INTRODUCTION

 Internet service formally started in China in March 1994. At that time there were only a few users.¡²1¡³  However, with the rapid development of the Internet, the number of users has grown enormously. The number of users was 620,000 by October 1997; 2,220,000 by the end of 1998; and 16,900,000 by July, 2000, according to the statistics of the China Internet Network Information Center (CNNIC).

The Internet has made our access to information easier than ever, and has even changed our lifestyles in some respects.¡²2¡³  At the same time, the Internet has brought about some new legal problems. Unauthorized distribution of pirated works online is one of them. In China, this problem presents the following legal issues:

¡²1¡³See Xu Chao, Online Distribution and Copyright, http://www.cnipr126.com.
 ¡²2¡³ For example, we can do shopping on the Internet, stream music or movies on the Internet. All of those things were totally unimaginable before.
 (I) whether distribution of a work online is an exclusive right of the copyright owner; (II) whether the online service providers are entitled to a compulsory license under the Chinese copyright law; (III) whether the online service providers should liable for others' copyright infringement. This article will address those issues.

I. Whether the Distribution of a Work Online is an Exclusive Right of the Copyright Owner

 Article 8 of the WIPO Copyright Treaty (WCT) This treaty was adopted by the Diplomatic Conference of WIPO on December 20, 1996. grants authors an exclusive ¡°right of communication to the public,¡± i.e., the right of ¡°authorizing any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them.¡± See Article 8 of the WCT. This right implicates the distribution of a work via the Internet. China is not a signatory to the WCT yet. Moreover, when the Chinese copyright law The Copyright Law of the People's Republic of China, which was adopted at the 15th Session of the Standing Committee of the 7th National People's Congress on September, entered into force on June 1, 1991.Regulations for the Implementation of the Copyright Law of the People's Republic of China, which was promulgated by the National Copyright Office, also entered into force on June 1, 1991. was enacted, the issues of distribution and dissemination of works online did not come out. As a result, there is not a right of communication to the public under the current Chinese copyright law, and there are no explicit provisions in the copyright law addressing whether the distribution or dissemination of works online is the exclusive right of copyright owners. 

In Wang Meng, et al v. Century Network Co., The trial court of those six cases is Beijing Haidian District People's Court which  ruled for the plaintiffs on July 15, 1999, and Beijing No. 1 Intermediate People's Court, the court of appeal, affirmed on December 14 of the same year. the plaintiffs are six wellª²known writers in China, and they sued the same defendant respectively for copyright infringement. The defendant posted the novels of the six writers on to its website without authorization, and any Internet users could download those novels. The defendant contended that the copyright owners did not enjoy the exclusive right of distribution or dissemination online as the copyright law has not granted them that right. This was rejected by the courts. The courts held that under Article 10(5) of the copyright law a copyright owner enjoys the right of exploitation and the right to remuneration on its work, i.e., ¡°the right of exploiting its work by reproduction, performance, broadcasting, exhibition, distribution, making cinematographic, television, or video production, adaptation, translation, annotation, compilation and the like, and the right to authorize others to exploit one's work by the above mentioned means and to receive remuneration therefrom.¡± Those rights are often referred to as property rights of the copyright owner. Under Article 10(5) of the copyright law, the copyright owner also enjoys the right of publication, the right of attribution, the right of alteration, and the right of integrity, all of which are often called the personal right of the copyright owner.   The right of exploitation of the copyright owner, includes, but is not limited to, utilization of the work through the means listed in Article 10 (5) of the copyright law. The words ¡°the like¡± in that provision can clearly evidence this. Exploiting other's works on the Internet, which is one of the means of utilizing works, though not listed in the copyright law, should be within the exclusive right of the copyright owner. Therefore, the defendant had infringed upon the right of exploitation and the right of remuneration of the plaintiffs.

Under Chinese copyright law, the right of exploitation is a bundle of rights, including such specific rights as the right of reproduction, right of performance, right of broadcast and right of distribution. In the Wang Meng case, the court did not make it clear whether or which specific right, such as the right of reproduction or right of distribution, has been infringed. From the opinion of the court, it seems that the court did not hold that the defendant had infringed upon any specific right listed in Article 10 (5), but that the defendant's exploitation of the works on the Internet belonged to ¡°the like¡± circumstances.
Distribution or dissemination of a pirated work on the Internet, such as the activities of the defendant in the Wang Meng case, infringes upon at least two specific rights within the right of exploitation of the copyright owner under current Chinese copyright law. One is the right of reproduction. In order to distribute a work online, the work must be reproduced on the server of the website; therefore, the right of reproduction of the copyright owner has been infringed. The other is the right of distribution. Under Chinese copyright law, distribution means ¡°the provision of copies of a work to the public by means such as sales and rental, in so far as the number of copies satisfies the reasonable need of the public.¡± See Article 5 (5) of Regulations for the Implementation of the Copyright Law of the People's Republic of China. The definition shows that sales and rental are but two of the ways of distributing works. In fact, there is no material difference between posting a pirated work on the Internet for users to download and the direct sale of hard copies of the work. The general public, whoever wants a copy of the work, can download from the website, though what he gets is an electronic version, not a hard copy, of the work. Therefore, in the Wang Meng case, there is a legal basis for a finding of the infringement of the right of reproduction and right of distribution by the defendant. Though the definition of ¡°distribution right¡± under the Chinese copyright law is different from that of the WCT, Article 6 (1) of WCT provides: ¡°Authors of literary and artistic works shall enjoy the exclusive right of authorizing the making available to the public of the original and copies of their works through sale or other transfer of ownership.¡±  it is logical and reasonable under Chinese law to find distributing or disseminating pirated works online infringes upon the distribution right of the copyright owner.

Up to now, there have been two copyright infringement cases concerning the unauthorized distribution of music in MP3 format in China. Under Chinese copyright law, the rights enjoyed by producers and performers of sound recordings are generally called neighboring rights. Article 39 of the copyright law provides that a producer of a sound recording enjoys the rights of reproduction, of distribution, and of remuneration therefrom. One of these two MP3 cases was settled by the parties, resulting in a promise made by the alleged infringer to desist from its activities and a payment of a nominal compensation to the copyright owner. The other case is still pending. There has been a debate over whether the copyright owners of sound recordings have the exclusive right to distribute their works via the Internet and what provisions of the law should be applied. On November 22, 2000, the Supreme Court promulgated an Interpretation on the Application of Laws to Copyright Disputes over the Internet. This interpretation which was adopted at the 1144th meeting of the Judicial Committee of the Supreme Court of China, entered into force on December 21, 2000.  From Article 9 (3) of the Interpretation, it can be inferred that the Supreme Court holds that the producer enjoys that right, and Article 45 (8) of the copyright law Article 45 of the copyright law provides: ¡°Anyone who commits any of the following acts of infringement shall bear civil liability for such remedies as ceasing the infringing act, eliminating the effects of the act, making a public apology or paying compensation for damages, depending on the circumstances:
...
(8) Committing other acts of infringement of copyright and other rights related to copyright.  should be applicable to such cases.

Under the same rationale and analysis as that of the literary works discussed above, those uploading MP3 sound recordings onto the Internet for other Internet users to download must reproduce the sound recordings on their servers, though the sound recordings are in digital forms. The offer made to the Internet users to download is just like that to distribute. Therefore, it is logical for the court to find that the rights of reproduction and of distribution, and right to remuneration of a producer of sound recording as well as those rights of the writer of the musical compositions have been infringed. If a court makes such a finding, Article 46 (5), rather than Article 45(8), of the copyright law Article 46 of the copyright law provides :¡°Anyone who commits any of the following acts of infringements shall bear civil liability for such remediesas as ceasing the infringing act, eliminating the effects of the act, making a public apology or paying compensation for damages, depending on the circumstances, ...

(5) reproducing and distributing a sound recording or video recording produced by other without authorization.¡±  should be applied.

IIª±Whether Online Service Providers are Entitled to a Compulsory License under Chinese Copyright Law

Online service providers who themselves have distributed pirated works via the Internet often argued in an infringement suits that they were entitled to a compulsory license from the copyright owner under Article 32 of the copyright law. Article 32 of the copyright law provides that ¡°except where the copyright owner has declared that reprinting or excerpting is not permitted, other newspaper or periodical publishers may, after the publication of the work by a newspaper or periodical, reprint the work or print an abstract of it or print it as reference material, but such other publishers shall pay remuneration to the copyright owner as prescribed in regulation.¡± The declaration prohibiting reprint or excerpt of a work must be attached to the work, and be made at the time when the work is published for the first time. See Article 43 of Regulations for the Implementation of the Copyright Law of the People's Republic of China, which was promulgated by the National Copyright Office and which entered into force on June 1, 1991. This provision has made it clear that only newspaper and periodical publishers are entitled to the compulsory license. Online service providers, such as websites operators, which are neither newspaper publishers nor periodical publishers, should not be entitled to compulsory license. Therefore, in the Wang Meng case, the courts denied the defendant's contention that it enjoyed the right of compulsory license and its only fault was that it did not pay remunerations to the plaintiffs.
The Interpretation promulgated by the Supreme Court This interpretation which was adopted at the 1144th meeting of the Judicial Committee of the Supreme Court of China, entered into force on December 21, 2000. amended the law. Article 3 of the Interpretation provides that except otherwise declared by the copyright owner, after the publication of a work by a newspaper or periodical publishers, or after the dissemination of a work online, other websites may reprint or print an abstract of the work, subject to paying remuneration to the copyright owner as prescribed in regulation and indicating the source of the work. Nevertheless, Article 3 also specifies that the category of works which the website can reprint or print as an abstract is the same as that of newspapers or periodicals. Under Chinese copyright law, there are nine categories of works. The nine categories of works provided by Article 3 of the copyright law are: literary works; oral works; musical, dramatical, quqi and choreographic works; works of fine art and photographic works; cinematographic, television and videographic works; drawings of engineering designs and product design, and descriptions thereof; maps, sketches and other graphic works; computer software; other works as provided for in laws and administrative regulations.    Generally speaking, only literary works, works of fine art and photographic works, drawings, sketches and other graphic works which are capable of being published by newspapers and periodicals, are the subject matter of compulsory license.

Whether the websites should be entitled to the compulsory license provided by the copyright law was a heated discussed issue in China. See Jiang Zhipei, How to Protect Copyright in Cyberspace, http://www.chinailaw.com/spxx/spxx26.htm.  The Supreme Court has given an affirmative answer to this issue through its aboveª²mentioned interpretation. 

However, the extension of the compulsory license to websites still poses some problems in the law and in practice. China is a member state of the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention). Article 9 of the Berne Convention provides that the domestic legislation of a signatory may permit the reproduction of literary and artistic works in certain special cases,

¡°provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.¡± There have been some criticisms of the compulsory license system under Article 32 of the copyright law, holding that it violates the Berne Convention for unreasonably prejudicing the legitimate interests of the author.

Now that the compulsory license is extended to the websites, the copyright owner will not be able to control the reproduction of its works online once they have been published by a newspaper or periodical, or been disseminated via the Internet, without declaring that reprinting or excerpt is prohibited. Perhaps the critics will say that this will unreasonably prejudice even more the legitimate interests of the author.

Moreover, it will also cause some problems in practice. For example, if a website wants to publish a novel by a popular writer, he might pay a lot of money for this, say 800 Yuan (about $97) per thousand words. However, once the novel is published online without a declaration prohibiting reprinting and excerpt, another website operator can upload it on to its own website without authorization from the copyright owner under the new compulsory license system, and its only obligation is to pay the right owner remunerations prescribed by regulation. The soª²called remunerations prescribed by regulation refer to the Remuneration Rates for Literary Works promulgated by the National Publication Bureau, and the highest remuneration rate will be 100 Yuan (about $12) per thousand words. That is to say that the second website operator will at most pay the writer 100 Yuan per 1000 words for the same novel, and deprive the writer of the chance to bargain. In the long run, no shrewd website operator or newspaper or periodical publisher will be willing to be the first publisher of a novel or other popular works, and the legitimate rights of the copyright owner and the public interest will be prejudiced.
Amendments to the Chinese copyright law are under discussion, and there is still a debate over whether the compulsory license system should be eliminated. Anyhow under the current law, the website operators are entitled to the compulsory license. Nevertheless, if they distribute or disseminate online those works already published by other newspapers, periodicals, or other websites without paying the prescribed remunerations to the copyright owner, they will still be liable for copyright infringement under Article 45 (6) of the copyright law. Article 45 of the copyright law provides: ¡°Anyone who commits any of the following acts of infringement shall bear civil liability for such remedies as ceasing the infringing act, eliminating the effects of the act, making a public apology or paying compensation for damages, depending on the circumstances:
...
(6) exploiting a work created by another without paying remuneration as prescribed by regulations;¡±

IIIª±Whether the Online Service Providers Should Be Liable for Others' Copyright Infringement

It is undisputable in China that a website operator, like the defendant in Wang Meng, who distributes pirated works on the Internet should be liable for its direct infringement. However, there is a dispute over whether an online service provider should be liable for others' copyright infringement, such as direct infringement by Internet users. Online service providers, or more specifically the Internet Service Providers (ISPs), generally can be divided into two categories: Internet Access providers (IAPs) and Internet Content Providers (ICPs). The Supreme Court held obviously there should be some differences between the liabilities of the two, and tried to differentiate their liabilities in its Interpretation. This interpretation which was adopted at the 1144th meeting of the Judicial Committee of the Supreme Court of China, entered into force on December 21, 2000.

Article 4 of the Interpretation provides that ISPs (including IAPs and ICPs) that induce or facilitate other's infringement should be liable for contributory infringement. Article 5 of the Interpretation provides a special liability for ICPs, i.e., ICPs which know of an Internet user infringes other's copyright through the Internet, or adopt no measures to remove the infringing materials after the notice of infringement given by the copyright owner, should be liable for contributory infringement. Article 5 of the Interpretation makes the difference between the liabilities of IAPs and ICPs clear:  both IAPs and ICPs should be liable for their participations in an infringement; while the liability for ICPs is more than that, and theirs liabilities procure whenever they know of an infringement but adopt no measures to stop it.
The author cannot find any rationale for the difference between the liabilities of IAPs and ICPs. The ICP which provides equipment and service to the direct infringer is actually facilitating the infringement even though it does not know that. Whenever it knows of the infringement, it should exercise control over the infringement either by removing or blocking the access to the infringing material. Otherwise, it will be liable for infringement imposed by Article 4 of the Interpretation. If the ICP is unaware of the infringement, it will not be liable under Article 5, nor will it be under Article 4 of the interpretation. The special liability imposed upon ICPs under Article 5 is unnecessary, therefore should be eliminated.
In China, the intent to infringe is not a prerequisite for copyright infringement. Articles 4 and 5 of the Interpretation show that the Supreme Court has put some limitations on the liabilities of ISPs. ISPs should only be liable for their own fault or negligence. The rationale is that there are so many materials on the Internet, it is impossible and impractical for ISPs to screen out those infringing materials. This is quite reasonable, and has been implemented by the lower courts.

In Liu Jingsheng v. Sohu Co., This is a case recently decided by Beijing No. 2 Intermediate People's Court, the information on this case is from http://www.chinaiprlaw.com. the defendant provided the Internet users with a search engine, and one linked website contained materials infringing upon the copyright of the plaintiff. The infringing materials were not saved in the server of the defendant. The court held that on the Internet the person who had provided the infringing information should be liable for the infringement, and the ISP who provided the technical services and facilities without knowledge of the infringement generally should not be liable. However, when the defendant knew that there were infringing materials on the linked website in October 2000, it should have stopped the linking. However, the defendant did not desist from the linking until November 30; therefore, it was liable for the infringement for the period from the date it knew of the infringement to the date it stopped linking.

In Collegiate Magazine Co. v. Beijing Jingxun Co. et al., This case is also decided by Beijing No. 2 Intermediate People's Court, the judgment of case is from http://www.cnipr126.com.  Jingxun provided the Internet users with server space for establishing their own websites free of charge, and the individual defendant Xiang Li, a college student from Nankai University, built his own personal website by using the service provided by Jingxun. Without authorization, Li  uploaded substantial portions of the work  Victorious Experiences in Entrance Exams to Master Degree ( Kao Yan Sheng Jing), a compilation copyrighted by the plaintiff, to his personal website. The court first held that uploading a work to a website is an act of reproduction, which should be authorized by the copyright owner, and Li had infringed upon the copyright of the plaintiff. Then, the court held that generally ISPs like Jingxun, should not be liable for the infringement of the Internet Users. In this case, Jingxun had immediately investigated the alleged infringement, adopted technical measures to block access to the infringing content of the personal website, and looked for the owner of the website and requested him to remove the infringing works. Therefore, the court held that Jingxun was not liable for the infringement of Li.

The rulings of these two cases are quite reasonable. The doctrine that ISPs should only be liable for their own faults and negligence is a very good balance between the rights and interests of the ISPs and the copyright owners. More importantly, this doctrine, by limiting the liability of ISPs, will encourage them to spread knowledge and information online, and thus benefits the general public.

CONCLUSION

The distribution of unauthorized works online prior to the promulgation of the Interpretation of the Supreme Court would definitely have constituted copyright infringement in China. Since the promulgation of the Interpretation, if the works distributed online without authorization belong to the categories of works subject to compulsory license, and the copyright owners of those works do not attach a declaration prohibiting the reprinting or excerpting, and the distributor or the website operator pay the prescribed remunerations to the copyright owners, it will not constitute infringement. As for the difference between the liabilities of IAPs and ICPs made by the Supreme Court, is unnecessary, as both of them should only be liable for their own faults and negligence.

(Zhang  Guangliang)