Music Industry Intellectual Property in China - Coursework Example

Intellectual Property for Music Management in China Music Industry Intellectual Property in China Introduction Intellectual property rights (IPR) can be described as the legally recognized and exclusive policies to the various creations of the human mind (Stoll, 2009). Under these rights, the particular owners are often given specific and exclusive rights to various innovations that they come up with. Some of these assets include music, artistic works, literary works, designs, symbols among other inventions and discoveries. Some of the most common forms of intellectual property rights used in many countries include patents, trade designs, copyrights, trade marks and to some extent, trade secrets are also common. It is important to note that many of the rules and policies that govern the full implementation of IP rights have been changing over the ages (Stoll, 2009). The term intellectual property began getting active use in the 19th century. In the 20th century, the term became profound in the global market place and in many countries of the world (Raju, 2006). In this case, some people may want to reproduce patented works of artists with the aim of benefiting from their sales without the consent of the original creators. People found going against the policies of intellectual properties often face stiffer penalties in courts of law. This paper examines the concept of copyright law in the Chinese republic and the efforts put in place to ensure that creators of original content in any country benefits from their mental creations. Benefits for a good Intellectual Property Rights Regime The protection of intellectual properties is an important practice that has to be carried out by entrepreneurs, who use their mental energy to create and develop innovations that influence social and economic functions at individual and corporate level (Mario, 2010). These rights are important in protecting inovators against competitors, who often may want to copy and implement ideas directly from other businesses. This makes it easy for the entrepreneurs to get back their invested costs in the development of the particular ideas and concepts. Intellectual property rights play a leading role in ensuring that businesses can maintain their long desired and deserved competitive advantage. IP rights that have been registered are important to entrepreneurs because they can get financial advantages from the ideas and concepts they develop. The continouss revenue enables the industry to keep their business in operations for the future (Mario, 2010). Additionally, registered IP rights are important assets to the business. It can be used to bargain for additional funding from financial institutions and other donors that can offer financial aid to the business (Engdahl, 2010). They also give confidence to consumers that the products and services made by a business are effective and meet certain quality standards. By benefiting from these rights, particular entrepreneurs enjoy rewards for the risks taken in investing in these mental creations and the development of new innovations. Therefore, they can use the profits they make to invest in ideas and innovations that can enhance the performance of these businesses (Stoll, 2009). When these businesses own the intellectual property rights, they can franchise or license their ideas and other innovations to other people without any unexpected risks. In this case, the entrepreneurs can expand and grow their business by developing other ideas and concepts that can influence individual and organisational practices. This way, they can increase the scale of their businesses in order to benefit from the economies of scale. Status of IRP in China China has approximately 1.3 billion inhabitants who form the potential consumers in China’s music industry. Additionally, it has about 1.1 billion telephones with approximately 22% of them having the capacity to access 3G (Mario, 2010). The number of people that can access and use the website is approximately 564 million (Mario, 2010). Despite these promising statistics, the music industry in China has been facing higher rates of piracy, which has been estimated to be about 90 percent. In order for China to reap the benefits of IPR, the legal and business infracture needs to exist (Crane, 2008). The IFPI (International Federation of the Phonographic Industry) has estimated that all the music that is consumed in the Chinese republic, has been pirated. Under these conditions, many questions continue to emerge about the future of the country’s music industry. The recovery of the Chinese music industry is expected to take long. In recent years, the industry has collapsed on several occasions, moving from about $55.5 million in 2006 all the way to $19.9 million in 2011 (Mario, 2010). Recently, the digital music industry has been showing some signs of hope in China and other countries in the Asian continent. This has been necessitated by the large numbers of people that can access and use the internet effectively in the changing technology as influenced by the smartphone development (Priest, 2014). With an estimated population of about 4.3 million people consuming music through the internet, China’s music industry could be poised for a great future. Collective Management Organisations in China Collective management organisations refer to bodies created under legal provisions to participate in the cumulative management of issues of copyrights and other related rights on behalf of authors and other creators of original inventions and mental works (Stoll, 2009). This systems allows for pooling of rights in the process of licensing these repertoires to the particular users (Mario, 2010). The collective management organisations are essential in facilitating the link between various right holders and many other users, thus making the process of licensing to be much easier. In many instances, like those involving mass usage of these works, CMOs become the most effective and practical way to license the use of these copyright works. In China, the concept of CMOs is said to have emerged almost three to four decades ago (Priest, 2014), but their influence continues to be felt in ensuring that people developing music and other original works benefit from their creativity. One of the issues that CMOs in China have had to confront is the decision on the choice an effective optical model due to the particular external nature in the origin of CMO system in China. Additionally, it has to face the different shapes and sizes of the CMOs because of the roots of civil war as presented by the legal system in China (Raju, 2006). In as much as the CMOs have been experiencing a positive growth in the recent past, a number of issues continue to present local and international challenges that need to be dealt with effectively. One of them is the relationship between the members and the particular CMOs, which still need to be addressed effectively. Additionaly, there is great need to address the relationship between the CMOS and the non-member holders of copyrights policies, as well as the unprecedented abuse of the policies by these members. These needs have been cited as the most urgent and outstanding that have to be addressed in the China’s music industry. Challenges facing IPR in China’s Music Industry So far, it is a general observation that the kind of relations existing between CMOs and their particular members depend on the trust created by both parties (Wang 2010). In this case, a particular CMO is expected to safeguard the particular rights of the holders under its name and not in that of the right’s holder. This legal provision is clearly spelt out under RCCA rules, in article 2. This section holds that CMOs are supposed to exercise the particular rights of their holders in their particular name and that of their members. It is important to realize that at present, there is no dispute over the kind of relationships existing between members of the CMO and the organisations themselves at the legislative and theoretical level (Raju, 2006; Sidel, 1985). However, as far as the judicial level is concerned, a divergence in views exists. The problem emerging relates to the functioning of CMOs and the holders of copyright laws in the process of suing third parties that breach copyrights laws In this regard, the cause of disagreement has been these two parties, i.e., the CMO and the policyholders, who have the legal capacity to make a legal suit against a third party who infringes on copyright rules (Stoll, 2009). The courts have tried to provide a solution to this standoff by asserting that a relational trust often has to exist between the holders of the rights and Music Copyright Society of China (MCSC), such that the obligations and rights of the parties have to be regulated by the terms and conditions set in the agreement (Wang, 2010). In this case, the MCSC can as well manage the copyrights policy in its very name, thus ending the standoff (Wang, 2010). Expected Solution In order to develop the solution to the above challenge, it is important to understand the development path that it has taken. It is believed that these problems have been brought about by the ambiguous nature of RCCA. In as much as the provisions in article 2 give CMOs the right to implement the act alone, it does not provide a direction as to whether the particular right holders can also implement it. Additionally, the source of this challenge has been necessitated by the current nature of the Chinese law, which is described as being highly hybrid. In this case, it has to behoove the concerned authorities to make some clarifications for the members of the CMO and the organisations themselves, towards achieving issues of common good. In this case, the process may have to involve adapting some sections of the trust law in China (Priest, 2014). This means that the trust system that defines common law in the world has to be adapted to the system of civil laws in China. It is believed that this is possible, considering the fact that the same has been applied to Quebec in Canada, with great success (Gervais, 2003). When this was done in Canada, the trust laws were creatively incorporated in the civil code that initially existed (Yu 2010). For the case of China, it would not be necessary to overhaul the entire legal system; rather, what are important are just few sections that would streamline the responsibilities that have to be taken by the different parties in the China’s music industry (Sidel, 1985).). This follows the fact that a series of systematic amendments that are comprehensive and specific to certain issues is the one needed to ensure proper functioning of the CMOs and the rights of their members and non-member policyholders (Ma, 2010). When clear demarcations of the rights and responsibilities of all the players in the music industry in China are outlined, it is possible that the country will be in a better position to effectively tackle the current challenges and other that might arise in the industry in the near future. The Challenge of Litigation explosion In the recent years, copyright holders have filed various cases against karaoke companies over issues of infringement of their copyright laws (Crane, 2008). Most of these members are actually not party to the CMO agreements. These karaoke companies via the CMOs have noted the increased cases that have been filed as being in contrary to the developments in the collections of licensing fees (Zhai, 2003). In 2008, only three cases were filed, but the number rose up to 20 in 2009, with the following year recording about 39 of these cases. The years that have followed have seen these cases ranging in their hundreds and thousands. In the analysis of these cases, it is evident that the non-members to CMOs often give their tights to some of the relevant CMOs. In this case, venture capital gets to be invested in the process of litigation so that legal suits are filed in huge batches. These lawsuits have risen to become veritable in the music industry in China (Zhai, 2003). The explosion in the litigation process annoys CAVCA in many ways, because the legal suits hampers the process of collecting the karaoke license fees (Ma, 2010). Karaoke companies have been become much reluctant in the process of paying their license fees to the CAVCA. In their analysis, it does not make sense or differences if they pay for purposes of using the works in the audio-video creative works or not (Ma, 2010). This arises from the fact that they stand to be sued in the court of law in either of the case. Therefore, it is better for them to carry out their functions and wait for the legal processes to come by, depending on the infringements cited by CMOs or policyholders. Expected Solution The litigation problem has become a central challenge that has been affecting the Chinese Music Industry for a long time. The solution to these challenges is expected to play a leading role in the achievement of the goals and objectives in the Chinese intellectual property rights, not only in the music industry, but also in other industries. In the process of solving these litigation challenges, CAVCA has developed four strategies that it hopes can be helpful in solving these challenges. The first step has been persuading and coercing holders of the policy rights and non-members to the organisation to hand over their policy rights to CAVCA, which promises to administer them in the best interest possible. Secondly, it has sought to engage in dialogue with karaoke companies in order to ask them not to be relying on the works created in times of dispute (Crane, 2008). This means that they have to delete them completely from their respective karaoke databases. The third approach involves assisting these karaoke companies to deal with the emerging lawsuits The fourth and final strategy deemed effective in solving some of these litigations challenges involves seeking support from the courts and relevant government agencies (Liu, 2007). The director of CAVCA has promised not to give any licenses to karaoke companies; instead, he has promised to inform these companies to stick to the right legal procedures so that they can avoid some of the risks that arise when they deal with non-members to CMO and CAVCA. These measures are expected to be very effective in solving most of the challenges arising in the music industry’s intellectual property rights in China (Liu, 2007). It is important to realize the implementation of these recommendations will be essential in streamlining the duties and responsibilities of policyholders and those of CMO. However, the disadvantages expected to arise would be that CMOs capacity to collect licensing fees and issue the particular licenses will be weakened tremendously (Liu, 2007). A different alternative would be to create a new licensing regime, which is to be known as an extended repertoire. Under this regime, it would be much easier and efficient to issue and collect license fees from policyholders. References Crane J. A. (2008). Riding the Tiger: a comparison of intellectual property rights in the United States and the People’s Republic of China. Chicago-Kent Journal of Intellectual Property. 7(1):95-120. Engdahl, S. (2010). Intellectual property rights. Detroit, MI: Greenhaven Press Gervais, D. (2003) Application of an Extended Collective Licensing Regime in Canada: Principles and Issues Related to Implementation’, Canadian Heritage. Retrieved from. Liu, X. (2007) ‘On Qualification of Proper Party of Copyright Collective Management Organization,’ Faxue Pinglun (Chinese) 146(6), 58–65. Ma, J. (2010). Analysis on Litigations against Karaoke Companies. Retrieved from. Mario, B. (2010) Collective Management of Copyright and Related Rights. The Netherlands: Kluwer Law International BV. Priest E. (2014). Copyright extremophiles: do creative industries Thrive or just survive in china’s high-piracy Environment? Harvard Journal of Law & Technology. 27(2): 468-539. Raju, C. (2006). Intellectual property rights. New Delhi: Serials Publications. Sidel M. (1985). Copyright, Trademark and Patent Law in the People’s Republic of China. Yale: Princeton University. Stoll, P. (2009). WTO--trade-related aspects of intellectual property rights. Leiden: Martinus Nijhoff. Wang, J. (2010) ‘Should China Adopt an Extended Licensing System to Facilitate Collective Copyright Administration: Preliminary Thoughts,’ European Intellectual Property Review, 32(6), 283–9. Yu, H. (2010) ‘Sinolization of Dual Ownership of Trust Property in Anglo-American Law System,’ Modern Law Science (Chinese), 32(3), 159–68. Zhai, R. (2003) ‘Analysis of the Legal Relation in the Copyright Collective Management,’ Falv Shiyong (Chinese). (1–2), 121–123. Read More