Slow Death for China's Copyright Controversy

(Caixin Online) When China enacted a copyright law in 1990, legal experts lined up to oppose the first clause of Article 4, which says: "Works for which publication or distribution is prohibited by law shall not be protected by this law."

The clause' critics said that, to safeguard intellectual property rights and encourage innovation, every authored work should be copyrighted and protected. Even works legally prohibited from publication or distribution in China should receive copyright recognition, they said, to protect them from piracy.

The furor failed to change the law, and the clause was never threatened – until now.

On February 26, the 11th National People's Congress (NPC) Standing Committee passed an amendment to the copyright law that deletes Article 4's controversial clause.

The fact that the clause was included 20 years ago "reflected the social context at the time – worries and sensitivity to publishing," said Jiang Zhipei, a former Supreme People's Court president and senior adviser to the law firm Fangda Partners.

Those attitudes changed last year when the World Trade Organization's (WTO) Dispute Settlement Body issued a key ruling concerning access to China's publishing market.

The ruling followed a 2007 dispute against China filed by the United States. The Americans argued that the Chinese government's content reviews of certain works led to market restrictions and copyright infringements when materials did not specifically violate Chinese law.

For example, because the Chinese government denied market access for certain American movies and television programs, pirated versions of the banned programs were allowed to circulate widely in China. And because the copyright law lacked protection for "works for which publication or distribution is prohibited by law," American copyright holders had no way to legally protect themselves against pirating.

The WTO board ruled on the case involving China's protection of intellectual property rights and law enforcement measures in March 2009. The ruling was relatively favorable to China, with the WTO backing only two of seven American charges.

One charge backed by WTO experts was that the first clause of Article 4 violated the Berne Convention, an international copyright pact, and the WTO's Agreement on Trade-related Intellectual Property Rights.

Neither the United States nor China appealed, so China was required to amend the clause within a year – that is, before March 20, 2010. As a result, the copyright law was put on the NPC agenda.

According to Jiang, nearly all participants in an NPC expert group convened to consider the amendment agreed that the clause should be deleted.

"Removing the clause cleared up some worries from overseas copyright holders and sent a message that China is unswerving about protecting copyrights, and will not fail to adhere to the basic bottom line of protecting copyright holders because of differences in stages of economic development, cultural traditions or ideology," said Jiang.

"It also shows that China strictly abides by WTO commitments," he said. "When there are disputes, China deals with them in accord with WTO rulings."

Might removing the clause have any negative impact? Jiang said worries about increased publishing industry law violations are unfounded. "Removing the clause doesn't mean laws and regulations besides the copyright law are useless," he said.

And to bolster the legal basis, the NPC Standing Committee inserted a stipulation that "the state manages the distribution of works according to the law" in Article 4 while removing the controversial clause.

Si Weijiang, a lawyer for DeBund Law Offices and a member of the National Lawyers Association Committee on Intellectual Property Rights, told Caixin the events leading to the revision should be seen as a lesson and an experience worthy of thorough review.

Problems with the clause had persisted for years before the WTO finally took up the case. Only after international pressure was applied did lawmakers agree to make changes.

"Our legislative standards need to be raised," Si said. "Legislating should no longer be carried out behind closed doors."

Si doesn't think deleting the clause will substantially change China's weak protection of intellectual property rights. But it is a first step.

The key to future protection for copyrighted materials, said Si, lies in substantially improving enforcement mechanisms. Otherwise, China will not avoid future intellectual property disputes at the WTO.

(Translated by AHK)