China’s Plan for Copyright Creativity

copyright

China’s National Copyright Administration released it plans for the 13th Five Year Plan regarding copyright (the “Plan”), attached here (including machine translation).  The plan comes on the back of the State Council’s 13th Five Year Plan for the Protection and Enforcement of Intellectual Property (January 16, 2017), which has further elevated IP in China’s state planning hierarchy.

The Plan reflects the State Council’s decision on China becoming a “Strong IP Country” and includes much of what one might expect from a state planning document on copyright.  For example, it notes that China will complete its revision of the much delated copyright law reforms, as well as related implementing regulations and ministerial rules.  The plan also emphasizes improvement of administrative enforcement, including criminal/administrative coordination, and working with the National IPR Leading Group and other agencies, rather than civil enforcement/remedies/injunctive relief, etc.  The draft also reflects the regrettable tendencies of the patent system of focusing on IP quantity as opposed to quality, with goals of increasing copyright registrations to 2,780,000 and software registrations to 600,000 by 2020, as well as creating additional demonstration cities and other copyright promotion projects.

The plan laudably calls for increased cooperation with foreign countries including “cooperative strategic MOU’s” with the United States and other countries, as well as  “working on more programs with international associations based in Beijing” , and resolution of bilateral issues in a “win-win” environment.

The draft also recognizes that “infringement of copyright is still relatively common, and the copyright environment in reality still needs to take steps forward to improve.”  However the report also notes that China is a “developing country” and it needs to avoid “excessive protection and abusive protection.”

Despite China having a huge copyright civil docket (over 60,000 cases in 2015), the report focuses exclusively on public enforcement and supervision mechanisms, including various interagency efforts, with commitments to:

Further strengthen copyright enforcement coordination mechanisms and promote improvement culture at all levels of law enforcement agencies implementation of the copyright law enforcement mechanisms, effective copyright enforcement in cultural market administrative law enforcement functions, use “anti-piracy and pornography” work organization and coordination mechanisms to strengthen Public security, Industry and Commerce, MIIT, Network Security and other departments, to cooperate and form collaborative copyright enforcement efforts. Strengthening the convergence of copyright administrative law enforcement and criminal justice, actively participate in the construction and use of national action against Counterfeit and Substandard goods enforcement and criminal justice information sharing platform for convergence of, and further information in copyright enforcement cases. Better play an oversight role for local law enforcement supervision and social rights, the establishment of local copyright law enforcement cooperation mechanisms cooperation with corporations, associations and copyright law enforcement mechanisms. [the link inserted is my own addition]

进一步强化版权执法协作机制,推动完善各级文化综合执法机构落实版权执法任务的工作机制,有效发挥文化市场行政综合执法中的版权执法职能,充分运用“扫黄打非”工作组织协调机制,加强与公安、工商、工信、网信等部门的配合、协作,形成版权执法合力。加强版权行政执法与刑事司法的衔接,积极参与建设和使用全国打击侵权假冒工作行政执法与刑事司法衔接工作信息共享平台,进一步推进版权执法案件的信息公开。更好发挥地方执法监管和社会维权监督作用,建立地方版权执法协作机制及版权执法部门与企业、协会合作机制

The government management approach to copyright is also reflected in a call for increased government subventions for copyright creation through “seeking financial support and preferential policies, and increasing the intensity of support for copyright.” This approach could result in further distortions of China’s IP environment, much as has occurred in the High and New Technology Enterprise program.

 

Note: Wordcloud at the beginning of this blog is from the machine translation of the Plan.

USPTO and Renmin University Copyright Protection Program Highlights Importance of Copyright Reform for China

revenuestreams

Last July 20, 2016,USPTO and Renimin University jointly hosted a program at Renmin University on Copyright Developments in China and the United States.  The program was covered by some of the specialty media.  Here’s a brief summary regarding some of the four key developments in China that I abstracted from the speakers at the conference:

  1. Building upon some of the path breaking work of Eric Priest and others, there appeared to be near unanimity amongst the speakers and audience of the importance of revenue diversity for China’s creative industries to thrive.  Amongst the areas highlighted, were the importance of public performance rights, of licensing for digitalization of content, of small claims procedures for copyright owners, the utility of collective management in certain contexts, and the importance of providing copyright protection for sports broadcasting (as opposed to using neighboring rights or antiunfair competition law).  The current copyright licensing environment in China uniquely supports one exclusive license, but even that revenue source is vulnerable to non-renewal if piracy erodes the value of buying legitimate content and may therefor not be sustainable in the face of “piratical” or free competition.  Musicians, as an example, are heavily dependent on public performances and secondary sources of revenue, such as DVD/CD/ streaming sales are thin.  Revenue diversity can also included non-copyright revenue streams, such as trademark rights, and perhaps merchandising rights.  Efforts have also been underway to increase pledging of copyrighted content, which can help with financing of copyrighted content.
  2. Many of the Chinese speakers spoke about increasingly creative enforcement approaches, such as the Sword Network Campaign,  enhanced administrative supervision over platforms (16 video sites/20 music sites/20 literary sites) and punitive damages.  Although they are still a minority of criminal IP cases, there is an increasing number of  criminal referrals from administrative cases (from 2005 to 2015, more than 450 cases were referred to criminal prosecution).  Article 287 of the newly amended Criminal Law, which provides for criminal liability by reason of providing computer services was noted as a potential area for expanded criminal copyright liability.
  3. Technology and globalization were making enforcement increasingly more difficult, while at the same opening up possibilities for more efficient enforcement techniques.  Audiovisual use of the internet was one of the most popular reasons in China to be online (73.2% of netizens view AV products in China). Music is a close second (72.8%), while literature was only 43.1%.     Copyright protections which did not extend to interactive (online) environments, were increasingly undercutting revenue streams.  China’s reservation under article 15(1) of the WIPO Performance and Phonograms Treaty was noted (“(1) Performers and producers of phonograms shall enjoy the right to a single equitable remuneration for the direct or indirect use of phonograms published for commercial purposes for broadcasting or for any communication to the public.”).  The increasing complexity of the copyright environment, including the environment for licensing was highlighted as a theme in both the United States and China.   Media box piracy was identified as a problem (see 湖南快乐阳光vs 清华同方).  A case involving use of parasitic software to modify the original code was noted, under the Antiunfair competition law ( 鹏讯 [深圳] v 上海虹连网络)
  4. Regarding enforcement, the efforts of the courts to develop precedential or guiding cases to resolve complicated emerging issues was also underscored, particularly due to the extensive delays in passing copyright law reform, which has now been ongoing for several years.  There were over 70 research topics underway as part of the copyright law reform.  There needs to be increased scope of protection of copyright and improved mechanisms for enforcement.  Some of the difficulties in providing copyright protection to certain areas were traced back to the original training program in 1985 in Nanjing on copyright law, which was provided by European experts, and introduced European concepts and models, such as neighboring rights.    Changes in substantive law and judicial practice, such as providing for treble damages,  sampling of allegedly infringing content, establishing a requisite standard for “originality” vs a non-original product (see 北京乐东 vs 北京昆仑 concerning copyright in entertainment software characters) idea vs. expression in variety shows (See Beijing High Court’s: 关于审理涉及综艺节目著作权纠纷案件若干问题的解答), harmonization with other laws (such as the Antiunfair Compeittion Law),  how much copying constituted infringement, discovery of source code to verify infringement of software products, and specialized IP courts/three-in-one (administrative/civil/criminal) tribunals were all noted.  In addition, an expanded scope for audiovisual works, or lowering of the creativity required for cinematographic works were noted as possible approaches to providing protection for sports broadcasts.   Rights holders were also selecting overseas venues for litigation where rights were sometimes better protected.

In general, the speakers agreed that China needs copyright reform for its own needs, and that this reform was not due to outside pressure. In addition, there are increasing opportunities for collaboration between the United States and China on the creation and distribution of copyrighted content, which appear to be mirroring increased collaboration in science and technology.  Ultimately, China needs improved copyright protection and enforcement in light of its own desires to increase its soft power, and support its creative industries.