The challenge of copyright enforcement in china's movie industry

Katia BEIDER

The challenge of copyright enforcement in China's movie industry

Research paper
Dr. CUI

2015/2016

LAWS6116 CHINESE INTELLECTUAL PROPERTY LAW

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Table of Contents

INTRODUCTION 3

Part I: Historical grounds for challenges 7

Section I: Traditional Chinese thoughts 7

Section II: The large size of China's territory 8

Section III: The economic difficulty 9

Section IV: Censorship 9

Part II: Advantages resulting from improvements 11

Section I: Promoting the cultural development of China's movie industry 11

Section II: Promoting the economic progress 12

Section III: Promoting the social progress 13

Part III: Legal inconsistency facilitating copyright infringement 14

Section I: Incoherence with international conventions 14

Section II: Vagueness of legal terms 14

Section III: Lack of regulations toward online infringements 15

Section IV: Unreasonable and costly copyright enforcement 15

Section V: The lack of a proper deterrent mechanism 16

Section VI: A difficult reliance on administrative enforcement 17

Section VII: Chinese legal thinking on copyright protection 17

Part IV: Reforms aiming toward an effective copyright protection ... 18

Section I: Meeting its international obligations 18

Section II: Clarifying legal terms 18

Section III: Improved regulations toward online infringements 19

Section IV: Improving the consistency of the judicial system 20

Section V: Ameliorating copyright administrative enforcement 20

Section VI: the upcoming Law of the PRC for promoting film industry 21

CONCLUSION 23

Bibliography 24

Primary sources 24

Secondary sources 25

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INTRODUCTION

«Be not afraid of growing slowly, be afraid only of standing still».

This Chinese proverb could be addressed to China as far as its copyright enforcement is concerned. Indeed, even though it is common to criticize China because of its rampant piracy, a positive evolution can be observed in this area.

This research paper will examine China's copyright enforcement in regard to China's film industry. In order to have a broader approach of this subject, copyright protection of foreign imported films will complete the study of domestic movies.

Copyright is known as «the exclusive right to reproduce or authorize others to reproduce artistic, dramatic, literary or musical works» and it extends to cinematographic films.¹ In that sense, copyright enforcement refers to the activity of making copyright laws respected.

Copyright protection is granted only to eligible works. That means that a work should meet some criteria. The United States Code gives a clear definition for that purpose: «Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device».² The point (6) provides protection specifically for motion pictures and other audio-visuals works.³ China's Copyright Law also provides a list of eligible works but does not define expressly what is meant by `work'.⁴ Once again, cinematographic works are part of the list.⁵ These works are defined as follows: «works which are recorded on some medium consisting of a series of images, with or without accompanying sounds, and which can be projected with the aid of suitable devices or communicated by other means».⁶ This statement highlights the meaning of the terms employed in article 3 of the Copyright Law of the PRC above mentioned.

¹ Oxford Dictionary of Law, Eighth Edition, 2015.

² United States Code (U.S.C), Section 102 (a).

³ U.S.C Section 102 (b).

⁴ Copyright Law of the People's Republic of China, Article 3.

⁵ Ibid, (6).

⁶ Implementing regulations of the Copyright Law of the People's Republic of China, article 4.

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In order to have a complete picture of the issues analyzed in this research paper, a brief presentation of copyright's regime is needed. Indeed, if a film doesn't meet the criteria elaborated by the Copyright Law of the PRC, it will not be granted protection. This will be the case if the whole theme of a film relies only on a common idea and not on an expression.⁷ This has to do with the dichotomy existing between ideas and expressions. The World Intellectual Property Organization (Copyright treaty) and the World Trade Organization (TRIPS agreement) expressly refused to grant copyright protection to ideas.⁸ Even though, this dichotomy isn't mentioned in the Copyright Law of the PRC, as China is now a member of the WIPO and of the WTO, their treaties bind it. Ideas are not protected by copyright because they refer mainly to concepts, opinions, or human thoughts, which cannot be economically exploited because they belong to the humanity,⁹ as it is the case for air that we breathe. A movie can be said to express the producer's creativity by relying for instance on «digital effects, action scenes or characters' images».¹⁰

This requirement is closely linked to the «original intellectual creation» condition, which should be met by a work in order to be copyrightable.¹¹ The notable writer Oscar Wilde illustrated the notion of `originality' in those terms: «Every portrait that is painted with feeling is a portrait of the artist, not of the sitter».¹² It means that in order to be copyrightable, a work should emphasize the personality of the author. According to the doctrine of scenes-à-faire, a work will not express the creativity of its author if some settings used are considered as standards for a specific topic¹³. Concerning the motion picture industry, it will be the case where a producer makes a movie about Chinese revolution and includes some revolutionary songs.¹⁴ This means that usage of these settings is common and every director is free to use them without risking to be sued for infringing another movie.¹⁵

⁷ World Intellectual Property Organization (WIPO), Copyright Treaty, 1996, Article 2 «copyright protection extends to expressions and not to ideas».

⁸ World Trade Organization (WTO), Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), 1994, Article 9.2.

⁹ Pang Laiwan; Cultural control and Globalization in Asia: copyright, piracy and cinema; Routledge Media, Culture and Social Change in Asia; 2006; p.18.

¹⁰ Ibid.

¹¹ Implementing regulations of the Copyright Law of the People's Republic of China, Article 2.

¹² Wilde Oscar, The picture of Dorian Gray, 1890.

¹³ Alexander v Haley (SDNY, 1978).

¹⁴ Dr Can CUI, Lecture about Chinese Intellectual Property, the Chinese University of Hong Kong, 15 October 2015.

¹⁵ Yin Xiaoying Zhang Guochuan v Shenzhen Film Studio, Shenzhen Literature and Art Association &Suzhou TV Station, Beijing Secondary Intermediate Court, 11/02/2006, case n°7909.

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However, if these songs are copyrighted there must be an authorization from copyrights' owners in order to use them in the movie. Using these common settings doesn't deprive the author from his copyright if his film expresses his creativity in other ways such as his «own emotions, thoughts, knowledge and experiences».¹⁶ To illustrate, two French movies were based on the life of French designer Yves Saint Laurent.¹⁷ They had a lot of common scenes such as Saint Laurent meeting his muse Betty Catroux in a nightclub, the catwalk of one of his most successful collection (collection 1976) or scenes with his lover Jacques de Bascher. But there was no infringement because each director showed these life moments by using his creativity to emphasize his own approach to the designer's life.

Finally, this original expression should be «capable of being reproduced in a certain tangible form».¹⁸ It means that a work should be fixable. This criterion shows that the Copyright Law is there to «regulate real commercial activities»¹⁹ and not to grant protection to imaginary works of arts, science or literature. Film producers easily meet this condition as a cinematographic work is always fixed, be it on a roll of film, on a DVD or on a computer.

The authorship of a cinematographic work will belong to the «scriptwriter, director, cameraman, lyricist, composer» while copyright will be enjoyed by the producer.²⁰ Authors will enjoy moral rights: the right of authorship, the right of integrity, the right of publication and the right of alteration. Yet, Copyright owners will enjoy economic rights such as: the right of reproduction, the right of distribution, the right of adaptation and cinematography.²¹ There is no time limit concerning the protection of moral rights, except for the right of publication, so that anyone sharing a cinematographic work will have to respect them forever.²²

¹⁶ Yin Xiaoying Zhang Guochuan v Shenzhen Film Studio, Shenzhen Literature and Art Association &Suzhou TV Station, Beijing Secondary Intermediate Court, 11/02/2006, case n°7909.

¹⁷ «Yves Saint Laurent», directed by Jalil Lespert, WY Productions, 2014.

«Saint Laurent», directed by Bertrand Bonello, Mandarin Cinema and EuropaCorp, 2014.

¹⁸ Implementing regulations of the Copyright Law of the PRC, Article 2.

¹⁹ Pang Laikwan, see above note 9.

²⁰ Copyright Law of the PRC, Article 15.

²¹ Ibid, Article 10.

²² Ibid, Article 20.

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However, economic rights and the right of publication are protected only during fifty years starting from the first publication of the work or fifty years after the completion of the creation of the cinematographic work if it was not published.²³ The doctrine of fair use can constitute a defense as it allows individuals to use a published work «for their own private study, research or self entertainment».²⁴ This limit to economic rights is strictly regulated. For instance, Beijing First Intermediate Court ruled that there is an infringement of economic rights where a Film Academy projects a movie not only on its campus for teaching purposes but also during a Festival accessible to the public.²⁵

Nowadays, copyright infringement can take one of the two following forms: traditional piracy such as «unauthorized copying and selling of DVDs» and online piracy such as file sharing.²⁶ Internet piracy is a global phenomenon facilitating Intellectual Property Rights (IPR) infringement. The dissemination of works all over the Internet makes it difficult to address this kind of piracy. Traditional piracy is far from being eradicated either. As China is playing a key role in international piracy, its copyright protection should be strengthened. Indeed, its piracy rate is as high as 77 percent in China and had cost to US economy $107 billion for example.²⁷ Improvements in China's copyright enforcement will serve better the global economy by avoiding monetary loss in business' industries such as the film industry.²⁸

In order to analyze the need for a stronger copyright protection in China, we will first examine the difficult establishment of an effective anti-piracy regime due to historical grounds (Part I). This will be completed by a closer look to the advantages resulting from copyright improvements (Part II). Moreover, we will discuss legal inconsistency of China's law that facilitates infringements (Part III) and the numerous reforms that it has carried out in order to answer to these inconsistencies (Part IV).

²³ Copyright Law of the PRC, Article 21, paragraph 3.

²⁴ Dr Can CUI, Lecture about Chinese Intellectual Property, the Chinese University of Hong Kong, 31 October 2015.

²⁵ Audio-Video Company of Beijing Film Studio v Beijing Film Academy, Beijing First Intermediate Court, 10/10/1995.

²⁶ Eric Priest, 2006, «The future of music and film piracy in China», Berkeley Technology Law Journal: Vol 21:795, p.801.

²⁷ International Intellectual Property Alliance (IIPA), 2013 Special 301: China - Report on Copyright Protection and Enforcement, p.32.

²⁸ Cheung Gordon, Intellectual Property Rights in China, 2009, p.22.

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Part I: Historical grounds for challenges Section I: Traditional Chinese thoughts

Firstly, traditional Chinese thoughts present a strong challenge toward a deterrent copyright law. An old Chinese proverb «To steal a book is an elegant offence» emphasizes well the lack of a legal tradition in the Chinese traditional culture in regard to copyright.²⁹ For example, in a Confucian society copying was part of a learning process.³⁰ By copying a piece of art, an individual was actually showing respect to the author.³¹ Furthermore, Confucius developed the concept of li that governs people's behavior in a society.³² Because of a moral belief, individuals will adjust their selfish behaviors.³³ The rule of law (fa) seems to be a direct opposite of this spiritual concept because it is rigid and will suppose the use of force to maintain order.³⁴ In accordance to the concept of li, there is no need for the concept of fa. Also, the concept of li introduced the notion of equality.³⁵ This notion led to the establishment of the Republic of China as a Revolution against the Qing Dynasty. This revolution was completed with the Communist takeover under Mao Zedong, aiming to bring equality to the masses.³⁶ This concept of equality appeared as an obstacle toward copyright enforcement because copyright fees and royalties were seen as creating inequalities.³⁷ They provided profit only to authors and not to the masses.³⁸ Intellectual Property rights were appearing as tools of exploitation by granting private property rights to particular individuals.³⁹ Copyright was seen as a monopole owned by an author, in opposition to the State's supremacy in a communist idea.⁴⁰

²⁹ Cheung Gordon, see above note 28, p.20.

³⁰ Ibid., p.20

³¹ Ibid.

³² Brent Yonehara, Enter the dragon: China's WTO accession, film piracy, and prospects of the enforcement of Copyright Laws, UCLA Entertainment Law Review 9(2), (2002), p.398.

³³ Ibid.

³⁴ Ibid.

³⁵ Ibid.

³⁶ Ibid.

³⁷ Ibid.

³⁸ Ibid.

³⁹ Cheung Gordon, see above note 28, p.21.

⁴⁰ Brent Yonehara, see above note 32.

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Section II: The large size of China's territory

Secondly, the size of China's territory makes it difficult to fight effectively piracy. The total surface of China is equal to 9.5 million square kilometers, making it the forth-largest country in the world.⁴¹ In 2015, it has a population of 1.4 billion.⁴² Such large number is said to make it nearly impossible to efficiently control the respect of Intellectual Property rights (IPR).⁴³ As a rule, if central authorities promulgate laws, local authorities assure their implementations. However, some provincial authorities get benefit from piracy, be it financially or politically so that they don't even try to enforce the copyright law and simply «turn a blind eye».⁴⁴ This refers to corruption. For example, a local official will not risk loosing his position by enforcing copyrights as ordered by central authorities if the highest official within his administration has an interest in not enforcing this right.⁴⁵ Moreover because of local protectionism, some authorities will prefer to let go a defendant accused of copyright infringement if he is highly contributing to local taxes.⁴⁶ In that sense, Eric Priest considers local protectionism as the biggest challenge for cracking down on piracy.⁴⁷ Also, because of the size of the territory, there are a lot of bureaucratic agencies such as the National Copyright Administration (NCA), which may enforce intellectual property rights. But there is a lack of cooperation among these agencies resulting from rivalries, as there is a competition over the rights to enforcement.⁴⁸ For instance, the infringement of a DVD gives rise to both copyrights and trademarks rights if the logo of the studio company appears on the cover.⁴⁹ In such cases, the lack of cooperation between the NCA and China Trademark Office may present an obstacle to the national spread of the rule of law in China.

⁴¹ www.nationsonline.org/oneworld/countries_by_area.htm (visited on the 5/11/2015).

⁴² www.worldometers.info/world-population/china-population/ (visited on the 5/11/2015).

⁴³ Cheung Gordon, see above note 28, p.21.

⁴⁴ Massey Joseph "The Emperor Is Far Away: China's Enforcement of Intellectual Property Rights Protection, 1986-2006," Chicago Journal of International Law: Vol. 7: No. 1, 2006, Article 10, p.233.

⁴⁵ Priest Priest, see above note 26, p.823.

⁴⁶ Kariyawasam Rohan, Chinese Intellectual Property and Technological Law, «Copyright protection in China» by Li Yufeng, Edward Elgar, 2011, p.98.

⁴⁷ Ibid., p.822.

⁴⁸ Priest Eric, see above note 26, p.824.

⁴⁹ Ibid.

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Section III: The economic difficulty

Thirdly, an economic argument is often evoked to explain difficulties met during the fight against piracy. Some towns are economically growing only thanks to piracy.⁵⁰ By violating intellectual property rights, Chinese citizens can obtain products at a lower price so that they can not only get access to knowledge and technology, but also consume culture products cheaply.⁵¹ In that sense, paying more to access to a copyrighted work in accordance to the law is not really attractive: pirating is less expensive for the consumer. In 2014, the salary of an average worker was about seven hundred dollars per month.⁵²In this situation, paying one dollar for a pirated DVD will be more appealing than paying ten to fifteen for a legitimate one.⁵³ However, this argument can be counter-balanced as it will be shown in the second part of this research paper.

Section IV: Censorship

Finally, censorship can lead to the development of a black market. China's Copyright Law restricts significantly the rights of authors whose works violate China's Constitution or other laws. For example, showing pornographic movies in public places is prohibited in China.⁵⁴ Nonetheless, US judges ruled that an obscene movie could be entitled to copyright protection as long as it meets the criteria of a copyrighted work.⁵⁵ This was justified by the following non-discriminatory principle: «pragmatism further compels a rejection of an obscenity defense» because «obscenity is a community standard which may vary to the extent that controls thereof may be dropped by a state altogether».⁵⁶ With regard to the Copyright Law of the PRC, copyright holders are forbidden to jeopardize «public interests when exercising their copyright».⁵⁷ This allows the State to control the works in order to verify their accordance with the law. As far as the motion picture industry is concerned, if the State forbids the production of a movie because it is too political, this movie will most likely appear in an illegal version on the Internet.

⁵⁰ Dimitrov Martin, Piracy and the State: the Politics of Intellectual Property rights in China, Cambridge University Press, 2009, p.4.

⁵¹ Cheung Gordon, see above note 28, p.22.

⁵² China Labor bulletin, www.clb.org.hk/en/view-resource-centre-content/100206 (visited on the 4/11/2015).

⁵³ Priest Eric, see above note 26, p.828.

⁵⁴ Criminal Law of the People's Republic of China, Article 152, Articles 363-368.

⁵⁵ Mitchell Bros film group v Cinema adult theatre, United States Court of Appeals (Fifth circuit, 1979).

⁵⁶ Jartech, Inc. v. Clancy, United States Court of Appeals (Ninth circuit, 1982).

⁵⁷ Copyright Law of the People Republic of China, Article 4.

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People want to escape from the control of the State. Consuming pirated goods allows them to express their freedom by accessing forbidden products.⁵⁸ Additionally, there is a lack of certainty concerning the censorship process so that some film producers are not able to access to China's market.⁵⁹ Some authorities are even said to reject the production of a movie simply to avoid paying license fees.⁶⁰ This shows that as a consequence of censorship standards, it is really tough to find legitimate copies of foreign movies because the Chinese Government does simply not authorize their distribution.⁶¹ For instance, Memoirs of a Geisha⁶² was banned because it could offend mainland viewers to see Chinese actresses in the role of Japanese courtesans.⁶³ Similarly, The Dark Knight⁶⁴ couldn't be shown in China. Warner Bros., the producer of the movie, cited «cultural sensitivities in some elements of the film" to justify it.⁶⁵ As a result, any person willing to see one of these movies in China would have to download them illegally in order to do so. Furthermore, even if the China Film Bureau approves it, the foreign film must meet further requirements. Indeed, there is an importation quota following which films can be imported to China only on a limited basis per year.⁶⁶ This shows that cultural products can be used as political tools by China whereas for some countries such as the United States, these products are commercial and require an open market and not a controlled one.⁶⁷

Consequently the need for an efficient copyright protection should be understood at different levels: individual, local and State level. This would be a first step toward a stronger protection of copyrighted works. This improvement will be highly beneficial for China in many aspects, as it will be discuss in the next part.

⁵⁸ Cheung Gordon, see above note 28, p.60.

⁵⁹ IIPA, 2013 Special 301 see above note 27, p.49.

⁶⁰ Ibid.

⁶¹ Los Angeles Time, «DVD pirates running rampant in China», Dan Levin and John Horn, March 22, 2011

⁶² Memoirs of a Geisha (2005), directed by Rob Marschall, U.S.A: Colombia Pictures.

⁶³ CBCA News, Arts & Entertainment, «Dark Knight won't be on big screen in China» 26/12/2008 www.cbc.ca/news/arts/dark-knight-won-t-be-on-big-screen-in-china-1.740993 (visited on the 27/10/2015)

⁶⁴ The Dark Knight (2008), directed by Christopher Nolan, USA: Warner Bros. Pictures.

⁶⁵ Ibid.

⁶⁶ Creemers Rogier, «Insight about the reception of the WTO», China Perspectives n°2012/1, 2012.

⁶⁷ Ibid., p.29.

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Part II: Advantages resulting from improvements Section I: Promoting the cultural development of China's movie industry

China's motion picture industry is flourishing: it is the second-biggest movie market in the world after the United States.⁶⁸ However, the lax of copyright enforcement in China's film industry is world-known so that the international audience is looking into it with a wary eye. It reduces significantly the diffusion of China's films abroad.⁶⁹ By strengthening copyright protection, the State would promote cultural development of domestic films worldwide. The Government already took incentive measures for that purpose by providing «stricter enforcement of copyright regulations» showing that it is aware that urgent progress is needed.⁷⁰ Domestic films seem to be more and more preferred by Chinese audience as they promote Chinese culture, emphasizing core values of Chinese society.⁷¹ The more these movies will be effectively protected, the more Chinese culture will be promoted and developed. For instance, during summer 2015 Chinese films such as Monster Hunt⁷² or Monkey King: the Hero is back broke through in terms of box office.⁷³ Monster Hunt was ranked second of China's 2015 box office, right after the American film Furious 7.⁷⁴ This fact shows that domestic motion picture industry is evolving: movie directors start to be more creative so that domestic films are now as attractive to Chinese consumers as American movies were already. The development of domestic film industry will also help to meet spiritual and cultural needs of Chinese citizens and would strengthen the urban culture.⁷⁵

⁶⁸ Max Peskin, «Can Animation Cure What Ails the Chinese Movie Industry?» 07/06/2013,

www.chinafile.com/reporting-opinion/media/can-animation-cure-what-ails-chinese-movie-industry (visited on the 23/10/2015).

⁶⁹ Ibid.

⁷⁰ Ibid.

⁷¹ State Intellectual Property Office of the P.R.C (SIPO), «Why do Chinese Domestic films catch up from behind in terms of ticket-office», 19/08/2015.

www.english.sipo.gov.cn/news/iprspecial/201508/t20150819_1162510.html (visited on the 20/10/2015).

⁷² «Monster Hung» directed by Raman Hui, China film group corporation, 2015.

⁷³ SIPO, see above note 71.

⁷⁴ China's Yearly Box Office, 2015, www.boxofficemojo.com/intl/china/yearly (visited on the 11/11/2015).

⁷⁵ Circular of the General Office of Shanghai Municipal People's Government on printing and distributing the implementing opinions for promoting the prosperous development of Film industry in Shanghai, 2011.

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Moreover, on the one hand strengthening copyright protection will promote China's economy. On the other hand, it will promote social progress.⁷⁶

Section II: Promoting the economic progress

From the economic point of view, improving copyright enforcement will help developing various industries by promoting a legal consumption. People will be more willing to go to the cinema than to illegally download a movie if criminal liabilities are efficient. Box office will be then really high so that it will serve well Chinese economy. As a consequence, cinema tickets could be more affordable in order to create a mass consumption.⁷⁷ Also, Chinese firms specialized in innovative productions will get benefit from an improved enforcement of IPRs laws as they will get more money if consumers purchase legally their products.⁷⁸ Improvement in copyright enforcement is dependent on clarifying censorship standards. Such an improvement will create a competitive market where commercial terms prevail so that foreign movies can be imported and independent domestic movies produced.⁷⁹ A more competitive market will attract greater foreign investments. Otherwise a lot of Chinese provinces may know a decrease in Foreign Direct Investment (FDI) as it was the case for Guangdong province because of its rampant IPRs infringement.⁸⁰ The importance of FDI was even emphasized by Chinese officials stating that copyright protection should be strengthened in order to attract those investments and to develop a healthy economy.⁸¹ Moreover, by effectively fighting copyright infringement the government will be able to «maintain order in the audio-visual market».⁸²

⁷⁶ Administrative regulations on audio and video products (revised in 2013), Order of the State Council of the P.R.C n°645, Article 1, Article 3.

⁷⁷ Nowadays, the average price for 2 cinema tickets is 120 Yuan which is really a lot compare to average salaries that is why China's State Administration of Radio, Film and Television (SARFT) wants to plan a maximum price for film tickets.

www.shanghaiist.com/2012/01/11/mainland_chinas_ticket_costs_to_be.php (visited on the 5/11/2015)

⁷⁸ Massey Joseph, see above note 44, p.237.

⁷⁹ IIPA, 2013 Special 301, see above note 27, p.49.

⁸⁰ Cheung Gordon, see above note 28, p.43.

⁸¹ Priest Eric, see above note 26, p.821.

⁸² China Daily, Chinese Intellectual Property, Notice of the cracking down on the piracy of New Years's film, 22/03/2011

www.ipr.chinadaily.com.cn/2011-03/22/content_12207503.htm (visited on the 4/11/2015).

Section III: Promoting the social progress

From a social point of view, cracking down on piracy will serve social progress as people will be more aware of copyrights and will be more willing to respect them. It will consequently enhance the overall functioning of the rule of Law in China. For instance, it will help eradicating illegal activities such as officials' corruption.⁸³ A better assimilation of the rule of Law will promote a better social harmony. It will also provide Chinese audiences with better quality and variety of films.⁸⁴ Indeed, if China's film industry evolves into a more open market with an effective copyright protection, more producers will be willing to enter into it: consumers will then be able to access more movies. It will also create social progress because it will allow to be informed better and help consumers to gain more knowledge.⁸⁵ A more open market will also bring more freedom to Chinese citizens. Consuming foreign ideas, for example, can lead to a social emancipation due to a better awareness of fundamental rights such as freedom of speech. By being less afraid of censorship, authors could be more creative. Chinese consumers will then have access to more and more domestic movies and this will help them satisfying their consumption needs. This argument can counter balance a previous argument made in Part I stating that illegal access to movies is sometimes an expression of freedom.

China's awareness about the benefit of enhancing its copyright protection leaded it to start a massive program of reforms trying to answer as much as possible to all the inconsistencies of its Copyright law. In order to evaluate better the scope of these improvements, we will first present all the legal inconsistencies that China is facing.

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⁸³ Priest Eric, see above note 26, p.834.

⁸⁴ Ibid.

⁸⁵ Cheung Gordon, see above note 28, p.58.

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Part III: Legal inconsistency facilitating copyright infringement

As a result of legal inconsistency, the current copyright enforcement system is said to be not really `efficient'.⁸⁶ This can be explained by multiple factors.

Section I: Incoherence with international conventions

First of all, in many aspects China's Copyright Law does not conform to international conventions ratified by the country. For instance, the Berne Convention states that a cinematographic work is automatically granted copyright protection in all countries of the Union.⁸⁷ This applies to works by citizens of any State that ratified the Convention unless the first publication of the work didn't take place in a Berne country.⁸⁸ China adhered to this Convention in 1992 so that it should insure its effectiveness within its territory.⁸⁹ Yet if a foreign film does not meet the censorship standards, it will not be granted protection so that any Chinese website can suggest such a work for downloading without authorization and China won't hold it responsible for copyright infringement.⁹⁰ Therefore, copyright protection is not automatic for foreign cinematographic works, which is contrary to Berne's provisions. Also, it was noted that article 10 (12) of the Copyright Law of the PRC is inconsistent with article 8 of the WIPO Copyright Treaty (WCT) as the latter includes all ways of communication of works while article 10 (12) includes only communication on demand.⁹¹ It means that under China's Copyright Law, cinematographic works to which the public acceded in real time are not regulated.

Section II: Vagueness of legal terms

Another important factor is that some legal terms of China's Copyright Law are vague and for that reason they can lead to contradictory interpretations concerning its enforcement.⁹² A few provisions are really general such as article 10 (17) including «other rights to be enjoyed by copyright owners» in the list of granted moral and economic rights.

⁸⁶ Kariyawasam Rohan, see above note 46, p.96.

⁸⁷ Berne convention for the Protection of Literary and Artistic Works, 1886, Article 2(6).

⁸⁸ Pang Laikwan, see above note 9, p.17.

⁸⁹ Kariyawasam Rohan, see above note 46.

⁹⁰ Ibid.

⁹¹ Ibid, p.103.

⁹² Kariyavasam Rohan, see above note 46, p.103.

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These general statements are dangerous because they gave too much «flexibility to local courts and judges in exercising their right of discretion».⁹³ Some unclear statements further leave loophole regarding legal predictability such as article 22 (7) of China's Copyright Law allowing State organs to use a work in order to fulfill their official duties.⁹⁴ This vagueness allows for abuse both by State officials, but also by the public concerning other unclear statements.⁹⁵

Section III: Lack of regulations toward online infringements

If some provisions are too vague, some are simply missing. For instance, the Copyright Law of the PRC is silent concerning illegal cam-recording infringing copyright of cinematographic works.⁹⁶ Illegal camcording is defined by the International Intellectual Property Alliance as «the use, or attempt to use, an audiovisual recording device to make or transmit a copy of a cinematographic work (É), from a performance of such work in an exhibition facility».⁹⁷ A domestic film was camcorded in 2008 but since China's Copyright Law does not ban this activity, the suspects were not hold liable.⁹⁸ The Film industry is also suffering from User Generated Content (UGC) websites such as Youku ( www.youku.com) allowing users to upload movies and make them available for downloading by anyone. These uploads are most likely often proceeded without any authorization from copyright owners. China's Copyright Law lack of regulation toward this twenty-first century piracy weakens the scope of copyright protection by not allowing rights owners to fill actions against this violation of their rights.

Section IV: Unreasonable and costly copyright enforcement

The Copyright Law of PRC hopefully governs classical forms of infringement. For instance, article 47 (8) of the Copyright Law of the PRC provides for civil liabilities in regard to cinematographic work's infringement like the rental of such a work without the permission of right holders. However, obtaining copyright enforcement can be unreasonable and costly.⁹⁹

⁹³ Kariyawasam Rohan, see above note 46, p.98.

⁹⁴ Brent Yonehara, see above note 32, p.407.

⁹⁵ Ibid.

⁹⁶ IIPA, 2013 Special 301, see above note 27, p.39.

⁹⁷ Ibid.

⁹⁸ IIPA, 2010, ITC Investigation No. 332-514, China: Intellectual Property Infringement, Indigenous Innovation Policies, and Frameworks for Measuring the Effects on the U.S. Economy, p.19.

⁹⁹ Kariyawasam Rohan, see above note 46, p.98.

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Legal action in the area of copyright infringement can involve «good money» for the State because of its business dimension.¹⁰⁰ Government agents will not hesitate to charge right holders a lot in order to enforce their rights because right owners suffer a lot of copyrights infringements and will be willing to pay whatever they need to stop it. That is why the burden of proof is so high, especially for foreign right holders. They need to present a lot of certificates in order to enforce their IPRs in China such as copyright registration certificate and certificate of legal representative.¹⁰¹ This is besides the fact that these certificates need to be translated in Chinese by a qualified organization.¹⁰² Filling an action for copyright infringement looks therefore really long and costly, a legal inconsistency fostering infringers upon copyright owners.

Section V: The lack of a proper deterrent mechanism

Thresholds for criminal liability are also unreasonably high under China's Law. In order to be liable, the defendant should process to at least 500 copies of the work.¹⁰³ This restricts a lot the field of copyright infringement prosecution. Also, China's Criminal Law provides for criminal liability for those who committed copyright infringement by meeting some requirements concerning threshold such as gaining «a fairly large amount of illicit income».¹⁰⁴ It means that anyone who sells less than 500 copies or who doesn't gain a lot of money by infringing copyrights will not be hold liable. Article 217 of the Criminal Law of the PRC envisages as an alternative to this condition «other serious circumstances» but this is once again too vague to help copyright enforcement and can give rise to contradictory interpretations by judges.

Nevertheless, even where the copyright holder succeeded in his action against the pirate, criminal penalties are often insufficient to discourage future infringers. Fines can be relatively low compared to the money won by selling unauthorized copies of DVDs or by illegally making movies available on websites accessible to the public. For instance, a copyright infringer was sentenced to a fine of 30,000-Yuan while the volume of the illegal sale he participated to was 2.4 million Yuan.¹⁰⁵

100 Kariyawasam Rohan, see above note 46, p.98.

101 IIPA, 2013 Special 301, see above note 27, p.41.

102 Ibid.

103 IIPA, 2013 Special report, see above note 27, p.40.

104 Criminal Law of the PRC, Article 217, Article 218.

105 The Second Branch of Shanghai People's Procuratorate v Gu Randi and other persons, 19/04/2005.

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Section VI: A difficult reliance on administrative enforcement

Moreover, administrative enforcement is far from being reliable. Firstly, a lot of right owners do not believe anymore in administrative enforcement because of the overwhelming challenge to bring civil or criminal enforcement actions.¹⁰⁶ It is also not reliable «due to a lack of manpower».¹⁰⁷ One must be brave enough to defeat local protectionism for example in order to stop some copyright infringements. Additionally, lack of coordination between administrative authorities and the Public Security Bureau (PSB) leads to inefficient results.¹⁰⁸ A notable inconsistency also results from the way agencies handle complaints filled by foreign right holders.¹⁰⁹ Indeed in some regions there are administrative authorities, which simply refuse these complaints while other local authorities seem to be more cooperative.¹¹⁰

Section VII: Chinese legal thinking on copyright protection

Last but not least, Chinese legal thinking on copyright protection weakens the efficiency of its enforcement.¹¹¹ On the one hand, Article 1 of the Copyright Law of the PRC reflects the socialist ideology as the fact that community prevails over the individual.¹¹² However, intellectual property rights are by essence a matter of individuality as it grants moral rights to authors. By contrast, Article L111-1 of French Intellectual Property Code is bringing the author as an individual to the center of the copyright law. On the other hand, not all Chinese authors interpret the notion of `originality' similarly so that some works are not always respected.¹¹³ Therefore, without recognizing the works created by others, authors are showing their lack of awareness toward copyright protection. This misunderstanding is tightly linked to the vagueness of legal terms employed by the Copyright Law of the PRC.

However, China has carried out numerous reforms fostering a better copyright enforcement in order to answer to all these critics.

106 IIPA, 2013 Special 301, see above note 27, p.41.

107 Kariyawasam, see above note 46, p.99.

108 IIPA, 2013, Special 3001, see above note 27, p.41.

109 Ibid.

110 Ibid.

111 Kariyawasam, see above note 46, p.99.

112 Article 1 of the Copyright Law of the PRC emphasizes that authors of copyrighted works are protected to encourage the building of a socialist society and promote socialist culture.

113 Kariyawasam, see above note 46, p.99.

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Part IV: Reforms aiming toward an effective copyright protection

China is the most dedicated country in terms of resources used for cracking down on piracy.¹¹⁴

Section I: Meeting its international obligations

China knows that its international credibility is at stake. According to Article 26 of the Vienna Convention on the Law of Treaties (VCLT): «every treaty in force is binding upon the parties to it and must be performed in good faith» (pacta sunt servanda). Some members of the WTO have already threatened China many times of initiating WTO infringement procedures «for non-compliance with the TRIPs norms».¹¹⁵ As Article 60 (3) (b) VCLT provides for material breach such as the violation of a provision essential to the execution of the treaty, it means that China's non-compliance with the TRIPs norms can be seen as a breach of obligations. A more deterrent copyright legislation would allow China to meet its international obligations and to avoid being sued. By, signing the 2012 U.S-China Film agreement, China made a significant commercial development.¹¹⁶ This helps China to meet better international standards in copyright protection by working closely with U.S agencies. For instance, China increased the imported films quota after signing this agreement by allowing 34 foreign movies to be distributed annually within its territory on a revenue-share basis.¹¹⁷ Before that, only twenty imported films were allowed per year.¹¹⁸A more competitive market results from this improvement so that it is not accurate anymore to blame China for a close market.

Section II: Clarifying legal terms

Criminal IP opinions helped to clarify the threshold for criminal liability, easing the burden of proof for copyright owners and permitting to address better copyright infringements.¹¹⁹ These opinions elaborates a list of requirements which should be met such as illegal operations costing more than 50,000 RMB or illegal dissemination of third parties works reaching more than 50,000 clicks.

114 Dimitrov Martin, see above note 50, p.17.

115 Devonshire Chris, Intellectual Property Rights in China, China Briefing's publications, Springer, Second Edition, 2011, p.3.

116 Ibid., p.34.

117 Ibid., p.45.

118 Ibid.

119 IIPA, 2013 Special 301, see above note 27, p.40.

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These improvements helped a few Chinese districts to prosecute infringements more regularly.¹²⁰ Amelioration was still needed for all districts to follow it on a regular basis. For this reasons, further clarifications were made in 2015 concerning administrative penalties. It is now explained that «serious circumstances of illegal acts» concern dissemination of other people's work where actual clicks reached 25,000 times or where the dissemination was made in the form of membership while registered members reach at least 500 people.¹²¹ This statement improves the whole system by erasing vagueness of legal terms so that more and more judges will now be able to make consistent decisions. Also, Shanghai has issued ways of promoting the development of China's film industry such as «establishing coordinative mechanism for administrative law enforcement work».¹²² This fact shows that willingness of cracking down on film IPR infringement is not present only at the State level but also at the local level. Some IP training programs are offered to China's officials in order to educate them on copyright.¹²³ This increases their awareness that protecting copyright is essential for the sake of China's economy but also for the prosperous development of the national film industry, the whole process being highly dependent on improving administrative enforcement.

Section III: Improved regulations toward online infringements

Addressing online infringements was also improved. The Supreme People's Court (SPC) issued «2012 Networks Rules» which aim to strengthen copyright protection by providing better guidance for the courts in order to deal effectively with disseminated works in Internet era.¹²⁴ This decision was followed by the Draft Copyright Law amendment that addresses twenty-first century piracy by covering «reproductions in the online environment».¹²⁵ SIPO also pointed out the necessity of addressing infringements arising in a cyber environment.¹²⁶

120 IIPA, 2013 Special 301, see above note 27.

121 National Copyright Administration (NCA), comments sought for revising implementing measures for the copyright administrative penalties, 2015.

122 Section 7, Circular of the General Office of Shanghai Municipal People's Government on printing and distributing the implementing opinions for promoting the prosperous development of Film industry in Shanghai, 2011.

123 Priest Eric, see above note 26, p.830.

124 IIPA, 2013 Special 301, see above note 27, p.42.

125 Ibid., p.42.

126 SIPO, the Promotion Plan for the Implementation of the National IP Strategy, 2014, Section 3 Paragraph 27: «Strengthen the IP protection in cyber environment, carry out special crackdown major infringement and counterfeit goods sold on Internet.»

www.english.sipo.gov.cn/laws/developing/201405/t20140505_944778.html (visited on the 14/11/2015).

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Section IV: Improving the consistency of the judicial system

China made significant progress concerning the consistency of its judicial system. If in the 1990 IP tribunals were not really effective, lots of improvements are perceptible since recent years, providing a more fair and transparent system to IPRs owners.¹²⁷ It is manifested in particular in the fact that trials are now opened to the public so that judges are less likely to be corrupted. ¹²⁸ Judicial decisions also started to be published, participating to the transparency of the judicial system and helping to increase the predictability of IPR tribunals' decisions.¹²⁹ Moreover, in 2014 China has created specialized IP courts in order to have a greater number of trained and independent judges.¹³⁰ IP courts will provide for an even more harmonized Chinese IP judicial system.¹³¹ It will also lessen IP tribunals' burden of handling numerous cases, increasing the effectiveness of copyright protection.

Section V: Ameliorating copyright administrative enforcement

Moreover, China has multiple projects toward an amelioration of copyright administrative enforcement. In the 2011 promotion plan for the implementation of the National IP Strategy, the State IP Organization (SIPO) proposed to establish not only a mediation mechanism for copyright disputes but also a mechanism linking effectively the judicial and administrative agencies.¹³² SIPO also clarified the role of the provinces in order to enforce IPRs by stating that the provinces must «enhance the international competence of regional intellectual properties by supporting and instructing relevant enterprises to strengthen the international layout of intellectual properties in major industries and technical field», «promoting the improvement to the competent advantage of intellectual properties in trade in goods and making use of policies on finance, taxation, banking and trade»; «encouraging the enterprises engaged in service outsourcing to strengthen the storage of intellectual properties.» If those guidelines are followed they will definitely strengthen copyright protection.

127 Dimitrov Martin, see above note 50, p.35.

128 Dimitrov Martin, see above note 50, p.106.

129 Ibid, p.107.

130 Provisions of the Supreme People's Court on the Jurisdiction of the IP courts in Beijing, Shanghai and Guangzhou, 31/10/2014.

131 Reinhold Cohn Group, China's new intellectual property groups, 5/03/2015, www.rcip.co.il/en/article/chinas-new-intellectual-property-courts/ (visited on the 7/11/2015).

132 Section 69, SIPO, the promotion plan for the implementation of the National IP Strategy, 2011.

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In its 2014 promotion plan for the implementation of the National IP Strategy, SIPO established a list of measures that needs to be followed. The inevitable revision of the Copyright Law of the PRC is one of them.¹³³ The implementation of a campaign against online copyright piracy is also among the many measures meant to improve copyright protection.¹³⁴ The mass media helps to reach a maximum number of Chinese citizens quickly. This kind of campaign will raise public's awareness about the need to protect and respect copyrights, helping to increase the respect of the rule of law. Copyright must be supervised on a large-scale online in order to improve the mechanism of protection.¹³⁵ Formulating and promulgating «the Action plan for Deepening the Implementation of the National IP Strategy (2014-2020) was also part of SIPO's 2014 promotion plan. The Action plan also sets multiple measures in order to enhance copyright protection and more generally IPRs protection, but in greater details than SIPO's promotion plan. Concerning audio-visual works, the Action plan aims to improve their regulation.¹³⁶ Strengthening administrative enforcement of IPRs is once again on the list as well as pushing officials to enforce laws in a normative and fair way.¹³⁷ The urgent need for improvement is manifest in all-new measures taken by Chinese government. It is just a matter of time before effective progress will be seen in enforcing IPRs.

Section VI: the upcoming Law of the PRC for promoting film industry

Finally, the upcoming Law of the PRC for promoting film industry should have a positive impact on enforcing copyrights. The Legislative Affairs Office of the State Council first issued explanatory notes on this upcoming law in 2011 stating that it will especially facilitate the entry into China's movie industry by erasing restriction «on the investment by social capital into film production».¹³⁸

133 SIPO, 2014 Promotion Plan, see above note 126.

134 Ibid, Section 3, Paragraph 28.

135 Ibid., Section 3, Paragraph 36: »Carry out active copyright supervision on large-scale online content suppliers, expand the supervision scope at appropriate time, refine the long-term working mechanism, further standardize the copyright order of online literature.»

136 Circular of the General Office of the State Council on Forwarding the Action Plan on the Further Implementation of the National IP Strategy (2014-2020) to Intellectual Property Offices and Other Departments, Article 2, Paragraph 2.

137 Ibid., Article 2, Paragraph 1.

138 Explanatory notes of the Legislative Affairs Office of the State Council on seeking public opinions on the Law of the PRC for promoting film industry, 2011, Section 2, Paragraph 1 (1).

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It also proposes to diminish administrative and approval procedures in order to serve the same goal.¹³⁹ Furthermore, the National People Congress of the PRC issued it first draft for comments on November 6, 2015. Before a translation to English becomes available, to make our opinion we can rely on commentaries made by China films lawyers. First, censorship standards will no longer be a problem for filmmakers if this upcoming Law enters into force. Indeed, movies dealing with «general» themes will not be subject to approval anymore.¹⁴⁰ Clarification concerning review standards will bring predictability: State authorities will have to elaborate these standards and make them available to the public.¹⁴¹ Further clarifications will certainly figure in the latest version of this law before it enters into effect. For the moment, these clarifications are already highly positive concerning the future of copyright enforcement in China.

139 Explanatory notes of the Legislative Affairs Office of the State Council on seeking public opinions on the Law of the PRC for promoting film industry, 2011, Section 2, Paragraph 1 (2).

140 China Film Insider, «China's Film Industry Promotion Law: the new draft » by Mathew Alderson and Grace

Yang, 10/11/2015, www.chinafilminsider.com/chinas-film-industry-promotion-law-the-new-draft/ (visited on the 17/11/2015).

141 Ibid.

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CONCLUSION

As it was demonstrated throughout this paper, the challenge of copyright protection in China results not from the lack of laws toward this protection but from the difficulties related to their enforcement. The complexity of this enforcement is related to issues that aren't only legal but also cultural, social, economical and political. Awareness at the State level but also at the local and individual level will help safeguard the copyright. Local protectionism should be fought effectively. The large size of China's territory is still an issue but thanks to the creation of specialized IP courts local enforcement of IPRs will be improved. Training programs for judges will also serve this goal. Bureaucratic agencies should also be more cooperative in order to strengthen copyright protection. Moreover, consumers must understand that if they don't purchase copyrighted works legally they expose themselves to serious penalties. At the State level, it should be understood that cracking down on piracy will help enhancing the whole Chinese legal system by showing that China stands for the rule of law. For instance, by fighting effectively against copyright infringement, China will be able to reduce the black market significantly. Also, legal consistency and judicial predictability will provide clarification and guidance. Indeed, clarifying legal terms will ease the burden of proof for right owners filling action against infringers. Moreover, an amendment of the Copyright Law is needed in order to include communication in real time to address better online infringement. The Copyright Law of the PRC should also expressly regulate illegal camcording. These improvements will help regulate more effectively the twenty-first century piracy. Moreover, all those ameliorations will help China to meet its international obligations, strengthening its international credibility. It will also permit a healthy development of its film industry, sustaining China's social and economic sectors. Chinese citizens will not only purchase copyrighted movies legally because of deterrent penalties, but also because this approach will benefit them. Indeed, it will help develop some industries so that more jobs will be created. Also, the development of domestic motion picture industry will provide Chinese audience with more movies and will contribute to the amelioration of their quality. Numerous reforms aiming toward an effective copyright protection were carried out by China in the recent years. One of them is the clarification of administrative enforcement; another is the clarification of criminal threshold. It appears also through the signature of the US-China Film Agreement. In any event, the most eagerly awaited law is the Promotion Film Industry Law that should enter into force during the next months. The future of China's movie copyright protection will highly depend on this upcoming law.

8011 words

24

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