Stepping up an Overhaul of the Copyright Law

2011/06/16,By Guo Shoukang, Professor &Doctoral Advisor, Law School, Renmin University of China,[Copyright]

The Patent Law, the Trademark Law and the Copyright Law constitute the major parts of the intellectual property (IP) law system of China. For historical reasons, the IP system and IP laws, compared to other civil law regimes, were relatively late to develop in all countries of the world. The IP system did not begin to be recognized and developed until society and technology made substantial progress. China, under unique historical circumstances, missing the first and second industrial revolutions, lagged far behind Western countries in technology development, thence, to be much later in establishing its IP system. After the reform and opening-up were launched, patent and trademark laws were installed in 1984 and 1982 respectively, despite the great difficulties, and the copyright law, because of much greater difficulties than the other two, was not promulgated until 1990, to be implemented in 1991.
When the Copyright Law was drafted, the lawmakers were mainly concerned about the underdevelopment of China’s economy and cultural industry. Some calculation indicated at that time that due to considerable use of foreign works, we were to pay an annual royalty of 900 million US dollars, a scaringly large figure at that time, to foreigners should a copyright system be established. This stirred up much opposition. But later, a further study proved that the figure was exaggerated. In order to protect copyrights, encourage the creation and dissemination of works beneficial to the improvement of socialist ethical and cultural progress and material wealth, and to promote the progress and prosperity of socialist cultures and scientific causes, the Copyright Law was finally passed in the 900’s, even though it merely reached the bottom level of protection required under international conventions.
Theoretically, the economic infrastructure defines its superstructure. The Copyright Law of the 1990’s is a product of its time. When the 15th session of the 7th NPC Standing Committee passed the first Copyright Law, the country was undergoing the pain of transition from a planned economy to a market economy. As a result, the law inevitably carried the mark of the time. Although, since it became effective as of June 1, 1991, the Copyright Law played positive roles in protecting the rights of copyright holders, motivating their creativity, promoting the growth of economy and technology, and leading to the prosperity of cultures and arts, it cannot be denied that the framers were almost impossible to foresee future development in the copyright area, considering the special social situation and economic base. Now, the law must be revised timely with the rapid development of society, in order to address the copyright-related issues of today which are different from those in the 1990s. Since they were first promulgated and became effective, the Patent Law has been revised three times, and the Trademark Law draft has now seen the third revision completed. Compared with the two, the Copyright Law has only slow progress in revision. It was revised in 2001 and again in 2010. As the 2001 revision was intended to meet the requirements for China’s entry into the WTO, it is nothing more than absolute necessity. The revision of this year, again, is nothing but a fine tuning to coping with WTO dispute resolutions, and still falls short of amendment for strengthening protection of right holders.
Looking at other Asian countries and regions’ legislative progress concerning copyright, we find that Japan has revised its copyright law 35 times since inauguration; South Korea and the Taiwan region, 17 times; Singapore, 7 times; Malaysia, 6 times; and India, 5 times. China has done only two revisions. Japan, which has done the most revisions, is one of the Asian countries that provide the best copyright protection. Generally speaking, the more the revisions of the law, the better protection accorded. In short, China must act timely to revise its law in order to meet the requirements of the new situation and trend.
The current Copyright Law grants producers of sound recordings four rights, i.e., right of reproduction, right of distribution, right of rental, and right of information network communication. In the past decade, the global record sales saw a large downslide, and the record industry of China performed even worse. The musical sector develops with huge inputs of manpower and material resources by record companies which, however, cannot benefit from the traditional record sale due to rampant piracy and the rapid and powerful growth of the Internet. With the right of reproduction and the right of distribution alone, the producers of phonograms have insufficient income and sometimes even suffer losses. Moreover, due to wide-spread musical piracy, they cannot manage to get any income from the right of rental. From the litigations between record companies and search engines (, for example), one can easily see that under the less-than-perfect legislation, the record companies are struggling for their right of information network communication. It is obvious that the four rights granted by the existing Copyright Law have been inadequate to protect the producers of sounding recordings and the sunset phonograph industry. Therefore, in the new situation, it is urgent to grant more rights to the producers of phonograms. In this respect, the copyright laws of other Asian countries or regions provide guidance. For instance, the Copyright Law of Taiwan region regards phonograms as “works of authorship” and protects them as such, so that producers of phonograms have all the rights of copyright holders. The Hong Kong SAR, Singapore, Malaysia and Thailand all deem the rights that producers of phonograms have as copyrights rather than neighboring rights.
The Copyright Law provides that a copyright holder can have as many as 17 rights, while a producer of phonographs, which is deemed as a holder of neighboring rights, can only have four. The existence of a phonogram is dependent upon contributions from three persons, namely, the author, the performer and the producer. As practices go, the contributor alone is to be remunerated. In this case, the producer should also benefit. In most countries, producers of phonograms have been granted the proprietary right and the right to remuneration against broadcasting organizations that air the phonograms to the public. Those countries and regions include all EU countries and Australia, New Zealand, Canada, Hong Kong SAR and Taiwan, as well as most other countries in Asia and Latin America. The essentiality of the income from the right of (mechanical) performance to record companies determines the sustainability of the record industry to create new records and push new artists. Unfortunately, China is one of the few countries that grant neither of the above two rights. Chinese record companies, accordingly, are unable to gain anything from the broadcasting organizations and business places that play their music to the public. On the one hand, China has more than 500 radio and TV stations which broadcast songs produced by record companies daily and in so doing get a huge income of advertising fees. Record companies, on the other hand, cannot have any such income because the Copyright Law does not grant them the right of broadcasting. At such public spaces as large department stores, song and dance halls, restaurants, cafes and bars, music is played to help merchants attract numerous customers and increase their incomes, while record companies, the music producers, can’t pocket a single cent. In the long run, this will definitely affect the flourishing and development of musical art in China.
Moreover, the above rights are also confirmed in related international conventions, including the Rome Convention of 1961 and the WIPO Performances and Phonograms Treaty (WPPT) of 1996. Many countries also grant the right of broadcasting and the right of (mechanical) performance to foreign producers of phonograms, provided that these rights exist in the home country or countries of the foreign producers. Because the Copyright Law does not provide for these rights, nor is China a party to the Rome Convention, the producers of Chinese music that is gaining popularity abroad have no access to any income from the use of their music in foreign countries. If these rights were added to the Copyright Law, the Chinese producers would have a new source of income, their innovation be enhanced, and excellent Chinese music works go international. In addition, the wide spreading of excellent music works would effectively curb the flagrancy of bad songs on the Internet and the invasion of unhealthy cultures from other countries.
As the source of their income is being depleted, producers of phonograms cannot focus their mind on music production. The increasing copyright litigations pose a burden too heavy for them to bear. Now, it is urgent for us to place it high on our agenda to further revise the Copyright Law, to strengthen the protection over producers of phonograms and grant them the right of broadcasting and the right of (mechanical) performance. In the revision, we should take into account the impact of social development and technological advancement in the copyright field, and how to protect the rights holders and add momentum to the growth of the cultural and creative industries. We should never stop progressing, nor should we keep on making minor changes as we have done before; otherwise, the revision would turn out to be a useless attempt that does not drive home the substantial change we need. In short, we must step up an overhaul of the Copyright Law here and now.

(Translated by Ren Qingtao)

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