Hong Kong proposes new copyright exception for text and data mining to facilitate AI adoption

The Hong Kong Government recently launched a two-month public consultation aimed at enhancing the Copyright Ordinance (“CO”) to address the challenges brought by AI technology. 

The consultation focuses on four key areas:

• Copyright protection of AI-generated works; 
• Copyright infringement liability for AI-generated works;
• Possible introduction of a specific copyright exception for text and data mining activities (“TDM”); and 
• Other issues relating to generative AI, such as deepfakes. 

The Government expressed the view that no substantive legislative amendments concerning AI-generated works and copyright infringement liability arising from AI-generated works are required at this stage, as the coverage of the current CO provisions are sufficient to address such issues. More significantly, the Government proposes to introduce a new copyright exception within the CO to allow the use of copyright works for computational data analysis and processing, which covers conventional TDM and the enhancements or training of AI models. 

In coming to this proposal, the Government expresses the view that such TDM exception would increase accessibility in copyright works by AI developers or users for developing and training their AI systems. This will boost the development of AI industry in Hong Kong and Hong Kong’s global competitiveness. 

The Government also notes in the consultation document that other major jurisdictions have introduced similar specific copyright exceptions for TDM activities, albeit with varying scope and conditions. For example, while the TDM exception in the UK is limited to non-commercial research use, the copyright laws in Japan and Singapore provide for broad TDM exceptions for commercial and non-commercial use. The TDM exception in the EU on the other hand contains an opt-out option for copyright owners. 

The government proposes the TDM exception under the CO to be extended to both commercial and non-commercial use. This is premised on the view that TDM activities cover a wide range of use that include commercial endeavours, such as the development of AI models for commercial use, conducting business analytics, and privately-funded research and development work. 

Nonetheless, the Government acknowledges that conditions can be imposed on the TDM copyright exception to safeguard a proper balance of interests. Such conditions could include:

• Requiring lawful access to copyright works; 
• Rendering TDM activities unauthorised if licensing schemes are available or where copyright owners have expressly reserved their rights (providing an opt-out option);
• Restricting further communication, distribution and dealing of the copy made under the TDM copyright exception; 
• Requiring sufficient acknowledgment; 
• Requiring secured storage; and/or 
• Restricting retention and requiring destruction after a certain period of time or upon request.  

Next steps

The Hong Kong Government’s consultation on reviewing and strategically enhancing the CO by way of introducing a new TDM exception is a positive step toward addressing the IP complexities and risks that businesses developing and using AI solutions in their business and services need to navigate. Notably, the proposed TDM exception, if introduced, will align Hong Kong with the evolving international legal landscape at the intersection of AI and copyright laws. The Government is inviting feedback on the matters outlined in the consultation document by 8 September 2024, thereafter, subject to its review processes and feedback on its proposals, a draft Bill for the new TDM copyright exception may be introduced to the Legislative Council as early as the end of 2024 or early 2025.