Parodies and comments on current affairs would be exempt from an extended copyright law providing they met "fair use" criteria, under the latest government proposal.
The government has been trying for eight years to strengthen copyright laws to offer more protection for copyright holders online and meet international standards, but has faced opposition amid concerns that non-commercial parody and satire would suffer. A previous bill was dropped in 2012.
It says the latest version of the amendment, to be tabled to the Legislative Council on Wednesday, offers exemptions that will enhance freedom of expression. But some in the online community say the safeguards do not go far enough.
Works featuring "secondary creations" - such as new lyrics for existing tunes - will not face civil or criminal liabilities providing they are either parodies or comments on current affairs and can be considered "fair use".
"All exemptions would require fair use, or else we would be opening a big hole in the copyright law, meaning you could do anything under it," a government source said.
Courts would assess whether works were examples of "fair use" by assessing such criteria as whether the work aimed to make a profit. It would also consider the work's similarity to the original.
The bill would also establish a "safe harbour" for online service providers so their liability for copyright infringement on their platforms would be limited - providing that, once notified of a breach of the law, they took steps to remove the offending work. In cases of criminal liability, courts would consider economic loss to the owner based on whether the work was a substitute for the original.
The government said the amendments were necessary because Hong Kong's copyright law was a decade behind many developed countries.
Regarding the exemption for parody makers, Joe Lam Cho-shun, chief executive of the popular Golden Forum website, said many in the online community were still worried.
"It's like it will all depend on judge's rulings in the end. Internet users may be worried about breaching the law and could refrain from making creations. This is the most worrying thing."
Lam said many in the online community had been hoping for greater exemptions to the law.
IT sector lawmaker Charles Mok said that some internet users might not trust the government's claim of greater freedom.
None of the three options listed in the consultation document gained majority support from the more than 2,000 submissions received from web users and copyright owners last year.
Mok said the government had opted for the most "open" proposal of the three, but this option was still less open than a fourth proposal based on Canadian law that many internet users backed.
Under this proposal not only parody makers, but all creators of non-commercial content - such as remixed music or home movies with commercial background music - would be exempt from civil and criminal liabilities.
Lego will set up a committee to discuss the bill, which is expected to take about a year. The new exemptions could take effect by the middle of next year.