On June 1st, 2021, the newly amended Chinese copyright law (hereinafter “the amendments”) will take effect, bringing with it enhanced protections for copyright holders and creators in China. The focus of the amendments (available here in Chinese) is to provide greater recourse in China for copyright holders for infringements on their rights and provides courts with more power to investigate copyright claims and levy punitive damages for violations.
The amendments significantly increase the penalties imposed on copyright infringement in China. Notably, the amendments introduce new punitive damages for serious and willful infringement of copyright materials, an increased upper limit for statutory damages, new evidence burdens for copyright infringers, and provides creators in China greater protection for works not clearly covered by previous legislation.
Punitive damages for serious and intentional infringement
Article 54 of the newly amended copyright law states that where copyright or copyright-related rights are infringed, the infringer shall pay according to the actual losses suffered by the rights holder or the illegal gains of the infringer. The amended law also states that for serious and intentional infringement, the infringer can be fined by the people’s court for an amount up to 5 times in punitive damages – marking the first time that punitive damages are adopted in China’s copyright law.
Punitive damages are based on the actual losses suffered by the rights holder or illegal gains by the infringer, as chosen by the rights holder. Thus, those engaged in the intentional infringement on a copyright holders rights to a specific work now face damages to the amount of 1 – 5 times their illegal gains in damages.
Until the amendments, it remains to be seen how the courts interpret “serious” and “intentional” infringement criteria for levying punitive damages on copyright violations. However, the new amendments provide courts with significantly more recourse for handling and levying punishment for certain forms of copywrite violations.
Increased upper limit for statutory damages
In scenarios where the copyright holder’s losses or the infringer’s illegal gains are difficult to calculate or evidence is insufficient, courts can impose statutory damages on the infringer in the form of lump-sum payment to the copyright holder. The amendments increase the upper limit for statutory damages tenfold – from RMB 500k (USD $76,800) to RMB 5 million (USD $768,000) – and introduce a new minimum of RMB 500 (USD $76).
New evidence burden for copyright infringers
Article 54 also provides courts greater power to investigate copyright claims and determine the amount of compensation based on copyright holder’s losses and the infringer’s illegal gains.
Where the evidence needed to calculate damages – such as accounting records and books – the court can order the infringer to hand-over evidence in their possession. If the infringer does not provide the relevant records, or provides false records, the people’s court may determine the amount of compensation by referring to the claims of the copyright holder and the initial evidence provided by the claimant.
Broadening copyrightable works
Article 3 of the copyright law provides the types of works which are considered to be copyrightable works. Under previous copyright law, article 3 contains an open-ended category for “other works as provided for in laws and administrative regulations”. The amendment replaces the language of the open-ended category with “other intellectual achievements that meet the characteristics of the work”. The amendment provides a broader interpretation of copyrightable works without requiring intervening legislature or other administrative authorities.
Protections for “Audio-visual” works
Prior to the amendments, copyright law in China has provided protections for “cinematographic works and works created by a process comparable to cinematography”. Under the amendments, the old definition has been replaced with the broader term “audio-visual works”. While it remains to be seen how authorities will interpret the broadened terminology, it’s expected to facilitate copyright protection of new media works such as live-streamed sports, e-sports, and emerging forms of works such as short videos and animations.
Scope of infringeable activities
In the amended law, article 53 provides an updated list of activities that constitute infringement state that the infringer shall bear civil liability for their actions which violate the rights of the copyright holders. The amendments mostly follow that of existing copyright law while amending activities to include technological copyright management tools and updated language.
The following list outlines infringeable activities:
- Copying, distributing, performing, screening, broadcasting, compiling, or disseminating the copyright work to the public through information networks without the permission of the copyright owner, unless otherwise provided for by this law;
- Publishing books for which others enjoy exclusive publishing rights;
- Copying and distributing audio and video recordings of performances without the permission of the performers, or disseminating performances to the public through information networks, unless otherwise provided for in this law;
- Copying, distributing, or disseminating audio-visual works to the public through information networks without the permission of the producers of the audio-visual work, unless otherwise provided for in this law;
- Broadcasting, copying or disseminating radio and television works to the public through information networks without permission, unless otherwise provided for in this law;
- Intentionally circumventing or destroying, as well as facilitating the circumvention or destruction of, technical measures intended to protect the copyright material without the permission of the copyright owner or copyright-related right owner, unless otherwise provided by laws and administrative regulations;
- Deliberately deleting or altering the copyright management information on a work, audio-visual works, etc., without permission, as well as knowingly providing to the public works, audio-visual works, etc., whose rights management information is deleted or changed without permission, unless otherwise provided by laws and administrative regulations;
- Producing or selling works that impersonate signature elements of another.
Additionally, article 53 provides courts the power to classify certain infringement activities to be damaging to the public and impose additional penalties. In case of damage to the public interest, the court shall order the infringer to cease its infringing activities, confiscate illegal gains, and destroy infringing products, materials, tools, and equipment used in their production.
Courts may impose additional penalties of less than RMB 250,000 (USD $38,400) where no illegal income was obtained, income is hard to calculate, or illegal income is less than RMB 50,000 (USD $7,680). In case illegal income obtained is above RMB 50,000 (USD $7,680), courts may impose additional penalty of between 1 to 5 times the amount of illegal income.
Implications of China’s new copyright law
In the past, experts have criticized copyright legislation in China for being too lenient – imposing a maximum limit of only RMB 500,000 (USD $76,800) for infringement. However, with the new increased maximum threshold for statutory damages and the introduction of punitive damages, the cost for infringing on copyrighted materials is significantly higher than before and likely to deter a great number of potential infringers from doing so in the future.
The amendments also broaden the scope of copyrightable works and provides serval novelties to the types of work the law protects. This helps bring China’s copyright law up to date with emerging creative media and provides creators greater protection for works not clearly covered by previous legislations, such as short videos and live streaming.
With China’s new copyright law entering into effect on June 1st 2021, what remains to be seen is if the amendments will act as a deterrent for copyright violations in China and how copyright holders will enforce their rights under the new amendments.
