China Begins New Era Of Copyright Protection

(UPDATED) This guest post is by Mathew D, Vice-President of R2G/wa3.cn, one of China's leading digital music distributors.  He blogs on the music industry and copyright reform in at The Global Outpost.

New music copyright protection guidelines have been announced by the Beijing Copyright Bureau which aim to redress the burden of proof imbalance between copyright owners and those engaging in and in many cases, profiting from institutionalized piracy.

The Beijing Municipal Bureau of Press and Publication (Copyright Bureau) brought together Copyright Owners including representatives of record labels, publishers, composers, music distributors and industry associations amongst them Taihe Rye, Dong Music, Music Copyright Society of China and R2G who voiced their opinions and support for the guiding framework late last week.

It was noted that the law needs to objectively state what defines Copyright Ownership, as currently there is a heavy burden of proof upon Copyright Owners with the balance tilted in favor of Service Providers. Copyright Owners have an inordinate amount of work to not only prove their ownership but also to issue take-down notices whilst Service Providers seek sophisticated ways to perpetuate music piracy, most commonly abusing Safe Harbour Laws and using their technology platforms as a cover to facilitate users’ uploading of copyrighted content. In fact, Service Providers including music Search Engines themselves get into the act and simply upload the copyrighted content whilst conveniently blaming their users.

As Music Ally stated in its China profile report (subscription only) last month:

“Only two online companies have fully-licensed music streaming and downloads services in place: Google-backed Top100 offers free ad-funded downloads and streaming, while R2G’s wawawa has paid-for streaming and downloads, too. Both companies, however, face fierce competition from other dubious portals and services, amongst which stand out Sina, QQ Music, Xiami, VeryCD, and the infamous Baidu.

Although some of these have some form of licensing in place, they all carry pirated content too, fueling traffic levels that generate advertising and adjacent service revenues in the hundreds, if not thousands, of millions of dollars. Whereas piracy in the West remains, for the most part, an activity based on end-users sharing and downloading contents by themselves over one platform or another, in China it is mainly driven by commercial operations”

As traffic is important to these infringing Service Providers, they constantly feed users with unlicensed free content and cite their users’ habits and attitudes which are actually shaped by these corporations as an excuse and human shield to deflect from the institutionalized piracy that they engage in. As these companies are profiting from music piracy, their attempts to undermine actions against music piracy include feeble if non-existent efforts to take-down infringing content. It will be interesting to observe how Baidu will also join this “partial licensing as cover for pirate activity and traffic magnet” model once they launch their upcoming Ting music service

The Beijing Copyright Bureau has recognized that the law can be seen as a polariser as in practice it is an arduous task to prove Service Providers’ subjective intent even as their actions contribute to copyright infringement. As such, a new framework of guidelines to complement the existing laws have been proposed by them.

The most significant of the guidelines which will come into effect from 1 June 2011 are the following:

• The Beijing Copyright Bureau will set up a publicly accessible website for Copyright Owners to register their works and Service Providers who provide file-sharing services, search, links or act as channels are then automatically required to take down links to these known copyrighted works or prevent users from uploading these works to their properties.
• Service Providers are thus effectively required to automatically take down copyrighted works that they know of or should have known that users do not have the right to upload or disseminate.
•  Service Providers are required to remove infringing content immediately or latest within 24 hours upon notice by the Copyright Owner.
• Service Providers are required to take down the same copyrighted work that had been previously taken down/ disconnected based on notification from the Copyright Owner.

The full list of the Guiding Framework on the Protection of Copyright is available here

Currently, Service Providers have been able to employ a variety of means to perpetuate illegal use of copyrighted material by counting on the arduous tasks and barriers that Copyright Owners have to overcome if they are to take legal action:

1. Service Providers require take-down notices to be accompanied by an Authorization Letter from the Copyright Owner or an exclusive Authorization Letter from the assigned distributor
2. Some Service Providers contend that Authorization Letters are insufficient proof of ownership and demand that lyrics be also provided before they will consider a take-down while others require notarized Authorization Letters
3. URLs of each case of infringement have to provided.
4. The Service Provider then sneakily moves the infringing content to a new URL or simply ignores the take-down notice.
5. To then undertake legal action, every page on the website showing the infringing content will first have to be printed and notarized as proof
6. The infringing content itself has to be downloaded, and as further proof, a video camera will have to capture the download/ streaming process
7. A full chain of authorization from the artist, the music composer to the label and distributor has to be provided, and each of these has to be notarized.
8. Physical CDs will also have to be provided which indicate the copyright information [(P) and © symbols]
9. And then begins a long wait to have the legal case accepted in courts, before a further waiting period yields a hearing.

As Wu Jun, CEO of R2G summarized it, current difficulties include:

• Complexity and arduous process of establishing and proving rights ownership
• Costly and heavy burden of proof whereas infringement carries little cost
• Difficult process to inform infringing companies (to take-down content)

It is thus important that Copyright Owners play their part  in registering their works with the Beijing Copyright Bureau so that the new regulations can be enforced once it becomes active from 1 Jun 2011.

There will definitely be a trend towards licensing but at the same time, this will not happen in a vacuum if Content Owners do not pursue the required piracy monitoring and necessary legal actions to inhibit infringing companies from their practices of theft. It will also require investment and collective pressure from Content Owners against infringing companies  if they are to effect the necessary change in action and attitudes, and this will likely be reciprocated by accompanying government support.

The bold and united stand taken by Chinese authors against Baidu’s Wenku site which hosted and made available millions of copyrighted books and documents for free and the subsequent announced step down by Baidu is an example of collective action at work.

The other area to note is that the major infringing companies will periodically announce that they are pursuing a licensing strategy when faced with mounting pressure only to revert to their infringing habits once the spotlight is off them. So it is partly in the hands of a united music industry to effect change – Content Owners that undercut each other are effectively devaluing their own market

With the Beijing Copyright Bureau seeking the views of the music industry as part of this year’s initiative to address the endemic copyright problems in China, a cautiously optimistic approach might be in order.