1.1 What are the requirements for copyright to subsist in a work?
Article 2 of the Implementing Rule of Copyright Law of PRC provides that work shall refer to original intellectual creations in the literary, artistic and scientific domain, insofar as they are capable of being reproduced in a certain tangible form.
Therefore, a work protectable under the Copyright Law of PRC must be:
(1) original, which means that the work must be originated by the author rather than copied from any other party; and
(2) reproducible, which means that the work must be able to be fixed in a tangible form.
1.2 On the presumption that copyright can arise in literary, artistic and musical works, are there any other works in which copyright can subsist and are there any works which are excluded from copyright protection?
Copyright can also subsist in the following works under Chinese law:
(1) Oral works, which refer to works that are created with spoken words, such as impromptu speeches, lectures and court debates.
(2) Dramatic works, which refer to such works as drama, operas and others which are used in stage performance.
(3) Choreographic works, which refer to works that express idea and emotion through successive body movement, gestures and facial movements and expressions.
(4) Architectural works, which refer to works with aesthetic value which is expressed in architectural or constructional form.
(5) Photographic works, which refer to artistic works created by recording images of existing things or people on light-sensitive materials or other media with the aid of a device.
(6) Graphic works, which refer to drawings of engineering designs and product designs for the purpose of actual construction or manufacture, maps and sketches showing geographic phenomena and demonstrations of the fundamental nature or structure of a thing or object.
(7) Model works, which refer to three-dimensional works made according to the shape and structure in a certain scale of an object for the purpose of exhibition, experiment, observation and measurement.
(8) Software works, which refer to computer programs and documents.
However, laws, regulations, resolutions, decisions and other legislative, judicial and administrative documents of government and their official translations, current news, calendars, numerical tables or forms for general use, and formulas are excluded from copyright protection.
1.3 Is there a system for registration of copyright and if so what is the effect of registration?
Copyright registration applications can be filed with the Copyright Protection Centre of China (CPCC) and other copyright registration institutions in China. The cost varies from 100 RMB to 5,000 RMB.
Although copyright registration is not a compulsory requisite for the establishment of copyright ownership, such registration is regarded as prima facie evidence to prove the ownership of copyright, particularly in court actions.
1.4 What is the duration of copyright protection? Does this vary depending on the type of work?
The duration of copyright protection in China is the life of the author plus 50 years, which means the duration is from the day the work is completed to December 31st of the 50th year after the author’s death.
With regard to works of organisation, the duration is from the day the work is completed to December 31st of the 50th year after the work is first published.
However, the author’s moral rights, including rights of attribution, authorship, revision and integrity, are protected without a time limit.
1.5 Is there any overlap between copyright and other intellectual property rights such as design rights and database rights?
There are overlaps between copyright and other intellectual property rights is common. For example, logos or sounds (sound marks) can be protectable under both copyright law and trademark law. The design of a product can be protectable as a design patent under patent law, as a work of applied art under copyright law (where it reaches a certain artistic level) or as a three-dimensional mark under trademark law (where the design is distinctive) or as a trade dress under Anti Unfair Competition Law.
1.6 Are there any restrictions on the protection for copyright works which are made by an industrial process?
Theoretically, copies of works made on a large scale by industrial process are protectable under copyright law without legal obstacles. In practice, industrial products are scarcely protected by copyright law due to its insufficiency in artistic value/level.
However, the following two types of industrial products are regarded as protectable under copyright law.
(1) software – software products mostly rely on copyright protection; and
(2) works of applied art – the design of functional products are protectable under copyright law if such design satisfies the requirements of artistic level, functionality and originality.
2.1 Who is the first owner of copyright in each of the works protected (other than where questions 2.2 or 2.3 apply)?
■ The author of a literary, musical, dramatic and artistic work.
■ The producer of a film.
■ The designer of an architectural work.
■ The person who makes the adaptation, translation, annotation or arrangement for a derivative work.
2.2 Where a work is commissioned, how is ownership of the copyright determined between the author and the commissioner?
Where a work is commissioned, the ownership of the copyright should be determined by the contract between the author and the commissioner. However, if there is no contract or the contract is not clear enough, the author is the owner of the copyright.
2.3 Where a work is created by an employee, how is ownership of the copyright determined between the employee and the employer?
There are two sorts of works that are created by the employee:
- If the work is completed mainly by using the material and technical resources of the employer and the responsibility for the work is borne by the employer, e.g. the product design drawings, maps and computer software, then the copyright shall be owned by the employer.
- With regard to works other than those mentioned above, the employee shall own the copyright, though the employer has the prior right to use the work within its business scope.
2.4 Is there a concept of joint ownership and, if so, what rules apply to dealings with a jointly owned work?
The copyright of a work, which is created jointly by two or more co-authors, shall be owned jointly by the co-authors.
Where the joint work is separable, each joint owner can own the copyright of the part he has created independently, provided it does not affect the copyright of the joint work as a whole.
Where the joint work is inseparable, any enforcement of the copyright shall be agreed by all joint owners. Where the joint owners fail to reach an agreement and have no justified reasons for the failure, each joint owner can exercise all the rights, except the right of assignment. However, the income generated therefrom shall be fairly distributed between or among the joint owners.
3.1 Are there any formalities which apply to the transfer/assignment of ownership?
The assignment of copyright requires a written contract between the assignor and the assignee. The contract shall include the following provisions:
(1) the title of the work;
(2) the right(s) being assigned and the geographic scope thereof;
(3) the assignment price;
(4) the date and method of payment of the assignment price;
(5) liability for breach of contract; and
(6) other terms which the parties consider necessary.
The rights of publication, authorship, revision and integrity cannot be assigned. Failing to comply with the formalities may result in legal risks concerning the validity of the assignment.
3.2 Are there any formalities required for a copyright licence?
The licensing of copyright requires a contract between the licensor and the licensee. The contract shall include the following main terms:
(1) the type(s) of right(s) being licensed;
(2) whether the licence is exclusive or non-exclusive;
(3) the geographic scope and term of the licence;
(4) the amount and method of remuneration;
(5) liability for breach of contract; and
(6) other terms which the parties consider necessary.
Particularly when the licence is exclusive, there must be a written contract. The content of the exclusive licensing right must be included. Failing to comply with the formalities may bring legal risks to the validity of the licence.
3.3 Are there any laws which limit the licence terms parties may agree (other than as addressed in questions 3.4 to 3.6)?
Generally, the parties cannot agree on the terms to license the moral rights of the copyright owner, including the right of publication, authorship, revision and integrity.
3.4 Which types of copyright work have collective licensing bodies (please name the relevant bodies)?
Currently, there are five collective licensing bodies in China. For musical works, the collective body is the Music Copyright Society of China (MCSC). For audio and video works, the collective body is the China Audio-Video Copyright Association (CAVCA). For literal works, the collective body is the China Written Works Copyright Society (CWWCS). For photographic works, the collective body is the Images Copyright Society of China (ICSC). For film works, the collective body is the China Film Copyright Association (CFCA).
3.5 Where there are collective licensing bodies, how are they regulated?
The collective licensing bodies are mainly regulated by the Copyright Law of PRC and the Regulations on the Collective Administration of Copyright. According to the law and regulations, the application for establishment of a collective licensing body shall be reviewed and approved by the National Copyright Administration of China.
3.6 On what grounds can licence terms offered by a collective licensing body be challenged?
The licence terms offered by a collective licensing body may be challenged in several particular circumstances:
(1) The collective body has not been authorised by the owner of copyright or is beyond the scope of the authorisation.
(2) The collective body fails to stipulate the specific amount of the chargeable royalties or the royalties are substantially higher than the official royalty charging rates.
(3) The licence includes extra works which are unnecessary for the user.
4.1 What acts involving a copyright work are capable of being restricted by the rights holder?
The following actions are deemed as copyright infringement:
(1) publishing a work without permission from the owner;
(2) publishing a joint work as a work created solely by oneself without permission from the other joint authors;
(3) passing off as the author without participating in the creation of the work;
(4) distorting or tampering with the work of another;
(5) plagiarising another’s work;
(6) renting films, computer software, audio or videos without the permission of the owner;
(7) using the layout of a published book or periodical without permission from the publisher;
(8) reproducing, distributing, performing, projecting, broadcasting or compiling a work, or broadcasting the same to the public via an information network, without permission from the owner;
(9) publishing a book for which another person has the exclusive right of publication;
(10) reproducing and/or distributing an audio or video recording of a performance or broadcasting the same without permission from the performer;
(11) reproducing and/or distributing an audio or video recording or broadcasting the same without permission from the producer;
(12) broadcasting or reproducing a radio or television broadcast without permission;
(13) deliberately circumventing or cracking the technical measures taken by a copyright owner without permission;
(14) deliberately removing or modifying the electronic rights control information contained in a work without permission; and
(15) producing or selling a work by passing it off as the author’s own.
4.2 Are there any ancillary rights related to copyright, such as moral rights, and if so what do they protect, and can they be waived or assigned?
There are four kinds of moral rights related to copyright. They are the right of publication, authorship, revision and integrity. The right of publication means the right to decide whether or not to make a work available to the public. The right of authorship means the right to affix one’s name to a work to indicate the author’s identity. The right of revision means the right to revise or authorise others to revise one’s work. The right of integrity means the right to protect one’s work against misrepresentation and distortion. Theoretically, the moral rights, especially the right of authorship, can neither be waived nor assigned.
4.3 Are there circumstances in which a copyright owner is unable to restrain subsequent dealings in works which have been put on the market with his consent?
According to the principle of the first-sale doctrine, once the works have been put into the market with the owner’s consent, the owner no longer has the right to restrain subsequent dealings with the works.
The application of the first-sale doctrine in digital circumstances is more complicated; in general, the doctrine will merely apply to the sale of physical copies rather than digital copies of the work, as the latter will result in an increased number of copies.
5.1 Are there any statutory enforcement agencies and, if so, are they used by rights holders as an alternative to civil actions?
The copyright bureaus at all levels are the authorised enforcement agencies for copyright.
However, the enforcement capacity of such enforcement bodies are not sufficiently effective to be used as an alternative to civil action due to the limited number of agencies as well as their limited human resources.
Besides, the copyright administration departments are merely authorised to conduct raids to stop the infringement, rather than order the infringer to compensate the loss of the right holder. Therefore, in most occasions, the copyright administration departments function as a supplementation to civil action, rather than an alternative.
5.2 Other than the copyright owner, can anyone else bring a claim for infringement of the copyright in a work?
Besides the owner, the successor of the owner, exclusive licensee and collective licensing body also have the right to bring action against a copyright infringer. A non-exclusive licensee can also bring a legal action with the written authorisation of the copyright owner.
5.3 Can an action be brought against ‘secondary’ infringers as well as primary infringers and, if so, on what basis can someone be liable for secondary infringement?
Generally, whoever knowingly induces or assists another party to carry out infringing acts shall be jointly liable with the primary infringing party. Particularly, where an internet service provider instigates or assists a network user to conduct an infringement of the information network transmission right at the time of providing a network service, the said supplier shall jointly bear liability for infringement with the primary infringer.
Where a network service supplier induces or encourages a network user to conduct an infringement against the right of making available of a work by way of speech, promotion, technology support, bonus points, etc., such act by the provider will be liable for secondary infringement.
Where a network service supplier knows or ought to know that a network user makes use of a network service to infringe the information network transmission right but fails to take necessary measures such as deleting, screening, and cutting off the connection, or assists such act by providing technical support with receipt of notice from the right owner, the said supplier will likely be liable for secondary infringement.
5.4 Are there any general or specific exceptions which can be relied upon as a defence to a claim of infringement?
The exceptions which can be relied upon as a defence include fair use and statutory licence. Fair use includes:
(1) private use for study, research or enjoyment;
(2) appropriate quotation used to introduce or comment on certain works;
(3) inevitable use for news reporting;
(4) translation or reproduction of a small number of copies for the purpose of education or scientific research;
(5) reasonable use for the purpose of carrying out official duties;
(6) reproduction by a library, archives, memorial hall, museum, art gallery, etc., for the purpose of exhibiting or preserving an edition of such work;
(7) gratuitous performance of a published work with no charge collected from the audience nor any remuneration paid to the performers;
(8) copying, painting, photographing or videotaping of a work of art placed or exhibited at an outdoor public place;
(9) translation of a published work created in the Han language into the language of a domestic minority ethnic group, and the publication and distribution of such within China; and
(10) translation of a published work into Braille for publication.
For fair use, there is no need for the user to obtain permission from the owner nor to pay any royalty.
A statutory licence includes:
(1) for the purposes of the compilation and publication of textbooks for compulsory education and state educational plans;
(2) reprinting or publishing a work published by other newspapers and magazines unless the owner declares it is not allowed;
(3) using a previous audio recording to produce an audio recording of musical work unless the previous publisher declares it is not allowed;
(4) broadcasting another’s published work by radio or television station; and
(5) broadcasting a published audio recording by radio or television station.
For a statutory licence, there is no need for the user to obtain permission from the owner either, but the user should pay a reasonable royalty.
5.5 Are interim or permanent injunctions available?
An interim injunction can be obtained before or during the process of litigation. A copyright owner or copyright-related rights holder, who has evidence showing that another party is infringing or is about to infringe its rights, adding that the failure to immediately halt such infringement would result in damage that would be difficult to remedy, may apply to the court for an interim injunction against the conduct concerned prior to or during the process of a civil action.
A permanent injunction can be obtained in most cases where the acts of the defendant are found by the court to constitute infringement.
5.6 On what basis are damages or an account of profits calculated?
The damages to the copyright owner shall be based on the actual loss of the owner. The owner’s actual loss may be computed by multiplying the decrement of reproductions due to infringement or the sales volume of infringing copies with the unit profit the owner would have gained in issuing those reproductions. In cases where it is hard to determine the decrement of reproductions, the loss shall be determined according to the market sales of the infringing copies.
Where the actual loss is difficult to calculate, the damages paid may be based on the amount of the illegal proceeds. The amount of damages shall also include the reasonable expenses incurred by the copyright owner in halting the infringement.
If neither the actual loss of the copyright owner nor the illegal proceeds earned by the infringer can be determined, the court may decide and award damages not exceeding 500,000 RMB according to the circumstances of the case.
5.7 What are the typical costs of infringement proceedings and how long do they take?
The typical costs of an infringement proceeding often include a litigation fee, lawyer’s fee, expenses for investigation and notarisation, etc. There is no statutory limitation on the length of a trial involving a foreign party. A first-instance copyright infringement proceeding often takes six to twelve months. If any related party appeals the case with the court of second instance, the court action will take another six to nine months.
5.8 Is there a right of appeal from a first instance judgment and if so what are the grounds on which an appeal may be brought?
China adopts a “two instances” trial system. In general, all of judgments in first-instance judgments can be challenged by appealing to a higher level of court, i.e.: if the first-instance judgment was decided by a basic court, it can be challenged by appealing to an intermediate court; if the judgment was decided by an intermediate court, it can be challenged by appealing to a high court; and if the judgment is decided by a high court, it can be challenged by appealing to the Supreme Court.
An appeal can be brought on the grounds that the first-instance judgment is based on wrongfulness concerning the facts or the applied laws and regulations. In the second-instance proceeding, the whole judgment will be reviewed, including the evidence and legal reasoning.
5.9 What is the period in which an action must be commenced?
Generally, a copyright infringement civil action must be commenced within two years after the copyright owner knows or should have known of the occurrence of the infringement. Where the two-year time limit has expired but the infringement still continues, the court shall order the infringer to cease the infringement, but the damages shall only be calculated for two years taken backward from the date when the owner filed the litigation.
6.1 Are there any criminal offences relating to copyright infringement?
There are two kinds of criminal offences relating to copyright infringement.
Firstly, piracy, which includes:
(1) reproducing and distributing a written work, musical work, motion picture, television programme or other visual works, computer software or other works without the permission of the copyright owner;
(2) publishing a book of which the exclusive right of publication is enjoyed by another person;
(3) reproducing and distributing an audio or video recording produced by another person without the permission of the producer; and
(4) producing or selling a work of fine art with the forged signature of another painter.
Secondly, selling the above copies knowingly.
6.2 What is the threshold for criminal liability and what are the potential sanctions?
For piracy, if the illegal revenue exceeds 30,000 RMB, or the illegal turnover exceeds 50,000 RMB, or the quantity of illegal copies exceeds 500 in total, or there are other serious circumstances, the suspect shall be sentenced to a fixed-term imprisonment or criminal detention of not more than three years and/or be imposed with a pecuniary fine. If the illegal proceeds are more than 150,000 RMB, or the volume of illegal business is more than 250,000 RMB, or the quantity of illegal copies is more than 5,000 in total, or there are other especially serious circumstances, the suspect shall be sentenced to a fixed-term imprisonment of not less than three years but not more than seven years, and be concurrently imposed with a pecuniary fine.
7.1 Have there been, or are there anticipated, any significant legislative changes or case law developments?
The Copyright Law of PRC is in the process of being revised, which is widely regarded as the most significant revision in the history of copyright law in China.
There are a number of significant changes which can be anticipated relating to the following issues. Among others, the following are worthy of attention.
Fair-Use of Computer Programs
Providing Devices or Parts “Solely for Altering Programs” is not “Fair-Use”.
In the previous two drafts, the amendments allowed authorised users of computer program works to install, make a backup copy, or make necessary alterations as necessary for the program to achieve its function in its environment, while prohibiting supply of the altered program to any third party without authorisation.
With regard to the third aspect, this draft further adds that the user shall not provide any third party with devices or parts that are solely for the alteration of a computer program.
Note: Article 19 of the Protection Regulation of the Right for Information Network Transmission prohibits the manufacture, importation or provision of devices or parts that are mostly used to avoid or destroy technical protection devices, which is regarded as an extended protection for copyright of a computer program.
Likewise, this draft further prohibits the provision of devices and parts that are solely for altering computer programs, which further extends the scope for acts of infringements in order to prevent the use of altered programs by third parties that exceeds the scope of fair-use.
Circumvention of Technical Protection Measures and Fair-Use
In the last two drafts, the law provided that the circumvention of technical protection measures can be regarded as fair-use and not infringing, if it is: (1) for the purpose of school education or scientific research; (2) for the purpose of non-profit use by blind persons; or (3) for the purpose of public work by administrative or judicial organs.
The new draft further adds the following two circumstances as fair-use: (1) research of encryption; or (2) reverse engineering of computer programs.
Collective Management of Copyright and Extension of Competence of Copyright Collective Management Associations
Collective Management of Copyright (CMC) is a mechanism under which the copyright owners authorise an independent Collective Organization of Copyright Administration (COCA) to exercise their copyrights or related rights, such as to initiate law suits on their behalf.
The setting of Extension of Competence of Copyright Collective Management Associations aims to encourage and facilitate copyright licensing, in particular to assist those users who want to pay royalties but find it difficult to locate the appropriate right owners.
Under this provision, the COCA, acting nationwide, may exercise the copyrights or related rights on behalf of both the right owners who are a member of the organisation and those who are not; however, the COCA shall not exercise the rights of authors who have made a written reservation declaring that their rights are not to be managed by the organisation.
This Draft and the past two drafts provide that a standard license fee for the licensing of works managed by the COCA shall be published by NCAC.
Given the strong opposition made by major local musician associations and audiovisual producer associations, the new Draft removed from the list of applicable subject matters of this provision published written works, musical works, artistic works and photographic works, leaving only the self-service song system, i.e. Karaoke establishment, as the sole applicable subject.
The third Draft further specifies that the standard license fee is provided by the COCA and shall be published by NCAC afterwards. Relevant parties are authorised to submit opposition against such published standard, which will be finally decided by a Professional Committee, whose members include judges and public servants of administrations, as well as lawyers.
Note: Such CMC mechanism has been challenged by copyright owners because it deprives the rights of non-member copyright owners to “opt-out”, i.e. to make their own decision on claiming compensation and refusing the administration by COCA. They do not accept such standard licensing-fee decided by the COCA in its previous agreement with users.
It appears that the Extension of Competence of Copyright Collective Management Associations, as a whole, is maintained throughout all three Drafts. However, the second and third Drafts provid three exceptions to the principle of Copyright Collective Management “CCM”: (1) if the non-member author can prove that the users of the work is aware and has understood the concept of “opt-out”, i.e. reservation made by the right owner but still keeps using it; (2) if the non-member author has notified the use to stop using, but the user refused to stop; and (3) if, in spite of a court decision ordering to cease using the work of the non-member author, the user still continues using it.
Such exceptions were regarded as new changes to restrict the application of this provision and maintain the legitimate interests of right owners.
7.2 Are there any particularly noteworthy issues around the application and enforcement of copyright in relation to digital content (for example, when a work is deemed to be made available to the public online, hyperlinking, etc.)?
The right of network dissemination is a new kind of copyright in the digital age. It is the right to make the work available to the public online. A work is often deemed to be made available to the public online when members of the public can get access to the work from any place at a time chosen by them.
With respect to a network service provider that provides information memory space, or searching or linking services, if the owner believes that any of the works involved in the services have infringed upon his/her right of network dissemination, he/she may file a written notice with the network service provider, requesting it to delete his/her works or to cut off the links to the works.
After receiving the notice from the owner, the network service provider must immediately delete the works or cut off the links to the relevant works, and shall simultaneously forward notice of such to the provider of the relevant works.