIVE COUNCIL ─ 4 February 2016 statutory provision at any time. Though Members from the labour sector have often cited the Employment Ordinance as an example, I find this example basically inapplicable to this situation.

Chairman, a Member mentioned yesterday a popular game called Candy Crush. I am one of the game players, too. I believe most people would not read the terms and conditions when downloading this game or others until they sense trouble. What we are discussing now is that although tens of thousands of users play this game, it was invented or produced by a single company. How can a single company face tens of thousands of users and address their different needs? So, it can only strive to do everything possible to protect itself against infringement. Furthermore, no one will really read the terms and conditions. Certainly, during this examination of this Bill, some Members would deliberately examine its provisions and read out one or two paragraphs from the Bill. However, will all netizens do the same in reality? Utterly no. Hence, what implications will this matter really have? I believe the implications on netizens will not be significant. However, the signing of contracts by the business sector will be affected. This is why the significance of freedom of contract is one of the major points of contention in the debate conducted by the British Parliament at that time.

During that parliamentary debate, MPs opposing restricting contract override spoke of a paper which was also mentioned by Members in this Council yesterday, the European Union InfoSoc Directive. The United Kingdom is currently the only place in the world that imposes restrictions on contract override. Amid such a major controversy, the United Kingdom indicated that the impact of the implementation of the new law will be reviewed over a five-year period. Why did netizens place restriction on contract override at the bottom of the three amendments and consider it not a big deal even if this amendment were removed? Because they have little knowledge of this doctrine. Furthermore, does this amendment really have such a close bearing on netizens?

Chairman, users and most players simply do not care much about the contract concerning the game because not much interest is at stake. In a business environment, however, the operation of a company is at stake and the interest involved is thus substantial. If we really enact a law that will impose restrictions on contract override in Hong Kong, I believe many producers or production companies will stop pursuing development in Hong Kong. Why? Because both international and local companies engaging in production in Hong LEGISLATIVE COUNCIL ─ 4 February 2016 4879

Kong will find that a signed contract can be overturned by this provision. I believe all interested companies will switch to other places where there are no such provisions on the signing of contracts. Hence, I think that this provision will pose a major obstacle to the overall development of the creative industry in Hong Kong.

Chairman, I will not dwell on other details. Furthermore, I will not drag on until the 15-minute speaking time is used up, as did the pan-democrat Members. I would like to make an appeal here. If Mr CHAN Kam-lam can really take a step forward by convening a four-party meeting in his capacity as Chairman of the Bills Committee to engage netizens, copyright owners and even the Secretary to resolve the problem within the shortest possible time and enable all parties concerned to reach a consensus, I believe the examination of this Bill can be completed within two weeks and, what is more, the progress of the Government's tabling of the remaining 18 Bills to the Legislative Council will not be affected.

Thank you, Chairman.

MR JAMES TIEN (in Cantonese): Chairman, since I did not participate in the scrutiny of the Copyright (Amendment) Bill 2014 (the Bill), I do not wish to express any strong views on it. However, when it comes to the issue of contract override, having worked in the Legislative Council for many years, I have the feeling that the law enacted by Members is above all private agreements. If private contracts can override the law, why is it necessary to enact laws?

Certainly, the labour sector has cited employment contracts as examples. For instance, the minimum wage rate is prescribed by law. Can an employer and an employee enter into another contract to set the minimum wage level at $24? Of course, they are not supposed to do so, but this is not the only example. As members of the business sector, we will sign a lot of contracts. For instance, I have many units for lease and one of them is rented to someone for use as an office. Could I sign a contract in private with him so that he could smoke indoors? Since the Government has legislated against smoking indoors, the law enacted by the Government is certainly above the agreement signed among companies.

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Mr Tommy CHEUNG is in the Chamber. Can he smoke indoors if I rent a shop to him for operation as an eatery and tell him he can smoke inside the shop? Of course, he is not supposed to do so. Mr Frankie YICK is present, too. Can he be spared from switching off an idling engine should he hire a taxi from a taxi association? All drivers must switch off idling engines under the present law. Hence, in this respect, should the Government take into consideration the consistency of the laws of Hong Kong in general? The Government must not adopt an opposite approach in dealing with this piece of legislation to allow private contracts to override the law.

Chairman, I would like to make this point only: The Government must state clearly why special treatment has to be given to this issue, unlike the Employment Ordinance, company contracts and even private contracts. All government legislation should override all other contracts or agreements. This is basically the duty of the Legislative Council. No private agreements or contracts can override any law enacted by the Legislative Council. Thank you, Chairman.

MR LEUNG YIU-CHUNG (in Cantonese): Chairman, in my speech yesterday I mentioned that the Chief Executive Officer of the International Federation of the Phonographic Industry (Hong Kong Group) Limited representing the copyright industry, Mr Ricky FUNG, had once stated openly that the three amendments proposed by the pan-democrat Members are aimless. I said yesterday that I would focus on contract override in my discussion in this session to see who is aimless. Given the time constraint, I was unable to draw a conclusion and so, I would like to continue speaking on this point.

Chairman, I trust you will understand the meaning of aimless. It means shooting randomly without a target, or acting without a specific objective or putting forward impracticable proposals. I wonder if Mr FUNG knows what it means, or if he deliberately acts like an ostrich, burying his head in the sand and wantonly accusing other people of being aimless. As a saying goes, "What Peter says about Paul tells more about Peter than Paul". When he accused other people of being aimless, it shows that he himself is all the more so. In their eyes there is only money; in their hearts there is only money; they stress only the right to and freedom of contract. I think this is entirely a fig leaf.

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Chairman, why did I say that? As some Members said earlier, restriction of contract override can be found not only in the United Kingdom, but also in other regions, including Singapore. While it is said to be impracticable, it has been put into practice in some places and whether you support it or not, this is an existing fact. If this provision is really impracticable, it would not have existed in these places. Therefore, my conclusion is that this proposal is not aimless, for it has been implemented in other places, just that we are here to express our agreement or disagreement to it. This shows that it is not an aimless proposal.

The attitude of the Government of the Hong Kong Special Administrative Region (SAR) does not differ much from that of the copyright owners. The SAR Government said that in proposing new copyright exceptions in the Copyright (Amendment) Bill 2014 (the Bill), it is aware of the strength of arguments for the inclusion of contract override provisions in similar exceptions in the United Kingdom. But regrettably, while they have carefully considered whether Hong Kong should follow suit, they concluded with reservation over such a course in the Bill for seven reasons. I do not intend to discuss these reasons one by one. I will only discuss the three more important ones.

First, "the freedom of contract plays a vital role in Hong Kong's free-market economy and it remains a cornerstone in the law of contract." Chairman, I believe no one will object to this view. Indeed, whether from a commercial or non-commercial viewpoint, there is a need to enter into contracts. How possibly will we object to this concept? The point is that the concept of contract must have a legal basis. It must be supported and protected by law. It is not an abstract concept with no substance.

With regard to Mr James TIEN's speech just now, as far as I understand it, he considered that the signing of a contract is meaningful only when it has a legal basis. The examples cited by him earlier are very good. They highlighted the fact that contracts signed without a basis will give rise to many unfair and unreasonable phenomena. An example is borrowing from loan sharks. The contract may specify a very high interest rate. This is also in line with the contractual spirit, and one who wishes to secure loans has to pay a high interest rate, but is this acceptable? This is also a normal financing activity in a free society. The problem is that this is unreasonable and so, the authorities must legislate to provide that it is illegal to charge an interest rate above a certain level. This is to put the law above contracts.

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Besides, Mr CHUNG Kwok-pan mentioned the Employment Ordinance (EO) earlier on. I have paid attention to his speech but I do not understand why he did not explain the reasons for the non-applicability of the EO to this case, or perhaps he can take the opportunity to explain this point to me in detail. Chairman, speaking of employment contracts, the EO provides a basis. But it does not mean that no changes can be made and instead, further improvements can be made. Take sick leave as an example. The EO provides that an employee is entitled to sickness allowance if he has taken sick leave for four consecutive days. Some good employers may grant sickness allowance to an employee who is sick for one day. The EO serves only to prevent employers from setting out in the contract less favourable terms of employment, such as granting sickness allowance to an employee only if the latter has taken sick leave for five days. We consider that a contract concluded on such a legal basis can uphold the spirit behind the contract signed by the two parties, and protection is actually provided for both parties, not only one of the parties.

The Government said that "the freedom of contract plays a vital role in Hong Kong's free-market economy and it remains a cornerstone in the law of contract". I think no one will oppose this, only that the Government has omitted to say that the prerequisite is to have a legal basis in order to ensure protection for both parties. Chairman, I think this is more important.

Furthermore, Mr CHUNG Kwok-pan questioned earlier that if a contract can be overridden by law, what is the meaning of signing contracts? I think his remark shows a reversal of order. Chairman, what we are talking about today is to enact a law first and then private contracts will be signed in the future. Unless a party to the contract purposely shuts his eyes when entering into the contract in future, he should know what is stipulated in the law before setting out the contractual terms. This is a matter of order. One must know the stipulations in law first. How is it possible that the terms are set out first and are found to be incorrect and illegal only afterwards? That would show that the persons concerned lack understanding, knowledge and awareness of the law. Chairman, the order is very important.

Second, the Government said that there is no evidence before us that the current and proposed copyright exceptions have failed to achieve the benefits intended owing to contract override. Chairman, to achieve the intended benefits, certainly we have to look at what the benefits refer to. We consider that if we look at benefits solely from the angle of interest, it is obviously difficult to tell. But I think we must not only look at interest, for the rights and protection to LEGISLATIVE COUNCIL ─ 4 February 2016 4883 which we are entitled are more important. We cannot rashly say that we need only look at the interest or benefits. We also have to protect the rights of some people and this is the spirit of legislation. If we do not even stress or protect them, then I think legislation is meaningless.

Third, the Government is concerned that "the existing copyright exceptions that are silent on the limitation can be overridden by contracts". Mr James TIEN made a good point in this connection earlier on. The point is that even if other provisions have not imposed any restriction on contract override, that would not matter as long as no one finds this a problem in reality, in which case the status quo can be maintained. But in this case, we consider this a problem insofar as copyright is concerned and so, it is necessary to deal with it. So, I think this is not an excuse. Members have cited such ordinances as the EO as examples to explain why this is necessary. How great will be the implications produced by these provisions? Of course, to the commercial sector, the EO will consistently have a bearing on the conditions of their operation. But let us think about it the other way round. If employees are not provided with protection and a reasonable working environment, they will not be able to help their employer who will, in turn, be stripped of his competitive edges. Therefore, this is reciprocal, not unilateral.

Therefore, I think the reasons stressed by the Government are lopsided and cannot truly achieve the objective of the Government of upholding the spirit and principle of legislation. I think this is most regrettable, and this approach of the Government has given people the impression of the Government colluding with business and knowing only to protect the unilateral interest of copyright owners to the neglect of the basic rights of other people. This was and still is the attitude of the Government. This is indeed most pathetic.

Chairman, the Government made this conclusion in the end: "The use of a commercial contract to exploit copyright is natural and within the contemplation of the Copyright Ordinance. And each contract is to be viewed as applicable to the set of specific circumstances that the two contracting parties are facing and the legal certainties that they both desire. It is unfair to suggest that conclusion of such a commercial contract on mutually agreed terms would be meant to 'circumvent' copyright exceptions." Chairman, this conclusion precisely echoes my earlier remark that the Government protects only the interest of a small group of people. I venture to say that the Government, in blatantly stating that "the use of a commercial contract to exploit copyright is natural", is actually spelling out 4884 LEGISLATIVE COUNCIL ─ 4 February 2016 most clearly and thoroughly its legislative intent. Legislation is not made for the interest of certain people but the Government has outrageously told us plainly that this is only natural. Chairman, just now I criticized that this is collusion between the Government and business and this cannot be clearer, for even the Government itself has admitted it. How can we accept this? Over the past decade or so, there have been incessant criticisms of the Government colluding with business in society and yet, the Government has outrageously laid it bare again today. It has failed to learn a lesson during this period of time and worse still, it even seeks to continue with such collusion. I think this is indeed disappointing.

Chairman, today, we call for the inclusion of restriction on contract override, and most importantly, we do not mean to strike out contractual terms. As we can see from the situation in the financial industry, whether it be the use of credit cards or the opening of an account, many terms or conditions are set out, and this is common in commercial contracts. We often say that even though these contractual terms are founded on a legal basis, their protection of consumers has remained inadequate, but the point is that this has no bearing on competition in the business community as a whole and the relevant trades or industries can continue with their operation. But in this Bill, why is the Government protecting the interest of a small group of people in such a biased, unfair and unreasonable manner, but not protecting creativity and the right of creation which has been continuously stressed by society at large, especially the netizens? Therefore, I support the views of Dr Dennis KWOK.

Chairman, I so submit.

MR GARY FAN (in Cantonese): Chairman, I continue to speak in support of the first group of amendments proposed by Mr CHAN Kam-lam on behalf of Mr Dennis KWOK which adds provisions limiting contract override.

The Government has been advancing arguments against restricting contract override. Mr CHAN Kam-lam, Chairman of the Bills Committee, mentioned in his opening remarks that the Government should not restrict freedom of contract. He also pointed out that if copyright owners and users mutually agree to enter into a contract, it is perfectly reasonable in the commercial world for copyright owners to claim damages in case of breach of contract on the users' part.

LEGISLATIVE COUNCIL ─ 4 February 2016 4885

Chairman, such a notion is plausible on the surface and the Neo Democrats of course respect the basic principle of freedom of contract, but what we need to note that in reality the ordinary masses are not on an equal footing when entering into a private contract with copyright owners.

Chairman, as stated in the minutes of the 20th meeting of the Bills Committee, Mr Martin LIAO from the pro-establishment camp said, "only when there was unequal bargaining power in a contractual relationship should the law come into play." Chairman, I totally subscribe to this viewpoint which I also consider important. Freedom of contract must be based on the equal status of both parties, otherwise the law should come into play to protect the rights of the disadvantaged.

Just like the example of mobile phone Apps which I cited in my first speech, the so-called private contracts, contrary to common understanding, are made not just in black and white and in duplicate with both contracting parties' signatures, but in possibly a great many ways. For example on the App Store, just on the side of the download page is the link to the licensing agreement. Even if users have not visited the webpage to read a single word of the agreement or ticked any box on the webpage, they can …

CHAIRMAN (in Cantonese): Mr FAN, this is the second time you are speaking. Please do not repeat the opinions you have already presented.

MR GARY FAN (in Cantonese): Chairman, my speech will follow and if you would listen carefully you will see I will never repeat myself. I have done my homework and made notes …

CHAIRMAN (in Cantonese): Mr FAN, you have just repeated your arguments.

MR GARY FAN (in Cantonese): No, Chairman, would you please listen carefully. I am saying that if the purchase or download of mobile phone applications done in such a manner is identical to accepting the entire licensing agreement on which a contract is entered into, the licensing agreement can hardly be considered an adequate and comprehensive explanation of the contract. It 4886 LEGISLATIVE COUNCIL ─ 4 February 2016 could be a strategy employed by copyright owners to deny people, at the time of accepting the contract, the chance to raise objection to or request amendments of certain contractual terms. People are left with the only options of either buying it or not. Yet Mr CHUNG Kwok-pan from the Liberal Party also mentioned that most people would not carefully read these agreements at all. Therefore, the Legislative Council should guard the gate of the law in the contracting process. On an unequal footing between the contractual parties, how broad can the boundary of freedom of contract be? Indeed we should establish a specific standard. As the Legislative Council has had such a lengthy discussion about the Copyright (Amendment) Bill 2014 (the Bill), there should be an appropriate standard to impose appropriate restriction on freedom of contract so as to bring the contracting parties back to an equal position.

Chairman, I would like to reiterate that the Neo Democrats similarly respect the grand principle of freedom of contract as much as the Liberal Party. However, Chairman, just like other kinds of freedom, freedom of contract is not without boundary. The reason for me comparing freedom of contract to other kinds of freedom is that the Bill under discussion now involves another kind of freedom to which the people of Hong Kong attach great importance, that is, freedom of speech. Our insistence on the adequacy and clarity of the exceptions included in the Bill stems from the effect it will cause to freedom of speech. If we cannot introduce restriction on contract override, copyright owners can, by means of private contracts, force people to give up the protection originally afforded them by statutes and the ordinance, rendering the exceptions permitted by the Copyright Ordinance (CO) non-existent except in name, also narrowing the space for freedom of speech and expression enjoyed by citizens and netizens.

Chairman, the Government and Members of the pro-establishment camp have presented another viewpoint, that is, private contracts cannot override the law. Under the existing principle of common law, any contract found to be in violation of the law will be deemed unenforceable automatically; thus it is not necessary to include restriction on contract override in the CO. Chairman, the actual, objective result such a viewpoint and notion will produce is citizens and netizens being forced to challenge the law. Without restrictive provisions against contract override, in the event that a copyright owner files a lawsuit against netizens for breach of contract, the law will come into play for the Judge to make a ruling, which will cost a bigger price to netizens than to copyright owners. Average netizens and citizens cannot bear the cost of lawsuit, LEGISLATIVE COUNCIL ─ 4 February 2016 4887 eventually giving rise to a chilling effect that copyright owners do not need to really bring the case to court but just issue a lawyer's letter to effectively shut citizens and netizens up.

Chairman, in expounding his amendments, Mr Dennis KWOK mentioned that copyright owners whom he has contacted will very likely include provisions in their private contracts to restrict exceptions originally accessible to netizens. If different copyright owners draft different contracts to restrict different exceptions: no parody is allowed for singer A's song and no rewriting for commenting on current events is allowed for singer B's songs ― citizens will only have greater worries. For example, not long ago Mocking Jer created a "kuso" version of Andy LAU's song, rewriting its lyrics to Go Shopping Every Day. In the future if they want to do "kuso" versions of songs, apart from knowing how to do creation in the form of parody, they also need to find out if the terms of use contained in the materials for secondary creation restrict parody. In case a few songs are edited and pieced together, it is even more difficult for people to check if the terms of each song allow exceptions.

Chairman, during the debate on the adjournment motion, Ir Dr LO Wai-kwok from the Business and Professional Alliance for Hong Kong quoted the press release issued by The Law Society of Hong Kong on 28 January 2016. His "body" recited with eloquence. On the subject of restricting contract override, he quoted The Law Society of Hong Kong that it had caused controversies in the United Kingdom because freedom of contract should not be easily subject to intervention. Chairman, I would like to quote a review report also published by the Cardiff University to refute Ir Dr LO Wai-kwok's arguments. We know that British Prime Minister David CAMERON commissioned the review conducted by an independent committee chaired by a professor of the University, seeking to study ways to reform the British intellectual property regime in order to promote innovation and economic growth. The report, in a large part, pointed out how outdated the British fair dealing regime has been. However, Chairman, a paragraph in the report is particular important, which elaborates what problems will arise if both contracting parties stand on an unequal footing.

I quote paragraph 5.40 of the report. "Where an institution has different contracts with a number of providers, many of the contracts overriding exceptions in different areas, it becomes very difficult to give clear guidance to users on what they are permitted. Often the result will be that, for legal certainty, the 4888 LEGISLATIVE COUNCIL ─ 4 February 2016 institution will restrict access to the most restrictive set of terms, significantly reducing the provisions for use established by law. Even if unused, the possibility of contractual override is harmful because it replaces clarity with uncertainty." Chairman, "clarity" here means, for example, "I have the right to make a private copy". In the case of "uncertainty", it refers to "I must check my licence to confirm that I have the right to make a private copy".

Chairman, the last sentence of this paragraph, "the possibility of contractual override is harmful because it replaces clarity with uncertainty", is exactly what I wish to highlight, which is copyright owners are free to conclude different contracts on different intermediary platforms, such as Facebook, YouTube and Instagram, to override various exceptions stipulated in the CO. The final outcome is people will not know which course to take. Members have used Candy Crush as an example in their speeches. Using the same example, copyright owners can forbid any secondary creation by users exploiting elements of the game. This is the uncertainty that I have just emphasized. This is an uncertain, unclear and hazy area produced by the absence of restriction on contract override.

Chairman, needless to say copyright owners are endowed with enormous resources compared with the ordinary public to hire professional legal teams who will draft such contracts for their own protection, listing which exception is subject to what restriction and possibly using words incomprehensible and unfathomable to the average eye. In this way, citizens will not know at all how much protection they have.

Chairman, let me cite another example, that is, the Legislative Council Website indeed contains private contractual terms. And Members or our assistants who access the Website every day may not have a clear understanding of them. Why do I cite this example? Chairman, what is the first sentence of the Disclaimer and Copyright Notice of the Legislative Council Website? By accessing this Website or any of its webpages, you unconditionally agree to the terms of this Disclaimer and Copyright Notice which may be modified or supplemented from time to time by the Secretary General of the Legislative Council Secretariat without prior notice."

(Mr WU Chi-wai stood up)

LEGISLATIVE COUNCIL ─ 4 February 2016 4889

MR WU CHI-WAI (in Cantonese): Chairman, a quorum is not present.

CHAIRMAN (in Cantonese): Mr Gary FAN, please pause for a moment. Will the Clerk please ring the bell to summon Members back to the Chamber.

(After the summoning bell had been rung, a number of Members returned to the Chamber but some of them did not sit down)

CHAIRMAN (in Cantonese): Will Members please sit down. Mr Gary FAN, please continue.

MR GARY FAN (in Cantonese): Chairman, just now I was talking about the private contract contained on the Legislative Council App and Website. One of the provisions is written clearly: "Please check this webpage regularly for any modifications or supplements which may be made." Whom does this provision protect? It protects Secretary General Kenneth CHEN in modifying or supplementing the Notice without informing users in advance. If citizens need to access the Legislative Council Website, they have to check the webpage regularly. However, once they visit the Website, the actual outcome is they unconditionally agree to all relevant modifications and supplements. We need to find out and ascertain if this is an equal contract.

For further understanding of the Copyright Notice of the Legislative Council Website, clause 1 states: "Unless otherwise indicated, all materials and contents found on this Website are subject to and protected by copyright owned by the Legislative Council under section 184 of the Copyright Ordinance (Cap. 528) or other third parties concerned (where applicable)." Chairman, I must add that section 184 of the CO pertains to Legislative Council copyright. What is the condition otherwise indicated by the Copyright Notice? Clause 2 is: "The Secretary General permits reproduction of the copyright protected materials or contents found on this Website free of charge in any format or medium for personal or internal use within an organization, subject to the following conditions", among which includes clause 2(b): "Such materials or contents must be reproduced accurately and must not be used in any manner adversely affecting any right or interest of the Legislative Council and the Commission.".

4890 LEGISLATIVE COUNCIL ─ 4 February 2016

Chairman, this clause imposes restrictions on users who must do "accurate reproduction"; in other words, it has to be reproduced without a single word changed, contradictory to certain forms of secondary creation permitted by the CO. The wording of clause 2(b) is different from the Bill currently under examination as the latter provides a relatively clear definition and extent of the damages to copyright owners' rights. Yet the Copyright Notice of the Legislative Council reads "must not be used in any manner adversely affecting any right or interest of the Legislative Council and the Commission". What does it refer to specifically? There is no clear definition. Therefore, reading the Copyright Notice, it is difficult for citizens to understand exactly what rights they have to bargain with Secretary General Kenneth CHEN in relation to access to the Legislative Council Website.

Moreover, clause 3 of the Copyright Notice reads: "Where third party copyright is involved in the materials or contents found on this Website, permission for reproduction or distribution or otherwise use of any such materials or contents must be obtained from the copyright owner(s) concerned." It means citizens will have difficulty discerning, for example, how to access and use the contents of the submissions from the Hong Kong Copyright Alliance on the CO which are accessible on the Legislative Council Website? Without any restriction on contract override, it is difficult for people to know how to enquire with the Hong Kong Copyright Alliance about their reproduction authority.

For these reasons, Chairman, I have spoken in support of the first group of amendments to add provisions limiting contract override in respect of copyright exceptions.

MISS CHAN YUEN-HAN (in Cantonese): Chairman, I have listened to the speeches of Members for quite a while and they were examining the Copyright (Amendment) Bill 2014 (the Bill) from different perspectives. I think the Council faces a huge difficulty. In fact, as I have pointed out in my column, it is obvious that the remarks of certain Members were simply made for the purposes of filibustering and stalling. Although some Members had made fair comments on the Bill, such comments were entirely drowned by the filibusters.

Therefore, when Mr CHAN Kam-lam proposed to convene a four-party meeting last week, I immediately thought it would be a great idea. Yet, I soon felt deflated. Why? At the early stage, I had liaised with the Secretary and LEGISLATIVE COUNCIL ─ 4 February 2016 4891 members of the Hong Kong Copyright Alliance and even talked to some netizens in private. During the course of discussions ― at the early stage ― why were there two schools of opinion among Members of the Hong Kong Federation of Trade Unions? In fact, I also understand their points. At the early stage of discussions, all of our proposals were rejected and no consensus could be reached on any aspect. They completely refused to accept these three amendments, including the amendment concerning fair use. With decades of experience of negotiation, I believe such a situation is equal to reaching a dead end with no room for discussion at all. No consensus can be reached regardless of how sincere we are.

However, I noticed that there has been a slight improvement in the situation recently. Mr CHAN Kam-lam proposed the idea last week and Ms Emily LAU has given a favourable response today. From a positive perspective, it is favourable to the current situation. Yet, will there be any positive outcome? I am not sure, but I believe there will be no room for discussion if both parties continue to point an accusing finger at each other. Why am I saying this? If the pan-democrats actually aim to resolve the problems rather than filibuster ― I have to emphasize once again that we should be resolving the problems instead of filibustering ― and if they aim to filibuster instead of resolving the problems, then all of our efforts will be in vain. I did ask my friend for opinions before delivering my speech today. I asked whether such an idea will actually achieve any positive outcome and my friend replied, "It will be futile, so do not bother. The pan-democrats are obviously trying to filibuster and ignore the Government." Besides, some wondered whether the Government and the Hong Kong Copyright Alliance have agreed with such an idea? Have the parties represented by Mr MA Fung-kwok agreed with it?

Currently, all parties are still maintaining their own stances. Some criticized Mr CHUNG Kwok-pan for his stance on the grounds that we had spent a considerable amount of time on undertaking consultation and, therefore, some later stated that it would be unacceptable to make concessions at this very stage. Contrary to my original stance, I now agree that we cannot solve the problems under the current circumstances. Together with Mr CHUNG Kwok-pan and Mr CHAN Kam-lam, we will do whatever it takes to solve the problems …

CHAIRMAN (in Cantonese): Miss CHAN, I have allowed you to speak for over three minutes. Please focus your speech on the relevant amendments.

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MISS CHAN YUEN-HAN (in Cantonese): Chairman, I got your point. My speech is mainly concerned with solving the current problems and responding to Mr CHAN Kam-lam. While I support the idea of convening a four-party meeting proposed by Mr CHAN Kam-lam, the pan-democrats have to make a concerted effort during the discussion process and avoid the raising of objection by some of them later on since, honestly, it will be really difficult for us to walk down this path further. It is unfortunate that some netizens said they would not accept such a proposal even if the Keyboard Frontline considered it acceptable. Therefore, I fully support the idea proposed by Mr CHAN Kam-lam and will throw my weight behind him so that we can strive to resolve the biggest challenge currently faced by the Council. We want to solve the problems one by one at every opportunity instead of making high-sounding speeches and ending up in a lose-lose situation, which is pointless. Chairman, I will finish my speech soon. I mainly wish to point out that …

CHAIRMAN (in Cantonese): Miss CHAN, please speak on the question of whether provisions restricting contract override should be added.

MISS CHAN YUEN-HAN (in Cantonese): Chairman, I totally understand your point. In fact, we can discuss these disputes when a four-party meeting is held later. Chairman, let me reiterate once again that I support Mr CHAN Kam-lam in extending an olive branch and I hope the pan-democrats can give a united response to his suggestion. I also hope all parties will support this idea such that we can convene a four-party meeting.

Thank you, Chairman. I so submit.

MR WU CHI-WAI (in Cantonese): Chairman, I think everyone would hope to identify a direction to solve the problem through the discussion in this Council. I hold that if each of the parties, including the Government and copyright owners, can have candid discussions on the three amendments proposed by the pan-democrats, it is actually a good direction for all parties to reach a consensus throughout the course of such exploration.

I would like to come back to the discussion about restricting contract override. In fact, as mentioned in my speech yesterday and pointed out by LEGISLATIVE COUNCIL ─ 4 February 2016 4893

Mr James TIEN clearly earlier, in addition to the principle of freedom of contract, consistency of contract is also the expectation of everyone when it comes to the making of private contracts. In other words, matters prohibited in the law should not be given any overriding effect in the form of contract, to the effect that safeguards supposedly available under the law are suddenly nullified when a contract is concluded. All along, be it explicitly or otherwise, or in the tradition of common law, the consistency and certainty of freedom of contract under the law are established in this way. Only when we are presented with a practical issue, namely the long debate we have had on several exception provisions during the deliberations on the Copyright (Amendment) Bill 2014 (the Bill), should we eventually find out that as we have actually attached importance to the fact that legislation should not be unreasonably overridden by contracts in expressly written contracts or in the operation of laws in the past, why can we not bridge the gap in this regard?

I would like to quote the speech made by the Secretary in the resumed Second Reading debate of the Bill on 21 January. He mentioned that "the freedom of contract plays a vital role in Hong Kong's free-market economy and it remains an important cornerstone in the law of contract" ― certainly, as mentioned by Mr James TIEN earlier, equally important is the certainty of contract, which is also a vital cornerstone in the law of contract ― Then, in point (2) of the speech, the Secretary said that "[t]here is no evidence before us that the current and proposed copyright exceptions have failed to achieve the benefits intended owing to contract override"; in point (3), the Secretary expressed the concern that "copyright exceptions that are silent on the limitation can be overridden by contracts"; and point (4), "of the many overseas jurisdictions, these provisions are included for certain copyright exceptions only in the United Kingdom". The Government also expressed support for the views presented by The Law Society of Hong Kong (Law Society) in its letter dated 30 October to the Bills Committee. I will look at the issue from the aforementioned perspectives.

First, what is the position of Law Society? They have proposed three points: first, freedom of contract should not be restricted unless there is a strong ground to do so; second, overseas academics are rather divergent on this; third, a decision should be made on whether contract override is partially or fully restricted in order to achieve the policy objectives. Therefore, in those three points, we do not see any mention either on the part of the Government or Law Society of any issue of principle when provisions restricting contract override are incorporated into the Copyright Ordinance (CO). In fact, the Secretary has 4894 LEGISLATIVE COUNCIL ─ 4 February 2016 repeatedly highlighted that further discussion on this part is possible after the package is "pocketed". Hence, this may just be a technical issue rather than one of principle.

As many Honourable colleagues mentioned repeatedly earlier, freedom of contract is similarly not absolute, especially when fair dealing exceptions for purposes of criticism, review, quotation, reporting and commenting on current events, parody, satire, caricature, pastiche as well as giving or receiving instruction are introduced in the Bill. Therefore, in addition to protecting freedom of expression, it can also in practice foster the transmission of knowledge, which is a form of promotion of creativity. Hence from this perspective, as the Secretary put it, freedom of expression should outweigh freedom of contract under the Basic Law, and should be loftier as a principle.

Chairman, it was also mentioned in the Secretary's speech in the resumed Second Reading debate of the Bill that "there is no evidence before us that the current and proposed copyright exceptions have failed to achieve the benefits intended owing to contract override". But honestly, there is no relevant case law in Hong Kong, and the Government has said that no one has so far been charged for parody, satire, caricature, pastiche, and so on. Of course, relevant exceptions were non-existent in the past. In fact, this only indicates a point of dispute triggered by the Bill all along, that is, there is no way to address streaming as the most popular form of transmission under the original CO, and we have no complete picture of the changes to take place after communication right is put under regulation of the CO in the future. Precisely because of such concern, and after repeated discussions with the Government of the Bill, the various exceptions have been incorporated, albeit with the wild card that such exceptions may be overridden by contracts.

Another point raised by the Secretary is that academics are rather divergent, and that is the way it should be. It is only natural for different perspectives and views to emerge in the academia. I believe that in a normal realm of academic freedom, it is naturally not easy to attain unanimity over any given issue, yet this is obviously not a reason for rejection. Of course, the arrangement of restricting contract override may be rare in other places and countries. Nevertheless, the United Kingdom is a sovereign state with the common law tradition of upholding legislative principles, and the Hong Kong community upholds the country's spirit of law all along; when the United Kingdom is aware of its importance and adopts it, and whereas many of our case LEGISLATIVE COUNCIL ─ 4 February 2016 4895 law and statutory arrangements established in the past were modelled on the British practice, I see no reason why Hong Kong cannot take a page out of the British book to incorporate the restriction on contract override into our CO.

Surely, the Secretary and some Honourable colleagues may express worries about the partial approach, because only some areas of exceptions are involved in the current discussion. Will other unspecified areas be thus stripped of some statutory restraint, as if it was implied that contract override is possible in areas where contract override provisions are not incorporated under the CO? As a matter of fact, in the world of the past, copyright owners and users under contract might resort to the original CO to tackle relevant problems; however, as a new mechanism on exceptions is now involved, no one would like to see anything new in this regard, namely the likelihood of contract terms overriding the exceptions granted under the law.

In fact, why was there no need to care that much in the past? As copyright owners said, because there was still room and space to act to the effect of parody, pastiche, satire or "kuso" with no statutory restraint. However, given how it is expressly provided for in the Bill, a clear legal framework is more strongly needed in order to address the relevant issues. Therefore, I am speaking in full support of Mr Dennis KWOK's proposal to add contract override provisions to the Bill.

The Secretary has said on other occasions that we need not worry, because the Unconscionable Contracts Ordinance is still in place to ensure that consumers or the weaker party to a contract will not be deprived of their rights. Nevertheless, we see that the Unconscionable Contracts Ordinance is not limited to certain circumstances in determining if relevant unreasonable conditions are not considered part of the contract under the Ordinance. Put simply, there is always this discussion about one of the points, namely the bargaining position and relative power of consumers and the other party. On the surface, one may feel relieved, thinking that given the huge discrepancy between their positions, some contract override provisions in the contract may be not enforceable or nullified; but in many of the past cases, the Court would need to make full consideration instead of merely taking one party's position into account.

Unfortunately, the realm of cyberworld is unlike what takes place in business operations, where users are briefed on the contract terms in detail through a single person. As long as a user enters the cyberworld, be it for 4896 LEGISLATIVE COUNCIL ─ 4 February 2016 buying a product or browsing a website, agreement to relevant terms is thus implied. As mentioned by many Honourable colleagues who spoke earlier, most users would not have read the terms clearly, but options seem to be available objectively speaking, as users may choose "Not Accept" to leave without buying the product. The question remains whether this is really an option, and the option is actually …

CHAIRMAN (in Cantonese): Mr WU, I note that many of the points raised in your speech just now have been mentioned by other Members. This is the second time you are speaking. Please try to avoid repeating the points already raised by other Members.

MR WU CHI-WAI (in Cantonese): Chairman, what I would like to raise is, we cannot assume that the weaker of the two parties to a contract is protected under the law solely on the basis of the Unconscionable Contracts Ordinance. For this reason, when we learn of the claim of the Government and copyright owners that there is no intention to influence freedom of speech through the power granted under this piece of legislation, we have a stronger case to add to the Bill contract override provisions in order to ensure protection of the interests of consumers.

We can see that the crux of the whole issue certainly lies in whether copyright owners will refrain from exercising their own power. If copyright owners have the right to make use of contracts to override the exceptions granted to the weaker party under the law, the whole balance will be tipped in their favour, giving them absolute power to decide what is to be allowed or whether to fight back; the weaker party may resort to the criteria of exceptions permissible under the law, but they may still be subject to legal challenges, a situation which I think is absolutely unfair and defeats the intent of lawmakers.

Therefore, I speak in support of Mr Dennis KWOK's amendments, and hope that Honourable colleagues will give serious thoughts to them. Thank you, Chairman.

MR CHARLES PETER MOK (in Cantonese): Chairman, before all else, I would like to spend one minute to respond to the speech delivered by Miss CHAN. I am very grateful to her for her speech just now, and I also wish LEGISLATIVE COUNCIL ─ 4 February 2016 4897 to tell television viewers that Members on both sides actually seek to exhaust every means possible to resolve this issue. I believe it is also the wish of the vast majority of the pan-democrat Members to resolve this issue. I also believe the same is true of all four parties, including the pro-establishment Members ― I will not name any names here because they have all vowed not to give in ― the vast majority of Members wish to resolve this issue, too. Actually, it is the unanimous wish of participants of the four-party meeting, including the pan-democrat Members, the pro-establishment Members, the industry and netizens, to seek a way out. I only wish to say that although the four parties do not include the Government, I hope it can, during the process, refrain from preventing us from seeking a way out, even if it is unable to give us a helping hand.

Chairman, I would like to respond briefly to the speeches delivered earlier by a couple of Members, particularly the ones delivered this morning by two Members on behalf of the business sector. First of all, Mr CHUNG Kwok-pan repeatedly questioned how the business sector could continue to make investments in Hong Kong if contracts could be overridden by law. Some of his other speeches also give me the same feeling, though probably it has something to do with some businessmen's misunderstanding of this Ordinance. In fact, just as the Chairman corrected Mr Albert CHAN last evening, the current question is the law being overridden by contracts but not vice versa. We must get this point straight first.

In my opinion, Mr James TIEN knew very well when delivering his speech that we were talking about the law being overridden by private contracts. He also raised a good question: Why is it that only this Ordinance faces such situations? In fact, as we have mentioned before, some contract override provisions can also be found in other existing laws. Mr TIEN also asked why these restrictions had to be included in this piece of legislation and then cited some examples. I do not wish to make too much repetition, but I remember he mentioned the example of hiring a taxi from a taxi company. He asked whether an exemption for switching off an idling engine could then be granted. The answer is certainly in the negative. Although I am not an expert in law, I can see that this example cannot be compared to the situation under discussion now.

Firstly, the scenarios imagined by the business sector might be related to the signing of commercial contracts between companies or two operators. However, the first problem currently facing us is, although the contracts are 4898 LEGISLATIVE COUNCIL ─ 4 February 2016 commercial in nature, members of the public as one of the contractual parties are very often required to just tick and confirm "OK" online. For instance, software buyers are treated as having accepted the relevant terms and conditions once they open the package to use the software. Very often, these contracts are implicit in nature. In other words, options are usually unavailable or consumers will have already made a choice unknowingly with no room for negotiation. The signing of a private contract with a company is different, because I will discuss the terms and conditions with the other party. In the former case, however, there is no room for discussion. Consumers can only select "Yes" or "No". Moreover, Members should not accuse certain Members of being irresponsible. I believe many people will also tick "OK" or "Yes" without a second thought. These unilateral contracts are different in nature from the examples cited by Mr TIEN just now, for members of the public have no right to say or influence the contractual provisions. Under such circumstances, I think full consideration must be given to public interest and rights. Hence, Members have sought to propose these exceptions to prevent certain private acts of the public from being unduly regulated by commercial contracts.

As regards the second difference, I have no idea how many taxi companies specify in their contracts that taxi hirers are not required to abide by the law governing idling engines. I believe such situations will not arise anymore. However, we have indeed frequently seen the copyright-related situations being discussed now. According to Mr Dennis KWOK, some copyright owners he has got in touch have considered or mentioned the possibility of adopting this method to override the exceptions prescribed in the existing legislation. Hence, this situation is not fictitious or has never occurred; otherwise, there is no need to panic. The truth is this situation has already happened. Therefore, in order to ensure that members of the public have a clear understanding of the law, we consider it necessary to introduce contract override provisions.

Chairman, I shall deliver the rest of my speech in English because it was prepared in English. I will also specifically mention the situation in Australia because, during our discussion in the Bills Committee about contract override provisions, a lot of information provided involves the considerations made by Australia and the discussions conducted by the Australian Law Reform Commission. In my opinion, it is absolutely necessary to clarify some of the information provided by the Government and certain arguments and conclusions advanced by it, which are found to be misleading, too.

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MR CHARLES PETER MOK: Chairman, on the issue of the amendment on introducing limited limitation on contract override, I emphasize the part about a limited set of limitation is not a broad overall limitation on contract override. In connection with this amendment originally proposed by the Honourable Dennis KWOK and moved by the Chairman of the Bills Committee, the Honourable CHAN Kam-lam, I want to point out that at the Committee stage when the Government was arguing the case against limiting contract override, its arguments were biased and the whole discussion was rather misleading. In particular, I would like to point out what the Administration told members of the Bills Committee during the discussion on the situation in Australia.

First, our Government emphasized that the Copyright Act 1968 in Australia "generally contains no provision that prevents agreement excluding or limiting the operation of exception except in relation to certain exceptions for computer programs". However, our government paper did point out that the Australian Law Reform Commission (ALRC) recommended the Australian Copyright Act (ACA) be amended to provide that contractual terms restricting or preventing the doing of any acts which would otherwise be permitted by libraries and archives exceptions are unenforceable.

Furthermore, limitations on contract override should apply to the new fair dealing exceptions which incorporates limiting the existing fair dealing provisions. And I add that the ACA actually covers criticism and review, parody and satire, reporting news and the giving of professional advice. These exceptions and exemptions are very similar to the ones we are talking about and we are introducing in our current Copyright (Amendment) Bill 2014 in Hong Kong.

In addition to these Australian fair dealing exceptions, the ALRC also recommended that limitations on contract override be applied to quotations, non-commercial private use, incidental or technical use, educational use, library or archives fields and access for people with disability. Chairman, these are very similar to the fair dealing exceptions in Hong Kong that are being proposed or in existence except, again, the access for people with disability. But, Chairman, you can see that the direction that the ALRC has set out is very clear. But our Government also told us emphatically and this is a very important part that, in the ALRC's view, broader limitations on contract override, for example, extending to all exceptions, or to all fair uses, would not be practicable or 4900 LEGISLATIVE COUNCIL ─ 4 February 2016 beneficial. The ALRC considered that in the less confined, more market-oriented environment of an open-ended fair use exception, limitations on contracting out are harder to justify and more likely to have unintended effects.

Now, if you just look at this part, you would think that would mean that in Australia, they are actually considering that limiting contract override is no good, maybe the Government wants to use this to imply that limitation on contract override was not something the ALRC recommended. But actually, no, they are talking about broad limitations on contract override, not what the Honourable Dennis KWOK proposed and the Honourable CHAN Kam-lam moved, which is certainly a limited set of limitations on contract override only.

If you go back to the draft document, the draft amendment that we are considering in section 39 is about fair dealing exception for criticism, quotation and reporting and commenting on current affairs. And in section 39A under discussion about fair dealing exception for parody, satire, caricature and pastiche, it is limited, not a broad and overall contract override that we are talking about. Our amendment for the limitations on contract override most certainly are confined and not applied to any open-ended fair use exception as quoted from the Australian document.

Now, if we look deeper into the proposal by the ALRC about introducing limitations on contract override into their copyright law, you will find a lot of parallels to the situation here in Hong Kong. But first of all, what is contract override? According to the general contractual law in 2007 in a piece with the title "Contractual Restrictions and Rights under Copyright Legislation", contract override is a contract which purports to oust the jurisdiction of the Courts if contrary to public policy and therefore void or unenforceable, but probably not an illegal contract.

Now, since 2002, the Copyright Law Reform Committee in Australia has been considering the issue of contract override. Later on, the ALRC continued to examine the issue and the widespread use of contract override, which was exactly what I was talking about when I was responding to some comments made by the Honourable James TIEN this morning. And these widespread uses of contract override, such as online publishing, putting in contract terms to prevent library and archives from making duplicates of copyrighted works, overriding legal exemptions that library and achieve should enjoy by law, similar contract override terms found for legally exempted use of copyrighted materials for LEGISLATIVE COUNCIL ─ 4 February 2016 4901 educational purpose, and more such terms, are also found on various online contract terms and conditions for copyrighted works. The ALRC also quoted academics in Australia who pointed to the clear violations and contradictions to legal exemptions by these contract override terms and conditions. I am sure if we do the same analysis in Hong Kong, we would find very similar situations.

The ALRC also found that these contract override terms and conditions were increasingly prevalent. Chairman, limiting exchange of copyrighted work, such as books or digital contents between libraries, loaning or duplication of certain books for educational and research purposes, contradict their existing fair dealing exemptions. Now, since the publication of the report of this Commission, they have continued to find that these contract overrides are increasing in number and in scope, especially because the distribution of copyrighted works has expanded from printed works to online or digital distributions. So, according to the Australian National Library, only 21% of the licensed terms of the digital materials in their database allow libraries to loan out these materials to Australian users by making digital duplicates, and 57% prohibit library users from using these content in their National Library altogether.

I will continue to cite these examples in my speech later on in my next round of presentation on the situation of not just Australia, but also the situation during the review in the United Kingdom, and we can see a lot of parallels between Hong Kong and these other similar economies as ours.

Thank you, Chairman.

MR MARTIN LIAO (in Cantonese): Chairman, as I said during the resumed Second Reading debate on the Copyright (Amendment) Bill 2014 (the Bill), the issue of exemption from liability pertaining to the use of copyright works is actually a matter of striking a balance between the interests of copyright owners and users of copyright works with a view to enabling creators to obtain reasonable economic returns under legal protection, and giving them economic incentives to create and innovate on a continued basis, without overly stifling free competition and the flow of information in society at the same time. The setting of this equilibrium point is indeed just a matter of opinion. In fact, the amendments tabled before us today, including those proposed by the Chairman of the Bills Committee, Mr CHAN Kam-lam, on behalf of pan-democrat Members 4902 LEGISLATIVE COUNCIL ─ 4 February 2016 are indeed worth pondering. I do not regard these amendments as the so-called "great scourges". Under the current circumstances, the key issue is whether or not they are suitable for Hong Kong.

The current discussion involves adding sections "relating to contract override provisions in respect of copyright exceptions". So far, such provisions have been adopted only in the United Kingdom, but it has also aroused intense controversy in the country. The British Government has undertaken to assess the impact of such provisions on the community and release the findings five years after their implementation, namely in 2019. How will the United Kingdom acquit itself then? We can only wait and see at the moment.

Unlike Hong Kong, the creative industries in the United Kingdom have already reached a rather mature stage, but Hong Kong is still at a starting or restarting stage. Do we have the luxury of making some institutional changes that may weaken the incentives for creation, thus stifling the development of creative industries and undermining the potential of Hong Kong to become a trading centre of intellectual property? The concept in question is also rather controversial in other countries. For example, the Australian Law Reform Commission (ALRC) recommended that statutory provisions overriding contractual terms should be limited to libraries and archives exceptions, but it also pointed out that removing freedom to contract might risk reducing the flexibility of the copyright regime. Therefore, contrary to the claim of some Members, the freedom of contract is not outdated.

The European Commission even refused to accept similar limitations. Could it be that both the ALRC and the European Commission are inebriated and only the pan-democrat Members in Hong Kong are sober? The current amendments seek to introduce similar provisions in Hong Kong, but doing so would arouse much controversy as well. Currently, in Hong Kong society there seems to be a perception that the introduction of contract override provisions into the Bill can ensure that acts exempted under the legislation will not be limited by contractual terms, thus providing more protection to netizens. Is this perception correct? First of all, we should understand that a contract is a prerequisite for contract override provisions to be effective, but the netizens currently capturing and modifying images on the Internet, writing new lyrics to old songs, and so on, have not signed any contract with copyright owners beforehand. Therefore, the introduction of contract override provisions will not provide more protection to netizens either. At present, some people in the community even expect this LEGISLATIVE COUNCIL ─ 4 February 2016 4903 amendment to reduce the odds of secondary creations being subjected to criminal prosecution. In fact, however, even in the event of restriction being imposed on contract override, it is only related to civil claims. It does not affect criminal liability. Therefore, such an argument is arguably missing the point.

Moreover, the amendments restrict contract override across the board, obliterating even the opportunity to formulate a more lenient provision. The exceptions under the law will become the highest standards then. The provisions sought after to broaden the freedom of use may limit the broader freedom of use offered by contracts. Is it not rather ironic? Some people say that this will not happen to copyright owners, but if the consumer is Google, Facebook, YouTube, Alibaba or Tencent, why not?

Some would say that it does not matter because the importance of introducing contract override provisions lies in preventing the making of contracts that are more stringent than the law, but is it the actual case? True enough, a contract can indeed be written in a more stringent and restrictive manner than the law, but it can be otherwise more relaxed. At present, the advanced models of copyright regulation worldwide tend to let copyright owners enter into contractual agreements with large enterprises operating intermediary platforms, such as Microsoft, Google, Facebook, YouTube, and so on, under which the copyright owners collect royalties from these large enterprises, rather than levying charges on the massive netizens one by one, because it is difficult for copyright owners to seek recourse against individual netizens. Under this arrangement, the consumers are generally large enterprises rather than ordinary netizens. In reality, nobody can arbitrarily enter into any contract that undermines the freedom of use of copyright users. Compared with large intermediary platforms such as Facebook, Google, YouTube, Alibaba and Tencent, copyright owners are in a weaker position. They cannot act arbitrarily and recklessly. On the contrary, they are hamstrung by these large enterprises. In addition, the exceptions in copyright law are introduced on the basis of public policy. It is impossible for copyright owners to flout statutory provisions simply by means of a contract.

In fact, the United Kingdom has introduced contract override provisions into its copyright law not because of the existence of many contracts more stringent than the law but rather for the purpose of trying out this new model of statutory regulation in the European Union on a pilot basis, so as to explore how the copyright regime can tie in with the development of new technology. Some 4904 LEGISLATIVE COUNCIL ─ 4 February 2016 people are worried that copyright owners may force users of copyright works to accept some overly stringent conditions. However, as a matter of fact, having regard to such situations of differing bargaining powers, legislation has been put in place in Hong Kong, namely the Unconscionable Contracts Ordinance and the common law, to protect members of the public from being bound by unreasonable contractual terms or unconscionable bargains. In fact, the formulation of this common law doctrine of unconscionable bargain is related to copyright. Therefore, it is questionable whether there is an imminent need for Hong Kong to introduce contract override provisions into the Bill.

(THE CHAIRMAN'S DEPUTY, MR ANDREW LEUNG, took the Chair)

Deputy Chairman, meanwhile, we have to also carefully deal with the issue of how to strike a balance between contract override provisions and freedom of contract. As I said during the resumed Second Reading debate, contracts are accorded great sanctity in common law, and honouring the spirit of contract is also part of the core values of economic freedom and rule of law in Hong Kong. The freedom of contract is not absolute, nor is it outdated. Deputy Chairman, erosion of the doctrine of freedom of contract must be underpinned by significant public interests. Is there currently any consideration of significant public interests that warrants erosion of these core values? If we erode freedom of contract on grounds of copyright exceptions this time, we can do the same in future for other reasons. Then, how should we define under what circumstances we can or cannot do so? If the Council passes the relevant amendments, then contract parties will be unclear about whether the contracts in question will eventually be ruled null and void by the Court. In that case, will copyright owners give up the Hong Kong market or even adopt the laws of other regions instead of those of Hong Kong? A small leak will sink a great ship. When that time comes, not only will the status of Hong Kong as an international trade centre be affected, but the development of professional services will also not be spared from the impact.

Deputy Chairman, I would also like to take this opportunity to respond to issues about the concept of freedom of contract. Some Members mentioned freedom of contract. I was somehow surprised by that. They would even talk about freedom of contract? However, when I listened to them further, I found that most of the remarks came down to mere literal interpretation. Some LEGISLATIVE COUNCIL ─ 4 February 2016 4905

Members from the legal sector even described the doctrine of freedom of contract as outdated. It reflects their failure to fully understand the meaning of freedom of contract and its importance in common law.

Freedom of contract is important not because Hong Kong is an international business community, but rather because of the freedom protected by common law. Some Members hold that freedom of contract is less valuable than other freedoms, such as freedom of speech, freedom of assembly, and so on, but I do not believe this is the way freedoms are weighed in common law. In fact, freedoms are incomparable in quantity, as if they are blindfolded like the goddess on the roof of the Court of Final Appeal Building. Deputy Chairman, none of the freedoms are absolute. Whenever significant public interests are at stake, the spirit of protecting freedom in common law will not be hindered. Therefore, while based on the key doctrine of protecting freedom, common law can keep abreast of the times and be full of vitality.

If today the freedom of contract is eroded under circumstances not involving significant public interests, how can we address the situation in future when other freedoms are eroded under circumstances not involving significant public interests?

I think the current impact on freedom of contract does not involve significant public interests. Why are the interests of netizens significant public interests? Nobody can give a clear explanation. Restricting contract override does not benefit netizens either. It will only benefit large enterprises, resulting in an imbalance between the interests of copyright owners and those of copyright users.

Deputy Chairman, putting aside the aforesaid query, if all the three amendments proposed by the pan-democrats are passed, then only a bigger problem will arise, that is, the copyright law of Hong Kong may become neither fish nor fowl, full of contradictions.

Deputy Chairman, another amendment proposed to introduce open-ended fair use provisions into the existing exhaustive fair dealing exception model, but the contract override provisions do not cover fair use exceptions. They only cover the new exceptions proposed in the Bill under the existing fair dealing regime. If both amendments are passed, how can both regimes co-exist in Hong 4906 LEGISLATIVE COUNCIL ─ 4 February 2016

Kong? This is not a philosophy of law issue, but a real issue related to the operation of the legal system. Unfortunately, the Member who proposed the amendment has offered no answers. Is that a responsible act?

Looking around the world, there is currently not yet a place where these three doctrines, namely fair dealing, fair use and user-generated content (UGC), are adopted for exceptions at the same time. Singapore is arguably the only example adopting a mixture of fair dealing and fair use. Although the exceptions offered in Singapore are applicable to all purposes of copyright use, Singapore basically still adopts the fair dealing doctrine to address problems concerning exemption from liability.

Deputy Chairman, all in all, the practice of including contract override provisions is controversial in a number of jurisdictions across the world. Even the practice in the United Kingdom is only experimental in nature and can be scrapped five years later. The United Kingdom is willing to be a guinea pig. For whom is Hong Kong being a guinea pig? As far as Hong Kong is concerned, our society is not in urgent need of the introduction of such provisions, which have not undergone any public consultation and, in addition, will give rise to issues related to the integration and actual operation of freedom of contract and even other amendments. Therefore, I really do not see any reason why Hong Kong needs to introduce contract override provisions in a hurry. At this legislative stage, I will not support this amendment.

I so submit.

(Mr LEUNG Kwok-hung stood up)

MR LEUNG KWOK-HUNG (in Cantonese): Deputy Chairman, please do a headcount.

DEPUTY CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(While the summoning bell was ringing, Mr LEUNG Kwok-hung spoke loudly)

LEGISLATIVE COUNCIL ─ 4 February 2016 4907

DEPUTY CHAIRMAN (in Cantonese): Mr LEUNG Kwok-hung, the meeting is still in progress. Even though we are doing a headcount, you should keep quiet.

(While the summoning bell was still ringing, Mr LEUNG Kwok-hung spoke loudly near the main entrance to the Chamber)

DEPUTY CHAIRMAN (in Cantonese): Mr LEUNG Kwok-hung, you are still in the Chamber. Please keep quiet.

(While the summoning bell was still ringing, some Members returned to the Chamber but not to their seats)

DEPUTY CHAIRMAN (in Cantonese): Will Members please be seated.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

DEPUTY CHAIRMAN (in Cantonese): Mr Paul TSE, please speak.

MR PAUL TSE (in Cantonese): Deputy Chairman, I speak in support of this amendment. Unlike some Honourable colleagues from the pan-democratic camp, my position may be different. Deputy Chairman, I am afraid that this time, the most important reason is that it does not just involve legal issues, or that we only need to consider a simple question of whether a certain matter, the relevant Bill or proposed amendments are justified or balanced in terms of merits. Instead, it is about some sort of panic, worries and sentiments. In this regard, I am both a legal practitioner and a member in the political field. I am afraid I need to take this situation into account as well.

Earlier during the break, I heard the comment that how it would be possible for Mr Dennis KWOK, as a lawyer and representative of the legal profession, to support such an amendment because many foreign investors and international organizations may not choose to anchor their base in Hong Kong and use Hong Kong laws as the basis of the relevant contract terms as a result. This will certainly affect the business of solicitors and barristers as well as the possibility 4908 LEGISLATIVE COUNCIL ─ 4 February 2016 of Hong Kong developing into an arbitration or even intellectual property centre. In respect of this, I will leave it to Mr Dennis KWOK to explain his stance as to why he is blatantly acting against the interests of the profession this time. As a Member with capacities in both the legal and political circles, I am afraid I am also inclined to support this amendment. Deputy Chairman, my reasons are as follows.

Deputy Chairman, we have heard much about legal certainty and freedom of contract this time. I am afraid the examples cited by a number of Honourable colleagues previously have missed the fundamental core of the issue. We can find different examples from law books or cases showing that sometimes, we are inclined to think that given the importance of consistency in law, no person shall override statutory requirements by private contracts. On the contrary, sometimes it is deliberately provided in law that contracting parties may choose whether or not to comply with the law. It just varies depending on many different cases.

Certainly, we will consider the relevant social situation, such as whether the social and political values of a capitalist society prevail, or on the contrary, they are more of a socialist bias. In this regard, when we make reference to the cases or stances in legislation in other places, we have to be careful because as we know, in respect of copyright law, that is, the primary justifications for legislating on copyright in such common law countries as the United Kingdom and the United States, basically more consideration is given to social and economic factors. But on the contrary, the fundamental reason for the formulation of copyright law in some European countries initially is natural right, particularly for protection of the freedom and accomplishments of writers and creative workers. Such different orientations will often result in divergent stances, especially on the issue of contract override involved this time. Hence, regarding the question raised by Mr Martin LIAO earlier as to whether we would follow the path of the United Kingdom to be a guinea pig, I am afraid we have to examine at which stage this amendment is.

Deputy Chairman, apart from the political and social values in society, we certainly also have to look at the social development of different stages. Once upon a time in certain societies, one of the most fundamental principles of common law was caveat emptor. When studying the first principle of the law of contract, people would understand the point that every person was obliged to protect his own interests by himself. In society, the Government would not help LEGISLATIVE COUNCIL ─ 4 February 2016 4909 people to protect themselves. For this reason, every buyer must be careful when entering into contracts and purchasing products, or else he himself would suffer. This was the principle in the past. Certainly, as society gains increasing advancement, we ask for more and more protection. Hence, there is now more and more intervention by government or laws. Originally, Hong Kong was a completely laissez-faire society with minimal restriction, but now, there are increasingly more restrictions. In fact, there is no need for me to go into the details. Such measures as minimum wage and the Trade Descriptions Ordinance are all heading in this direction.

Thirdly, Deputy Chairman, we have to examine whether the relevant societies have been faced with any special incidents with far-reaching impact, leaving them specially sensitive to certain values or legislation. For example, after the 911 incident, a number of provisions in the Patriot Act of the United States were passed despite the fact that they ran counter to its previous constitutional and legislative spirit and principles as its society faced a significant shock. Moreover, after the occurrence of SARS, some laws and measures especially those specific to quarantinable diseases in Hong Kong were made stricter and harsher than that in other countries which may not find them acceptable. Another example is that while Hong Kong now faces a situation in which people are rather worried about the threat that may be posed to Hong Kong by the Mainland values, laws and its tight control over Internet freedom, we must look at the circumstances of Hong Kong practically, instead of monotonously considering whether we should take a step forward or backward regarding our position in terms of our laws. I am afraid it will render us unable to grasp the biggest problem that we are actually facing now.

Deputy Chairman, another point to note is the legislative nature. Some legislation is obviously formulated on the premise of protecting public interests, such as a ban on smoking and idling vehicles, labour legislation and the Disability Discrimination Ordinance as mentioned by some Honourable colleagues earlier. They are all laws enacted with special purposes mainly for the protection of significant public interests. Hence, contractual terms are totally restricted from overriding statutory provisions in this regard. But on the other hand, many laws are not specific to issues involving significant public interests. For example, some provisions in the Arbitration Ordinance, the Companies Ordinance or even the Building Management Ordinance are actually just a platform or an option. Just like a buffet, the relevant parties may choose whether these provisions should be used to facilitate them in doing business or making some arrangements in life. 4910 LEGISLATIVE COUNCIL ─ 4 February 2016

Very often, these ordinances will easily result in contract override. But what stage the Copyright Ordinance (CO) under discussion is at now? In the era when letterpress printing had been invented, the original intent of the earliest CO was to protect book publishers. And subsequently, apart from publications, it also protected music production, literary or even artistic works, extending from one realm to another. Such issues supposed to be rather private in nature have turned increasingly public, especially when it comes to an era of communication rights. I am afraid it is not purely about whether I will tell the whole world after inventing certain things, or tolerate plagiarism allowing others to use my inventions. Now we have reached a stage where the power of communication rights is instant, prompt and worldwide, allowing accurate reproduction of the original. Everyone can do so using domestic computer equipment. In this regard, when we have come to this stage and in particular, given the large number of online activities in recent years, this issue has become very complicated. I am afraid it does not simply concern the contractual rights between buyers and sellers, creative workers or even copyright owners or users. Rather, we should look at the overall development. Based on these several reasons, we cannot simply and roughly point out whether we should uphold the freedom to contract, or give priority to the statutory protection of public interests. I am afraid if we simplify things in such a simple way, we will fail entirely to see where the problems actually lie.

Now, concerning the reasons for Hong Kong's existing geopolitics and its problems, I am afraid we must stand up to this fear. In this regard, I think that this amendment is worthy of support provided that it does not have any significant impact on the possibility or existence of the entire copyright regime. Deputy Chairman, the most important reason is that I have carefully read the several reasons advanced by the Government. Why do they not support this amendment? There are basically five reasons. I will go through them quickly.

(THE CHAIRMAN resumed the Chair)

First, while we had such exemptions in the past, there was no evidence that copyright owners would abuse or act in breach of them; second, under many other general principles concerning public policy, excessive abuse of rights by copyright owners is already prohibited; third, some cases and provisions are already very clear. For example, the Disability Discrimination Ordinance, the LEGISLATIVE COUNCIL ─ 4 February 2016 4911

Employment Ordinance or the Unconscionable Contracts Ordinance are specific and serve to address situations in which contracts should not be enforced; fourth, they question whether it will stir up trouble if they hastily accept this proposal now without thorough understanding of the consequences. It will not just stir up trouble relating to the existing communication rights. For some exemption provisions which we have originally been using for a long time, due to the different ways of handling and treatment, the previous practice may be called into question, thereby messing up the whole situation and changing everything. In addition, should we conduct thorough consultation or consider other development before we make any decision? This is understandable and concerns the so-called fear mentioned by me at the beginning.

On the one hand, netizens or copyright users will have fear because they used to have such a large degree of freedom in the past. But all of a sudden, it has been tightened and therefore, they do not know what will happen next. Furthermore, as I mentioned earlier, politically, our neighbour, which is considered by the whole world as a rather closed country suppressing netizens as well as freedom of speech and the Internet, has tightened its grip on Hong Kong affairs. Should we stand up to it? On the other hand, if we look at the track record of the Government, especially the incumbent Government and the Chief Executive, are they trustworthy? While it is claimed that there will be no abuse, can we believe that? In addition, seeing previous cases of "access to computer with criminal or dishonest intent", we do have such apprehensions.

The current situation can be described as fear versus fear. I have pointed out the netizens' fear. So, what is the fear of copyright owners or representatives? It is because there has been excessive technological development at such a quick pace, and too many things have been happening, plus the fact that infringers can cause much harm and abuse as long as they have a computer in hand. Under such circumstances, if it is relaxed to such a degree, can we tighten it again later? Such a fear versus fear situation has locked us in a stalemate.

Chairman, earlier on, I mentioned that we must study overseas examples carefully because of the different underlying ideologies, social values, economic conditions and stages of development of copyright or even other intellectual property. But indeed, there must be some reasons for the United Kingdom to go that far. And why did it arouse so much controversy? It is certainly because 4912 LEGISLATIVE COUNCIL ─ 4 February 2016 quite a number of copyright owners in the United Kingdom or even some international organizations think that if such a relaxed approach is adopted in the legislation, it may result in many unforeseeable consequences.

To conclude, Chairman, I think that in the prevailing political circumstances, if we fail to understand the actual situation of Hong Kong more specifically and practically, but insist on weighing its pros and cons purely from a theoretical and legal perspective in our examination of the issue, we will certainly think that this amendment carries a lot of uncertainties. Also, it will affect Hong Kong's status as a legal service centre. But if we really wish to address the concerns of the other side, provided that so doing will neither involve any major principle nor cause any serious harm, should we also address the political consideration of the other side, so that it may be passed at the political level? This is a kind of political wisdom. Our constitutional reform package failed to pass some time ago because some people were unwilling to "pocket it first". I hope the copyright owners will not repeat the same mistake this time around. If we can "pocket it first" and take one step forward, we should try our best to "pocket it first" because even if the CO is too lax, we can still take our time to improve it and introduce amendments in the future.

Thank you, Chairman.

MR ABRAHAM SHEK: Chairman, in contract law, freedom of contract manifests the essence of free market principles. When proponents of freedom maximization are clamouring for including contract override provisions in our copyright regime in the name of safeguarding ordinary web users' freedom, they are also inferring the opposite: freedom of contract and our cherished free market principles can be derogated for the seemingly more transcendent freedom of netizens. Obviously, this cynical view needs to be rebutted.

I cannot agree more with Mr Dennis KWOK, who highlighted that freedom is no absolute concept, and hence there must be a trade-off when necessary. Yet, the question is: how should we draw the line? Should it be drawn rigidly for the sake of protecting human rights, which sounds more politically correct in an increasingly populous society? Freedom is a long-established core value of Hong Kong. Under the auspice of freedom, everyone can do whatever he wishes subject to the law of Hong Kong. Article 27 of the Basic Law prescribes that Hong Kong residents shall have freedom of speech, of the press and of LEGISLATIVE COUNCIL ─ 4 February 2016 4913 publication, but such rights are not absolute. In case of illegality such as libel or defamation, the person who committed the act is liable in the Court for abusing such freedom. As the same analogy goes, freedom of contract is not transcendent in the sense that when illegality is involved or fundamental human rights are at stake.

Nevertheless, the question is not which of the freedoms is more transcendent. The better view is which of the freedoms should prevail in the copyright context subject to case-by-case analysis, and this is one of the very matters the Copyright (Amendment) Bill 2014 (the Bill) aims to deal with. Unlike the rights such as the right to life and the right to be free from torture and inhuman or degrading treatment or punishment, neither the freedom of contract nor the freedom of speech, of the press and of publication is absolute. In other words, when two such rights are in conflict, the traditional approach is to decide which one should be prioritized ― there must be a trade-off. However, this is not a mechanic process and we cannot strip out the context, omitting factors of history and the actual situation of society and jump to a summary knee-jerk conclusion that one of the two rights must triumph in all scenarios.

Chairman, as Ms Cyd HO has reiterated, and rightly so, the exponential development of information technology and electronic communication devices in recent years has brought about a sea change in the copyright regime. However, this rapid, ongoing change is relatively short in history when compared with the much longer history of the copyright concept. Yes, the United Kingdom's regime includes the contract override provisions to give users, consumers and businesses certainty and clarity that the new fair dealing exception would apply in all circumstances regardless of the terms of a contract; nonetheless, the introduction of the contract override provisions in the United Kingdom is highly controversial and has attracted much debate during the legislative process. The British Government has been criticized for underestimating the adverse economic impact on the content industry and has been urged to monitor closely the impact of the implementation of the provisions in the United Kingdom. The responsible minister then reassured the House of Lords that the impact of the change would be evaluated within five years.

Given the fact that the United Kingdom also sustains hardships in implementing the contract override provisions, this justifies copyright owners' position that restrictions on contract override should be not introduced without 4914 LEGISLATIVE COUNCIL ─ 4 February 2016 proper discussion as it may restrict freedom of contract and the impact on businesses of any material change would upset the balance among the interests of different stakeholders.

In fact, the Bills Committee received around 8 500 submissions during the scrutiny period. Although the views were generally divergent, these submissions delivered a clear message to the Bills Committee, which is that the core issue of the Bill, like the others, is about achieving balance ― the proper balance between protecting the legitimate interests of copyright owners and the reasonable use of copyright works.

On balance, it would, therefore, be more prudent for us to steer a cautious course by maintaining the essence in freedom of contract, at least to wait and see the evaluation results of the United Kingdom's regime. As a rule of thumb, crossing the river by touching the stones is more astute as the development of new media is still a relatively new concept and its impact on copyright protection is far from self-explanatory.

Chairman, arguably, copyright owners' rights in the United Kingdom are being adversely challenged with the potential impacts of the contract override provisions not properly assessed by the British Government before the provisions were introduced. If we should bring the United Kingdom's approach to Hong Kong, are we going to bring the side-effects to Hong Kong? Are we suggesting that copyright owners' rights are secondary to netizens' and can be sidelined since we have already known that copyright owners in the United Kingdom are suffering because of the contract override provisions? Affirmative answers to these questions are unpalatable. After all, not all copyright owners are transnational corporations or mega institutions. Many of them are individuals as ordinary as individual netizens and the weight of the former's rights is as light as the latter's ― their legitimate interests also need to be safeguarded. On the other hand, flexibility and freedom of contract are prerequisites for creativity if we aim to promote creativity and make it a flourishing industry, because well-delineated property right is the foundation of economic freedom and the bedrock of success for modern market economies. In these lights, it is inadvisable to adopt an across-the-board approach to draw a dichotomy in the Bill which would discriminate against copyright owners.

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Chairman, even without the contract override provisions, I doubt the rights and interests of ordinary web users would be discriminated against disproportionately. As a general rule, whenever legislation or terms of a contract restrict the rights of people, the Court will take a very cautious approach, taking into account factors such as reasonableness and proportionality in an objective fashion for the purpose of arriving at an equitable result. This is particularly true when the parties to a contract involve consumers or the more susceptible (like ordinary web users) in that the Court is more prepared to protect the weaker parties or consumers, while the Court will take a harsher and much more unbending approach to adhere to the terms of a contract between business and business. This could also deter a business from initiating any proceedings against ordinary web users unless it has concrete evidence to prove that the accused has done something with direct, obvious and material derogation to its interests.

Furthermore, in an absence of contract override provisions, the proposed Bill is in conformity with the Basic Law, including the provisions concerning human rights. Thus, the worry that the rights of ordinary web users would be prejudiced against with the passage of the Bill without the contract override provisions is totally unwarranted.

Chairman, counter argument has it that in an absence of contract override provisions, it would create a chilling effect discouraging netizens from exercising their legitimate rights given that the Unconscionable Contracts Ordinance traditionally applied in the sale of goods and services has yet to be applied in intellectual property-related cases ― the Court has yet to establish any case law to give effect to the Unconscionable Contracts Ordinance in that realm. The paradox is: if we accede to this view, are we saying that the Court's power to create legal precedents in common law would be taken away or marred simply because of the exclusion of contract override provisions? Clearly, not only is such an argument baseless, the logic behind it is also dangerous as it implies disparagement and mistrust to the Judiciary that could undermine the independence of the Judiciary and the cherished separation of powers.

Chairman, we do not sit here to pull the language of the Bill to pieces and make nonsense of it. We sit here to find out the balance between conflicting matters in the Bill and we do this better by taking a cautious course and making sense of the interpretation of the relevant provisions than by opening them up to destructive analysis with unnecessary prejudice.

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In these words, I oppose Mr Dennis KWOK's amendments. His amendments are not without good reason and logic, but political expediency does not override principles that have been established for ages. Thank you, Chairman.

CHAIRMAN (in Cantonese): Mr LEUNG Kwok-hung, please speak.

MR LEUNG KWOK-HUNG (in Cantonese): Me?

CHAIRMAN (in Cantonese): Mr LEUNG, did you request to speak?

MR LEUNG KWOK-HUNG (in Cantonese): Yes. Chairman, speaking of contract override, Hong Kong is exactly an example of this kind of issues, right? In 1842, the British traded in opium, invaded our country and forced us to sign an unequal treaty. Then in the battle of 1860, the Anglo-French allied forces forced our country to sign another unequal treaty. In 1971, our Motherland made a declaration to the whole world, stating clearly to the United Nations that Hong Kong was not a colony, though it had not yet recovered Hong Kong at the time. Honourable Members of the opposition camp, did our Motherland do anything wrong? When the city was under siege, we had no choice. When the city was under siege, they said opium was a lawful commodity of our own choice, and opium trade was conducive to the health and well-being of Chinese people. Our Motherland was trampled twice, not to mention the other incidents, such as the Eight-Nation Alliance. When we talked about this issue, given their mercantilism or imperialism which grew from mercantilism, the British told us that it was a contract. They said, "Sorry, Chinaman, this is a contract signed by your own people."

Chairman, what was your view on these unequal treaties during the times you grew up? Those who have some knowledge of the development of human history will know that people's right stands above businessmen's right. Chairman, this is my standpoint which is never repetitive. Being a Chinese, I know how painful an unequal treaty is to the recipients who have no choice. Hence, may I advise Members to read the speech delivered by President XI LEGISLATIVE COUNCIL ─ 4 February 2016 4917

Jinping at some kind of second international conference convened in Beijing. He said the world did not belong to the Americans. They could not force any law on us.

Chairman, the question we are discussing here today is whether a signed contract can override other public agreement or values. This is a rather significant question in jurisprudence. After all, what is meant by copyright owner? A copyright owner is someone who, engaging in nothing productive, makes money solely by acquiring copyrights from other people. Chairman, as you may also understand, given the constraints on people's production technologies and complexity of the production process, even if someone has invented a certain piece of work, it will be difficult for him to have sufficient money or skills to reproduce his invention in large quantities to turn it into a commodity. This is the condition under which copyright owners exist. Chairman, as we are Chinese people, let me speak on another Chinese story. LUO Guanzhong ― do Members know LUO Guanzhong? Members should know him. His Romance of the Three Kingdoms is a classic example of plagiarism. He copied the story from a storyteller. Yet CHEN Shou, the author of Records of the Three Kingdoms, would not sue LUO Guanzhong because it had already been quite a while. LUO Guanzhong copied from his work. However, the storyteller had already been paid, and LUO Guanzhong, who wrote the book based on his story, did not print a lot of copies. So the storyteller would not sue him, right? LUO Guanzhong was a creator. When he created his work, he did not think about getting rich. He only wished to express … Frankly, if you have read Romance of the Three Kingdoms, you will know that right from the start, he said "the world under heaven, after a long period of division, tends to unite; after a long period of union, tends to divide"1, telling people in the world not to be so silly. LEUNG Chun-ying will not last forever … Sorry, it should be the Han Dynasty would not last forever, right? Corruption would cause its own downfall. This is the view expressed by him at the very beginning. He simply spelt out his conception of history and outlook on life by means of a historical novel. What we are discussing here today is the view that if we do not protect the interests of copyright owners, we will be unable to facilitate society in continuing to move forward. Actually it is wrong. On the contrary, such an act will make our society unable to move forward.

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Chairman, I have read Harry Potter in prison because on the first day of my imprisonment, I did not have any book to read. Someone asked me, "Mr LEUNG, do you have any books to read?" I said I did not have any, and he said he could lend me a copy of Harry Potter. Then I read a few pages. As we all know, people read books to kill time, but the female author of Harry Potter wrote books to kill time. Being a single mother who could not find anything else to do, she decided to write books for other people to read. Later, she succeeded, and her books became people's favourite page-turners. Harry Potter is a piece of literary work no matter whether any copy of it has been bought or not. It can be said that if no copyright owner had bought its copyright, it would not have been printed into so many copies in different languages, benefiting both adults and children. Hence, the copyright owner has gained his benefits in this process. Yet the question is, what is copyright? Copyright is like light shining everywhere. It can also be fire burning in hell. It is up to everyone's interpretation. That is to say, after acquiring the copyright, the copyright owner may, before its expiry, impose on different tiers ― I cannot help mentioning LEUNG Chun-ying again ― I should say different levels, not different tiers. They may impose restrictions on consumers and creators at different levels. Chairman, actually I do not oppose copyright. I only wish to ask why copyright can last such a long period. Why is it not just three days, three months or a year?

On the copyright issue, the amendments which we are debating today suggest that they can enjoy their copyright, but the community also needs some armour for protection. Copyright owners can be likened to being given a sword which they may draw anytime to exercise their right, taking civil action against me or lodging complaints against me, thus leading to criminal proceedings. We merely request some armour to protect the community as well. The Government says all right, it will provide us with six suits of armour, so we will get our armour. The question is, if there is a seventh offence, how will it be handled? The Government says it has no idea.

Our view is, no matter what approach is adopted … In the most outrageous example I have cited earlier, the British shipped opium to China, then invaded China and made China sign an unequal treaty. Actually I need not speak too much on issues relating to unequal treaties. Chairman, you have signed many contracts with various organizations. Take Kindle, the e-book reader, as an example. Do you know the content of the contract? You certainly have no clue, and you will not exploit your public office for private ends, making use of LEGISLATIVE COUNCIL ─ 4 February 2016 4919 your capacity as the President to request the Legal Adviser of the Legislative Council to examine Kindle's contract for you. Anyway, I suppose the Legal Adviser has indeed read the contract. She tells the Chairman, this is not good, this organization would take advantage of you. You have really fallen for their legal tricks. Chairman, in that case, may I ask you, can you exploit your public office for private ends, protesting in the name of the President of the Legislative Council that the contract concluded with the other party is unreasonable, infringing on the constitutional right under the Basic Law of Hong Kong, so it should not be enforced in Hong Kong? You cannot do so. This unequal agreement, similar to the treaty of the Opium War which was signed when the city was under siege in 1842, is beyond dispute.

Chairman, another point is, when all of us, including you and me, are phubbers who often use electronic devices to obtain information and forward such information to other people after digesting it, there will definitely be chances for us being sued by copyright owners. Hence, my view is simple. If any contract signed between copyright owners and us is inappropriate, the law should override such a contract. That means such a contract shall not override the public contract which we are discussing now. Why is this a public contract? Because we enact laws in the Legislative Council. We enact laws on behalf of all the people of Hong Kong. We have a constitutional right. The right of the subordinate laws made by us under the constitution (that is, the parent law) is irrefutable.

If someone now tells me that the laws of Hong Kong enacted by Mr Jasper TSANG and all the Members at Legislative Council meetings, or the laws drawn up by the respectable Basic Law Consultative Committee and the respectable Basic Law Drafting Committee can actually be overridden, then why were the laws enacted in the first place? For what do we sit here? Honourable Members and Mr LIAO, what are we doing here? It turns out that we have cast a sword to kill ourselves. Regarding the laws enacted by us, in the future people can say that given the long-standing spirit of contract which shines everywhere, all the 70 Members are idiots because we believe in mercantilism, and mercantilism stands for the spirit of contract. Buddy, I have done some reading. In mercantilism, the purpose of contracts is merely to reduce transaction costs, but now we are talking about public power. Public power means the laws enacted by us carry public power. Such public power seeks to protect all members of the public rather than …

4920 LEGISLATIVE COUNCIL ─ 4 February 2016

Chairman, as I also wish to protect their right to leave, I request a headcount of my own accord. That is how people like them, who will not listen to others, behave. As soon as they hear any unpleasant remark, they will leave their seats. Chairman, I request you to do a headcount … Now I wonder if they are leaving the Chamber …

CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(While the summoning bell was ringing, Mr LEUNG Kwok-hung spoke loudly in the Chamber)

CHAIRMAN (in Cantonese): Mr LEUNG Kwok-hung, please do not speak loudly in the Chamber.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

CHAIRMAN (in Cantonese): Will Members please be seated.

MR LEUNG KWOK-HUNG (in Cantonese): After we …

CHAIRMAN (in Cantonese): Mr LEUNG Kwok-hung, you should rise to speak only after I have called your name.

Mr LEUNG Kwok-hung, please continue.

MR LEUNG KWOK-HUNG (in Cantonese): Thank you, Chairman. I saw Honourable colleagues leave the Chamber to grab some bites. I know humans need food, but humans cannot live without spiritual food either, right? Just now I was saying that the right I need to protect is the people's right. Laws enacted by the people are laws derived from the constitution, the parent law, to protect the LEGISLATIVE COUNCIL ─ 4 February 2016 4921 people's right. It shall not be overridden by any private contract. On the mention of this point, Members thought it did not suit their taste, so they left the Chamber to grab some bites. Let me now give Members some spiritual food.

Simply put, my argument is as follows. When we discuss whether a contract should override a public or private law, there is actually an important principle. If I am speaking in a trade association or some other places, what matters most is commercial interests. However, now we are speaking in the legislature. Let me tell the Democratic Alliance for the Betterment and Progress of Hong Kong or the Hong Kong Federation of Trade Unions, their members and voters are also people I have to protect. If we state here today that private contracts or contracts between two parties can override other statutes, especially those enacted by the legislature, that just means scrapping the function of the legislature.

Chairman, I would like to cite an example. There is also a case of contract override in this Chamber. Our Rules of Procedure has set out the ways and manners of conduct of meetings. If a certain Member, considering that he has such a need, adopts a private contract other than this public contract to settle his own business, standing and talking outside the Chamber area, but he is still regarded as being present, such a case is contract override. Returned by elections conducted under supervision by the Basic Law, we enter this Chamber and have to abide by the Rules of Procedure here. Although I often do not abide by the rules, Chairman, my situation is not contract override. I did not sign any contract with anyone. I have only signed a contract with my voters. For this reason, I will receive their punishment.

Contract override suddenly arose. They invented a new contract there, regarding standing there as attending the meeting. It is the best example. If the two Honourable colleagues standing there yesterday were counted as Members who were present, the Chairman should warn and instruct them to return to their seats. Otherwise, I might as well attend the meeting by standing right before you now. If they were not counted as Members who were present, my request for a headcount was certainly justified. Was that not contract override? That is to say, a bunch of people used a private contract to override our public contract, right? For this reason, Members, I will not tolerate it here. They themselves wish to eat and shit there, but I am not that kind of man. I thank the Chairman for his wise judgment.

4922 LEGISLATIVE COUNCIL ─ 4 February 2016

DR PRISCILLA LEUNG (in Cantonese): Chairman, first of all, I have to say that I am not a member of the Bills Committee but over a period of time in the past, I did try very hard to listen to Members' reasons for not agreeing to these three amendments or why there have been such huge controversies when there was no filibustering.

The amendment under discussion now is about whether there should be statutory restriction on contract override. Mr Abraham SHEK has spoken at length on the freedom of contract earlier on. I think law students or members of the legal profession certainly know that the law of contract is taught in the first year and so, the freedom of contract is a very important basic concept. Particularly in a free market, great importance is attached to the principle of free will in signing a contract and the spirit of respect for contracts. On this premise, I believe in Hong Kong and especially in common law, contracts are given particular weight. Therefore, this is a basic concept.

However, I have also heard the views of Mr LEE Cheuk-yan in particular. I remember that he mentioned Cap. 344 of the Laws of Hong Kong yesterday, and several other Honourable colleagues also mentioned the provision in the existing Building Management Ordinance that the deed of mutual covenant can be amended only with a 100% consent. Therefore, they hold that insofar as the amendment of the Copyright Ordinance (CO) is concerned, we should consider whether an amendment should be made in advance to pre-empt problems of fairness arising from contractual terms between the financially weaker party and the financially stronger party.

Ms Cyd HO particularly mentioned one point, and I think the angle of her discourse is correct. She asked whether we are referring to a contract between two persons or one between a person and a corporation. If it is the latter, as an corporation often has enormous financial strength, I think this seems to be the cause of concern among Members. We have also dealt with many problems in this respect before. When it comes to Cap. 344, I believe many Members have plenty of experience up their sleeves for sharing. In a lawsuit against a large, financially strong corporation, there is certainly a wide disparity between the strong and the weak. Having said that, I still think that the amendments, including these three amendments ― we are discussing the first amendment ― are not ill-intentioned. First, what I find to be more bizarre the more I hear it is why everyone said right from the outset that the amendments proposed by the LEGISLATIVE COUNCIL ─ 4 February 2016 4923

Government will turn the CO into "Internet Article 23", thinking that the Government must not reject their amendments and stressing that they are indispensable wholesale. This is what I have heard. Your stance is very firm and so, you have to filibuster.

The question of contract override indeed involves a lot of philosophical issues in law. It also involves how we look at public policy. In fact, I agree that in some cases, there are often times when we must not allow in law … The strong and the weak may have entered into a contract, and from our participation in the work of many committees, we found that small fonts are used in many cases. This, we do understand. The use of small fonts has affected the general consumers as well. We had conducted an inquiry into the Lehman Brothers incident and found that the affected parties did not read the terms. But even if they did read them and knew all the words in Chinese and English, they still would not be able to understand what the terms mean. So, I can understand this situation.

However, with regard to the three amendments proposed by you, I think in respect of the restriction on contract override, is it so important that you would rather see the entire Amendment Bill overturned? I think it is not as important as you claimed. As for these amendments proposed by the Government, they have been proposed for eight years from the last Government to the current-term Government. These amendments can be improved, particularly as many exceptions proposed in the community have been provided for in express terms. My first view is that the amendments to this Ordinance, especially those proposed by the Government, have substantially improved the situation in many ways. Frankly speaking, we in the teaching profession always use a lot of copyright works for non-commercial purposes and now, exceptions are provided in many cases, and the use of copyright works for such purposes as parody, satire, and so on, that you have strongly demanded are actually covered. We should take the attitude of facilitating the passage of these amendments by all means.

I have listened attentively to Ms Emily LAU's speech earlier on. In fact, I somewhat appreciate that she did not take the attitude of stressing the indispensability of the amendments right from the beginning. I think no one has bad intentions on this issue, or else you pan-democrats would not have stayed here for four years. It is true that each country has its discussion about such 4924 LEGISLATIVE COUNCIL ─ 4 February 2016 provisions. Many pro-establishment Members and the Government also mentioned this earlier, and you also said that despite many rounds of debate, the United Kingdom, Australia and Canada still cannot draw a definite conclusion on this amendment insisted by you. Can you be more open-minded? In fact, the copyright industry should also be more open-minded. As for we Members, at least I am very willing to carefully listen to your views on the three amendments proposed by you. But in order to accomplish the task, both sides should be able to find a way out, and with regard to Ms Emily LAU's suggestion just now, I am willing to take it into further consideration. I am willing to further discuss on our side your proposal that acceptance of only one of the amendments will do. But there are two prerequisites, and I have actually started discussing this with colleagues. First, for matters originally settled in the Bills Committee, a consensus seems to be lacking among Members now and so, we can further discuss them. If Members said that they may not insist on the other two points provided that we accept the fair use doctrine, and if what Ms Emily LAU has said can reflect the view of most of you, I think it is worth exploring this proposal by, among other things, discussing it with the Government. After all, we all wish to get the job done properly. No one would wish to see the netizens suffer; no one would wish to go to court. When we discuss the second amendment, we can further look into the fair use doctrine which I think warrants detailed discussion.

However, as for the second prerequisite, when I heard of this proposal, I suggested that discussion be held on it but you had very strong views and insisted on filibustering to force us to accept your amendments. You said right from the outset that they are indispensable wholesale, insisting on proposing all the three amendments. This approach is like children stomping their feet on the ground to make a scene, insisting that we must accept your amendments, or else we would be forced to be stranded in the Chamber. This has aroused strong aversion among Members. I think you should reflect on yourselves. Why did we feel so resentful on that previous occasion? Because Dr Kenneth CHAN and several other Members (I forgot who they are) seemed to be saying that we in the Chamber were not giving them audience. In fact, we do hope that you can seriously return to the discussion of the amendments. It would be meaningful only if you could do that, and members of the public who are listening to us would find it meaningful, instead of hearing only the ringing of the bell all the time. But you …

LEGISLATIVE COUNCIL ─ 4 February 2016 4925

CHAIRMAN (in Cantonese): Dr LEUNG, you have spoken for more than eight minutes but you have yet come to the amendment under discussion now. Please speak on the subject as soon as possible. While I allow you to respond to other Members' speeches, you should speak on the subject as soon as possible and discuss the amendments concerned in this debate.

DR PRISCILLA LEUNG (in Cantonese): Chairman, in fact, I wish to say that contract override is, in my view, not that important and that whether Members support or oppose it should not be a worthy cause for filibustering or even overturning this Bill.

Insofar as contract override is concerned, it is difficult for many people, especially those who have received legal training, to accept that the freedom to set contractual terms can be reduced by the law, but to me, I think this freedom is not absolute. I think insofar as contract override is concerned, if there is really a chance for a wide disparity to arise between the strong and the weak, it is necessary to introduce amendments to prevent unreasonable arrangements. We do have these examples from the past. For instance, we had discussed these issues when examining the legislation on privacy. Therefore, I think enforcement is the critical consideration.

But honestly, I think they may not necessarily have to insist on the acceptance of this amendment first, for there are still controversies in society and in various countries and an absolute conclusion seems to be lacking. Therefore, I accept the Government's view that under the circumstance, why do we not follow those practices with greater certainty and endorse the proposed exceptions first, rather than entangling ourselves in the question of contract override, for it involves lots of philosophical contentions and has yet been entirely proven in various countries? Therefore, on this issue, I think it is unnecessary to insist on restricting the contractual spirit in law.

Chairman, I so submit.

MR MA FUNG-KWOK (in Cantonese): Chairman, in the debate on this subject spanning the last few days, I noticed that many pan-democrat Members support the provisions restricting contract override proposed by Mr Dennis KWOK. 4926 LEGISLATIVE COUNCIL ─ 4 February 2016

However, after spending a considerable amount of time listening to the speeches of Members who support the amendments, I have come to the conclusion that most of them ― I am not sure if it was their intention ― still showed an incomplete understanding of the significance of the Copyright (Amendment) Bill 2014 (the Bill) or made a distorted interpretation of certain terms which frequently appeared in the Bill. As far as I understand it, the ultimate aim of the Bill is actually protecting the works crafted by creators with industry. Undoubtedly, the Bill also provides many exemptions to balance the overall interests of society. Over 50 exceptions are already provided before this update of the existing Copyright Ordinance (CO), and the Government currently proposes to provide six additional exceptions. As the sector that the Bill seeks to protect, even the copyright industry accepts the recommended exceptions. Some of their potential rights will, in fact, be forfeited with each additional exception. They will certainly consider this issue carefully and meticulously with a view to balancing the interests of society while protecting their own interests.

In fact, is there anything wrong with creators trying to protect their own rights? Yet, the pan-democrat Members have spent a huge amount of time on making remarks which still centred around secondary creation, tertiary creation, and so on. We must respect the interests of creators and their rights they seek to protect. I would like to point out here that many pan-democrat Members who have spoken before me do not have a clear understanding of the relationship between creators and copyright owners and they often consider copyright owners as large consortia and large enterprises. In the speeches delivered by Mr LEE Cheuk-yan, Dr KWOK Ka-ki, Mr LEUNG Yiu-chung and Mr LEUNG Kwok-hung, I noticed that they had respectively described copyright owners as large consortia and claimed that copyright owners being unproductive would exhaust all means to exploit loopholes and reap without sowing and simply gain profits by purchasing copyrights. These Members also stated that they hope to protect netizens and members of the public, who are in a less favourable position, by providing them with the right to use copyright works and copyright exceptions.

I would like to point out that a creator is someone who has developed an original idea which can be expressed in various forms, such as words and sounds. A creator will receive income when someone supports, endorses or make reinvestment in his ideas for using the underlying works. Creators are usually LEGISLATIVE COUNCIL ─ 4 February 2016 4927 the first to reap returns if their works have generated revenue. When someone makes an investment, he will first pay remuneration to the creator before receiving revenue from his reinvestment. In many cases, the creator himself is also the copyright owner who receives royalties or revenue from other sources direct. Since the whole process involves various tiers, it is unfair to describe a creator as an enterprise or a consortium. For example, a composer, a lyricist or an author of a book is an individual entity who will directly gain profit from their creations. A film production company, however, has to arrange … in my experience, the company might need to sign 50 contracts and liaise with 50 creators to obtain the right of using all of their works through the licensing regime so that the company may earn profits by making further investment in production while in many cases, the company may suffer a loss.

Let us look at the situation in Hong Kong. Taking the Composers and Authors Society of Hong Kong Limited as an example, it is actually an agency with over 4 000 members ranging from Joseph KOO and James WONG, renowned composer and lyricist respectively who are gone, to unknown young creators or singer-songwriters who are still waiting for opportunities. Members of both categories want to earn profits and make a living through the copyright regime.

Furthermore, let us examine the case of the Hong Kong Reprographic Rights Licensing Society. Nearly all of its members are publishing houses operating as small and medium enterprises (SMEs) which represent a large number of young writers as well as experienced writers. When a book is published and its sales volume has reached a certain amount, the author can receive royalties directly after deducting the cost of investment.

As for film production, let us consider the situation of the Hong Kong Motion Picture Industry Association and the Movie Producers and Distributors Association of Hong Kong Limited. A majority out of some 200 of their members are SMEs which had made a huge contribution to the film industry in Hong Kong over the last two to three decades. However, I can tell Members that nowadays, most of their members can no longer invest in the production of films, and the comics and animation industry of Hong Kong faces the same situation. Therefore, copyright owners usually are not the direct beneficiaries as they simply represent the interests of certain people. Mr WONG Yuk-man, who was present just now, has also discussed this subject with me outside the 4928 LEGISLATIVE COUNCIL ─ 4 February 2016

Chamber earlier. He said he will publish a book and since he is the writer, copyright owner as well as the publisher, he can receive a reasonable return. Nevertheless, very few writers can get a reasonable return nowadays.

I would also like to point out that 90% of the record labels in the world are SMEs. Is there anything wrong with protecting their own interests and striving to reap returns from their investments? Why did Members describe their behaviour as collusion between the Government and the business sector as well as large consortia oppressing the netizens?

Besides, I would like to point out, as mentioned by many Honourable colleagues already, that the pan-democrat Members have a mistaken notion that the interests and stance of copyright owners conflict with that of netizens. In this regard, I would like to cite some overseas statistics: there are over 6 million netizens in Hong Kong and over 2 billion netizens in the world who use the Internet. With the Universal Copyright Convention … 94 countries have signed the convention and enacted relevant laws while among them, the United Kingdom has introduced provisions restricting contract override. The remarks made by Mr Dennis KWOK concerning his proposal for introducing a provision restricting contract override as well as the remarks made by other pan-democrat Members failed to convince me that, although 93 countries and regions did not consider it necessary to introduce provisions restricting contract override, there is a particular need for Hong Kong to do so. Members often ask why the copyright industry is so reluctant to accept the aforementioned idea, and I have explained the reasons earlier. As far as I know, instead of opposing the idea, members of the industry simply wondered why it is necessary to introduce a provision which may affect the entire ecology of the industry without having any detailed discussions beforehand. They are willing to have a discussion on whether such a provision truly serves the interests of society after the passage of the Bill.

Another important issue, as I have mentioned earlier, is that the arguments advanced by Mr Dennis KWOK and many other Members merely stated that the existing CO only protects large enterprises. However, as I have mentioned just now, most of the copyright owners or creators are, in fact, individual entities. Six million netizens comprise a large spectrum of people. Apart from netizens, many enterprises and organizations in the copyright industry are also copyright users. These amendments will affect not only certain netizens but also many enterprises.

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If the provision restricting contract override is included in the Bill, does it mean that a film production company can, upon obtaining the copyright of a novel after signing a contract with its author, produce various film adaptations of the novel? While the author demands, "The subject of my novel is very serious so I prefer the company not to use an exaggerated approach and include any humorous components in the movie", the film production company replies, "No way. As contract override is restricted by the law, we are free to choose any style of adaptation of the novel in the film". Do we actually want to create this kind of ecology? Citing this example, I just wish to explain to Members that these amendments may create many uncertainties or expected consequences. Under the current circumstance, I therefore seriously consider that the new provision should not be introduced precipitately to include in the Bill some components which have not gone through thorough discussion.

Moreover, many pan-democrat Members were worried that the exceptions would be inapplicable. I believe their concerns are mere speculation. I would like to point out that there is no evidence suggesting that contract terms overriding the laws are found in Hong Kong, especially in the copyright industry. Over 50 exceptions are provided under the existing CO. There is no precedent of a copyright owner imposing restrictions in contract terms without being considered and passing the test in court. In a highly competitive commercial environment, most of the copyright owners will simply try their best to make it easier for consumers to use their works instead of imposing various impractical restrictions which will affect their individual competitiveness. Currently, there are other ordinances, including the establishment of the Consumer Council, which enable consumers to lodge complaints if they have been subject to unfair or unreasonable treatment.

Lastly, even if some copyright owners have actually imposed restrictions by inserting unreasonable terms and initiated litigation, the Court will make a ruling on the case eventually. Such a ruling is actually restricting contract override, which means that if the contract terms conflict with the laws, the Court will not allow copyright owners to assure their unlawful rights, by inserting such contract terms arbitrarily. Therefore, a certain degree of protection is already available under the current system. Why is it necessary to include this provision in the Bill hastily now and even regard such a provision as the prerequisite for the passage of the Bill?

4930 LEGISLATIVE COUNCIL ─ 4 February 2016

I am deeply worried that if we introduce a legal provision which is not mature, comprehensive or detailed in response to a hypothetical question, it may give rise to unexpected legal consequences and create more problems than those we intend to solve even though we are well-intentioned. I believe we must adopt a cautious approach in enacting legislation since we are not doing an experiment.

Chairman, I so submit.

(Mr CHAN Chi-chuen raised his hand in indication)

CHAIRMAN (in Cantonese): Mr CHAN Chi-chuen, what is your point?

MR CHAN CHI-CHUEN (in Cantonese): I would like Mr MA Fung-kwok to clarify one of the points in his speech just now. When he was citing examples of creators who are gone, he mentioned Joseph KOO and James WONG. I know "Uncle James" has passed away but "Brother Fai" will hold a concert at the Hong Kong Coliseum at the end of February. I would like Mr MA Fung-kwok to clarify this point.

CHAIRMAN (in Cantonese): Mr MA, please explain what do you mean by "gone".

MR MA FUNG-KWOK (in Cantonese): I was referring to "Uncle James" who is gone and the famous composer Mr Joseph KOO.

MS CYD HO (in Cantonese): Chairman, let me do the explaining for Mr MA. Mr James WONG passed away, whereas Joseph KOO left Hong Kong to emigrate to another place. Therefore, in a way, he has also left.

Chairman, I hope you will give me some time. I wish to talk about the four-party meeting arranged by Mr CHAN Kam-lam because it is rather important, and it echoes the speeches delivered by a few Members this morning. I am not a sociable person. I seldom sit down and talk with Members of the LEGISLATIVE COUNCIL ─ 4 February 2016 4931 pro-establishment camp, but this morning, I sat down and had an unprecedented discussion with Mr CHAN Kam-lam for some 20 minutes. It is the first time since I entered this legislature and became his colleague. We sat down for a discussion together with the intention of resolving the problem and settling the conflict. In fact, last week I immediately responded to Mr CHAN Kam-lam, welcoming his assistance in convening the four-party meeting because we have no way to make appointments to meet with the officials. If we ring up the Chief Secretary for Administration, she will not entertain us, but if an invitation is made by Members of the pro-establishment camp to request the government officials to sit down for a joint discussion, the chances of getting it done will be much bigger. At this stage, I think if we can really sit down and reach a consensus together, thereby attaining an all-win situation after the Chinese New Year holiday following the Legislative Council meeting this week, it will be awesome. It can also indicate to the public that Members of the pro-establishment camp and the pan-democrat Members can actually engage in discussions together. Nevertheless, here I must also earnestly request the officials to come down off their high horses. When the Council can work flexibly with such softness, will the officials please do not hinder the progress of the matter just to vent their personal feelings. I would like to bring up this point to the Secretary first.

Chairman, next, I wish to respond to the speeches delivered by several Members this morning. I will start with the last one, so I will respond to Mr MA Fung-kwok's speech first. He said the purpose of copyright was to protect the original creators. Yet I have read the latest instant news about Sunny CHAN, the screenwriter of "Love Undercover". Chairman, have you watched "Love Undercover"? It is a funny story about a silly and dumb cop who cannot do anything well with her clumsiness, but since she is a new face, she is assigned to an undercover operation. This film had very good box-office receipts, and it seems the same plot was used to produce a film series with a total of three entries. Later, the copyright was even sold to an American film company. When American film companies acquire copyright from us, as in the case of "Internal Affairs", usually they will pay a handsome price, but how much did Sunny CHAN, the screenwriter of "Undercover Love", receive? His cheque was worth only US$10. Moreover, when he went to the bank to cash the cheque, the handling fee was as much as $100.

I certainly understand, as mentioned by Mr MA Fung-kwok just now, commercial organizations in the entertainment and performing arts sector need to dish out a lot of capital in their investment, and not every film will have good 4932 LEGISLATIVE COUNCIL ─ 4 February 2016 box-office receipts like "Undercover Love". Perhaps only one out of 100 films produced will succeed like "Undercover Love" or "Internal Affairs". Hence, the investment involved is similar to the tremendous resources which, as we have said, the Innovation and Technology Bureau needs to inject. In fact, there will definitely be a number of projects which do not yield any returns, so it is necessary to use the revenue from those films or projects which have yielded profits to cover other expenses. Consequently, the original creators may not be able to receive much money as their share. Nevertheless, even if no money is gained from the other projects yielding no returns, the original creator of a profitable project should not be paid only US$10, should he? What a meagre amount! For this reason, no wonder we have such a strong view on the failure of the existing copyright regime and the Copyright Ordinance to protect original creators.

Just now Mr MA Fung-kwok also mentioned that the existing law had already provided some 50 exceptions. Actually his figure is short of the actual figure because the Secretary said there were 62 exceptions in total. However, as I counted in my speech a week or two ago, there are only three exceptions available for individuals, while the other exceptions are only applicable to public organizations, for example, for the Legislative Council business, the Government's administration and the judicial procedures. Concerning the exceptions for individuals, I am very willing to repeat them here. The first exception for individuals is watching videos at home. The second one is watching video recording of television programmes at home. The third one is listening to instant news such as traffic information in cars. These are the exceptions. The Secretary is welcome to find a few more. The fourth exception which I can barely manage to find is education and study.

Having read the principal Ordinance from the beginning to the end, I can only find these four exceptions. In my last speech I already counted them, and I also asked the Secretary if he wanted me to count them again. Hence, I wish to clarify here that the law actually offers very few exceptions for individuals. Moreover, these exceptions cannot cater for the newly added communication right which we are discussing now. Those several exceptions mentioned by me just now merely focus on certain old-fashioned home appliances, such as watching video discs and films with video recorders. They have nothing to do with what we are talking about right now, that every one of us may infringe on the special communication right when we surf on the Internet with the mobile phones in our hands.

LEGISLATIVE COUNCIL ─ 4 February 2016 4933

Besides, Mr MA mentioned just now that at present, there are 90 countries which do not have any limitation on contract override. Only the United Kingdom has enacted such a provision. Why should Hong Kong immediately follow the British practice and act as a guinea pig now? Actually other Members from the legal sector can speak more on this point later. This morning, a Member mentioned that the directive issued by the European Union (EU) on copyright in information society does not carry any contract override provision ― it is certainly available in the United Kingdom ― but the EU or other jurisdictions such as Australia restrict contract override in different laws. Although they did not formally put it in black and white in their copyright law, this concept does exist.

Chairman, next, I am going to respond to Mr Martin LIAO's speech. As a matter of fact, I consider this morning's debate quite good because many Members took part in the debate on the provisions, giving their responses based on the actual provisions. Mr Martin LIAO said freedom of contract should be respected. If there is really anything which must override freedom of contract, it must be based on important public interest. After hearing his point, I immediately took out the Basic Law for a look. Of course, our standpoints and perspectives on values are different. I respect that, but I still immediately took out the Basic Law for a look. Chapter III of the Basic Law, "Fundamental Rights and Duties of the Residents", consists of more than 10 articles from Article 24 to Article 42. The Basic Law sets out its contents by starting with the most important subject. Chapters I and II are, as a matter of course, about the relationship between the Hong Kong Special Administrative Region and the Central Authorities, representing very important constitutional principles. Chapter III is about the fundamental rights of the residents, in which Article 27 provides that Hong Kong residents shall have freedom of speech, of the press and of publication. Given its vital importance, this right is set down in the very early part of the Basic Law. Where are the articles about leases set out? These articles are set out in Chapter V "Economy", in which Section 2 is "Land Leases". Of course, before that, there are articles about finance, monetary affairs, trade, industry and commerce, which we may interpret as the need to respect freedom of contract. However, compared with freedom of speech and of expression, at least I personally think, and I believe many people of Hong Kong think alike, that freedom of speech and of expression is more fundamental than freedom of contract. Indeed, this is also demonstrated by the layout of the Basic Law.

4934 LEGISLATIVE COUNCIL ─ 4 February 2016

Of course, it does not mean we may ignore the freedom of contract in the business world. As pointed out by a Member, if the law can override contracts at every turn, businessmen will not come here to make any investment. However, as far as I understand it from the perspective of free economy, if the Government imposes more statutory restrictions, investors will all the more be deterred. On the contrary, if the Government's legislation is more open with fewer restrictions and less protection for vested interests, it will be more attractive to new investors. If our laws only protect the existing parties with vested interests, it will be unable to encourage new investors to come here. In fact, ever since its inception, Hong Kong has worked according to this principle. That is why we adopt a low tax regime with low tax rates. Whenever we propose raising the tax and request universal retirement protection, the Government will emphasize that Hong Kong is an open and free place which adopts a low tax regime with minimum restrictions. Only then can economic development be sustainable.

Following the same principle, if a place imposes fewer restrictions and offers more protection, it will be more attractive to investors. That is indeed the case for copyright, though the perspective and entry point may be different. The copyright exceptions which we are discussing now include restricting contract override. That is to say, do not use legislation to protect the existing business stakeholders on every occasion. We need to be more open so that the development of the whole creative industry in Hong Kong can be more vigorous. Another point is, Hong Kong has always been a free port which levies very few tariffs. That is why it became a prosperous entrepot. It has been so from the past up to the present.

Back to economy and trade. Actually the business sector is not afraid of legislation. No matter how complicated the wording of the legislation is, the most important thing is that it must be clear and easy to understand. Only then will there be stability and predictability. Countries around the world have put numerous laws in place. There were 20 000 to 30 000 laws in Germany in 1989. As some 20 years have since passed, now there are probably more. However, the business sector there has not been hindered from making investments because there are too many laws. As long as the legislation is clear, easy to understand and predictably stable after enactment, the business sector will have nothing to fear. They will change their mode of operation in the places concerned to LEGISLATIVE COUNCIL ─ 4 February 2016 4935 facilitate their business operation. What are their greatest fear? They fear most that after the introduction of legislation, the authorities will interpret the law casually, enforce it at will and adopt double standards as in the case of LEUNG Chun-ying, who infringed on copyright and still has not paid all the fees, yet no legal action will be taken against him. This is the business operators' greatest worry. Is it true that whatever the officials have done, they will not be prosecuted, but if members of the general public, including the business sector, or the second and third sectors of society break the law, the Government can invoke the law to prosecute them? This is the greatest fear of the business sector.

I hope I can succeed in convincing Mr Martin LIAO here. As regards the contract override provisions in other jurisdictions, Mr Albert HO will expound on them later. Then there were the short speeches delivered by Mr CHUNG Kwok-pan and Mr James TIEN this morning. They said there was such restriction only in the United Kingdom, while there was not any in the EU, and this kind of restriction was detrimental to business interests. I hope the response given by me to Mr Martin LIAO just now has already answered this point raised by the two Members of the Liberal Party.

Lastly, Chairman, I would like to point out that there are indeed countless examples of unfair and unreasonable contracts all over Hong Kong. Even though the Chairman may accuse me of repeating Mr Gary FAN's argument, I still wish to add a point, since I really need to criticize the Legislative Council Website. The notice on this Website states that by accessing the Website, you agree to the terms of this notice. Even if you want to leave, it is already too late. As soon as you enter the Website, without clicking on the "Agree" icon, you are already taken as having accepted the terms. I hope the Secretariat can deal with this. Despite the provision of various exceptions in respect of the operation of the Legislation Council, I hope we will be reasonable and not too overbearing.

Moreover, I would like to throw down the gauntlet to Members. When we watch a live broadcast online, an application called Silverlight is used. Have Members read the terms of Silverlight? If we do not accept this application, we will be unable to use our mobile phones to watch the live broadcast. If all of us may be trapped by this kind of unreasonable contract, why do we not remove these unreasonable terms to benefit the general public? Thank you, Chairman.

4936 LEGISLATIVE COUNCIL ─ 4 February 2016

CHAIRMAN (in Cantonese): The meeting is now suspended. Will Members please return to the Chamber at 1.30 pm.

12.57 pm

Meeting suspended.

1.30 pm

Committee then resumed.

(THE CHAIRMAN'S DEPUTY, MR ANDREW LEUNG, took the Chair)

(Mr CHAN Chi-chuen stood up)

DEPUTY CHAIRMAN (in Cantonese): Mr CHAN Chi-chuen, what is your point?

MR CHAN CHI-CHUEN (in Cantonese): Deputy Chairman, I request a headcount.

DEPUTY CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(While the summoning bell was ringing, Mr Albert CHAN stood up and spoke loudly)

LEGISLATIVE COUNCIL ─ 4 February 2016 4937

DEPUTY CHAIRMAN (in Cantonese): Mr Albert CHAN, the meeting is in progress now. Please keep quiet and sit down.

(While the summoning bell was ringing, some Members returned to the Chamber but not to their seats)

DEPUTY CHAIRMAN (in Cantonese): Will Members please return to their seats.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

DEPUTY CHAIRMAN (in Cantonese): Dr Helena WONG, please speak.

DR HELENA WONG (in Cantonese): Deputy Chairman, I speak in support of the Committee stage amendment proposed by Mr Dennis KWOK and supported by the Bills Committee in relation to restriction on contract override. The amendment seeks to ensure that the six new statutory exceptions in the Bill will not be restricted by contracts signed by netizens for use of online services in such a way that they cannot exercise their rights, thus literally invalidating the six exceptions. As the protection accorded to netizens by the Bill may be rendered void by contract override, netizens are very worried that once the Bill is passed, there will be an impact or damage on Internet freedom or secondary creation.

In his speech on the resumed Second Reading debate on the Copyright (Amendment) Bill 2014 on 21 January, Secretary for Commerce and Economic Development Gregory SO said that after careful consideration, the Government considered this amendment proposed by Mr Dennis KWOK unacceptable. I feel deep regret about such remarks from the Secretary. At the meetings of the Bills Committee or during the resumed Second Reading debate, the Secretary repeatedly pointed out that freedom of contract plays a vital role in Hong Kong's free-market economy and it remains a cornerstone in the law of contract. However, I wish to point out that freedom of contract is by no means absolute. None of the two parties to a contract can arbitrarily enter into the contract while 4938 LEGISLATIVE COUNCIL ─ 4 February 2016 flouting the laws. If Members say that as long as both parties so agree, they can arbitrarily enter into a contract, then the slavery system can also be turned into a valid contract, thus circumventing the existing legal framework. In the law of contract, a contract is a legally binding agreement reached through consensus between two or more parties. Examples in daily life include sale and purchase agreements, insurance contracts and tenancy agreements. These contracts establish a relationship in law, namely the creation of legal rights and obligations through agreement between the parties thereto.

A contract must be entered into by and between two or more parties. I believe Members and the attending officials also understand very well that, in daily life, when consumers purchase services or products, they are often bound by the terms and conditions set by traders. Recently, I have also signed several contracts because my office needed to renew contracts with telecommunications companies for Internet and phone services. Before signing the contracts, I had to expressly accept those contract terms densely printed in tiny fonts, otherwise there was no way to renew the contracts.

Consumers are often bound by the terms and conditions set by traders but they will utterly have no opportunity to discuss those terms and conditions with the traders. They can either sign the contract or not, but failure to sign the contract will result in unavailability of services from the company. In fact, consumers have no choice at all. Their choice is merely which company to patronize, but every company requires them to sign a contract. In the process of signing these contracts, the consumers and the service providers are not on an equal footing. Actually, the two parties are not just in an unequal status, but even arguably in a relationship marked by significant disparity. We, as lawmakers sitting here, must consider this Bill from the standpoint of protecting consumers' interests …

DEPUTY CHAIRMAN (in Cantonese): Dr WONG, I wish to remind you that the Committee is discussing the amendments to the Copyright Bill rather than consumers' interests.

LEGISLATIVE COUNCIL ─ 4 February 2016 4939

DR HELENA WONG (in Cantonese): Deputy Chairman, I have all along been speaking on the amendments.

DEPUTY CHAIRMAN (in Cantonese): There is no copyright restriction between Internet service providers and consumers, so please come back to the question of this debate.

DR HELENA WONG (in Cantonese): Deputy Chairman, I am going to explain to you the relationship thereof. As we have to discuss contract override, I must first talk about contracts. I mentioned just now that consumers have no bargaining power at all and Members must examine the Bill from the standpoint of protecting consumers' interests. Regarding the current efforts to amend copyright laws, we have to protect the interests of copyright owners on the one hand, but also consider whether the Bill provides adequate protection to netizens on the other. We have been filibustering for so long just to get this point across. After all, how can we ensure that netizens' freedom of speech and creation will not be undermined because of the legislative amendment?

Now, the Bill proposes to introduce fair dealing exceptions for works of parody, satire, caricature or pastiche, use of copyright works to comment on current events and quotation of copyright works. We understand that the six new exceptions in the Bill are an improvement over the existing legislation. We have no doubts about it, but the question is: upon the introduction of these six exceptions, can netizens really do the acts that are permitted? We are worried that Internet service providers may set out some details in the contracts to override the six new exceptions proposed in the Bill, thus placing netizens in breach of contract and holding them accountable for civil liability. As the focus of copyright owners is, of course, on maximizing profits, they will exhaust all means to fight for the best interests of their copyright works. Copyright owners definitely have incentives to draw up contracts …

(Mr CHAN Chi-chuen raised his hand in indication)

4940 LEGISLATIVE COUNCIL ─ 4 February 2016

DEPUTY CHAIRMAN (in Cantonese): Mr CHAN Chi-chuen, what is your point?

MR CHAN CHI-CHUEN (in Cantonese): A Member is talking on her mobile phone in the Chamber. The President did say that this is not allowed.

DEPUTY CHAIRMAN (in Cantonese): Miss CHAN Yuen-han, please do not talk on your mobile phone, and return to your seat.

Dr Helena WONG, please continue.

DR HELENA WONG (in Cantonese): Deputy Chairman, copyright owners definitely have incentives to draw up contracts. As the saying goes, "The devil is in the details." Before being urged by agents or sales promoters to sign contracts, consumers have no time at all to read those terms and conditions of use, which are often densely printed. Copyright owners may set out various provisions in the terms and conditions of use to limit the exercise of some acts of secondary creation that are originally permitted by law. If netizens always engage in online dissemination of altered pictures, cover songs, and so on, to express their concerns about certain incidents, they may inadvertently break the law at any time. This type of works that mock current affairs often arouses the interest of a great number of netizens in reproduction, viewing, giving "likes" or sharing. Some online creation groups, such as Mocking Jer, adapted Andy LAU's song Catching Happiness Alone to Go Shopping Every Day. I do not know if Members have listened to it, but I believe it must be very popular on the Internet.

The aforesaid secondary creation seeks to describe how members of the public continue to protest in the form of the so-called "shopping" or "gau wu", so as to express their discontent with politics, after the clearance of the occupied areas by the Police. By adapting Andy LAU's song Catching Happiness Alone, netizens vent their discontents over the Police responsible for the clearance, because the so-called "kind mother" would also beat people with a police baton. Do you know the hit rate of this video on YouTube, Deputy Chairman? There are already over 800 000 hits.

LEGISLATIVE COUNCIL ─ 4 February 2016 4941

While YouTube earns revenues from advertising based on hit rates, copyright owners cast their focus on the economic benefits generated by this secondary creation video. Therefore, copyright owners definitely have incentives to enter into contracts with YouTube, requesting YouTube to impose restrictions on the works shared by users on its platform, including those currently exempted under the Bill. It is foreseeable that if the contract override provisions cannot receive support from Members, the proposed copyright exceptions will exist in name only.

Rightly as the Secretary said, the six exceptions should be adequate to protect the public, but I think they will ultimately become castles in the air, unable to protect the public at all. Having regard to these factors, I support the amendment proposed by Mr Dennis KWOK. Members should also reconsider the issue of the so-called "contract override".

Regarding the inclusion of contract override provisions, the Australian Law Reform Commission (ALRC) has in fact made similar recommendations. The ALRC Report 122 published in November 2013, entitled Copyright and the Digital Economy in English and "版權與數碼經濟" in Chinese, has mentioned the issue of "contract override", but the term "contracting out" is used in Australia. The term "contract override" refers to an agreement between owners and users of copyright material that some or all of the statutory exceptions to copyright are not to apply. For example, the user agrees not to use copyright material in ways that would constitute fair use or fair dealing. According to this definition, if legislation permits contract override, the six new exceptions granted by the Bill will exist in name only. If the Secretary or Members really consider it necessary to provide for fair dealing exceptions for the purposes of parody, satire, caricature, pastiche, commenting on current events and quotation, I do not understand why the Government and the pro-establishment Members do not seriously consider accepting the amendments related to restricting contract override.

On the matter of restricting contract override, the Intellectual Property Department has responded in writing, "Under the current regime, individual users may enter into contractual agreements with copyright owners on terms mutually agreed, for example, to license the use of copyright works for specific purposes. It is possible that the owner may, at the same time of granting the licence, secure an undertaking from the user not to engage in certain permitted acts, but only for a consideration that the user is willing to pay and the owner is willing to accept".

4942 LEGISLATIVE COUNCIL ─ 4 February 2016

It can thus be seen that the Government also agrees that copyright owners can subject netizens' secondary creations to regulation through private agreements or contracts. Even if the six new exceptions proposed in the Bill are passed, if contracts prevail, members of the public will not be able to enjoy adequate protection (The buzzer sounded) …

Deputy Chairman, I support this amendment.

DEPUTY CHAIRMAN (in Cantonese): Dr WONG, your speaking time is up. Please stop speaking.

MS CLAUDIA MO: This is a debate and I feel obliged to speak again about what Mr Abraham SHEK has expressed earlier today. Mr SHEK asked, "Did you not worry, guys, that the Court would tend to protect consumers in general?" I think no one would particularly dispute that statement. The fact is consumers are consumers. In the spirit of common law, what is not disallowed is allowed. We are all ordinary consumers here. Why would we need to be taken to court to explain ourselves for something we thought we had done in a perfectly legal and perfectly proper manner, and that we were innocent? But in the present case, you may be taken to court for something you thought you have not done, and this is the central point of the argument here. Why should a consumer who has been behaving very nicely be suddenly turned into the accused, the defendant?

Another argument by Mr SHEK goes so far as saying that the effect of the amendment of Mr Dennis KWOK could amount to harming the separation of powers. This is really nonsense. What he is talking about basically is that the executive and the legislative powers should not and should never harm or tread upon powers that should be vested with the Court. But what Mr SHEK has failed to understand is that the Court is there to institute prosecution against the bad and protect the good. The Court is never there to institute prosecution against the good, let alone persecuting the good. Am I right? A perfectly innocent man, or at least the defendant as he is, should be taken to court for the Court to decide whether he may be ignorant though he is innocent. That is the argument here, and there is nothing to do with the separation of powers.

LEGISLATIVE COUNCIL ─ 4 February 2016 4943

Another colleague, Mr MA Fung-kwok, has quite rightly said that in the protection of consumers' right, one can always go to the Consumer Council. This is quite right indeed except that you have to do it on your own, you have to act proactively to get your rights protected. Again, is that fair? I would also like to tell Mr MA Fung-kwok of a particular case I was reminded of just now if Mr MA Fung-kwok is really so keen on protecting copyrights, especially those in the entertainment arena. There is a popular local movie titled "新紮師妹", which I think is called "Love Undercover" in English. The screenwriter of this very popular movie is Sunny CHAN, and I assume she is a female screenwriter. She actually told the press last December that the copyright of that movie had been sold to Hollywood. She said what she received as the screenwriter of the movie was US$10. Is this what we mean by copyright protection? Or is this indeed "contract override"? What exactly this screenwriter has signed with the movie producer may be contract, and so on, and so forth.

Come back seriously to what we are talking about here. In life, we talk about freedoms, freedoms of all kinds. We normally, or I normally, pay a lot of attention to freedom of the press, freedom of speech and expression, and so on. Most people, I should assume, would not particularly think of freedom of contract. It just does not occur to us if we are not in that sort of business, say the copyright business, for example. One would normally assume that "let us do something together" or "let us get this done" will constitute a contract between you and me. Under which, we agree to do what is going to be done on conditions of "such as and so on". Even the agreement is verbal, it should take legal authority. We are talking about consent between adults. It is fine. This is the reason at the time towards the end of the Bills Committee that I still had reservations about Mr Dennis KWOK's amendment personally. I thought that his amendment might infringe my basic right to enter into agreements and contracts with other people. How could he say that a law should be made to override my personal wishes and things? What I had failed to think thoroughly at the time were public interest and public policy. If it is about private contracts, it is fine. In cases like I lend you some money at some interest rate, say 5%, it is alright, for the issue involved is merely between two parties and is absolutely private. However, when it comes to the huge public arena and the public domain, where should the line be drawn about what is private and what is public?

4944 LEGISLATIVE COUNCIL ─ 4 February 2016

Anyway, having given the issue a lot of thought, I am now prepared to say what I failed to say towards the end of the Bills Committee sessions. I am not blaming the Chairman of the Bills Committee for not giving me time to do so. No, I am not saying that. I am stressing that I was not sure about that at the time and I had thus refrained from talking. For I always follow one journalistic rule, that is, if in doubt, leave it out. If I do not know anything, I will keep my mouth shut about that, and if in doubt, I will check it out. I did and I have done so concerning the present issue. So, here I am talking about what I want to really add to the present debate.

Since then, I have done quite a bit of research. Of course, you all knew that I am not anyone by legal training and I have nothing to do with the legal trade, but I do read and read quite a lot. I happened to find the following line in an article seriously answered my question. The particular article is from Yale Human Rights & Development Law Journal of the Yale University. Do not worry, I am not going to read out paragraph after paragraph, I will just read out two lines.

The first line is actually a question and I quote: "Can a right …" ― a basic right, the right to contract, contractual spirit we are talking about ― "Can a right be both fundamental and subject to a fairly large amount of arbitrary regulation?" That is exactly my question. It is about basic human right, the right to contract, and the answer to this question is: "It is clear that the right to contract is subject to some limitation." It is also stated in the ruling of a court case in America that, "Neither property rights nor contract rights are absolute … Equally fundamental with the private right is that of the public to regulate it in the common interest …" ― what I normally call public interest.

Now, ladies and gentlemen, I would claim I am a keen reader, although unlike the education chief who boasted that he would read up to 30 books a month. I would say I read one book a month on average. This book in my hand is often used for animal rights campaign and I always quote from it. I actually learn the word "oomph" from this book ― Marley & Me. I have double checked the copyright stipulations of the book, and it is stated that "all rights reserved". Of course, nobody is quite sure what this "all" is referring to in the phrase "all rights reserved". I do not know if I have made myself very clear that I tend to quote this book very often either physically in real life or in the cyber world. The copyright stipulations also say: "No part of this book may be used or LEGISLATIVE COUNCIL ─ 4 February 2016 4945 reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews." So, I would assume I am quite safe with my quotations and other things.

However, for another book, I am not so sure. I may need to check with Mr Dennis KWOK, my most likable colleague here, whether I have done anything wrong legalistically, or technically at least. This book is called Red Herrings and White Elephants. I used this book very often in the past 10 years for teaching English, for I am an English teacher as well. This is especially so when "white elephant" is such a popular phrase these days. Yet my concern is that I am not only quoting from the book, I have also scanned pages of the book. In fact, I have a little video clip of the book to teach children English and to arouse their interest, so as to teach them what does "white elephants" mean and what is meant by wasting money, and so on.

Again, I double checked the copyright stipulations of this book. Let me read it out now. Mr Dennis KWOK, you must listen to it. It is stipulated that "All rights reserved. No part of this publication may be reproduced, stored in a retrieval system". It mentions "retrieval". I do have that online clip of mine, so technically I could have or must have infringed the copyright of this book. Have I really done so? I am not sure, and I would need to seek legal consultation and legal opinion on this matter. Then, I told myself, "Maybe I am just getting too uptight about the 'contract override' business. No one is going to take this to court, so what am I making all these remarks and the fuss for?"

Now, maybe Members are thinking that in modern times, all those copyright stipulations would have become more lenient. As in the case of the first book, a novel ― it is not a novel, Marley & Me is about a dog's meaningful life ― the stipulations are quite lenient, I thought, in my understanding of the copyrights of books.

This book I am holding is the newest one I have read and is given to me by a friend of mine. This book, Thinking, Fast and Slow, is written by the Nobel Laureate, Daniel KAHNEMAN. It is a quite meaningful book and I use it to teach politics. Surprise, surprise! The line on copyright stipulation actually says, "Except in the United States of America, this book is sold subject to the condition that it shall not, by way of trade or otherwise, be lent, re-sold, hired out …" Now, I cannot even lend the book to anyone, what is this all about? 4946 LEGISLATIVE COUNCIL ─ 4 February 2016

This is more than unsettling. For this reason, we need to propose certain amendments to assure the rights of consumers (The buzzer sounded) … and that of the readers of books …

DEPUTY CHAIRMAN (in Cantonese): Ms MO, your speaking time is up, please stop.

DEPUTY CHAIRMAN: I would like to point out to the Honourable Member that you might have breached the journalistic principle. The Court of Hong Kong does not institute prosecution. Whether to prosecute someone and put him on trial in court are matters for the Government.

MR ALBERT HO (in Cantonese): Deputy Chairman, in this debate session this morning, two or three Honourable colleagues talked about the four-party meeting. Please allow me to briefly talk about my views. I consider the four-party meeting absolutely necessary. For conflicts or disputes involving the interest of different parties where a suitable balance has to be struck, all parties concerned should definitely sit down and talk. If we are willing to talk, we should do so until a result comes out of such discussion. Of course, it has to be done in good faith, meaning every party has to be reasonable and sincere in the discussion.

Now as Mr CHAN Kam-lam has made a proposal on behalf of the pro-establishment camp while Members from the democratic camp also want to lend it their support, and I believe in the copyright sector, representatives of copyright owners as well as users (the so-called netizen representatives) are willing to talk, if the Government refuses to take part or give a proactive response, it is failing its duty. I recall that in making my first speech in the Second Reading debate I said discussion was necessary and the Government should not be rigid like an iron plate. Because of this, the Secretary ridiculed me and asked if I could speak for the pan-democrats. Certainly, no one can state a stand on behalf of everyone here. But I just sincerely wished to express my view that we should find a way out through negotiation on these issues. Deputy Chairman, as regards the four-party meeting, I shall stop here.

LEGISLATIVE COUNCIL ─ 4 February 2016 4947

I will first respond to a few viewpoints raised by Mr MA Fung-kwok in his speech this morning. He got straight to the point and said that as exceptions introduced in the Copyright (Amendment) Bill 2014 (the Bill) would already exploit some of copyright owners' rights, it would be unfair to still propose contract override provisions. I will focus my speech on the idea of "exploitation of some rights". As a matter of fact, the drafting of the Bill itself is an exploitation of netizens' rights which are currently not prohibited. Right now there is no law forbidding streaming broadcast but the Government seeks to establish communication rights on the Internet through legislation. For this reason, the Government is the one exploiting citizens' rights. The Government should not frame it in such a way that the current request for the inclusion of many reasonable exceptions is an exploitation of copyright owners' rights. It totally puts the cart before the horse.

Second, Mr MA also mentioned that those who will benefit from contract override are not only large corporations and business moguls. Frankly, how would the parties knowing how to draw up this kind of contracts not be large corporations and business moguls? Could it possibly be that Mr WONG Yuk-man wants to publish a book and will request a contract? Of course not. Indeed, many of us small-time writers do not mind other people making "pirated" copies of our published books. The most important thing is our works are read.

However, the biggest issue right now is only large corporations can draw up such complicated contracts. Most of the time, when a creator is not yet known or does not know how successful his or her own works will be, he or she has already sold off the copyright of his or her works, thus enjoying limited benefit derived from copyright. It is a definite. How will people in this industry not be clear about this? The greatest beneficiaries are the corporations and enterprises purchasing the copyright. But it is fine because it is a free world. If you are willing to sell your copyright of course you are free to do so. However, please do not claim that the contract override principle does not benefit large corporations and enterprises.

Third, Mr MA Fung-kwok said the original creators can sell their works to large corporations but some unfavoured works will be used under exception such as parody, satire and secondary creation. But I have to tender this reminder, that is, the Court, when adopting the principle of fair dealing exceptions, needs to 4948 LEGISLATIVE COUNCIL ─ 4 February 2016 consider whether the work is created for profit-making. It is important to carefully read the relevant law. If large corporations or enterprises make profits on secondary creation, it is of course not acceptable. But if it is not for profit, why does it matter? I believe it does not matter. This argument, therefore, is not valid. I hope people can discern clearly the unfair aspect of contract override and our arguments for restricting it. Some Honourable colleagues have already spoken on it and I will try not to repeat but to reiterate a few key points.

First, it protects our most basic rights and interests. Many Honourable colleagues have mentioned this point already. The Basic Law stipulates that Hong Kong residents enjoy freedom of speech, freedom of expression, freedom of communication, freedom of creation and freedom of publication. These are essentially basic principles underlying the improvement and growth of our society. We must preserve such a social milieu.

We notice that nowadays secondary creations do exist in society, which are not entirely copycats or made to exploit the original creators. No. Indeed secondary creation opens up a new horizon. "Long Hair" put it very well today. He used Romance of the Three Kingdoms as an example and asked if the novel is a plagiarized version of Records of the Three Kingdoms. Definitely not, but Romance of the Three Kingdoms does make use of some historical information from Records of the Three Kingdoms. Therefore, secondary creation opens up a new horizon. We have to give these rights reasonable protection, particularly as many people engage in public affairs by means of the several exceptions currently under discussion, including parody and satire, and they are not after profit. Members need to know that it is not acceptable to make profit from these exceptions ― or should I say it is most probably not acceptable. As a result, people need to understand that such rights need protection.

Second, if the Government allows contract override, the situation will get very complicated. How complicated? The handling of each case requires not only consideration of the law but also scrutiny of the contract. I have pointed out in my first speech that the British Library had conducted a study and found that, say 100, contracts were signed in relation to copyright issues, each of which contains totally different exceptions to restrictions. What can be done and what cannot be done are not determined by the law but by how many exceptions are allowed in each contract.

LEGISLATIVE COUNCIL ─ 4 February 2016 4949

Imagine how serious the situation will become. For example, if you have signed 100 contracts, you will have to get a lawyer to read them in detail to ascertain what can be done and what cannot be done. How can an ordinary man in the street deal with this? They have to not only consider the complicated Copyright Ordinance ― now with amendments ― but also read the contracts. Therefore, many experts have pointed out that it will make the law even more complicated as various types of commercial contracts will come into the picture.

Third, we need to examine it against a very simple principle of fairness. If the entire society approves of, through legislation, some essential exceptions, which give protection to people and are in line with public interest, why do we allow certain people who have greater bargaining power, financial strength and authority to coerce others into signing a contract and giving up certain rights conferred by the law? It should not be the case. If today we pass the Bill to confirm the legitimacy of these exceptions which are in line with public interest, why do we allow them to be taken away moments later in the form of contracts? We have cited so many examples to illustrate that public policy prohibits the so-called contracting out, that is, entering into a contract outside the law. It is fair. We have discussed this matter for such a long time and the inclusion of these exceptions represents a reasonable balance.

Certainly we will also adopt the fair use doctrine to enlarge the scope of fair dealing. It is to refer the case to court which will consider a few more principles. We have mentioned that those four principles have already been included in the legislation. What indeed is such a big deal? We also need to note that the average man in the street will not casually take this kind of issues to court. Who has the money to pursue a lawsuit? As a Member I have helped many ordinary citizens solve their problems. Fearful, they all told me they had received a lawyer's letter and consulted me about what to do. For example, some of them bought a product which was similar to one made by Louis Vuitton or Prada and asked what they should do. They bought it for just $200, but products of these brand names cost more than $10,000 or $20,000 each. How could they look similar? Every year I would handle many cases like this one.

Let me tell Members that the chief executive officer of Louis Vuitton just made a trip to the Legislative Council to meet with me to discuss these matters. He said it is right for me to help ordinary citizens because they did not mean to break the law. They have no thorough understanding of complicated copyright 4950 LEGISLATIVE COUNCIL ─ 4 February 2016 issues and just order the goods from Mainland factories. Hence, often I tell them to stop such sale and refrain from engaging in a lawsuit. Why would they want to get involved in a lawsuit? Then they should inform the other party the source of the goods. He said what we do is correct and we should share with other Honourable colleagues that when dealing with this kind of issues it is important not to persist but disclose the source. As long as they stop selling such goods charges will not be pressed. I said there is no use pressing charges as average people are not rich at all. The best they can do is to surrender the whole stock, isn't? Therefore, these big companies also understand that average people will not pursue a lawsuit with them; neither do they have the means to. In fact, I find some borderline cases and some designs are a far cry from the products of brand names like Louis Vuitton and Hermès, having just a few spots in common, which do not suffice to establish a case. What is the point of engaging in a lawsuit?

Therefore, if we all understand this point we will not let average people easily take any case to court ― it can be quite complicated just meeting a lawyer. They just happened to run into a Member who understands these problems so they can make enquiries and seek legal advice. Otherwise they would have no clue about what to do. We need to understand this.

Lastly, I would like to come back to Mr Martin LIAO's speech made today. Though I was not present this morning, I learnt from other Honourable colleagues that he had revisited the Unconscionable Contracts Ordinance. In ruling a certain contract unconscionable, the factors to be considered are fairly complicated, a fact that I am sure Mr LIAO is aware of. The Ordinance provides that the Court will consider an array of factors. I am going to simply read them out: (1) "the relative strengths of the bargaining positions of the consumer and the other party", which is easy to understand ― for example an ordinary man does shopping at a department store and their strengths are poles apart; (2) "whether, as a result of conduct engaged in by the other party, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the other party", which is not too difficult to comprehend; (3) "whether the consumer was able to understand any documents relating to the supply or possible supply of the goods and services", which can be done; (4) "whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer or a person acting on behalf of the consumer by the other party or a person acting on behalf of the other party in relation to the supply or possible supply of the goods or LEGISLATIVE COUNCIL ─ 4 February 2016 4951 services", which is relatively more complicated; the last one is (5) "the amount for which, and the circumstances under which, the consumer could have acquired identical or equivalent goods or services from a person other than the other party", meaning if the amount is outrageous.

Let us all take a look at these factors which are quite complicated. And each of them requires the party who has been wronged by unfair contracts, the so-called plaintiff, to adduce evidence, otherwise the Court will not easily rule the contract unconscionable. It is because the underlying principle of the Court is if both contracting parties have full knowledge of the contents and are of a conscious mind and of age at the time of signing the contract, the contract thus signed should not be lightly repudiated.

Therefore, with many years of experience handling such cases, I know it is an extreme circumstance. All right. Now we apply the Ordinance to commercial contracts and is it suitable? I am not certain if the copyright of these works constitutes a good or service. I have no idea. Yet, Deputy Chairman, the biggest problem is, as we think that these exceptions are necessary and reasonable, and also in line with public interest, why do average people have to go to court before the contract is determined unfair or unreasonable? This is unnecessary because we utterly consider these exceptions our rights conferred by law, which should not be taken away by some rich and powerful large corporations or anyone with bargaining power. I so submit.

MR WONG YUK-MAN (in Cantonese): Deputy Chairman, in order to prevent contractual terms from overriding the statutory exceptions in the Copyright Ordinance (CO), these amendments are proposed to add sections relating to restriction on contract override in respect of copyright exceptions. These amendments are grouped under the first debate which revolves around a series of amendments proposed by Mr CHAN Kam-lam on behalf of the Bills Committee. Their purpose is to restrict contractual terms from preventing or restricting any act which, by virtue of the relevant sections of the CO, would not infringe copyright, stipulating that the contractual terms concerned are unenforceable. This series of amendments was originally proposed by Mr Dennis KWOK but as they were passed in the vote taken in the Bills Committee, they are, therefore, proposed by the Chairman of the Bills Committee, Mr CHAN Kam-lam.

4952 LEGISLATIVE COUNCIL ─ 4 February 2016

Many Members mentioned contract override in their speeches earlier and I heard that they often said "合約凌駕性" in Chinese. Members always have a particular liking for the word "性" (inherent character, nature or sex). Saying "合約凌駕" is good enough, and it is fine as long as it spells out the meaning that contract is not overriding. Why should the word "性" be always added? The other day I saw a banner in my constituency of Kowloon City. It was put up jointly by Ms Starry LEE, Dr CHIANG Lai-wan and District Council Member NG Po-keung of the Democratic Alliance for the Betterment and Progress of Hong Kong. On the top of the banner it was written "協助申請關愛基金的 非綜援和非公屋住戶領取一次性生活津貼" (Assisting Community Care Fund applicants who are not living in public housing and not receiving Comprehensive Social Security Assistance (CSSA) to receive a one-off living subsidy). Subsequently, a resident asked me to do him a favour by enquiring of them whether he can receive "兩次性生活津貼" (receiving a living subsidy twice or a subsidy for having sex twice) as he does not live in public housing and does not receive CSSA. So, as for this term "合約凌駕性", does it mean that the contract should be overridden or overriding? This is downright a mess and nonsense. Therefore, it is very dangerous to use this word "性".

These amendments seek to amend some provisions on permitted acts in sections 39, 39A, 41A, 241, 241A and 242A of the CO. These amendments, of which the contents are more or less the same, can be generally referred to as amendments on contract override. In this connection, I think the Secretariat or the President should amend the theme of this debate, which is "就版權豁免加 入限制合約凌駕性的條文", by deleting the word "性". Otherwise, there will again be such terms as "強制性器官捐贈" (mandatory organ donation or mandatory sex organ donation) and "一次性工作" (one-off work or one instance of sex work), and if that happens, what should we do?

It is very important to forbid contractual terms from preventing or restricting acts permitted under the CO, or else all the statutory exceptions in the Ordinance would exist in name only. It would truly be a waste of public coffers to allow contractual terms to override certain exceptions this Council has spent a long time discussing. Why can the statutory exceptions in the CO be excluded or restricted by terms in private contracts? Members should ask this question. I believe many people may find this puzzling too. There are many barristers in the Chamber. Some barristers kept telling us about the contractual spirit, but some others said that contracts must not override the exceptions. They are all LEGISLATIVE COUNCIL ─ 4 February 2016 4953 members of the legal profession, and I really find this incomprehensible. I do not know whether I should believe Mr Martin LIAO or Mr Dennis KWOK who are both barristers. To members of the general public, do they not feel even more puzzled than I do? Some Members said that Hong Kong is a free society and a free economy and so, contracts are very important and we must respect the contractual spirit. However, some Members disagreed and said that contracts cannot override these exceptions. Which barristers should we heed? Then I came to think that the more complicated and controversial these provisions are, the richer both groups of barristers will become, because many people will engage them in lawsuits and they will stand to gain benefits. But this is certainly not the truth.

When the former Legislative Council examined the CO in 1997, the then Members might have ignored section 37(1) which provides that "The provisions of this Division specify acts which may be done in relation to copyright works notwithstanding the subsistence of copyright;" ― I did not take part in the deliberations of this Bills Committee then, or else I would definitely amend the Chinese text of this provision ― "they relate only to the question of infringement of copyright" ― this line is very important ― "and do not affect any other right or obligation restricting the doing of any of the specified acts." Has the Secretary read this provision, namely, section 37(1) of the CO enacted in 1997? Section 37(1) has not been amended since 1997 when the CO was enacted. "This Division" refers to Division III of Part II of the CO, and this Division provides for "Acts Permitted in relation to Copyright Works", which are those 60-odd statutory exceptions the Secretary has often claimed to be quite comprehensive in coverage recently. Section 37(1) expressly provides that the statutory exceptions under this Division do not affect any other right or obligation restricting the doing of any of the specified acts. So, what does "other right or obligation" refer to? It certainly includes terms in private contracts.

Therefore, even though the CO exempts certain permitted acts from the liability of copyright infringement, the persons concerned may still be liable for breach of contract, and although civil liabilities will be attracted, this can still be serious. Ordinary citizens may become broke as a result. For instance, my application for an appeal over my previous bid for judicial review was rejected recently and the Judge ordered me to pay $70,000. Carrie LAM even said that I have a monthly salary of some $93,000 and the legal fees that I am required to pay are still less than my earnings for a month.

4954 LEGISLATIVE COUNCIL ─ 4 February 2016

In bulldozing the Bill through this Council, the Administration has kept saying that six major new exceptions are introduced under the Bill, that the freedom of speech will be given more protection, and that the users can continue to use copyright works to a reasonable extent. The remarks made by the Director of Intellectual Property, Ms Ada LEUNG, are most laughable. I wonder if those remarks came from herself or she thought that it was cool to make such remarks, but I think they are the most nonsensical bullshit. She described the Bill as having "three safeguards" and "four merits". What do "three safeguards" mean? Many people in the Chamber may not know what she meant by "three safeguards". She described the Bill as having "three safeguards" and "four merits", but what exactly are the "three safeguards"? They refer to safeguards for copyright owners, the use of others' works by users to a reasonable extent, and freedom of speech. These are "three safeguards", whereas "four merits" mean that copyright owners, users, intermediary online platforms, and the development of the creative industry in society as a whole as well as the economy can all benefit.

I remember that in the 1980s, there were the so-called "five stresses, four points of beauty and three loves" in China. I would like to ask "buddies" with affiliation with the Communist Party of China (CPC) in the Chamber if they still remember what these "five stresses, four points of beauty and three loves" back in the 1980s referred to. Does Mr WONG Kwok-hing know? I can assert that he does not remember them at all. The five stresses are on decorum, morals, manners, discipline. What about the "four points of beauty" …

DEPUTY CHAIRMAN (in Cantonese): Mr WONG, you have strayed from the question.

MR WONG YUK-MAN (in Cantonese): I certainly have not strayed from the question. Are you dumb? I am talking about "three safeguards and four merits". The Director thought that her description would make it easier for Members to remember this, but it turns out that nobody remembers it. Let me tell you why. It is because we are different from Mainland China. They force things on people's memory but we are not people brainwashed by the CPC in Mainland China, and we do not force ourselves to remember anything. Coming LEGISLATIVE COUNCIL ─ 4 February 2016 4955 back to "three loves", they mean love for the People's Republic of China, love for socialism and love for the CPC ― I know these better than you do. In fact, what use is there to speak of "three safeguards and four merits"? These are not the facts really. You may be better, and it does not suit you to say such things. She may have read too many books from the Mainland, and this Director of Intellectual Property is really awesome. Well, I talked about this only casually as I happened to think of this, and Deputy Chairman, do not think you can bluff me. Let me tell you that the information that I have prepared is sufficient for me to speak in the five sessions, but as I found that Members are feeling a bit bored, I, therefore, tried to cheer up the atmosphere a bit by doing a "stand-up comedy", as you may call it, in order to lift Members' spirit. Do you want "一次性生活 津 貼" (one-off living subsidy or a subsidy for having sex once)?

With regard to the Bill and the original statutory exceptions, while the 60-odd exceptions still leave a lot to be desired, many people hold that it is better to have them than not having them. However, the copyright owners can arbitrarily restrict these statutory exceptions through contractual terms ― The authorities must not say that this will not happen ― we may often come across this in the making of legislation and as a result, the legislation has become an "incantation of the golden hoop". When Monk Xuanzang in the Tang Dynasty was unable to control SUN Wukong, the Monkey King, who possessed immense strengths in sorcery, he could chant this "incantation of the golden hoop". But before he could do so, Xuanzang must first hoodwink SUN Wukong into putting on the golden hoop, telling him that he would look handsome in that golden hoop and that since this is the Year of the Monkey, it would be great to put on this head ornament. Finally, SUN Wukong put on this golden hoop and once he put it on and with the chanting of the "incantation of the golden hoop", it would be useless no matter how almighty the Monkey King was. So this is the "incantation of the golden hoop", and many draconian laws which are only formulated but not to be enforced are precisely playing the function of the "incantation of the golden hoop". The Government said that having these exceptions is better than not having them, and this is also a view held by people in support of the Bill. But if the copyright owners can arbitrarily restrict these statutory exceptions through contractual terms, these exceptions, though included in the Bill, may turn out to exist in name only. Those 60-odd so-called statutory exceptions would become a mirage anytime.

4956 LEGISLATIVE COUNCIL ─ 4 February 2016

The amendments proposed by Mr Dennis KWOK target only six sections, and even if all the amendments are passed, there will still be inadequacies, for the copyright owners can still restrict other statutory exceptions through contractual terms. In his speech Mr KWOK explained that he had proposed amendments to six most important exceptions, modelling on the practice in the United Kingdom. This, I cannot agree. Is it that the other exceptions are dispensable? If we follow the general approach of the United States in respect of copyright exceptions and practise fair use, how does restriction on contract override work? What should we do then? Many people proposed the fair use approach and they are referring to the practice in the United States.

In view of this, I tried to propose amendments to section 37 to extend the principle of Mr KWOK's amendments to cover the entire Division III of Part II, that is, section 37(1) which I mentioned earlier on. In other words, if these amendments proposed by me are passed, all statutory exceptions will not be restricted by any contractual term. Many Members have expressed similar views in their speeches in this debate. I do not know when they became enlightened and why they did not do what they preach but suddenly thought of it only now. Perhaps it is because many people have been feeding them with information and so, they have suddenly come to the awakening. Therefore, Deputy Chairman, the entire debate is very useful (有 益) and constructive (有建 設) ― I will not say "建設性" and "有益性" ― because through this debate, at least some people who did not know the Bill well are forced to study it hard, and through this debate they found that what is actually wrong can be taken as right in many cases. So, this debate is a good thing. Do not say that filibuster is time-consuming or even wasting our life, because this kind of debate is, in fact, useful and very constructive.

As the amendments proposed by me will have implications on the exceptions not covered in the Bill, the President, Jasper TSANG, ruled that my amendments are inadmissible as they are not relevant to the subject matter of the Bill and violate Rule 57(4)(a) of the Rules of Procedures. Although I have achieved nothing, Secretary Gregory SO has undertaken to kick-start consultation on legislative amendments immediately after the passage of the Bill. I will definitely revisit this issue and promote amendment of the CO to the effect that all the statutory exceptions in the entire Division III of Part II will not be restricted by any contractual term. I hope that even if Secretary Gregory SO LEGISLATIVE COUNCIL ─ 4 February 2016 4957 will not remain in office in the next Government, he can remind his successor of this task. He has to leave this unfinished task to the next Government for it to honour this undertaking, because it is a function of the Government to ensure continuity. The current-term Government must inherit the work of the last-term Government, and the next Government must inherit the policies of this Government. This principle is all the same.

My speech in the first session ends here.

(Mr CHAN Chi-chuen stood up)

DEPUTY CHAIRMAN (in Cantonese): Mr CHAN Chi-chuen, what is your point?

MR CHAN CHI-CHUEN (in Cantonese): Deputy Chairman, I request a headcount.

DEPUTY CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(While the summoning bell was ringing, some Members left their seats for conversations)

DEPUTY CHAIRMAN (in Cantonese): Will Members please return to their seats.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

DEPUTY CHAIRMAN (in Cantonese): Mr LEE Cheuk-yan, please speak.

4958 LEGISLATIVE COUNCIL ─ 4 February 2016

MR LEE CHEUK-YAN (in Cantonese): Deputy Chairman, having listened to the speeches made by many Honourable colleagues earlier, I wish to give a brief response here. The first point is about the platform of a four-party meeting that Members are talking about now. The Labour Party is glad to see the development of this issue in a positive direction. We hope that this arrangement can resolve the disputes between the community or netizens and the copyright owners, as well as those between the pro-establishment camp and the pan-democrats. If all parties are sincere in offering an olive branch, we believe this issue will be taken forward in a more positive direction. Having said that, we certainly dare not harbour too high an expectation because after all, we will know the actual situation only after all parties have come to the conference table.

However, Deputy Chairman, what I consider most disappointing is the attitude of the officials and in particular, the attitude of Gregory SO and Carrie LAM. While we on this side are moving in a positive direction, we heard officials criticize this arrangement in private, saying that it is not feasible and that it is difficult for the Government to give way. Is that true? Will the Government please clarify this. When all the four parties are moving in a positive direction, government officials outrageously threw a wet blanket on this initiative, so what are they up to? Does the Government wish to resolve the problem at all? If it does not wish to resolve the problem … Deputy Chairman, frankly, we can simply ignore the Government and in fact, the pro-establishment camp can ignore the Government too. If these amendments are supported by this Council or passed at separate voting, we actually need not pay attention to what the Government thinks. Or course, I think the Government should be more proactive and more positive in considering this issue, rather than taking a negative attitude.

Now we are building on our own a platform for discussion among all parties, but we are doing this because the Government is irresponsible and has not exerted its utmost in mediation and co-ordination. The Government is actually derelict of its duties. I am not saying that we can simply ignore the dereliction of duty on the part of the Government if our discussion can reach a consensus, but I think the Government should not get in our way. It should not hinder the development of this issue in a positive direction; nor should it throw a wet blanket on the efforts being made. We do not expect the Government to be proactive in handling this matter; just forget it, as we have already given up this Government. But at least the Government should not look at things negatively.

LEGISLATIVE COUNCIL ─ 4 February 2016 4959

In the whole issue, I think we really have to settle scores with Gregory SO. What exactly has he done? Because he has all along failed to proactively play the role of a co-ordinator that things have come to this sorry state. The President of the Legislative Council can deal with this situation in another way though. The Labour Party has consistently called for the invocation of Rule 55(1)(a) of the Rules of Procedures (RoP), but that relevant motion was negatived. However, we can still invoke Rule 55(1)(b) of the RoP to commit the Bill to a select committee. So, we consider …

DEPUTY CHAIRMAN (in Cantonese): Mr LEE, I have already allowed you to express some views on the four-party meeting. Please come back to the question now.

MR LEE CHEUK-YAN (in Cantonese): Alright. What I mean is that for the purpose of a four-party meeting, if the President of the Legislative Council can invoke Rule 55(1)(b) to set up a select committee, it would be tantamount to convening a four-party meeting, but the President of the Legislative Council has not yet made such a decision. I now openly appeal to the President of the Legislative Council to take this step.

This morning I heard some Members respond to my speech made yesterday. Dr Priscilla LEUNG mentioned the law of contract right from the beginning, pointing out that she read it in the first year of her studies in law. She made this point to highlight the right and freedom of contract, stressing that everyone enjoys freedom of contract in a free market. However, her entire theory is a legal theory, not a political theory. The political theory is that as capitalism has developed to the present state, there are often cases of bullying of the less well-off and the weak, and this situation must be restrained. In other words, capitalism must be restrained; so must free market. This is a universally recognized direction in political science all over the world, and the further restriction of monopolies and bullying of the weak in capitalism is also a direction of the development of a democracy. It is regrettable that Members have repeated that old viewpoint. If free market is above everything, then even the law would be deemed unnecessary. Since there is the law and the law provides for exceptions, there is no reason to attach importance only to free market; and when exceptions are provided for in law, there is no reason for contracts to override the law.

4960 LEGISLATIVE COUNCIL ─ 4 February 2016

On the other hand, Dr Priscilla LEUNG also expressed support for steps to be taken to prevent cases of bullying of the weak. I found her remarks incomprehensible. Does she actually support or oppose the restriction of contract override?

Deputy Chairman, please do a headcount.

DEPUTY CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(While the summoning bell was ringing, some Members returned to the Chamber but not to their seats)

DEPUTY CHAIRMAN (in Cantonese): Will Members please be seated.

(When the summoning bell stopped after being rung for 15 minutes, THE CHAIRMAN resumed the Chair)

CHAIRMAN (in Cantonese): The time for summoning Members to the Chamber has ended but a quorum is not present in the Chamber. Council now resumes.

Council then resumed.

ADJOURNMENT OF MEETING

PRESIDENT (in Cantonese): I now adjourn the meeting.

Adjourned accordingly at 3.18 pm.