China.xml

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<article lang="en">
<articleinfo>
    <date>2017-05-18</date>
</articleinfo>
<section id="chap.china">
<title>China</title>
<simpara>author:[Xia,Yang]</simpara>
<section id="sec_introduction_china">
<title>Introduction to software protection under Chinese law</title>
<section id="sec_body_china">
<title>Body of law</title>
<simpara>The regulations contained in the &#8220;The People&#8217;s Republic of China
Copyright Law&#8221; are formulated to protect the rights of copyright
owners, to safeguard interests in the development, dissemination and
use of computer software, to encourage the development and application
of computer software, and to promote the software industry and the
development of information technology in the context of the national
economy.</simpara>
<simpara>The key legal regulation in the context of software is the general
Copyright Act. While there is a Software Act, it is a special statute
in relation to the general Copyright Act, and as such does not contain
any specific provisions above and beyond its terms.</simpara>
</section>
<section id="sec_object_china">
<title>Software Act: Object of protection</title>
<simpara>Computer programs and preparatory material related to their
development are protected by copyright and are equivalent to literary
works within the meaning of the Berne Convention for the Protection of
Literary and Artistic Works. According to the Copyright Law, only
original computer programs enjoy copyright protection. This means that
a computer program has to be an original intellectual creation of its
author. No other criteria may be used to determine whether the program
is subject to copyright protection. The ideas and principles behind
computer programs or technical interfaces are explicitly denied
copyright protection.</simpara>
<simpara>The term computer software (hereinafter referred to as software)
refers to computer programs and related documentation.</simpara>
<simpara>The relevant terms are defined as follows:</simpara>
<simpara>(a) A computer program is the code sequence used by computers or other
devices capable of processing information, or a sequence of symbolic
instructions or statements which can be automatically converted into a
sequence of coded instructions. The source code and object code is of
the same program.</simpara>
<simpara>(b) A document contains the text data and charts used to describe the
computer program&#8217;s contents, composition, design, functional
specifications, development and test results, such as details of the
program design, flow charts, user manuals, and so on.</simpara>
<simpara>Software protection under these regulations must be independently
developed acquired by the developer, and relates to a specific
tangible object.</simpara>
<simpara>Legislation on copyright protection for software does not extend to
the ideas used in software development, processing, and methods of
operation or mathematical concepts and suchlike.</simpara>
</section>
<section id="sec_authors_china">
<title>Authors/Beneficiaries</title>
<simpara>The relevant terms are defined as follows:</simpara>
<simpara>(a) A software developer can be a legal entity or organization
responsible for the actual organizational development, direct
development and software development; or can be an individual person
responsible for the independent software completed by their own
effort.</simpara>
<simpara>(b) A software copyright owner is an individual person, a legal entity
or an organization that enjoys the copyright in accordance with this
regulation.</simpara>
<simpara>Chinese citizens, legal entities or organizations enjoy copyright in
accordance with this regulation regardless of whether their software
is published or not. Foreigners and stateless persons enjoy copyright
in accordance with these regulations if their software is first
published in China. Foreigners and stateless persons also enjoy
copyright protection under these regulations if the developer is a
resident of a state that has signed an agreement with China or an
international treaty to which China is a signatory.</simpara>
<simpara>Software copyright by default belongs to the software developer unless
otherwise stated. If there is no proof to the contrary, the individual
person, legal entity or organization holding the copyright is
therefore deemed the developer whose name is on the software.</simpara>
<simpara>If the software is developed by two or more individual persons, legal
entities or organizations, the co-ownership of the copyright is
stipulated by a written contract.</simpara>
<simpara>If there is no written contract to describe ownership and rights, or
the contract is not clearly defined, the jointly developed software
can be used separately and the developers of each respective part may
be entitled to independent copyright.  However, the copyright
protection afforded in this context does not extend to the entire
software developed. If a situation where co-developed software cannot
be divided and no contract or other form of mutual agreement exists
between the co-developers, then no single developer may prevent the
other developers from exercising their rights apart from the right of
transfer, but the benefits have to be fairly distributed amongst all
the co-developers.</simpara>
</section>
<section id="sec_exclusive_china">
<title>Exclusive rights</title>
<simpara>Software copyright holders enjoy the following rights:</simpara>
<simpara>(a) Publication right</simpara>
<simpara>(b) The right of authorship</simpara>
<simpara>(c) Amendment right</simpara>
<simpara>(d) Reproduction right</simpara>
<simpara>(e) Distribution right</simpara>
<simpara>(f) Lending right</simpara>
<simpara>(g) Right to network Dissemination of information</simpara>
<simpara>(h) Translation right</simpara>
<simpara>According to the second paragraph of Article 10 of the Copyright Law,
if the copyright holders allow others to exercise their rights, they
are entitled to payment in accordance with the relevant provisions of
the contract.  By the same token, the owner of a software copyright
may authorize others to exercise his or her software copyright and the
right to receive remuneration, or fully transfer that copyright or
renumeration right.</simpara>
</section>
<section id="_exceptions_to_exclusive_rights">
<title>Exceptions to exclusive rights</title>
<simpara>Owners of lawful copies of software enjoy the following rights:</simpara>
<simpara>(a) The right to install the software on a computer and other devices
capable of processing information;</simpara>
<simpara>(b) The right to make backup copies to prevent losses.  These backup
copies may not be made available to others for use by any means, and
the owner must destroy the backup copies if he or she loses
proprietorship of the lawful copy of the software;</simpara>
<simpara>(c) To use the computer application software and to improve its
functionality and performance by making necessary modifications;
however, unless otherwise provided, without permission from the
software copyright owner the modified software may not be supplied to
any third party;</simpara>
<simpara>In order to study and research the inner design and principle of a
computer program, involving its installation, display, transmission,
storage or other use, the granting of software copyright permission is
subject to payment of remuneration.</simpara>
<simpara>To authorize others to exercise activities covered by software
copyright restrictions, the parties have to enter into a written
contract. If there is no written contract or agreement expressly
stipulating an exclusive license, the right to exercise the copyright
has to be treated as non-proprietary.</simpara>
<simpara>There are cases where such contracts are not necessary.  Article 30 of
the Computer Software Act explains the circumstances in which a
copyright holder&#8217;s authorization is not required for reproducing
and/or translating a computer program in order to obtain
interoperability information.</simpara>
<simpara>Article 30 is compulsory law, and contractual provisions to the
contrary are deemed not to exist.
However, exercising these statutory rights is often difficult in
practice because the licensee generally has no access to the source
code of the application, and it is not legal to enforce source code
access for the purposes of interoperability.</simpara>
</section>
<section id="_dispute_mediation">
<title>Dispute mediation</title>
<simpara>The software copyright infringement dispute may be mediated. If the
mediation is inadequate or the mediation achieves the agreement latter
side to renege on the mediation promise, they can go to the People&#8217;s
court to carry on litigation. If the litigant is not willing to
mediate, may also go directly to the People&#8217;s court.</simpara>
</section>
<section id="_term_of_protection">
<title>Term of protection</title>
<simpara>The software copyright&#8217;s protection period is 25 years, beginning from
the initial publication of the software and ending on December 31 of
the 25th year following. Before the expiration date of the protection,
the software copyright owner may apply to the software registration
management organization to get another 25 years, but the total
protection period afforded to any software product cannot surpass 50
years.</simpara>
</section>
<section id="_special_measures">
<title>Special measures</title>
<simpara>When the owner of copyright is not able to protect his or her rights
related to software provided in an infringing manner, the end
recipient of the illegal code still has a duty to destroy or otherwise
cease use of the code once they are made aware of the situation.
However, they have recourse to seek compensation for this loss and its
ancillary consequences from the original supplier of the infringing
code.</simpara>
</section>
</section>
<section id="sec_unprotected_china">
<title>Unprotected software and non-commercial software</title>
<simpara>Software that is an intellectual creation of the author is regarded as
original and can obtain copyright protection, while non-original
software is excluded from such protection. Third party revision or
sharing without agreement from the software copyright owner or their
legitimate successor is prohibited.</simpara>
<simpara>Teaching activities, scientific research, and government agencies
operating official functions can use software for non-commercial
purposes; these non-commercial rights include the ability to make free
copies of the software without the copyright owner or its legitimate
successor&#8217;s agreement. However, the software&#8217;s name must be correctly
mentioned in use and the exploiter should not infringe upon other
rights which the owner and its legitimate successor enjoy.
Additionally, after the copied software has completed its
non-commercial use, it should be reclaimed or be destroyed properly
and must not be used for other goals or be given to other people.</simpara>
</section>
<section id="sec_pd_china">
<title>Unprotected software and public domain software</title>
<simpara>Only software that is an intellectual creation of the author can
obtain copyright protection. Non-original software does not come into
consideration for copyright protection and can, in principle, be used
freely.</simpara>
<simpara>Under Chinese law, public domain software is considered as software to
which the author has given up all rights and on which no other party
is able to enforce any rights. This software can be used, reproduced
or executed freely without obtaining permission from a rights holder
or the payment of a fee to such a party or their representatives.
Public domain software may in certain cases even be presented by third
parties as their own work, and by modifying the original work, third
parties can take certain versions of such code out of the public
domain again.</simpara>
<simpara>The underlying principle is that software value can only be achieved
through protection granted by intellectual property law. Under the
general law in this field, value is presented by granting certain
exclusive rights to the legal owner of a work, who may realize fiscal
or other returns through contracts with third parties, with the
proviso that such rights eventually cease and the work enters the
public domain. This creates a circle of economic activity that
supports industrial and economic development.</simpara>
<simpara>Proprietary software and open source software (free software) differ
only in terms of their circulation mechanism, and not in terms of the
applicability of Copyright.</simpara>
</section>
<section id="sec_analysis_china">
<title>Analysis of FOSS under Chinese law</title>
<section id="_copyrights">
<title>Copyrights</title>
<simpara>From the view of most enterprises, software development differs from
traditional creation of copyrighted work. It is no longer subject to a
single person or even an organization. With the development of the
Internet, very few people operate behind closed doors in the software
industry. Building on the ideas and experience of predecessors' has
become a crucial factor to the development of software technology.</simpara>
<section id="_qualification_of_foss">
<title>Qualification of FOSS</title>
<simpara>Copyright law in China operates under the principle of
&#8220;self-executing&#8221; protection.  After a creative good is completed it is
automatically subject to copyright protection regardless of whether it
is published or registered.  The right to publish source code&#8201;&#8212;&#8201;an
intrinsically important part of the FOSS&#8201;&#8212;&#8201;belongs to the software&#8217;s
&#8220;publication right&#8221; range.  The protections of software copyright may
be considered as a mix of applicable law and contracts between the
rights holder and any third parties. This model is from the province
of international conventions and national copyright laws of the US,
and the protection of software copyright law in China is no exception.</simpara>
<simpara>One pertinent example is that the Chinese government issued a special
regulation on software copyright protection as part of the Copyright
Law with the subject &#8220;Computer Software Protection Regulations&#8221;. This
provides that without the copyright owner or his legal transferee&#8217;s
consent the use of software is equal to copyright infringement; in the
&#8220;Computer Software Protection Regulations&#8221; Article 18 and 19 the
provision of software licenses and transfer of rights must be in the
form of a written agreement. In this sense, protection of software
copyright in China and international copyright norms are virtually
identical.</simpara>
<simpara>Article 12 of the Copyright law of the people&#8217;s republic of China states that where a work is created by adaptation, translation, annotation or arrangement of pre-existing work, the copyright in the work shall be enjoyed by the adaptor, translator or arranger, provided that the exercise of such copyright shall not prejudice the copyright of the original work. Interpretation of the original author should be via their consent and include remuneration, while right of authorship remaining with that party.  If the interpretation is created out the period of protection for creative works, it should be with the original author&#8217;s consent, but no remuneration is necessary. Naturally the original work shall not be violated or distorted in the process of interpretation.</simpara>
<simpara>Article 13 of the Copyright law provides for co-ownership of
copyrighted works, covering situations where a work is created jointly
by two or more co-authors.  Put simply, in these cases copyright in
the work shall be enjoyed jointly by those co-authors while any person
who has not participated in the creation of the work may not claim
co-authorship. If a work of joint authorship can be separated into
independent parts and exploited separately, each co-author may be
entitled to independent copyright in the parts they have created,
provided that the exercise of such copyright shall not prejudice the
copyright in the work as a whole. The general consideration is that
the creation of a work of joint authorship requires cooperation and
arrangement between the authors. If one party does not get consent
from the other, then each party only has copyright and its attendant
right of modification or distribution in their own section of the
work.</simpara>
</section>
<section id="_rights_of_the_original_co_authors">
<title>Rights of the original co-authors</title>
<simpara>&#8220;Participation&#8221; in co-authorship refers to expression in the form of
a creative and intellectual work applied either in conceptual planning
or writing operations. If a party does not do creative work that falls
under this definition of participation, then they cannot become
regarded as a joint author. This participation and its attendant
copyright in the work of joint authorship can be further regarded in
two different ways, either with the whole coauthored work taking a
form that can be split into individually authored sections or a form
that cannot be split into separate parts. The ability to distinguish
individual contributions as opposed to entirely combined contributions
naturally has implications for personal rights and property rights and
their exercise in market transactions.</simpara>
<simpara>Unless the components of software can be clearly distinguished, it is
almost certainly going to be defined as an &#8220;indivisible work&#8221; under
Chinese law. These are works whereby it cannot be concluded clearly
what the individual contribution of every author is, e.g. when two
authors write the source code together.</simpara>
<simpara>Where a work is created jointly by two or more co-authors, the
copyright in the work shall be enjoyed jointly by those co-authors.
Any person who has not participated in the creation of the work may
not claim the co- authorship.</simpara>
<simpara>If a work of joint authorship can be separated into independent parts
and exploited separately, each co-author may be entitled to
independent copyright in the parts that he has created, provided that
the exercise of such copyright shall not prejudice the copyright in
the joint work as a whole.</simpara>
<simpara>On the other side, if a work of joint authorship can&#8217;t be separated
into independent parts and exploited separately, the copyright in the
work shall be enjoyed jointly by those co-authors, in which case the
authors are free to regulate the exercise of the copyrights by
agreement. If they can&#8217;t reach any kinds of agreements relating to the
moral rights and have no cogent reasons, No party shall prevent
exercise of the rights except for the transfer request, but the
proceeds should distribute to all the other parties with attendant
rights.</simpara>
</section>
<section id="_authors_of_derivative_works">
<title>Authors of derivative works</title>
<simpara>FOSS often falls under the category of a derivative or composed work.
Derivative works and composed works are works whose originality may be
definable, but whose existence depends on existing work(s), from which
at least some original characteristics are copied.</simpara>
<simpara>Where a work is created by adaptation, translation, annotation or
arrangement of a pre-existing work, the copyright in this work thus
created shall be enjoyed by the adaptor, translator or arranger,
provided that the exercise of such copyright shall not prejudice the
copyright in the original work.</simpara>
<simpara>The copyright in a work created by compilation shall be enjoyed by the
compiler, provided that the exercise of such copyright shall not
prejudice the copyright in the pre-existing works included in the
compilation. The authors of such works included in a compilation as
can be exploited separately shall be entitled to exercise their
copyright in their works independently.</simpara>
<simpara>So, the author(s) of the derivative or composed work are the only
persons with a copyright on their work. This is not independent and
full copyright, which is restricted, however, because the derivative
or composed work cannot be operated without the consent of the holder
of the copyright on the original work. In the case of FOSS licenses
such consent is not a problem, subject to respecting the terms and
conditions (e.g. regarding further distribution of the derivative
work).</simpara>
</section>
<section id="_the_assignment_of_copyrights">
<title>The assignment of copyrights</title>
<simpara>In order to control the rights related to a specific FOSS project, it
may be useful to collect all copyrights concerning this project within
one organization. The existence of such an organization can simplify
the management and enforcement of joint rights, with the collective
management of copyrights is usually, but not necessarily, regulated by
the fiduciary transfer of copyrights. This assignment is relatively
trivial, with ownership of copyright in a commissioned work being
assigned via contract between the commissioning and the commissioned
parties. In the absence of a contract or of an explicit agreement in
the contract, the copyright in such a work shall belong to the
commissioned party.</simpara>
</section>
</section>
<section id="_moral_copyrights">
<title>Moral copyrights</title>
<simpara>FOSS originated in America, and therefore attaches less importance to
the moral rights of the author than it might under a country governed
by Civil Law. The Open Source Definition specifies that the author of
software distributed under a FOSS license cannot oppose the use of the
software by certain people and groups or for certain areas of
application.</simpara>
<simpara>For example, according to article 22, in some cases, a work may be
used without permission from, and without payment of remuneration to,
the copyright owner, provided that the name of the author and the
title of the work shall be indicated and the other rights enjoyed by
the copyright owner by virtue of this Law shall not be prejudiced.
Furthermore, article 23 specifies the statutory license of copyright.</simpara>
<simpara>Whether an author is able to give up all his rights on a work is more
complex under Chinese law, as such law contains the principal
indefeasibility of the moral rights. Although renouncement of moral
rights is possible in principle, the global renouncement of the future
exercise of moral rights is void, and this naturally also applies to
moral rights on software.</simpara>
<simpara>The author of a work distributed under the FOSS license shall
therefore probably be able to oppose any use of his work by people or
groups or for certain purposes which affects his honour or reputation,
based on his moral rights.</simpara>
<simpara>Moral rights are reflected in derivative works. The author of the
original work will therefore, based on his moral rights, not only be
able to oppose the use by third parties of his work, but also the use
of derivative works which affect his honour or reputation.</simpara>
</section>
<section id="_enforcing_foss_licenses">
<title>Enforcing FOSS licenses</title>
<simpara>The question whether a FOSS license can be enforced depends on whether
a valid license was issued. The essential questions are: (i) between
whom is a license granted, and (ii) has the license been validly
granted?</simpara>
<section id="_contracting_parties">
<title>Contracting parties</title>
<simpara>In China, the Contract Law governs all kinds of licenses, but it can
be questioned whether FOSS licenses fall into the sphere of the
Contract Law of China. There is no clear stipulation about FOSS
licenses in its wording, and no case has yet came before the People&#8217;s
court to provide a ruling about the validity of the license.  Pending
this, a more general interpretation in view of existing rules and
norms may be proposed.A creative work that needs two or more people to
complete normally involves an agreement to arrange copyright
allocation or grants. If one author makes his work available under a
FOSS license, the answer is clear: the license is reached between the
licensee and the author. But in some cases, the works are finished by
different people and they are all contributed to the programs. At this
time, the question becomes more complicated. With whom the licensee
reaches a contract depends on the different cooperation methods
applied by the co-authors.</simpara>
<simpara>If a work of joint authorship can be separated into independent parts
and exploited separately, each co-author may be entitled to
independent copyright in the parts that he has created, provided that
the exercise of such copyright shall not prejudice the copyright in
the joint work as a whole. This would allow for the author who created
the independent parts to grant a license to contracting parties based
on his or her individual section of the work. Meanwhile, if the work
cannot be separated in such a fashion, and the authors do not
collectively agree on general license terms, a license and implied
contract should be reached between the licensee and every author of
the program.</simpara>
<simpara>Most FOSS licenses solve this through agreements such as BSD, Apache
and GPL licenses. For example, the GPL creates a contractual bond
between the licensee and all authors in the chain. GPL version 3
contains the following clause: &#8220;Each time you convey a covered work,
the recipient automatically receives a license from the original
licensors, to run, modify and propagate that work, subject to this
License&#8221; and GPL version 2 states that &#8220;each time you redistribute
the Program (or any work based on the Program), the recipient
automatically receives a license from the original licensor&#8230;&#8221; While
apparently effective in US and other markets and internally consistent
with the rest of the license, it is not clear that this construction
will be regarded valid under China Copyright Law.</simpara>
</section>
<section id="_validity_of_the_foss_licenses">
<title>Validity of the FOSS licenses</title>
<simpara>An author chooses a FOSS license because he wants to distribute his
work and make it available to others&#8201;&#8212;&#8201;possibly with certain
restrictions. For him it is important that he can enforce these
restrictions. However, the status of FOSS author rights in China is
not entirely clear.</simpara>
<simpara>The most common use of FOSS code development and therefore the
application of the licenses is through the internet. While
conventional IT agreements are reached by the explicit acceptance of
the terms and conditions by the licensee following the signing of the
terms and conditions, FOSS software is made available with some simple
specification on a website or in the source code form that it concerns
FOSS. The license usually does not need to be explicitly accepted. In
other words, the act of opening the packaging or clicking &#8220;I agree&#8221;
button&#8201;&#8212;&#8201;methods to reach a licensing agreement are generally
considered to be valid and are covered by &#8220;The electronic signature
law of the People&#8217;s Republic of China&#8221;&#8201;&#8212;&#8201;tend not to apply with FOSS.</simpara>
<simpara>Having to click and confirm every time could in some cases interfere
with the use of the software, according to the international common
practice. The Open Source Definition opposes demanding explicit
agreement with the license conditions with the aim of confirming the
agreement between licensor and licensee.</simpara>
<simpara>The question is whether in these cases a valid license is possible.
The answer to this question is not clear under Chinese law. The reason
is that the user of a copyright protected work needs to be able to
indicate the grounds on which he is able to use the work. FOSS is
still under the protection of present copyright law and using the
software without the author&#8217;s consent implies a copyright
infringement, with the implication that everyone who wants to use
software which they find via the internet, they should actively look
for the license, at least if they know such software will be under the
terms of a license. If the user cannot prove that they elected obey
the license, they must refrain from using it.  But without a mechanism
to do so, a potential grey area exists.Of course it is doubtful
whether a user would benefit from disputing the existence of a FOSS
license. If the user disputes the conclusion of the FOSS license, this
implies no legally valid copyright license was granted and the user
therefore is not allowed to use the software.  Renouncement of
copyrights should not be open to conjecture, but needs to be proven.
The availability of a work on the internet does not mean it becomes
public domain.</simpara>
</section>
<section id="_validity_of_the_contract">
<title>Validity of the contract</title>
<simpara>Rights holders can place contracts and any party violating the
agreement must assume responsibility for their actions. When an author
chooses a FOSS license it is relatively clear that he wants to
distribute his work and make it available to others&#8201;&#8212;&#8201;possibly with
certain restrictions. For him it is important that he can enforce
these restrictions.</simpara>
<simpara>The exception in China is that for public welfare or personal use,
people can accord to the principle of reasonable use, and do not need
to conclude contracts or pay any remuneration in this context. This
does not preclude the necessity of the authors and users signing a
contract for licensing, but may impact some of its scope. It would be
expected that such a contract would include licensing rights, whether
licensing right is exclusive or not, the scope and space of using, the
remuneration&#8217;s standards and methods if applicable and the events that
may be regarded as breach of contract.</simpara>
<simpara>Whatever the situation, the Regulation for Computer Software
Protection in China provides that the licensing of software copyright
shall be in possession of a contract for licensing. And the licensee
may not exercise the right that has not been licensed by the software
copyright owner in the contract for licensing.</simpara>
<simpara>Normally, rights holders in FOSS write programs collaboratively under
a license that permits users to use, change, copy, and distribute the
works free of charge, provided that they follow the licensing
guidelines of the software. This can cause some confusion because
commercial software doesn&#8217;t usually allow you to change a program and
redistribute it unless you specifically negotiate that in an
additional license. But in both cases if you make copies or distribute
modified versions of the software without permission, you infringe the
copyright, and you must take the responsibility. By implication when
locating software on the internet it is very important to explore what
license is being used. If the user can&#8217;t prove that he knows the
content of the license applicable to the work, he must refrain from
using it, and cannot seek to assume that no license or contract is in
play.  Only in cases where the terms applied to the contract are
manifestly unfair can a move be taken to void its applicability.</simpara>
</section>
</section>
<section id="_waiver_and_liability">
<title>Waiver and liability</title>
<simpara>Typically, FOSS licenses contain very strong exoneration clauses,
which discharge the author from all liability. The reason for this is
that FOSS is often made available without a fee, as a result of which
the author generates insufficient income to pay for liability
insurances and legal costs. In China, the validity of this clause is
not entirely clear, with the reason being questions that arise about
the extent to which such exoneration clauses comply with the general
validity requirements under Chinese law due to the existence of no
specific legal regulation of FOSS licenses. Liability requirements are
scattered in Chinese civil law, with an example being that Article 53
of the contract law of PRC states that the following types of
exoneration in contracts are invalid:</simpara>
<simpara>(i) that causes the personal injury,</simpara>
<simpara>(ii) that causes property loss by intentional misconduct or gross
negligence.</simpara>
<simpara>Meanwhile, Article 52 in the contract law stipulates: if only there is
one of following state, the contract shall be invalid:</simpara>
<simpara>(i) obtain the contract by means of fraud or stress, at the same time
causes damage to the interests of the state.</simpara>
<simpara>(ii) viciously collude, to damage the interests of the state, the
collective, or a third party.</simpara>
<simpara>(iii) use legal form to cover up illegal purpose.</simpara>
<simpara>(iv) do harm to the public interests. And</simpara>
<simpara>(v) And violate the compulsory laws or administrative rules.</simpara>
<simpara>Generally speaking when considering FOSS license as a form of civil
contract, all the regulations of the contract behaviour are available
for the FOSS license. But with such licenses being quite different
from typical contracts there remain areas of differing potential
interpretation and therefore potential confusion. One remedy in the
mid to long-term is to add FOSS licenses as a special form of
contracts in the contract law of PRC.</simpara>
<simpara>Chinese legislation doesn&#8217;t normally perceive a large difference
between guarantee liability from amateur and professional sellers, but
there are some considerations to take into account regarding FOSS.
Theoretically, there is difference if the stipulating party be
considered as a professional seller. The professional seller is deemed
to know the defect in the software, and in pursuance of article 153 of
the contract law of PRC, contractual provisions of non- indemnity for
surface or hidden quality defects have no effect if the seller knew
about the defect at the time of the sale. Additionally, according to
Article 150, the seller has the duty to guarantee defects. The
professional seller of FOSS will therefore be liable in principle for
issues with FOSS code provided unless he can also provide proof of
ignorance regarding defects. Such proof may be hard to provide.</simpara>
</section>
<section id="_the_copyleft_principle">
<title>The copyleft principle</title>
<section id="_principle">
<title>Principle</title>
<simpara>A characteristic found in many FOSS licenses is the so-called
&#8220;copyleft&#8221; principle, which is a new and different way of enforcing
copyright in software. FOSS licenses which incorporate the copyleft
principle lay down by contract that everyone in the chain of
consecutive users, in return for the right of use that is assigned,
needs to distribute the improvements he makes to the software and the
derivative works he makes under the same conditions to other users as
those under which he received the original work. In other words,
software which incorporates copyleft FOSS needs to be distributed as
copyleft FOSS. FOSS means sharing with each other, instead of
monopolizing.</simpara>
<simpara>This has the consequence that it is not possible to incorporate
copyright protected parts of copyleft software in proprietary licensed
work directly.The copyleft principle can restrict the commercial
possibilities of the software, at least regarding business models or
product deployments that assume proprietary behaviour. Sometimes
warnings are issued for the dangers that companies could encounter if
a negligent or vindictive employee were to incorporate a piece of
copyleft code in the code of proprietary software and parties
relatively new to FOSS worry that a company would be obliged to make
its proprietary software available under a copyleft FOSS license.
Although caution is necessary regarding the use of the third party
work, one can ask oneself whether such scenarios are realistic under
Chinese law. Copyright protection is still strong and absolute in
current Chinese legal system. The sanction for incorporating copyleft
code in proprietary software will usually be restricted to a
prohibition to distribute the software which is in breach or the
obligation to remove this piece of code from the program. If the
unlawful use has caused damage to the author, this damage will need to
be reimbursed, but not more than they actually suffered damage.  As
such, the implications of copyleft are restricted to normal measures
of expected remedy under copyright law.</simpara>
</section>
<section id="_validity">
<title>Validity</title>
<simpara>Questions regarding the validity and implications of copyleft clauses
coincide with questions regarding whether an author is able to validly
lay down how derivative works need to be distributed. The answer to
this question under Chinese law is not definitive.</simpara>
<simpara>The copyright owner or copyright-related right holders are able to lay
down the use of the work for a particular use, or link certain
conditions to this.
Such a right was recognized and based on an interpretation of Article
9 of the copyright law of 27 October 2001. According to the rule, the
copyright owner can determine the destination of a work, to copy or
distribute, to rent or to exhibit, to performance or screening, etc.
They also can license or transfer the rights, with an example being
that a copyright collective management organization can claim in its
own name for copyright owners, and can carry on lawsuit and
arbitration activities as copyrights owner.</simpara>
<simpara>The right to determine the destination not only applies inter partes,
but &#8220;erga omnes&#8221;, provided that the third parties, in all
reasonableness, should know what the destination is.
The author can therefore lay down the copyleft condition based on his
right to determine the destination of his work, though aspects of
derivative work use/reuse may challenge this.  According to the
provisions of Article 12 of the copyright law, the author of the
original work has no rights on the derivative work; that&#8217;s to say &#8220;A
work derived from adaptation, translation, annotation or arrangement
of a pre-existing work, the copyrights belongs to the author of the
derivative work which be operated doesn&#8217;t subject to the consent of
the copyright owner of the original work, but the exercise of such
copyright shall not infringe the copyright in the original work&#8221;.</simpara>
<simpara>In summary, all rights are subject to abuse, including the copyright.
An author can therefore not randomly exercise his economic and moral
rights. A lawful tangible or moral interest needs to be proven.  The
implications of Article 9 are in no measure overridden by those of
Article 12, but the applicability of both will probably have an impact
in any case involving right of use issues and FOSS licenses in a court
of law.</simpara>
<simpara>The traditional use of copyrighted work in China would see approval
from a right holder subject to some form of remuneration, and the
simple outcome that other situations probably constitute infringement.
But licensing a work under a copyleft restriction will in principle
not constitute an abuse of rights, and with &#8220;reasonable use&#8221;, you
can make use of the work without the consent of the copyright holder
and without the need to pay remuneration. Of course, the licensing or
assignment contract of the copyright owner has not explicitly been
transferred, and you can&#8217;t randomly exercise the rights without the
consent of the copyright owner, otherwise will constitute
infringement.</simpara>
<simpara>Viewed formally under Chinese law, a FOSS license is a contract.
According to the contract law, it is effective as long as the parties
signed the contract voluntarily, it contains no violation of the
mandatory regulations applicable to contracts, and if the parties
strictly obey the law to exercise rights and perform obligations.
A legitimate moral interest applied by a rights holder could be
the decision to keep his work within the FOSS community, also in a
derivative format, through the measure known as copyleft. Companies
which have constructed a business model around distributing software
under copyleft restrictions will usually be able to prove the
existence of a legitimate interest.</simpara>
</section>
</section>
<section id="sec_damages_china">
<title>Damages</title>
<simpara>Damage caused by copyright violations are compensated under copyright
law in accordance with the general civil liability of the illegal act.
This implies that the injured party of a copyright breach needs to be
compensated.</simpara>
<simpara>According to the provisions in Article 47 of the copyright law the
copyright administration has the rights to stop the infringement,
confiscate the illegal income, destroy the infringing reproductions,
and may impose fines under the condition of infringing the public
interests. If the circumstances are serious, they also can confiscate
materials, tools, and other equipment which was used for making
infringing reproductions. The one who infringe the copyright can be
considered as constituting a crime, and shall bear criminal
responsibility.</simpara>
<simpara>According to Article 36 of the regulations of copyright law of 2
August 2002, parties who have violated Article 47 of the copyright law
and also offended public interest should be punished with a fine that
is 3 times of the income of the illegal operation or 10 thousand Yuan
if the income of the illegal operation is difficult to calculate.</simpara>
<simpara>Infringements of software copyright are regarded in the same light as
infringements of every other copyright. The aforementioned principle
is therefore applicable in case of copyright infringements of
software.</simpara>
<simpara>Additionally, according to the provisions in article 23 and article 24
of the software protection regulations, all actions which have
infringed the software copyright should hold the following civil
liabilities:</simpara>
<orderedlist numeration="arabic">
<listitem>
<simpara>
Stop the infringement
</simpara>
</listitem>
<listitem>
<simpara>
Eliminate the bad effects
</simpara>
</listitem>
<listitem>
<simpara>
Apologize
</simpara>
</listitem>
<listitem>
<simpara>
Compensation for the losses
</simpara>
</listitem>
<listitem>
<simpara>
Civil sanctions.
</simpara>
</listitem>
</orderedlist>
<simpara>FOSS essentially seeks to provide software as the effective public
intellectual property of all mankind, and allows for sure software to
be distributed freely between the persons of preparation and
application. Any restrictions of the intellectual property rights will
eventually limit and obstruct its development.</simpara>
<simpara>Therefore certain legal experts may assume that the damage to the
copyright owner will be limited, as he has made his work freely
available via the internet.</simpara>
<simpara>However, the essence of FOSS is not free, but &#8220;thought sharing,
knowledge sharing and resource sharing&#8221;. The user can freely operate,
copy, distribute, research and improvement the software, and avoid the
intervening from the proprietary software. One can modify the program
to make it better, make it more applicable. One can experience the
excitement which comes from the achievement which be improved more
efficiency.  But one retains certain obligations to all others.</simpara>
<simpara>Besides establishing a reputation and recognition with the related
value creation, an author can have other reasons to make his work
&#8220;freely available&#8221;. The author may also have a direct monetary
advantage from the free distribution of his work. The simplest way is
circulating the free works f advertising. Another way is granting
specific services to support the software. Taking this further into a
specific economic example, the free circulation of the work can
provide that it has as many users as possible, allowing the author to
generate income from the provision of technological support and
consulting services, or &#8220;licensing proprietary add-ons&#8221;. Another
business model is the so-called dual licensing model. This model uses&#8201;&#8212;&#8201;as the name allows us to deduce&#8201;&#8212;&#8201;two different licenses. The first
license is often a copyleft license intended to provide a wide range
of users. The second license without the copyleft system can then
leveraged to obtain payment from interested parties who want to avoid
the copyleft principle.</simpara>
</section>
</section>
<section id="sec_uk_china">
<title>FOSS cases in China</title>
<simpara>No cases have been reported yet (June 2011).</simpara>
</section>
</section>
</article>