Secondary remuneration, are you ready?

2013/1/24By Doris Li, Jessie Chen, China IP,[Copyright]

On July 6th, the National Copyright Administration of the People’s Republic of China announced the second draft revision of the Copyright Law (second draft revision). Compared with the first draft revision, which was delivered on March 31st, the second explicitly grants the right of secondary remuneration to authors, screenwriters, directors, lyricists, composers and major performers for uses of audiovisual works after an original performance. The new provision has been met with warm responses from the affected parties. Directors and screenwriters are competing for the title of the copyright holder, while producers hold that if there is no investment, the screenwriters, directors and performers will not be paid in the first place, let alone receive secondary remuneration.

The new provision endows economic profits to authors, screenwriters, other associated authors as well as major performers if there are other profitable uses of the original audiovisual works. Though the affected parties are pleased, they also realize implementing the law may cause problems. How will remuneration among the producers, creators and performers be "fairly" distributed? What defines the scope of "major performers?" Is a famous performer with a minor position as a guest performer a "major performer?" In practice, the lack of clear definitions for eligibility and clear rules for fair distribution may cause significant disputes if related parties fail to reach a contractual agreement on these issues.

Parties involved may inflexibly hold personal interpretations of the law during grievances while legal professionals may hold varying interpretations and questions about proper application of the law. Interested parties have already listed problems which should be solved before the legislation passed: (1) who should pay remuneration, the producers or their users? (2) Could the law be satisfied by giving eligible parties a single payment and then permit unlimited secondary uses or should eligible parties be paid based on the specific uses on an ongoing basis? (3) What is the definition of a "specific use"? Does "use" mean full use or partial use of the audiovisual works? Are indirect performance and broadcasting included? (4) Can eligible parties lose, sell or waive the right of secondary remuneration?

On October 18th, members of the Copyright Law Amendment Committee held the fourth meeting to discuss the third draft revision of the Copyright Law. Both the contents of the meeting and the third revision are confidential. For the right of secondary remuneration, many people believe it will take time before it is affirmed. If it is finally introduced, the follow up detailed provisions and judicial interpretations will be under the spot light, and there have already been heated discussions as to how to solve the problems related to the practical operations.

In order to give a voice to the various opinions, the cover story of this issue is the topic of “Secondary Remuneration, Are You Ready?” which was also the topic of the forum held on October 18th by China IP magazine. Directors, screenwriters, producers, scholars, lawyers and judges expressed their views and arguments on the issue.

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