Tuesday, November 18, 2008

Transitional Review Mechanism of China’s TRIPs Implementations Q&A Copyright Law

When China became the 143rd Member of the WTO on December 2001, it automatically entered into TRIPs, which is an integral part of the WTO Agreement. Upon accession to the WTO, China agreed (see Section 18 of the Protocol on the Accession of the People’s Republic of China WT/L/432) that the first eight years its commitments to align its IPR laws will be reviewed during an annual Transitional Review Mechanism (TRM) by the TRIPs Council. This means that the last of such annual reviews will be held in 2009. Thereafter there will be a final review in year 10 (2011) or at an earlier date decided by the General Council.
According the TRM: “China shall provide relevant information, including information specified in Annex 1A, to each subsidiary body in advance of the review.”

The Secretariat of the WTO received communications with questions addressed to the People's Republic of China from Japan on 6 October 2008 (IP/C/W/518), the United States on 9 October 2008 (IP/C/W/520), the European Communities on 13 October 2008 (IP/C/W/521), and Canada on 20 October 2008 (IP/C/W/524). The Reply from China (IP/C/W/525) came on 21 October 2008.

In a Q&A series about the communication between the United States/Japan/European Communities on the one hand and the People's Republic of China on the other I will deal with the questions and answers about the following subjects: copyright, trademarks and geographical indications, patent law revisions, enforcement, plant variety protection, anti-monopoly law, undisclosed information/protection of confidentional information and government policy.

We start the series with Questions about China's Copyright Law US/Japan/EU/Canada versus the People's Republic of China:

Canada had no questions regarding copyright.

The US asked whether China has explained (and translated in accordance with paragraph 334 Working Party Report) article 4 Copyright Law, Amended 2001 (and I guess if they didn’t that the US would like to get this interpretation): “Works the publication or distribution of which is prohibited by law shall not be protected by this Law. Copyright owners, in exercising their copyright, shall not violate the Constitution or laws or prejudice the public interests.”

The US is probably most interested in the interpretation of the first sentence which declares censored works not protected under the copyright law. It is dubious whether this provision is in compliance to the Berne Convention.

By reading the questions it becomes clear that copyright piracy via the internet is becoming an ever more crucial subject in China. The US requests a description of the steps necessary to take down infringing content or links after receiving notice from a recognised right holders’ representative. What are the remedies available against internet service providers who do not engage in immediate takedowns and whether such remedies have been imposed to date. Remedies available to suspend or terminate the accounts of repeat infringers. Legal steps necessary for right holders or their representatives to obtain information about direct infringers. Give examples of vases where the above referenced legal procedures, including specific efforts taken, have taken place. Whether the Regulations for the Protection of the Right of Communication through Information Network is also covering ‘the right of making available’ on other forms of transmission in an online environment such as real-time and P2P streaming. Does the criminal prosecution/conviction thresholds established in the judicial interpretations of 2004 and 2007 apply for internet copy piracy too?

Picture by Kai Hendry

US asks China to provide information on the number of prosecutions for each provision of law under which criminal copyright infringement, including via the internet, for 2007 and the first six months of 2008. Please provide the following information: When the criminal complaint was filed; Which court; Identities of the defendants; Provisions of law alleged to have been violated; Current disposition; If concluded, whether the case resulted in acquittal or conviction (and the sentence, suspended or not; Involved foreign work.

US asks China whether the software end-user piracy is subject to criminal penalties, if so under what circumstances and pursuant to which laws. US and Japan ask China when it will amend its copyright law. And what are the steps involved. Can foreign governments and other stakeholders provide input and comment on the drafts and if so at what stages.

Japan asks China to provide it with a schedule for the drafting of the regulation on royalty regulation for broadcasting and television organizations, which article 43 Copyright Law stipulates that the State Council is to establish. Article 43 Copyright: “A radio station or television station that broadcasts a published sound recording, does not need a permission from, but shall pay remuneration to, the copyright owner, except that the interested parties have agreed otherwise. The specific procedures for treating the matter shall be established by the State Council.”

If the Legislative Affairs Office of the State Council is still in process of establishing the regulation, please provide is with the details of the progress. Japan writes that the collective management societies in China are not able to distribute royalties to right holders appropriately because users of copyrighted works often do not report their actual usages fully. Therefore, to build an adequate system for distribution, as stipulated under of the Regulation for Collective Management of Copyright, there is a need to ensure full enforcement of the users’ obligation to provide full usage information. And a need to encourage them (what means Japan, higher punishments, or better explanation by the collective management societies in China?). Is China planning to take new measures against this problem?

According to the European Communities foreign suppliers of sound recording distribution services appear to receive less favourable treatment than Chinese suppliers. The European Communities complain that imported music is subject to content review before digital distribution, while Chinese enterprises without foreign investments are subject to registration but not prior content review.

The European Communities have a problem with time it takes to clear the censorship process. First mover advantage for the right holders is very important in the music business in the race with infringers. What is China intending to do about this? Equality of arms for foreign suppliers as to Chinese enterprises? Are there plans to make the clearance process quicker?

The European Communities point out that sound recording imported into China in physical form intended for digital distribution must undergo content review prior to distribution. Domestically produced sound recordings appear not to be subject to this requirement, but can instead be digitally distributed immediately. Another problem is that censorship clearance for a digital work does not mean the equivalent physical work has also passed censorship and vice versa. What is China going to do about this?

The European Communities writes: Article 9(1) TRIPs imposes an obligation to comply with articles 1 to 21 Berne Convention. Article 11bis Berne Convention prescribes that at least an equitable remuneration is payable to the author for the broadcasting of their works. However since the amendment of the Copyright Law in 2001 no remuneration has been paid to right holders for the use of music in their broadcasts. What measures will China take, when will the tariff rates be set by the State Council? Will right holders be compensated for the years when their music was being broadcast prior to tariff rates being set?

Answers by China

China refers vaguely to modifications to the Copyright Law, relevant implement rules that cover all areas included in TRIPs and bring these measures info full conformity with the TRIPs. And regarding copyright it gives some statistics: "In 2007,copyright administrative agencies at all levels imposed 9,816 administrative punishments, confiscated 75.69 million pirate goods." China declined to answer the other questions. However, this might have something to do with the pending dispute settlement at the WTO.


Anonymous said...

Another great post. Thanks for unlocking this information. Looking forward to the rest of the series.


kang.diane said...

For your information. Report of the WTO Panel for the dispute between USA and China regarding "Measures Affecting the Protection and Enforcement of Intellectual Property Rights" has been issued on 26 Jan. 2009, WT/DS362/R.
In this report, the Panel concludes that paragraphs 7.139 and 7.181 of China Copyright Law, specifically the first sentence of Article 4, are inconsistent with China's obligations prescribed in TRIPS.

kang.diane said...

For your information. Report of the WTO Panel for the dispute between USA and China regarding 'Measures Affecting the Protection and Enforcement of Intellectual Property Rights' has been issued on 26 Jan. 2009, WT/DS362/R.
In this report, the Panel concludes that paragraphs 7.139 and 7.181 of China Copyright Law, specifically the first sentence of Article 4, are inconsistent with China's obligations prescribed in TRIPS.

IP Dragon said...

Dear Diane,

Yes, I know I have posted the last two blogs (February 8 and 9, 2009) about the WTO report. And there will be more on the subject.

Thank you anyway,

Danny Friedmann
IP Dragon