International Comparative Legal Guide – Copyright 2022 (China chapter)

1. Copyright Subsistence

1.1 What are the requirements for copyright to subsist in a work?

Under the Chinese Copyright Law, works created by the author and with originality are protected by copyright. There is no requirement on fixation, publication or registration.

1.2 Does your jurisdiction operate an open or closed list of works that can qualify for copyright protection?

There is an open-ended list. The Chinese Copyright Law stipulates nine categories of works:

1. written works;
2. oral works;
3. music, drama, folk art, dance, and acrobatic art works;
4. fine arts and architectural works;
5. photographic works;
6. audio-visual works;
7. graphic works and model works such as engineering design drawings, product design drawings, maps, schematic diagrams, etc.;
8. computer software; and
9. other intellectual achievements that meet the characteristics of a work.

1.3 In what works can copyright subsist?

The Chinese Copyright Law protects the above-mentioned nine categories of works created by natural persons, legal persons or unincorporated organisations, as well as the personal and property rights arising therefrom.

1.4 Are there any works which are excluded from copyright protection?

Yes. The Chinese Copyright Law does not apply to:

1. laws, regulations, resolutions, decisions, orders of state agencies, and other documents of a legislative, administrative, or judicial nature, and their official translations;
2. simple factual news; and
3. calendars, universal number tables, universal tables and formulas.

1.5 Is there a system for registration of copyright and, if so, what is the effect of registration?

Unlike patents or trademarks, there is no unified registration system for copyright in China. Currently, the Copyright Protection Centre of China (CPCC) and several competent regional copyright bureaus are responsible for the registration of works and software copyright. Copyright registration, which is not mandatory, provides publication of the status of copyright and prima facie evidence of copyright ownership, as well as time of creation in case of a copyright dispute. Regardless of whether the work is registered or not, the author’s copyright to his/her work will not be affected.

1.6 What is the duration of copyright protection? Does this vary depending on the type of work?

Copyright protection starts from the creation of the work. However, the duration of copyright protection varies depending on the type of work.

If the copyright belongs to a natural person, the term of protection for the publishing rights and the property rights in the copyright shall be the life of the author and 50 years after his/her death; if it is a collaborative work, the copyright shall expire 50 years after the death of the last deceased author.

If the copyright belongs to a legal entity, the term of protection for the copyright property rights is 50 years, expiring on the 31 December of the 50th year after the first publication of the work. Works that have not been published within 50 years of the completion of their creation shall no longer be protected by the Chinese Copyright Law.

For audio-visual works, the term of protection for publication rights is 50 years; the term of protection for copyright property rights is 50 years. However, if the work has not been published within 50 years of its creation, it will not be protected by the Chinese Copyright Law.

1.7 Is there any overlap between copyright and other intellectual property rights such as design rights and database rights?

Yes, there can be some overlap between copyright and other intellectual property rights. For example, a trademark or design that falls within the categories of works can also receive copyright protection.

1.8 Are there any restrictions on the protection for copyright works which are made by an industrial process?

There are no restrictions on the protection for copyright works which are made by an industrial process, as long as they fall within the categories of works that are protected by the Chinese Copyright Law.

2. Ownership

2.1 Who is the first owner of copyright in each of the works protected (other than where questions 2.2 or 2.3 apply)?

The first owner of copyright is the author, unless otherwise stipulated in the Chinese Copyright Law. A natural person who creates a work is its author.

Unless there is proof to the contrary, the natural person, legal person or organisation without legal person qualifications whose name appears as the author on a piece of work shall be the author.

Where a work is produced through adaptation, translation, annotation, or arrangement of a pre-existing work, the first owner is the adaptor, translator, annotator, or arranger accordingly, provided the exercise of such right shall not infringe the copyright in the original work.

The first owner of a compiled work is the compiler, provided the compiler’s exercise of its copyright shall not infringe the copyright in the original work.

In a piece of audio-visual work, for the copyrights of films and television dramas, the first owner is the producer; for other copyrights, the ownership shall be agreed upon by the parties concerned, and in the absence of any agreement or where the agreement is unclear, the first owner is the producer.

The authors of scripts, music and other pieces of work in a piece of audio-visual work that can be used separately shall be entitled to exercise their copyrights separately.

2.2 Where a work is commissioned, how is ownership of the copyright determined between the author and the commissioner?

The ownership of the copyright in a commissioned work shall be agreed upon in the contract between both the commissioning and commissioned parties. If no explicit agreement is contained or no contract is concluded, copyright shall vest in the commissioned party.

2.3 Where a work is created by an employee, how is ownership of the copyright determined between the employee and the employer?

Notwithstanding the below circumstances in which the employer enjoys the copyright, generally copyright in a work for hire shall vest in the author:

1. engineering design drawings, product design drawings, maps, schematic diagrams, computer software, etc., created mainly by using the material and technical conditions of, and under the responsibility of, the employer;
2. pieces of service work created by the employee of newspaper publishers, periodical publishers, news agencies, radio stations and television stations; and
3. works for hire for which the copyright shall vest in the employer, pursuant to the provisions of a law, administrative regulation or contract.

2.4 Is there a concept of joint ownership and, if so, what rules apply to dealings with a jointly owned work?

Yes. Where a work is jointly created by two or more authors, the copyright shall be jointly owned by these joint authors.

The copyright shall be exercised by the joint authors through consultation; where consultation fails and without any justifiable reason, no party shall prevent other parties from exercising rights other than the right to transfer the right of exclusive use or to license others for exclusive use and the right of pledge, provided that the proceeds obtained shall be distributed to all joint authors in a reasonable manner.

Where a jointly created work can be divided for separate use, each author may individually enjoy copyright to the part(s) created by that author, provided the exercise of the copyright shall not infringe the entire copyright in the jointly created work.

3. Exploitation

3.1 Are there any formalities which apply to the transfer/assignment of ownership?

Yes. The transfer/assignment of ownership requires a written contract that shall contain the following main contents:

1. title of the work;
2. right(s) to be transferred and the geographic area thereof;
3. transfer price;
4. payment date and method for the transfer price;
5. liability for breach of the contract; and
6. other issues that the parties deem necessary to be agreed upon.

3.2 Are there any formalities required for a copyright licence?

Yes. A copyright licence requires a licensing contract that shall contain the following main contents:

1. type(s) of the right(s) to be licensed for use;
2. whether the right(s) to be licensed for use is (are) exclusive or non-exclusive;
3. geographic range and term of the licence;
4. standard rate and method for remuneration payment;
5. liability for breach of the contract; and
6. other issues deemed by the parties as necessary to be agreed upon.

3.3 Are there any laws which limit the licence terms parties may agree to (other than as addressed in questions 3.4 to 3.6)?

Where publishers, performers, sound or visual recording producers, radio stations, television stations, etc., use others’ works, they shall not infringe the authors’ rights of authorship, alteration, integrity, or entitlement to remuneration.

3.4 Which types of copyright work have collective licensing bodies (please name the relevant bodies)?

There are several collective licensing bodies; for example, the Music Copyright Society of China for music, the China Audio-Video Copyright Association for audio-visual works, the China Written Works Copyright Society for written works, the Images Copyright Society of China for photographic works, and the China Film Copyright Association for films.

3.5 Where there are collective licensing bodies, how are they regulated?

The competent copyright department of the State shall conduct supervision and administration of collective licensing bodies in accordance with the Chinese Copyright Law.

3.6 On what grounds can licence terms offered by a collective licensing body be challenged?

A user may report to the State Council’s copyright administrative department if the user believes that a collective licensing body is involved in any of the following circumstances:

1. the body violates Article 23 of the Regulations on Collective Copyright Management and refuses to conclude a licensing contract with the user;
2. the body fails to agree on the specific sums of royalties to be collected as per the announced royalty rate standards; or
3. the body refuses to provide any record or business material specified in Article 32 of the Regulations on Collective Copyright Management that the user requests to access.

4. Owners’ Rights

4.1 What acts involving a copyright work are capable of being restricted by the rights holder?

The acts of copyright infringement shall be restricted by the rights holder, including:

1. publishing a work without the copyright owner’s authorisation;
2. publishing a work jointly created with others as a work solely created by oneself, without the other joint author(s)’ authorisation;
3. affixing one’s name to another’s work for one’s own fame and profit, without participating in the creation thereof;
4. distorting or falsifying another’s work;
5. plagiarising another’s work;
6. using a work, without the copyright owner’s authorisation, through exhibition or shooting audio-visual work, or in ways such as adaptation, translation, or annotation, unless otherwise specified in the Chinese Copyright Law;
7. using another’s work without paying remuneration which is due and payable;
8. rent the originals or duplicates of a piece of work or audio-visual product, without licensing from the copyright owner of the piece of work, computer software or audio-visual product, or the performer or audio-visual producer, unless otherwise prescribed in the Chinese Copyright Law;
9. using the layout of a book or periodical published by a publisher, without the publisher’s authorisation; and
10. live broadcasting or publicly transmitting a performer’s live performance, or recording the performance without the performer’s authorisation; etc.

4.2 Are there any ancillary rights related to copyright, such as moral rights, and, if so, what do they protect, and can they be waived or assigned?

The Chinese Copyright Law divides copyright into personal rights and property rights; personal rights may also be regarded as moral rights, including the rights of publication, authorship, alteration and integrity which cannot be waived or assigned.

4.3 Are there circumstances in which a copyright owner is unable to restrain subsequent dealings in works which have been put on the market with his consent?

Yes. The copyright owner’s right to distribute the original or copy of a specific work is exhausted after the first legal sale or gift, and the right of distribution can no longer be enjoyed. However, the right owner can still enjoy other rights such as the right of information network dissemination, the right of reproduction, the right of broadcast, etc.

5. Copyright Enforcement

5.1 Are there any statutory enforcement agencies and, if so, are they used by rights holders as an alternative to civil actions?

Copyright holders can use the National Copyright Administration and its local bureaus as the statutory enforcement agencies when the infringement relates to the public interest. According to the amended Chinese Copyright Law, local copyright administration bureaus (in some cities, the Culture and Market Enforcement Brigade also performs such function) have the right to investigate the infringement activities and order the infringer to stop such activities. When necessary, they can also confiscate any illegal revenue, infringing products, and equipment used to conduct infringement, and impose a fine. When the illegal revenue is more than CNY 50,000, the fine is one to five times the illegal revenue. When the illegal revenue is less than CNY 50,000, the fine can be up to CNY 250,000.

Although the infringement could be deterred, please note that the rights holder cannot claim damages when filing a complaint before copyright administrations. If the rights holder is seeking damage, civil action is necessary after the copyright administration investigation.

5.2 Other than the copyright owner, can anyone else bring a claim for infringement of the copyright in a work?

The exclusive licensee can file a copyright infringement complaint on his own, while a non-exclusive licensee can file a copyright infringement complaint only when explicitly authorised by the rights holder. In addition, copyright collective management organisations may file copyright infringement claims when authorised by the rights holder.

5.3 Can an action be brought against ‘secondary’ infringers as well as primary infringers and, if so, on what basis can someone be liable for secondary infringement?

The copyright owner and an authorised person can file a complaint against both primary and secondary infringers as long as the secondary infringer assists or induces the primary infringer to conduct the infringement activities.

5.4 Are there any general or specific exceptions which can be relied upon as a defence to a claim of infringement?

Fair use and statutory licence are two exceptions that can be used as a defence against an infringement claim.

The following activities each constitute fair use, with no compensation required to be paid to the rights holder:

1. the use of another’s published work for personal study, research or appreciation;
2. appropriately quoting in a work a published work of others for the purpose of introducing or commenting on a work or illustrating a point;
3. unavoidably reproducing or quoting a published work in newspapers, periodicals, radio broadcasts, television broadcasts and other media for the purpose of news reporting;
4. the publication or broadcasting by newspapers, periodicals, radio stations, television stations or other media of a topical article on political, economic or religious issues that have been published by other newspapers, periodicals, radio stations or television stations, except where the copyright owner has declared that the publication or broadcasting is not permitted;
5. the publication or broadcasting by newspapers, periodicals, radio stations, television stations or other media of a speech delivered at a public meeting, except where the author has declared that such publication or broadcasting is not permitted;
6. the translation, adaptation, compilation, broadcasting or reproduction in a small part of a published work for classroom teaching or scientific research, for the use of teaching or scientific research personnel, but not for publication or distribution;
7. the use of a published work by a State organ for the purpose of performing its official duties within a reasonable range;
8. the reproduction by libraries, archives repositories, memorial halls, museums, art galleries and cultural centres of work in their collections for the purpose of display or preservation of copies;
9. a free performance of a published work, in which no fee is charged to the public or remuneration is paid to the performers, and which is not to make a profit;
10. the copying, drawing, photographing or videotaping of an artistic work set up or displayed in a public place;
11. the translation of a published work created in the spoken and written language of the State by a Chinese citizen, legal person or organisation without legal personality into a work in the spoken and written languages of ethnic minorities for publication and distribution in the country;
12. the provision of published works to persons with dyslexia in an accessible manner that they can perceive; and
13. other circumstances provided for by laws and administrative regulations.

The statutory licence is rather simple: it is for the implementation of compulsory education and national education planning and writing textbooks published, without the permission of the copyright owner, in the textbook compilation of published work pieces or short written works, music works or single works of art, photography, graphics, but it shall pay compensation to the copyright owner in accordance with the relevant provisions, and indicate the author name and name of the work.

The legitimate owner of software copies can fairly use the software as follows:

1. according to the needs of use, load the software into computers and other devices with information disposal capabilities;
2. make a backup copy to prevent the copy from being damaged. These copies shall not be made available to others by any means and shall be destroyed when all persons lose ownership of the legal copies;
3. make necessary modifications to the software in order to be used in the actual computer application environment or to improve its functions and performance. However, unless otherwise agreed, this modified software may not be provided to any third party without the permission of the software copyright owner; and
4. anyone who uses software by installing, displaying, transmitting or storing it for the purpose of learning and studying the design ideas and principles contained therein may do so without obtaining permission from the software copyright owner, and no remuneration is required.

5.5 Are interim or permanent injunctions available?

Usually, a court judgment would grant a permanent injunction. Preliminary and interim injunctions are also available. To apply for the preliminary and interim injunction, the petitioner shall prove that:

1. infringement has taken place;
2. there will be irreparable damages if no injunction is granted; and
3. the balance of convenience favours the petitioner.

• No public interest would be harmed if an injunction is granted.

5.6 On what basis are damages or an account of profits calculated?

The basis for calculating damages would be in the following order:

1. actual loss suffered by the rights holder or the illegal profits obtained by the infringer;
2. royalties for licensing such right; and
3. statutory damage between CNY 500 to CNY 5 million.

The court may usually support part of the attorney fees, but not all. The amended Chinese Copyright Law also introduced punitive damage for malicious infringement, which will be one to five times the damages granted.

5.7 What are the typical costs of infringement proceedings and how long do they take?

The costs include court fees and attorney fees. When the plaintiff claims damage, the court fee is calculated based on the damages claimed. When the plaintiff does not claim damage, the court fee is rather cheap, usually between CNY 500–1,000.

The attorney fees vary depending on the situation. Normally, there is also an investigation cost. Attorney fees for copyright infringement litigation for the first instance trial are generally under USD 100,000.

Usually, the court should conclude the first instance proceeding within six months of accepting the case. For the second instance and after, the case shall be concluded within three months of the appeal.

5.8 Is there a right of appeal from a first instance judgment and, if so, what are the grounds on which an appeal may be brought?

Yes; according to the Article 147 of the Civil Procedure Law of China, the party dissatisfied with the first instance judgment can appeal to the court at the next level within 15 days (Chinese party) and 30 days (foreign party) from the date of service of the judgment. During the second instance, the judgment of the first instance would not be enforced. The appeal can be filed based both on the issue of fact and the issue of law application.

5.9 What is the period in which an action must be commenced?

The statute of limitations for a copyright infringement case is three years; the timer starts after the rights holder or any interested party knew or should have known that the infringement occurred.

If the plaintiff filed the suit after the three-year limitation period but the infringement has continued to occur, the court will grant a permanent injunction and calculate the compensation for three years before the filing of the case to the date the holder filed the case.

6. Criminal Offences

6.1 Are there any criminal offences relating to copyright infringement?

Yes, according to Article 53 of the Chinese Copyright Law, the perpetrator shall be investigated for criminal liabilities pursuant to the law if criminal offences are constituted. Furthermore, Articles 217 and 218 of the Criminal Law of the People’s Republic of China stipulate that serious copyright infringement may constitute a crime.

6.2 What is the threshold for criminal liability and what are the potential sanctions?

Generally, the threshold for criminal liability for the amount of illegal gains is CNY 30,000, and the amount for illegal business operations is CNY 50,000.

According to Article 217 of the Criminal Law of the People’s Republic of China, for the purpose of profit, a large number of illegal gains or other serious circumstances, the infringer shall be sentenced to fixed-term imprisonment of not less than three years but no more than 10 years, and fined. In addition, knowingly selling works reproduced by infringing the copyright for the purpose of making profit, as mentioned in Article 217 of the Criminal Law, shall, if the amount of illegal gains is huge or if there is another serious circumstance, be sentenced to fixed-term imprisonment of not more than five years, and also be subject to a fine concurrently or separately.

7. Current Developments

7.1 Have there been, or are there anticipated, any significant legislative changes or case law developments?

The new Chinese Copyright Law recently came into force in June 2021. We expect that there will not be any significant legislative changes in the near future. In addition, courts in China such as the Supreme Court have issued guideline cases in recent years, and the Beijing Intellectual Property Court has also been releasing typical cases each year, including copyright-related cases with guiding significance.

7.2 Are there any particularly noteworthy issues around the application and enforcement of copyright in relation to digital content (for example, when a work is deemed to be made available to the public online, hyperlinking, etc.)?

With the widespread use of the internet and social media, the problem of copyright infringement of digital content has become increasingly serious, and is mainly manifested as an infringement of the right of information network dissemination.

Article 23 of the Regulations on the Protection of the Right of Information Network Communication stipulates that network service providers provide search or link services for their service targets. If there is a link to a sound or video recording, the provider shall not be liable for compensation; however, if it is known or should be known that the linked work, performance, sound recording or video recording is infringing, the provider shall bear joint infringement liability.

7.3 Have there been any decisions or changes of law regarding the role of copyright in relation to artificial intelligence systems, including the use of copyright in those systems and/or any work generated by those systems?

There is currently no standard legislation with regard to artificial intelligence systems in China. According to the Chinese Copyright Law, copyright owners shall include authors and other natural persons, legal persons, and organisations without legal person qualifications that enjoy copyright under this Law. Thus, there is still an ongoing dispute regarding the role of copyright related to AI systems, and whether the products in AI systems shall be included in the scope of copyrights.

In the case Shenzhen Tencent Computer System Co., Ltd. vs Shanghai Yingxun Technology Co., Ltd., the Nanshan District Court in Shenzhen held that the content generated by Dreamwriter software constituted a textual work. In order to demonstrate that the object generated by the AI constituted a work, the court specifically emphasised that the article involved was generated by the plaintiff’s creative team using Dreamwriter software.

This is the first judgment to affirm that the Chinese Copyright Law provides protection for AI-related works. The judgment recognises the contribution of human intellectual labour in the production process of AI-related works, and protects some AI-related works that meet the requirements of the Chinese Copyright Law.

This article was originally published as part of the International Comparative Legal Guide – Copyright 2022, click here for the original article.