Draft Amendments to the Chinese Copyright Law
The modern Chinese Copyright Law, in its history, has been substantively revised twice, in 2001 and 2010. A significant number of draft amendments have been on the table since 2010. On June 6, 2014 the Office of Legislative Affairs of the State Council of the People’s Republic of China released a “finalised” series of draft amendments to the Copyright Law in order to ensure improvement in its intellectual property laws and regulations, and further encourage and foster the innovation industry.
The Draft was composed by the National Copyright Administration Leading Group for amendment of the Copyright Law and the National Copyright Administration Expert Committee for amendment of the Copyright Law, both of which are special bodies set up by the National Copyright Administration (NCA). It is a result of the consideration of opinions and advice submitted by the public and both domestic and international organisations and governments in response to previous drafts, and further enhanced by China’s judiciary in their role of expanding the recognition of copyright rights and international copyright norms. Therefore, it is the collective work of many bodies and exemplifies China’s dedication to improve its Copyright Law.
The Draft also includes policy considerations, including:
(a) acknowledging copyrights as progressively becoming more respected in China due to domestic and international changes such as China’s economic progress;
(b) creation of new challenges to copyright protection due to online and digital technologies; and
(c) the important role that copyright considerations play in international trade and politics such as the World Trade Organisation.
Subject matter of the copyright
Under Article 5, the subject matter of a copyright has been extended to include the following:
(a) literary works;
(b) oral works;
(c) music works;
(d) dramatic works;
(e) quyi works;
(f) dance works;
(g) acrobatic art works;
(h) fine art works;
(i) applied art works;
(j) architectural works;
(k) photographic works;
(l) audio-visual works;
(m) charts and graphs;
(n) three-dimensional works;
(o) computer programmes; and
(p) other literary, artistic or scientific works.
The Draft has significantly widen the subject matter of a copyright, for example, it renamed ‘the cinematographic works and works created by a process analogous to cinematography’ to ‘audio-visual works’, which is a wider and more comprehensive term, added ‘applied art work’, and changed ‘computer software’ to ‘computer program’ to add literary work protection over computer files.
However, the Article provides that, as well as a requirement of originality, these works will also have to be ‘fixed in some form’, therefore this may have effectively introduced a further criterion for the identification of works that qualify for protection under the Copyright Law. In practice, this may limit the actual extension of the scope of the amended Article and negate the positive impacts of widening the subject matter of a copyright.
Criteria of ownership of rights
The Draft introduces certain amendments aimed at reflecting and reinforcing the principle of autonomy in regards to the owner of the copyright. For example, under Article 16, the permission of the copyright holder of the derivative work and the copyright holder of the original work shall be obtained; and under Article 19, the copyright holders enjoy exclusive rights over the use of audio-visual work. This is in stark contrast to the existing law where it provides for works belonging to the producer, whereas in the Draft, it now allows for parties to conclude an agreement on the recognition of ownership.
Extension of the protection period
A significant change proposed by the Draft is in relation to photographic works, which is to maintain it at the same protection level given to other copyrightable works, that is, not for a mere fifty years from the date of publication as it is under the current law, but for the duration of the author’s life and for another fifty years after the author’s death. Therefore, the amendment considerably extends the length of the protection period granted to photographic works.
Implementation and enforcement of copyright
The Draft reinforces the idea of civil responsibility by espousing it in many of its Articles, including Article 72, to state that those infringing copyright or related rights or violating duties concerning technological protection measures or the relevant rights management information as provided in this Law, shall bear civil responsibility to cease the infringement, cancel the influence, make a formal apology, compensate damage and so on. Furthermore, the Draft provides for the applicability of the Civil Procedure Law of the People’s Republic of China on copyright or related rights holders applying for the preservation of activities, assets or evidence under Article 82.
The Draft also replaces the sequential regulations present in the current law and introduces a new compensation calculation system under Article 76 whereby compensation is calculated either:
(a) as the actual loss sustained by the right owner;
(b) as the infringer’s illegal profit;
(c) as a reasonable multiple of royalties in the normal trade of copyright; or
(d) if it was impossible to determine a specific amount according to the above criteria, as a sum not higher than RMB 1 million.
The new system was introduced in response to provide for the gaps left by the first two methods, as they were a significant burden to calculate, thereby leaving successful plaintiffs without adequate compensation. Therefore, the third method of calculation is based on an objective and reasonable multiple of normal royalties, ensuring a way for copyright holders to receive a fair and just compensation.
Furthermore, the Draft increases the amount of statutory damages and punitive damages awardable, so under Article 77,, in the case of an infringing activity the administrative copyright management department may order cessation of the infringing activities, issue a warning, confiscate unlawful income, and confiscate or destroy infringing goods and reproductions. Further, it provides that where the amount of an illegal business value is more than ¥50,000, the administrative copyright management department shall impose a fine of more than 1x but less than 5x of the amount of the illegal business turnover, and in relation to ¥0 - ¥50,000 illegal business turnovers or where the illegal business turnover is difficult to calculate, the authority may impose a fine of an amount up to ¥250,000.
Under Article 78, the administrative copyright management department may impose a warning, confiscate unlawful income, and confiscate devices or components mainly used in avoiding or destroying technological protection measures. It further provides that where the amount of an illegal business value is more than ¥50,000, the administrative copyright management department shall impose a fine of more than 1x but less than 5x of the amount of the illegal business turnover, and in relation to ¥0 - ¥50,000 illegal business turnovers or where the illegal business turnover is difficult to calculated, the authority may impose a fine of an amount up to ¥250,000.
Therefore, under a new compensation scheme and an increase in the amount of fines and damages awardable, the Draft seeks to enhance protection over copyright holders by introducing such significant provisions, and further enforce them in an effort to increase compliance.
The Draft is a commendable effort made by the State Council in response to the needs expressed by copyright holders, and it is with great excitement and expectation that the intellectual property community looks to the 2015 release of the fourth draft to the Copyright Law. However, giving significant discretionary powers to one particular body, namely, the administrative copyright management department, is a cause for concern, as there is potential there for abuse or misuse of power.
The Draft has been produced to recognise the rights of copyrights holders and to strengthen those rights through specifically improving infringement compensation standards by doubling statutory penalties and introducing punitive remedies, as well as changing the method of calculating compensation. Therefore, adding this to the widening of the subject matter of a copyright, the extension of the protection term for a copyright, and an increased recognition of copyright holders, the Draft is an example of China engaging in major reforms over the past decades of its intellectual property laws in an attempt to increase transparency in legislative processes and a genuine effort to improve enforcement capacity. This is especially significant in the intellectual property area, as intellectual property protection can reduce the barrier for bilateral trade and an increase in such protection aligns domestic and foreign objectives, and furthermore, the possession of strong intellectual property protection is an invaluable means to promote innovation.
ABOUT THE AUTHOR: Matthew Murphy
Matthew Murphy is a Partner in the MMLC Group. Matthew Murphy would like to thank Joyce Chng for her contributions to this article.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.