A Seller’s “original” work that obtained copyright protection in China is protected for the life of the author (the Seller) plus an additional 70 years after death. While copyright protections last for a substantial amount of time, this certainly does not mean that a Seller in China will not run into any issues with their copyright. It is highly likely that a Seller in China, regardless of their copyright protections, will have the copyright infringed or be accused of infringing another’s copyright. If either of these scenarios occur, there are a significant steps Sellers can take to stop infringers and defend themselves against infringement claims of others’ copyrights.
Stopping Copyright Infringers
There are multiple modes of attack a Seller has in their arsenal when addressing an infringer in China. Which method the Seller chooses to use is based upon a multitude of considerations: how much time the Seller is willing to spend; how much money is the Seller willing to spend; is the Seller seeking damages; how much money has been lost; has the infringement risen to a criminal level? The following are a list of several different means of solving infringement problems that, while separated, can often be used in conjunction with one another to provide the most comprehensive protection plan to keep a Seller’s copyrights protected.
(A) Contacting the Online Platform
When an international Seller, say in the United States or the UK, detects copyright infringers in China, it is most often discovered when the Seller simply finds their own products being sold on an online-platform such as Amazon, Alibaba, or eBay, without their permission. When copyright infringement is first discovered, the Seller may seek protection at the border, begin administrative proceedings, file a civil suit, or raise criminal allegations. The Seller should not forget, however, that the easiest and often simplest solution to the problem may be to simply contact the online-platform that is permitting the sale of the products.
This should almost always be the Seller’s first mode of attack once an infringement is discovered because there are many positives to contacting the online retailer. Contacting the infringer is, by far, the least expensive route to alleviate infringement issues. Many websites, such as Amazon, have pre-established avenues of communication for their Sellers. Amazon, in particular, makes it easy for a rights owner to take down infringers.
The downside to contacting the digital sales platform, however, is that it may be no more than a bandage on a far larger wound. A website removing an infringing listing does nothing to prevent that individual from selling on another site or selling in person to person interactions in China.
(B) Border Protection
If a Seller’s issues with copyright infringement are coming from their products flowing across the Chinese border, either in or out, without their permission, then protecting copyrights via the Chinese border may be a potential solution. The State Council of the People’s Republic of China gives customs the power to seize and protect different items via the Regulations on Customs Protection of Intellectual Property Rights.
Article 2 states:
Customs protection of intellectual property rights used in these Regulations refers to the protection provided by Customs for the exclusive rights to use a trademark, copyrights and their related rights, and patent rights…related to import or export goods and protected under the laws and administrative regulations of the People’s Republic of China.
Article 2 empowers China’s border protection agents to seize any goods that they believe is infringing upon the Seller’s properly-registered copyright protections. What makes this such an attractive means of attacking infringers is that customs will seize these goods on their own accord without the Seller alerting them of a potential infringer. This means of fighting infringers, coupled with contacting seller-sites to take-down products from their platforms, can potentially limit the infringer solely to the domestic Chinese market.
That, however, is the limit of the power of customs enforcement to protect a Seller’s copyright protection. No damages may be issued by customs nor can they go after the infringer in the country itself, since their power ends at what comes across the border. It is very likely, therefore, that while contacting the online platform and seeking enforcement at the border may be a component of a seller’s attack on an infringer, it is not the only retaliation they may take. Next, we will explore some more intensive, but potentially more rewarding means of stopping infringers and seeking damages from the wrongs they have done to the Seller’s business.
Chinese Administrative Proceedings
There are many positives to using administrative proceedings as a means of stopping copyright infringers. An administrative proceeding is when the Seller contacts one of the local-level government offices to stop copyright infringers that are infringing in their districts. This local-level work helps to attack specific areas of infringement and can be a much quicker and less costly procedure than going through the court system to stop infringers. Furthermore, if the city-level administrative office administers a decision that is averse to the Seller, the Seller may appeal the decision to the higher province-level administrative board for review.
Anthony’s Advice: Be advised, however, that the province’s administrative office will not be reviewing the merits of your case. Rather, they will analyze whether the lower-level office properly reviewed your case.
Filing a complaint at an administrative office to begin proceedings on the Sellers copyright infringement action is relatively straightforward. The Seller needs to go to the city-level administrative office where the infringement has taken place and bring evidence such as: a copyright ownership certificate, a Chinese recordal certificate, original/draft of the product, a copy of the infringing works, and a purchase receipt of where the Seller can buy these infringing items.
While administrative proceedings can be done more quickly and cheaply than legal proceedings and can be done at the local-level and appealed to higher offices, there are a significant number of drawbacks to this method. First and foremost, administrative offices cannot issue damages. For a seller looking to compensate themselves for their monetary losses due to an infringement, this may discourage them from using this method and looking to the courts instead right at the outset. In addition, because proceedings must begin at the local-level, the Seller will have to be fluent in Chinese and savvy to the workings of the government so that they can navigate these many department. No administrative offices have preliminary injunctive powers. In other words, administrative offices cannot stop infringers until a judgement is reached. During the entire investigation and, if the Seller appeals a decision, the appeal process, the infringer may still be able to sell these illicit goods without any hindrance.
Judicial Protection in China’s Civil Courts
There are many benefits to bringing a civil action in the People’s Court against an infringer such as the court’s ability to issue preliminary injunctions, to preserve evidence of the infringement, and to issue damages. Before a case can be brought, however, as is true in any country the Seller must show to the court that their copyright is an original work. It is recommended, therefore, that the Seller have the actual original work that optimally, was signed by a notary at the time of creation. Even in China where copyright protections may be granted automatically, it is prudent for the Seller, as we have said before in this book, to register their copyright protections in the country.
There are multiple levels to the People’s Court: Basic, High, Intermediate, and Supreme. Each level consists of different chambers: civil, administrative and criminal. Internationally-based Sellers, such as in the U.S. and U.K., will likely have their matters heard in the Intermediate Courts.
The first benefit of a civil judicial action is that the court may offer a preliminary injunction. This is a power that web platforms, customs, or administrative offices do not have to offer a seller. This provides immediate relief to the Seller because it halts all infringing activity for, at the very least, the duration of the trial. Preliminary junctions, however, can be difficult to obtain and costly. The Seller is required to put up a monetary bond estimated at the gross revenue lost by the infringer during the injunction-period if the infringer is proven innocent.
The second benefit of a civil judicial action is that the court has the power to preserve infringing materials for examination. This, again, is a power that the three previous avenues do not offer. If a Seller brings an administrative action, contacts customs, or contacts the web platform, these bodies do not have the power to preserve the infringers materials. This in practice, allows the infringer to destroy or hide their materials before they are caught. Because the courts have the power to keep these infringing materials on file, it prevents the infringer from escaping justice by simply throwing their goods away.
The third benefit to a civil judicial action, and likely the most important to the Seller, is that the People’s Court has the power to award damages. Not only can the court award damages, but there is also technically no limit to the amount the court may award; in reality, however, damage payments have usually never been as high as a Seller would want. Yet, as China’s overall concern with their intellectual property issues has increased, so have the damage-payments; a sign of good things to come for sellers seeking justice in the People’s Court.
Judicial Protection China’s Criminal Courts
Criminal courts in China, like the civil courts, have powers attractive to Sellers seeking justice such as the ability to issue preliminary injunctions, to preserve infringing materials, and to issue damages. In addition to these powers, the criminal courts may also issue criminal sanctions such as additional fines and even jail-time for infringers.
Before a Seller may attempt to raise a civil claim to a criminal level, the Seller must prove that the infringement is of such a serious nature that it rises to a criminal level. This level is dictated by Article 217 of the Criminal Law of the People’s Republic of China. The categories of sales that apply to criminal infringement suits are those infringers who:
(1) copy and distribute written, musical, movie, televised, and video works; computer software; and other works without the permission of their copywriters;
(2) publish books whose copyrights are exclusively owned by others;
(3) duplicate and distribute audiovisual works without the permission of their producers;
(4) produce and sell artistic works bearing fake signatures of others.
Furthermore, these infringements can neither be done accidentally nor a small-amount. The Seller must also prove that the infringer had “knowledge” of his or her infringement and that he or she “gain[ed] a huge amount of illicit income” from the sales.
CJ’s Side Note: To make matters even more difficult for the Seller, this evidence must be brought before the People’s Court or to the Public Security Bureau before the discovery process. Meaning, the Seller must have gathered this evidence on their own or with the help of an attorney before the Seller has the legal-access to all the infringers documentation.
As mentioned above, if the Seller can meet these threshold requirements before the court, the Seller may be able to inflict the most serious punishments against the infringer. Besides preliminary injunctions during trial and damage payments at the conclusion, an infringer may be “sentenced to not less than three years and not more than seven years of fixed-term imprisonment and a fine, if he causes particularly serious consequences.” The infringer, in a criminal trial, faces not just the halting of their business and damage-payouts to the Seller, but actual imprisonment for their actions. Besides making the Seller whole again for having their business stolen, criminal sanctions are the ultimate deterrent against others in China thinking they can scam the Seller.
CJ’s Tip: It goes without saying that a criminal trial in the People’s Court is a serious matter. This type of situation requires the Seller to retain an attorney with expertise and experience in these matters.
Defense: Fighting Off Copyright Infringement Claims in China
While the media seems to only publicize the widespread copyright infringement from Chinese-nationals against foreign based Sellers, this is not the full story. There are cases where Chinese Sellers or Chinese business have brought copyright infringement suits against foreigners who infringe upon their products and try and sell them in China and abroad. As such, this is all the more reason that a Seller should have trademark protections. Protection to not just fight infringers, but to prevent others from claiming that they, the Seller, are infringing copyright protected works.
In December of 2012, a group of eight Chinese authors successfully won a copyright infringement suit that they had brought against Apple. The electronics company was found guilty by the People’s Court of having violated Chinese Copyright Law by hosting third party apps that sold infringing copies of the authors books. Apple was forced to pay $165,000 to the eight authors as a result.
Sellers should notice this case and take heed, not because of the final judgement (which obviously was not very serious for Apple), but to keep in mind that this type of suit is possible. When entering the Chinese market, a seller will likely be thinking almost entirely about what to do if their copyrights are stolen. As this case highlights, however, foreign companies and foreign sellers are susceptible to claims that they have infringed upon Chinese copyrights.
Copyright protections are automatic in China under the Berne Convention, but that does not mean those protections are recognized by Chinese courts. The savvy Seller will be sure to register their copyrights in order to provide more protections to products, both offensively and defensively, upon entering the Chinese marketplace. It is no secret that China is fraught with copyright infringement issues, and the Seller must be prepared. Yet, that is really only half the reason for copyright protections. As the Chinese intellectual property landscape continues to develop and the courts become more sophisticated, the Chinese government, like any other, will become more willing and capable to protect their own citizens’ intellectual property rights. The modern-day Seller must be prepared for a future where it is just as likely their copyrights be infringed upon as is that they are accused by another of copyright infringement. These are all important considerations for the Seller entering the Chinese marketplace.
This article was researched and written by CJ Rosenbaum, Esq., a founding partner of Rosenbaum Famularo, P.C., the law firm behind AmazonSellersLawyer.com and two incredible law students who participated in the firm’s Summer Associate Program: Conor Wiggins and Moshe Allweiss. Conor and Moshe are 2019 J.D. Candidates at the Hofstra University School of Law. For a more thorough explanation of Chinese Intellectual Property Law for Sellers, please request a copy of our book, Amazon Sellers’ Guide to Chinese Intellectual Property Law.