Copyright rules in China

Get to grips with the framework of copyright law in China with the 2018 TerraLex Cross-Border Copyright Guide.

What are the main sources of copyright law in China?

The main source of copyright legislation in China is the Copyright Law. The first Copyright Law was promulgated in 1990 by the Standing Committee of the National People’s Congress, which is the legislative body of the Chinese Government. This law has since been revised twice, in 2001 and 2010. A third revision is now in discussion before the Legislative Affairs Office of the State Council.

Judicial interpretations are another important source of copyright in China.  Judicial interpretations are binding opinions issued by the Supreme People’s Court on the implementation of certain laws. Regional courts can also issue interpretations, which would only be binding upon courts in those local jurisdictions. Chinese courts may cite judicial interpretations of Copyright Law to support their reasoning in judgments. 

As a civil law system, court decisions are not sources of copyright law in China and have no binding effect. However, certain guiding cases, which are selected and published by the Supreme People’s Court each year, have reference value to the lower courts.

Chinese Government continues its fight against online copyright infringement

The Copyright Law provides administrative protection to copyright holders. Under the law, the Chinese Government may impose a fine on those who seriously infringe another’s copyright. On 26 June 2014, the Shenzhen Market Supervision Administration issued a RMB260 million fine to QVOD Technology Company (QVOD), which marked a milestone in China’s efforts to fight online piracy. The Chinese Government did not slacken thereafter.  In July 2016, a campaign named Sword Net 2016 was carried out jointly by four Chinese administrative departments (NCAC, the Internet Information Office of China, the Ministry of Industry and Information Technology of China and the Ministry of Public Security of China (MPS)).

The Sword Net 2016 campaign began in July 2016 and was mainly against copyright infringements (i) of online literature and movies; (ii) committed through apps;  and (iii) conducted by the online advertisement alliance. Sword Net 2016 was a great success. According to the Government’s official report, 514 online copyright infringement cases were investigated during this campaign and 290 infringing websites were shut down by the Government. Fines totalling RMB4.67 million were imposed on those infringers.

With the success of Sword Net 2016, the Government has continued with Sword Net 2017, which started in late July 2017. This time, besides the infringements of online literature and movies, and those committed through apps, the Government has shifted its focus to e-commerce platforms such as Tmall, Taobao and JD.com, etc.

Additionally, the Chinese Government is maintaining its strong copyright protection for the movie and literature industries, and endeavours to significantly reduce copyright infringement through administrative mechanisms, which it hopes will deter infringers. For instance, each month, the NCAC publishes a warning notice on its official website, listing all movies and TV programmes that will be specially focused on and protected in the following months.

Chinese courts support increased damages in copyright infringement cases

Recently, copyright holders have been obtaining greater damages for copyright infringement claims than before, because Chinese courts have raised the available statutory damages in some cases.

In a copyright infringement case between two internet companies (Shanghai Xuanting v Beijing Zongheng Network), the Shanghai No. 2 Intermediate People’s Court awarded damages of RMB3 million to the plaintiff. The work in dispute in this case was an online novel. The plaintiff acquired copyright of the novel from the author. Without the plaintiff’s authorisation, the defendant uploaded the work on its own website and made the work available to the public. The first instance judgment was affirmed by the Shanghai High People’s Court. The decision is now final.

The actual damages in this case were not high. However, the decision was a major breakthrough because the judgment awarded was far beyond the statutory damages provided in the Copyright Law (see point 6.1). According to the Copyright Law, if the copyright holder’s actual loss and the infringer’s illegal gain are hard to determine, a court may award statutory damages up to RMB500,000. In this case, the court held that the plaintiff’s damages were over RMB500,000 based on the evidence, even though the exact amount was hard to determine. After considering the economic value of the work, the defendant’s infringing activities, the duration of infringement, and the defendant’s bad faith, the court awarded damages of RMB3 million.

To find out more about subsistence of copyright, ownership, infringement, remedies, enforcement and copyright reform in China, download the 2018 TerraLex Cross-Border Copyright Guide.