Last month, the Hong Kong Customs and Excise Department ("Customs") conducted Operation Magpie, an enforcement operation against illegal karaoke setups in party rooms and restaurants. Karaoke is deeply intertwined with Hong Kong's cultural and social fabric. Since the 1990s, it has been a staple in Hong Kong's night life, with a number of major chains dominating the karaoke scene. However, in the 2000s, the concept of party rooms began to gain popularity. Party rooms are designed to be fun and versatile spaces equipped with a wide range of entertainment facilities including karaoke and gaming consoles. While Customs has conducted raids on party rooms in previous years, Operation Magpie 2024 was particularly notable because it was the first time that Customs had enforced against the unauthorised streaming of karaoke tracks. Unauthorised streaming of copyright material is prohibited by a new technology-neutral exclusive communication right for copyright owners that was introduced in 2023. In this article, we consider the facts of Operation Magpie, its significance, and the legislative amendments that have empowered Customs to address infringements involving streaming technology.

Party room raids

During Operation Magpie, a team of over a hundred Customs officers executed raids on 31 party rooms and one restaurant across the city, including in Causeway Bay, Mong Kok, Kwun Tong and Tsuen Wan. These raids resulted in the seizure of 39 karaoke devices, four game consoles and a batch of audio and video equipment, with a total approximate market value of HK$1.1 million. It was estimated that the seized karaoke devices were loaded with over 1.8 million allegedly infringing karaoke tracks, ranging from pop classics from the 60s to the latest hits. A total of 18 individuals were arrested, including venue managers, company directors, and shop proprietors. Two of the arrested individuals were charged under the Copyright Ordinance (Cap. 528), while the rest were released on bail. One of the party room owners was also suspected of making a false trade description under the Trade Descriptions Ordinance (Cap. 362) for falsely claiming to have obtained a valid licence for showing films and television programmes.

The significance of Operation Magpie 2024

Operation Magpie 2024 is particularly noteworthy as it is the first time that Hong Kong Customs has enforced against the use of streaming technology to provide infringing content. Historically, enforcement actions against IP infringements in party rooms focused on traditional setups involving physical karaoke machines with pre-loaded songs. These machines did not involve streaming technology, as the infringing content was directly stored on those karaoke devices. In those cases, Customs invoked the offence of unauthorised possession of infringing copies of a copyright work for the purpose of trade or business .

In contrast, the streaming technology uncovered during Operation Magpie represents a comparatively sophisticated method of infringement. In this case, four party rooms in Causeway Bay each contained a television connected to a set-top box installed with streaming software. Party room customers used their smartphones to scan a QR code displayed on the television screen. The QR codes linked to an interface which allowed Customers to request songs from a remote karaoke device located outside the premises. The remote karaoke device sent the requested songs to a streaming encoder, which in turn transmitted the content via the Internet to the set-top box in the party room. The officers also located the data centre in a commercial building within the same district and seized a batch of network devices. This investigation was aided by experts from the Computer Forensic Laboratory, a specialized department within Customs set up in 2022 to tackle advanced technology crime and cybercrime.

Legislative background: the Copyright Ordinance Amendment

Customs' power to enforce against illegal streaming has its basis in the latest amendments to the Copyright Ordinance, which took effect on 1 May 2023. These amendments have expanded the scope of copyright protection, giving copyright owners the exclusive right to control the communication of their works to the public via any mode of electronic transmission. Previously, a copyright owner's protected rights were limited to "copying" and other acts such as "performing, showing or playing" or "broadcasting" the work to the public. Prior to the amendment, it could have been argued that no copying is involved in streaming, and therefore unauthorised streaming did not constitute copyright infringement. The revised ordinance now explicitly covers the unauthorised distribution of copyrighted content via "wire or wireless means, in such a way that members of the public in Hong Kong or elsewhere may access the work from a place and at a time individually chosen by them (such as by making works available through the Internet)". This closes previous legal loopholes that allowed infringers to stream pirated content.

Conclusion

By successfully targeting streaming technology-related infringements, Hong Kong Customs has set a precedent for future enforcement actions. This legislative evolution and successful enforcement against karaoke streaming underscores Hong Kong's commitment to maintaining a copyright enforcement regime that adapts to technological advancements. Karaoke enthusiasts can expect an increasingly robust enforcement of the technology-neutral exclusive communication right, promoting a fair and legal environment for their favourite pastime.