Comments on the Draft Amendement of the Chinese Copyright Act

The first copyright act of the People’s Republic of China was acceptd 30 years ago (September 7, 1990). Quite a lot has changed since the adoption of that law, and following two less detailed amendments (one in 2001 and another in 2010), China now faces the third reform of this act.

Although I said „faces”, it might be wise to recall that this third reform is underway since a full decade. (It theoretically started shortly after the 2010 amendment was accepted, as that law was truly limited in its scope – the need for more changes was immediately visible.) Still, if we look at the draft proposal, published in April (see here), one might say it is worth the time to wait so much for the draft. No doubt: the proposal – I only managed to read the English translation prepared by Jiariu Liu – is not perfect (as you will see it soon), but it includes multiple important and good changes, both substantively and in a procedural sense. The most important question that remains is a usual one: will the reform truly affect the application and the appreciation of copyright law in China? Let’s take a look at the most important elements of the reform proposal, and let’s add a few guesses at the end.

The draft proposal includes notable positive changes regarding the administration and transparency of collective rights managements organizations (Article 8); it introduces the three-step test (see Article 22 first sentence); it implements the Marrakesh Treaty’s copyright exception for the benefit of visually impaired people [see Article 22(12)]; it envisages a quite unique concept of „performance-made-for-hire” (see Article 38); it introduces rules on technological protection measures and rights management information (see new Articles 47 to 50); Article 50 calls for a balanced system of interests by declaring that copyright abuses by rights holders shall be strictly prohibited and punished (by administrative fines, the amount of which equivals with the fines of copyright infringers).

Besides these positive changes, some negative remarks should be made, too. It might be due to my limited understanding of the text, but the amended Articles 9, 11 and 16 seem to unnecessarily overlap. While Article 9 speaks of copyright owners (this category include authors and other natural persons, legal persons and non-legal-person organizations), Article 11 declares that

„except where otherwise provided for in this Law, copyright in a work shall belong to its author. The author of a work is the natural person who creates the work. Where a work is created under the auspices and according to the intention of a legal person or non-legal-person organization, which bears responsibility for the works, the said legal person or organization shall be deemed to be the author of the work. (…)”

Finally, Article 16 covers the concept of work-made-for-hire, where, contrary to Article 11’s logic of „deemed authorship”, the default is that the copyright in such works are enjoyed by the author (with the notable fact that the employer has a priority to exploit the work). The regulatory overlaps of authorship and ownership might need to be corrected.

Another point that might need further clarification is the erasure of the original Article 44. This rule allowed radio and television stations to broadcast published sound recordings in the lack of permission but upon payment of remuneration to the rights holders. I did not notice any equivalent rule like that in the amended/new version of the draft act.

Exceptions from the strict protection of TPM under Art. 48 are warmly welcome, even though the first of those exceptions might lead to legal problems (or, put it differently, it could lead to misunderstandings in its current form). In light of the English version of the proposal, it seems so that only teachers and researchers can access copyright protected contents for classroom teaching or scientific research, but students – in the lack of expressed reference to them – might be unable to rely on this exception.

Finally, the new Article 53 on statutory / punitive damages is of extreme importance, but I am not sure how it will work in practice. This article speaks of a multi-level compensation calculation mechanism. The order of calculation is as follows: actual losses, gains, multiple of fees due for the use, and in serious cases „one to five times” the compensation of any of the above three options. Last, if none of these options can be applied to determine the damages due, statutory damages might be applied – up to 5m RMB. We might add two notes on the statutory damages rule. First, „one to five” multiplication sounds flawed. „One” simple means = the same. If the Chinese legislator wanted to introduce „real” punitive damages, the good wording should have been like „two to five times”. Second: I am totally unfamiliar with the regular compensations in China. Is 5m RMB overly excessive or normal or too low? To put it this way: is it really repressive or something normal? (I don’t believe it can be too low, as the plan of the reform is to raise statutory damages from 500k to 5m.) We’ll see it in practice! On this aspect of the draft, see also Tian Lu’s post on IPKat.

To sum it up: the Chinese reform proposal is the first that TRULY intends to amend the Copyright Act of the PRC, and hence it is of great importance. I am keen on following the developments. If there will be anything new in this field, I’ll post on that.

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