TELEVISION BROADCASTS LTD v. HONG KONG CABLE TELEVISION LTD

HCA 2055/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2055 OF 2004

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J U D G M E N T

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I.  Introduction

1.  Between 20 July and 19 September 2004 HK Cable re-transmitted TVB’s TV broadcasts to subscribers of HK Cable’s network.  TVB says that in so doing HK Cable infringed TVB’s copyright in the broadcasts.  TVB contends that there is no defence and asks for summary judgment.

2.  HK Cable does not dispute that the copyright in the television broadcasts resided in TVB at the material time.  HK Cable instead says that it has defences to TVB’s claim.  Those defences are:-

(1)    HK Cable was entitled to re-transmit the broadcasts by Copyright Ordinance (Cap. 528) (CO), s. 82(1)(b).

(2)    TVB implicitly authorised HK Cable to re-transmit the broadcasts and is now estopped from taking action against HK Cable.

(3)    It was in the public interest for HK Cable to re-transmit TVB’s broadcasts.

3.  I have to decide whether HK Cable’s defences are arguable.

II.  Discussion

A.  CO s. 82(1)(b)

4.  CO s. 82(1) provides:-

“The copyright in a television broadcast or a sound broadcast is not infringed by any person who, by the reception and immediate re-transmission of the broadcast without any alteration, includes a programme in a service provided:-

(a)    ...

(b)    by an interconnection between a communal aerial broadcast distribution system within the scope of section 8(4)(e) of the Telecommunications Ordinance (Cap. 106) and a subscription television network licensed, or deemed to be licensed, under the Telecommunications Ordinance (Cap. 106), where the re-transmission is for the reception of the users of the communal aerial broadcast distribution system;...

(c)    ...”

5.  The reference in CO s. 82(1)(b) to Telecommunications Ordinance (TO) s. 8(4)(e) does not define a communal aerial broadcast distribution system (CABD).  TO s. 8(4)(e) simply reads:-

“any system which, without a change of frequency, carries from a single aerial, by wire or other material substance which does not cross a public street or unleased Government land, to outlet points in one building or in more than one building if such buildings are owned by the same person television programmes provided by any company licensed under the Broadcasting Ordinance (Cap. 52).”

6.  Hong Kong has 2 free-to-air TV broadcasters, both well-known, TVB and ATV.

7.  Typically, free-to-air TV signals are picked up by the antenna of a building.  That signal, which is in ultra-high frequency (UHF) and analogue format, then passes through internal cable to a signal amplifier and distributor within the building.  From there, the UHF signal is transmitted by cable to the TV sets of the units comprising the building.  Such system is an example of a CABD. 

8.  A building may also be connected to HK Cable’s network.  In such case, the signal for HK Cable’s programmes is routed through HK Cable’s network to the building’s CABD.

9.  Within the CABD, HK Cable’s signal runs through cable to a combiner, passes through a sound amplifier and distributor, and ends up at a set-top box (STB) usually sitting on a TV set within a unit.

10.  HK Cable provides the STB to individual subscribers.  The STB decodes the signal which finally emerges as a picture on the TV screen.

11.  The point at which HK Cable’s network connects with the CABD of a building is a point of interconnection between the 2 systems.

12.  Between 1993 and 1997, where a building was connected to HK Cable’s network, free-to-air signals picked up by a building’s aerial were split into 2 streams.  One stream went through a converter in the building to be turned into a VHF signal.  The other stream remained in UHF.  The converted VHF signal was then combined with HK Cable’s signal by a combiner within the building and re-transmitted to the STBs of individual units.  The unconverted UHF signal avoided processing by the STB by being routed through a bypass. 

13.  This system meant that subscribers to HK Cable’s services could access TVB’s programmes both through HK Cable’s handset and their own TV’s handset.

14.  In December 2001, after the foregoing service of transmitting free-to-air programmes over HK Cable’s network had ceased, HK cable changed its signal from analogue to digital format.

15.  Between 20 July and 19 September 2004 HK Cable resumed the delivery of free-to-air broadcasts along with its own programmes.

16.  This time HK Cable received TVB’s free-to-air signal through an antenna at Cable TV Tower in Tsuen Wan. 

17.  The free signal was then converted from radio frequency to audio-visual format.  The audio-visual signal was further worked on by an encoder and transformed into digital MPEG (Motion Picture Engineering Group) format. 

18.  The MPEG signal and HK Cable’s own programme broadcast were then combined and compressed by a multiplexer.  The combined signals were transmitted through HK Cable’s network to individual buildings.

19.  Upon arrival at a building, the compressed signals were bundled with TVB’s free-to-air signal (as received by the building’s aerial).  This was typically done by passing both sets of signals through a combiner within the building’s CABD. 

20.  The bundled signal then proceeded through the building’s internal cable to the STB of a unit.  The STB decoded HK Cable’s cable signal and re-converted the MPEG signal back to UHF band.

21.  In the meantime, TVB’s free-to-air signal as received by the building’s CABD would be received directly by the unitholder’s television set through a bypass.

22.  The result was that a unitholder who also subscribed to HK Cable’s services could access the following:-

(1)    Using HK Cable’s handset, HK Cable’s programmes as well as those of TVB and ATV; and,

(2)    Using his TV’s own hand set, TVB and ATV programmes.

23.  There is a 1.5 second difference between what a viewer watching a TVB programme on conventional TV sees and what a viewer watching the same TVB programme as re-transmitted by HK Cable sees.  The 1.5 second delay may be due to the interval taken by HK Cable to process TVB’s free-to-air signal, including capturing, converting, encoding, compressing, de-compressing, decoding and re-converting TVB’s original signal.

24.  HK Cable’s process of re-transmission also strips off a test carrier signal which is transmitted by TVB but not normally perceived by a viewer.

25.  Further, HK Cable’s re-transmission strips a TVB broadcast of stereo sound, so that the programme as received by a subscriber through the STB is only heard in mono.

26.  There was considerable discussion before me as to whether CO s. 82(1)(b) permits reception and re-transmission of free-to-air signals at one and the same location (such as Cable TV Tower).  Mr Shieh SC (appearing for HK Cable) says that it does, Mr Smith SC (appearing for TVB) says that it does not.

27.  I shall assume, without deciding, that Mr Shieh is right.  Nevertheless, it seems to me that Mr Shieh’s argument based on CO s. 82(1)(b) still fails.

28.  This is because re-transmission of a free-to-air signal under CO s. 82(1)(b) must be “without any alteration”.  In stripping off the stereo sound from TVB’s broadcast, HK Cable is altering TVB’s broadcast.

29.  It is Mr Shieh’s case that the words “without any alteration” must be read restrictively.  What is enjoined is merely (Mr Shieh submits) the change of a broadcast’s content as perceived by a viewer.

30.  But even on his narrow construction of CO s. 82(1)(b) (which I do not necessarily accept), Mr Shieh cannot get around the plain fact that the removal of stereo is a perceptible change in the content of what TVB has broadcast.  Mr Shieh says that the viewer gets to hear precisely the same words or sounds on HK Cable’s re-transmission as in the original broadcast.  But that is beside the point.  With the original, the viewer hears (or at least has the option of hearing) the sounds in stereo; with the re-transmission he does not (and has no option of hearing stereo).

31.  As Mr Smith points out, the CO itself defines “broadcast” in s. 8(1) as a transmission of (among other things) “visual images and sounds”.  It follows that the transmission of a different quality of sound (mono in place of stereo) must inevitably be an alteration of content.

32.  It is no answer for Mr Shieh to say that in the early 1990s HK Cable re-transmitted TVB’s signals, apparently without complaint from anyone, at a time when an earlier version of CO s. 82(1) (namely, Copyright Act 1956 s. 14(8A)(d)) was in force.  That earlier version did not include the words “without any alteration”.  The latter words only came in later.  Further, there is no evidence that the earlier re-transmissions involved (as they do now) the stripping off of stereo sound.

33.  It follows that, even on Mr Shieh’s own terms, the re-transmission engaged in by HK Cable was not within the exemption provided by CO s. 82(1)(b).

B.  Estoppel

34.  Mr Shieh fairly accepts that, if I find against him (as I have done) on the issue of stereo sound, his estoppel argument is untenable.  On no reading of the evidence, can it be supposed that TVB expressly or impliedly authorised HK Cable to alter the content of TVB’s broadcasts by removing their stereo sound.

35.  I need not consider this defence further.

C.  Public interest

36.  Mr Shieh submits that there are 2 ways in which the public is benefitted by the re-transmission carried out by HK Cable.  Those are as follows:-

(1)    Subscribers to HK Cable’s service need only use 1 handset to access TVB’s and HK Cable’s programmes.

(2)    HK Cable’s digital service means that certain areas will receive better quality TV pictures than they presently do.  Those areas are remote parts of Hong Kong or places where the density of tall buildings makes it hard for the CABDs of smaller building to receive clear free-to-air signals.

37.  Mr Shieh submits on the basis of the dissenting opinion of Mance LJ in Hyde Park Residence v. Yelland [2001] 1 Ch 143 that there is at least an arguable case that public interest allows the Court to override copyright.

38.  Assume (without deciding) that as a matter of principle the public interest can trump copyright.  In my judgment, none of the 2 benefits suggested by Mr Shieh can conceivably qualify as a basis for ignoring TVB’s rights.

39.  As to the first alleged benefit, I do not see how the convenience afforded to HK Cable subscribers of using a single handset can amount to a benefit to the public generally.  The convenience of using one remote control to operate a TV can hardly enable the Court to run roughshod over TVB’s property rights.

40.  On the second alleged benefit, there is no evidence before the Court as to what proportion of the Hong Kong population it is claimed does not receive a clear signal.  Nor is there evidence of how (if at all) HK Cable is addressing the specific needs of that proportion of the population. 

41.  For example, it is not apparent whether those areas which cannot receive clear free-to-air signals are places to which HK Cable’s digital services are widely available.  As Mr Smith submits, what HK Cable is arguing is that, because there are problems of receiving TVB’s signal in some areas, HK Cable is justified in re-transmitting TVB’s signal to Hong Kong people generally.  That conclusion does not follow logically from the premise.

42.  Mr Shieh has shown me evidence of TVB acknowledging reception problems in some parts of Hong Kong.  But that same evidence shows that TVB is also seeking to address the problems through implementation of digital technology.  In those circumstances, I do not see how the Court can overlook TVB’s intellectual property rights in favour of HK Cable.

III.  Conclusion

43.  HK Cable has breached TVB’s copyright.  It has no defence to TVB’s claim.  There will be judgment on liability in TVB’s favour against HK Cable accordingly.

44.  I will now hear counsel on appropriate consequential orders and costs.