Copyright in China is a bundle of personal and
property rights attaching to certain types of works. Copyright
works include written works (such as screenplays) and
cinematographic works (such as motion pictures). The rights in
written works include a right of cinematography, being the right to
adapt the written work into a cinematographic work. Producers
exercise this adaptation right when they turn a screenplay into a
motion picture. The rights in the resulting cinematographic work
include the right of public presentation or exhibition, certain broadcast rights and the right to
communicate through an information network.
Chinese law provides for the registration of a pledge over
copyright works. The regulations refer to the "recordal of a
copyrighted work deposit." China's pledge system is recognized by WIPO. The pledge is a kind of
security interest in support of a loan. An advance of funds on
account of development, production or distribution costs, under a
contract, can qualify as a loan for the purposes of a pledge. The
lender need not be a Chinese entity. It could be a foreign studio,
producer, distributor, investor or bank, as long as the copyright
concerned is owned by a Chinese entity.
Though a framework exists, the registration of pledges is not
yet common in the Chinese film and TV business. There are several
reasons for this. Completion bonds or completion guarantees are
only in their infancy here. The existing regulations are not
comprehensive and they lack clarity in key areas. There is also no
reliable system for assessing the value of copyrights. The main
difficulty is the registration of a pledge over future copyright or
a copyright expectancy. But, as with so many things in China,
difficult does not mean impossible.
Originally published on October 5th, 2015
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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