China Releases Draft Amended Copyright Law With Punitive Damages and Digital Rights Management Articles

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The National People’s Congress of the People’s Republic of China has recently released Copyright Law of the People’s Republic of China (Draft Amendment) for comment.  Of particular is the availability of punitive damages of up to five times actual damages, an exponential increase in the maximum statutory damages from 500,000 RMB to 5,000,000 RMB (about $708,000 USD), and switching the burden of proof for proving damages.

Damages

Article 53 of the draft amendment adds quintuple damages for intentional infringement and raises maximum statutory damages to 5 million RMB from 500,000 RMB when damages are hard to prove.  Statutory damages may become a historical relic however as the Courts can order a shift in the burden of proof in damages from the plaintiff to the defendant under Article 53.   

“In order to determine the amount of compensation, the people’s court may order the infringer to provide accounting books and related materials if the the accounting books and materials related to the infringement are in the possession of the infringer.  If the infringer does not provide accounting books or materials, or if the infringer provides false accounting books and materials, the people’s court may rely on the claims of the right holder and the evidence provided to determine the amount of compensation.”

This burden switching combined with quintuple damages might lead to some extremely high verdicts in the future and increase the amount of copyright litigation in China.

Digital Rights Managements (DRM

The draft also includes provisions for DRM.  Renumbered articles 47 – 50 authorize the use of DRM for copyrighted materials and prohibits other from circumventing DRM or providing others with the tools to do so.  Fines of up to 250,000 RMB can be imposed for DRM circumvention in addition to any civil liability that may attach for copyright infringement. Exceptions are provided  though for educational/research purposes, providing materials to visually impaired when works cannot otherwise be obtained, performance of government duties, safety evaluation of computers/networks, and research on encryption/reverse engineering.

Language

In addition, various amendments were made to catch up with changes in technology and law. For example, “citizens” is changed to “natural persons;” “other organizations” to “unincorporated organizations,” and “movie works and works created in a manner similar to filmmaking” to “audiovisual works.”

The deadline for the submission of comments to the National People’s Congress is June 13, 2020.  Full text of the proposed amendments are reproduced below.

 

Author: Aaron Wininger

Aaron Wininger is a Senior Attorney and Director of China Intellectual Property at Schwegman Lundberg & Woessner.

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Author: Aaron Wininger

Aaron Wininger is a Senior Attorney and Director of China Intellectual Property at Schwegman Lundberg & Woessner.