• Measures for the Registration of Copyright Pledges
  • March 16, 2011 | Authors: John V. Grobowski; Yiqiang Li; Wendy Yan
  • Law Firm: Faegre Baker Daniels - Shanghai Office
  • China's General Administration of Press and Publication has issued new rules governing the pledge of copyright as security in contracts, replacing outdated rules that had been in place since 1996 and were in conflict with other, newer laws. The Administration of Press and Publication (also known as the State Copyright Bureau or National Copyright Administration) issued the Measures for the Registration of Copyright Pledge (Pledge Registration Rules) last November; the rules took effect on January 1, 2011. The Pledge Registration Rules resolve conflicts that arose after amendment of China's Copyright Law in 2010 and implementation of the PRC Real Right Law in 2007.

    The Pledge Registration Rules also implement Article 26 of the 2010 revisions of China's Copyright Law, which were enacted by the Standing Committee of the National People's Congress in February 2010. (See the April 2010 issue of China Law Update.) Article 26 said simply, "Where a copyright is used as a pledge, both the pledger and pledgee shall register the pledge with the copyright administrative authorities of the State Council."

    According to the Pledge Registration Rules, in order for a pledge of copyright to be valid, the pledger and the pledgee must enter into a written contract, and such contract shall be registered at the General Administration of Press and Publication. The establishment of, or changes, transfers, and elimination of the pledge of copyright, will become effective only after the same is recorded on the Copyright Pledge Register maintained by the General Administration of Press and Publication.

    Below is a summary of the Pledge Registration Rules and the detailed requirements for copyright pledge registration.

    Documents to be Submitted When Applying for Registration

    When applying for registration of a copyright pledge, the parties must submit the following documents:

    • Application form for the registration;
    • Identification documents of both the pledger and pledgee;
    • The main contract between the parties as well as the copyright pledge contract;
    • If the copyright being pledged is jointly owned, a written document showing that co-owners of the copyright consent to the pledge;
    • If the pledger authorized others to use the copyright before it is pledged, the contract authorizing use of the copyright;
    • If a value assessment of the pledged copyright is required, the assessment of the value; and
    • Other required documents.

    If the original versions of the submitted documents are in English, the parties shall submit Chinese translations as well.

    Information to be Included in the Copyright Pledge Contract

    The Pledge Registration Rules require certain information to be included in every contract that pledges a copyright:

    • Basic information on the pledger and the pledgee;

    • Type and amount of debts that are being secured by the pledge;
    • Time limit for the debtor to fulfill his or its obligations;
    • Content and protection period of the pledged copyright;
    • Scope and length of the guarantee of the pledge; and
    • Other particulars agreed to by the parties.

    Reasons for Rejection of Registration

    If one of the following circumstances occurs, the Pledge Registration Rules direct the General Administration of Press and Publication not to register the pledge in the Copyright Pledge Register:

    • The pledger is not the copyright owner;

    • The contract violates mandatory provisions of laws or regulations;
    • The protection period of the copyright that is being pledged has expired;
    • The time limit for the debtor to fulfill his or its obligations exceeds the protection period of the copyright being pledged;
    • There is a dispute over ownership of the pledged copyright; or
    • Other circumstances where the pledge conditions are not satisfied.

       

    Deregistration of the Copyright Pledge

    The Pledge Registration Rules direct the pledger and pledgee to apply for deregistration of the copyright pledge if any of the following occurs:

    • The pledger and the pledgee agree to deregistration;

    • The obligations contained in the main contract have been fulfilled;
    • The pledge right has been exercised;
    • The pledgee renounces the pledge; or
    • Other circumstances that lead to elimination of the pledge.

       

    Conclusion

    According to Chinese government data, from January 2000 to August 2010, the Copyright Protection Center of China, which is entrusted by the General Administration of Press and Publication to handle pledges of copyright, has handled 934 copyright pledges, among which 747 involved the pledge of copyrights involving computer software. Issuance of the Pledge Registration Rules is a result of that trend. In addition, with issuance of the Pledge Registration Rules, the General Administration of Press and Publication has put forward much clearer guidelines on the copyright pledge registration process.