Rights holders have the following options for enforcement once they discover that their rights are being infringed:

• Judicial protection the People’s Courts for hearing civil cases and for judicial review (appeal) of administrative decisions on copyright cases (see section on Judicial Enforcement).

• Administrative protection It should be noted that China is unique in providing not only judicial protection, but also administrative protection of copyright. The National Copyright Administration (NCAC), under the State Council is the authority in charge of copyright administration. In addition, other administrations can also crack down on piracy by alternative approaches (see below).

• Border protection Customs General Administration and the Customs at local ports. See Customs Enforcement Roadmap.

• Criminal sanctions the People’s Courts, the People’s Procuratorates and the Public Security Bureaus for criminal investigation and prosecution in serious copyright infringement cases, Criteria determining the seriousness of a copyright infringement case are set out by the PRC Criminal Law and the corresponding SPC judicial interpretations (see section on Copyright Protection as a Crime).

Important considerations

To enjoy copyright, a work must be original. To claim copyright in any country, it is strongly recommended to keep the original copy of a work (even if it is only a first draft) and to have it signed and dated in front of a notary. This is important to show that the work is an original product, and to prove when it was created, and by whom. Voluntary recordal of copyright is highly recommended in China as commented earlier.

JUDICIAL ENFORCEMENT

By going through the Court, one may obtain preliminary injunctions and request the Court to preserve any evidence of infringement and the property of the defendant. The plaintiff also may obtain damages. This presents a major advantage for the copyright owner to put an end to the infringing activity quickly.

If an infringement act reaches the threshold of constituting a crime of copyright infringement (see see section on Copyright Protection as a Crime), the public security bureau is the investigative bureau for collecting evidence of the suspected crime; and the procuratorate is responsible for filing public prosecution with the Court if the procuratorate finds that there is sufficient evidence to prosecute the infringer.

An aggrieved party may also initiate a private prosecution with the Court against the infringement for criminal liability if certain criteria are satisfied for instance:

(i) the procuratorate does not institute public prosecution, and the aggrieved party has evidence to demonstrate the crime and the circumstance of the crime is not serious, e.g. the crime may be prosecuted with penalty of a fixed term of imprisonment of no more than 3 years, alone or together with a penal sum; or

(ii)the aggrieved party has evidence to prove that the accused party has infringed its copyright and should have been prosecuted for criminal responsibility according to the law, but the public security bureau or the procuratorate has made a decision in writing not to prosecute the accused party.

For cases falling under (i), if the Court finds the evidence is not sufficient and the case should have been accepted and investigated by the public security bureau, or the accused party is likely to be sentenced to an imprisonment over 3 years (which implies the crime is serious), the Court will send the case back to the public security bureau for investigation.

Although there is no explicit rule or stipulation on suspending the civil case pending a criminal case, in practice, the judges presiding over the civil case may delay the civil trial until the criminal judgment is made. The criminal action will not provide any damages to the aggrieved party, and the plaintiff can and has to pursue damages under a civil claim.

DOCUMENTATION REQUIRED

In order to initiate legal proceedings with the People’s Courts, a plaintiff should prepare:

• A        written    complaint;

• A        certificate        of     the  legal         status      and  addresses/phone numbers of the plaintiff and the defendant;

• Evidence  of     copyright         ownership      and  the  asserted copyright         infringement; and

• A        power     of     attorney if       a       lawyer     is      retained by    the  plaintiff.  (A foreign plaintiff is required to file all documents originating outside of China in notarised and legalised copies).

The complaint shall introduce the basic information of the plaintiff as the copyright owner or authorised user to a copyright work, the legal status of the defendant and the addresses where the Court could serve the complaint to the defendant, any copyrights owned by the plaintiff, the asserted infringement act, the cause of action, and the request by the plaintiff.

Usually the plaintiff should adduce two types of evidence with the Court. One is the evidence to prove the plaintiff’s legal right over the copyright work in suit, the other is the evidence of the alleged infringement act conducted by the defendant. If possible, the plaintiff may adduce evidence of damages caused by the infringement act.

If, as plaintiff, you decide to retain a lawyer to represent your case before the Court, make sure your lawyer is licensed to practice PRC laws and represent you before the Court. Be careful with the scope of authorisation on the power of attorney. If your lawyer is not authorised to sign on the complaint, request for intermediation, appeal petition or other important litigation documentation, the Court may reject the above documents submitted by the lawyer!

COMPETENT COURTS

China has a four level court system – basic, intermediate, high and supreme. The basic courts are trial courts, while the others are both courts of trial and appeal. Every court consists of several chambers, including civil, administrative and criminal chambers. IP rights cases usually fall under the jurisdiction of the civil chambers. Administrative disputes and criminal cases involving IP rights come under the jurisdiction of the administrative and criminal chambers respectively.

Most IP rights related disputes involving foreign parties are started at Intermediate Courts that also hear appeals from Basic Courts. High Courts handle important cases as courts of first instance and appeals from lower level Courts. The Supreme People’s Court (SPC) handles major cases having significant influence throughout China and other cases deemed necessary at its own discretion. Appeals to the SPC are rare and most IP right related disputes end with the appeal at the High Courts. Courts at a lower level may request Courts at a higher level to hear a case of first instance if the lower Court considers that the case should be heard by the Court at a higher level. Courts at a higher level have authority to decide to hear a case of first instance that is under jurisdiction of the Court at a lower level. Thus, a high profile IP dispute involving matters of provincial concern could conceivably be referred to a court at a higher level for trial.

INTERIM RELIEF – INJUNCTION AND PROPERTY/ EVIDENCE PRESERVATION

According to the Copyright Law, the plaintiff can request the Courts to stop infringing acts immediately, preventing huge losses before and during the lawsuit. This is called a “preliminary or pre-trial injunction”. In practice, an injunction is not always easy to obtain and can be costly as the plaintiff has to put up a monetary bond which is calculated at an amount somewhere between past gross revenue and profits which would have been earned by the defendant during the injunction period.

Evidence and property preservation pending trial of a lawsuit offers some assistance to plaintiffs to ensure that infringers do not destroy evidence that will later be needed to prove infringement in court. Payment of a monetary bond is a pre-requisite in obtaining the property preservation order that is generally much lower than the amount required for a preliminary injunction.

Although the Copyright Law provides that interim relief should be considered and decided upon by the Court within 48 hours, the plaintiff should expect a longer timeframe in obtaining and the enforcement of any order.

TRIAL PROCEDURES, OUTCOME AND TIME SCALES

In brief, a plaintiff will go to court to file the complaint and/ or the application for interim relief. A court fee is payable that is computed by reference to the amount of damages claimed in the complaint. In any event, the lawsuit must be filed within 15 days of the issuance of the interim relief. If the Court accepts the case, the first instance proceedings will be initiated and the Court will serve the complaint on the defendant. The Court will designate a trial panel to hear the case. Before the court hearing, the trial panel will give the relevant parties a certain period of time to submit evidence. After the court hearing, the trial panel will award and announce judgment in public. In the case of a domestic litigation, the proceedings for the first instance usually have to be completed within 6 months but this timeframe does not apply to foreign related litigation.

If the Court decides not to accept the case or if the Court decides to dismiss the complaint, the plaintiff is entitled to file an appeal against the order made by the Court in relation to the above if the plaintiff is not satisfied with the order.

COMPENSATION AND DAMAGES

Theoretically, there is no limit on damages; you can recoup whatever losses you suffered. In practice, damages are quite low but have been increasing over the past five years (very few judgments of more than EUR 500 00 - 1 million have been made, and those that are fairly large usually go to appeal). Generally, the level of damages is computed based on the actual loss of the right holder; or if the actual loss is difficult to calculate and demonstrate, the illegal income earned by the infringer. Damages include reasonable expenses incurred by the right holder for the purpose of halting the infringing act. If neither the actual loss nor the illegal income can be determined, the People’s Court has the authority to award statutory damages of not more than RMB 500,000. Given the lack of discovery process in Chinese civil procedure, most right holders will find it difficult to obtain sufficient information or material (such as outputs, sales or costs of the infringing products) to compute a claim for damages based on its loss or profit gained by the infringer. Hence, the statutory damages option is often chosen by right holders.

Important considerations 

If the actual loss to the owner or the illegal income of the defendant cannot be confirmed, the defendant will be ordered to pay compensation up to a maximum of RMB 500,000 depending on the seriousness of the infringement. In China, compensation includes the cost to the owner of stopping the infringement, the fees paid to Chinese attorneys (although the level recoverable is limited) and fees paid for investigation of the case.

USE OF FOREIGN JUDGMENTS

Although judges may learn from the foreign cases, they do not refer to foreign judgments in practice nor do they follow the example provided by the foreign judgment. You can present, and they will consider, but they have no obligation to accept.

APPEAL PROCESS

Within 15 days of receiving a judgment from the Court, either party may file an appeal with the Court at a higher instance and institute proceedings for a second and final-instance hearing. A foreign appellant has 30 days to file an appeal, and a foreign defendant has 30 days to respond to the appeal. In terms of procedure, the appellant needs to go to the court of appeal directly, submit a written appeal and prepay the associated legal costs (which are based on a percentage (1-2.5%) of the infringement amount up to RMB 1 million, after which the percentage drops to 0.5%). The written appeal should include the names and addresses of both parties, the first trial court details, the serial number of the case, a brief account of the first-instance case and details for the appeal and request.

COPYRIGHT INFRINGEMENT AS A CRIME

The PRC Criminal Law stipulates that the following acts constitute a crime if the volume of copies or profits generated surpass the threshold stipulated in the judicial interpretations of the SPC and/or causes severe impact on society.

(1) copy and distribute any written, musical, film, TV and video works, computer software and other copyright work without permission from the copyright owners;

(2) publish books that the others enjoy an exclusive right to publish;

(3) duplicate and distribute audiovisual works without permission from the producers;

(4) produce and sell artistic works bearing fake signatures of the others; and

(5) knowingly sell the infringing duplications of the works described in the above (1) to (4).

Or other circumstances of a serious nature. These criteria apply to individuals and shall be three times higher for crimes committed by a ‘work unit’.

WHAT ARE THE PENALTIES FOR THE CRIME OF COPYRIGHT INFRINGEMENT?

The penalties for the crime of copyright infringement are divided into two stages depending on the seriousness of the infringement: a fixed term of imprisonment of no more than 3 years, alone or together with a penal sum, and in the case of serious crimes, custody or a fixed term of imprisonment of three to seven years, together with a penal sum. There are specific guidelines to determine what constitutes “serious circumstance” or “particularly serious circumstance” by reference to stipulated levels of illegal proceeds.

If the infringer is a legal entity or organisation instead of an individual, the responsible person of the entity or organisation that is in charge of the infringing act will be sentenced to a fixed-term imprisonment while the entity or organisation will be punished with penalty.

HOW CAN A COPYRIGHT HOLDER PURSUE AN INFRINGER’S CRIMINAL LIABILITY?

The copyright holder can go to the People’s Court or the Public Security Bureau (police) to lodge a criminal complaint and must present evidence. Any complaints received by the NCAC or any local copyright administration, which is found to constitute a crime, will be forwarded to the Public Security Bureau for investigation and then the People’s Procuratorate for public prosecution.

ADMINISTRATIVE ENFORCEMENT PROTECTION

Important points regarding the administrative enforcement route

Over the past few years, using NCAC procedures has proved to be relatively quick and cost-effective. However, similar to the other administrative authorities, the NCAC and the local copyright administrations are not empowered to issue damages. Only the People’s Court has the power to award damages to the plaintiff. So if a plaintiff is looking for damages, the administrative enforcement route is not the one to choose - it is only appropriate if you are seeking to stop the infringing act quickly.

Judicial proceedings are time consuming and can be costly. Preliminary injunctions are not always available and may in practice be difficult to enforce. Therefore, enforcement through the administrative authorities may be the more effective option for some industries, such as music and film, though this is not always the case.

It is not necessary to pursue an administrative complaint through the NCAC. According to the Implementing Regulations of the Copyright Law, local copyright administrations (city-level) are authorised to handle almost all normal cases, as opposed to the national-level office that investigates and oversees infringing acts of national influence. The Copyright Law has empowered the local copyright administrations to stop infringement of copyright and confiscate illegal income, and confiscate and destroy pirated reproductions and the implements of such reproduction. In addition, local copyright administrations can fine illegal users a sum of money in accordance with their wrongdoing.

Recent procedural strengthening has improved correct and consistent application of the administrative procedure law. Increased pressure on Administrative agencies may cause administrations to be more hesitant about accepting difficult cases or unclear complaints, in particular with regard to foreign cases, which are often more confusing. It is important therefore to file complaints as thorough and complete as possible.

Some people also use the administrative procedure to help in the effort to find evidence for use in a later civil or criminal case. Some local copyright administrations have a reputation as good investigators, and have detailed local knowledge, including knowledge about piracy operations in their region. Coupled with strategically timed local anti-counterfeiting campaigns, they “are in the know” about and understand what is going on in their city and province, and can help your company take immediate and effective actions. Sometimes, companies hire their own investigators to work with local copyright administrations. This is an effective form of collaboration and highly recommended, as long as you get hold of good investigators and coordinate closely with the local administrations.

ACTIONS TO INVESTIGATE AND STOP AN INFRINGEMENT

If the local copyright administration accepts the complaint, they will send a letter to the defendant (with a copy of your complaint), and require him to go to the local administration within a fixed period to answer the charges. In practice, many respondents, particularly those wilfully infringing a copyright, do not reply to the letter or may try to find loopholes or mistakes in the administrative procedure to delay the action. For example, for foreign copyright holders, a requirement exists to translate details of the complaint into Chinese. Respondents may find mistakes in the translation and require a re-submission of the complaint. Pirates, particularly the most sophisticated ones, may look for the smallest mistakes upon which to base a protest to the administrative department and delay the procedure.

After submission of the complaint, the local administration will investigate the details of the complaint with the parties concerned, and make a judgment based on the evidence and both parties’ statements. As mentioned above, the local copyright administration does not have preliminary injunction powers and may not take any action to stop the infringing activity until a final judgment is made. Once a judgment is made, however, the local administration can order the infringing party to stop production and can close their factory and/or facilities.

One issue to consider is that for wilful piracy, the infringing factory may already have disappeared by the time the local administration makes the closure order. Some particularly sophisticated and institutional pirates will even exploit every possible form of stalling to save time, knowing that no damages can be awarded and that a great deal of money is being made in the intervening time.

HOW TO FILE A COMPLAINT

It is relatively simple to make a complaint with the local copyright administration. First, go to or call the local administration (most usually at the city-level) where the act of infringement has taken place. The local administrative official will help you register a complaint and take follow-up action, provided that you submit adequate evidence to support your complaint. Adequate evidence could include:

• A      (foreign) copyright         ownership      certificate;

• A      Chinese  recordal  certificate;

• An    original,   or     drafts       or     designs   signed     and  dated;

• A      copy         of     the  infringing         works;

• A      purchase         receipt    for   the  infringing         items,      which       you  might       obtain when buying the infringing product as proof (some company investigators have the receipt notarised by bringing a notary incognito to the purchase site, etc.).

You then need to go to the local administration, fill out a complaint form and attach your evidence.

Note: National legislation does not mention whether a government bureau can or cannot charge for services; local regulations cover this and so fees can vary from place to place, but they are generally relatively inexpensive for foreign companies – from several hundred to several thousand Chinese Renminbi.

TIME SCALE AND COSTS

In order to regulate the acts of the administrative enforcement by the competent administration of copyrights, the NCAC issued the Measure for the Implementation of Administrative Penalties for Copyrights Infringement in 2003. According to this Measure:

• Whereas  a       copyright         administration        receives  complete         set   of     the complaint document from the petitioner, the copyright administration shall, within 15 days from the receipt of the complaint document, make a decision on accepting the petition or not and notify the petitioner of the decision. In case of non-acceptance, it shall let the petitioner know, in a written decision, the reason for not accepting the complaint.

• The   Measure          further    provides that,         prior         to     issuing     a       punishment decision, the copyright administrations shall deliver a prior announcement to the concerned party about the facts, grounds and legal basis upon which the copyright administration is going to make a punishment decision. Meanwhile, the copyright administration shall inform the concerned party of its right of statement, right of appeal and defence. The time limit for the concerned party to state, appeal or respond to the announcement is 7 days upon receipt of the announcement or 30 days from the publication date of the announcement if the document could not be served on the concerned party.

• There        are   no    further    provisions       in      the  Measure          on    the  time         limits such as regulating the copyright administrations to send the copy of the complaint to the respondent, or for the respondent to respond to the complaint, or for the copyright administrations to commence investigation and enforcement action or to make an administrative decision.

In practice, there is also no guidance on the time limit in each phase of the enforcement procedure taken by the copyright administrations. Unfortunately, local copyright administrations do not always follow the NCAC guidelines and can in some cases be stringent on formalities. However, the procedure may take longer than expected particularly if the defendant challenges the enforcement and is uncooperative.

Costs related to administrative procedures include investigation and attorney fees.

EVIDENCE

To make a complaint you need to collect two kinds of evidence. One is evidence that you are the rightful copyright holder; the other is evidence that your rights are being infringed (see section on How to Make a Complaint). In addition, the rights holder must clarify details of the infringing content to assist the judgment of the local officials. All evidence originating from outside of China is required to be notarised and legalised and this process can in some countries take time to complete.

PARTICIPATION OF THE COPYRIGHT OWNER

In addition to supplying the necessary evidence to the copyright bureaux, right holders can also help the investigation by hiring their own private investigators to assist the local administration. Additionally, petitioners can provide a good deal of useful information, such as leads for investigators on factories, shipments, etc., and valuable training for local officials, particularly on detection techniques for sophisticated products. By working together in a close collaborative manner with local investigators and administration officials, the complaint procedure can proceed quickly.

APPEAL

An administrative appeal (from the city to the provincial level) is available when the local administration has rejected your complaint. Note that the appeal takes place under the Administrative Review Law that looks into the procedure used by the local administration at a lower level, not into the technical merits of the case. An administrative appeal by the defendant against the administrative order of infringement is also available.

To file an appeal, go to the provincial copyright administration for a consultation, and submit a written application with evidence. In some cases, you will be allowed to participate in the review of the procedure. A final decision should be forthcoming within approximately one month. Appeals are more likely to receive a sound attention in larger and more sophisticated localities than in more remote areas. Remember that the NCAC nationwide has only 300-400 employees, and so is particularly understaffed compared to other IP agencies.

If the petitioner or the defendant is dissatisfied with the decision made by the copyright administrations, it could also file an administrative case with the People’s Courts for judicial review. The other party will be added to the court proceedings as a third party.

PENALTIES AND RELIEF

If the infringement is proven, the department can order the illegal party to stop infringing, confiscate all illegal income and destroy piratical reproductions, ask the illegal user to pay a fine “in accordance with his wrongdoing”, and confiscate the material, implements and equipment used in the production of counterfeit goods.

However, rights holders should note that sometimes the factory against which the complaint is made also produces legitimate goods. If a complaint is accepted by the local administration, the entire factory may not be closed but only that part that makes fake products. This is particularly true if the factory is a large or important local employer.

Given that preliminary injunctions are not available, counterfeiters have adequate opportunity to remove the machinery used to produce fakes before a confiscation, return it once the complaint procedure is closed, or move it to another location.

LIABILITIES TO THE PETITIONER

In addition to the above-mentioned liability of providing evidence and assisting in the investigation, the petitioner may pay a small fee, if the local administration has such a regulation. There are no other real risks or liabilities.

Alternative administrative enforcement routes It is worth noting that besides NCAC, other administrative departments also play an important role in enforcing your copyright:

• The   General  Administration       of     Customs (GAC)      has  the  authority to seize imported goods which infringe copyright. Copyright owners may directly apply to Customs for seizing goods suspected of infringing a copyright. If a copyright owner has already recorded his or her copyright with the Customs, the Customs will voluntarily send a notice to the copyright owner when they suspect goods of infringing the recorded copyright. For more information on customs enforcement, please refer to the Roadmap for Intellectual Property Protection: Customs Enforcement in China.

• The   General  Administration       of     Press        and  Publication      (GAPP)    is responsible for stopping unlawful publications from being circulated in the market. Since most pirated books, phonograms and movies are not approved by the GAPP to be published, GAPP could confiscate and destruct those unlawful publications.

• All      movies    must        get   the  permission      from         the  State        Administration of Radio Film and Television (SARFT) before they can be publicly showed or sold for home viewing. In addition, video sharing websites must obtain a “permit for transmission of audiovisual program via Internet” from SARFT, and they have a duty to make sure all the videos on theirwebsites are lawful. Therefore, copyright owners of cinematographic works can complain to SARFT when they find infringing videos on a video website, especially when the website does not have the permit mentioned above. SARFT could impose fines on the website, and telecommunication administration could close it.

•  Any   unit that wishes     to     make       available over         the  Internet  “cultural products” such as audio/visual recordings, computer games, comic strips, performance and artistic works, should apply for permit from the Ministry of Culture (MoCu), and shall not provide any unlawful content. In particular, importation of “cultural products” is subject to the Ministry of Culture’s review and approval. Given the fact that most pirated on-line foreign computer games and comic strips are not approved by MoCu, and most of them are provided by those websites that fail to obtain the permit from the Ministry of Culture, the copyright owner could make a complaint to MoCu.

• The   State        Administration       for   Industry  and  Commerce      (SAIC)      has the responsibility to maintain the market order by issuing business licenses. Without a proper license, nobody is allowed to sell books, phonograms, computer software and movies. So local industry and commerce bureaus can stop an individual or unit without a proper license from trading copyrighted materials.

Major copyright legislation/interpretations (non extensive)

• Copyright          Law,          second    amendment   promulgated  on    26     February          2010         and  implemented          on 1       April         2010.

• Interpretation        by    the  Supreme         People’s Court       (SPC)        and  the  Supreme         People’s Procuratorate         concerning      Several    Issues      on    the  Specific   Application     of     Law for   Handling Criminal  Infringement Cases         upon        Intellectual     Property Rights,     effective          as     of     5       April         2007.

• SPC’s        Interpretations      concerning      Several    Issues      in      Application     of     the  Law in      the  Trial of     Cases         Involving          Copyright        Disputes over         Computer       network (II),  last  amended        on    20     November         2006         and  effective          as     of     8       December       2006.

• Regulations    on    Protection       of     Rights      of     Dissemination         on    Information    Network,         promulgated  on         10     May          2006         and  implemented          on    1       July  2006.

• Measures        for   the  Administrative        Protection       of     Internet  Copyright,       promulgated  on    29     April         2005         and  implemented          on    30     May          2005.

• Regulation      on    the  Collective        Administration       of     Copyright,       promulgated  on    28     December       2004         and  implemented          on    1       March      2005.

• Regulation      on    the  Protection       of     Computer       Software,        promulgated  on    20     December       2001         and  implemented          1       January   2002.

• The  Implementing         Measures        for   Administrative        Punishment   for   Copyright        Cases       promulgated  on         24     July  2003         and  effective          as     of     1       September     2003.

• Regulation      on    the  Implementation    of     the  Copyright        Law (Order     of     the  State        Council    [2002]         No.359), implemented          as     of     15     September     2002.

• SPC’s        Interpretation        Concerning     the  Application     of     Laws         in      the  Trial of     Civil Disputes over         Copyright        (Fashi       [2002] No.31),         implemented          as     of     15     October  2002.

• Measures        on    Registration    of     Copyright        over         Computer       Software,        implemented          as     of     20         February          2002.

• Copyright        Law,          first amendment   promulgated  on    27     October  2001         and  implemented          on    1         December       2001.

• Measure          for   Registration    of     Copyright        Pledge     Contract,         23     September     1996

• Civil Law (implemented        on    1       January   1987)        and  the  SPC’s        Opinion   on    Several    Issues      concerning         the  Implementation    of     the  General  Principles         of     the  Civil Law,          effective          as     of     26     January         1988.

• Copyright        Law,          adopted on    7       September     1990         and  implemented          on    1       June         1991.