Unlike in Australia, copyright can be registered in China.
Under Chinese law, a copyright registration certificate can be used as proof of copyright ownership and validity in legal proceedings, however, copyright protection takes effect from its creation, not from its registration. Also, if the owner has already registered copyright in another country such as the US the certificate can be used to prove the ownership in China as well.
Although registration of copyright in other countries can be used in China, administrative agencies or the People’s Court will usually require that any foreign copyright certificates are notarised and legalised (with a local Chinese embassy or consulate) before the certificate can be used in Chinese administrative actions or lawsuits. This can be time-consuming and expensive.
Chinese copyright certificates can also be useful when applying for governmental schemes available for software companies.
Copyright licences which set out what you will allow others to do with your work can also be registered in China. A party can sometimes be barred from relying on a licence agreement if the licence is not recorded. To comply with Chinese foreign exchange regulations, banks located within China will generally prevent a Chinese license recipient from transferring royalties to the foreign bank account of a licensor unless there is proof that the copyright license has been recorded.
If an infringer uses online services to infringe on copyright (such as the distribution of pirated software), the copyright owner has right to notify the online service provider and ask it to take measures to prevent it. If the online service provider fails to act within a specified time, it is then liable for any loss and damage, in addition to the primary infringer.
Improvements by the licensee
When an Australian company licences a Chinese company in connection with an ICT product, it can be deemed a technology import contract which is therefore subject to China's Regulations on the Administration of the Import and Export of Technology (“Import & Export Regulations”).
If you are doing business in China this can severely impact your ability to control any improvements to your technology made by the Chinese licensee.
For example, not only do the import and export regulations prohibit contractual clauses which restrict a licensee from making improvements to technology or using that improved technology in future but the Chinese licensee also owns copyright in any improvements it makes to the licensed technology.
China's software regulations allow software to be used for the study and research of the concepts and principles underlying the software design without needing the permission from the copyright owner.
Licensees are often in a better position to reverse engineer ICT products, particularly if they have access to confidential information as part of the licence arrangement. To reduce the risk of this, carefully draft contracts to safeguard against reverse engineering and the access and use of confidential information for reverse engineering.
See our other resources for IP protection in China.