Under section 118(2A) and (2B) of the Copyright Ordinance, a person commits the business end-user possession offence if he, without the licence of the relevant copyright owner, possesses an infringing copy of any of the five specific categories of copyright works, namely computer programs, movies, television dramas, musical sound recordings or musical visual recordings, for the purpose of or in the course of any trade or business, with a view to its being used by any person for the purpose of or in the course of that trade or business.

The maximum penalty for this offence is imprisonment for 4 years and a fine of HK$50,000 in respect of each infringing copy.

The Government is committed to ensuring that Hong Kong’s copyright regime is robust and competitive, safeguarding the legitimate interests of copyright owners while also serving the public interest.  Having regard to the important roles and functions of certain libraries, museums and archives in preserving and conserving works, particularly those of historical, cultural or heritage value, for public access, and after balancing the legitimate interests of copyright owners and public interest, the Copyright Ordinance provides that subject to compliance with certain statutory conditions (including for the purpose of heritage conservation or for other purposes)*, the business end-user possession offence does not apply to the possession of infringing copies of four specific categories of copyright works, namely movies, television dramas, musical sound recordings or musical visual recordings, by designated libraries, museums and archives.  This helps the relevant libraries, museums and archives fulfil their role in preserving culture and disseminating knowledge.

 *Please see FAQ no. 6.

Designated libraries, museums or archives must comply with the conditions under section 118(2E) or (2F) of the Copyright Ordinance in order to be exempted from the criminal liability of the business end-user possession offence.

 In addition:

1. This statutory exemption does not apply to unauthorised possession of an infringing copy of a computer program by designated libraries, museums or archives for use in business; and

2. If designated libraries, museums or archives possess any of the five specific categories of copyright works under section 118(2B) of the Copyright Ordinance, namely computer programs, movies, television dramas, musical sound recordings or musical visual recordings, for use in business without authorisation, this statutory exemption does not affect the rights of any copyright owner to take civil action against such libraries, museums or archives.

Designated libraries, museums or archives must comply with the following conditions under section 118(2E) or (2F) of the Copyright Ordinance in order to be exempted from the criminal liability of the business end-user possession offence:- 

1. For the purpose of heritage conservation (section 118(2E) of the Copyright Ordinance), if— 
   1. the infringing copy was donated or given to the designated libraries, museums or archives by the public; or
   2. the infringing copy was made by the designated libraries, museums or archives to preserve or replace the infringing copy referred to in paragraph i. against loss, deterioration or damage; 

2. For other purposes (section 118(2F) of the Copyright Ordinance), if— 
   1. the infringing copy was—
      1. donated or given to the designated libraries, museums or archives by the public; or

      2. made by the designated libraries, museums or archives to preserve or replace the infringing copy referred to in subparagraph A. against loss, deterioration or damage;

   2. it is not possible by reasonable enquiry to ascertain the identity and contact details of the copyright owner of the work in question; and
   3. a copy (other than an infringing copy) of the work in question cannot be obtained on reasonable commercial terms.

An example of the statutory conditions under section 118(2E) of the Copyright Ordinance is that in the course of conducting businesses, designated libraries, museums or archives for the purpose of heritage conservation possess copies of the relevant copyright works (such as films) donated by third parties, or for the same purpose with genuine needs duplicate such copies to stable materials to keep deterioration to the minimum and ensure that a copy of the work of quality continues to exist.  In these circumstances, designated libraries, museums or archives may not be able to seek copyright clearance before making copies or taking any action to preserve the quality of the donated copies.

An example of the statutory conditions under section 118(2F) of the Copyright Ordinance is that before designated libraries, museums and archives make use of donated copies of works (such as films) which are out of print or not commercially available in the market for purposes other than preservation, such as for showing or making them available for public access, it may not always be possible for them to ascertain the identity and contact details of the copyright owners concerned by reasonable enquiry.

Under section 118(2FB) of the Copyright Ordinance, libraries, museums or archives are eligible for designation only if their owners are:

1. a charitable institution or trust of a public character that is exempt from tax under section 88 of the Inland Revenue Ordinance (Cap. 112); or
2. a statutory body that is exempt from tax under an Ordinance other than the Inland Revenue Ordinance, or a subsidiary of such a statutory body.

The Notice aims at designating certain libraries, museums and archives for exemption from the criminal liability of the business end-user possession offence even though they possess infringing copies of four specific categories of copyright works, namely movies, television dramas, musical sound recordings or musical visual recordings, for use in business, subject to compliance with certain statutory conditions.  However, this statutory exemption does not exempt designated libraries, museums and archives from civil liability.

On the other hand, the Copyright (Libraries, Museums and Archives—Prescribed Conditions for Making Copy) Regulation and the Copyright (Specified Libraries, Museums and Archives under Sections 47 to 53) Notice aim at, for the purposes of the permitted acts under sections 47 to 53 of the Copyright Ordinance, specifying the descriptions of eligible libraries, museums and archives and prescribing the statutory conditions for compliance for doing the relevant permitted acts. Specified libraries, museums and archives may, under certain specified circumstances and subject to compliance with the relevant prescribed conditions, reasonably use copyright works without the copyright owners’ licence and without infringing copyright.