Regulations on Computers Software Protection

(Promulgated by Decree No. 339 of the State Council of the
People’s Republic of China on December 20, 2001, and effective as
of January 1, 2002)

Chapter I General Provisions

Article 1 These Regulations are formulated in
accordance with the Copyright Law of the People’s Republic of
China, for the purposes of protecting the rights and interests of
copyright owners of computer software, regulating the relationship
of interests generated in the development, dissemination and use of
computer software, encouraging the development and application of
computer software, and promoting the development of software
industry and the informatization of national economy.

Article 2 For the purposes of these
Regulations, the term “computer software” (hereinafter referred to
as “software”) means computer programs and relevant documents.

Article 3 For the purposes of these
Regulations, the following definitions apply:

(1) “computer program” means a coded instruction sequence which
may be executed by devices with information processing capabilities
such as computers, or a symbolic instruction sequence or symbolic
statement sequence which may be automatically converted into a
coded instruction sequence for the purpose of obtaining certain
expected results; the source program and object program of a
computer program shall be deemed as one and the same work;

(2) “documents” means literal descriptions or charts used to
describe the content, structure, design, functional performance,
historical development, test results and usage, such as program
design instructions, flowcharts, and user’s manuals;

(3) “software developer” means a legal entity or other
organization that actually organizes, or directly carries out, the
development of a piece of software and assumes responsibility for
the accomplished software, or a natural person who independently
completes, relying on his own conditions, the development of a
piece of software and assumes responsibility therefor;

(4) “software copyright owner” means a natural person, legal
entity or other organization that enjoys software copyright in
accordance with these Regulations.

Article 4 The software protected under these
Regulations must be developed independently by the developer and
fixed on tangible medium.

Article 5 Chinese citizens, legal entities or
other organizations enjoy, in accordance with these Regulations,
copyright in the software which they have developed, whether
published or not.

Foreigners or stateless persons having software first published
within the territory of the People’s Republic of China enjoy
copyright in accordance with these Regulations.

Software copyright enjoyed by foreigners or stateless persons
under an agreement concluded between China and the country to which
they belong to or in which they have their habitual residences, or,
under an international treaty acceded to by China, is protected in
accordance with these Regulations.

Article 6 The protection of software copyright
under these Regulations shall not extend to the ideas, processing,
operating methods, mathematical concepts or the like used in
software development.

Article 7 A software
copyright owner may register with the software registration
institution recognized by the copyright administration department
of the State Council. A registration certificate issued by the
software registration institution is a preliminary proof of the
registered items.

Fees shall be paid for software registration. The charging
standards for software registration shall be provided for by the
copyright administration department of the State Council jointly
with the competent department for pricing of the State Council.

Chapter II Software Copyright

Article 8 A software
copyright owner shall enjoy the following
rights:

(1) the right of divulgation, that is, the right to decide
whether to make the software available to the public;

(2) the right of developer-ship, that is, the right to claim
developer’s identity and to have the developer’s name mentioned in
connection with the software;

(3) the right of alteration, that is, the right to supplement or
abridge the software, or to change the sequence of instructions or
statements;

(4) the right of reproduction, that is, the right to produce one
or more copies of the software;

(5) the right of distribution, that is, the right to provide the
original copy or reproductions of the software to the public by
selling or donating;

(6) the right of rental, that is, the right to authorize others
to use temporarily and onerously the original copy or reproductions
of the software, except where the software itself is not the
essential object of the rental;

(7) the right of communication through information network, that
is, the right to make the software available to the public by wire
or wireless means so that members of the public may have access to
the software from a place and at a time individually chosen by
them;

(8) the right of translation, that is, the right to converse the
natural language of the software into another natural language;
and

(9) other rights which shall be enjoyed by software copyright
owners.

A software copyright owner may authorize others to exploit his
copyright, and has a right to receive remuneration.

A software copyright owner may transfer, wholly or in part, his
copyright, and has a right to receive remuneration.

Article 9 Except where otherwise provided in
these Regulations, the copyright in a piece of software belongs to
its developer.

The natural person, legal entity or other organization whose
name is mentioned in connection with a piece of software shall, in
the absence of proof to the contrary, will be its developer.

Article 10 Where a piece of software is
developed jointly by two or more natural persons, legal entities or
other organizations, the copyright ownership shall be agreed upon
in a written contract between the co-developers. Where, in the
absence of a written contract or an explicit agreement in the
contract, the joint software can be separated into independent
parts and exploited separately, each co-developer may enjoy
independent copyright in the part which he has developed, but the
exploitation of such copyright shall not extend to the copyright in
the joint software as a whole. Where the joint software cannot be
separated into independent parts and exploited separately, its
copyright is enjoyed jointly by those co-developers and exploited
by agreement. In the absence of such an agreement, any co-developer
shall not prevent, without justification, the other(s) from
exploiting the copyright except the right of transfer; however, the
profit received for exploiting the joint software shall be
reasonably shared between all the co-developers.

Article 11 Where a piece of software is
developed on commission, the copyright ownership shall be agreed
upon in a written contract between the commissioning and the
commissioned parties. In the absence of a written contract or an
explicit agreement in the contract, the copyright shall be enjoyed
by the commissioned party.

Article 12 Where a piece of software is
developed under a task assigned by a State organ, the ownership and
exploitation of its copyright shall be stipulated in a letter of
project assignment or a contract. In the absence of an explicit
stipulation in the letter of project assignment or the contract,
the copyright shall be enjoyed by the legal entity or other
organization that has accepted the task.

Article 13 Where a piece of software developed
by a natural person working in a legal entity or other organization
in the course of his service involves one of the following
circumstances, the copyright therein shall be enjoyed by such legal
entity or organization, which may reward the natural person for the
development of the software:

(1) the software is developed based on the development objective
explicitly designated in the line of his service duty;

(2) the software is a foreseeable or natural result of his work
activities in the line of his service duty; or

(3) the software is developed mainly with the material and
technical resources of the legal entity or other organization, such
as funds, special equipment or unpublished special information, and
the legal entity or other organization assumes the responsibility
therefor.

Article 14 The software copyright shall exist
from the date on which its development has been completed.

In the case of software copyright of a natural person, the term
of protection shall be the lifetime of such person and fifty years
after his death, expiring on December 31 of the fiftieth year after
his death. In the case of a piece of joint software, the term of
protection shall expire on December 31 of fiftieth year after the
death of the last surviving developer.

In the case of software copyright a legal entity or other
organization, the term of protection shall be fifty years, expiring
on December 31 of the fiftieth year after the first publication of
such software; however, if any such software has not been published
within fifty years from the date on which its development has been
completed, it shall be no longer protected under these
Regulations.

Article 15 Where software copyright belongs to
a natural person, his successer(s) may, after his death, inherit
the rights provided for in Article 8 of these Regulations except
the right of developer-ship, during the term of protection provided
for in these Regulations, in accordance with the succession Law of
the People’s Republic of China.

Where software copyright belongs to a legal entity or other
organization, the copyright shall, after the change or the
termination of the legal entity or other organization, be enjoyed,
during the term of protection provided for in these Regulations, by
the legal entity or other organization that has taken over the
former’s rights and obligations, or, in the absence of such entity
or organization, by the State.

Article 16 Owners of lawful copies of a piece
of software enjoy the following rights:

(1) to install and store the software in devices with
information processing capabilities, such as computers, according
to the need of their use;

(2) to make backup copies against damage, provided that such
owners do not offer others in any way the backup copies for their
use and that they destroy such copies once they lose the ownership
thereof; and

(3) to make necessary alterations to the software in order to
implement it in an actual environment of computer application or to
improve its functions or performance, provided that such owners do
not, except otherwise agreed in the contract, offer any third party
the altered software without permission from the software copyright
owner.

Article 17 A piece of
software may be used by its installing, displaying, transmitting or
storing for the purposes of studying or researching the design
ideas or principles embodied therein, without permission from, and
without payment of remuneration, to the software copyright
owner.

Chapter III Software Copyright Licensing and
Transfer

Article 18 In the
case of a license to exploit software copyright, the parties shall
conclude a licensing contract.

The licensee shall not exploit any right that the software
copyright owner has not expressly granted in the contract.

Article 19 In the
case of an exclusive license to exploit software copyright, the
parties shall conclude a written contract.

In the absence of a written contract or an explicit agreement
upon exclusive license in the contract, the right that the licensee
is authorized to exploit shall be deemed as a non-exclusive
right.

Article 20 In the
case of a transfer of software copyright, the parties shall
conclude a written contract.

Article 21 Anyone that concludes an exclusive
licensing contract or a transfer contract of software copyright may
register with the software registration institution recognized by
the copyright administration department of the State Council.

Article 22 A Chinese
citizen, legal entity or other organization that authorizes a
foreigner’s exploiting software copyright, or transfers it to a
foreigner, shall comply with the Regulations of the People’s
Republic of China on Administration of Technology Import and
Export.

Chapter IV Legal Liability

Article 23 Except where otherwise provided in
the Copyright Law of the People’s Republic of China or these
Regulations, anyone who commits any of the following acts of
infringement shall, in light of the circumstances, bear civil
liability by means of ceasing infringements, eliminating ill
effects, making an apology, or compensating for losses:

(1) to publish or register a piece of software without the
authorization of the software copyright owner;

(2) to publish or register a piece of software developed by
another person as ones own;

(3) to publish, or register, a piece of joint software as
developed solely by oneself, without the authorization of the other
co-developer(s);

(4) to have ones name mentioned in connection with, or alter the
name on, a piece of software developed by another person;

(5) to alter or translate a piece of software without the
authorization of the software copyright owner; or

(6) to commit other acts of infringing upon software
copyright.

Article 24 Except where otherwise provided in
the Copyright Law of the People’s Republic of China, these
Regulations, or other laws or administrative regulations, anyone
who, without the authorization of the software copyright owner,
commits any of the following acts of infringement shall, in light
of the circumstances, bear civil liability by means of ceasing
infringements, eliminating ill effects, making an apology, or
compensating for losses; where such act also prejudices the public
interest, the copyright administration department may order to
cease infringements, confiscate illegal income, confiscate or
destroy the infringing copies, and may impose a fine concurrently;
where the circumstances are serious, the copyright administration
department may confiscate the material, tools and equipment mainly
used to produce infringing copies; and where the act violates the
Criminal Law, criminal liability shall be investigated for the
crime of infringing upon copyright or selling infringing copies in
accordance with the provisions of the Criminal Law:

(1) to reproduce, wholly or in part, a piece of software of the
copyright owner;

(2) to distribute, rent or communicate to the public through
information network a piece of software of the copyright owner;

(3) to knowingly circumvent or sabotage technological measures
used by the copyright owner for protecting the software
copyright;

(4) to knowingly remove or alter any electronic rights
management information attached to a copy of a piece of software;
or

(5) to transfer, or authorize another person to exploit, the
software copyright of the owner.

Whoever commits the act referred to in item (1) or (2) of the
preceding paragraph may be concurrently fined 100 yuan for per copy
or not more than 5 times of the value of the products; and, those
who commits the act referred to in item (3), (4) or (5) of the
preceding paragraph may be fined not more than 50,000 yuan
concurrently.

Article 25 The compensation paid for infringing
upon software copyright shall be determined in accordance with
Article 48 of the Copyright Law of the People’s Republic of
China.

Article 26 A software
copyright owner that can present evidence to prove that another
person is committing, or is to commit, an infringement which, if
not being prevented promptly, is likely to cause irreparable harm
to him, may, before instituting legal proceedings, apply to a
people’s court, in accordance with Article 49 of the Copyright Law
of the People’s Republic of China, for an order of a stop to
relevant act and for measures of property
preservation.

Article 27 In order
to prevent infringement, a software copyright owner may, before
instituting legal proceedings, apply to a people’s court, in
accordance with Article 50 of the Copyright Law of the People’s
Republic of China, for evidence preservation where the evidence is
likely to be missing, or to be obtained difficultly
later.

Article 28 A
publisher or producer of copies of a piece of software that fails
to prove that the legal authorization for the publication or
production, or, a distributor or renter of copies of a piece of
software that fails to prove the legal source of the copies which
he distributes or rents, shall bear legal
liability.

Article 29 The development of a piece of
software which is similar to a pre-existing one due to a limit of
alternative forms of expression does not constitute an infringement
of the copyright in the pre-existing one.

Article 30 A holder
of copies of a piece of software that neither knows nor has
reasonable grounds to know that such copies are infringing ones
does not bear liability of compensation but shall cease the use of,
and destroy, the infringing copies. Nevertheless, if the cease of
use or the destruction of such copies is likely to cause heavy
losses to him, the holder of such copies may, after paying
reasonable remuneration to the software copyright owner, continue
to use such copies.

Article 31 A dispute
over software copyright infringement may be settled by
mediation.

A dispute over a software copyright contract may be submitted to
an arbitration institution for arbitration under an arbitration
clause in the copyright contract or under a written arbitration
agreement concluded later between the parties.

Any party may institute legal proceedings directly in a people’s
court in the absence of an arbitration clause in the contract or of
a written arbitration agreement concluded afterwards between the
parties.

Chapter V Supplementary Provisions

Article 32 Any act of infringing upon software
copyright committed prior to the entry into force of these
Regulations shall be dealt with under the relevant provisions of
the State that are in force at the time when the act was
committed.

Article 33 These Regulations shall be effective
as of January 1, 2002. The Regulations on Computer Software
Protection promulgated by the State Council on June 4, 1991 shall
be repealed simultaneously.

(State Council)