Chinese Intellectual Property Law (Part 1) - Copyright

With China having become a huge economic power in the last few decades, I thought it'd be about time to write a short overview of the different aspects of intellectual property law in China. These posts will be split into three parts, each discussing a different area. We'll kick things off with copyright law. Often the more disputed topic in the area, when close to a third of all counterfeit imports to Europe were from China in 2009.

The Chinese copyright legislation has been an issue for most of the 1990s and early 2000s, as other nations saw their laws as inadequate and their enforcement of the provisions lax at best. The first iteration of their copyright law was enacted in 1990; the Copyright Law of the People's Republic of China (English translation can be found here, Chinese here). 

The aim of the legislation is simple: 

"This Law is enacted, in accordance with the Constitution, for the purpose of protecting the copyright of authors in their literary, artistic and scientific works and the rights and interests related to copyright, encouraging the creation and dissemination of works conducive to the building of a socialist society that is advanced ethically and materially, and promoting the progress and flourishing of socialist culture and sciences". 

One key difference has to be noted; the Chinese law actively encourages the dissemination of works. Often omitted in especially common law nations, the notion of dissemination of works is more often than not left on the back burner, as a hand-down in the form of "fair dealing" or "fair use". While still being a part of the given legislation, it seems it's not as intrinsically embedded in the laws as it seems to be in the Chinese equivalent, at least on the face of it.

The law provides protection for the typical assortment of subject matters that most legislatures seem to have offered, such as written, oral, photographic and graphic works. The protection is also offered to foreign nationals who are subject to treaties to which China and their nation are signatories to, such as the Berne Convention and TRIPS. The legislation is heavily modeled after the Berne Convention and thus all aspects of the law need not be expanded upon further, as they mirror most national legislations in common law countries, and possibly civil law countries as well.

Copying taken to an extreme

Terms for copyright are, again, very similar to ones found in, for example Australia and the UK, where protection is offered for life and 50 years after death, aside from cinematographic works which are given 50 years of protection from its first publication. The latter differs from Australia for example, where the duration is 25 years after initial publication.

Some issues are presented in the Chinese "fair dealing" provisions or situations where works may be used without permission or payment to the creator of the work. Several of the categories, such as the permission to rebroadcasting or publishing of speeches or content published by other newspapers or news outlets, are opt-out provisions. By default there is an assumed ability to reuse your content, even by competitors. Secondly, there is a provision allowing the live performances of works for free. This provision allows for a very wide and open-ended ability to utilize content at any events which don't charge an entrance fee, such as conventions or festivals. Not really the biggest of issues, but does leave a gaping hole when it comes to the protection of a performer's right to their content. Most of the "fair dealing" provisions in the legislation are standard ones found in most common law countries, either in express categories or through the common law.

Overall the legislation follows Berne very closely, and should sound familiar to those who've dealt with it before. Not being entirely familiar with the starting point of the Chinese legislation it is hard to say just how far they have come in the last few decades, but surely the standard of protection has gotten better as the country has become more and more "capitalist".

There has been contention over the legislation since its inception. China has been dispute settlement through the instigation of other countries at the WTO 30 times since 2002, after it became a member of the organisation in 2001. There have been noted issues in especially the enforcement of the protection of intellectual property rights, where China has been lacking for years.

Even with its shaky emergence into the wider intellectual property regime, China has made strides towards a more universally accepted standard of protection given to intellectual property rights. The National Copyright Administration of China released its Draft Proposal only a few months ago, which would bring about much needed amendments to the current legislation. The aim of the amendments is to extend the scope of copyright, to encourage its registration, include resale royalties and to amend restrictions applying to certain types of copyright. When and how the law is finally amended remains to be seen, but it should bring China closer to a more international standard.

(Part 2 discussing Trademarks can be found here, Part 3 discussing Patents here)

Retrospective - All's Fair in Dealing and Education

Having just a few days ago written about the Canadian progression in the field of fair dealing and education in the new Copyright Modernization Act 2012, I thought it would be best to address a case that changed the way the old provisions of fair dealing applied to both study and education in newfangled ways, applying the principles set out in the mammoth of a case that was CCH, practically still hot from the oven (discussed on this blog as well and worth reading should you be unfamiliar with it).

The case of Alberta (Education) v Canadian Copyright Licensing Agency (Access Copyright) dealt with the copying of excerpts from textbooks and other materials by teachers to distribute to their students as a means to study only specific parts of texts. Some of the materials being copied were under the copyright of Access Copyright, for which various royalty payments were negotiated in the 1990s between the school boards and the company. After subsequent negotiations there was an agreement made for royalties to be paid on a volume basis, instead of the old per-student basis negotiated for most of the decade.

The use of the copies was tracked individually to ascertain the volume being copied; looking at their purpose, who made the copies, and who they were for. Most of the copying was done by teachers either for themselves or for students at their behest, which was agreed to fall under fair dealing by both parties. The contentious matter was the copying of materials for students by the teachers to take home and read. It was argued that this copying of materials did not fall under fair dealing for research or private study, as the copies were not requested by the students themselves, not meeting the requirements set out in CCH, at the initial hearing for the Copyright Board. The schools argued that they would fall under the provision thus being exempt from the tariffs set by Access Copyright. The Copyright Board decided the use did not fall under fair dealing, failing to meet the requirements under CCH; however the schools appealed the decision.

Private "study"

The case culminated in the Supreme Court of Canada in mid-2012 where the matter of whether the teachers' use fell under fair dealing, specifically the aforementioned provision of research or private study was finally decided. One has to note that the Canadian provision expressly mentions the possible use of materials for study as a private one, possibly indicating that a teacher could not act as a conveyor of material to the student, largely being Access Copyright's argument in the case; as the copies were not made at the request of students, it did not fall under fair dealing.

The courts gave an interesting argument, deciding that the teachers' use did indeed fall under fair dealing. To fully appreciate how the Court reached this conclusion, it is useful to look at what exactly was said in the judgment:

"...there is no such separate purpose on the part of the teacher.  Teachers have no ulterior motive when providing copies to students.  Nor can teachers be characterized as having the completely separate purpose of “instruction”; they are there to facilitate the students’ research and private study.  It seems to me to be axiomatic that most students lack the expertise to find or request the materials required for their own research and private study, and rely on the guidance of their teachers.  They study what they are told to study, and the teacher’s purpose in providing copies is to enable the students to have the material they need for the purpose of studying.  The teacher/copier therefore shares a symbiotic purpose with the student/user who is engaging in research or private study.  Instruction and research/private study are, in the school context, tautological."

Clearly the Court saw that the relationship between a student and their teacher is symbiotic; one where the teacher merely facilitates the students' private study by providing them with the material. Should the students be instructed to go and look for the material themselves, copy it, and use it for personal study, their learning would clearly be hindered significantly. Without the teacher being a sort of "middle-man", and being a part of that personal study, the students would suffer.

The Court didn't alter its position in the matter of personal study, firmly sticking to its prior interpretations, but did apply common sense in the relationship between a teacher and a student in that regard. The case didn't enable anyone to abuse the provision under the veil of providing materials for others for personal study. The decision was a 5-4 split decision, clearly showing a side of disdain even in the judiciary to accept this use of fair dealing as such, but nevertheless the decision seems to be a practical one and clearly makes sense. Without the option for teachers to copy and distribute reading materials for their students, the underlying matter of fairness would be skewed towards the copyright owner instead of the user, clearly going against what fair dealing stands for; the allowance of use of various copyright materials to improve yourself, your knowledge and to improve society as well without the shackles of copyright payments when clearly there is no competing interest.

Thoughts on the Canadian Copyright Modernization Act 2012

In the wake of highly impacting cases in the Canadian courts, one of which was discussed on this very blog not too long ago, the Canadian Parliament enacted a piece of legislation aiming to bring the Canadian copyright laws to the 21st century; the Copyright Modernization Act 2012.

The worst copyright abusers of them all

The Act made several changes to the existing Copyright Act, adding a categorical exception for educational use, one which is absent from its Australian counterpart for example. This exception bares significant weight in today's world, providing a means for schools to give students copied materials from copyrighted works and to teach more efficiently and broadly. There clearly is no competing interest in doing so, and allows for both poorer schools and students alike to utilize materials otherwise not in their means to acquire.  Several copyright collectives opposed the education provisions, and much to their chagrin, they were enacted and the breadth of the provisions is quite substantial. The addition of this exception makes sense both from a legal and a human perspective. After the decision of Alberta (Education) v Canadian Copyright Licensing Agency, which extended the previous fair dealing exceptions to cover educational purposes through some clever legal argumentation, there seemed to be no reason to attempt to prevent this exception from being enacted. Also looking at things from the perspective of a potential parent some day, the freer use of material in an educational setting will enable future generations to learn more effectively.

The second exception added in the Act is one which is yet to see an equal in any legislature in the world; the use of copyrighted material in non-commercial content made by users. What the provision allowed was the creation of new works using older copyrighted material such as songs, videos etc, so long as the the use of those works is for non-commercial purposes. Often cited as the "mash-up" provision, it provides a great tool for users to create a variety of works without the fear of legal repercussions. Some questions do remain however:

What is a non-commercial purpose, and could the purpose of the work change over time? A perfect example of this would be videos on YouTube. One might initially make a hilarious video of your cat meowing along to a popular song or yourself hilariously singing along to one, for the purpose of sharing your pet's or your own escapades with that of a select few or just the comedy appreciating populous at large. When posting that video your intention was probably not commercial, or at least you didn't believe or think you'd make money off of that video. But what if it goes viral and all of a sudden you have the opportunity to make a few bucks? Would the purpose of that video change at that point and become a commercial one, even after it would explode in terms of viewership years later? This presents a scenario that would clearly be one for judges to look at pertaining to each given situation, but it does present some ambiguity as to the application of this particular exception.

High Schoolers mashing it up

Second is the effect that websites have as the sharing platforms for content, potentially impacting its commerciality. Lets look at another scenario: A new start-up website encourages and helps distribute disseminated content, using the Canadian provision as the means to allow users to do so. The users themselves don't get paid for the content, but the large amounts of shared content containing copyrighted works used in user-created works does spur and increase in website traffic, profiting the website and its owners. The purpose for the videos was not, much like in the YouTube example, commercial in itself, but purely one where other users wished to share their videos with other users in that platform. Would that purpose constitute as a commercial one if it profits the website? Would the encouragement to disseminate and share content change their purpose in itself? Again, questions like this would remain for the judiciary to decide should they become contested in the courts.

Overall the Copyright Modernization Act does expand and allow for better and wider uses of content, both on a personal user level and on a wider scale. It does address issues which have evolved through the use of mediums such as the Internet, but still some ambiguity remains. There have been no cases dealing with the shiny new provisions, but with content sharing being such a big part of modern Internet interaction, they undoubtedly will be litigated on in the future.

Goliath triumphs over David - US Supreme Court upholds Monsanto's rights on their seeds

In true David vs Goliath fashion, Monsanto, a multinational biotechnology company, took on a farmer over the use of their patented soybean seed some 5 years ago. The legal saga has come further than anyone expected, reaching as far as the steps of the US Supreme Court late last year. The Court released its decision only some days ago, yielding an interesting, albeit not surprising result.

The case of Bowman v Monsanto Co concerned Mr. Bowman, having purchased and used Monsanto's gene manipulated seeds from a certified vendor, much like many of his peers. The seeds themselves were altered to be pesticide resistant, giving farmers the ability to plant their crops and protect them from the bug scourge that wreaks havoc amidst fields all over the world (scenario slightly exaggerated here). One caveat in the purchase of Monsanto's seed is that they can only be used for one planting cycle; that is that any seeds from the harvested crop cannot be used to plant another cycle and the farmer has to buy yet another batch, thus preventing the self-growing of plantable seeds by farmers, retaining Monsanto's monopoly over that particular seed. Mr. Bowman had fully complied with all terms set by the company in his operations, but wished to lower his costs and bought his seed from a grain elevator, ones meant for consumption and not planting. Some of these seeds contained the alteration patented by Monsanto, which Mr. Bowman used to then plant his subsequent crops once he has killed off the plants which weren't resistant to the pesticides. Once Monsanto discovered Mr. Bowman's actions, the company proceeded to sue him for patent infringement.

Terrifying - from a farmer's perspective

In their decision the Court was unanimous, showing a clear stance as to where the law stands today. In his argument Mr. Bowman relied on the doctrine of patent exhaustion. This effectively means that once a patented item has been legally sold, the person who's bought that particular item can sell or dispose of it as they wish, much like with any item they legally purchase. Once the patented item has been legally sold, the patent rights in that particular item end, or are exhausted, preventing the patent holder from controlling it post-purchase. Because the doctrine relates to a "particular article" the person who's bought the item has no right to make copies of that item - in this case creating new plantable seeds. There is no exhaustion if new copies are made, resulting in Mr. Bowman infringing Monsanto's patent. Having bought the seeds from a grain elevator didn't help his cause either, making his claim over exhaustion all the more dubious. As stated the appeal was unanimously dismissed.

You have to accept that the Supreme Court was perfectly right in their decision, and the unanimity further highlights this. As Justice Kagan stated in the Court's decision, should the exception have been accepted "...patents on seeds would retain little value." Clearly this would decimate any patents related to seeds, and once planted and used over and over, possibly even resold to other farmers, the patents would be completely worthless. The decision was one of common sense.

Source: GEN

Retrospective - Sweaty brows, no reward?

One of the most influential cases formulating our understanding of what can be protected by copyright all over the World was the US case of Feist Publications Inc v Rural Telephone Services Co. The case concerned a telephone service provider, Rural Telephone Services. As the company provided said services, it had to collect and compile listing information, publishing the collection in a directory annually. The directory was in itself an alphabetical listing of people, their numbers, addresses and so forth, much like the Yellow Pages. Rural Telephone Services was one of over a dozen phone services providers in Kansas. Feist Publication sought to publish an area-wide directory, having bought the data and required rights from the other providers in order to do so, falling short when Rural Telephone refused to sell them their data. Not being ones to fail, Feist Publication took Rural Telephone's data anyway and used it without their consent, utilizing roughly 3% of their data without any modifications and a substantial part more with some amendments and changes. Upon noticing this Rural Telephone proceeded to sue Feist Publication for infringement.

The question falling ever so graciously on the US Supreme Court's lap was whether there was a copyright work to protect to begin with, without which the case would fall flat. The Supreme Court did consider other matters, such as fair use, substantiality (amount copied) etc., but the most influential of which was the consideration over the existence of copyright.

All that work for naught

In their decision the Supreme Court saw that the directory in itself, should it show sufficient originality, could potentially be protected by copyright as a whole; however the raw data - phone numbers, addresses etc. - could not be protected as it isn't an original work. If there is no originality, the work cannot fall under the protection of copyright and is thus free for all to use. To put it in simpler terms, the presentation of the facts is something that can be protected, but not the information. What the case changed significantly was the "sweat of the brow" or "industrious collection" test used by lowers courts which extended protection of compilations from only its presentation to the data as well, which the Supreme Court subsequently repealed. The Court in its decision saw that the test had wrongly interpreted the 1909 Act and thus skewed the main principle of copyright: one cannot copyright ideas or facts.

Sweat of the brow has been used by the courts prior as a means to extend copyright to collections of data purely through the laborious efforts of the person compiling the information, creating value in that work through the sheer efforts they have put into it. English courts have accepted the notion of sweat of the brow, although not in the same fashion as its counterparts over the pond.

Essentially what the Court iterated in its decision was the fact that there was no element of creativity. No work will attain copyright protection, regardless of the amount of work put into it. The compilation of lists, directories or other factual information, with no element of creativity in its presentation, will not be protected under copyright. As said, the presentation, layout of information for example, could be protected, but the information presented will not be a copyright work. It could've taken you decades of meticulous work, however that it itself doesn't not make it protectable.

The law has moved on from Feist, often taking smaller or larger leaps, but the case still remains at the heart of copyright law, having influenced both US and foreign cases even today. If monopolies were allowed in raw data, a lot of the things we have right now could not be possible, and this would clearly impact modern applications of phone directories and such on the Internet. The disapproval of the sweat of the brow principle was a logical change in the law going forward and has enabled innovation through the use of data in other applications.

The Enterprise and Regulatory Reform Act 2013

A piece of legislation having incited a lot of conversation among the copyright law community in recent times is the Enterprise and Regulatory Reform Act 2013 in the United Kingdom, having been given assent last month, and finally having its final draft released early this month. The discussions around the Act have been largely focused on its approach to orphaned works, especially relating to photographs, but what could the impact of the legislation potentially be?

The Act mainly deals with amendments relating to corporations, mergers and markets, but the inclusion of copyright provisions seems to have fallen into the spotlight more than the rest. Section 77 adds a licensing scheme to works, which after a diligent search, have become orphaned as the owner of the copyright has not been found or cannot be contacted to attain a license to their work. Once this has been established, regulations passed by the Secretary of State could allow for that work to be  licensed to the party or parties seeking to use it for their own purposes for a fee.

Photographers should never resort to drastic measures

What causes the most concern to owners of copyright works, especially photographers, is the lack of definition for what a 'diligent search' would entail, as it isn't defined in the Act, and the nature of the environment where their works currently reside for the most part; the Internet. Looking at the former, what potentially could amount to a diligent search remains quite open, and will without a doubt be looked at by the judiciary in coming years once the Act has come into force. On the face of it one could imagine it encompassing would be proper investigation, through the means of Internet searches for similar imagery and trying to attain who the real author is, or by the use of other means of identification, such as watermarks or digital signatures in copyright works. What makes this issue difficult is the nature of the Internet, where information (including copyright works) is passed on and on, used and copied, diluting or even eradicating the underlying metadata from works, possibly rendering the identification of the copyright owner near impossible. Also the lack of clarity as to what amounts to a diligent search further adds to the ambiguity, since if a lower threshold is introduced amounting to a diligent search, the Act could potentially create a loophole through which works could be abused by those wishing to use them for their own benefit.

One thing I also have to note is a lack of a way of redress for those whose works have been licensed under the Act. There is no provision enabling the original copyright owners from enforcing their copyright once the license has been granted, even after they have identified the work or works as their own, clearly opening the provision up for possible abuse without repercussions. Surely such an omission is one which could harm the creative industry, however as I've stated this is purely speculative and whether this will cause any abuse or harm remains to be seen. The Act has already ruffled some feathers within the creative community, so its potential impact seems to be real and threatens those within the industry.

The Government has posted a list of Facts and Myths about the Act, and also provided some clarifications as to its effects and implementations.

Independent third party;  Sherlock Holmes

The IPO never addresses the matter of what a diligent search is, even in its notes mentioned above, but it does give some indication as to the process, where a diligent search will be "...verified by the independent authorising body which the Government will appoint before a work can be used". What this means is that the process will be an evidentiary process, so there will be no automatic scheme implemented, and all licenses should go through a more rigorous process before being granted. Not only will this provide a minimum threshold, but also an independent body whose sole job it will be to wade through the sea of applications.

The Act does not remove any automatic rights in works, nor does it allow for them to be 'stripped' from them, contrary to the belief of some parties. What it does is introduce a potentially harmful scheme, but as said, it will remain to be seen how or whether this will impact authors of copyright works. The IPO also indicates that authors will have a say in the final draft of the Rules, giving them more say in the process coming down to its finalization and establishment.

Also the licensing fees paid will be held for the copyright owner to claim, allowing for some amount of compensation should the works' owner or owners come to light, but it still does not address the possible financial loss incurred from a very successful use of a copyright work.

Retrospective - Fair dealing in modern Canada

What are the limits to what you can do with copyrighted material that you've bought? The degree of freedom can vary quite a bit, even within the common law system itself, ranging from more restrictive (and, quite frankly, out-dated) levels of fair dealing such as in the UK, to the broad fair use of the United States. The position of fair dealing in common law countries took a huge leap in the beginning of the new millennium, in the frozen North of all places.

The land of maple syrup, lumberjacks, and apparently fair dealing

The hallmark case of the early 2000s in the development of fair dealing and its application in Canada was CCH Canadian Ltd v Law Society of Upper Canada which not only shaped subsequent legislation, but changed the approach taken to fair dealing within the judiciary. The case was one of several where the Supreme Court of Canada flexed its muscle and actively developed the interpretations of fair dealing provisions in Canada.

To provide the case with some exposition, fair dealing essentially is a set of categories through which copyrighted material can be used. In Canada, the UK and Australia fair dealing is restricted to fixed categories, such as criticism and review, study and research, and the reporting of news, with the US standing alone with a much broader, open-ended policy of fair dealing (in the US referred to as 'fair use'); leaving out set categories and opening up fair use to a much wider interpretation and application by the judiciary. One could describe the former jurisdictions as a feeding bowl approach, where the acts allowed are merely provided as exceptions as opposed to being intrinsically embedded in the copyright provisions or copyright itself as a concept. What this means is that essentially the exceptions are treated as leftovers, or in another sense inferior to that of the rights in copyright and their execution. The US legislation takes a much more lenient approach, evaluating the possibly infringing act through its nature and purpose, clearly allowing for more wiggle-room and judicial interpretation than its counterparts.

The case of CCH dealt with the copying of legal materials for practitioners and law firms within Ontario, seldom including other parts of Canada as well, where cases, legislation and other works were copied and sent to their customers for a fee. The Law Society also offered photocopying services for anyone wishing to copy the materials themselves. CCH Canadian took exception to this use of copyrighted material, some of which were owned by them, and sued the Law Society for copyright infringement. The matter went as far as the Supreme Court of Canada, where the case dealt with a number of issues, but the more influential of which considerations over fair were dealing under the Canadian legislation.

One quote in the case, albeit not directly related to the fair dealing discussed, from the case of Théberge v Galerie d'Art du Petit Champlain Inc by Justice Binnie, showcasing the Court's attitude towards copyright quite well:

"The Copyright Act is usually presented as a balance between promoting the public interest in the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the creator (or, more accurately, to prevent someone other than the creator from appropriating whatever benefits may be generated)... The proper balance among these and other public policy objectives lies not only in recognizing the creator’s rights but in giving due weight to their limited nature."

What this approach does differently is discuss the limited nature of the rights, whereas often the rights of authors and content creators alike is treated as absolute while fair dealing is purely annexed to those rights. The balancing of public interest and rights is imperative when considering fairness, which is an operative part of all fair dealing. If balance between people’s interests and their rights is not struck real fairness can never be attained.

In its deliberation of fair dealing the Court formulated the approach that should be taken when assessing proper fair dealing, more specifically fairness in that dealing, using both the US legislation discussed above and the English case of Hubbard v Vosper and set six factors that need to be assessed in determining the fairness in fair dealing; (1) the purpose of the dealing; (2) the character of the dealing; (3) the amount of the dealing; (4) alternatives to the dealing; (5) the nature of the work; and (6) the effect of the dealing on the work. In their decision the Law Society had not infringed copyright and their actions fell square within fair dealing. The purpose of the dealing refers to a possible commercial or defamatory use of the works, while its nature also plays a part in the deliberation, that being whether the work is published or confidential for example. Amount refers to how much of the work was copied, be it a page from a book or the entire work; the more copied, the more likely it will not be a fair amount. Would copying the work be something that has to be done, with no alternatives, or would other ways of accessing or using the same or similar material be available, and at what cost or effort would this come at. Finally whether the copying has a detrimental effect on the work or its sales has to be considered, with a satiric work clearly not affecting a factual work’s sales in the same market. The terms themselves are left relatively open, providing space for deliberation and interpretation on a case-by-case basis.

The vigilant guardians of copyright

Without diving too deep into the specific findings of the Court, one conclusion can be drawn from the outcome and the language used; the Court changed the approach often taken in copyright from a rights holder emphasized approach to a user-centric approach. As stated before showed a change of attitude within the judiciary, placing fair dealing not merely as an allowance provision, but as a set of intrinsic user rights that existed by virtue of the public's need to use their legally purchased material in ways which were not foreseen in the drafting of earlier laws. What the Canadian Supreme Court did was bring fair dealing closer to the 21st century, and brought it back into life. 

This case and ones after it spurred the Canadian Parliament to act and a piece of legislation was introduced, the Copyright Modernization Act, which brought the old laws more in line with the Internet, clarified the position of internet service providers and permitted certain acts of copying by consumers.