Asia IP

Yan Xiaohong, associate chief of State Administration of Press, Publication, Radio, Film and Television, recently said that a “Sword Net Action” in 2015 would target intellectual property protection in the music industry.

Yan also said that China’s new Copyright Law – the third edition of the law, which is currently being modified – would see increased penalties for copyright infringement.

Bai Gang, a partner at Wan Hui Da in Beijing, says that Sword Net Action, which was initiated about a decade ago, is intended to address internet copyright piracy. “From 2005 to 2013, this campaign has resulted in the investigation of 4,241 cases related to internet piracy, the shutting-down of 1,926 infringing or piracy websites, the confiscation of 1,178 servers and related equipment sets, and the imposition of fines of Rmb7.83 million (US$1.26 million). Perhaps most critically, 322 cases were transferred to judicial departments, a referral rate of 7.6%, presumably for criminal prosecution.”

Spring Chang, a founder and partner at Chang Tsi & Partners in Beijing says the most successful year was from 2010 to 2011, where 1,148 cases were recorded under the Sword Net Action. She believes that the action helps standardize the Chinese music industry to make it more professional.

Last year, the action covered a range of content types, including films and television programmes, literature, and online games, with a particular focus on selling pirated products through the internet.

However, Chang believes solving the problem of rampant pirating in China’s music industry cannot solely rely on the Sword Net Action, which she calls is swift and efficient, but temporary. Rather, Chang says, a sounder, more long-term system is needed, but China lacks this system at the moment. The country’s only officially-recognized organization for music copyright administration is the Music Copyright Society of China, but the protection provided is inadequate because the society’s inner management of duties and responsibilities is unclear. “The institution should prevent artists and musicians from losing money due to infringements, but it fails to do the job, since large amounts of money are flooding into the pockets of websites that play the artists’ works, [and not into the pockets of the] artists,” she says. Chang says that although the potential development of the Chinese music industry is huge, there is still a long way to go to achieve mature status.

Lawyers believe that singers do care about their benefits and rights under the copyright law. “Chinese composers have been mostly concerned about statutory licensing in the amendments to the Copyright Law. They have expressed anger regarding the draft amendment, as they believe it will diminish their professional rights if passed,” Bai says.

A classic example for Chinese singers is the case of Cao Fang, a folk singer who used a smart way to successfully protect the copyright of her songs. In 2012, she launched her new EP, named Qiancaihong, via Apple’s App Store, through which people could have a free trial listen or download through a purchase. Each time the EP is downloaded, the money increases, as well. “This is a good way for artists to protect their works,” Chang says, since the direct benefit gained from the song is belongs to the right person.

Talking about the current changes to China’s copyright law, which had not been modified for more than 10 years, Chang says two main improvements are expected. “On one side, the new copyright law is expected to standardize the definition of copyright infringement, which was a bit unclear before. On the other side, it may expand the range and strengthen the power to fight piracy, since the original costs of copyright piracy are relatively low.”

Bai adds other potential changes that may come about from the amendments. “Article 46 of the document stipulates that music producers may use a musical work from another recorded product, as long as it has already been published for more than three months, in their own productions without having to obtain consent from the copyright holder. The article says producers must report the use to relevant government authorities and fairly compensate the original artist.”

He notes that the draft says that if the copyright holder does not state otherwise, royalties for such use will be collected through collective copyright management organizations. “Composers have complained that the draft may deprive them of their copyright interests,” Bai says. “Industry insiders have also expressed concerns that the provisions will make record companies less willing to invest in record promotion. Article 46 of the Amendment has been deleted after public consultation.”