A Comment on Chinese Legal Environment of Online Copyright Protection


Motion pictures

Records and music

Business softwarea

Entertainment softwareb





Piracy levels


Piracy levels


Piracy levels


Piracy levels


Priority watch list
People’s Republic of China


95 %


85 %


90 %


90 %



aBSA’s 2004 piracy statistics are preliminary. BSA’s final 2003 figures represent the US software publisher’s share of software piracy losses in each country as compiled in October 2004. In prior years, the “global” figures did not include certain computer applications such as operating systems, or consumer applications such as PC gaming, person, finance, and reference software. These software applications are now included in the estimated 2003 losses resulting in a significantly higher loss estimate than was reported in prior years

bBSA’s reported dollar figures reflect the value of pirate product present in the marketplace as distinguished from definitive industry “losses”

Therefore, this article tries to conduct a comprehensive survey on Chinese legal environment of online copyright protection, including introducing government policies, the recently enacted and amended relevant law and regulations, and discussing judicial views by doing some case studies as well. Finally, this article calls for China’s corporation with her trading partners especially the USA to work out to diminish the conflicts arising from IPR infringement disputes in China including the online aspect. Hopefully, a goal of “double or multiple wins” can be achieved thereafter.

16.2 Implementation of the WTO TRIPS Agreement

One of the most significant achievements of the Uruguay Round was the negotiation of “the Agreement on Trade-Related Aspects of Intellectual Property Rights” (hereinafter TRIPS Agreement), which requires all World Trade Organization (WTO) Members to provide certain minimum standards of protection for patents, copyrights, trademarks, trade secrets, geographical indications, and other forms of intellectual property. The Agreement also requires countries to provide effective IPR enforcement. The TRIPS Agreement is the first broadly subscribed multilateral intellectual property agreement that is subject to mandatory dispute settlement provisions.

Developed countries were required to fully implement the TRIPS Agreement as of January 1, 1996, while developing countries were given a transition period for many obligations until January 1, 2000. Ensuring that developing countries are in full compliance with the TRIPS Agreement obligations now that this transition period has come to an end is one of the Bush Administration’s highest IPR priorities. The least developed countries have until January 1, 2006, to implement the TRIPS Agreement.

However, in order to address the concerns raised by the least developed countries, the United States suggested, and all other WTO members agreed, to extend the transition period for 10 years, until 2016, for the least developed countries to implement their TRIPS obligations for patent and data protection for pharmaceutical products.

Developing countries continue to make progress toward full implementation of their TRIPS obligations. Nevertheless, certain countries are still in the process of finalizing implementing legislation and establishing adequate IPR enforcement mechanisms. Every year, the US Government provides extensive technical assistance and training on the implementation of the TRIPS Agreement to a large number of US trading partners. Such assistance is provided by a number of US Government agencies, including the US Patent and Trademark Office, the US Copyright Office, the Department of State, the US Agency for International Development, US Customs and Border Protection, the Department of Justice, and the Department of Commerce.

This assistance is provided on a country-by-country basis, as well as in group seminars, including those cosponsored with the World Intellectual Property Organization (WIPO) and the WTO. In addition, US industry is actively involved in providing specific enforcement-oriented training in key markets around the world. Technical assistance involves the review of, and drafting assistance on, laws concerning intellectual property and enforcement. Training programs usually cover the substantive provisions of the TRIPS Agreement, including IPR enforcement.8

16.3 Internet Piracy and the WIPO Internet Treaties

The Internet has undergone explosive growth and, coupled with the increased availability of broadband connections, serves as an extremely efficient global distribution network for pirated products. The explosive growth of copyright piracy on the Internet is a serious problem.

An important first step in the fight against Internet piracy was achieved at WIPO when it concluded two copyright treaties in 1996: “the WIPO Copyright Treaty” (WCT) and “the WIPO Performances and Phonograms Treaty” (WPPT) (collectively, the “WIPO Internet Treaties”).

The WIPO Internet Treaties help to raise the minimum standards of intellectual property protection around the world, particularly with respect to Internet-based delivery of copyrighted works. They clarify exclusive rights in the online environment and specifically prohibit the devices and services intended to circumvent technological protection measures for copyrighted works.

Both treaties entered into force in 2002. As of April 29, 2005, there are 51 members of the WCT and 49 members of the WPPT; this number will rise significantly when the EU joins, which, by internal arrangement, is expected to occur when the last five EU Member States complete their implementation processes.

Many countries have implemented in their national laws key provisions of these treaties even though they have not yet formally ratified them. At this point, therefore, the WIPO Internet Treaties are now part of the international IPR legal regime and represent the consensus view of the world community that the vital framework of protection under existing agreements, including the TRIPS Agreement, should be supplemented to eliminate any remaining gaps in copyright protection on the Internet that could impede the development of electronic commerce.

In order to realize the enormous potential of the Internet, a growing number of countries are implementing the WIPO Internet Treaties and creating a legal environment conducive to investment and growth in Internet-related businesses and technologies.9

16.4 A Glance at China’s Legal Environment of Internet Copyright Protection

16.4.1 Government Anti-piracy Policy and Efforts—A Software Industry Perspective

On July 27, 2004, Chinese Vice-Premier Wu Yi said at “the Second China International Software and Information Service Fair” in Dalian that the country regards software as an industry with strategic importance and is formulating effective policies in areas including anti-piracy and anti-monopoly, to encourage its development. Wu Yi said that only with effective IPR protection could software companies be interested in staying in the business and contributing to the prosperity of the industry.

Apart from tighter government efforts in using copyrighted software, another challenge for pirated software pedlars is the increasing unauthorized proliferation of software on the Internet. As the Internet has grown more and more popular among the Chinese, it has also become a faster route for peddling the software.

A report by the Electronics Intellectual Property Rights Consulting and Service Center (EIPRC) under the Ministry of Information Industry (MII) and the China Software Industry Association (CSIA) in 2004 indicated that organizational users get 10 % of their software from the Internet, while the rate was 34 % among individual users. Despite the increasing adoption of copyrighted software among enterprises and organizations, unauthorized copies within organizations became another issue meeting serious concerns from software companies.

The EIPRC-CSIA report showed illegal copying, and unauthorized use of copyrighted software ranked the No. 1 means of piracy in the eyes of software companies, even before pirated discs, pre-installation with hardware, and Internet downloading.

Zhao Tianwu, director of EIPRC, said the results showed there was still a lot of work to be done to improve software users’ awareness of IPR protection, which should include more than simply not buying pirated software disks.

More than 60 % of the organizations surveyed said education could raise people’s awareness of IPR protection. Forty percentage of them believed education with examples of legal and financial risks was the most effective way. From the software companies’ side, 72 % of them said the law should be enforced more strictly, or the legal system improved, while only 9.8 % of them said education through the media was more effective.

It is believed that all these things might need a lot of effort from the government, companies, and ordinary users, and it will take a long time to elevate people’s awareness to a significant degree.10

16.4.2 Law and Regulations

China’s legal system for copyright protection was gradually established in the 1990s, with the implementation of the “Copyright Law” as a hallmark in this process. It has also promulgated a number of regulations with legal effect, such as “Regulations on the Protection of Computer Software,” “Regulations for the Implementation of the Copyright Law,” “Procedures for the Implementation of Administrative Sanctions Concerning Copyright,” and “Regulations on the Collective Management of Copyright.” The promulgation and implementation of these legal documents have laid a solid legal foundation for copyright protection.

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