What You Need to Know About Software Copyright Certificate (SCC) in China as an App Developer

Mobile apps are becoming increasingly popular and profitable in China, the world's largest smartphone market. However, app developers face many challenges and risks in this competitive and complex market, such as intellectual property infringement, unauthorized copying, and legal disputes. To protect their rights and interests, app developers need to register their software with a software copyright certificate (SCC) in China.

A SCC is a legal document that proves the ownership and copyright of a software program or mobile app in China. It contains a unique identification number, the name of the app, and the company that owns the certificate. The name of the app must match the name on the certificate. If the app name changes, a new certificate must be applied. A SCC is not a trademark, but it can be used to prove and protect the exclusive rights of the app developer in China.

In this article, we will discuss the importance and benefits of having a SCC in China, such as proving ownership, protecting rights, removing unauthorized copies, and avoiding disputes. We will also describe the legal framework and registration process for SCC in China, and address the difficulties and challenges of obtaining SCC in China, especially for foreign companies. We will provide some solutions or suggestions for app developers who want to register SCC in China, such as using a Chinese subsidiary or a service provider. Finally, we will summarize the main points and provide some recommendations or insights for app developers who want to register SCC in China.

Background

China has a strict and complex legal framework for cross-border data transfer, which is mainly governed by the Personal Information Protection Law (PIPL) that came into effect since 1 November 2021. According to the PIPL, personal information handlers who intend to transfer personal information outside China must meet one of the following conditions:

• Passing the security assessment organized by the Cyberspace Administration of China (CAC).
• Obtaining certification from professional institutions designated by the CAC.
• Signing a standard contract formulated by the CAC with the foreign recipient.
• Meeting other conditions stipulated by laws and administrative regulations.

Among these conditions, signing a standard contract is considered to be the most feasible and practical option for most personal information handlers, especially for small and medium-sized enterprises. The standard contract, also known as the software copyright certificate (SCC), is a legal document that proves and protects the ownership and copyright of a software program or mobile app in China.

The SCC contains a set of clauses that specify the rights and obligations of both the data exporter and the data importer, such as the purpose, scope, category, and volume of data transfer; the technical and organizational measures to ensure data security; the notification and remedy mechanisms in case of data breach; and the liability and dispute resolution methods.

The SCC is not mandatory for cross-border data transfer, but it is highly recommended as it can effectively reduce the burden of proof and facilitate data protection enforcement in China. The SCC can also help data exporters to remove unauthorized copies of their software or app from Chinese app stores and platforms.

The SCC is issued by the Copyright Protection Centre of China (CPCC), which is the official body responsible for software registration in China. The application process for SCC involves submitting various documents and materials to the CPCC, such as basic information about the company, operation manual of the software or app, source code sample, and proof of ownership. The application fee varies depending on the type and size of the software or app, but it is generally affordable for most applicants. The application process usually takes about 2 to 4 weeks.

Benefits

Having a SCC in China can bring many benefits for app developers who want to protect their rights and interests in the Chinese market. Some of the main benefits are:

• Proving ownership: A SCC can serve as a valid proof of ownership and copyright of a software program or mobile app in China. It can help app developers to establish their exclusive rights and prevent others from copying or plagiarizing their work.
• Protecting rights: A SCC can also help app developers to protect their rights and interests in case of any infringement, dispute, or litigation. It can provide a legal basis for app developers to claim damages, seek injunctions, or request administrative actions against infringers.
• Removing unauthorized copies: A SCC can also help app developers to remove unauthorized copies of their software or app from Chinese app stores and platforms. App developers can report any infringement to the CPCC, which will coordinate with the relevant authorities and platforms to take down the infringing copies.
• Avoiding disputes: A SCC can also help app developers to avoid disputes and conflicts with other parties, such as customers, partners, or competitors. It can clarify the rights and obligations of both parties and prevent any misunderstanding or miscommunication.

Challenges

Obtaining a SCC in China can also pose some difficulties and challenges for app developers, especially for foreign companies who want to enter or expand in the Chinese market. Some of the main challenges are:

• Meeting the eligibility criteria: The SCC is not applicable for all cross-border data transfers, but only for those that meet certain conditions, such as not being a critical information infrastructure operator (CIIO), not processing personal information exceeding one million individuals, and not transferring personal information or sensitive personal information exceeding certain thresholds. For app developers who do not meet these conditions, they have to seek other legal mechanisms, such as passing the security assessment organized by the CAC or obtaining certification from professional institutions designated by the CAC.
• Assessing the impact of data protection laws and policies: Before entering into the SCC, the data exporter is required to assess the impact of data protection laws and policies of the destination jurisdiction on the enforceability of the SCC. The data exporter must also prepare an impact assessment report and keep it for at least three years. This can be a challenging and time-consuming task for app developers who have to deal with multiple jurisdictions and different legal systems.
• Complying with the obligations and responsibilities: The SCC imposes various obligations and responsibilities on both the data exporter and the data importer, such as ensuring data security, notifying and remedying data breaches, cooperating with supervision and inspection, and accepting liability and dispute resolution. These obligations and responsibilities can be burdensome and costly for app developers who have to adopt technical and organizational measures, establish internal policies and procedures, and allocate resources and personnel to comply with them.
• Facing legal risks and uncertainties: The SCC is a relatively new legal mechanism in China, which has not been tested or enforced in practice. There may be legal risks and uncertainties for app developers who use the SCC for cross-border data transfer, such as how to interpret and apply some of the clauses, how to resolve potential conflicts or inconsistencies with other laws or contracts, and how to deal with any changes or updates in the future²³.

Process

The process of registering SCC in China involves submitting various documents and materials to the Copyright Protection Centre of China (CPCC), which is the official body responsible for software registration in China. The process can be divided into four steps:

• Step 1: Prepare the application materials. The application materials include basic information about the company, operation manual of the software or app, source code sample, and proof of ownership. The operation manual should describe the main functions, features, and technical specifications of the software or app. The source code sample should be at least 30 pages long and cover the core modules of the software or app. The proof of ownership can be a contract, invoice, or other document that shows the ownership or license of the software or app.
• Step 2: Submit the application online. The application can be submitted online through the CPCC website. The applicant needs to register an account, fill in an online application form, upload the application materials, and pay the application fee. The application fee varies depending on the type and size of the software or app, but it is generally affordable for most applicants.
• Step 3: Wait for the review and approval. The CPCC will review and verify the application materials within 20 working days. If there is any problem or deficiency with the application materials, the CPCC will notify the applicant and request for correction or supplementation. If the application materials are complete and meet the requirements, the CPCC will issue a SCC to the applicant.
• Step 4: Receive and check the SCC. The SCC will be sent to the applicant by mail or email. The applicant should check the SCC carefully and make sure that all the information is correct and consistent with the application materials. If there is any error or discrepancy, the applicant should contact the CPCC and request for correction or replacement.

Conclusion

In this article, we have discussed the importance and benefits of having a SCC in China for app developers who want to protect their rights and interests in the Chinese market. We have also described the legal framework and registration process for SCC in China, and addressed the difficulties and challenges of obtaining SCC in China, especially for foreign companies. We have provided some solutions or suggestions for app developers who want to register SCC in China, such as using a Chinese subsidiary or a service provider.

We hope this article has helped you to understand the SCC mechanism and its implications for cross-border data transfer in China. We recommend that app developers who intend to transfer personal information outside China should carefully assess their eligibility and compliance requirements for using the SCC, and seek professional advice if necessary. We also suggest that app developers should monitor the development and enforcement of the SCC and other related laws and regulations in China, and be prepared to adjust their strategies and practices accordingly.

Published at February 25th, 2023