Long-awaited amendments to China’s Copyright Law introduce punitive damages for the first time, provide greater powers to the authorities when investigating infringement and capture the rapid developments in digital technology
First enacted in 1991 and amended in 2001 and then 2010, China’s lawmakers began reviewing the third amendment (Draft) to the Copyright Law on April 26, 2020.
The most significant amendment in the Draft relates to compensation for damages (Article 53). The statutory damages in the Draft have been raised by ten times from CNY 500,000 to 5 million (USD 70,000 to 700,000).
In an environment where copyright infringement has become rampant, this increase addresses the nominal compensation that has been commonplace for many years.
The Draft introduces a new calculation system for compensation accounting for punitive damages, which is based on either the actual loss sustained by the rights owner, the infringer’s illegal gains or a multiple of normal royalties. This helps copyright holders to receive fair compensation by significantly increasing the cost of infringement.
To help determine illegal gains of the infringer, the Draft adds that the administrative authorities shall have the power to launch inquiries over concerned parties, investigate illegal acts, conduct onsite inspections, consult and copy relevant materials as well as to seal and detain places and goods during investigations (Article 54).
The rapid development of digital network technology promotes the online dissemination of works and eases access to copyrighted works. The Draft keeps pace with the development and application of digital technology as well as new means for the reproduction of copyrighted works.
The Draft changes “cinematographic works and works created from an analogue process to cinematography” to “audio visual works” (Article 3.6, Article 10.1.7, Article 15, Article 21.3, Article 46 and Article 48.8) and refines the definition of “the right of broadcasting” from “the right to broadcast or communicate a work by wireless means” to “the right to broadcast or communicate a work through wired or wireless means” (Article 10.1.11).
These amendments help to solve an issue with works of new formats/modern technologies met in current practice and offers protection regardless of the technology employed. The Draft also expands provisions on technological protection measures and helps to avoid any ability to circumvent technological protection measures (Articles 47 to 50).
The Draft further extends the scope of copyright protection by limiting the work that is not copyrightable from “news on current affairs” to “pure factual information” (Article 5.2). This amendment suggests that commentary text, photographic works, audio visual works and other contents in news are copyrightable, if they meet the originality requirement.
The Draft extends the length of the protection period granted to “photographic works” from fifty years from the date of publication to the duration of the author’s life and for another fifty years after the author’s death (Article 21.3).
The “works of applied art” has not been listed as a separate type of copyrighted work, which indicates that the applied artworks could only claim copyright protection as artwork and aesthetic values of the works will be necessary for such protection.
To comply with relevant rules of international treaties, the Draft revises the provision in relation to authorship by changing the original description of “citizens” to “natural persons” and “other organisations” to “unincorporated organisations” (Articles 2, 9, 11, 16, 19, 21 and 22).
The long-awaited amendments will strengthen copyright protection, especially in the digital environment. At the same time, the Draft enhances supervision and punishment of copyright infringement, which will serve as a greater deterrent in the future. Raising statutory damages and including punitive damages will encourage parties to assert their intellectual property rights.
