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Manage your Intellectual Property in Mainland China, HongKong, Macao and Taiwan

Software and E-Commerce

If software is developed in Europe but marketed in China, how can a copyright be obtained to protect the software? How long is the protection period?

Software is protected by a copyright upon its completion and does not require registration in order to be protected. The protection of software remains the same, whether it is domestic or foreign software, and is granted for the lifetime of the software proprietor and a 50 year term thereafter.

In practice, because it provides increased protection, it is highly advised to register the software developed in Europe before the China Copyright Protection Center – Software Copyright Registration Department, a department of the National Copyright Administration. A certificate of ownership should be issued within 60 days. The registration is valid for five years but can be renewed. Such a registration should be made before disclosing the software in China.

What acts constitute infringement of software copyright?

Piracy of software is the unauthorized reproduction and distribution of software without the consent of its author. It can consist of manufacturing or selling pirated software. Another common infringement is altering the software without the consent of the author or registering another person's software as one's own work.

The applicable regulation classifies the infringement activity into five categories:

    • Copying or partly copying a copyright holder's software
    • Distributing, leasing or disseminating through the information network to the public a copyright holder's software
    • Intentionally evading or disrupting the technical measures adopted by the copyright owner for the protection of his software

Intentionally deleting or altering electronic rights management information of the software without the authorization of the copyright owner (i.e. such as abuse of licensing rights)

  • Assigning or authorizing others to exercise the copyright holder's software copyright

What penalties will an infringer of my protected software bear?

Generally, the penalties will consist of the following:

  • An order to cease the infringement
  • Confiscation of the illegal income and of infringing duplicates, and
  • The payment of a fine.

In accordance with the list of acts constituting copyright infringement (see question 2) and the PRC Copyright law, the following fines are applicable:

  • For acts described in item 1 and 2, a fine of RMB 100 for each copy or a fine of not more than 500% of the sales price, may be imposed additionally
  • For acts described in item 3, 4 and 5, a fine of not more than RMB 50,000 may be imposed additionally.

In terms of civil liability, the damages may be awarded to the owner of the copyright as defined below.

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What framework is in place in the PRC to guard against IPR infringement through e‐commerce?

E‐commerce specific legislations have been implemented at the municipal and provincial level, in Beijing municipality (Interim Measures for the Supervision and Control of the Electronic Commerce 2002, Protection of the Lawful Rights and Interests of Consumers in Online Economic Activities Notice, 2000) and Guangdong province (Electronic Transaction Regulations 2002) respectively.

Despite the Electronic Signature Law (enforceable in PRC on 1 April 2005) there is a lack of national legislation dedicated to e‐commerce. Therefore, there is no specific legal framework for IPR infringement through e‐commerce, the only framework in place is the PRC Copyright Law.

What acts constitute IPR infringement through e‐commerce?

An IPR infringement in the scope of e‐commerce can be either:

An infringement of the content provided online, such as an unauthorized reproduction of a protected work offered for sale online An infringement of the copyright of the website itself by using an identical graphic design and colours of the presentation of the web site.

If I become aware of a competitor infringing my copyright, am I obliged to take action? If so, are there any specific time frames within which the action must be taken? Do I lose my rights if I do not take action?

The decision to bring an action against the infringer is a personal decision of the copyright owner and it is not compulsory to take legal action against the infringer. The time limit for actions of copyright infringement is two years starting from the date when the copyright owner has known or should have known of the infringing act. If the infringement is continuous, the time limit will be calculated from the date of its termination. Failing to bring an action against the infringer will never challenge the ownership of the copyright owner.

How long does it take to resolve a case of software infringement? How much does it cost?

The time frame for such a case is difficult to establish or to predict as many elements need to be considered (difficulty to assess one's right, evidence to be brought, nature of the jurisdiction etc.). A legal action before the administrative jurisdiction is generally quicker than an action brought before the civil jurisdiction. Furthermore, it is difficult to estimate the cost for such a case. An infringement of software can also be solved through an out of court settlement.

The possible remedies include cessation of the infringement, financial compensation and a public apology. In addition to administrative penalties, fines and confiscation of the illicit gains can also be ordered.

What damages are available to a party who has had their software infringed?

In terms of civil liability, the damages shall be awarded to the owner of the copyright based on the actual loss or the amount of illegal income (if the actual damage cannot be ascertained), up to an amount of no more than RMB 500,000. The infringer can also be liable for the reasonable expenses incurred on behalf of the plaintiff for costs incurred from the investigation and from obtaining evidence with regard to the infringement. Criminal penalties may be imposed together with civil liabilities, if the infringement constitutes a crime. The threshold of the illegal income is RMB 20,000 for an individual and RMB 100,000 for a company. Administrative fines may also be imposed, to an amount of no more than three times the amount of the illegal operational value or, to a value of no more than RMB 100,000.