Potential Introduction of TDM Exception in Hong Kong?

TDM generally refers to the use of computational techniques to analyse large quantities of data of all kinds (numbers, text, images, etc.) to identify trends and patterns. The data and information collected, used and/or stored during computational data analysis may involve copyright works and may raise copyright issues.

The consultation paper provides a helpful overview of the exceptions for TDM activities in other jurisdictions. The EU, Japan, Singapore and UK have introduced specific copyright exceptions for TDM activities. While the TDM exception in EU, Japan and Singapore extends to both commercial and non-commercial uses; the TDM exception in UK is confined to non-commercial research only. It is also worth noting that in the EU, the exception has an “opt-out” option (i.e., an option to allow copyright owners to exclude their works from AI activities). In contrast, the US does not have an express TDM exception, however, the open-ended fair use exception in US copyright law may cover certain TDM activities.

Hong Kong’s Copyright Ordinance (Cap. 528) does contain a number of copyright exceptions that permit fair dealing of copyright works under specified circumstances. However, an exception for use of copyright works for TDM activities is not presently in place. 

The consultation paper discusses several arguments for and against introducing a TDM exception.

Arguments in support of a TDM exception

• Promotes accessibility in copyright works to teach AI systems
• Allows researchers and analysts to use text and data mining for examining large bodies of data
• Aligns Hong Kong’s copyright laws with those in overseas jurisdictions

Arguments for not introducing a TDM exception

• Interferes with current market practices, practices such as licensing schemes (i.e., generative AI models to be trained on licensed copyright works) may be undermined
• May not be sustainable for the changing technology

The Hong Kong Government considers that the overall benefits of a TDM exception justifies its inclusion in Hong Kong’s copyright laws. The potential downsides can be balanced out by providing proper safeguards to copyright owners. Cutting edge research is a highly competitive area and enterprises or researchers working in Hong Kong may benefit from a TDM exception.

While wording for the TDM exception has not been proposed at this stage, the Hong Kong Government has put forward the following suggestions in the consultation paper:

1. include both commercial and non-commercial use in the proposed TDM exception; and
2. impose condition(s) on the proposed TDM exception, e.g., requiring lawful access to copyright works, not permitting TDM activities if licensing schemes are available or including an opt-out option for copyright owners.

The consultation paper also covers other copyright issues related to AI, such as the issue of copyright infringement arising from AI-generated works.

The consultation period ends on 8 September 2024. Concerned parties are encouraged to put in submissions. Please reach out if you would like to have a chat.

The consultation paper may be found here and the Hong Kong Government’s press release may be found here.