The fundamental legislation applicable to art law is the Copyright Ordinance, which provides for the exclusive right of the owner to do the acts specified therein and prioritises the absolute entitlement of the author of a copyright work. Copyright protects the expression of an idea but not the idea itself.

The rights conferred by the Copyright Ordinance expire 50 years after the end of the calendar year in which the work was first made or, if the work is made available to the public during that 50-year period, the copyright shall expire 50 years after the end of the calendar year in which the work was first made available to the public.

The authority implementing copyright regulation is the Copyright Tribunal, which has jurisdiction to hear and determine proceedings under and in respect of an employee award for his or her use of a copyright work outside the reasonable contemplation, reference to a licensing scheme of copyright, entitlement to a licence under the licensing scheme and in respect of acts infringing copyright.

The Copyright (Amendment) Ordinance was enacted in May 2022 and introduced a technology-neutral “communication right” for copyright owners to address new methods of the transmission or distribution of copyright material, such as live streaming, non-downloadable video on demand, the provision of access to copyright works via hyperlinks and peer-to-peer file transfers. The Amendment Ordinance also clarifies and augments the use of the word “communication” in relation to copyright materials.

This Ordinance further expands new exemptions for parody, satire, caricature and pastiche, stating that fair dealing with a work for the purpose of parody, satire, caricature or pastiche does not infringe copyright in the work. It provides an exemption for online service providers to take advantage of contemporary cache and hosting of data in copyright identity. Online service providers will also find safe harbour protection where they have not received a financial benefit directly attributable to a copyright infringement, and are able to avoid liability under the Copyright Ordinance through the implementation of a notice of alleged infringement and the taking down or disabling of access to alleged infringing materials upon receipt of notices of infringement. However, certain questions in the community regarding possible copyright infringement through the use of artificial intelligence (AI) still remain unaddressed.

The increasingly common method to identify a particular provider of goods or services is to do this under the identification of a “brand”. Brands can be protected as registered trade marks in Hong Kong, which gives sufficient protection to all aspects of related artwork in a specific brand of a particular provider. Certain branding with specific artwork on the whole or part of a specific manufactured article can also be protected for the registered owner by the registration of a design right under the Registered Designs Ordinance, and may also be protected as an “artistic work” under the Copyright Ordinance.

Purely intellectual property such as a patent in a computer program and a business method can be protected under the Patents Ordinance, provided that the underlying invention relating to the program makes a technical contribution over and above that provided by the program or business method itself, such as an improvement in the working of the computer.

The Copyright (Amendment) Ordinance 2023 introduced a broader range of fair dealing exceptions to copyright ownership, covering in particular the use of copyright works for parody, satire, caricature and pastiche, data caching by online service providers and media shifting where the version of the media format is made for private and domestic use.

The Personal Data (Privacy) Commissioner published a Model Personal Data Protection Framework identifying the risks associated with AI in relation to guarding and warning against inadvertent disclosure of personal data through insufficient training or using poor-quality data in relation to use on an AI system. The consequence has been to enhance the level of AI governance within enterprises and the proper use of technology in aspects of application of the Personal Data Protection Principles under the Personal Data (Privacy) Ordinance.

The main rights of an artist over a piece of artwork are the entitlement to be recognised as the original creator of the work, and the entitlement to copyright in their creation under the Copyright Ordinance. There are also clear rights applicable to any contractual application of an artwork and related to its creator artist.

Collaborative/collective artworks with multiple authors would generate individual copyright for each of the multiple authors, and it would be appropriate for the copyright entitlement to be individually established as a contractual reality and clearly recorded as a collaborative right between all of the authors.

The copyright owner is entitled to take legal action for damages or for injunctions against any copyright infringement by virtue of his or her entitlement under the Copyright Ordinance. This would be referable to the owner of a specific artwork, and the infringement gives rise to an action for damages or a take-down order and injunction against continued or repeat infringement.

There is no need to make an application for registration of a copyright in Hong Kong. The enjoyment of copyright protection is supported by the original nature of the copyright work that is recorded in a material form. Copyright arises automatically and there are no requirements for registration or other formalities of the copyright.

There is no statutory resale right (droit de suite).

The copyright period under the Copyright Ordinance is 50 years from the date of creation by the author of the copyright work. During this period, any third party seeking to exploit the copyright work can only do so with express licence and permission from the copyright holder.

Following the death of a person entitled to copyright as the author and with the entitled right to be identified as the author, the executors or the express legatees are entitled to the estate of the deceased artist for the remainder of the 50-year period from the date of creation of the work. Distinct from such ownership of copyright, no party has statutory authority to a right to authenticate the artwork of the deceased artist. However, reliable experts are frequently employed to give evidence in court regarding authentication, but this of course remains a matter of opinion.

Authentication does not establish a compulsion for a specific artwork to be included in the catalogue raisonné of the artist, nor are the personal representatives compelled to issue a favourable opinion in respect of any certificate of authenticity.

If reliable best available written or oral evidence results in a purchased artwork being declared inauthentic, then it is open to the injured purchaser to take legal proceedings against the original vendor whose sale of the purchased artwork has been declared inauthentic.

There is no legislative definition of “cultural heritage” in Hong Kong. The recognition of such a field was only identified in 1976 through the enactment of the Antiquities and Monuments Ordinance as a recognition by the government of a growing public perception of the reality of cultural heritage in a place that had been under British rule since 1841 but was now increasingly subject to the need to acknowledge the huge Chinese population as having cultural heritage entitlement and corresponding need for its protection.

The Antiquities and Monuments Ordinance (AMO) introduces definitions of “antiquity” and “relic”, and also specifies a “place, building, site or structure erected, formed or built by human agency before the year 1800 and the ruins or remains of any such place, building, site or structure whether or not the same has been modified, added to or restored after the year 1799”.

The AMO provides that ownership of every relic (as defined) discovered in Hong Kong after the commencement of the AMO automatically vests in the Hong Kong government from the moment of the discovery of the relic. It is possible for the Secretary for Development to disclaim a relic as such and, following such disclaimer, the government ownership of that disclaimed relic shall be extinguished and its ownership shall vest in the person who, but for the enactment of the AMO, would otherwise have been the owner thereof.

The AMO further established the Antiquities Advisory Board (AAB), which is charged with advising the Secretary for Development on any matters relating to antiquities or any proposed monuments, but the powers of the AAB are essentially restricted to buildings and structures, and are not concerned with either the visual arts or intangible cultural assets.

See 5.2 Cultural Heritage and Adverse Possession.

The main clauses in an art sale contract must cover the name and address of the artist as the seller and the name and address of the purchaser. The sale contract should provide that the title to the physical work remains with the artist until the full sale price is paid, at a point which must be provided for. The same applies to the retention of copyright with the artist until the completion of the sale. It is also best for the agreement to provide assurance to the artist of the purchaser's obligation to attribute the moral rights of the artist as the artist of the work being purchased, with a further express agreement by the purchaser not to mutilate, repaint or destroy the work and further that the purchaser should use best endeavours to ensure and provide that all obligations of the purchaser under the agreement are passed on to any new purchasers from the first purchaser.

It is also advisable for the sale contract to provide for responsibility for transport of the work from the artist or selling gallery to the purchaser. If the agreement is to make provision for royalty to the artist upon any resale, then an appropriate clause should be included to require that the first purchaser pays a specified percentage of any resale price to the artist, and this obligation should be made the subject of a further resale obligation by the first purchaser to all subsequent purchasers.

The agreement should further provide for copyright as being an independent right that, during the period of copyright, may vest either in the original author or in his or her estate and then pass on to any purchaser until the expiry of the copyright period. This provision for copyright ownership and obligation is separate from that of ownership. A further provision should be included related to insurance of the work until completion of any period between the date of the sale contract and the delivery of the work from the possession of the artist; such insurance should be agreed to be for a specific value, which must then be engaged with the insurer. The agreement should further clearly provide for its termination and for dispute resolution, whether by way of court proceedings or arbitration, with an express choice of law to govern the contract.

There are no specific issues in relation to the transfer of an artwork abroad, other than those set out in 6.1 Key Clauses in Art Sale Contracts.

If the purchaser of the artwork is reliably informed that the purchased work is inauthentic or fake, and the artwork does not conform to the description made of it by the seller, then action can be taken for damages, often related to the cost paid by the purchaser to the seller but also possibly for aggravated damages, which might include a possible loss of profit for the purchaser on the possible intention of resale.

Checks and verification should be made by auction houses and galleries in respect of all aspects of authenticity and ownership to be fully satisfied in any particular case before offering an artistic good for sale.

Art advisers play an intermediary role between the prospective purchaser of an artwork and the prospective seller, being either an auction house or a sale gallery. The responsibility of the art adviser depends very much on a specific contract with the proposing purchaser, which will be best advised to include at least a shared specific liability for inauthenticity and failure to achieve delivery of the artwork in question at the time of successful purchase by the buyer.

The four ordinances applicable to money laundering in Hong Kong are:

• the Organized and Serious Crimes Ordinance;
• the Drug Trafficking (Recovery of Proceeds) Ordinance;
• the United Nations (Anti-Terrorism Measures) Ordinance; and
• the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.

The Organized and Serious Crimes Ordinance defines money laundering as dealing with property that is known or believed to represent the proceeds of an indictable offence. A person doing this commits an offence if they deal with such property while knowing or having reasonable grounds to believe that the property in whole or in part, directly or indirectly, represents the proceeds to any person of an indictable offence. There are technical defences to a charge under this section but if the charge is validated then the committing of the offence makes the committor liable on conviction upon indictment to a fine of HKD5 million and imprisonment for 14 years, or on summary conviction to a fine of HKD500,000 and imprisonment for three years.

It is further provided that references to an indictable offence include reference to conduct that would constitute an indictable offence if it had occurred in Hong Kong, so any such offence occurring outside Hong Kong is also caught. It is further provided in the Drug Trafficking (Recovery of Proceeds) Ordinance that a person commits an offence if they deal with property that they know or have reasonable grounds to believe represents, in whole or in part, directly or indirectly, any person’s proceeds from drug trafficking. Again, a person committing an offence is liable on conviction upon indictment to a fine of HKD5 million and imprisonment for 14 years, or on summary conviction to a fine of HKD500,000 and imprisonment for three years.

In order to avoid any such liability, there are obvious cautionary steps that must be taken in any aspect of the art market and usually by way of full knowledge of the source of any funds or of the proceeds of transacting any dealing with an artwork, and it is clearly the responsibility of all parties to any particular transaction to be well aware of the wide extent and possible global impact of these money laundering provisions.

There is no cultural heritage protection for collections.

Under Section 5 of the Copyright Ordinance, “artistic work” means (inter alia) a graphic work, a photograph, a sculpture or a collage, irrespective of artistic quality, and “photograph” means a recording of light or other radiation on any medium on which an image is produced or from which an image may by any means be produced, and which is not part of a film.

Under Section 1 of the Copyright Ordinance, copyright is a property right that subsists in (inter alia) artistic works.

The coverage in the Copyright Ordinance of “artistic works” extends to photographs, irrespective of artistic quality. In the case of an artistic work (including a photograph as defined), the duration of copyright is 50 years from the end of the calendar year in which the author dies. It is further provided in Section 72 of the Copyright Ordinance that it is not an infringement of copyright in an artistic work to copy it, nor to issue or make available copies to the public, for the purpose of advertising the sale of the work.

A non-fungible token (NFT) can be defined as a unique, digital certificate that is stored on a blockchain. The non-fungibility of an NFT is found in its unique, independent, standalone and fixed value in contrast to the “fungibility” of assets of an interchangeable nature, such as dollar cash or bitcoin. The NFT provides certain ownership rights in an asset of a typical digital character, such as a digital work of art. The NFT provides a powerful tool to establish and demonstrate ownership rights in the digital asset, where it is often hard to demonstrate such rights given how quickly and easily digital works can be replicated. The NFT is generated under the terms of a “smart contract”, which is a contractual binder stored as computer code on a blockchain. The NFT includes the unique identifier, the blockchain wallet address of the current owner and an identifier of where the digital work of art associated with the NFT may be found.

A blockchain transaction is fully transparent in that anyone can view an NFT and its underlying information, including the blockchain address of the current owner and the blockchain address of each owner since the original creation of the NFT. The buyer of an NFT must already have a digital wallet in order to receive, access and transfer the NFT in question. This is because an NFT can be bought and sold like any other piece of property but the purchase and sale are effected by transferring the NFT through a blockchain transaction from the seller to the purchaser. In this connection, it is very important to realise that the ownership of an NFT is simply the ownership of a virtual asset on the blockchain, but this ownership does not extend to any rights or other entitlement to the underlying asset, such as a painting or a book, with particular reference to the attachment of any copyright in the NFT asset.

The positioning of an NFT on the blockchain consolidates the authentic creation. This structure does not permit inauthentic or counterfeit entry into the blockchain.

There are two possible ways to move and transfer an artwork or art collection under sensible planning:

• the artwork can be settled into a trust with reliable trustees to own and exploit the artwork for the purposes set out in the Trust Deed; or
• the artwork can be bequeathed by a will made by the owner to such causes as the owner/testator may decide, whether personal or charitable.

The position in Hong Kong under the Intestates’ Estates Ordinance fixes the devolution of title upon intestacy to parties which the deceased intestate may not approve, but no amendment is possible.

There are no tax implications in Hong Kong for the acquiring of an artwork through gift or donation.

As there are no inheritance/donation taxes imposed in Hong Kong, all types of artworks are excluded from inheritance/donation taxes.

An artwork can be placed in a trust, which can be established to preserve an art collection as a whole purpose trust. There are no fiscal penalties in Hong Kong for such an arrangement.