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There are serious copyright issue in China, which have hinder China from developing its new technology and creative industries. Here I would like to discuss come aspect of China copyright problems starting from a copyright case.

A Typical Copyrighte Protection Case Review

When "The Pacifier" was shown online by a Chinese website without permission, the Motion Picture Association of America (MPA) complained to the National Copyright Administration of China last October.

The copyright agency then ordered to stop the piracy and fined it US$11,140.

The episode had a happy ending. And a top Chinese piracy buster yesterday promised copyright holders tough action a la Vin Diesel in the Hollywood action-comedy by improving legislation and international co-operation; and cracking down on rampant copyright violations on the Internet.

"We must be iron-handed and unremitting on the work (of clamping down on online piracy and copyright infringements)," said Yan Xiaohong, deputy chief of the national copyright watchdog.

"Our goal is to foster an environment instrumental to both safeguarding the rights of copyright holders and dissemination of their works."

A four-month campaign launched last September resulted in the shutdown of 76 websites and the handling of 172 cases, including 28 serious ones involving movies, music, games, books and software sold or shared illegally over the Internet.

International copyright holders and organizations reported half of the 28 serious cases, he said.

"The special operation has to some extent played a deterrent role in curbing Internet piracy and copyright violations," Yan said. "But one campaign cannot solve the problem."

Conceding Internet piracy was a global headache for which no panacea has been found even in developed countries, Yan said his agency is striving to develop an "enduring mechanism" to protect copyright on the Internet.

On the advice of his agency and the country's Internet associations, the State Council is expected to release landmark regulations on the rights of communication on the Internet this year.

The statute will pave the way for the country to sign the World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO Performances and Phonograms Treaty to help fight digital piracy, he said.

"We are considering collaborating with some leading world bodies and associations of copyright-holders, including the MPA and the International Federation of the Phonographic Industry, with which we are discussing law enforcement on the Internet and other co-operation," he said.

He said Chinese copyright monitors would be equipped with advanced search engines which will enable law-enforcers to get to know which music downloads are not authorized and where their servers are located.

China have sound legal foundations for the protection of copyrights and neighboring rights.

China has placed a great deal of importance on IPR legislation since the implementation of reform and opening-up with a view to protecting fair market competition, safeguarding market economic freedom and order, and promoting economic and cultural development. The General Principles of Civil Law of the People's Republic of China provides for comprehensive protection for copyrights. China enacted the first copyright law in September 1990 and June 1, 1991 was the effective date. Although it started Copyright Legislation at a relatively late date, China has learned from and drawn upon the international successful experiences on copyright protection in the course of its copyright legislation according to China's own conditions and the international development trend, and thus formed the Chinese-style legal system for IPR (including copyrights) protection. Some foreign IP experts said, the fast speed of IPR legislation of China, rarely seen in the annals of the history of intellectual property. This system has won praise in the world community of intellectual property.

While setting up and improving the legal system for copyrights protection within the country, China has successively joined the World Intellectual Property Organization, the Berne Convention for the Protection of Literary and Artistic Works, the Universal Copyright Convention, and concluded the reciprocal protection of IPR with the United States and other countries. China has been very active in implementing its international obligations on copyrights protection, and steadily strengthened exchange and cooperation with the rest of the world in this regard. So we could say that the scope and level of copyrights protection in China have had a high starting point and are gradually becoming compatible with the international standards.

As inventors of printing technology, the Chinese began official copyright protection in 1068 when  the Emperor of the North Song Dynasty issued an order forbidding reproduction of the "Nine Books" without authorization. Guo Zi Jian, an official publisher of the Tang Dynasty, published the books in 932. The publishers of the Song Dynasty first became aware of copyright protection. For example, when a certain Mr. Cheng of Meishan, Sichuan, printed the book Stories of the East Capital, the "copyright page" of those days said, "Printed by Cheng of Meishan, who applied protection from the superior, any reproduction is prohibited." Later on, international treaties between China and other countries during the Qing Dynasty also stipulated for copyright protection. Nevertheless, there was no formal legal or administrative copyright protection until the middle of 20   century.

Legal Protection of Copyright in China

China has gradually implemented copyright protection along with certain other open policy reforms. As awareness of the importance of copyright protection continues to deepen, legislation on copyright issues has accelerated, and China has set up and enforced a fundamental legal system of copyright protection.

China Joins International Conventions

In the early eighties, China passed Provincial Regulations of Copyright Protection on Books and Magazines. The legislation of copyright protection in China has strengthened ever since. The Copyright Law of the People's Republic of China was put into force on June 1, 1991.The Chinese government then enacted a series of laws and regulations, among which are The Enforcement Regulations of Copyright Laws of the People's Republic of China, Protective Regulations on Computer Software, Rules on the Enforcement of International Copyright Pact, and Resolution on Punishment of Infringing Copyrights.

For the purpose of better implementation of copyrights laws and further improving copyrights litigation system, the Supreme Court has formulated and implemented nearly some judicial interpretations and judicial explanatory documents since 1993, based on the need arising from the judiciary work. They include the Circular on Several Issues on the Implementation of Copyright Law ( December 1993), the Circular on Further Strengthening Judicial Protection of IPR( September 1994), the Interpretation on Several Issues on the Applicability of the Decision of the Standing Committee of the National People's Congress on Punishing the Crime of Copyright Violation (January 1995) , and so on. These judicial interpretations and relevant documents have played a positive role in guiding China courts of different levels throughout the country in their trial of copyrights and neighboring rights cases.

China has two systems of channels to protect copyrights and neighboring rights.

One is the administrative ; another is judicial.

The administrative channel is the protection of copyrights and neightering rights. The State Copyright Bureau is in charge of the job. Depend on the Copyright Law, there is no registration requirement for copyright subject matter although authors can register in the Copyright Bureau, especially computer programs. These registrations often affect to prove the real authors or copyright owners. On the Copyright Law, protected subject matter in China includes literary works, oral works, musical, dramatic and choreographic works, works of fine art, photographic works, cinematographic television and video works, product and engineering designs and their explanations, maps and schematic drawings, computer programs, and other works as stipulated in laws and administrative regulations. Adaptations, translations, annotations and collations of such protected works are also protected. The scope of protection is as the same as the Berne Convention. The Copyright Law protects the works of "Chinese citizens, whether published or not." " Foreign persons" may enjoy protection under international conventions or bilateral agreements to which China is a party. Copyright owners may request settlement of infringement by the state or local Copyright Bureau. The administrations are empowered to issue cease-and-desist-order-like protection and to order the payment of compensation. If the person who was administratively punished and if they thought that it was unfair, they could sue to the court and the court would hear the case in public. The judges could affirm or reverse the orders, depending on the situation of the cases.

Another important administrative organization is Chinese Customs. After the State Council issued the order of protection of IP in May 1994, the Chinese customs is authorized to protect intellectual property rights relating to articles imported into and exported from China, including patents, trademarks and copyrights, may record his rights with the relevant Customs authorities. Recently they strict enforcement of laws and regulations and check the imports and exports of IPR - violated goods effectively. Depend on the law, when the owners require the custom to protect the IPR of their imports and exports goods the custom should input all the file record materials into the web of the custom computer system. The information can reach every custom nationwide in China and the customs enforce the protection of China. Statistics show that in 1997, Chinese customs filed the IPR record 492 cases and investigated and uncovered 175 cases, including 76 copyrights cases, violating 19,938,311 RMB yuan( 2,345,683.65 US dollars).

Let's talk about the judicial channel for protection of copyrights. As IPR cases including copyrights are specialized and technical, in 1996 the Supreme Court of China set up the IPR trial chamber to strengthen guidance to and supervision on trial of IPR cases in the whole country. The higher courts in Beijing, Shanghai, Tianjin, Guangdong, Fujian, Jiangsu , Hainan, Sichuan and Chongqin, and the intermediate courts in the capital cities of these provinces, municipalities directly under the Central Government and the special economic zones have successively established IPR trial divisions as their actual needs demand. In the IPR Trial Chamber of the Supreme Court there are 5 Justices and assistant judges now. Other courts set up collegial panels on IP cases in their civil divisions or economic divisions. These specialized tribunals and panels help to sum up experiences and to improve the handling of cases.

From 1991 to the end of 1997, China courts across the country accepted 23,048 civil cases concerning IPR disputes, and closed 22,314 cases. In a breakdown, 5,312 cases concerned patent, 4,852 of them were tried and closed; 3,447 copyright cases, 3,330 tried and closed; 1,565 trademark cases, 1,420 tried and closed; 8,969 technology contract cases, 9,022 tried and closed; 3,755 miscellaneous cases including trade secret violation, 3,690 tried and closed. In copyright cases, categories of works protected by China Court range from literary works, works of fine art, photographic works, cinematographic and videographic works, to computer software, LDs and CDs which are closely related to modern science and technology. Here are the characteristics of copyright cases handled by the courts in China:

A. Copyright disputes mainly occur in relatively economically and culturally advanced regions and cities like Beijing, Shanghai, Jiangsu, Guangdong, Zhejiang and Hubei.

B. Cases vary enormously from each other, many of them are very complicated. In some cases, not only is copyright involved, but also the right of name, right of reputation, right of portraiture, right of inheritance and (or) ownership and other intellectual property right.

C. The cases often involve very specialized fields. They could be involved in literature, art, motion picture, computer program, database, and so on. Therefore the judges need more specialized knowledge to handle these cases.

The legitimate rights and interests of copyrights holders have been protected according to law. For example, In the copyright infringement case of Wu Guanzhong v. Shanghai Duo Yun Xuan Firm and Hongkong Yong Cheng Antiques Auction Co. Ltd., Shanghai No. 2 Intermediate Court and Shanghai Higher Court ascertained that the two defendants paid no heed to dissuasion and went ahead with the joint auction of the artistic work passed off as the work of the plaintiff, constituting joint infringement of the plaintiff's copyright. The courts ruled that the illegal gain of HK$ 48,000 made by the defendants be confiscated, and the defendants pay the plaintiff 73,000 RMB yuan as a compensation.

China pass through three Aspects of Judicial Procedure to protect copyrights and neighboring rights.

1. Trial of criminal cases

In accordance with the Decision of the Standing Committee of National People's Congress Regarding the Punishment of Crimes of Copyright Infringement, the courts in China started to punish crimes of copyright infringement since January 1, 1995. On March 14 1997 the Eighth National People's congress at its Ninth Session amended the Criminal Law and IP crime was stipulated a special section.

According to the Criminal Law and the Interpretation of the Supreme People's Court, Two charges against crimes of copyright infringement. One is the crime of copyright infringement. The other is the crime of selling infringing copies. In accordance with the Criminal Law and the Judicial Interpretation, whoever, commits the crime of copyright infringement, shall be sentenced to fixed-term imprisonment of not more than seven years or criminal detention, or be sentenced to a fine.

Whoever, commits the crime of selling infringing copies, shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention, and with a fine.

On the Criminal Law, penalties imposed upon the offending enterprises or institutions. Any enterprise or institution which commits any of the crimes shall be sentenced to a fine, and the person directly in charge and others held directly responsible shall be punished in accordance with provisions of the law.

In December of 1995, Shenzhen police tracked down a large amount of pirated audiovisual products illegal replicated by Q company, and 15 suspects from the company including its manager-general "S" were arrested on the spot. By special investigations conducted by the Procuratorate, the local prosecutor filed a lawsuit with local same level Court. The court proved through hearing: Q company had been engaging in replication activities of pornographic and pirated VCD copies without any legal license of owners since May of 1994. Up to December, 1995, Q company had made 8 millions pirated and pornographic laser discs and video discs, with a huge illegal gains of more than 10 millions RMB yuan. The court made a verdict as following: sentenced the manager-general "S" to 12 years' imprisonment for two crimes confirmed : Infringing Copyright Crime and Replicating Pornographic Products Crime, and a fine of 300,000 yuan was imposed meanwhile. The other 14 culprits were also sentenced respectively to imprisonment ranging from 2-7 years.

Here is an example of the Selling Pirated Production case. S leased one site in a shop for selling AV productions. S bought 90,000 pirated Cds, and then 60,000 Cds were sold out. He received profit about RMB 25,000 yung. The X city Administration for Industry and Commerce issued warning to stop his illegal selling. But S still sell those pirated AV productions, and then he was arrested by the police. 30,260 pirated Cds were seized. S had good attitude on admitting his crime. The X city procurator brought a suit against S for his selling pirated production. S had no any objection of his crime, but S think he was lack of knowledge of law, so S required court to be suspended of sentence. After the X city court hearing the case: The defendant S knew those Cds were pirated production, but S still sold those for getting profits. The illegal receiving is RMB 25,000 yung, it is quite big amount, S had infringed the crime of selling pirated production. S can be sentenced lighter since he had good attitude. The judgment: 1) S was sentenced 9-month imprisonment and fined him RMB 55,000 yung; 2) confiscate 30,260 pirated VCDs.

In addition, all the infringing copies seized, unlawful income and all the criminal materials, implements, equipment of infringing copyright shall be confiscated. Subject to criminal responsibility under the Criminal Law, whoever commits any of the crimes provided by this Law and causes losses to the right owner, shall pay damages depending on the circumstances. This kind of civil suit can be brought together with the criminal prosecution.

2. Trial of Civil Cases

In accordance with the General Principles of the Civil Code of the People's Republic of China, the Copyright Law of PRC and the Law of Civil Procedure of PRC, anyone who commits acts of copyright infringement, shall be subjected, by China court through civil procedure, to civil liability for such remedies as ceasing the infringing act( injunctions ), eliminating the effects of the act, making a public apology or paying compensation for damages. In addition to civil liabilities mentioned above, acts specified in Article 46 of the Copyright Law may also be penalized through confiscation of illegal income or fines.

The principle of compensation in such cases is complete compensation, i.e. the infringement should compensate the infringed party for the actual total loss injured by the infringing act, which includes direct and indirect loss (of attainable interests, investigation expenses and attorney fees). The amount of damages should be decided on the basis of both the illegal income of the infringer and actual losses of the infringed party. Where one aspect is difficult to determine, the other may be considered as the basis for calculating damages. Apart from economic damages, moral damages may also be compensated. For example, in the case of Hongkong Polygram Company and other 22 companies v. Xu Huale from Taiwan concerning copyright infringement, Shanghai No. 2 Intermediate Court ascertained that the defendant violated the copyright of the plaintiffs, and ruled that defendant stop the infringement, pay the plaintiffs 6.67 million RMB yuan as compensation, be fined 1.2 million RMB yuan and make public apology to the plaintiffs in newspapers and magazines. In the case of Microsoft, Autodesk and Wordperfect v. Beiing Juren Computer Company, the first instance award issued by Beijing No. 1 Intermediate People's Court ordered the defendant to stop infringement activities, pay the plaintiffs 445,000 RMB yuan as compensation and a fine of 80,000 RMB yuan.

In civil proceedings, the China courts have the power to, at the request of the parties, take preservative measures on evidences and property. Where it is urgently necessary to dispose substantive civil rights of the party concerned, the courts may make preliminary judgment such as injunction before the final decision. I'll mention more about preservative measures later.

3. Trial of Administrative Cases

According to the Copyright Law, copyright administration department may impose administrative penalty upon serious infringing acts. Any party who objects to an administrative penalty may institute proceedings in a court within three months of having received the written decision on the penalty. China court, after examination, shall make judgment concerning the lawfulness of the administrative penalty in question, so as to affirm, annul or modify the penalty decision. If a party neither institutes proceedings nor implements the decision within the above limit, the copyright administration department concerned may apply to a court for enforcement. In fact, these cases are extremely rare because generally, the copyright administration departments do a very good job of enforcement and the evidences for infringement are solid and adequate.

To meet the increasing demand for adjudication, China courts have made great efforts in the training of copyright specialized judges through workshops, seminars, case analyses and study visits to other countries. Hence, there are batch after batch of judges who, proficient in law, foreign languages and professional knowledge, are capable of handling copyright cases. A complete structure of judicial bodies and a good contingent of judges ensure that China courts correctly handle copyright cases and effectively protect copyright.

As China has acceded to the Berne Convention, UCC, the Phonograms Convention, and signed bilateral agreements on copyright protection with some countries, the number of cases brought by foreign citizens and legal persons is steadily increasing. When a China court tries a case arising from copyright dispute involving foreign nationals, it acts in accordance with Chinese laws and relevant international conventions, international treaties (with the exception of the articles that China has reservations on), and bilateral agreements, to which China is a party, and with reference drawn to the international practices. It also strikes to the principle of national treatment and reciprocity on the applicable laws. For copyright cases which involve technical issues, China courts also engage technical experts to serve as an assessor or offer advice, thus ensuring openness, impartiality, seriousness and scientificity of the trials. For example, In the case of Walt Disney Company v. Beijing Publishing Company, Beijing Distribution House of Xinhua Book-Store and the third party -- the Great World Publishing Co. Ltd. concerning copyright infringement, based on the Copyright Law of China and the MOU between China and the United States on IPR Protection, Beijing Intermediate Court ruled that the plaintiff enjoyed the right of authorship to the artistic work of cartoon image involved in the case, the publication and distribution by the defendants of the "Disney Virtue Story Series" constituted infringement. The final award ordered the defendants to stop the publication and distribution, pay the plaintiff 227,000 RMB yuan( $26,706 ) as compensation and make public apology in newspapers and magazines. The court also imposed civil punishment on the defendants.

In the course of trying a case, if the behavior of one party in the case or other reasons may cause difficulty or inability for the implementation of an award, a China court shall make a ruling according to law for property preservative measures depending on the application of the other party; in case of no application from the party concerned, a China court may make a ruling for preservative measures according to law when necessary. When taking preservative measures, a China court may order the applicant to provide deposit. According to provisions of law, property preservative measures include seal, detention, freeze and other measures stipulated in law. Preservative measures have been proven very effective for trials of copyright cases by China courts. For example, in the case of Microsoft, Autodesk and Lotus V. Beijing Juren Computer and other 4 defendants, Beijing Intermediate Court applied in time property and evidence preservative measures to the 5 defendants according to the application and the effective deposit of the plaintiffs. According to the indications of the plaintiffs, the court sealed 7 computers and 366 soft disks. This case has drawn wide public attention.

As regards infringement damages, the judicial interpretation of the Supreme Court provides for three methods to calculate damages (plaintiff's loss, defendant's profit and fee of licensing contract as a reference), which are commonly used by courts in most other counties. Where infringement is ascertained, China courts shall apply the principle of sufficient compensation and punitive fine, that is to say, right holders are compensated for whatever amount they lose due to the infringement. For those infringers who knowingly conduct infringing activities with serious consequences, China courts shall confiscate their illegal income according to law and impose civil penalty on them such as fines and criminal detention, in addition to ordering them to take civil liabilities according to law such as stopping infringement, eliminating impact, making apology and compensation.

It ought to say, China has set up a better legal system of protection IPR than before. China is trying to improve the level of the protection. The internationalization of IP infringement should be paid attention to. The situation ask us to exchange more information and more understand each other and stand in the same place to cope with the infringements of IP even criminals. It is also my goal to come to US.

It has been a pleasure having the opportunity to speak today. My talk is not all-inclusive and may raise many additional questions that I would be pleased to discuss again in future. Thank you for your time and attention.

The Enforcement of Copyright Protection in China

China not only has a strong legal system for copyright protection, it also continues to strengthen enforcement. In recognition of the specialized nature of intellectual property rights cases and the advanced nature of the technology often involved, the higher people's courts in several provinces and municipalities directly under the central government such as Beijing, Shanghai, Guangdong, Fujian and Hainan have since 1992 established intellectual property rights courts as needs demand. The intermediate people's courts in all the special economic zones as well as Beijing and Shanghai have also established intellectual property rights courts. Intermediate people's courts in the capitals of other provinces, municipalities and autonomous regions have set up collegial panels specializing in cases involving intellectual property rights protection. This centralized the hearing of intellectual property rights cases, creates several advantages. It ensures unity in executing the law, amasses experience in dealing with the law, and strengthens the quality of judicature in intellectual property rights cases.China has tried a number of important copyright infringement cases under great public attention, producing undeniable social effects. These specific cases greatly increased knowledge and awareness of the laws.

If China would solve its copywrite issues, new technology and creative industry will not develop very well in the future. To make matter worse, it will face serious international complaints over pirate and forfeits increasingly, which is obviously a bad trend that I would rather not see.

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