By August Zhang
Rouse & Co. International, Beijing Office
The PRC Copyright Law 1990 is now in the process of amendment. The State Council has recently approved an amended draft, which is now being examined and deliberated by the Standing Committee of the National People's Congress. We estimate that the draft will be approved without major revisions, and therefore probably closely shadows the final version.
Pressure for Amendment
Since the Copyright Law 1990 went into force on 1 June 1991, a greater contribution towards the copyright protection has been made in China. However, the Law has in recent years come under pressure for amendment. A number of factors may explain this. Firstly, it is widely urged to expand the categories of copyright and create new areas for protection, such as protection of databases and the right to rent and transfer property rights, none of which are covered by the Copyright Law of 1990. Secondly, copyright infringement and piracy has been prolific and constant in China, and one of the factors for this is to some extent that the Copyright Law has not imposed sufficiently strong punishment against copyright infringers.
The proposed revision is expected to help remedy these shortcomings. Of the 56 articles of the Copyright Law, about 26 articles are due to be supplemented, revised or abolished. Indeed, a number of breakthroughs have been made in the proposed revision in the areas of expansion of property rights, injunction and punishment. Meanwhile, some improvement has also been made in respects of protection of format & layout, and collective administration.
Breakthroughs
A. Expansion of Rights
(1) Expansion of Property Rights
The Copyright Law 1990 describes the property rights in a copyright simply as "the right to use and the right to remuneration". The proposed revision elaborates the contents of property rights and clarified ten categories of rights in much more detail. Among these, the right of rent is added as an independent category, which refers to licensing for temporary use of film products and computer software programs. Personal rights remain unchanged in the proposed revision.
(2) Database Protection
Databases are not protected under the current Copyright Law. This has been a target of criticism since this does not comply with international standards. The proposed revision has embraced this protection by amending Article 14 of the Law. Under the revision, compiled works shall mean compilations of several works, parts of works, or "materials not forming a work" which is intended to include data compilation.
(3) Transfer of Copyright
The property rights in copyright may be transferred partly or entirely under the proposed revision, which have not explicitly been provided for in the Copyright Law of 1990 (though it contains regulations on license agreement). In this regard, a written contract of transfer shall be signed and clauses covering the content of rights transfer, price and method of payment, liabilities for the breach of contract etc. are to be included.
B. Interim Injunction
The Copyright Law of 1990 does not provide for the Court to grant an injunction. The proposed revision fills the gap by allowing a copyright proprietor to request, prior to the formal filing of the case, the court to grant interim injunction to stop the infringing acts. It provides that where the copyright proprietors and the other interested parties to the copyright consider that their copyright are infringed, and that irreparable loss will be caused without an immediate remedy, they may apply to the People's Court to stop the infringing acts. The applicants shall offer a monetary guarantee together with the application. The People's Court shall make a ruling within 48 hours after the acceptance of the application, and shall immediately take compulsory measures upon the request of the applicant.
It should be noted that such an injunction provided in the proposed revision will be the first legal formulation of its kind in Chinese law. It will be not only a significant development of the Copyright Law, but also marks a breakthrough in the Civil Procedures Law, which ignores injunctions in civil proceedings.
C. Increased Punishment
(1) Statutory Damages
Under the Copyright Law, damages are calculated according to the actual loss suffered by the infringed party, or the illegal income gained by the infringer. However, both the copyright proprietors and the court have often been stymied by being unable to calculate either the loss or the illegal income. The proposed revision has provided a solution to this. It stipulates that if the actual loss of the copyright proprietors and the illegal income of the infringing party cannot be satisfactorily calculated, the People's Court can make a judgement on damages of less than RMB 500,000 (approx. US$ 62,000) according to circumstances stated.
(2) Onus Probandi
Onus Probandi is not mentioned in the Copyright Law. Under the proposed revision, the onus is on the infringers for their relevant acts. Where a producer of the infringing reproduction, a publisher or a lessor of the infringing reproduction fail to produce the legal authorization of the reproduction or the legal source of the published and the leased reproduction, they shall be liable for punishment.
(3) Administrative Sanction
The Copyright Law 1990 has vested the copyright administrative agencies with the power to confiscate the illegal income and fine the infringers. The proposed revision further empowers the agencies to confiscate the "infringing reproduction and materials, tools and equipment for making the reproduction".
Improvement
(1) Format and Layout
The rights of format and layout enjoyed by a publisher have in theory been regarded as independent property rights relating to copyright. The current Copyright Law, however, is silent in this regard. The proposed revision adds a new stipulation, which states that a publisher has the right to permit or prohibit the use of the format and layout of his published book, newspaper and magazine, and the duration of protection for these rights shall be fifty years.
(2) Collective Administration
The proposed revision inserts a new article on copyright proprietors associations offering help in collection of remuneration and entering into court proceedings on behalf of copyright proprietors. However it consists of only a rough draft statement and the detailed regulations will rely on the State Councils deliberations.
Pitfalls
While significant developments are seen in the proposed revision, there are still some pitfalls and defects in it. One of the examples is in Article 43 of the Copyright Law. Under this Article, a radio station or television station may broadcast for non-commercial purposes, a published sound recording without seeking permission from, or paying remuneration to, the copyright owner, performer and producer of the sound recording. This regulation appears to conflict with international conventions like TRIPS and The Bern Convention, but it is not amended in the proposed revision. In fact, this Article has been challenged and criticized by a number of congress representatives in literary and artistic circles at the debate of the NPC Standing Committee.
The proposed revision grants a writer of a textbook the privilege to use published works, and even this privilege may be challenged. It is provided that parts of published works or short literary works, musical works or works of fine art and photographic works may be compiled into a textbook without the permission of the copyright proprietors if such textbooks are aimed at use in the 9-years'compulsory education school system. The "non-profit" argument as suggested by the drafters is not well founded.
The proposed revision seems not seem as comprehensive as expected in envisaging and protecting high technology-related copyrights such as in the field of Internet works protection. Internet works issues have recently developed very fast in China. However, both the Copyright Law and the proposed revision have not considered this, which leads to a number of legal uncertainties. For example, what constitutes an on-line work, and how can the copyright of on-line works be protected? Is it lawful to upload works belonging to others without authorization? Can a download of on-line work be regarded as "copy" as intended by Article 46 of the Copyright Law? Recently, a company in Beijing filed a suit against another company for damages regarding infringement of an on-line work. The defendant had used in its own homepage similar words and designs to the homepage of the plaintiff, however both the plaintiff and the court felt it difficult to find legal basis for the protection.
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The content of this article is to provide only a general information on the subject. Legal advice should be sought for any specific circumstances.
