China’s thriving digital book and online publishing industry has grown rapidly over the past couple years. To cope with the boom, the sector is undergoing many changes while new issues emerge every day.
According to the China Internet Network Information Centre (CNNIC), the country had 293 million online literature readers in 2014, an increase of 7.1 percent from the previous year.
Wang Zheng, general counsel of Yuewen Group, the country’s largest online publishing and e-book company, shares with ALB his experiences on the ground and how his role is evolving all the time.
ALB: WHAT IS THE DAY-TO-DAY WORK OF A LEGAL PROFESSIONAL WITH AN ONLINE PUBLISHING COMPANY LIKE? CAN YOU DESCRIBE AN AVERAGE DAY AT YUEWEN?
Wang Zheng: Our legal department is composed of three units, including a routine legal issues unit, litigation unit and government affairs unit. They focus on different spheres while working together to keep the group’s legal work running smoothly.
The routine legal issues unit is in charge of pre-event risk management, including contracts review, business registration and modification, qualification maintenance as well as other legal consulting business.
The litigation unit focuses on dealing with post-event disputes through litigation, filing complaints, letters as well as other legal actions required by other departments in the group.
The government affairs unit is responsible for liaison and coordination with related authorities, including government project applications, interpretation of updated polices and receiving government officials.
To conclude my daily work as the leader of Yuewen’s legal department, I would say I am playing the role of gatekeeper of Yuewen to ensure that all businesses of the group are functioning and running in good order.
ALB: HOW HAS THE LEGAL LANDSCAPE OF THE ONLINE PUBLISHING SECTOR IN CHINA CHANGED?
Wang Zheng: In China, we have seen that the government has continued to strengthen digital copyright protection. In the past couple years, related authorities have sped up new legislations and amendments of existing laws to cope with the emerging infringements and piracies along with the rapid growing online publishing.
For example, the statutory penalty was doubled in the amendments of Copyright Law in 2012. The “Sword Action” campaign, which was launched in 2010 and is intended to address Internet copyright piracy, has highlighted the protection of the copyright of online literatures in 2016 and has been used to crack down on a number of infringements and piracies. Recently, the National Copyright Administration of China, the country’s copyright watchdog, issued “Notice on Strengthening the Management of Online Literature Copyright”. It clarifies the liabilities and duties of online literature providers and also says that the authority will establish a “black and white list” system of online literature websites.
At the same time, awareness of copyright among the industry players, as well as the whole society, has been raised. The change is a result of the development of the country’s related legal framework, as well as the actions taken by industry players to safeguard legal rights.
As a leading company, Yuewen has always paid attention to the protection of copyright since we were established. We take initiative to combat some industry giants’ infringements and piracies. This has resulted in some large domestic [online publishing] companies rectifying some of their business and systems. Yuewen has also been actively promoting the concept of the genuine copy.
This January, Yuewen launched “Genuine Copy Alliance” to connect forces in the industry to foster a healthy ecosystem of online literature. Also, together with well-known authors, we started a campaign on Weibo called “I say ‘No’ to pirate copies”, which evoked profound responses among the public.
ALB: HOW DO YOU FIND THE LEGAL ISSUES OF ONLINE PUBLISHING COMPANIES IN CHINA DIFFERENT COMPARED TO PRINT BOOK PUBLISHING COMPANIES? AND IN GENERAL HOW ARE THEY DIFFERENT FROM ENTERPRISES IN OTHER SECTORS?
Wang Zheng: Online publishing faces more complicated and diversified infringements and piracies compared to traditional print book publishing due to the differences in content and media.
The Internet is instant, highly accessible and has low cost. Similarly, infringements and piracies of online literature usually have short cycles, low cost and are widespread. This means that genuine online literature providers like us face higher costs to safeguard our intellectual property.
Plus, mobile technology has been advancing rapidly; infringements and piracies of online literature have shown more technical characteristics, bringing more challenges to our work.
For example, wide usage of mobile content aggregation services and transcoding makes pirate copies much more accessible and has also largely improved the reading experience. Websites offering pirate copies connect with related technology providers and form a new industry chain of infringements and piracy. They try to escape justice by disguising themselves with “neutral technologies”.
How to see through the so-called “technology” and unveil their crime is not quite an issue for the traditional print book publishing industry; yet, it is the key concern for legal professionals working in the online publishing sector.
ALB: YOU MENTIONED THAT IT IS MORE COMPLICATED FOR ONLINE PUBLISHING COMPANIES. WOULD YOU LIKE TO ELABORATE ON THE MAJOR CHALLENGES YOU FIND CURRENTLY IN CHINA IN REGARDS TO DEALING WITH INTELLECTUAL PROPERTY AND PROTECTING GENUINE WORKS?
Wang Zheng: There are mainly four challenges in regards to protecting the copyright of online literature.
First, as I mentioned earlier, pirate copies have a much lower cost and shorter production period. It is now very easy to establish a website providing pirated literature. You do not need a lot of resources to copy or reproduce online books; there are even methods like manually typing.
Second, due to the large amount of online information and their well-concealed technology, it is very difficult for us to collect evidence to hand to the court. For example, last year, we sued a website with more than 100 pirate works. A mini van was fully loaded with all related documents. Plus, the litigation period is usually quite long. Every case takes several months.
Third, the penalty is not severe enough. Based on Yuewen’s experience, on average, pirate online works were only fined 10,000 Yuan to 15,000 Yuan, whereas their profits were much higher than that. The return is much larger than the cost, and that is a main driving factor leading to an increase of pirate works.
Fourth, legislation is still lagging behind compared to the digital copyright industry’s development as well as piracy technology development.
ALB: MONEY AND HUMAN RESOURCES ARE REQUIRED TO ESTABLISH A LEGAL AFFAIRS SYSTEM WITHIN A COMPANY. THIS MEANS IT IS A COST TO THE COMPANY. THEN DO YOU THINK THE LEGAL DEPARTMENT COULD CREATE VALUE FOR THE COMPANY? HOW CAN YOU HELP YOUR LEGAL TEAM TO ACHIEVE THAT?
Wang Zheng: The legal department can create value for a company. Take Yuewen’s legal team as an example – the value we create for the group can be observed in the following two areas.
First, we can do that indirectly through preventing loss. We can help the group control risks and avoid losses caused by operations that violate related regulations.
Second, our legal department helped establish Yuewen’s online publishing brand and expand the impact of our well-kwon intellectual property through protecting our books’ copyright and cracking down on pirate copies. At the same time, we helped the growth of our business. For example, in 2016, we saw the revenue of various businesses under Yuewen notably increase while many large platforms in the industry focused on tackling infringements and piracies of their businesses. This is a result of our legal department’s active litigation actions against pirate works in the past year.