Sports Broadcast Copyright in China: the Stranglehold of Originality

China copyright lawI spoke in Beijing last week at a conference on legal protection of sports broadcasts, organized by the National Copyright Administration of China (NCAC) and the United States Patent and Trademark Office. Other speakers included Chinese judges, Chinese and American lawyers and academics, sports league and broadcaster general counsel, and American and European IP officials. What follows is based on the speech I gave at the conference.

Copyright in sports broadcasts is not explicitly recognized in China by statute, though it has been recognized in some Chinese copyright cases. One of the ongoing debates in China copyright circles is whether explicit statutory recognition ought be given to copyright in sports broadcasts. Any such recognition would involve introducing a new class of copyright subject matter or the expansion of an existing class.

The introduction or expansion of a class of copyright subject matter is often rationalized as limiting free riding and providing an incentive to invest. In the absence of a clear sports broadcast copyright in China, one might therefore expect to find at least some evidence of market failure. However, a quick look at the business of broadcasting certain sports in China indicates a strong market — perhaps even a bubble.

Consider, for instance, Chinese Super League matches. China broadcast rights are, I understand, currently held by an associate of China Media Capital for a five-year term ending in 2021. Rights for the first two years were reportedly acquired for 300 million USD. Rights for years three, four and five were reportedly acquired for a total of one billion USD. In an indication this was a good deal for the head-licensee, Le TV committed to paying 414 million USD for a two-year sub-license, though Le TV subsequently defaulted and, as I understand it, the rights now lie with online TV service PPTV.

Now consider English Premier League matches. China broadcast rights are, I understand, currently held by Super Sports for a six-year term ending in 2020. These rights were reportedly acquired for 65 million USD. Note that this figure represents an assessment of market value made in 2013. For the three years commencing in 2020, PPTV has reportedly bid 700 million USD. This makes China the Premier League’s largest foreign broadcast market.

If these deals are any indication, the market is apparently already behaving as though sports broadcasts are protectable. But there is no proprietary foundation for this protection. The present foundation is contractual. The organizer of the game, a sports league, is the source of all rights in the game. The sports league relies on the “economics of exclusion” — the ability to monetize by controlling access to a sporting venue, in much the same way a theatrical exhibitor of a motion picture controls access to a movie theatre. In some cases, and in some courts, copyright protection has been recognized in China but a consistent jurisprudence has not emerged. The more readily available legal means of protection involve anti-unfair competition laws or the use of administrative or even criminal sanctions. Chinese tort laws and “related rights” laws are also invoked by rights holders when they fight piracy. Whatever the actual or potential legal redress for piracy may be, in assessing the applicable law in China it must be appreciated that a sports broadcast is always a special type of broadcast presenting unique challenges.

What makes sports broadcasts special is that the viewer wants to watch a game as it is played at the venue from which the broadcast is being made. The replay or the highlights are not as valuable as the live feed. The threat posed by illegal downloads after a game concludes is minimal. From a technical perspective, a live broadcast of any kind involves the compression of pre-production and post-production into a seamless and immediate production. That production, and the broadcasting of it, must occur simultaneously. Incidentally, sports leagues report that the advent of hand-held live streaming technology is not a major threat to their businesses because the quality of the stream lacks the production values of a professional broadcast.

The unique challenge of a sports broadcast is that satisfactory relief from a pirated version must be swift. It must be pre-emptive (in advance of the game) or instantaneous (well before the game ends and, ideally, within the first quarter hour). In either case, only urgent injunctive relief can ever be entirely satisfactory. Non-urgent preliminary injunctive relief will not solve the problem, and damages and accounts of profits are insufficient remedies.

Even if sports broadcasts are accorded clear and consistent protection under Chinese copyright law, it is fair to say that uniform urgent injunctive relief (as opposed to preliminary injunctive relief) is still largely beyond the capacity of the Chinese legal system. Therefore, the recognition of copyright in a sports broadcast would not, of itself, solve the underlying need for urgent relief. Still, China’s legal system in its present form does allow rights-holders to tackle repeat offenders, and the large Chinese platforms are already mostly respectful of broadcast rights anyway. In many ways, the real challenges are presented by the smaller, and often ephemeral, pirate sites. Even if these pirate sites can be identified and located, the people behind them nearly always lack substantial assets and are therefore rarely worth pursuing. To be effective in the present environment a sports league (or its local partner) needs a team of Chinese-qualified in-house litigators who understand the piracy landscape and are capable of engaging in guerrilla warfare using technological as well as legal or administrative means.

Despite the existence of these other means, despite evidence pointing to a strong market, and despite the inherent limitations of an action for copyright infringement in China, there is little doubt that explicit statutory recognition of sports broadcast copyright would provide greater certainty and support greater market efficiency. This is especially so if this statutory recognition were given to a broad-based, technology-neutral right embracing traditional broadcasting as well as streaming.

Industry stakeholders are not resisting the recognition of such a sports broadcast copyright. There is apparently a broad consensus among broadcasters and sports leagues on the issue. There is apparently no division between foreign and Chinese interests on this point either. Nor is a sports game sensitive — it is not subject to the kind of censorship, quotas, and approvals processes applicable to motion picture or episodic content. Nonetheless, there is ongoing resistance to the recognition of copyright in sports broadcasts. Resistance has arisen, I understand, because recognition of copyright in sports broadcasts would require the NCAC to change its understanding of the meaning of a copyright “work” and the applicable standards of “originality.” Absent market failure this issue is perhaps not viewed as a major priority. Whatever the reason, until the NCAC resolves this and other current issues it cannot present a coherent solution to the State Council Legislative Affairs Office (SCLAO). The SCLAO is therefore not in a position to recommend final legislation to the National Peoples Congress. The discussion has been bogged down for nearly a decade. All the while, the sports broadcasting industry is getting further and further ahead of the law.

As an important source of or influence on China’s copyright law, the Berne Convention, with its focus on works and authorship, provides a frame of reference for a consideration of the underlying problem in China. China became a party to the Berne Convention in 1992. Berne sets a number of minimum standards applicable to works and authors. A broadcast right is among those rights that must be recognized as exclusive rights of authorization. Authors enjoy the exclusive right of authorizing the broadcasting of their works.

China’s current copyright law has been in effect since 2010. It too applies to “works,” which include, among other things, works of literature, art, natural sciences, social sciences, engineering and technology, which are created in certain “forms.” With the exception of computer software, these forms are limited to specific kinds of works enumerated in the law. The sixth form in the list is “cinematographic works and works created by a process analogous to cinematography.” The ninth and final form in the list is “other works as provided for in laws and administrative regulations.” The rights comprising copyright in these works include the broadcast right. China also recognizes related, neighboring or “small” rights in other subject matter including video recordings. The protection given to these other subject matter is lower than that given to works. The standard of originality expected of a video recording is much lower than that applicable to cinematographic works.

In China, the sports broadcast copyright controversy arises for two reasons. First, because a game of sport is not generally seen as a “work,” so there is no broadcast of a work when a game is broadcast. Second, because even if it is accepted (as it is in the United States) that a broadcast always requires the simultaneous making of a recording, any such recording is insufficiently original to be regarded as a cinematographic work. There is little disagreement on the first reason. The real debate is about the second reason. The competing considerations on this point have been ventilated in the leading Chinese cases. Basically, the debate boils down to whether modern-day live broadcasts, with their professional directors, multi-camera units and advanced editing techniques, are producing content sufficiently original to qualify as a copyright work. It seems obvious to anyone with even a basic understanding of the production process that sports broadcasts are a form of entertainment every bit as sophisticated and entertaining as motion picture or episodic content, the originality of which is already recognized in China.

It will be seen, then, that the minimum standards of Berne, as reflected in Chinese copyright law concerning “works,” are at risk of becoming impediments to the recognition or creation of other copyright subject matter. There is an opportunity here for China to go its own way over and above minimum standards.

Other nations have, of course, gone their own ways and I want to mention two that have found instructive solutions to the problem of “works”: The United States and Australia. Both are obviously common law countries. There are many others, including civil law countries. Incidentally, as a last resort, those who oppose grafting common law principles to the Chinese legal context are fond of saying that German law is the proper source of Chinese copyright law and German law is inconsistent with the common law point of view on the points at issue. The trouble is that claims of this kind are generally made without a German copyright lawyer on hand to clarify the point. A German copyright expert would obviously make a welcome addition to future panels dealing with this issue.

The United States became a party to Berne in 1989. US copyright law is concerned with protecting “original works of authorship.” The recognized works include motion pictures and other audiovisual works. In US jurisprudence, sports games are not “authored” in the relevant sense so they are not “works.” Even so, sports broadcasts in the United States are entitled to copyright protection. The key to their protection is that the broadcasting of a game is understood as always involving the “fixing” of an audiovisual work, and the fact that this fixing occurs simultaneously with a transmission does not matter. This elegant solution was applied in 1976 and obviously did not prevent the US from later joining the Berne Convention.

Australia became a party to Berne in 1928. Australian copyright law is concerned with protecting “works” and “subject matter other than works.” The scope of protection for subject matter other than works is lower than that for traditional works, but this has not stopped them being treated as full copyright subject matter. Subject matter other than works include sound recordings, cinematograph films, and broadcasts. Copyright in a television broadcast is the exclusive right to make a cinematograph film or sound recording and to re-broadcast or communicate to the public otherwise than by re-broadcasting. The maker of the broadcast is the copyright owner. In Australia, copyright protection applies to the signal itself. There is no need to stretch the definition of “work” to include a broadcast. There is no need for the broadcast to contain a work.

These two examples demonstrate how a nation can recognize a certain type of copyright without compromising the minimum standards of Berne or being strangled by a debate about originality standards.

The sports broadcast problem could be solved in China if broadcasts were recognized as involving the fixing of a cinematographic work, of a work created by a process analogous to cinematography, or even of a video recording. Alternatively, some form of recognition could arise within the existing category of “other” works or through the mooted inclusion of a new general category of “audiovisual” works. These solutions would involve minimal disruption to China’s existing copyright system. All they would require would be an acknowledgement that a modern sports broadcasts satisfies a minimum standard of originality. It would not be necessary for a game of sport to be deemed a copyright work. Ultimately, though, these solutions would need to embrace a broad-based, technology-neutral definition of broadcast and they would need to depend on continued improvement in the availability and efficacy of urgent injunctive relief for copyright infringement.

Dan Harris

Dan Harris is internationally regarded as a leading authority on legal matters related to doing business in China and in other emerging economies in Asia. Forbes Magazine, Business Week, Fortune Magazine, BBC News, The Wall Street Journal, The Washington Post, The Economist, CNBC, The New York Times, and many other major media players, have looked to him for his perspective on international law issues.