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Typical Case

Company A is a renowned interior design firm that publicly publishes its designers' creative works on its official social media accounts.

B is a designer employed by Company C. In the course of their daily work, B frequently downloaded design works protected by Company A's copyright from Company A's social media accounts, falsely presenting them to their own clients as their own creations. Due to the exceptionally high quality of Company A's works, B secured a substantial volume of business opportunities. While providing services to clients, B did not directly use Company A's works but instead supplied new design proposals, thereby profiting hundreds of thousands of RMB.

1. Copyright Ownership of Works on Company A's Media Platform

Before determining whether B bears legal liability, it is essential to establish the copyright ownership of the works in question. This issue determines not only the plaintiff's standing in civil and commercial litigation but also the victim's status in criminal proceedings.

In practice, copyright ownership of such works is typically determined by the contract between Company A and the designer. Pursuant to Article 18 of the Copyright Law of the People's Republic of China, works created by natural persons in the course of performing duties for a legal person or non-legal person organisation constitute works for hire, with copyright generally vested in the author. However, where the contract stipulates copyright belongs to the legal person, such rights shall vest in the legal person, which may grant the author an award. In the case under discussion, it is deemed that Company A holds the copyright to the design works pursuant to the contractual agreement.

2. B's conduct generally does not constitute the crime of copyright infringement.

Pursuant to Article 217 of the Criminal Law of the People's Republic of China, where, for profit and without the copyright holder's authorisation, one reproduces and distributes literary or artistic works, or disseminates them to the public via information networks, and the illegal gains are substantial or other serious circumstances exist, this constitutes the crime of copyright infringement.

B's display of Company A's works to clients without the copyright holder's permission, for the purpose of securing business opportunities, should be deemed ‘for profit’. However, to establish criminal liability against B, at least the following three issues must be examined.

(i) Whether B's conduct constitutes ‘reproduction and distribution’ as defined by criminal law

Under the Copyright Law of the People's Republic of China, the rights of reproduction and distribution are distinct. Article 10 defines the right of reproduction as the right to produce one or more copies of a work through printing, photocopying, rubbing, recording, videotaping, duplicating, photographing, digitising, or similar means. The right of distribution is the right to make the original or copies of a work available to the public by sale or gift.

Based on a literal interpretation of these provisions, B's actions inevitably infringe upon the protection afforded to the reproduction right under the Copyright Law. Should one interpret the one-to-one presentation of works to clients as ‘making available to the public’, B's conduct would also infringe upon the protection of the distribution right. However, such an interpretation appears highly strained. Within the copyright domain, the distribution right falls under the category of economic rights. Compared to the right of publication, the distribution right focuses more on the market circulation attributes of a work as a carrier of intellectual achievements.

In this case, B's purpose in utilising Company A's work was to leverage the high-quality design pieces to increase the likelihood of closing deals during individual client negotiations, thereby creating greater opportunities to sell services to clients. It was not intended to generate direct economic benefits by selling Company A's work on the market. Consequently, it should not involve infringement of Company A's distribution right over the work.

Pursuant to Article 2 of the Supreme People's Court and Supreme People's Procuratorate's Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Infringement of Intellectual Property Rights (II) (now repealed) dated 5 April 2007, ‘reproduction and distribution’ in the context of copyright infringement offences encompassed acts of reproduction, distribution, or both. Under this interpretation, Party B's reproduction of Company A's work triggered criminal liability. However, this interpretation underwent revision following the repeal of the aforementioned judicial interpretation.

The ‘Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Infringement of Intellectual Property Rights’ (hereinafter referred to as the 2025 Intellectual Property Criminal Interpretation), effective 26 April 2025, redefined ‘reproduction and distribution’ as: ‘the act of both reproducing and distributing, or reproducing for the purpose of distribution, works or sound and video recordings without the authorisation of the copyright holder or the holder of related rights.’

Under this latest judicial interpretation, mere reproduction is insufficient to trigger criminal liability. The focus of ‘reproduction and distribution’ under Article 217 of the Criminal Law has shifted from both ‘reproduction’ and “distribution” to a unilateral emphasis on ‘distribution’. Consequently, B's act of reproducing A's work can no longer be automatically deemed criminal.

(2) Whether B's conduct constitutes ‘disseminating works to the public via information networks’

The answer to this question remains negative. Pursuant to Article 12 of the 2025 Criminal Interpretation on Intellectual Property, ‘disseminating to the public via information networks’ signifies ‘making works available to the public by wired or wireless means, enabling the public to access them at their chosen time and location’. As B provided the work in question to the client on a one-to-one basis during business negotiations, even though this was done via information networks such as WeChat, it does not fall within the circumstances described in the judicial interpretation. Consequently, it does not constitute ‘disseminating works to the public via information networks’ as defined by the Criminal Law.

(3) Whether B's profit-making activities meet the threshold of ‘substantial illegal gains or other serious circumstances’

1. B's profits do not necessarily constitute unlawful gains

Whilst B displayed Company A's works during client contract negotiations with the intent to facilitate transactions, the design fees subsequently paid by clients upon successful contracting cannot automatically be equated with ‘unlawful gains’.

In copyright infringement offences, unlawful gains should be confined to direct economic benefits derived by B through reliance on the infringed copyright. This corresponds to scenarios where B directly ‘copies verbatim’ or creates ‘substantially similar’ works to Company A's. However, when B successfully secures a contract using Company A's work and subsequently provides the client with new design creations within the commissioned project, the design fees received cannot be automatically deemed unlawful gains.

2. B's profits do not constitute ‘illegal business volume’

Pursuant to Article 13 of the ‘Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Infringement of Intellectual Property Rights’ (effective 26 April 2025), where the ‘illegal business volume’ reaches RMB 50,000 or more, or meets other specific criteria for illegal business volume, this constitutes ‘other serious circumstances’ and may establish the crime of copyright infringement.

Article 26 of the Provisions on the Criteria for Filing Criminal Cases under the Jurisdiction of Public Security Organs (I), jointly issued by the Supreme People's Procuratorate and the Ministry of Public Security on 25 June 2008, explicitly defines ‘illegal business volume’ as ‘the value of infringing products manufactured, stored, transported, or sold by the perpetrator during the commission of intellectual property infringement acts’. That is to say, the illegal business volume here still refers to the amount directly generated by the act of infringing the work. The distinction from the ‘illegal gains’ standard lies in the explicit stipulation that criminal liability arises once the perpetrator's business volume reaches the threshold, irrespective of whether actual profits were obtained.

3 B shall bear civil liability to Company A.

Although B's objective conduct may not constitute criminal liability as it does not meet the criteria of ‘reproducing and distributing’ or ‘disseminating works to the public via information networks’, this does not preclude civil liability towards Company A.

Pursuant to Articles 52 and 53 of the Copyright Law of the People's Republic of China, any person who, without the authorisation of the copyright holder, reproduces their work; or uses another's work without paying remuneration where such payment is required, shall bear civil liability including cessation of infringement, elimination of adverse effects, apology, and compensation for losses, as appropriate. The infringer shall compensate the rights holder for the actual losses incurred or the infringer's illegal gains. Where such losses or gains are difficult to calculate, compensation may be determined by reference to the royalty for the use of the rights. Where the actual losses, illegal gains, or royalty are difficult to calculate, the People's Court shall award compensation of not less than five hundred yuan nor more than five million yuan, based on the circumstances of the infringement.

B, having reproduced and used Company A's work without authorisation, shall bear the aforementioned civil liabilities towards Company A. Furthermore, the competent copyright authority may impose a fine on B based on the actual circumstances.

Special Notice:

This article is an original work by a solicitor of JAVY Law Firm and represents solely the author's personal views. It shall not be construed as formal legal advice or recommendations issued by JAVY Law Firm or its solicitors. Should any part of this article be reproduced or referenced, the source must be duly acknowledged.