Copyright & Licensing Practices in Mainland China Focus on Online Usage Chunyan Wang Associate Professor, School of Law Renmin University of China

Internet Usage in 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 Licensing China vs United States  Coming from Different Directions China Tradition of Communal Ownership of Property United States Tradition of Private Ownership of Property

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 Repository  Most 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 copyright 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 renowned 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 (China 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 printed 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 among right holders getting permissions using the One by One model.  Disadvantages  The high cost, yet low efficiency, of getting permission

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