Maximum Penalties to Skyrocket Under China’s New Copyright Law
China will increase the maximum penalty for copyright infringement by a factor of 10 in an effort to deter intellectual property violations, a major gripe for many companies that conduct business in the world’s second-largest economy.
The national legislature last week approved an amended copyright law that will raise the highest compensation payment for infringement to 5 million yuan ($762,114) from 500,000 yuan. The new law will take effect on June 1.
Shi Hong, the deputy director of the civil law office affiliated with China’s top legislative body, said that the current copyright protections are beset by “high costs, low compensation and weak enforcement.”
The changes will also make China’s copyright system more responsive to the “rapid development and adoption of new technologies” and reflect the need to link laws to China’s Civil Code and international treaties, Shi said.
The move marks the third time the copyright law has been tweaked in its 30-year history. It states that serious copyright violators must pay compensation equivalent to between one and five times the amount gained from using their work without permission, with a minimum penalty of 500,000 yuan and a maximum penalty of 5 million yuan.
Under the new law, courts will be able to order violators to give the authorities access to “relevant bank accounts and other materials,” and punish those who do not comply.
At the copyright holder’s request, they will also be able to order the destruction of any “materials, tools or equipment” used for illegally duplicating protected work, and block their entry into “commercial channels.”
If the party accused of infringement disputes the allegation, other revisions require them to provide evidence proving that they have obtained the permission of the copyright holder before using their work, or that their use is otherwise fair under Chinese law.
Additionally, legal organs in charge of copyright protection will have greater powers to investigate alleged violators and seize “relevant premises and property.” Copyright holders will also have greater scope to apply for preemptive action to be taken against suspected violators prior to filing a formal lawsuit.
Although the current law covers various literary and audiovisual content as well as “other works as stipulated by laws and administrative regulations,” the new version has been rephrased to include “other intellectual achievements that conform to the characteristics of a work,” leaving leeway for new forms that may emerge in future.
It also contains a broader definition of audiovisual works in a bid to encompass popular new online formats like livestreams, online games and short videos.
“The establishment of a (new) punitive compensation system will raise the costs of copyright infringement and will certainly have positive social effects,” said Zhang Hongbo, the director-general of the China Written Works Copyright Society. “It will act as a strong deterrent on possible infringement and piracy, thereby curbing their occurrence.”
On Monday, China’s Supreme People’s Court issued a set of opinions on strengthening copyright protections, calling on the judiciary to “take into account the interests of both disseminators and the general public,” and balance the “development of emerging industries with (the need to) safeguard copyright holders’ legal rights and interests” as well as “the creation and protection of the people’s cultural rights and interests.”
Contact reporter Matthew Walsh (firstname.lastname@example.org) and editor Joshua Dummer (email@example.com)
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