Copyright & Licensing Practices in Mainland China

Focus on Online Usage

Chunyan WangAssociate Professor, School of Law

Renmin University of China

Internet Usagein China 2005

China Population 1.25 Billion

Chinese Internet Users 100 Million

Annual Growth Rate 30 %

Third Largest in the World After U.S. and Japan

Creative Commons LicensingChina vs United States

Coming from Different Directions

China

Tradition ofCommunal

Ownership ofProperty

United States

Tradition ofPrivate

Ownership ofProperty

The Two Extremes

State of Anarchy The use of creative works online The case of the “Reader’s Home” Company digitizes many scholars’ works for use

in a digital library without permission from the copyright holders

Company gets sued by the rights holders

The Two Extremes

Author’s Consent Authors willingly allow dissemination of their works

Example – Open Access Scientific Research RepositoryMost Chinese physicists agree to publish under CC

Indifference to statutory royalties Copyright Agency of China: Ten million Yuan(US$1.2

M) in royalties not collected by the right holders 40,000 authors affected Main reason: Authors are eager to circulate their works

without royalty payment to get the benefits from the publicity associated with wide distribution

Basic Provisions of Copyright under Current Chinese Law

Moral Rights

Decision as to whether to publish Claiming authorship Authority over future alterations Integrity – protection against distortion

Basic Provisions of Copyright under Current Chinese Law

Economic Rights (some examples) Physical reproduction Distribution via sale or donation Lease – temporary grant of exploitation rights Exhibition – public display Performance Translation Internet Dissemination – wired or wireless

Distinct from physical reproduction/distribution rights

Two Scenarios in Mainland China Regarding Copyright Licenses

The User Oriented Approach The user looks for the rights holder and wants

to get permission from the rights holder. The Rights-Holder Oriented Approach

The rights holder seeks out the prospective users to negotiate the use of rights.

Categories of Users

Non Profit Institutions

National Digital Library

Project of National Cultural Resources Sharing (within the Ministry of Culture of China)

Categories of Users

Commercial Companies

The SS Reader (Super Star Company)

The Reader’s Home

ChineseALL

The Approach of Non Profit Institutions

Collecting Institution posts announcement asking rights holders to grant free c

opyright to the institution Examples - National Digital Library & Project of National Cultural

Resources Sharing under Ministry of Culture of China Collected the works of more than 2,000 authors including some re

nowned law professors. Authors granted institutions non-exclusive rights for free

Rewarding Authors Give authors certificate acknowledging the use of their work

Royalty Payments Pay royalties based on click-throughs to the related works

Overview of Copyright Licensing Strategies for Commercial Usage

Getting Permission “One by One” Getting Permission via “Copyright Agency”

or “Collective Copyright Administrative Society” (also called “Collecting Society”)

“Granting Offer”

Getting Permission One by One

Model adopted by Beijing Super Star Company (SS Reader)

Model adopted by ChineseALL Model adopted by CAJEPH (Chin

a Academic Journal Electronic Periodical House)

Beijing Super Star Company Model

Developed first commercial digital library system in China Created so-called “clearance building movement” (now

known as the “Super Star Model”) More than one hundred employees involved In-Person Visits - visiting the right-holders directly to get

their permission Permission granted from 230,000 authors! Provides free reader’s card for 10 years as consideration Considered a good model for getting legal permission from

the rights holder

The ChineseALL Model

ChineseALL established in 1999 as the first e-Book Publisher

Posts a standard license, prepared by the potential licensee (not licensor ), on its website and requests approval from author

Has signed such agreements with 18 renowned Chinese writers

Permission is granted to ChineseALL to publish all their works on its website

CAJEPH Model China Academic Journal Electronic Periodical House

CAJEPH is responsible for editing the database of CNKI (China National Knowledge Infrastructure).

It gets permission from the appropriate press or periodical house.

CAJEPH has made more than 17,600 such agreements in the past five years.

The Collective Administrative Society of Copyright

Music Copyright Society of China (MCSC) Established in 1992 The only collecting society of copyright currently

in China MSCS has more than 2,500 members Administers more than 1,400 music

compositions Written Works Copyright Society of China

Being formed - currently developing procedures

The “Granting Offer” Model

Initiated by the Reader’s Home Company Designed 14 different kinds of choices The case of “The Last Straw”

The Case of “The Last Straw”

A book written by Mr. Zhong Hongqi First published in September 2004 The first book to ever adopt the approach of

the “Granting Offer” Announcement of copyright was printe

d on the front page of the book

Announcement of Copyright

As It Appeared on Book’s First Page

What the Copyright Announcement Says

Any individual or institution may use this book provided they satisfy the following conditions:

1. Scope of Rights Granted - digital reproduction, distribution and/or dissemination online

2. The Royalty - 5% of revenue from the user of the work

3. Method of Payment - pay to Copyright Agency of China within 6 months of receiving any revenue.

4. Conditions of Usage - attribution and no distortion

5. Reservation of all other rights

Background on “Granting Offer”

Solves the problems of the traditional “One by One” model.

Avoid infringement suits against the advocates of the “Granting Offer” – “The Reader’s Home”

Promotion & Publicity - half the books published in China were self-financed by the authors Authors are willing to distribute their works for free More than 90% of authors contacted by the “Reader’s

Home” indicated they wanted to use this approach

Advantages and Disadvantages of the Different

Copyright Licensing Strategies

One by One Model

Collecting Society

Granting Offer

One by One Model

Advantages The guarantee of legality Super Star Company established good will amo

ng right holders getting permissions using the One by One model.

Disadvantages The high cost, yet low efficiency, of getting perm

ission

Collecting Society of Copyright Model

Advantages Solves some of the problems in the “One by One” model

Disadvantages Limitation of choice - currently only one music copyright society is

available Limitation of membership – qualifications for joining the society

prevent most musicians from becoming members The qualifications require that at least one music composition has

been published, broadcast, or performed by a specific level of publisher, broadcast station, or performer

Granting Offer Model Advantages

Good for the user to avoid infringement suits. Disadvantages

Since initiated by for-profit company, the Reader’s Home (one of the largest users of copyrighted works), this model was designed to benefit the user, not the author.

Most authors are not happy - the Reader’s Home tried to promote this model through the National Copyright Administration in an attempt to require all publishers in China to adopt this model.

Comment This model is somewhat similar to the CC License (regarding the

nature of the license), but the purpose and the promotion approach are totally different.

A Suggested Middle Ground Solution between the Two Extremes in

Chinese Copyright Licensing Models

Use the “One by One” Model Only in Appropriate Cases (well-known authors)

Offer a Choice in Collecting Societies Introduce Creative Commons License

As Replacement for “Granting Offer” Model Considered Best Choice for Mainland China