Universal Music Ltd v Neway Music Ltd
Court of First Instance
High Court Action No 1738 of 2017
Louis Chan J in Chambers
22, 30 October 2018

Civil procedure — summary judgment — copyright infringement — authorisation by copyright owner to licensing body withdrawn — licensing scheme expired — defendants admitted to using copyright materials — ongoing proceedings in Copyright Tribunal — no arguable defence — Tribunal had no power under Copyright Ordinance (Cap. 528) s. 156(3) to confirm or vary terms of scheme after its expiration — Tribunal could not make orders under s. 156(4) protecting defendants from infringement claim for use of copyright materials after expiry of scheme - summary judgment granted — stay of proceedings refused

H was a copyright licensing body for K-server licences and represented some record companies including P. Ds regarded the terms of the licensing scheme (the “Scheme”) operated by H unreasonable and applied to the Copyright Tribunal (the “Tribunal”) under s. 156(1) of the Copyright Ordinance (Cap. 528), seeking relief under s. 156(3) and (4) (the “CT2 proceedings”). While the CT2 proceedings were ongoing, some record companies which owned the copyright works licensed by H in the Scheme withdrew their authorisation from H and the authorisation by these record companies ceased on 30 June 2015. No licence was subsequently entered into between P and Ds for the latter’s use of the former’s karaoke music videos (KMVs). P claimed that Ds had since 1 July 2015 been infringing its copyright in its KMVs and commenced the present action against Ds for copyright infringement (the “Action”). Ds admitted that it had been using P’s KMVs from 1 July 2015 to 2 October 2018. P applied for summary judgment on liability or alternatively, judgment following the determination of various questions under O. 14A of the Rules of the High Court (Cap. 4A, Sub.Leg.). Ds sought a stay of the Action pending the determination of the CT2 Proceedings, arguing that despite the expiration of the Scheme on 30 June 2015, the Tribunal could still order under s. 156(4) that Ds could make lawful use of P’s KMVs beyond that date and P could not sue Ds for infringement of its copyright by reason of such use.

Held, allowing P’s application, giving summary judgment to P and dismissing Ds’ application, that:

(1) The Tribunal could not make an order under s. 156(3) and (4) of the Ordinance to allow Ds to use P’s KMVs in return for its payment to P thereof otherwise than in the context of a licence. Further, any order to be made under s. 156(3) was predicated upon the existence of a scheme under which a licence could be granted. Since the Scheme had already ended on 30 June 2015, the Tribunal could not make any order under s. 156(3) to confirm or vary its terms to take effect from 1 July 2015. The Tribunal could not make any order under s. 156(4) in the CT2 proceedings that could protect Ds from an infringement claim brought by P in respect of Ds’ use of P’s KMVs from 1 July 2015 in the absence of any licence from P taking effect from 1 July 2015. Ds had no arguable defence in law to the Action (Schindler Lifts (Hong Kong) Ltd v Ocean Joy Investments Ltd [2003] 1 HKC 438 applied). (See paras. 33–35, 37.)

(2) It was futile to stay the action pending the Tribunal’s decision in the CT2 proceedings as Ds had no defence to the claim of infringement from 1 July 2015. Further, the Action dealt with P’s claim from 1 July 2015 whilst the CT2 proceedings only dealt with the grant of a licence under the Scheme that ended on 30 June 2015. The order to be made in the CT2 proceedings would not affect P as it was not a party to those proceedings and H was not its agent in operating the expired scheme. To allow the Action to proceed would not result in wastage in time and costs as there was no overlap between this action and the CT2 proceedings. It would also cause injustice to P if this action were stayed. (See para. 38.)

Application

This was an application by the plaintiff in an action against the defendants for copyright infringement for summary judgment or determination of various questions under s. 14A of the Rules of the High Court (Cap. 4A, Sub.Leg.) and an application by the defendants for a stay of the proceedings. The facts are set out in the judgment.

Jurisdictions: 

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