CAPCOM CO LTD AND ANOTHER v. PIONEER TECHNOLOGIES LTD AND ANOTHER

  DCCJ 2655/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2655 OF 2007

-----------------------------------

---------------------------------------

----------------------------------------

REASONS FOR DECISION

----------------------------------------

Background

1.  This is an application for leave to appeal against my Decision of 7 March 2008, dismissing the Plaintiffs' application for summary judgment and granting unconditional leave to the 1st Defendant to defend the action.

2.  Notwithstanding the Notice of Appeal, Counsel for Capcom, the 1st Plaintiff, made it clear at the hearing before me that leave is only sought for Capcom, and not the 2nd Plaintiff, against Pioneer, the 1st Defendant only, and not against the 2nd Defendant. 

3.  At the conclusion of the hearing, I dismissed the Plaintiffs'  application for leave, with costs and certificate for Counsel.  The following are my reasons for the dismissal.

4.  The grounds of Capcom's application are that :

(1)  I was wrong in my interpretation and application of the words "criticism or review" used in s.39(1) of the Copyright Ordinance ;

(2)  I was wrong in the application of "fair dealing" in the s.39(1) defence; and

(3)  I was wrong in my understanding and application of the relevant law on Order 14 proceedings.

Applicable legal principles

5.   The principles on an application for leave to appeal under section 36 of the District Court Ordinance are set out in Ma Bik Yung v. Ko Chuen HCMP 4303/1999, Leong JA (unreported, 8 September 1999) citing Smith v. Cosworth Casting Processes Ltd. [1997] 1WLR 1538 in which Lord Woolf provided the following guidance:

(1)    The Court will only refuse leave if satisfied that the applicant has no realistic prospect of succeeding on the appeal.  This test is not meant to be any different from that which is sometimes used which is that the applicant has no arguable case.  Why however this court has decided to adopt the former phrase is because the  use of the word "realistic" makes it clear that a fanciful prospect or an unrealistic argument is not sufficient.

(2)    The court can grant the application even if it is not so satisfied.  There can be many reasons for granting leave even if the court is not satisfied that the appeal has any prospect of success.  For example, the issue may be one in which the court considers should in the public interest be examined by this court or, to be more specific, this court may take the view that the case raises an issue where the law requires clarifying.”

Whether there are realistic prospects of success on appeal on meaning of "criticism or review"

6.  Counsel for Capcom argued that it was wrong for me to adopt, in the Decision, the dictionary meaning of "account", "survey" or "report" for the term "criticism or review" as used in s.39(1) of the Copyright Ordinance.  He maintains that the Court should prefer the definition of "review" in the Oxford Advanced Learner's Dictionary (7th edition), being :

" a report in a newspaper or magazine … in which somebody gives their opinion of a book, play, film/movie, etc.; the act of writing this kind of report." 

7.  He also submitted that the definition of "review" in the New Shorter Oxford English Dictionary (2002 edition) should be adopted, namely:

" an account or criticism of a (new or recent) book, play, film, product etc."

8.  In considering the meaning of "criticism or review", the Decision adopted as the starting point the observations made by Robert Walker L.J. in the case Pro Sieben A.G. v. Carlton Television Ltd. [1999] 1 W.L.R. 605 :

" “Criticism or review” and “reporting current events” are expressions of wide and indefinite scope.  Any attempt to plot their precise boundaries is doomed to failure.  They are expressions which should be interpreted liberally …"

9.  It is also clear from the authorities that whether the defence of fair dealing is available is a question of degree, or of fact and impression.

10.   Adopting the approach advocated in Pro Sieben A.G. v. Carlton Television Ltd., the court should be slow to adopt any rigid definition, but should consider the facts and circumstances of the particular case to decide, by the degree of use and as a matter of general impression, whether the use of a copyright work is fair dealing for the purpose of criticism or review of that or another work.  The formula and meaning adopted in the case of De Garis v. Neville Jeffress Pidler Pty Ltd (1990) 18 IPR 292 relied upon by Counsel for Capcom for the meaning of "criticism or review" should be considered in this light, particularly since the facts and manner of the use of the copyright work in that case are totally distinguishable from the facts of this case, when the copyright work in De Garis was reproduced in toto by a press-clipping and news monitoring agency without any or very limited input by the defendant, and the court did not have to consider any comments or material purported to be criticism or review, and whether such comments or material amounted to "criticism or review" by the defendant.

11.  I agree with counsel for Pioneer that there is no basis for Capcom's proposition that the dictionary meaning of "review" as advocated by Counsel for Capcom should be preferred over and to the exclusion of the dictionary definitions set out in paragraph 25 of the Decision.  Having said that, I would add that even using the definition preferred by Counsel for Capcom, the Article complained of should fall within its ambit, as a report in which the editors of Pioneer gave their opinion on the Game.  The Game is the copyright work relied upon by Capcom.  I do not accept the argument that there has to be something more than a review of the Game, as Counsel for Capcom suggested.  I cannot see how the meaning given to "review" as set out in paragraph 26 of the Decision is against the ordinary usage of that word, as Counsel for Capcom submitted.  As the term used in section 39(1) is "criticism or review", I do not accept that it is unarguable that "review" need not be a critical report.  Whether or not Pioneer's use of the copyright work "comes to the boundaries" of "criticism or review" should be a question for the trial judge to decide in the light of all the evidence available then.

12.  On this analysis, I do not accept that there are any realistic prospects of success in an appeal on the basis that my finding in the Decision, that it is arguable that Pioneer's "account, survey or report of the Game" falls within the wide and liberal interpretation of "criticism or review" on their natural and ordinary meaning, must be wrong. 

Whether there are realistic prospects of success on appeal on "fair dealing"

13.  My understanding of Capcom's argument is that even if I am satisfied that "for the vast majority of the frames used by Pioneer, the text accompanying the frames or images would not make a great deal of sense to the reader without the images incorporated" (Counsel citing paragraph 29 of the Decision), the defence in section 39(1) is not available to Pioneer as such fair use or fair dealing is not for the purpose of criticism or review. Counsel also referred to paragraph 30 of the Decision which stated that I was satisfied, on the whole, that the incorporation and use of the images is necessary for the review made.

14.    As made clear in paragraph 28 of the Decision, the question of whether the defence of fair dealing is available to Pioneer depends on a consideration of all the facts and circumstances of use of the copyright work, including the degree and extent of such use by reference to the purported "criticism or review" and in the context of the contents of the article complained of, and the purpose of use.  This can only be properly done at trial in the light of all the evidence available, when Capcom's copyright work and Pioneer's work can be examined in detail by the trial judge, who will then be able to decide whether Pioneer’s use of the copyright work is fair.  Paragraph 30 of the Decision highlights the fact that the matter was only being considered at the stage of summary judgment, when the court only has to be satisfied that Pioneer has an arguable defence.

15.  I am not satisfied that there are realistic prospects of success on this ground of appeal.

Whether there are realistic prospects of success on appeal on the application of the law on Order 14

16.  Counsel for Capcom argued that there are no issues of fact between the parties, and that it would be pointless to give leave to defend on the basis that there is a triable issue of law.  Counsel for Pioneer was quick to point out that there are disputes as to Pioneer's extent or necessity of the use of the frames or images, the motive or purpose of use, and of course, as is patently clear from the documents filed in court, whether such use of the images constitutes fair dealing within the meaning of section 39(1) of the Ordinance.

17.   Counsel for Capcom referred to paragraph 14/4/12 of the Hong Kong Civil Procedure.  The principles applicable to Order 14 proceedings are clear, beyond dispute, and summarized in paragraph 10 of the Decision.  Where a question of law is raised, leave to defend should be given where a difficult question of law is raised, but if the point is clear and the court is satisfied that it is really unarguable, leave to defend will be refused.  The courts will determine disputed points of law on the hearing of an Order 14 application provided that the relevant facts are not in dispute.

18.  Even in the case of R.G. Carter v. Clarke [1990] 2 All E.R. cited in the passage relied upon by Counsel for Capcom, the Court recognized that in a case where the triability of the issue depends on evidence as opposed to law, "it is a very surprising situation if the Court of Appeal was prepared to disturb the judge's view".

19.  In this case, there are clearly facts in dispute as summarized by Counsel for Pioneer.  In any event, it was made clear in the Decision that in my judgment, Pioneer has an arguable defence on fair dealing, and that there are triable issues in relation to such defence such that the matter should proceed to trial.  I am not satisfied that there are realistic prospects of success on this ground of appeal.

Whether there are other reasons to grant leave

20.    As the Decision is not a judgment after trial on the defence of fair dealing for the purpose of criticism or review, but only a decision at a summary stage, I do not consider that the case raises any issue which requires clarification, the principles applicable to Order 14 proceedings being abundantly clear and beyond dispute.