1. Bent u klaar voor China? Antwerpen, 29 maart 2006 Bescherming van uw intellectuele eigendommen Practical Aspects of Software Protection in China Mr. Aubin de Perthuis Advocaat Ulys Law Firm www.ulys.net

2. Practical aspects of software protection in China Copyright protection for computer software 2001 Regulations on computer software protection How to secure a software-related technology licence or transfer? Tips

3. Practical aspects of software protection in China Copyright protection for computer software 2001 Regulations on computer software protection Background WTO adhesion Criteria for protection Independent development Fixation No disclosure requirement

4. Practical aspects of software protection in China Registration No longer a prerequisite for enforcement Registration procedure Registration advantages preliminary proof in favour of the registered software owner legal remedies Protection term 50 years after the authors death 50 years after the last developers death in case of co-development for a legal entity at 50 years after the first disclosure of the software

5. Practical aspects of software protection in China Case studies Administrative action: Microsoft v. Beijing Zhongxinlian and Tianjin Minzu (2004) Action filed before the Copyright Administration in 2004 Infringement of its Windows XP software copyright Two companies suspected of producing recovery disks of Windows XP Home edition for Lenovo From November 2001 to July 2003, 55.000 infringing recovery disks produced Beijing Zhongxinlian: part of a group of thirteen State-owned publication & distribution companies Tianjin Minzu: important factory specialized in the large-scale production of read-only compact disks

6. Practical aspects of software protection in China Case studies Administrative action: Microsoft v. Beijing Zhongxinlian and Tianjin Minzu Violation of the 2001 Software Regulations Copyright Administration fined the two companies & confiscated a small part of their illegal earnings Criminal prosecution also initiated Criminal detention for three persons and fines Best practice case First time Microsoft had successfully taken action against illicit manufacturers 80.000 RMB fine described as the largest administrative fine at that time for such infringment

7. Practical aspects of software protection in China Case studies Civil action: Autodesk v. Beijing Longfa (2003) Autodesk first initiated an administrative action for software infringement before the Copyright Administration Office At the same time, Autodesk applied for the preservation evidence before the Second Intermediate Court of Beijing Subsequent to it, Autodesk filed a judicial action before the same Court Less than 3 months after the claim acceptance and on the basis of the evidence collected both by the plaintiff and by Beijing Copyright agents

8. Practical aspects of software protection in China Case studies Court ruling against Beijing Longfa To immediatetely stop using infringed copies To make a public apology To pay compensation of 1.490.000 RMB to Autodesk To pay 32.250 RMB for litigation expenses To bear the investigation costs of 18.968 RMB Appeal Conciliatory agreement Best practice case Celerity Damages based on the retail price

9. Practical aspects of software protection in China How to secure a software related technology licence or transfer? Provisions under the 2001 Regulations on Computer Software Protection Removal of the 10 year validity term affixed to the licensing contract No longer distinction between moral and economic rights A written form is expressly required for exclusive licence and transfer

10. Practical aspects of software protection in China Provisions under the Copyright Law Scope of the licensing Licensing term Remuneration method Liability Confidentiality clause Choice of the law Arbitration clause

11. Practical aspects of software protection in China Provisions under the Technology Import & Export Regulations foreign licensor must check whether the licensed software is prohibited under import regulations whether the licensed software is restricted under import regulations If the technology contained in the software contract is freely importable the Ministry of Commerce must still approve the technology import contract and issue a certificate to that effect One of the conditions for such approval is that the Chinese counterpart has the right to undertake a technology import activity

12. Practical aspects of software protection in China Tips Preliminary remarks Preventive steps Analyse the need to transfer technology Carefully choose the recipient of the technology Attempt to break up the technology to be transferred Conduct surveillance of suppliers and distributors Control departing staff Do not hesitate to contact your embassy, consulate, attaché, national and EU chamber of commerce to get first-hand information & experience

13. Practical aspects of software protection in China THANK YOU! Mr. Aubin de Perthuis Ulys Law Firm www.ulys.net