Gui Hongxia, Liu Siyan and Zhao Yinghui King & Wood Mallesons
On 11 November 2020, lawmakers at the 23rd session of the 13th National People’s Congress (NPC) Standing Committee deliberated and voted to adopt the Decision on Revising the Copyright Law of the People’s Republic of China, marking the completion of the decade-long third amendment to the Copyright Law (hereinafter referred to as the “Amendment”). The newly amended Copyright Law (hereinafter referred to as the “2020 Copyright Law”) consists of 67 articles in six chapters, and shall come into force as of 1 June 2021.
Since the launch of this Amendment to the Copyright Law in 2011, public opinions have been solicited for many times. The amendment process is as follows:
On 31 March 2012, in accordance with the legislation plan of the State Council, the National Copyright Administration of the PRC drafted the Copyright Law of the People’s Republic of China (Draft Amendment) and solicited comments;
On 6 June 2014, the former Legislative Affairs Office of the State Council promulgated the Copyright Law of the People’s Republic of China (Draft Amendment for Review) and solicited comments;
On 26 April 2020, the Copyright Law of the People’s Republic of China (Draft Amendment) was deliberated at the 17th session of the 13th NPC Standing Committee and released on 30 April 2020 for public opinions;
On 17 August 2020, the Amendment to the Copyright Law of the People’s Republic of China (Draft for Second Deliberation) was deliberated at the 21st session of the 13th NPC Standing Committee and released for public opinions.
There are quite a few differences among the above legal texts. Now, on the occasion of the passage of the 2020 Copyright Law, the authors would like to take this opportunity to extent their congratulations and concern for the introduction of the 2020 Copyright Law. They make a comparison between the new Law and the current one, and present the highlights and difficulties of this Amendment and their significant impact.
1. Object System: Responding to the Practical Needs of the Protection of New Types of Works
Article 3 of the current Copyright Law, also known as the article on works, lists eight statutory types of works and other works. As new types of works keep emerging, it is difficult for the current article to meet the increasingly strong demand for copyright protection, and its interpretation and application in judicial practice have been widely discussed. In the 2020 Copyright Law, there are three major changes regarding this article:
- The 2020 Copyright Law adds a definition clause on works. The provisions of Article 2 of the Regulations on the Implementation of the Copyright Law of the PRC on the constituent elements of works are elevated to be part of the 2020 Copyright Law, clarifying that works shall refer to original intellectual creations in the literary, artistic and scientific domain in so far as they are capable of being reproduced in a certain tangible form;
- The provisions of the current Copyright Law on cinematographic works and works created in a way similar to cinematography focus on the creation method. In this Amendment, the expression of such works is unified as audio-visual works, in response to the demand for protection of new types of audio-visual works, such as online game graphics and short videos, which are created by filming methods different from those of film works;
- The 2020 Copyright Law cancels the requirement that other works must be restricted by laws and administrative regulations, so that there are laws applicable for protection of new types of works, and judges may have more room to apply and interpret the law.
In addition, this Amendment provides a more precise definition of the objects that are not protected by the Copyright Law. We know that the Copyright Law does not protect pure factual information, but in-depth reporting like discussion and analysis using simple factual information as material or background may constitute a news work and be protected by the Copyright Law. This Amendment changes the term “news on current affairs”, which is not protected by the current Copyright Law, to “pure factual news”, and adds news as a new category of service work to the service works section under the chapter of ownership of copyright, which is more precise than the current Copyright Law.
2. What Rights are Covered by Copyright: Responds to Changes Caused by Communication Technology to the Way of Using Works
What rights copyright covers is the core part of the Copyright Law. Article 10 of the current Copyright Law specifies 4 personal rights and 12 property rights. The 12 property rights are categorized based on the way of using works. The development of communication technology, however, enriches the way of using works, which leaves some communication methods unable to be covered by the current regulations. This Amendment is a response to the problems brought about by the technology development to the Copyright Law, and there are also three noteworthy changes:
- With respect to the right of reproduction, duplication and reproduction in a digital manner are covered by the right to reproduce.
- With respect to the right of lease, the 2020 Copyright Law clarifies that owners of rights in audio-visual works and computer software have the right of lease in both originals and copies of the work.
- With regard to the right of broadcasting and information network dissemination, the 2020 Copyright Law amends the definition of the right of broadcasting, and removes the provision that it shall be a right to publicly broadcast or disseminate works by wireless means. Thus, the Internet live broadcasting falls within the coverage of the right of broadcasting, which solves the long-standing practical dilemma that neither the broadcasting right nor the information network dissemination right can be applied to regulate the Internet live broadcasting.
Upon this Amendment, the scope of application of the right of broadcasting and the right of information network dissemination will be clearer, and the only difference between the two is whether communication is interactive.
The important revision to the right of information network dissemination is that it is no longer required that information network dissemination should be an act of “providing a work”. The deletion of the word “work” in the definition means that the right of information network dissemination is not limited to the act of providing a work, but also includes the act of providing services such as links.
3. Subject System: Better Rules on Ownership of Copyright
The ownership of copyright system is another basic issue in the copyright law. If an intellectual creation is recognized as a work, the next issue is to determine to whom the copyright belongs. In addition, clear ownership of copyright is the basis for copyright permission, transfer and distribution of benefits. This Amendment has made the ownership of copyright system more improved and clarified, with the following five major changes:
- The rule on presumption of authorship and the copyright registration system are merged into the separate Article 12 in the 2020 Copyright Law. The rule of presumption of authorship means that, in the absence of evidence to the contrary, a natural or legal person whose name mentioned in connection with a work is presumed to be the author. This provision is applied more as a rule of evidence in practice. The registration of copyright can also be used as preliminary evidence for entitlement to copyright in practice. The author speculates that in this Amendment, the combination of the two into the same article might also be out of the above-mentioned considerations.
- With respect to works of joint authorship, a new paragraph is added: in the event that co-authors cannot reach an agreement on the exploitation of the work, the co-authors may exercise their rights in the work by means other than assignment, exclusive license or pledge.
- Provisions on derivative works and compiled works are adjusted. The rules on the exploitation of derivative works and compiled works are included in the 2020 Copyright Law as the separate Article 16, and the relevant provisions of Articles 35, 37 and 40 of the current Copyright Law are deleted;
- Rules on ownership of audio-visual works have been improved. The special rules on the ownership of cinematographic works and works created in a way similar to cinematography under the current Copyright Law remain in place, and the copyright of such works shall be enjoyed by the producer. For the ownership of copyright in the audio-visual works other than cinematographic works and works created in a way similar to cinematography, the agreement between the parties concerned shall prevail, where there is no such agreement, the above-mentioned rule on ownership applies. In addition, rules on the exercise of rights to works that can be exploited separately are added to promote the communication and exploitation of screenplays, music and other works;
- News are recognized as a new category of service work in the section of special service works of the 2020 Copyright Law, echoing the amendment about news on current affairs in the above object system.
4. Limitations to Copyright Protection: For Promoting the Distribution and Exploitation of Works
The legislative purpose of copyright law is to promote the creation and dissemination of knowledge through granting protection for works. The “protection” of copyright and its “limitations” constitute a complete system of the law. The limitations to copyright protection in China mainly refer to fair use and statutory licenses. Article 22 of the current Copyright Law enumerates several circumstances where fair use applies, with no generality or a catch-all clause for contingencies. This arrangement triggers wide discussion and concern in practice due to its lack of flexibility. This Amendment provides the following four major changes related to fair use:
- Amending Paragraph 1, Article 22 of the current Copyright Law by specifying the constitutive elements of fair use: (1) specific names/titles of the author and the work; (2) no prejudice to the normal use of the work; and (3) no unreasonable damage caused to the legitimate rights and interests of the copyright owner.
- Adopting a semi-non-exhaustive legislative model by adding “other circumstances stipulated by laws and administrative regulations” to eliminate any potential omissions caused by the close-ended listing of applicable circumstances;
- Subjecting free performance to an additional restriction of “for non-profit purposes”. The free performance is featured by charging the public for none or paying no remuneration to performers. The purpose is to prevent disguising a profit-earning activity as free performance (e.g. by collecting advertising fees), which is in line with the legislative purpose of fair use provisions; and
- Showing more humanistic care for people with reading disabilities by extending the scope of fair use to the provision of works in an accessible way that people with reading disabilities can perceive, rather than in braille only.
5. The Neighboring Rights: More Clarified Yet Still Ambiguous
The “neighboring rights” is a generic term for the rights to disseminate works, which is widely used in theoretical research. This Amendment collectively refers to these as the “rights related to copyright” (for simplicity, it will still be referred to as “neighboring rights” hereinafter). The neighboring rights in China include the rights of publishers, performers, producers of audio and video recordings and broadcasting organizers. This Amendment incorporates four main changes in this regard:
- Adding the “right of lease” to the performer rights to further improve the neighboring right system; incorporating additional provisions on job performance and clarifying the corresponding right owner.
- Removing Article 44 of the current Copyright Law on the statutory license for broadcasting organizations to broadcast audio recordings, and adding another provision as Article 45 which provides that “If audio recordings are used for wired or wireless public transmission, or are publicly transmitted to the public through technical equipment for audio transmitting, remuneration shall be paid to the producers of such audio recordings.” Given the more frequent infringement of audio books in recent years, the 2020 Copyright Law has made the above amendment in response to practical needs so as to better protect the interests of producers of audio recordings; and
The provision on the rights of broadcast organizers is one that is mostly discussed this time. The main change is to add the right of communication through information network with an aim to address the copyright issue arising from the “replay” function. However, we are of the opinion that this Amendment will make the issue more complicated when it is uncertain which right should come into play (e.g. the right to broadcast, the right to communicate works through information network or any other right). In addition, this Amendment does not specify the objects protected by the rights of broadcast organizers, which may give rise to misunderstandings in practice. If the objects are not clearly defined, people may not pay enough attention to the distinction between “signal” and “program” in practice. As such, it will easily leave relevant subjects using broadcast to organize their programs with an impression that those who obtain the license of the signal will simultaneously obtain the license of the program carried thereby. Such misunderstanding will easily lead to confusion of licenses and infringement cases, and disputes will continue to exist in practice.6.
6. Legal Liabilities: Increased Penalties for Copyright Infringement
Another key amendment lies in the liability for damages arising from copyright infringement. Compared with the current Copyright Law, there are three major changes in this regard:
- For the basis of the calculation of damages, putting the actual loss of the right owner and the illegal gains of the infringer both in the first place. Accordingly, the application of the two calculation methods is no longer subject to an order of precedence, which is more in line with the practice. When it is difficult to calculate both of the two amounts, the damages may be assessed with reference to the license fee;
- Intensifying the investigation and penalties of copyright infringement and increasing the amount of punitive damages by 1-5 times. This change aims to increase the penalties for copyright infringement, and it is also the result of the implementation of punitive damages for IP matters under the Civil Code. In addition, the amount of statutory compensation has also been adjusted, increasing the cap to RMB 5 million and setting a minimum of RMB 500; and
- A people’s court may, at the request of the party concerned, order the destruction of infringing copies and tools, materials, etc. without indemnity in copyright disputes, demonstrating a more thorough effort to crack down on copyright infringement.
7. Other Amendments
The above major amendments, together with the changes and modifications in other aspects, are solid proofs of the progress in the copyright legislation of China. We will follow up on matters such as the publicity requirements for the collection of royalties by collective administrative organizations of copyright, and the improvement of regulations on technical measures and relevant rights management information.
This Amendment of the Copyright Law takes a whole decade, covering all aspects of the copyright system. Opinions of both the general public and the academic circle are mirrored in the 2020 Copyright Law, reflecting the collective wisdom of the society. Hopefully, it will shine in practice and bring out its maximum value. Meanwhile, as a derivative of technology, copyright will never stop evolving with its rapid development, meaning that the experts, scholars and practitioners in this field will continue their efforts on it.
 See Zhang Jin: Copyright Law, Peking University Press, 2018, p. 164.