China: Digital Revolution & Legal Evolution in China

National legal framework against computer piracy

Pursuant to Article 24 of the Computer Software Protection Regulations, a person is liable who violates the legitimate rights and interests of the computer software copyright owner. If the violation also damages the public interest, the copyright authority orders the removal of the violation, confiscates the illegal proceeds, confiscates and destroys the infringing copies, and may impose a fine. In addition, Article 23 of the Computer Software Protection Regulations provides for extensive civil liability of the infringer to the copyright owner. Pursuant to Article 217 of the Criminal Code, a person who infringes copyrights or related property rights for the purpose of achieving profits will be sentenced to a maximum of three years imprisonment and a fine or one-off financial penalty. In the presence of particularly serious circumstances, imprisonment could be up to ten years

Copyright & NFT (non-fungible tokens)

The Supreme Court in China has taken a clear position against crypto trading in its recent legal interpretation of criminal law. This means that trading in cryptocurrencies is classified as a means of illegally raising money. A judicial interpretation is the official interpretation of the Supreme Court on how to enforce a law in China. To consider cryptocurrency trading illegal, four conditions must be met. These are public fundraising, unspecified fundraising objectives, promised capital and interest income, and violation of laws and regulatory requirements. As a result, cryptocurrencies cannot play a usual role in NFT trading. China calls its own NFTs “Distributed Digital Certificates”, or DDC. The NFT infrastructure is currently under construction, meaning corresponding changes in the law can be expected in a timely manner.

Autor: Marcel Brinkmann