April 01, 2010

Copyright Law of the People's Republic of China (2010 Revision)

Issuing Body: Standing Committee of the National People's Congress
Issuing Date: February 26, 2010
Effective Date: April 1, 2010

Acting primarily to fulfill China's international treaty obligations, the Standing Committee of the National People's Congress has approved two changes to the Copyright Law of the People's Republic of China (2010 Copyright Law). The most important change, enacted in response to a World Trade Organization decision resolving a U.S. complaint, deletes a provision that previously denied copyright protection to works that were prohibited from publication and distribution in China. The amendments, the first to China's copyright law since 2001, went into effect on April 1, 2010.

Background: WTO Complaint

Article 4 of China's copyright law said previously: "Works the publication and distribution of which are prohibited by law shall not be protected by this Law." In practice, this clause left the owners of copyrighted works—most notably, movies—that had been legally published in other countries, but were not approved for publication in China, with little recourse to act against copyright pirates.

In 2007, the United States requested consultation with China through the WTO on "measures affecting the protection and enforcement of intellectual property rights," accusing China of lax enforcement of IP rights and failure to comply with several requirements under the Trade-Related Aspects of Intellectual Property Rights agreement and the Berne Convention for the Protection of Literary and Artistic Works.

In its defense, China expressed concern that providing copyright protection for illegal and prohibited works would lead to an increase in piracy.

A WTO dispute settlement ruled that because the old Article 4 protected only works approved in China, authors in the U.S. could do nothing to halt piracy of their creations in China if those works had not passed pre-publication or pre-distribution review. According to the WTO ruling: "Authors of works whose publication or distribution has not been authorized (and whose publication or distribution is therefore prohibited) appear not to enjoy the minimum standards of protection specially granted by the Berne Convention..."

New Article 4

Having accepted the WTO ruling, the Standing Committee removed the clause denying copyright protection to prohibited works and amended Article 4 of the 2010 Copyright Law to say: "Copyright owners should not exercise their copyrights in a manner that violates the Constitution or relevant laws, or harms the public interests. The country will supervise publication and distribution of the works in accordance with law."

New Article 26

In addition to amending Article 4 in response to the WTO ruling, the 2010 Copyright Law makes one other change, clarifying the process by which copyright ownership can be used as security for a debt or other legal obligation. Article 26 of the law now provides that: "Where a copyright is used as a pledge, both the pledgor and pledgee shall register the pledge with the copyright administrative authorities of the State Council."

The pledge of intellectual property in China has become common in daily life, especially after issuance of the Property Law of the People's Republic of China. In reality, however, this addition of a copyright pledge effects nothing new, as China's National Copyright Administration (NCA) has allowed the pledge of a copyright and the registration of the relevant pledge agreement through its regulations since 1996. Article 26 thus brings the 2010 Copyright Law into compliance with China's Property Law and NCA regulations.

Conclusion

As China gains experience with international dispute resolution processes, it continues to hone its legislative methods. As a result, upcoming laws and regulations might be expected to comply better with international practices and guidelines.

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