Finding balance between information sharing and copyright protection

The judgment at first instance in the copyright infringement case pitting authors Han Han et. al. against Baidu Wenku came into effect at the end of October 2012. The court ordered Baidu Wenku to compensate for the authors’ economic losses in the amount of RMB173,000 (US$28,000).

Baidu Wenku, as a file sharing platform, gathers various files that are made available for reading online and downloading, and encourages internet users to upload files. It also includes a vast quantity of online works of literature, and e-books of published works of literature.

There are two sides to this coin: the sharing of information resources increases the quantity of available information to the benefit of all; and protection of copyrights can stimulate the creativity of writers. With the spread of the internet, a conflict between information sharing and copyright protection has arisen. Between traditional hardcopy books and new e-books, the public is naturally gravitating to the cheaper, and sometimes even free, option.

The sharing of information resources online protects the public’s right to know and helps the spread of civic education. The issue of copyright makes it much more difficult for the public to utilise information resources, and exposes it to the risks of infringement.

However, failure to protect the lawful rights and interests of authors could well choke this fountain of knowledge. It is only through legislation that the interests of copyright holders, internet service providers and the public can be balanced. This is one of the crucial issues that current efforts to amend the Copyright Law need to resolve.

Strengthening copyright protection

In July 2012, the State Intellectual Property Office issued the second draft of the amended Copyright Law. The draft takes into consideration such social realities as the current state of copyright protection, level of technical development, etc., as well as the difficulties in applying the law in past copyright infringement disputes, in order to strengthen the protection of copyright holders.

The draft clarifies the definition of the medium of copyrights, i.e. the “work”, delineates the boundaries of copyright, adds the droit de suite, or right to revenue from resale of work, reduces the intertwining and overlapping of rights, addresses in detail the issue of the vesting of copyrights and clarifies the concept and scope of copyright, making application of the Copyright Law more practicable.

Reasonable use

The draft also strictly provides for the conditions that constitute “reasonable use of a work”, cancels, or reduces the scope of, existing statutory permits, and further protects the interests of copyright holders. In matters concerning liability for infringement, the draft increases the ceiling on the statutory measure of damages for infringement and provides for punitive damages in cases of repeat offences, thus aiding in increasing infringement costs and cracking down on infringement.

The draft also tweaks the incompatibilities between existing copyright content and technical development, adds technical measures for protecting copyrights and enhances the means for protecting copyrights in the internet age.

These revisions are in line with the trends and pertinent developments in copyright in the online age, and accord copyright holders stronger protection in keeping with current conditions in China.

Burden on service providers

In the infringement dispute between the authors and Baidu Wenku, Baidu cited the “online safe harbour” principle in its defence. This principle appeared in the Regulations for the Protection of the Right of Transmission Via Information Networks, implemented in 2006, and the Tort Liability Law, implemented in 2010. It provides that if an online storage and search provider, upon receipt of an application notice from a rights holder, removes the relevant infringing link, it will not be liable for damages.

The second draft of the amended Copyright Law reiterates this principle, but also clarifies the limits on its applicability. It only applies when an online service provider provides online technical services (storage, search or links), and does not apply when such a provider provides to the public others’ works, performances or sound recordings.

If this provision formally finds its way into the law, it will increase the oversight obligations of resource sharing platform service providers like Baidu Wenku and further restrict illegal online downloads.

Interests of the public

In the first draft of the amended law the legislators, with an eye on balancing the contradictions in copyright protection, transmission of works and cultural development, loosened the restrictions on the transmission of works in article 46, but this move sparked intense opposition from authors’ groups. The proposed change has been removed from the second draft.

The legislators’ original intent was to promote information resource sharing. However, due to the incomplete establishment of copyright awareness among the Chinese public, and the existence of rampant piracy, authors are usually the weaker group in copyright infringement disputes. Once an instance of infringement causes a work to enter the public domain, the rate of successfully halting the infringement and recovering losses through legal remedies plunges.

Add to that the magnifying effect of advanced online technologies on the transmission of works and the damage is huge. The second draft strengthens the protection of copyright holders to ensure the continued flow of revenue from the source that enables information resource sharing. The benefits for the public in this outweigh the disadvantages.

However, with the legitimisation of e-books and the establishment of electronic library data bases, a system for the “reasonable use” of electronic library data bases should be correspondingly added to the legislation.

Electronic libraries are the extension online of brick-and-mortar libraries, and should comply with the principle of putting the interests of the public first. Only in this way can the public be ensured of access to information resources through either means.

Wang Yadong is the executive partner and Shan Meng is a lawyer at Run Ming Law Office