Plagiarizing Contract will Infringe Copyright or not?

Company A had made a contract named as “Research on Particular Conditions of Construction Contract 2009” (“2009 Contract”), and obtained “Copyright Registration Certificate” in 2010. 2011, Company B published its announcement of tender, together with Particular Conditions. Company A found that Particular Conditions is similar with 2009 Contract both in structure and content, and it sued Company B for copyright infringement. Upon investigation, it was found that 92.9% of the content of Particular Conditions is the same as 2009 Contract. Company A’s appeal was supported by the court of first instance, however, the court of second instance overrode the decision of the lower court.

The premise of copyright infringement is the existence of work protected by “Copyright Law”. So the dispute focus is whether 2009 Contract is a kind of work, and shall be protected by “Copyright Law”.

According to Article 2 of the “Regulations for the Implementation of the Copyright Law”, the term “works” as referred to intellectual creations with originality in the literary, artistic or scientific domain, insofar as they can be reproduced in a tangible form. Therefore, originality and reproduction are the 2 basic elements on determining whether a specific object is the works as stipulated in “Copyright Law”. In this case, originality of 2009 Contract is the key point which shall be identified.

In fact, the current laws, regulations, judicial interpretations have not stipulated yet on this issue. In the aforementioned case, the Guangzhou Intermediate People’s Court held that: the terms of contract describe the rights and responsibilities of both parties, the legal expression is difficult to diversify, and an accurate and concise expression is even more difficult to diversify. 2009 Contract is just the written form of both parties’ consensus. If a contract shall be protected by “Copyright Law” just because its better manner of writing on the rights and responsibilities required by laws and regulations, where other parties cannot use such manner of writing, it is a virtual monopoly on ideas, which goes against the legislative intent of “Copyright Law”. This point of view denies the originality of the contract terms, and holds a negative opinion on the protection of contract by “Copyright Law”.

Actually, about the legislative intent of “Copyright Law”, we can figure out from the exclusive objects in Article 5 of “Copyright Law”. Such as, “Copyright Law” is not applicable to documents of a legislative, administrative or judicial nature and their official translations. We think that the final decision get the true legislative intent of “Copyright Law”. However, this point of view in the judicial practice is not a consensus one. In the past cases, different courts hold different point of views. For example, in this case, the decisions of the two courts are totally different. In addition, in the case（2001）HU ER ZHONG ZHI CHU ZI No. 86, Shanghai Second Intermediate People’s Court holds that contract shall be protected by “Copyright Law”.

Thus, if a company requires professionals to draft a contact with good structure and comprehensive content, and pays expensive commission, but other companies can use it for free, isn’t it unfair?

In practice, the company who pays for the well made contract can use confidential terms to protect its interests. In view of privity of contract, the provider shall require the other party to take the content of contract as confidential matters; and it can also stipulate confidential terms in labor contract or retainer contract with those who draft the contract. Thus, where the content of a contract has not been disclosed yet, but any party obtains through improper means, the party may constitute unfair competition; if the other party discloses, it shall bear the liabilities by breaching of the confidential terms.