IP Team of China Reading Limited: Goalkeeper in the Era of National Reading

By Jody Lu, China IP,[Copyright]

   In 2015, film and television works adapted from popular novels have attracted countless fans; it’s just like an unprecedented carnival feast.   Ancient oriental style Langya Bang obtained national popularity without negative comments ; Dragon-Seeking Spell of Ghost Blow Out The Light, which is comparable to Hollywood blockbuster, once again attracted great spectator’s interest in works of grave robbery; highly popular of network drama The Notebook of Grave-Robbery is sensationally in vague. All these super popular film and television works with high national audience ratings are adapted from network original novels of China Reading Limited.
  In March, 2015, China Reading Limited, established after merging Tencent Literature and former Shengda Literature, is extremely influential among original brands of Chinese digital reading. It has network original works and reading brands of qidian.com, chuangshi.   qq.com, yunqi.qq.com, readnovel.   com, qdmm.com, xxsy.net, hongxiu.   com, www.xs8.cn; it also has book publishing and digital publishing brands including Book Channel of Tecent Literature, the World of Chinese, Zhong Zhi Bo Wen, Ju Shi Wen Hua, rongshuxia.com, zubunet.   com; it has audio-book brands of tingbook, Lazy People Audio-book as well as of mobile apps with abovementioned content and services of QQ Reading and qidian Reading.   China Reading Limited became the strongest business unprecedented in China’s net literature and digital publishing history; it has core quality resources, 10 million volumes of works and 4 million of the original author team including a number of well-known writers.
  Despite being the industry’s largest IP output center, China Reading Limited’s IP management team is unknown to most people. Although it is one of the core team of the corporation, it has never been at the center of attention. In the view of Wang Zheng, the senior director of department of general legal issues, “IP team plays a role of goalkeeper”. A team of 40 people, which is also rare in the industry, is made up of the department of legal issues and the copyright department, responsible for the team’s legal affairs, governmentrelated affairs and copyright management of millions of works.   The team established “copyright integration” management process and mode of operation, which has become the core of the network literature industry system; despite of the shadow of the piracy, this team has won every battle concerning various types of rights lawsuits in 2015, including trademarks, copyright, the right of adaptation, and unfair competition.
  “In football, the most popular players are always strikers who score the goals and midfield players who pass the ball; if the goalkeeper is too eye-catching, it means the team has something wrong”, Wang Zheng said, “Our support team is like a goalkeeper who spot and solve problems as soon as possible, providing the primary protection for China Reading Limited’s idea of national reading.”
  Copyright Integration Management to Safeguard IP System to the Full Extent
  In the booming period of network literature, copyright is undoubtedly the most exciting keywords. According to Wang Tao, the agreement signing support team leader of the copyright management department, profiting model in terms of copyright is divided into two categories: the first is electronic readers’ payment for reading, with its earnings gained by China Reading Limited and authors according to certain proportion; the second is external authorization of IP, namely, adaptation works of video, games, animation and drama, with TV drama Langya Bang, Ghost Blow Out The Light and The Notebook of Grave-Robbery as examples.
  “ In the network industry concerning IP in the past, there were such phenomena as development disorder, brand decentralization, inefficiency and other drawbacks, resulting in halfway failure of many outstanding works.” Wang Tao said, “and the integrated management of copyright by China Reading Group established is a tailored remedy to this problem as it is a systematic and digitized management of contract signing, authorization and remuneration among other fragmented businesses. Based on China IP journalist’s observation, when literature website signed licensing agreements with authors, they usually used contract templates formulated by the legal department of the company, and editors, who is not of legal profession, are responsible of communicating with authors concerning contract signing, creating a cooperation environment of poor communication and inefficiency. China Reading Group is the first in the industry to separate the operations of signing the contract, the copyright management team and the business management. “As signing contract involves a number of legal issues, which and authors don’t understand very well, professional support is very necessary. Since all the members of our team are from law major, our communication with the author about signing the contract will boost efficiency and work results.”  Wang Tao said.
  Contract signing support team under the leadership of Wang Tao, is mainly responsible for the contract signing with its writers and other companies. Each year this team needs to analyze tens of thousands copyright agreement documents, which is one of the main business of the copyright management department; and another copyright support team, under the leadership of Li Jiejing, mainly deals with copyright information analysis, integration, query, retrieval and other related work, “like the archive management of the library, this is a complicated and delicate massive database”. According to Wang Tao, copyright support teams classify and document various kinds of the copyright material. Thanks to their efforts, business department could judge works’ copyright status by viewing the data information before copyright selling and authorization.
  After the era of Tencent Literature and former Shengda Literature, China Reading Group has also made reform in copyright management. “The process is more specialized and professional, the resources and information are in maximal usage, thus more close to and in better support of the company’s business development.” Wang Tao told China IP journalist. Details like author’s thoughts would even be recorded. Some authors value copyright income, while other authors value the strength of buyers, hoping that work was soon adapted. Copyright management department will classify their information and hand the feedback to the business department for them to consider the author’s intention in market cooperation, thus achieving win-win cooperation between author and the company. In copyright trade and import and export, the team will also conduct detailed data analysis, finding development direction that is more conducive to the business. With information such as the recent market trend, common transaction price and whether the buyer prefers one-time buyout or dividend paying cooperation, business department can conduct work in the market more conveniently.
  Under the fans effect, many original works realize goals of high click rate and then high ratings; some of the grass-root, original author become star writers overnight with annual income of tens of millions. Such inspirational story encouraged more and more literature enthusiasts to join the wave of website literature writing. Yet in fact, such success is very rare, and most of the grassroot writers are struggling, and some will abandon halfway. “The cultivation of a good writer is a long and difficult process, which is very important. And we cannot let the author who work for us worry about their living.”Wang Tao said. Last year China Reading Group launched the “Star Plan”, a new mode of cultivating writers; it is aimed to explore and develop original literary authors who have potential and promote the prosperity of the whole industry.
  Wang Tao told China IP journalist, for works that haven’t finished by authors with potential, the team will buy out the work at a fixed price per thousand words according to the assessment of the editorial department, without considering reading payments in the future, so as to ensure that the author can create without distraction. At the same time, for every author who updates every day, China Reading Group will offer nearly RMB 2000 monthly award to encourage them.   The media only see that we have created a lot of writers with daily income of over RMB 10,000, but what they haven’t noticed is that we also take a variety of ways to help and encourage authors to create.” Wang Tao said, “by encouraging more people to participate in the creation and cultivating fertile soil suitable for original literature, we believe that there will be more and more outstanding authors and cultural and creative industries will also become increasingly prosperous. ”
  Anti-piracy Operation is Imminent, Time to Promote Ecological Development of the Network Literature Industry
  Behind the carnival network literature, it is difficult to break loose from the piracy dilemma.
  Related survey shows that the current domestic digital reading payment rate is only 6%, while the rate of network literature is even less than this; the existence of piracy is the root cause of this situation. On the other hand, piracy revenue is more than 50 times of the original work. It is fair to say that piracy is a serious drag on the network literature industry, both in the industry size and creative value effect of it. Recently, the Chinese Website Literature Copyright Protection White Paper, released by iResearch, a consulting firm, shows that if China’s piracy website literature are priced as the original work, the loss of PC terminal paid reading income reaches RMB4.32 billion, the mobile terminal paid reading income losses are amounted to RMB3.45 billion and the loss of derivative products output is valued at RMB2.18 billion; and for the entire industry, losses reach nearly RMB10 billion due to piracy!
  As the “safe harbor” provision that specifies liability, a clear notice of “notice-and-takedown procedures” could gain exemption. On the contrary, in the “red flag” provision, legal definition “aware of” standard is fuzzy. “Safe harbor” has become shield of some search engines and sharing sites. “Piracy first and then notice; without notice they will not delete. For example, among ten pirated works, if only one of them received notification, they will simply delete this one; and even if all of them are deleted, after a while another ten pirated works will appear. This greatly increased the difficulty and burden of our regulation.” Wang Zheng said, “I think the Internet companies should have their own consciousness and take their responsibilities rather than let the law to specify what they should or should not do.”
  Some game will take free ride of website literature. “On the advertising page of a game with the background of Three Kingdom Period maybe some well-known website novels under China Reading Group; users who want to read the novels may click into it. For these game makers, they can gain a promotion and an active user by a free ride to earn; however, for our company, it is unfair competition.” Wang Zheng said, “Website literature industry paid more attention to direct piracy and infringement of the written works in the past; yet this year, we are more concerned about the breadth and depth of literature website copyright protection. And in addition to the rights protection against piracy of word works, unfair competition and trademark infringement cases are more part of our job.”
  As a newly-emerged industry, audio book adaptation market develops swiftly, but also has become the hardest hit area by piracy. In early 2015, China Reading Group effectively curbed the spread of a number of audio books in the market, including suing Himalaya, Dragonfly FM and other well-known audio book companies. “Through our efforts to protect copyright, we want to curb the new field of piracy in its embryonic stage, thus forming a sense of respect for copyright. Today, when they actively cooperate with us, this industry can be standardized in the early stages of development, and in fact, this will play a leading role model for the entire industry.” Wang Zheng said. After the beginning of 2009 video piracy war, now it is difficult to find links to pirated video in the portal. After a major reshuffle, China’s film and television industry has made a great achievement last year and domestic movie box office permanence can even rival that of Hollywood. Wang Zheng expects that this rosy prospect will appear in the field of website literature. “1We really hope that there are large anti piracy campaigns in the national policy level, or there are initiatives and protective measures for the whole website literature; these measures will protect the legitimate rights and interests of tens of thousands of authors of our group and promote the development of the whole creative industry of China.”
  (Translated by Yang Yang)

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