Difficulty in Linking Administrative Enforcement and Judicial Protection of Copyright

2010/06/12,By Kevin Nie, China IP,[Copyright]

A symposium on the “criminal judicial protection of the copyright of audiovisual works in Beijing, Tianjin and Shanghai” was held on January 15, 2010 in Beijing. The symposium featured representatives from the Supreme People’s Court, National Copyright Administration as well as public security organs, procuratorial organs, people’s courts and cultural administrative departments from the three municipalities and was sponsored by Beijing Municipal Bureau of Copyright and co-sponsored by Beijing Copyright Protection Association, Motion Picture Association, China Film Copyright Association and China Audio & Video Association. Participants discussed their experiences in linking up administrative enforcement of law and criminal judicial protection of copyright and the enhancement of criminal protection under the current legal framework with the hope of making substantial breakthroughs in defending the legitimate interest of right holders.
An urgent call
China has continuously increased protection and achieved marked results in copyright protection in recent years, especially in key industries such as film, online games, audiovisual works and software. A noticeable fruit is the soaring film box office income, which reportedly reached 6.2 billion Yuan last year, registering an annual growth rate of nearly 43%. But meanwhile, the copyright situation for audiovisual products of films and online videos is not so optimistic.
Though not affecting box office significantly, pirated audiovisual products ruin the entire industrial chain of film distribution. Mike Ellis, President and Managing Director of Asia-Pacific for the Motion Picture Association of America (MPA), believes that the development of audiovisual products is greatly limited by piracy throughout the whole industrial chain. Besides, increasingly rampant online piracy has made a huge impact on the film industry and also increased investment risk. In America’s relatively mature market, over 50% of the film industry’s income comes from outside of the box office, including that of DVD income. But in China, investors rely solely on box office, since profit from selling affiliated products like DVD is almost impossible. Feng Wei, China Region President of MPA, also believes that piracy has kept the copyright fees of authorized audiovisuals so low that it can be neglected.
The harder authorities cracked down on piracy, the more returns government and individuals will receive from film investments. Therefore, it is expected that piracy fighting could be brought to the level of criminal justice. “Copyright theft is not a problem only in China, but the whole world. From worldwide experience we can see that criminal judicial protection will serve as a catalyst to the greater environment of copyright protection,” said Mike Ellis.
Wang Yefei, Vice Director of Beijing Municipal Bureau of Copyright, said: “The state organized many crackdowns in recent years and government, judicial organs and courts all strengthened copyright protection, and made some breakthroughs. But the situation remains severe and some questions need to be discussed in criminal protection, such as how to apply the laws and how to enhance enforcement.”
Different offenses
Art. 217 of China’s Criminal Law provides that it shall be a criminal offense against copyright where an act of reproducing a literary work is committed for commercial purposes without authorization by the copyright owner, for an excessive amount of gain or with other aggravating factors. However, copyright infringements have so far prosecuted under the accusation for “operating an unlawful business” in judicial practice. One of the important reasons is that an “unlawful business” is much easier to define procedurally, but a charge of “criminal offense against copyright” is difficult. It requires tremendous work in classifying, verifying, and locating the appropriate copyright holders of the pirated works; the process itself being extremely complicated.
Law enforcement representatives from Chaoyang District in Beijing have given a detailed introduction to the case of “Zhou Xuebin selling pirated audiovisuals,” as one of the “top 10 cases for IP protection 2008-2009.” It is reportedly the first case of criminal prosecution relying on Article 217 of the Criminal Law. It is also the first time in which the court system of Beijing has accused the defendant of selling pirated disks under the charge of “criminal offense against copyright.” It marked a shift from using the “operating unlawful business” law to using the “criminal offense against copyright” law in criminal protection. This not only strengthened the crackdown, but demonstrated to the international community new trends and fruits in China’s IP criminal protection.
According to Ma Di, Vice Director of Public Prosecution II of the People’s Procuratorate, in the Chaoyang District, between 2002 and 2009, the Procuratorate accepted a total of 396 cases of criminal offenses against copyrights, involving three accusations: “operating unlawful business”, “criminal offense against copyright,” and “criminal selling of infringing reproductions.’ Most cases were before 2007 and 9 out of the 24 cases in 2008 were under the criminal offense of “operating unlawful business,” but 24 out of the 111 cases in 2009 were under “criminal offense against copyright.” The remaining failed to do so due to the evidentiary problem of establishing copyright owners. “Criminal selling of infringing reproductions” has not been prosecuted since 2007, and has been treated as “criminal offense against copyright” since 2008, as long as the duplicates reached the statutory threshold.
How should prosecutors handle a case involving both “unauthorized duplicates” and “illegal publications?” In Zhou’s case, there were 849 DVDs classified as the former and another 10,093 DVDs as the latter. Obviously, he committed both the crime of “copyright infringement” and the crime of “illegal business activities.” Then should the accused be punished by the former alone or both crimes? Dong Geng, Deputy Presiding Judge of the 1st Criminal Court of Chaoyang People’s Court, believes that since procuratorial organs didn’t charge Zhou for “illegal business activities,” the court, following the principle of “no trial without complaint” didn’t give a sentence regarding the selling of 10,093 illegal publications. However, in future practice, for cases involving both unauthorized duplicates and illegal publications and reaching the number stipulated in law, procuratorial organs should charge both and court should practice jointer of punishment of multiple crimes.
The burden of proof
Evidence is the key for criminal conviction. Under the current legal framework, how does one prove the key element of the “absence of authorization” in the criminal offense against copyright? Dong Geng, deputy director of the first felony division of the municipal court of Chaoyang District Court, believes that under the Criminal Law provisions it is necessary to prove that the reproduction or publication of another’s work was done, “without authorization from the copyright owner,” i.e., to prove that the reproduction is an infringing work. If no infringement is established, the work is no more than unlawful publication, which can only be prosecuted under “operating unlawful business.” In practice, a claim of infringing reproduction must be supported by evidence – to show the work is copyrighted – otherwise, only unlawful publication can be maintained at most.
Wang Zhicheng, Deputy Director of Copyright Department of National Copyright Administration, said that it is the view of the copyright authorities that infringement ought to be found where the alleged reproducer fails to show that his reproduction or publication has been lawfully authorized or otherwise. This is because providing the proof of absence of authorization, required by most prosecutors, would involve a large number of copyright holders. This is difficult to accomplish in most cases and therefore will block many cases from criminal prosecution, making the “criminal offense against copyright” a dead claim in effect.
According to Yu Lu, Political Commissar from Chaoyang Public security Sub-bureau, before setting out to capture Zhou, they had prompt and effective communication with the MPA and the Beijing Municipal Bureau of Copyright and reached consensus on the verification procedure of audiovisual copyrights, which ensured the success of the case.
In many cases that involve a wide range and huge number of copyright owners, it is extremely difficult to obtain the evidence of their notarized ownership documents in a prompt and effective fashion. There are four methods in practice: issuance by right holders, by related copyright collective management organizations, by government departments, and the inversion of the burden of proof.
“Copyright verification from a collective management organization was a creative attempt in Zhou’s case,” said Dong Geng, “which not only provided an efficient method, but solved to a large degree of the enforcement of copyright infringement, and provided experience for stronger criminal protection.”
Difficulty in connecting two systems
“While giving full play to the role of criminal justice, we need to consider our national conditions and the characteristics of enforcement and the judicial system and refrain from putting all hope into criminal protection. Only by efforts in both directions can we boost our copyright protection to a new level,” said Hu Yunteng, Director of Policy Research Office of the Supreme People’s Court.
The double-track system of judicial protection and administrative enforcement is a distinct feature and advantage of China’s copyright protection, which is conducted at central, provincial and local levels. Administrative departments at all levels have increased crackdowns on copyright theft, said Wang Zhicheng. The National Copyright Administration stressed this repeatedly in its files on criminal punishments. Top judicial organs have twice issued legal interpretations directly over criminal copyright theft; interpretations which lowered the threshold of administrative enforcement. Therefore, both administrative enforcement and criminal justice play an important role in China’s copyright protection.   
Wang also briefed on the case transfer from administrative to judicial organs. Between 2006 and 2008, administrative organs at all levels nationwide handled 27,372 cases of administrative punishment and transferred 741 of them, or 2.7%, to judicial organs. In the 2009 crackdown on online copyright, enforcement and public security departments closed 362 illegal websites, took 552 times to delete and screen infringing content, ordered a fine of nearly 1.3 million Yuan, confiscated 154 devices, such as Internet servers, and transferred 24 serious criminal cases, taking 4.4%. The proportion of case transferred was not very high, but there were also successful cases like the Tomato Garden.
Why is the proportion of case transfers so low? Wang believes that Article 217 stipulated, “without the permission of copyrighters,” but in practice, when a large number of duplicates or disks are seized, administrative enforcement, public security, procuratorial organs and courts could not reach consensus on verification of that factor. It has become a barrier in case transfer from administrative to judicial organs and explains the low transfer rate. Even if a case is successfully transferred, sentences on copyright infringement are rare.
As digital technologies move fast, the connection between administration and criminal justice systems on Internet copyright infringement has become more urgent and used as an excuse by developed countries in exerting pressure on China. The question is how to solve this problem. In 2009, the National Copyright Administration invited all sides for a coordination meeting and reached the following consensus: 1) Issue new interpretations to enhance criminal justice and avert the situation in which administrations dare not to transfer, public security departments dare not to accept, procuratorate departments dare not to prosecute and courts dare not to judge; 2) Take verification from copyrighters as one of the proofs required in starting a criminal action or prevent it from serving as a barrier in case transfer; 3) Formulate latest standards in copyright infringement prosecution by considering trends of digital technology and Internet development; 4) Under online digital environment, calculate the amount of illegal business and income by the proportion of pirated works in total online works; and 5) Enhance administrative enforcement by streamlining internal procedures.
As China’s copyright protection and social awareness has increased, right holders have also called louder for criminal justice on copyright theft. Most of them believe that administrative measures, including confiscation of duplicates, fines and the closing of workshops, are not enough. They believe that only criminal prosecution and sentencing can serve the purpose of deterrence. Therefore, to solve the problem of the connection between administrative enforcement and criminal justice and in addition to coordination between related departments, right holders should be encouraged to seek criminal protection actively.

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