In order to keep modernizing its IP laws, the Office of Legislative Affairs of the State Council of the People's Republic of China has recently released a draft amendment to the current Copyright Law. This follows the enactment of the new Patent Law at the end of 2009 and the entry into force of the new Trademark Law on May 1, 2014.
The Draft of the renewed Copyright Law proposes amendments to the subject matter of copyright, to the criteria of ownership of rights, to the protection period of rights and to the implementation and enforcement of copyright. Being these changes likely to affect foreign IP holders in China, they are here briefly discussed.
The Draft proposes to widen the subject matter of copyright. It does so, first, by renaming "the cinematographic works and works created by a process analogous to cinematography" as "audiovisual works", a far wider and more comprehensive term; adding "works of applied art", to which a protection period of 25 years is granted, and "three-dimensional works"; revising "computer software" to "computer program"; lastly, protecting computer files as written works.
Noteworthy, the types of "works" protected by copyright would be expanded from the previous 9 categories to 16 renewed ones. However, notwithstanding the numerous types of works listed in the Draft, only two new ones are actually added: "works of applied art" and "three-dimensional works". Indeed, the renewed list may be seen as the result of the combination of opposite perspectives between those who would rather list choreographic works, broadcast exercises, etc. as single and distinct types and those who, on the contrary, suggest gather similar works within the same category in order to avoid the excessive multiplication of categories of relevant works.
A last point to be noted is how, in addition to the requirement of originality (already present in the previous provision), the Draft introduces a further requirement which would need to be fulfilled for works to fall within the scope of the Copyright Law. Such requirement consists in that works would need to be "fixed in some forms": this amendment does present a few critical profiles, especially because it seems to introduce a further and more cogent criterion for the identification of works protected by the Copyright Law, thus limiting the actual extension of the scope of the amended Copyright Law.
The Draft introduces a few modifications aimed at reflecting and reinforcing the principle of "parties' autonomy" when the owner of the copyright is to be determined. This is particularly evident in the amended provision on the ownership of audiovisual works: while according to the current copyright rules such works should belong to their producer, the amendment that the Draft introduces would allow parties to conclude an agreement on the recognition of ownership. The same principle, granting full respect of and priority to what parties are willing to agree on, would be also applied to determine the ownership of works of employment.
Extension of the Protection Period
With regards to the protection period, the only significant change promoted in the Draft refers to photographic works. Indeed, the copyright of this type of works would be protected not -like in the previous provision- for fifty years from the date of publication, but for the duration of the whole life of the author and for further fifty years after the author's death. The proposed amendment thus aims at considerably extending the length of the protection period of photographic works and, in this way, at equalizing this duration to that already granted to the other copyrightable works.
A few amendments are suggested in the Draft to make the enforcement of copyright more effective and satisfying.
First, in order to clarify the civil liability of internet service providers, the Draft regulates in detail their civil liability, specifying when and how they would be held responsible, in line with the provisions of Tort Law.
Second, the Draft changes the method of determination of damages, thus replacing the sequential regulation present in the current Copyright Law: indeed, compensation would need to be calculated either as the actual loss sustained by the right owner, or as the infringer's illegal profit, or as a multiple of royalties in normal trade of copyright, or -were it impossible to determine a specific amount according to the above criteria- as a sum not higher than RMB one million. Moreover, the amount of statutory damages and punitive damages results to be increased, and the burden of proof upon the infringer intensified. This revision could be thus considered as advantageous to the right owner who is, in fact, granted the possibility to choose the most favorable criteria among the ones listed above to prove the need for compensation (were, of course, the right owner able to submit sufficiently solid evidence).
Lastly, the proposed amendments also concern the profile of administrative legal responsibility. Indeed, the Draft increases the amount of fines from 3 times to 5 times of illegal profits (if the amount of illegal business revenue is RMB 50,000 or more), and from RMB 100,000 to RMB 250,000 (if the amount of illegal business revenue is, instead, lower than RMB 50,000). In addition, the enforcement measures administrative management departments may activate (e.g. seizure) appear to be enhanced in the aim to crack down copyright infringement.
In light of the above, the Draft could be regarded as an effective attempt made by the State Council of the People's Republic of China to strengthen and update Chinese Copyright legislation and, thus, to better respond to the needs expressed by IP holders (especially foreigners) in China. As reported, the main changes would regard the definition of the subject matter, which appears to be refined; the remodeling of the ownership criteria, so to reflect the principle of "parties' autonomy"; the extension of the copyright protection period; the reinforcement of penalties for copyright infringement (from the possibility to opt for the most preferable method of calculation of damages, to the increase inadministrative sanctions), which would provide IP holders with more effective means to obtain satisfying protection. However, although these amendments could definitely be seen as positive steps forwards a modernization of Chinese Copyright Law, few critical issues still arises, namely the stricter requirements "works" would need to comply with to fall within the scope of the Law (i.e. originality and fixed form) and, in particular, the referred need of being "fixed in certain forms", which is not specifically defined or regulated and which could, thus, lead to some uncertainty on whether some works would be considered copyrightable.