Implementing Regulations for the Copyright Law: Highlights and Questions

Simultaneous Publication

In compliance with Article 3 of the Berne Convention (1971), the Regulations clarify that works created by a foreigner or stateless person published in China within 30 days after first publication outside China will be deemed to have been simultaneously published in China.  Under the 1991 Regulations, such works were regarded as having been first published in China.

Clarification of Rights of Co-authors

Where a jointly created work cannot be used by dividing it and the co-authors cannot reach agreement on the terms for their separate uses of the work, the Regulations permit each co-author to exercise his rights freely, absent “proper cause” from the other co-author.  The Regulations further suggest that a co-author may not grant any exclusive licence to third parties without consent from the other co-authors. 

The Regulations require the agreement of all co-authors, however, in cases where one of them wishes to assign his rights to another party. Consent from all co-authors is clearly required for assignment of the entire copyright of the work to another party.  The Regulations also require a co-author to account for and share any gains obtained through his separate use of the work with the other co-authors.

Exclusive Licences

The Regulations require exclusive licence agreements to be in writing, and they also provide for voluntary recordal of licences, as well as assignments.

The new Regulations also provide that if an exclusive licence agreement is silent or unclear, then an exclusive licensee will be deemed to have the power to exercise his rights to the exclusion of all other persons, including the copyright owner.  Further, the Regulations indicate that, unless otherwise agreed, an exclusive licensee must obtain the copyright owner51s consent in order to issue sub-licences to third parties.

Extended Protection for Foreign Works

Consistent with China51s commitments under the WTO, the Regulations explicitly recognize protection for performances and sound recordings produced or distributed by foreigners and stateless persons.  Likewise, protection is explicitly recognized for rights in radio and television programmes broadcast by foreign radio and television stations.  These provisions of the Regulations bring China51s copyright legislation into compliance with Article 14 of the TRIPs Agreement.

Administrative Enforcement

Power of Local Copyright Bureaux

The new Regulations eliminate the previous requirement that foreigners file complaints for administrative enforcement solely with the National Copyright Administration (NCA), i.e., at the central government level.  The Regulations now explicitly permit foreigners to seek relief directly from local copyright bureaux in cases where “harm is done to the social and public interests”, although it remains unclear exactly how this limitation will be interpreted.  NCA has meanwhile indicated it will only be involved in cases that may have an impact throughout the country. 

Power to Impose Fines

Under prior regulations, administrative fines against infringers were limited to up to five times the “total sales price” of the infringing products – a term that was regarded as ambiguous and impractical by many local enforcers. The new Regulations now provide for administrative fines against infringers up to three times the illegal turnover (fei fa jing ying e) of an infringer, provided it is determined that infringement has caused “harm to social and public interests”.   It remains unclear how illegal turnover will be calculated.  Rights holders would like to see turnover calculated with reference to the value of legitimate works, rather than the infringer51s own production cost or sales revenues (as is the case to date for most fines imposed for trademark offences).

The new Regulations further indicate that in cases where it is difficult to determine the amount of illegal turnover, a fine of up to Rmb100,000 (about US$12,000) may be imposed.2   Under China51s Civil Law General Principles, Chinese courts are empowered to impose similar fines in civil cases.

Power to Order Compensation

The power of the administrative enforcement authorities to order compensation to copyright owners and injured parties has been removed. This power was, however, rarely (if ever) exercised under the earlier regulations. Copyright owners will have to resort to court proceedings in order to seek compensation from infringers.   Under last year51s amendment to the Copyright Law, copyright owners may be awarded statutory damages up to Rmb500,000 (US$62,000) as well as recovery of enforcement expenses, including legal and investigation costs.

Preliminary Injunctions

Under the revised Copyright Law, preliminary injunctions can now be sought against copyright infringers.  The new Regulations do not contain any provisions in this regard. 

The Supreme People51s Court may issue a judicial interpretation shortly that will set out the conditions for the granting of such injunctions.  In the meantime, Chinese judges have indicated that preliminary injunctions may be sought from local courts by reference to the judicial interpretations issued in late 2001 and early 2002 in relation to trademark and patent disputes.

Unanswered Questions

The new Regulations fail to address a number of critical issues raised under the revised Copyright Law. We51ve identified three principal problems, as follows:

•      Will works of applied art be protected under the Copyright Law?  For now, only foreign works of applied art are protected in China, via the Berne Convention, the Universal Copyright Convention and Implementing Regulations issued in 1992 incidental to China51s accession to these conventions. 

•      Will unauthorized three-dimensional reproduction of two-dimensional works be considered as infringement?

•      Will circumvention or sabotage of technological measures such as “copy control” and “access control” and the trade in or manufacture of circumvention devices be considered as infringing acts?

Finally, the Copyright Law and new Implementing Regulations address civil and administrative enforcement of rights.   Criminal enforcement is dealt with exclusively under China51s Criminal Law.  To date, criminal enforcement of copyrights has been rare, in large part due to the lack of binding standards for commencing prosecutions or imposing criminal liability.3 The Supreme People51s Court is now considering the possibility of issuing a judicial interpretation, perhaps as early as the end of this year, to address this obvious gap in the law.

Footnotes

1        For full text of last year51s revised law, see China Law & Practice, December 2001/January 2002, 15(10), pp. 53-70. The revised copyright law was issued and effective October 27 2001.

2        Similar provisions appear in China51s new Trademark Law Implementing Regulations, see p.99 of this issue.

3        Earlier standards issued in 1995 became invalid after the Civil Law was amended in 1997.