How To Protect Your Copyright In China (The Ultimate Guide)

Introduction

Copyright is an intellectual property right that protects a person’s exclusive right to control how their original work is reproduced and dealt with by third parties. The main piece of legislation governing copyright law in China is The Copyright Law of the People’s Republic of China (the “Copyright Law”), which was adopted in 1990 and has since been amended in 2001 and 2010. A set of new amendments were proposed in April 2020, which have been released in draft form.

What is Copyright?

Copyright is an intellectual property right that protects a person’s exclusive right to reproduce, publish, or sell his or her original work. Copyright seeks to protect the expression of an idea rather than the idea itself. To be eligible for copyright protection the work must be original and reproducible.

Most types of works that can be protected by copyright in Europe can be protected by copyright in China. Creative works such as books, music, recordings, plays, films, paintings, sculptures, and photographs are capable of copyright protection. Databases are also protected. Unique to China is that computer software is expressly protected under the Copyright Law.

Copyright is a collection of rights that are afforded to the creator of original work. The creator of the original work has moral rights in the work they have created, including the right to decide whether their work is published, the right to have their name attributed to the work as the author, and the right to protect the work against distortion and mutilation.

As well as moral rights a copyright owner has economic rights concerning the copyrighted work. The copyright owner has the exclusive right to profit from the reproduction, distribution, exhibition, performance, broadcast, or dissemination of their original work.

Copyright Ownership

Copyright exists automatically upon the creation of an original work. The original work can be created anywhere in the world and it will still be afforded protection in China. Despite copyright protection arising automatically, it is possible to voluntarily register copyright in China. Registration can provide ready proof of ownership which can speed up enforcement proceedings. Copyright registration is discussed in further detail below.

The copyright in a work will either be owned by the creator of that work or their employer. Others might later become the owners of the copyright if it is subject to an assignment. In the absence of an express agreement under an employment contract, if work is created in the course of employment, the employee enjoys the ownership of the copyright. The employer however has the priority to use the work in its business for two years. This means the employee cannot license the work to a third party during this period without their employer’s consent.

There is a ‘special works’ exception which states that where an employee creates work primarily using the material and technical conditions of their employer, then the work created as a result, such as designs or computer software, will be owned by the employer. The employee will however have the right to be identified as the author.

If a third party is commissioned and produces original work, they will own the copyright in such work unless the contract between the parties states otherwise. It is important that intellectual property ownership is addressed within any contract in which it might be relevant. This will avoid potential future disputes.

A protected work does not need to bear any form of “copyright notice” to obtain or maintain the copyright. Generally, however, it is still advisable to use such a notice. During a copyright infringement lawsuit, the presence of the copyright notice on the published copy can help to refute the defense of the infringing party on a lack of knowledge of the copyrighted work.

The term of copyright protection for economic rights is usually the lifetime of the author plus 50 years. If a legal person or other organization is the owner of the copyright, the term would be 50 years from the date of publication (for published work) or 50 years from the completion (for unpublished work). The protection of moral rights is perpetual.

Copyright Registration

The Copyright Protection Centre of China (CPCC) is responsible for copyright registrations. A copyright registration application form can be found online. It needs to be completed and then printed out and sent to the CPCC. The CPCC reviews the application and requests a fee from the applicant. Once this fee has been paid the application enters an examination period of roughly 30 working days. A registration certificate is issued upon the completion of the examination period.

The application form requires the applicant to outline a brief description of the work to be registered. This description should include details about why the work was created, the process by which it was created, and state that the work is original, able to be reproduced, and is legally capable of being afforded copyright protection.

The right holder can apply to register the copyright with CPCC directly. However, for most foreign entities, it is advisable and probably more cost-effective to engage a specialized local agent to conduct the registration, which in essence, is a straightforward recordal process.

Copyright Licensing and Assignment

A copyright owner can license or assign economic rights, but not moral rights. To be included in a license or assignment, a right has to be expressly identified in a license or assignment agreement. Royalties or compensation for a license or assignment of copyright may be determined by agreement of the parties.

The typical license agreement contains the following provisions.

• The rights being licensed;
• Whether the license is exclusive or non-exclusive;
• The scope and duration of the license;
• The payment terms and methods; and
• The liabilities upon breach.

The typical assignment agreement contains the following provisions.

• The title of the work;
• The rights being transferred and the geographical scope of the right granted;
• The payment for the transfer;
• The date and method of payment; and
• The liabilities upon breach.

Copyright Enforcement

Any of the following acts will constitute an infringement of Chinese copyrights:

1. Publishing a work without permission from the owner of the copyright therein;
2. Publishing a joint work as a work created solely by oneself without permission from the other co-author(s);
3. Passing off as the author for another person’s work in pursuit of recognition and profit even though one has not participated in the creation of such work;
4. Distorting or tampering with the work of another;
5. Plagiarizing another’s work;
6. Unless this Law provides otherwise, using work for an exhibition, cinematization, a process analogous to cinematization, or similar, or using work by way of adaptation, translation, annotation, etc., without permission from the copyright owner;
7. Using another’s work without paying remuneration when remuneration should be paid;
8. Unless this Law provides otherwise, renting a cinematographic work, a work created by a process analogous to cinematography, computer software or a sound or video recording without the permission of the owner of the copyright or the related rights therein;
9. Using the layout of a published book or periodical without permission from the publisher;
10. Broadcasting a performer’s performance live or publicly transmitting his live performance or a recording of his performance without his permission; or
11. Any other infringement of copyright or related rights.

In determining copyright infringement, the “contact” and “substantial similarity” principle is frequently employed. “Contact” means that the allegedly infringing party has ways to acquire the work of the copyright owner. “Substantial similarity” means that the work of the alleged infringer is substantially identical or similar to the work of the copyright owner.

Copyright owners can enforce their rights through several different avenues. There are administrative, judicial, customs, and criminal routes.

Before commencing any action the suspected infringement needs to be investigated to confirm whether the infringement is taking place. Evidence should be gathered to assess whether the infringement is taking place and such evidence might be useful if proceedings are subsequently commenced. If judicial proceedings are contemplated then a notarised track purchase of the infringing item will be necessary to commence proceedings. This can be carried out by a private investigator.

A possible first step is to send a letter to the infringing party outlining your rights, identifying the claimed infringement, and stating that unless such action is ceased judicial proceedings will be issued.

Both civil and criminal cases relating to copyright infringement are heard in the Courts in China. The court has a range of civil penalties that they can impose on infringers, including injunctions to stop the infringement, ordering the preservation of evidence, ordering the destruction of infringing items, and any molds or apparatus used to produce them, forcing infringers to make a public apology and damages. Damages are assessed in relation to any losses suffered by the infringed and any gained income of the infringer. If damages cannot be assessed then the court can order the infringer to pay a maximum amount of RMB 500,000. In rare circumstances, a criminal complaint can be made and penalties include fines and imprisonment.

An administrative action is a faster and less expensive alternative to judicial action. The National Copyright Administration of China and local copyright administrative departments are responsible for overseeing administrative actions for copyright infringement and can order illegal activity to cease, confiscate and destroy pirated goods and equipment used to produce them and issue fines.

It is possible to directly apply to the General Administration of Customs (GAC) and request they seize goods suspected of infringing copyright. It is also possible to notify the GAC of your copyrights so that they are aware of your rights and may seize infringing goods as and when they screen goods entering and leaving China.

The enforcement mechanisms above are explained in more detail below.

Administrative Action

A complaint can be lodged with the local copyright administrative departments of the National Copyright Administration of China, who can take direct action against the infringer. The complainant needs to set out the complainant’s copyrights and provide evidence that infringement is occurring (such as providing a sample of the infringing product) and evidence that the infringing product will cause damage to the claimant’s interests.

The local copyright office will then conduct a raid on the alleged infringer’s property, confiscating any alleged infringing products. If the office is satisfied that there has been an infringement, it can then fine the infringer, seize/destroy the infringing goods, or even revoke its business license. The advantage of this route is that it is relatively cost-effective, quicker than civil proceedings, effective and the evidence collated can then be used in a civil action. The disadvantage of this course of action is that the claimant will not receive damages.

Customs Action

As well as examining goods entering China, the General Administration of Customs (GAC) examines goods leaving the country as well. This is useful as the GAC has the authority to protect intellectual property rights (including copyrights) and so can seize infringing products before they leave the country. The GAC will take the initiative to seize goods they consider to be infringements but to do this they require information from the trademark owner.

It is recommended that a copyright owner registers their copyright centrally with the GAC in Beijing so that the GAC can monitor shipments and inform the rights holder if they discover potentially infringing goods. Educating the GAC officials is equally important, so the copyright owner will need to notify Customs with as much information as possible, such as the names of the infringers, their logistics, characteristics of the infringing products, etc. The GAC has the power to seize and destroy the infringing goods once infringement has been established.

Civil Action

The rights holder can bring a court action seeking an injunction and damages. To pursue a civil action a complaint must be lodged with the civil division of the People’s Courts. The Court will set a date for a pre-trial hearing at which the parties will discuss evidence before the court. The Court will provide the parties with an opportunity to settle the dispute themselves. If the dispute does not settle a trial will take place. In all likelihood, a dispute will take between 6 to 12 months to reach trial depending upon the complexity of the case. It is worth noting that the pleading process in a Chinese civil action is less regimented than in the UK, due to there being no disclosure and little or no use of oral testimonies, witnesses or experts. The trial is much shorter and is usually concluded within half a day or one day.

In terms of remedies, the claimant may be awarded an injunction to cease the infringement, an order to confiscate the infringing goods and/or damages (or account of profits). Damages will be estimated in relation to the copyright owner’s losses and the profits gained by the infringement. Where the calculation of damages is impossible an award up to a maximum of RMB 500,000 may be imposed.

An interim injunction, although still rare, is available in China. It is possible for the rights holder, upon providing a guarantee to the court, to apply for an order for an interim injunction. The Chinese courts are cautious to grant an interim injunction, so great effort is needed with regards to evidence presentation and arguments to satisfy the burden of proof.

Due to the lack of disclosure in the Chinese court procedure, there is a high burden upon the rights holder to collect the evidence themselves. As a practical measure, it is possible for the rights holder, upon providing preliminary evidence of infringement, to apply for an evidence preservation order so the court can conduct a raid on the alleged infringer’s property to seize evidence on site. An asset preservation order can also be requested upon provision of a guarantee, so the court can seize assets of the alleged infringer to satisfy damages awarded in the judgment. Both measures are highly recommended pre-suit actions that the rights holder may apply for if possible.

Criminal Action

A criminal action is available through the Public Security Bureau, who may bring a criminal action against the infringing party for serious acts of copyright infringement. These acts may consist of unauthorized reproduction and distribution of copyrighted works which result in sizeable illegal income to the offender. A criminal action is an alternative to an administrative action or a civil action and has the biggest deterrent value. However, it is usually reserved for high-profile counterfeit or infringement cases. If the crime is serious, a penalty of up to seven years imprisonment can be imposed.

Copyright and Internet

This is an area where the law lags behind the technological developments and thus the application of copyright law to the internet is constantly evolving. The Copyright Law protects copyrighted material from being disseminated online without permission or payment. The law also allows for measures to be taken to restrict the unauthorized access of infringing works, audio, videos, and software. For example, it is copyright infringement for unauthorized uploading of copyrighted work to network servers, setting up shared files, or using file-sharing software such as peer-to-peer, which enables the general public to download, browse or otherwise obtain the copyrighted work.

The copyright law also allows for internet service providers (ISP’s) to be held liable for secondary infringement. If there is an infringing work or product hosted upon an ISP’s network, then the ISP will be liable for secondary infringement if they knew or ought to have known that infringement was taken place. The following factors are normally considered.

1. Based on the nature or method of the ISP’s service and its likelihood of triggering infringement, and the ability to manage information that the supplier should have;
2. The type and popularity of the works, performance, sound or visual recordings transmitted and the degree of distinctness of infringing information;
3. Whether the ISP selects, edits, modifies or recommends the works, performance, sound or visual recordings on its own initiative;
4. Whether the ISP has actively taken reasonable measures to prevent infringement;
5. Whether the ISP has set up a convenient program to receive an infringement notice and responds to the infringement notice reasonably in a timely manner; and
6. Whether the ISP has taken reasonable measures against the same network user’s repeated infringement.

With respect to an ISP that provides information memory space, or searching or linking services, a copyright holder may request that the ISP disable access to infringing works or products. The following contents shall be included in the written request:

1. Name, contact information and address of the owner;
2. The names of the infringed works, performance and audio-visual products that are required to be deleted or the web sites whose links are required to be cut off; and
3. The preliminary evidence of an infringement.

Conclusion

Piracy and counterfeiting are genuine issues facing both businesses in China as well as global businesses that operate within the Chinese market. In recent times online piracy and the illegal sharing of files have increased hugely and the level of music and literature copyright infringement in China is widely regarded as some of the highest in the world. Copyright law in China does afford rights holders protection and the legal landscape of copyright protection in China is developing to further strengthen the position of rights holders. Furthermore, as Chinese courts develop more specialized and more sophisticated intellectual property divisions, it will become easier for rights holders to effectively enforce their copyrights through the courts.