A Way for Companies to Agree on Copyright Belonging with Employees in China

By Luo Yanjie

In real life, a large number of outstanding copyright works are created during people’s work. Outstanding works will undoubtedly bring great benefits to right people which lead to disputes. For example, Hu Jinqing and Wu Yun, The father of Calabash Brothers, sued Shanghai animation film studio years ago, who were asked to confirm whether the copyright of characters in “Calabash Brothers” belonged to them, which the studio said the art character’s copyright belongs to the studio (note: the link is in Chinese).

This is a typical case of copyright dispute between employee and enterprise’s. Besides, the creation of the catton figure was in 1960’s when China had no copyright law then, the other reason for the dispute is that the two sides didn’t sign an agreement at the very beginning. Today, we would share our opinions on the topic with reference to the Copyright Law:

I. Two situations where copyright belongs to the company

In current “copyright law “, there are 2 situations where the work created by an employee belongs to the company. The first is “corporate works” in article 11, namely:

“In relation to a work which is created under the sponsorship, and according to the will, of a legal person or any other organization, and for which the said person or organization has the responsibility, the said person or organization shall be regarded as the author.”

The second is “special work for hire” in Article 16, namely:

“A work such as diagram of project design, drawing of product design, map or computer software, which is produced in course of employment mainly by using the material and technical resources of the legal person or other organization and for which the legal person or other organization has the responsibility”.

II. The difference between “special work for hire” and “corporate works”

From the law perspective, distinguishing between “corporate works” and “special work for hire” is not complicated, mainly as follows:

1, works reflecting different will

Theoretically speaking, special work for hire don’t reflect a legal person or any other organization’s will but the author’s personal thoughts. And in the works of a legal entity, while engaged in specific creative labor, is still human. But for “corporate works”, although the work is done by the employee, but it reflects an organization’s will. However, it is hard to distinguish this in practice.

2, Enjoy different rights of works.

Although copyright of both special work for hire and corporate works is enjoyed by the company, for special work for hire, the employee enjoys the right of authorship. Meanwhile, all corporate works’ right belongs to the company; the person is the true hero behind the curtain.

3, The company plays a different role in two kinds of works.

For special work for hire, the company generally only provides material and technical conditions; while for corporate works, the company pays more attention to the progress, how to carry out and details. Again, this difference is on a theoretical level and therefore difficult to distinguish in practice.

As mentioned above, the distinction between “corporate works” and “special work for hire” is hard to distinguish between in practice, because the “will” itself is a thing of the concept and an organization’s will is from people. Let’s take computer software as an example: first of all, the software is sponsored by the company and it represents the company’s “will”. The company also controls the software’s development. But at the same time, nobody can rule out the staff’s will in the creation of software. Therefore, there has always been scholars advocated to remove the “corporate works” concept (note: the link is in Chinese), and unified by the “special work for hire “. But in the latest draft of new “copyright law “, it still retains the “corporate works” concept.

III. Prior agreement is the best means to avoid disputes

Corresponding to “special work for hire”, employee and the company often have disputes about “general work for hire” in practice because the general work for hire’ copyright belongs to the employee in default.  The regulation in “Copyright law” is: “Works created by citizens for fulfilling tasks of legal persons or other organizations shall be regarded as works produced in course of employment. ”

Although “copyright law” also stipulates that: ” Within two years after the work was created, the author may not, without consent of the unit, license a third party to use the said work in the same manner as the unit does” in order to protect the rights and interests of the company. But for some high value works, only having the right to use cannot make the company satisfied.

Therefore, in view of the company, we recommend that the company and the employee reach a verdict in the labor contract or a separate contract in order to clear that works are owned by the company, and this kind of agreement is not against the law. On the contrary, copyright law clearly defined that:

“other organization according to the provisions of laws and administrative regulations or the contract” belongs to the “special work for hire”.

Other recommended posts on our website:
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5. Introduction of China’s Legal System of Trademark Renewal
6. Introduction on the Regulations concerning the Capital Contribution in IPR or Domain Name in China
7. The Copyright Registration in China Could Be FREE?
8. China Copyright Protection Term Longer than EU’s?
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