China Passes Internet Piracy Law

The Chinese government passed new laws this week to ban the ability to upload and download Internet material without the copyright holder's permission.

Officials in China say the decision aims to balance copyright owners' rights with those of Internet service providers (ISPs) and users who download content from the Web. The provisions pertain to text, video and audio. They include 27 articles that take effect on July 1, said intellectual property attorney Gang Bai on Friday.

Bai, who founded the Wan Hui Da IP Agency, one of China's largest law and IP firms, points to three main provisions: Extension of Copyright Protection offered to content owners, Notice and Delete, and narrowed responsibility of ISPs.

Under the Extension of Copyright Protection provision, corporations and individuals are "forbidden to delete or modify the copyright owners’ digital information on their works without the right owners’ permission," Bai said. "The infringer will face a maximum fine of RMB 100,000 Yuan [$12,500] and confiscation of computer equipment."

China has laws that prohibit Internet piracy, DVD, video and counterfeit goods, but some believe the government hasn't put the resources into tracking down and prosecuting pirates.Noticeably missing from the regulations is anything that suggests the creation of a new enforcement task force, said Bill Murray, president of William Murray & Associates.

"If you're a healthy Internet company running a big business and you get binged with a $12,000 fine that's not much of a deterrent," said the Los Angeles business consultant who specializes in media content. "On the other hand, if you get tied up in court or the Chinese government repeatedly comes after you could be much worse. The Chinese government is a little scary to have them going aggressively after you."

The "Notice and Delete" provision, according to Bai, puts the responsibility on ISPs to remove any questionable content from their site once a copyright owner submits a notice in writing. Content owners would send a written notice to the ISPs that breach copyrights and ask them to delete the works or links to the works.

The regulations also detail four exemption clauses for Internet service providers, Bai said. The providers are not obliged to examine the content before it goes up on their site and may decline to take responsibility once proven the process to upload content is automatic.

The "exemptions" seem the most troubling for Fritz Attaway, executive vice president and special policy advisor at the Motion Picture Association of America (MPAA). "There are broad prohibitions against trafficking in copyrighted materials over the Internet, but I also saw a number of exemptions that seem too broad for educational to reproducing material for the blind," he said.The MPAA is trying to work with the Chinese government to change their views and become more respectful of intellectual property, Attaway said.

The MPAA put global Internet piracy at $2.3 billion in 2005. Movie piracy occurs most prominently in China, Russia, the United Kingdom, France, Spain, Brazil, Italy, Poland and Mexico. China, with more than 110 million Internet users, is the world's second-largest Internet market following the United States.