The new Copyright Law aims to emphasise and update the protection for works subject to copyright, improving the legal environment for foreign rights holders. As the third revision of the law takes effect, analysis of the statute's history and the latest changes highlights key actions that brand owners can take now to burnish their enforcement strategies in China.
Headline changes to the copyright regime
Rethink on what is protected
In recent years, there has been a rapid rise in the popularity of short videos, often filmed by users and then posted online. However, there has been some disagreement over whether these – and other new types of content – are protected under the copyright regime in China. This is because the previous law enumerated only eight types of works that are protected by copyright and had an open clause to cover any exceptions – namely, "other works stipulated by laws and administrative regulations".
This list signally failed to capture all current and future types of works, while the definition of 'copy in a certain form' set out in the Regulations for the Implementation of Copyright Law was too narrow. Unfortunately, the expression of the open clause was not sufficiently rigorous, resulting in inconsistent standards for defining works subject to protection.
The new Copyright Law has vastly improved the definition of 'works' to encompass "intellectual achievements in the fields of literature, art and science that are original and can be expressed in a certain form". It has also amended "other works prescribed by laws and regulations" to "other intellectual achievements that conform to the characteristics of works". This definition is not only more accurate, scientific and reasonable, but is also forward-looking and should, hopefully, cover new types of works yet to be developed.
Cinematographic works brought up to date
In the same way, the reference to "cinematographic works" has been updated to simply "audiovisual works".This modification provides a significant boost to copyright protection in the digital environment.
Previously, Article 3 of the Copyright Law referred to "cinematographic works to which are assimilated works expressed by a process analogous to cinematography". The Regulations for the Implementation of the Copyright Law defines these as "works filmed on a certain medium, consisting of a series of pictures with or without accompanying sound, and projected or otherwise transmitted by means of appropriate devices".
'Filming' normally means shooting with a camera. However, advancements in technology mean that many movies – especially science fiction films and animation – are now created entirely on computers and no longer use cameras at all. Such works were not covered by the previous definition, leading to confusion that audiovisual works created without cameras were not subject to copyright protection.
The revised Copyright Law has also changed the term "cinematographic works to which are assimilated works expressed by a process analogous to cinematography" to simply "audiovisual works".
This amendment reflects the challenges to copyright brought about by rapid changes in the audiovisual industry. For example, online games, which have emerged in recent years and have grown into a market worth hundreds of billions of dollars, have raised the issue of how to define and protect aspects such as live broadcasts and online game images. The new definition should capture all such uses, significantly improving copyright protection in the digital environment.
Information network transmission and broadcasting rights
Information network transmission and broadcasting rights have also been amended under the new Copyright Law in an effort to address the growing issue of infringement by network broadcasters. In future, if network anchors perform or broadcast the works of others without their permission, they will be deemed to be infringing the rights holders' broadcasting rights.
When disputes involving non-interactive copyright infringement (eg, network broadcasts and suspended broadcasts) appear before the courts:
- they will no longer use the original provision for relief;
- the connection between the right of information network dissemination and the right of broadcasting will be more rigorous; and
- the application of the law will be far clearer.
Punitive damages
For years there has been widespread criticism of the low levels of compensation awarded for copyright infringement, in particular the fact that the upper limit is set at Rmb500,000.
The amended law stipulates that in cases where it is a challenge to calculate the rights holder's actual loss and the infringer's illegal gains, compensation can be awarded by referring to the rights holder's royalties. In addition, it raises the maximum legal compensation limit from Rmb500,000 to Rmb5 million and adds a minimum compensation limit of Rmb500.
By increasing the penalties for copyright infringement, the revision brings them more into line with penalties for other types of IP infringement. The 2013 revisions to the Trademark Law introduced punitive damages for the first time, while the Anti-unfair Competition Law has already raised the legal limit of damages to Rmb5 million.
The principle of compensation for IP infringement should be based on the principle of bridge and supplemented by punitive damages. The principle of bridge is to compensate for the loss of the obligee. Punitive damages are only applicable in case of serious and malicious infringement. However, there are still some problems in the judicial application of IP punitive compensation in China due to:
- the lack of specific guidance on the application conditions;
- the difficulty in determining the calculation base; and
- the unclear boundary between the system and legal compensation.
A new system of proof order production and the rule of proof obstruction
The new Copyright Law formally introduces a system of proof order production and a rule of proof obstruction in regard to copyright.
This helps both to shift the burden of proof onto infringers and, to a certain extent, to alleviate the difficulty faced by rights holders when it comes to providing proof, especially with regard to covert and violent online infringement.
If infringers have the relevant books and materials but fail to provide them, the court can determine the amount of compensation by referring to the unilateral claim and evidence provided by the rights holder. Punitive damages set out by the new provisions are designed to act as a deterrent and discourage intentional and serious infringement.
It is hoped that the combination of these systems will play a positive role in raising the cost of breaking the law and protecting the legitimate rights and interests of copyright owners.
Content that is not subject to copyright – from current affairs to simple facts
The previous Copyright Law stipulated that protection did not extend to current affairs news. However, the wording in the revised law has altered "current affairs news" to "simple fact news". In addition, the amended statute further limits the scope of 'information' and those objects not protected by copyright law to "facts".
The revised wording is consistent with expressions used in current legislation and judicial interpretations, which themselves are a response to the relatively mature practices of the courts in this area. In judicial practice, a significant amount of content defined as 'current affairs news' is not simply factual news, but a mix of the reporter's personal comments and tailored exposition, which clearly belongs to the category of works that enjoy copyright protection.
In addition, judicial practice has differed significantly with regard to whether photos that reflect current events are themselves current events and thus excluded from the scope of copyright protection. The reason for this is the lack of a unified understanding of 'current events news' as defined by the previous Copyright Law. The newly revised law reaffirms the common-sense view that facts should be excluded from the scope of copyright protection.
Top tips for enforcing copyright in China
Given the shake-up to copyright protection that the new law has given, the time is ripe for brand owners to take a fresh look at their enforcement strategies in China. The following six tips suggest areas in which to make the most of this opportunity.
1. Register copyright in works before the national copyright administration
China works on the system that copyright is automatically created as soon as a work is completed. However, if there is no signature, pseudonym or electronic sign on the work, it can be challenging to confirm the rights holder's identity and all too easy to change it. Authors may need to submit a number of pieces of evidence (eg, work papers, original, lawful publications or a certificate issued by the certification body) merely to prove that they hold copyright in a particular work. This has the knock-on effect of making it a great deal of effort for third parties to obtain legitimate authorisation from the genuine rights holder, which in turn has led to a large number of copyright disputes.
It is therefore recommended that authors file theirs work to the relevant government departments and obtain a registration. This can be used as preliminary proof of copyright in case of any dispute.
2. Register any trademarks before the Trademark Office where possible
If the work is a graphic and involves a relatively simple design that is mainly used as a commercial logo, the rights holder should consider applying for trademark registration. Registered trademarks are valid for 10 years but there is generally no limit on the number of times that registrations can be renewed.
Where the author of a copyright is a natural person, the term of protection is the author's lifetime plus 50 years, or 50 years if the author is a company. Works that are not published within 50 years of their creation are not protected.
Dual protection through both trademark and copyright registration will help enterprises to:
- further strengthen their IP portfolios;
- give play to their IP advantages;
- enhance their core competitiveness; and
- form sustainable innovation mechanisms.
Copyright and trademark rights overlap to some extent. Generally speaking, rights holders cannot claim protection for a work under both copyright and trademark rights at the same time in a lawsuit. However, they can make a choice according to the work or logo itself, as well as the specific use situation.
3. Prove ownership using new technology
Network copyright owners can use technical means – including digital watermarking and electronic signatures – to mark their works. In this way, the author's identity can always be proved, even after the work in question has been disseminated.
In fact, a new, fast and convenient digital self-protection method – the timestamp service – has now been approved by the Electronic Signature Law, which allows data messages with timestamps (ie, electronic documents) to be used as valid legal evidence. Authors of online works should apply for timestamps in good time, thus obtaining proof of the existence and content integrity of their works, which will help to safeguard their rights and interests as authors.
4. Ensure the impartiality of methods used to obtain evidence of infringement and the validity of the result
Once evidence of infringement has been found, online and offline evidence collection should be combined. In order to ensure the legality and effectiveness of this process, rights holders and their lawyers should notarise any evidence collected.
With the emergence of blockchain, some platforms have launched online forensics, which take account of web and video forensics. Taking screenshots of the entire webpage on which an infringing link is discovered can generate corresponding certificates and evidence packages, with the results uploaded in real time to ensure that data is protected from tampering.
5. Use e-commerce complaint systems
More and more e-commerce platforms in China are introducing channels for online complaints regarding infringing products. Once a rights holder has found evidence pointing to infringement on the network platform, it can prepare evidence to prove that its copyright has been infringed and then submit a complaint according to the platform's rules, requirements and operating procedures.
The online platform will review any complaint received. Infringing products are removed once infringement has been established.
6. Remember that abuses of rights of action and malicious litigation affect all rights holders
The right of action of copyright is abused when a party's exercise of it goes beyond legitimate and legal boundaries. Malicious litigation lacks a legal basis and can cause serious damage – not only to the legal rights and interests of the other party, but also to the litigation system and society in general.
It therefore behoves all rights holders to ensure that any action they take has a solid basis and is justified in law.
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.
