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

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Coram : H. H. Judge Mimmie Chan

Date of hearing : 1 February, 2008

Date of handing down Decision 7 March, 2008

DECISION

Background

1.This is an action relating to a very popular video game, the "MONSTER HUNTER PORTABLE".  The copyright in the game is owned by the 1st Plaintiff in these proceedings, and it claims that its copyright has been infringed by the Defendants.

2.By a summons issued on 16 October 2007 ("Summons"), the Plaintiffs apply for summary judgment.  They seek an injunction to restrain the Defendants from infringing the 1st Plaintiff's copyright and from passing off the 1st Plaintiff's products, an order for delivering up and forfeiture of infringing products, and an inquiry as to damages. 

3.The 1st Plaintiff ("Capcom") is a company incorporated in Japan in the business of manufacturing and publishing video games and video game strategy guide books.  The 2nd Plaintiff ("Capcom Asia") is the Hong Kong subsidiary of Capcom.  The 1st Defendant ("Pioneer") is a Hong Kong company in the business of publishing magazines.  The 2nd Defendant is a director of  Pioneer.

4.Capcom claims to be the owner of the copyright in the portable play station video game "MONSTER HUNTER PORTABLE 2nd" ("Game"), and in the charts and data of the Game.  In the Statement of Claim, the Plaintiffs identify the copyright work they rely upon simply as the Game, and "charts and data of the game".  The Plaintiffs claim in the Statement of Claim that Pioneer had reproduced "images" identical or substantially similar to the copyright work without the authority of Capcom, and had used "different composite frames and charts" in their magazine "PSP 超級玩樂誌（2007年新春特別號）" ("Magazine"), which had allegedly been copied from Capcom's copyright work.

6.As a result of questions raised by the Court at the commencement of the hearing of the Summons, counsel for the Plaintiffs confirmed that the Plaintiffs will not seek to rely, for the purpose of seeking summary judgment, on the claims of infringement of copyright in the charts of the Game, nor on passing off.  Further, Capcom Asia's claims against both Defendants and Capcom's claims against the 2nd Defendant in the Summons were all abandoned. 

7.For the purpose of the application for summary judgment, therefore, Capcom focused on its claim against Pioneer of infringement of its copyright in the Game as a film comprising all the visual images incorporated in the Game, by virtue of Pioneer's reproduction in the Magazine of copies of individual frames of images imported from the said film.

8.At the hearing, Pioneer does not dispute its importation of images identical or substantially similar to frames from the film, but claims by way of defence that such importation and inclusion in the Magazine was "for the purpose of criticism or review", constituting fair dealing within the meaning of section 39 (1) of the Ordinance.

9.The confined issue for determination on the Summons is whether Pioneer has an arguable defence of fair dealing so as to resist summary judgment under Order 14 of the Rules of the District Court.

10.The principles applicable to applications for summary judgment are clear and not in dispute.  To resist an Order 14 application, the defendant must show that there are triable issues.  The court has to determine whether what the defendant says is believable, and if it is, whether what the defendant says amounts to an arguable defence in law (Schindler Lifts (Hong Kong) Ltd. v. Ocean Joy Investments Ltd. [2003] 1 HKC 438). The burden of proof is on the defendant, but it is not a heavy one.  It is not the function of the court at this stage to assess if a defence will succeed at trial.

The copyright work and the alleged infringement

11.For the better understanding of Capcom's claim of infringement and Pioneer's defence of fair dealing, it is useful to consider the nature of the work in which Capcom claims copyright, and Pioneer's alleged infringement thereof.

12.Capcom manufactures video games, and the Game which is the subject matter of Capcom's claim of copyright in these proceedings is, apparently, extremely well-known and popular amongst teenagers and young adults in Asia.  The Game was created in 2007.  According to the Plaintiffs, the Game occupies 10% of the market share, and is the number one video game in Hong Kong and in Asia.  Players spend long hours on the Game and in the process develop skills and techniques on how to play the Game.  Mainly because of that, Capcom has a successful ancillary business of publishing and licensing others to publish "game strategy guide books", to educate and assist players to understand the Game and to play it skillfully.

13.The Magazine is published by Pioneer on monthly basis.  It has been distributed in Hong Kong since July 2005.  According to Pioneer, the Magazine updates readers on the latest information and news of portable play stations ("PSP") and video games, reviews and comments on PSP games, and reviews hardware and accessories of computers and PSP.  The Magazine features video games of different manufacturers.  According to Pioneer, books on video games are also published by video game manufacturers, but the contents of these books exclusively feature the individual manufacturer's own video games. 

14.Pioneer published a special issue of the Magazine in March 2007, which included a 101 page article entitled "MONSTER HUNTER PORTABLE 2^nd 晉身定級獵人之路" ("Article").  The Magazine was published shortly after the release of the Game in Hong Kong.  According to Pioneer, the Game is a continuation of "MONSTER HUNTER PORTABLE", an earlier version of the Game which was released in about late 2005.  According to Pioneer, the Game was very popular but was written in Japanese only at the material time.  Some players, particularly new players, may accordingly have difficulty in understanding the Game or the differences between the Game and its earlier version. 

15.The Article was a special feature which claimed to contain a report on the "combined experience（經驗總匯）" acquired by editors or journalists of the Magazine ("Editors") who had purportedly spent 300 hours playing the Game.  On its face, the Article appears to aim at setting out tips to players of the Game, on the basis of the experience acquired by the Editors in playing the Game, and the skills and techniques they gained in the process.

16.The Article contains 7 chapters, with text, frames showing images from the Game, tables, and charts.  The text, tables and charts included in the Article are detailed and elaborate, including summaries of different features of the Game (such as the tools, tasks, "food ingredients" and weapons featured in the Game) and reports on the game results.  As Capcom's claims relating to the charts have been abandoned, the application for summary judgment concerns only the approximately 86 frames included in the Article which Capcom claims are reproduction of its copyright work.

17.Capcom does not dispute that at the time when the Article was published, Capcom and/or its licensees had not yet published Capcom's own strategy guide book for the Game.  It has not been claimed that the Article is a reproduction of Capcom's own strategy guide.

19.It is against the background outlined in the preceding paragraphs that Capcom's claims of infringement and Pioneer's defence of fair dealing are raised.

Whether there are triable issues of fair dealing

20.Capcom claims that the purpose of the Article is to instruct readers on how to play the Game, as the Article is equivalent to a strategy guide book for the Game.  Capcom claims that neither comment nor criticism of the frames incorporated or the images included was made in the Article.  According to Capcom, the Article made no "argument or comparison" between the frames incorporated and any other work, such that (as Capcom claims) the Article is neither criticism nor review.  Further, Capcom claims that it is unnecessary to import so many frames or images from the Game into the Article even for criticism or review.  It is Capcom's case that Pioneer's purpose or motive of publishing the Article is to deprive Capcom of its right to publish its own strategy guide book, such that the defence of fair dealing is not available to Pioneer.

21.There is no dispute from the authorities cited that fair dealing is a question of degree (Lord Denning M. R. in Hubbard v. Vosper [1972] 2 Q.B. 84,94), or of fact and impression.  As Robert Walker L.J. observed in 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 …"

22.Counsel for Capcom sought to argue that "for the purposes of criticism or review" should be given the meaning of "for the purpose of argument" or "for the purpose of comparison", citing the following passage from the same judgment of Robert Walker L.J. in the Pro Sieben case :

"It seems to me that in the composite phrases "for the purposes of criticism or review" and "for the purpose of reporting current events" the mental element on the part of the user is of little more importance than in such every day composite expressions as "for the purpose of argument" or "for the purpose of comparison".  The words "in the context of" or "as part of an exercise in" could be substituted for "for the purpose of" without any significant alteration of meaning."

23.From a reading of the judgment itself, it is clear that Robert Walker L.J. was, in the passage relied upon by counsel, referring to the subjective or objective test of the intentions and motives of the user of the copyright material, and particularly, the meaning of the words "for the purpose of", rather than the meaning of "criticism or review".  I do not accept that "criticism or review" must mean argument or comparison.

24.As the Lord Justice pointed out, "criticism or review" are expressions of wide and indefinite scope, to be interpreted liberally.  The courts have recognized that criticism or review need not be limited to criticism or review of literary style or merit of the work, and may include, for example, the doctrine or philosophy expounded in the work (Hubbard v. Vosper, ibid), or ideas and events expounded in the work (Copinger and Skone James on Copyright, 15th edition,9-39).  The criticism or review can also be of either the work copied, or of another work (Copyright Ordinance, s. 39(1)).

25.Taking therefore the ordinary meaning of the word "review", it includes "a survey or report" according to the Advanced Learners' Oxford Dictionary.  Counsel for Pioneer also referred to the definition of "review" in The New Shorter Oxford English Dictionary, to cover "a general survey or reconsideration of some subject or thing" and "an account or criticism of a (new or recent) book, play, film, product etc".

26.Adopting the liberal interpretation advocated by Robert Walker L.J., I accept that by its ordinary meaning, "criticism or review" can include Pioneer's account, survey or report of the Game released by Capcom on the market.  The Article may well also constitute an instruction to readers on how to play the Game, but considered as a whole, my overall impression is that the Article is a review and general survey of the Game as a new product, with an account of the weapons players can use in the Game, comments on the efficiency or ease with which the weapons can be employed, some comparison between the old and new versions of the Game, and apparently, reports on game results achieved by the Editors.

27.Within the wider ambit of being a report made by, or a survey of, the Editors and their experience of playing the Game and skills they acquired in the process, the Article also includes a review of some positive and some negative features of the weapons available for use in the Game (from pages 27 to 36 of the Article itself).  There are also comments on the complexities of the system of the Game and of the "village scene" (on page 10 of the Article),comments on the method of "combining materials (合成物品）" (on page 99 of the Article), and comments on the vast amount of information and materials which have to be ascertained by players (also on page 99 of the Article).

28.The key question in deciding whether there is an available defence under section 39 (1) is whether Pioneer's use amounts to fair dealing.  In this regard, the court has to take into consideration the extent and amount of use, the use made, and the perceived purpose of use.  Capcom claims that it is unnecessary to incorporate the frames or images even for the purpose of criticism or review.

29.I have considered the images which were reproduced in the Article.  My overall impression is that for the vast majority of the frames used, the text accompanying the frames or images would not make a great deal of sense to the reader without the images incorporated.  For example, in the context of the description of the "hunter's home", and where the equipment is located and how access is to be obtained, the images are reasonably required.  As I have accepted that an account of how the Game is played or played skillfully can come within the wide and indefinite scope of "review", instructions and tips to readers on how to play the Game can be better understood with images included.  In particular, in the review of the different weapons, inclusion of images of the weapons themselves is, in my opinion, reasonably necessary.

30.There are instances in which the instructions or tips given can be given without the frames included, but there are only approximately 10 of such instances, and they constitute a minority of the total number of approximately 86 images or frames incorporated in the Article.  On the whole, I am satisfied that the incorporation and use of the images is necessary for the review made in the Article.

31.Capcom claims that the motive, and subjective and true purpose of the Article and Pioneer's use of the images is to deprive Capcom of its right to publish its own strategy guide book.

32.Although Lord Denning said in Hubbard v. Vosper (ibid) that "it is not fair dealing for a rival in the trade to take copyright material and use it for his own benefit", it is important to bear in mind that what Capcom relies upon as its copyright work is the film, or more broadly, the Game, but not Capcom's strategy guide book for the Game, which is a separate and distinct copyright work not made the subject matter of the present proceedings.  Moreover, in British Broadcasting Corp.v.  British Satellite Broadcasting Ltd. [1992] Ch 141, it was pointed out in the judgment of Scott, J. that the fact that the defendant is a commercial rival of the copyright owner does not, ipso facto, take the case outside fair dealing.  It is no more than a factor, and perhaps in some cases a very weighty factor, to be taken into account in considering whether there has been fair dealing.

33.On the facts of the present case, and taking into consideration the fact that Capcom does not rely on its copyright in any strategy guide book for the Game in its claim of infringement made against Pioneer in these proceedings, and the extent of use of the frames or images in the context of the contents of the Article, my overall impression is that the Article was as a whole made for the purpose of review.  Judging by the objective standard of a fair-minded and honest person, I am satisfied that Pioneer's use of the frames and images in the Article can be said to be "fair dealing".

34.It is important to bear in mind that at this stage, it is impossible and indeed inappropriate for a judge to see the film (in its traditional sense) or to examine all the images in the Game (if this is possible, or necessary).  It may be that at trial, the claim by Pioneer that the purpose of the Article is for criticism and review will be shaken.  However, I only need to be persuaded at this stage that Pioneer has an arguable defence under section 39 (1) of the Copyright Ordinance. 

35.I am satisfied that there are triable issues in relation to Pioneer's defence, and that the matter should proceed to trial.  Capcom's claims against Pioneer in the Summons is accordingly dismissed, with costs and certificate to Counsel.  Capcom's claims against the 2nd Defendant, and Capcom Asia's claims against both Defendants, in the Summons have already been dismissed at the conclusion of the hearing on 1 February 2008.

Mr. Lin Feng, instructed by William Lam & Co, for the Plaintiffs

Mr. Laurence Li, instructed by C.L. Chow & Macksion Chan for the Defendants