A pre-eminent law firm in Hong Kong

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Our vision is to help support our clients and the broader community in Hong Kong to capitalise on the exciting and unique range of local and global opportunities the city offers.
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IWD 2025

Accelerate Action

During International Women's Day, JSM reaffirmed its commitment to advance equity in the workplace. JSM partner and co-chair of the firm's Gender Equality Network, Jasmine Chiu, shared JSM's Diversity, Equity and Inclusion strategies and initiatives with three publications highlighting our efforts to empower all employees in their career advancement.
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Asian Financial Forum 2025

Powering the next growth engine

JSM was a collaborating partner at the 2025 Asian Financial Forum (AFF), facilitating the exchange of insights among influential leaders in the global economy. Our Commercial Managing Partner Hannah Ha, led an insightful panel titled “Global Spectrum – Forging Regional Capital Markets Collaboration.
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Introducing JSM

Homegrown.
Global outlook.

Our story is more than 160 years old. It is a story that demonstrates the resilience, spirit and strength the people of Hong Kong are renowned for, as our city grew from the small provincial port in Southern China to become the leading global financial and legal centre that it is today.

When the world has changed so has our firm – always taking the initiative to find the best course through unchartered territory for our clients, the community and our people.

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Our story is more than 160 years old. It is a story that demonstrates the resilience, spirit and strength the people of Hong Kong are renowned for, as our city grew from the small provincial port in Southern China to become the leading global financial and legal centre that it is today.

When the world has changed so has our firm – always taking the initiative to find the best course through unchartered territory for our clients, the community and our people.

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Who we are

Established in 1863.

Reinvented in 2024.

Insights

Latest publications

While it took Studio Ghibli 15 months to animate a four-second scene in The Wind Rises, it only took a few days for the internet to be flooded with images generated in the style of the renowned Japanese animation studio – enabled by OpenAI’s latest version of its artificial intelligence (AI) image generation tool, released in late March 2025.11 This legal update explores some of the copyright issues behind this trend from a Hong Kong perspective. What does copyright protect? In terms of artistic works, copyright law protects how an idea is conveyed visually. Thus, it is often said that there is no copyright in an idea, only in the original expression of an idea. Although an artistic work may reflect the artist’s decisions to paint one thing instead of another – and to use certain colours and brush techniques – it is the expression of these ideas as a whole that constitutes the artistic work being protected.22 As such, a style that comprises distinct visual features and techniques, whether belonging to certain periods in art history, an artist or a studio, is unlikely protectable by copyright. There is, however, copyright in the animations, stills and other works of Studio Ghibli productions. Images and photographs that users upload to the tool may also be subject to copyright, which may not necessarily belong to those users. If the image generated has significant commonalities with Studio Ghibli’s works or the uploaded works, and the features taken represent a substantial part of the copyright works, the output may amount to copyright infringement unless authorised by the copyright owners. Proposed TDM exception in Hong Kong As OpenAI explained, its image generation tool was trained on “images reflecting a vast variety of image styles [which] allows [its] model to create or transform images convincingly”.33 Given how closely the generated images resemble Studio Ghibli’s iconic style, there is a strong inference that the tool had been trained on its works – although OpenAI did not confirm either this, or whether any such training was authorised. In this connection, the Hong Kong SAR Government is preparing an amendment bill to introduce a text and data mining (TDM) exception to copyright infringement under the Copyright Ordinance (Cap. 528).44 The proposed exception will permit reasonable use of copyright works for computational data analysis and processing for both non-commercial and commercial uses, thereby facilitating the training of AI models. After public consultation from July to September 2024, the government noted that most of the responding copyright owners, organisations or groups opposed the introduction of the proposed TDM exception. Concerns included that the exception would undermine the licensing market for TDM activities and lead to more generated material competing with copyright work. Opponents therefore suggested the exception should be limited to non-commercial or non-commercial research purposes.55 In response, the government considers that a TDM exception covering both non-commercial and commercial purposes is appropriate, taking into account technological advancement, international and market trends, and policy objectives of fostering AI development.66 To balance the interests of copyright owners, in formulating the exception, the government will be mindful that the dealing should neither conflict with normal exploitation of copyright works, nor unreasonably prejudice the legitimate interests of copyright owners. As such, the following conditions are proposed: Requiring users to have lawful access to copyright works Prohibiting the use of infringing works Requiring users to keep and disclose records of the source of copyright works Carving out the exception where relevant licensing schemes are available Providing an “opt-out” option for copyright owners.77 The amendment bill is aimed to be introduced to the Legislative Council in the first half of this year. The government also plans to formulate non-binding codes of practice and guidelines on above-mentioned conditions (3) and (5).88 If introduced, the TDM exception could provide some comfort and clarity to the AI community on how copyright works may be used in the training process. However, guidance will be needed on the operational level; for example, regarding the categories and details of records that need to be kept. Copyright owners, especially those holding a substantial body of works that may be valuable for AI training, should stay tuned on how to exercise the opt-out option effectively (if it so wishes) – for example, through machine-readable metadata, or expressly in their terms of use. Fair dealing exception The imitation of style brings to mind another fair dealing exception – one that already exists in the Copyright Ordinance regarding fair dealing with a work for the purpose of pastiche (模仿).99 This exception has been untested in any published judgment in Hong Kong since it was introduced in 2022, and its equivalents in the UK and EU are rarely invoked. While the term “pastiche” is not defined in the Copyright Ordinance, the government cited the following definition in the 2022 consultation: “an artistic work in a style that imitates that of another work, artist or period”.1010 In the UK, the term is held to also apply to “an assemblage (medley) of a number of pre-existing works”.1111 In determining whether the exception applies in Hong Kong, courts must consider all circumstances of the case, including: the purpose of the dealing; the nature of the work; the amount and substantiality of the portion dealt with in relation to the work as a whole; and its effect on the potential market for, or value of, the work.1212 There is also an important primary consideration that the act must not conflict with a normal exploitation of the work by copyright owners, or unreasonably prejudice their legitimate interests.1313 In the UK, the exception was held not to apply in Shazam Productions Ltd v Only Fools The Dining Experience Ltd [2022] F.S.R. 25, in the context of an immersive dining show based on the characters, stories and catchphrases of a well-known television comedy series. The Intellectual Property Enterprise Court noted that the script of the dining show was “close to reproduction by adaptation than pastiche” and “not noticeably different” from the original series. As the original series was poised to be adapted into a musical, the court considered that the dining show would plainly compete with the musical, and was “a form of exploitation which a copyright holder would legitimately expect to be able to control (e.g. by licence)”.1414 AI developers seeking to rely on the pastiche exception may therefore have to grapple with the similar factor that their use of the copyright works is of a commercial nature. Although individual and recreational use of the tool may have little impact on the potential market for copyright works, a court may well consider that offering the tool to the public (including paying subscribers) on a large scale is a form of commercial exploitation – which the copyright owner has a legitimate interest in controlling. Also, developers could have a harder time invoking the exception pertaining to use of copyright works at the training phase than output generation. This may be the case if the copyright works were processed indiscriminately at the training phase, with no specific mandate to limit the use of such works for the purpose of pastiche by users. Conclusion Whether style imitation by generative AI is permissible – and the extent to which the TDM and pastiche exceptions can be relied upon – are just a few of the legal challenges posed by such technology that await judicial and regulatory clarification. As a side note, copyright owners may also avail themselves of the tort of passing off, if the AI developer or users engaging in trading activity make any misrepresentation that leads the public to believe the AI-generated works are from, endorsed by, or affiliated with the copyright owners. In addition to the proposed TDM exception, the government also plans to issue non-binding guidelines to elaborate on the copyright protection of AI-generated works and copyright infringement relating to such works.1515 These issues were covered in the 2024 consultation, but the government does not consider it justifiable to introduce related legislative amendments at this stage.1616 Therefore, any guidance on how existing provisions and legal principles could apply in different scenarios would be welcome.
Legal update 13 May 2025
Partnered events 12 May 2025
Navigating the new Construction Industry Security of Payment Ordinance which is going live on 28 August 2025! The new Construction Industry Security of Payment Ordinance will significantly impact contract operations from both project management and financial perspectives. Join our upcoming webinar where Jason Leung and Wenny Huang will discuss ways to mitigate these impacts through proper contract provisions with contractors, suppliers, consultants and other stakeholders. They will also provide a better understanding of this important legislation, including the background of the Ordinance and its scope of application.
Legal update 7 May 2025
On 6 May 2025, the Securities and Futures Commission (SFC) and the Hong Kong Stock Exchange (HKEX) jointly announced the launch of a dedicated Technology Enterprises Channel (TECH). It aims to facilitate new listing applications from prospective Specialist Technology Companies and Biotech Companies under Chapter 18C and Chapter 18A of the Main Board Listing Rules (Listing Rules), respectively, as well as a new confidential filing option for such companies. TECH has introduced a number of new measures to support prospective Specialist Technology Companies and Biotech Companies in understanding the applicable Listing Rules and assist in their preparation for listing in Hong Kong before they submit formal new listing applications. These measures include: Specialised team: Dedicating a team with relevant experience in reviewing and providing guidance on Chapters 18C and 18A applications. Enhanced engagement: Engaging with prospective Specialist Technology Companies and Biotech Companies to gain a deeper knowledge of their specific businesses and facilitate their comprehension of the requirements of the Listing Rules. Guidance: Providing guidance on the eligibility and suitability for listing of prospective Specialist Technology Companies and Biotech Companies. Case-specific advice: Providing opportunities for prospective Specialist Technology Companies and Biotech Companies to discuss and seek the HKEX’s preliminary guidance on case-specific issues arising under the Listing Rules. Prospective applicants seeking to communicate with HKEX under TECH may contact the Listing Division set out in the TECH webpage. As Specialist Technology Companies and Biotech Companies are often in their early stages of research and development or have yet to commercially launch their products, premature and prolonged disclosure of information on such companies’ details may pose greater risks compared to other industries. In order to mitigate these risks, companies seeking a listing under Chapters 18C and 18A are now permitted to submit their draft listing documents confidentially. This confidential filing option will be available for listing applications by Specialist Technology Companies and Biotech Companies after 6 May 2025. The regime and requirements for listing with a weighted voting right structure is governed under Chapter 8A of the Listing Rules. Specialist Technology Companies and Biotech Companies that fully meet the requirements under Chapters 18C and 18A, respectively, will now be presumed to have satisfied the innovative company requirements and external validation requirements under Chapter 8A, but are still subject to all other applicable requirements under the weighted voting right regime. The introduction of TECH and confidential filings for Specialist Technology Companies and Biotech Companies represents the commitment of SFC and HKEX to attract high-quality companies from innovative sectors around the world to its markets. By supporting prospective issuers on their listing journey in Hong Kong through enhancing transparency and providing support, it is very likely to increase the attractiveness of Hong Kong’s IPO market. Prospective listing applicants are welcome to contact the authors of this legal update for further details.
Legal update 25 April 2025
In February 2024, the Hong Kong government announced plans to relax the requirement for a “continuous contract” under the Employment Ordinance from needing to work 18 hours a week for four or more consecutive weeks (i.e. the “418 rule“) to 68 hours in four weeks. Please see our earlier legal update for more details. The Employment (Amendment) Bill 2025 to introduce changes to the continuous contract requirement has now been gazetted. Announced on 11 April 2025, the Bill seeks to amend the Employment Ordinance to provide for there to be a “continuous contract” where an employee works: not less than 17 hours per week for four or more consecutive weeks (changing the “418 rule” to “417 rule”), or 68 hours or more in aggregate over a 4-week period (i.e. the “468 rule”). The Bill was introduced into the Legislative Council for first and second readings on 16 April 2025 and further considered by the House Committee on 25 April 2025. Once the Bill is passed by the Legislative Council, the proposed amendments will come into operation on the first Sunday six months following gazettal. Employers and HR practitioners are encouraged to keep a close eye on the latest developments. Stay tuned for more updates! A copy of the Bill can be found here. See also the Press Release for more information.
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