I. Introduction

II. Differences of Copyright Laws in US and China

1. The Copyright Registration System

Prior to becoming a party to the Berne Convention in 1988, the United States had adopted a system requiring registration. After 1998, this system changed to one in which one could, but did not have to register, to receive protection under the law. Although there was a change, the choice of registering or not has a direct relationship to the award of statutory damages. The sole difference between registering and not registering is that a registered copyright is legal evidence fitting court requirements for bringing a lawsuit and sentencing. That is to say, if, when suing on a claim of infringing activity, registrant and non-registrant fail to show proof, then the judge can decide in favor of the registered copyright, but the opposite is not the case. China, on the other hand, has always utilized a voluntary system of registration, such that whether or not registration has been effected has no impact upon the availability of protection at law. The method of sentencing is no different from that of the United States, such that even where evidence is unavailable, the judge makes the decision.

2. Legal Relief

The United States has “judicial protection” as its only form of legal relief. Judicial protection is either civil or criminal. China’s judicial protection is, of course, also either civil or criminal, and in this respect there is not a great distinction. Section 504 of the American Copyright Law states that a rights holder may be awarded damages, including actual damages and profits gained by the infringement in 504(b) and statutory damages in 504(c). The purposes of this established copyright principle, that is, punitive damages, in which the amount of damages exceeds the direct economic damages caused to the infringed party by the infringer, are conciliation, severe punishment and warning, evidencing a moral outlook.

In China, according to Section 11 of the “Supreme People’s Court Interpretation of Several Problems as to the Application of Law Regarding Decisions on Illegal Publication in Criminal Cases” (Judicial Interpretations, 1998, No. 30), publication, printing, copying and issuing illegal publications is interpreted to be “other illegal business acts that seriously disturbs market order,” as specified in Article 225 of the Criminal Law. Illegal business acts is a crime specified by Article 225 of the Criminal Law: “Article 225. Whoever, in violation of the state stipulations, has one of the following illegal business acts, which disrupts the market order and when the circumstances are serious, is to be sentenced to not more than five years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine not less than 100 percent and not more than 500 percent of his illegal income and, where the circumstances are particularly serious, be sentenced to not less than five years of fixed-term imprisonment and a fine not less than 100 percent and not more than 500 percent of his illegal income or the confiscation of his property. As it is difficult to procure evidence in crimes of copyright infringement and the sale of copied infringing material, the decision in most copyright infringement cases rests on illegal business acts for counterfeiters (including sellers of copyrighted infringing material). Even though the decision is not based on the crimes of copyright infringement and the sale of copied infringing material, sentencing on this basis is more severe than in the crimes of copyright infringement and the sale of copied infringing material.

The only point on which legal relief between the United States and China differs is that China, aside from judicial protection, also allows for administrative protection. The government can administratively punish infringing activity that is serious but does not rise to the level of a crime, including confiscation of infringing products and illicit income, destruction of the infringing products and fines.

There are two conclusions regarding the differences in copyright policy and practice between the US and China: the rate of copyright infringement in the US is not high, and China’s in comparison somewhat higher. Of course, these two conclusions cannot be completely ascribed to differences in copyright policy and practice. There are many other factors -- economics, the character of the nation’s people, education, traditional culture, geographic locale, etc.

III. Purchase of Chinese Book Materials

1. Insufficient ability to plan title selection. Before reform, the only responsibility of an editor of a publisher was to read manuscripts, even to the point of there being no contact between them and publication/issuance. This, over time, created a defect in market-conscious title selection planning and editing. However, publishers, in the midst of a reform of the cultural system, need precisely this kind of person, causing them to be lacking in the area of title selection.

2. Difficulty in bringing to fruition the marketisation of the management system. Part of the work of a publisher can be delegated, according to the practice of a market economy, to specialized companies in society, such as editing, proofing, design and issuance, etc. But, since the management system in publishing was created in the long-term planned economy, it can be said that it is deeply rooted, and it is still difficult to rapidly uproot it from publishing (specialized companies in Chinese publishing are now not yet well developed).

3. Publishers, other than having a portion of its workers who are partially employed, have as well retirees who depend upon publishers for an income, and since the social welfare system is imperfect, the burden is extremely heavy and this situation will delay publishers from developing on their own. After reform, many non-state-run cultural companies began operations by issuing book materials, gathering valuable experience in the market and much capital, and thereafter began publishing on their own. These publishing companies, while lacking state qualifications, correctly saw the defect in publishers’ abilities to plan title selection, in manuscript payments strictly according to the rule, the lengthy publishing cycles and other disadvantages, squeezed into the Chinese publishing market by borrowing equipment and adopting “cooperative publishing” with publishers, and in a very few years held a large portion of the Chinese publishing market. But, their editing and proofing were unprofessional; publishing operations, non-standard; and issuance system, chaotic. This not only affected the quality of the books put out, but also created difficulties in purchasing, and created many troubles for buyers and sellers of book materials in areas such as information relating to new books and cataloguing data for book purchasing. For example: a certain “publishing merchant” and a publisher worked together to publish a book, and signed a contract, the contents of which had no relationship to us, but the contract for issuance which they signed had a very close relationship with the buyer and the sales proposal. Chinese publishers and publishing merchants are two different concepts in that a publishing company is established with the state’s formal permission, and nationally there are over 500 companies, publishing about 200,000 new books annually (including 30-50,000 reprints) whereas publishing merchants use the name of Cultural Company, are actually publishers, but strictly speaking they do not have publishing permissions from the state. Every publishing contract signed by the publishing company and a publisher is different because it was signed based on a their individual best interests, and therefore, some publishers are the main channel, while the publishing company is secondary; some publishing companies take on the entire work of publishing, only giving publishers an editing fee and several dozen sample books; other publishers take on the entire work of publishing and the publishing company only collects book royalties, etc. Therefore, the book buyer must first be clear whether the book to be purchased is a book from the publisher itself or a book published cooperatively by a publisher and a publishing merchant. This is extremely important. Because, if the book you want is that by the publisher itself, its publication rights are clear, a definite guarantee; if you plan to purchase a book that is published cooperatively by a publisher and a publishing merchant, its publication rights are not clear and its procurement ratio is hard to calculate. Since the aforementioned conditions are common in publishing, it creates a situation where the inaccuracies of publishing information can only create an unsatisfied feeling towards the seller in the mind of the buyer. In 2006, China began a complete and thorough reform of the cultural framework, meaning that there will be a big change in the Chinese publishing system, and the Chinese publishing marketing is entering a time of standardization.

1. Serious publication information asymmetries have created shackles on the smoothness of library purchasing.

The so-called information asymmetries in purchasing refer to the extreme lack of understanding of the conditions in Chinese publishing; the insufficient grasp at any given moment of China’s book publishing information and market of publication; the lack of clarity of the changes in China’s book export suppliers since reform; the lack of understanding of the book export policies of the Chinese government, etc. As to Chinese library suppliers, it is the inability to grasp at any given moment the buyer side demand for Chinese materials: not very well understanding the buyer side demand for book services (such as cataloguing data), etc. For everyone here, it is of the utmost importance to be able to grasp Chinese publishing information at any given moment. But that is difficult to do. Because the Chinese publishing environment has created delayed inaccuracies in publishing information and a situation in which supplier quality has not completely improved, therefore, regardless of whether it is state-owned or private, no company can produce a supplier catalog that is up-to-date, complete and perfect for the convenient use of domestic and overseas library purchasing, and this without doubt has caused the greatest amount of trouble to the purchasing departments of overseas and research libraries, and especially to public libraries. Resolving this problem in these conditions, one can only rely upon the small range of data communicated between the buyer and the supplier.

2. A smooth operations model is the fundamental guarantee to complete the work of purchasing.

The traditional purchasing model cannot be criticized, and before there is a brand new modern model. I believe that my company’s current purchasing model is still workable: before an order is placed, my customer first notifies me by email of the classification and amount of books to be purchased (for example: literature, 50 types), and I immediately notify my company’s cataloguing team (members of which are my company’s information collection staff and part-time editors from publishing companies). Based upon our grasp of Chinese book publishing information, we produce within a deadline a list of 100 types of literature books, which after my approval is immediately sent to the customer. My customer will then promptly select 50 items which satisfy them and inform me of the sub-quantity of books and Purchase Order Numbers to be approved, and then begin purchasing, numbering, packing and shipment. This method of operation, regardless of the rate of actually shipped books or delivery time of books, can basically satisfy the customer.

3. The choice of Chinese book materials supplier is also crucial to the completion of the purchasing work by the buyer.

Supplier’s quality, mindset, and ability form the basis for the customer to evaluate the supplier. Because Chinese cultural enterprises are going through an historical stage of organizational reform, this is a painful and extraordinary time, considering the difficulties of a change in mindset and from monopoly to competition, and the difficulties of privately owned and other supra-cultural companies supported by government policies and the lack of foreign trade knowledge. Therefore, there are few mature export suppliers who understand books are familiar with the publishers, are supported by large amounts of capital, have sufficient publishing information to create supplier catalogs, have large amounts of inventory, are responsible and place importance upon customer service. However, I believe that a management mindset, a service mentality, an ability to collect information, and a cultural ambience throughout the organization are the requirements of a modern supplier. Take for example the issue of USMARC data for books. Originally, this issue should not have become a problem in a large publishing nation like China, but owing to its system, mindset and service mentality as well as the effects of many other likewise factors, this issue has only now received emphasis from some Chinese book suppliers, and begun to be operational. A further example, like that which has been discussed, is that China’s current publishing environment limits the creation of supplier catalogs, and one can say that it is impossible for any book supplier to create a complete and accurate catalog. Given the current condition of suppliers, how can one think of a way to create for the buyer a small range of information to be communicated in order to resolve the problem of book cataloguing information? This reflects whether or not the supplier has a “service” mentality.

IV. How to Distinguish Pirated Books and Audiovisual Products

1. Publications of which the content itself is illegal, such as publications that incite subversion of the national government’s authority and propagandize feudal superstitions.
2. According to the strict requirements of relevant Chinese law for entry into the publishing market, publishing activity by those without industry qualifications is illegal, and consequently the publications created by them are illegal.
3. Publications that infringe upon the copyrights of others.

The concept of clearly knowing illegal publication is essential for the library buyer. To protect oneself, one must clearly know the three kinds of illegal publications described above. In addition, let us explore how to distinguish pirated books and audiovisual products.

There are basically three types of illegal audiovisual product:

1. The publication, copying and merchandising of state prohibited audiovisual products
According to relevant legal regulations, all contents containing “threats to the unification of the nation, sole authority and sovereign land,” “incitement of disharmony between ethnicities, damaging the solidarity of ethnicities,” “leaking of state secrets,” “propagation of lewdness, superstition or violence,” “libel, insults of others,” etc., are all prohibited nationwide from publication, copying or merchandising, and all are illegal audiovisual products. These illegal audiovisual products are easy to distinguish, and currently are not on the market.

2. Audiovisual products illegally produced and published by official publication and reproduction units.
These illegal audiovisual products are not distinguishable by most people. For example, audiovisual products published by an audiovisual publishing unit which has transferred, leased or sold its unit name or publication number to another unit or individual; audiovisual products published without an audiovisual publishing permit; audiovisual products that do not match up with book materials published by a book publisher; audiovisual publications that exceed the scope of publication, etc. Moreover, there are official audiovisual reproduction units adding recorded material; audiovisual products modified at the request of the unit hired to perform the sales function; audiovisual products manufactured from a foreign-provided master or mold, but not entirely exported, with some remaining in the country and sold, broadcast, re-recorded or given away; audiovisual product pirated and sold en masse without a “Letter of Delegation for the Reproduction of Audio and Visual Recorded Products” with the audiovisual publishing unit, etc. In sum, the kinds of illegal audiovisual products are many and difficult to distinguish. For example, audiovisual products counterfeited by audiovisual publishing units; foreign audiovisual product smuggled into the country; audiovisual products produced with stolen names and publishing numbers of audiovisual publishing units which have received government permission, etc.

3. Many other foreign audiovisual products smuggled into the country and published as pirates. Method for distinguishing pirated CDs:

1. Etched CDs; the face of the CD is bluish-green, and the center of the disc lacks the infi typeface origination identification number (SID number).
2. Smuggled CDs
   1. Holes punched in the package or face of the CD.
   2. CD in original export packaging (overseas and Hong Kong/Macao, Taiwan), lacking the “Audiovisual product anti-counterfeiting mark” and the “China Books Import and Export Company anti-counterfeiting mark.”
3. Missing the audiovisual anti-counterfeiting mark.
4. Packaging or CD face lacks the name of an audiovisual publishing unit.
5. Lacks the China Standard Audiovisual Product Number. China Standard Audiovisual Product Number format: ISRC/national number/publisher number/recording production year/year of recordation/recording type or classification number. For example: ISRC CN-F44-03-317-00/AJ6
6. Center of disc lacks an SID number (ifpi) or the SID number is unclear.
7. Packaging lacks the strip number. Strip number format: ISBN7/publisher number/publication serial number/checksum number (10 digits). For example: ISBN7-88511-044-3

Audiovisual numbers of the publishing unit and audiovisual product printed on packaging and disc face are inconsistent.

V. New Method of Authentication Beginning in 2006

1. General method using the “B” header number audiovisual anti-counterfeit mark:
   1. The anti-counterfeit mark is produced with “laser paper” technology which can be torn with the hand. This clearly different from ordinary laser holographic marks which can’t be torn by hand.
   2. The entire graphic is produced with “laser etching,” and the light creates in the central portion a moving raster, which is moreover, moving continuously.
   3. The mark shows two Chinese characters: “audio” and “video.” In a 5x magnifier, the letter “Y” may be seen to the left of the character for “audio,” and the letter “X” may be seen to the right of the character for “visual.”
   4. Around the circle clearly visible in the anti-counterfeiting mark, one can see with the naked eye another circle formed by a very thin line. With a lighted microscope, one can see it. This circle is composed of the continuous phrase “CHINAVIDEOAUDIO” in miniature, and two Chinese characters for “text” and “change” in miniature located between the phrases.
   5. One can see with a lighted microscope the two characters “audio” and “video,” the two circles and the center of the disc, and the diacritic, etc., all on a white circular dot neatly aligned. The “A” header number audiovisual anti-counterfeiting mark does not show a “Y,” the narrow circle formed by “CHINA VIDEO AUDIO,” and the special characteristics described in section 5 above.

2. All audiovisual products carrying the audiovisual anti-counterfeiting mark must be temporarily sequestered at each level of audiovisual administrative management departments, and progress through authentication that it is an official edition of an audiovisual product, and can be released for issuance after the application of the anti-counterfeiting mark by the original publishing unit; those that are illegal audiovisual products are punished according to relevant regulations in the “Audiovisual Product Management Regulations” and “Ministry of Culture Implementation Opinion Regarding Concrete Application of Laws and Regulations to Attack Illegal Audiovisual Product Commercial Activity.”

VI. Self-Protection during Purchasing

A library buyer should be aware of the following:

1. When signing an agreement with a supplier, one must pay attention to the insertion of clauses relating to copyright protection and clear responsibility.
2. The export of official versions is a responsibility and duty of a book supplier that cannot be shirked. Therefore, if copyright problems occur during the purchasing process, the supplier should be fully responsible, with the end user having no responsibility.
3. If Chinese language books and audiovisual materials in the library develop copyright problems that are not easily resolved, seek free advice and assistance from the author.