*Article* **Cultural and Creative Industries and Copyright at the Regional Level: The Cases of Shenzhen and Hangzhou in China**

**Ya-Feng Zhang 1,2**


**Abstract:** Cultural creative industries (CCIs) have become an important driver in motivating the modern economy around the world, and the sustainable development of CCI is calling for a proper profit mechanism. Using China as the research context, this article investigates how copyright is used in the development of CCIs. The cities of Shenzhen and Hangzhou are selected as cases, and I identify 98 representative CCI enterprises from Shenzhen and 127 representative CCI enterprises from Hangzhou to conduct the analysis. It is found that the development of CCIs in different cities shows different models with regional characteristics, and shares some characteristics in common; most CCI enterprises have experience with copyright registration; copyright is highly correlated with other types of intellectual property (e.g., patent, trademark), and there is an obvious integration of copyright and technology; judicial lawsuits have become a major tool for enterprises to use copyright to protect their benefits, with plaintiffs winning the majority of the lawsuits. This research has both significant theoretical and practical implications, and contributes to theory about the use of copyright in the development of CCI at a regional level.

**Keywords:** cultural creative industries (CCIs); copyright; creative economy; China

## **1. Introduction**

This article attempts to investigate the role of copyright in cultural creative industries (CCIs). On the one hand, CCIs are becoming increasingly important in encouraging economic growth and have been growing rapidly worldwide [1–4], bringing about an era of creative economy [5]. The impact of CCIs on society is significant in affecting people's social and cultural life, and the development of CCI is seen as a source of the prospective economy [6,7] and a reflection of soft power [8] and a sophisticated society [9]. It is estimated that in 2020 there was a USD 750 billion contraction in the gross value added (GVA) generated by CCIs globally [10]. A pre-crisis forecast predicts that the creative economy could represent 10 percent of global GDP before 2030 [2], and a report by UNESCO found that 51.2 million people across the globe were self-registered as working in some capacity (full-time, part-time, intern) in the CCIs on LinkedIn as of January 2021, accounting for 6.7% of all global LinkedIn users at the time [10].

On the other hand, the sustainable development of CCI is affected by various factors [3,4,11,12], and intellectual property (IP), including copyright, is a crucial factor [13,14]. CCIs contribute to the economy in a variety of ways [1,5], with copyright being one of the most important mechanisms [13]. Copyright helps firms to protect innovation and guarantee their capability to profit from innovation [15], providing CCIs with competitive advantage and appropriability. Because CCIs rely heavily on copyright, they are also called copyright industries [14].

However, the literature has not fully studied the function of copyright in the development of CCIs. Most of the prior research on this topic only theoretically stresses the role of copyright for CCIs [16–18]. Although some empirical research has studied CCIs [19–21],

**Citation:** Zhang, Y.-F. Cultural and Creative Industries and Copyright at the Regional Level: The Cases of Shenzhen and Hangzhou in China. *Sustainability* **2022**, *14*, 5293. https:// doi.org/10.3390/su14095293

Academic Editors: Marlen Komorowski and Justin Lewis

Received: 19 February 2022 Accepted: 26 April 2022 Published: 27 April 2022

**Publisher's Note:** MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations.

**Copyright:** © 2022 by the author. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

only a few papers have empirically examined the development of regional CCIs and the role of copyright. For example, Pager [22] studied the cases of Nigeria, India, and China and found that copyright offers distinct advantages over alternative models. Ncube [23] used South Africa as a context to study the role of IP, particularly copyright in the creative industry, and stressed the importance of the copyright framework.

Therefore, the present article asks the following question: what is the role of copyright in the development of CCIs? Specifically, I investigate whether CCIs use copyright and how CCIs use copyright. By doing so, I try to provide some empirical evidence about the relationship between copyright and CCIs. This will reply to the "what is" question, thus developing existing research that pays attention to the "what should be" issue in this topic [16–18].

To answer the above question, I set China as the research context and select the cities of Shenzhen and Hangzhou to conduct case studies. I identify 98 representative CCI enterprises from Shenzhen and 127 representative CCI enterprises from Hangzhou according to official information published by the local governments. More enterprise information is matched using an external database, and I am then able to analyze the characteristics of CCIs and the role of copyright.

#### **2. Literature Review**

#### *2.1. IP and Industry Development*

IP and industries are closely connected in the modern economy [24]. An increasing number of industries rely on IP to develop and are named IP-intensive industries [25,26]. In the US, the Economics and Statistics Administration (ESA) and the US Patent and Trademark Office (USPTO) published the report Intellectual Property and the US Economy: Industries in Focus in 2012 and found that IP-intensive industries accounted for approximately 5.06 trillion dollars in value added, 34.8% of the US GDP [27]; and the direct and indirect employment of IP-intensive industries contribute 40.0 million jobs, 27.7% of all jobs in the US. The report was updated in 2016 and 2022, and the latest version found that IP-intensive accounted for 41% of the domestic economic activity and 44% of the employment [28]. In Europe, the European Patent Office (EPO) and the Office for Harmonization in the Internal Market (OHIM) (Presently the European Union Intellectual Property Office (EUIPO).) published Intellectual property rights intensive industries: contribution to economic performance and employment in the European Union in 2013, and found that IP-intensive industries contribute 26% of employment and 39% of GDP in the EU [29].

Enterprises frequently use IP as strategic business tools to access competitive advantages [30–34]. The protection of IP rights helps prevent market failure induced by free riding and encourages the efficient allocation of innovative and creative elements [22]. Enterprises in certain industries that hold IP can choose to use their IP in different ways [32], such as selling it, licensing it or donating it. IP can bring several effects to their holders, such as preventing potential rivals from entering the market, attacking by litigating competitors who already exist in the market, and establishing and improving reputation [30,32].

Different types of IP have different characteristics and advantages for the development of products and industries [15]. Patents are more often used in technology-based industries [35], while copyright is more often used in content-based industries such as movies, online games, and publications [36]. This is the reason why the previously mentioned reports by ESA and USPTO and EPO and OHIM divided IP-intensive industries into copyright-intensive industries, utility patent-intensive industries, design patent-intensive industries, and trademark-intensive industries [27,29]. Boudreau et al. [15] recently investigated the use of patents and copyright in mobile apps and found that apps differentiated by their design are more likely and effectively protected by patents, while apps combining elements of differentiated content are more likely and effectively protected by copyright.

#### *2.2. Copyright and Cultural Creative Industries (CCIs)*

CCIs reflect the economic value of copyright. Since copyright and CCI are inextricably correlated, CCI is frequently referred to as the copyright industry [14]. The concept of the copyright industry is popular with the World Intellectual Property Organization (WIPO) and the US. WIPO published the first edition of Guide on Surveying the Economic Contribution of the Copyright-Based Industries in 2003 to promote the development of the related industries [37], and in the US the research team of economist Stephen E. Siwek has been writing reports about the copyright industry in the US economy for a long time [38]. Towse [18] pointed out that copyright policy is also cultural creative policy. Manfredi et al. [25] explored the economic contribution of copyright industries in Italy, and found that copyright has a great impact on the aspects of economic growth, the labor market and country development.

As a typical type of IP, copyright is heavily emphasized in the study of CCIs [39]. Copyright plays a crucial role in the development of CCIs [17,18], providing an institutional framework for the development of CCI [35]. Creative contents are the foundation of CCI, and CCI is also named the content industry [22]. Enterprises make profits by producing, duplicating and sharing their content [40]. However, it is difficult for enterprises to control content, especially in an era where the Internet is widely used. Copyright is effective in protecting content-based products and industries [15]; thus, CCI enterprises rely on copyright to grow [41].

A core logic of copyright law is to protect expressions. This allows authors of particular works to profit from assigning or licensing their works and encourage them to create more content or works [42]. Furthermore, how exactly copyright functions in the development of CCI is understudied, and this is the main research question the present paper stresses.

#### **3. Research Design**

#### *3.1. Research Context*

China holds a dominant position in the global market for creative goods and services [43]. The CCIs in China began to develop after the open and reform policy was implemented in 1978, particularly in the 21st century, and the output of CCIs has grown at a quick speed in recent years [44–46]. The added value of CCIs increased from 878.6 billion Yuan in 2009 to 4494.5 Yuan in 2020, the latter is more than five times the former value; the total imports and exports increased from 38.89 billion USD in 2009 to 108.69 billion USD in 2020, and the latter is approximately 2.8 times the former; and, since 2016, the percentage of the added value of CCI to GDP in China has been above 4% (Table 1). Governments in most Chinese cities have fostered this growth [19]. In 2009, the General Office of the State Council in China issued the Plan on Reinvigoration of the Cultural Industry. In 2010, the Ministry of Finance launched special funding to support the development of CCI.

I choose the two cities in China, Shenzhen and Hangzhou, as cases for this research. In 2015, the National Cultural Industry Research Centre in Tsinghua University published a report about the CCI competitiveness of the cities in China (Available at: https://www. tsjc.tsinghua.edu.cn/info/1017/2278.htm, accessed on 10 January 2022), and the top five cities include Beijing, Shanghai, Shenzhen, Guangzhou and Hangzhou. In 2018, in a report about the city level cultural creative activity index, the cities of Chengdu, Beijing, Hangzhou, Shanghai and Shenzhen received the highest score (Available at: https:// www.sohu.com/a/241901835\_99925288, accessed on 10 January 2022). In 2020, Zero2IPO Research published a report about the investment and development of CCI in China, where the development index of CCI in select cities was calculated, and the top five cities included Beijing, Shanghai, Guangzhou, Hangzhou and Shenzhen (Available at: https://free.pedata.cn/1440998437317018.html, accessed on 10 January 2022). It can be seen from these reports that, apart from Beijing and Shanghai, Shenzhen and Hangzhou perform well in the field of CCI. However, Beijing and Shanghai are cities with special positions in China; they are directly governed by the central government, and have the same administrative level as provinces, while other prefectural cities are governed by

provinces. Considering the special position of Beijing and Shanghai, their CCI development may not be representative. Therefore, I use them as our research targets.


**Table 1.** Development of the CCI in Shenzhen and Hangzhou.

Notes: CCI is classified using the 2004 edition of the Cultural and Relative Industry Classification published by the National Bureau of Statistics before 2012, and after 2012, it has been classified using the 2012 edition. The data comes from the China Statistical Yearbook on Cultural and Related Industries 2021; the data of added value and its percentage to GDP in 2020 comes from the website of the National Bureau of Statistics in China since the yearbook does not have data on this year, available at http://www.stats.gov.cn/tjsj/zxfb./202112/t20211229\_1825717.html, accessed on 18 March 2022.

#### *3.2. Data and Method*

The data used in this work comes from several sources. The added value of CCI comes from the Chinese Statistics Yearbook of the Cultural and Relative Industry, the Shenzhen Statistics Yearbook, the Hangzhou Statistics Yearbook and the Hangzhou CCI Office's website (Available at: http://www.0571ci.gov.cn/article.php?n\_id=7845, accessed on 10 January 2022). I use a popular patent database INNOJOY (innojoy.com) to search the patent applications of the enterprises. Enterprise information is manually collected from a commercial online firm information database QICHACHA (qcc.com), and I mainly look up the enterprises' registration type, final beneficiary, certification of national High-Tech Enterprise, registration of copyright, trademark and websites.

I conduct the analysis in the following steps. First, I have a general look at the development of CCI in Shenzhen and Hangzhou. This is realized by analyzing the annual added value of CCI and its percentage to the local GDP in the two cities.

Second, I select representative enterprises in CCI from Shenzhen and Hangzhou to analyze the development characteristics of the CCI. I identify 98 local CCI enterprises in Shenzhen based on a list of the top 100 enterprises of CCI (2015–2016) released by the Shenzhen Culture and Sport Office in 2017 (The list includes 100 enterprises, two of them are dropped since they are enterprise groups and the exact enterprise information is difficult to determine, and their businesses are too widespread. According to the Cultural Creative Industries' revolution and development policy in Shenzhen (Shenzhen Municipal Government [2011], No. 175), the growth of the added value of the Top 100 CCI enterprises should be above 30%). I identify 127 local CCI enterprises in Hangzhou based on the following lists: the "CCI Demonstration Enterprises" recognized by the Propaganda Department under the Hangzhou Municipal Government, and the first, second and third batches of "Growing Cultural Enterprises" recognized by the Cultural Reform Work Lead Group under the Zhejiang provincial government.

After identifying these enterprises, I am able to analyze the sub-industry structure of the CCI and the ownership structure of the CCI enterprises. CCIs include a variety of sub-industries, and looking at the internal industry structure can provide a new perspective in understanding the development of regional CCI. In this article, I use the classification mentioned in the Revolution and Development Outline of CCI in Shenzhen (2011–2015), where CCIs are divided into ten types of related industries: creative design, cultural software, animation and game, new media and cultural information service, digital publication, film and television, cultural tourism, intangible cultural heritage development, high-end printing, high-end arts and crafts.

Enterprise ownership is an important feature of an industry. I divide enterprises into three categories according to their ownership: state-owned enterprises (SOE), private enterprises (PE), and foreign-owned and Hong Kong, Macau and Taiwan owned enterprises (FHMT). State-owned enterprises include those that are registered as such or have a registered state-owned enterprise as one of their first three final beneficiaries. Foreign-owned and Hong Kong-, Macau- and Taiwan- owned enterprises include all types of foreign-owned and foreign-invested enterprises, as well as Hong Kong-owned and invested enterprises, Macau-owned and invested enterprises, and Taiwan-owned and invested enterprises. Finally, the remaining enterprises are private enterprises.

Third, I examine the exact role of copyright in the development of regional CCI. I analyze how the selected CCI enterprises are make of copyright by looking at their registration of copyright. Copyright is a type of IP that protects original works of authorship, and I divide copyright into two types according to their nature—general works and computer software (hereinafter referred to as "software"). Software means computer programs and relevant documents, it is different from general works (e.g., written works, music works, photographic works, art works, audiovisual works) in that it is more technology-intensive and can also be protected by patents under certain conditions. However, not all copyrighted works are registered, which means that some unregistered works can also be protected by copyright law. However, I only consider registered copyrights since those unregistered are not observable.

I then examine the integration of copyright and other types of IP. As noted by Al-Aali and Teece [34], IP—including patent, trademark, copyright, etc.—needs to be strategically managed from an integrated perspective. Crafting an integrated IP strategy can help build a competitive advantage for enterprises [31]. Therefore, I investigate how those selected CCI enterprises use copyright and other types of IP together, and patent, trademark and domain name are considered. Patents in China include three types of invention patent, utility patent, and design patent. Trademark is submitted by enterprises and granted by the China National Intellectual Property Administration (CNIPA). The use of domain names is usually reflected in the registration of websites.

The enterprises' certification of national High-Tech Enterprise is considered. This is a title recognized by the Ministry of Science and Technology (MOST) in China to those enterprises that are advantaged in high and new technology and have potential in development. The certification in itself is an integration of IP and can help enrich the findings. By examining whether the selected CCI enterprises in Shenzhen and Hangzhou are national High-Tech Enterprises, it can be seen how those enterprises are using technology.

I also look at the judicial protection of copyright of the selected CCI enterprises. Since copyright is a type of negative right [47], judicial protection becomes an important tool in the functioning of copyright [48]. I mainly analyze the copyright lawsuits involving the selected CCI enterprises. I search for copyright lawsuits concerning ownership and infringement involving those enterprises that were terminated before 31 December 2018 from PKULAW.

#### **4. The Development of Regional CCIs and Their Characteristics**

Table 2 shows the development of CCIs in Shenzhen and Hangzhou. The CCIs in both cities have developed to a high level. In 2012, the added value of CCIs in both cities increased to more than 100 billion Yuan; the added value of CCIs in Shenzhen exceeded 200 billion Yuan since 2016, and Hangzhou reached this milestone since 2015. The percentage of CCIs added value to the local GDP in Shenzhen and Hangzhou has been increasing in recent years, the percentage in Shenzhen reached 10% for the first time in 2018, and the percentage in Hangzhou is even higher, which has been above 20% since 2015. Seen from a national view, the added value of CCIs in Shenzhen accounted for more than 6% of the overall added value of CCIs in China, and Hangzhou's share has been above 8% since 2015.


**Table 2.** Development of the CCI in Shenzhen and Hangzhou.

Shenzhen-SZ; Hangzhou-HZ.

One of the typical CCI enterprise in Shenzhen is Tencent S&T (Shenzhen) Ltd. (Shenzhen, China) (https://www.tencent.com/en-us/, accessed on 22 April 2022). The company was founded in 1998 with its headquarter in Shenzhen, and has been listed on the Stock Exchange of Hong Kong since 2004. As a world-leading internet and technology company, Tencent's present business areas cover: (1) communication and social services, e.g., QQ, and Wechat; (2) video games and other digital content; and (3) other services, such as cloud computing, and advertising. Benefiting from the use of internet and information technology, Tencent has a dominant position in certain fields of CCI in China [49]. In 2021, Tencent ranked 132nd in the list of Global 500 by Fortune.

One of the typical CCI enterprise in Hangzhou is Zhejiang Huace Film Co., Ltd. (Hangzhou, China) (http://www.huacemedia.com/, accessed on 22 April 2022). The company was founded in 2005 and has been listed on the Stock Exchange of Shenzhen since 2010, known as the "Number one Stock in the field of TV series" in China. Its main business areas cover TV series, films, and relevant businesses.

Considering that there are more than 300 prefectural-level regions like Shenzhen and Hangzhou, the CCIs of the two cities hold a unique position in China. From the perspective of local development in Shenzhen and Hangzhou, the development of CCIs has a significant impact on local economics. In 2015, the percentage of the CCIs added value in Shenzhen to the local GDP reached 10%, and reached 20% in Hangzhou.

#### *4.1. Structure of the Regional CCIs*

Table 3 shows the internal structure of the CCIs in Shenzhen and Hangzhou. The structures of CCIs in Shenzhen and Hangzhou are different but share similarities at the same time. In Shenzhen, a majority of CCI enterprises come from the sub-industries of creative design (26 enterprises), high-end arts and crafts (16 enterprises), high-end printing (20 enterprises), and new media and cultural information service (18 enterprises). In Hangzhou, most CCI enterprises do business in the sub-industries of creative design (32 enterprises), animation and game (21 enterprises), cultural software (13 enterprises), new media and cultural information service (23 enterprises), and film and television (23 enterprises).


**Table 3.** The internal structure of the CCI in Shenzhen and Hangzhou.

In both cities, there are a large number of CCI enterprises in the sub-industries of creative design, and new media and cultural information service; the enterprises in the field of creative design do business mainly in architectural design, industrial design, advertising and brand design; and the enterprises in the field of new media and cultural information service specialize in digital media based on information and communication technology. In addition, the high-end arts and crafts industry and high-end printing industry stand out in Shenzhen, while the animation and game industry, cultural software industry and film and television industry hold a prominent position in Hangzhou.

To better understand the internal structure of the CCI, examples of the sub-industries are shown in Table 4. Several of these CCI enterprises occupy important positions in the Chinese market. In addition to the above-mentioned Tencent and Huace Film in their own fields, Chow Taiseng is a leading jewelry enterprise in China. Furthermore, several of those CCI enterprises have been listed in the stock mark, e.g., Tencent, Huace Film, Chow Taiseng, YUTO, Electronic Soul, Huamei, and Huace.

**Table 4.** Examples of the CCI enterprises from different sub-industries.


#### *4.2. Ownership of the Enterprises in CCIs*

Table 5 shows the ownership distribution of the CCIs enterprises in Shenzhen and Hangzhou. In both Shenzhen and Hangzhou, the percentage of SOEs is approximately 12%, and PEs account for the highest percentage.

However, the number of FHMT enterprises in Shenzhen is 23%, which is substantially greater than that in Hangzhou. This finding highlights the differences in the two cities' economic development models: Shenzhen, as China's pioneer of the open and reform policy, benefits greatly from Hong Kong's industrial transfer, and there are relatively more enterprises owned or invested by foreign countries, Hong Kong, Macau and Taiwan. For example, another famous jewelry enterprise, the Chow Tai Fook Jewelry Shenzhen Ltd. (Shenzhen, China) is invested by its parent company in Hong-Kong.


**Table 5.** Ownership of the CCI enterprises in Shenzhen and Hangzhou.

However, Hangzhou's development benefits more from its business-oriented history, and the private sector plays an important role in the region. Nearly 86% of CCI enterprises are private enterprises. The above-mentioned enterprises, Electronic Soul, Quantuo, and Huace, are all private enterprises.

#### **5. The Role of Copyright in the Development of CCIs**

#### *5.1. The Frequent Use of Copyright*

Tables 6 and 7 show the copyright registration status of the CCI enterprises in Shenzhen and Hangzhou. In Shenzhen, Shenzhen Nika Jewelry Ltd. (Shenzhen, China) registered the most general works with a number of 477, Shenzhen East Boya S&T Ltd. (Shenzhen, China) registered the most software with a number of 753; Tencent S&T (Shenzhen) Ltd. (Shenzhen, China) registered the most works (including general works and software) with a number of 1043 (Table 8). Among the 98 enterprises, 40 enterprises have registered at least one general work, 61 enterprises that register at least one software, and 74 enterprises have registered at least one general work or software.

**Table 6.** Copyright and other types of intellectual property (IP) in Shenzhen and Hangzhou.


**Table 7.** Copyright of the CCI enterprises by sub-industry.



**Table 8.** Top-15 CCI enterprises in Shenzhen with copyright registration.

In Hangzhou, Hangzhou Xuanji S&T Information Technology Ltd., China registers the most general works with a number of 197; Hangzhou Bianfeng Internet technology Ltd., China registers the most software, with a number of 571 (Table 9). Among the 127 CCI enterprises, 56 have registered at least one general work, 80 have registered at least one software, and 95 have registered at least one general work of software.

**Table 9.** Top-15 CCI enterprises in Hangzhou with copyright registration.


Specifically, these CCI enterprises use suitable copyrights to protect their innovations and support their business. As an online media server, Tencent uses both software and general work to protect the content, online applications and characters (Table 8). As online game producers, Shenzhen East Boya, Bianfeng Internet and Zhexin Information use software frequently (Tables 8 and 9).

#### *5.2. The Integration of Copyright and Other Types of Intellectual Property (IP)*

Table 10 shows that, apart from copyright, other types of IP, including patent, trademark and domain, are also frequently used.


**Table 10.** Other types of intellectual property (IP) in Shenzhen and Hangzhou.

Tables 11 and 12 show the correlation analysis of copyright and other types of IP in Shenzhen and Hangzhou, respectively. In Shenzhen, Table 11 shows that both general work and software are significantly correlated with invention patent, design patent and trademark; and that software is highly correlated with the registration of websites.

**Table 11.** Correlation of copyright and other types of IP (Shenzhen).


\* significance at 0.01 level.

**Table 12.** Correlation of copyright and other types of IP (Hangzhou).


\* significance at 0.01 level.

Patent is a reflection and measurement of technological innovation, and the above correlation reveals that CCIs are using technologies. This is also supported by national statistics on the granted patents in CCI areas in China (Table 13), which shows that the number of patents, particularly invention patents, has increased dramatically in recent years. After checking the status of the CCI enterprises one by one, it is found that 49 enterprises out of 98 in Shenzhen are national High-Tech Enterprises, accounting for 50% of all enterprises. This concludes that technology is playing an important role in the development of CCIs, and their integration is deepening.


**Table 13.** Granted patents of CCIs in China.

Source: China Statistical Yearbook on Culture and Related Industries 2021.

This phenomenon can also be explained by looking at the business model of the CCIs. Table 14 shows the top 10 CCI enterprises that have applied for the most patents in Shenzhen and Hangzhou. These enterprises accounted for most of the patents in the CCI area. In Shenzhen, enterprises in the field of new media and cultural information service file the most inventions, and the development of these enterprises depend highly on both information technologies and copyright; enterprises in the field of high-end arts and crafts file the most designs, because this type of patent, together with copyright, can better protect their products.

**Table 14.** Top-10 CCI enterprises in patent application.


However, the correlation relationship between copyright and other types of IP in Hangzhou is not significant (Table 12); I also find that 52 enterprises out of the 127 enterprises in Hangzhou are national High-Tech Enterprises, accounting for 41%. This implies that CCI development routines differ in different cities.

#### *5.3. Judicial Protection as an Important Way to Use Copyright*

Tables 15 and 16 show the copyright litigations of the ICC enterprises in Shenzhen and Hangzhou, respectively. Among the 98 CCI enterprises in Shenzhen, 19 have experience with copyright litigation. Huaqiang Fangte (Shenzhen) Animation Ltd. (Shenzhen, China) is involved in 1803 copyright litigations and acts as plaintiffs in all of those suits; Shenzhen Xunlei Internet technology Ltd. (Shenzhen, China) is involved in 735 copyright litigations and acts as a plaintiff in 580 of them; Tencent S&T (Shenzhen) Ltd. (Shenzhen, China) is involved in 216 copyright litigations and acts as a plaintiff in 144 of them. It is also found that the majority of the copyright lawsuits are settled instead of going to court judgment, and the plaintiffs win the majority of the judged litigations. Taking Tencent as an example, Tencent is the owner and operator of the popular communication software Wechat. In 2018, Tencent found that some chatting emojis were used by another software application without licensing, and filed a lawsuit in the court and won the case (The code of the case is (2019) Jing 0491 Civil No. 16794.).

**Table 15.** Copyright litigation of the CCI enterprises in Shenzhen.



**Table 16.** Copyright litigation of the CCI enterprises in Hangzhou.

In Hangzhou, 27 out of the 127 enterprises are involved in copyright litigation, but the enterprises are defendants in most of the lawsuits. Huashu Media Internet Ltd. (Shenzhen, China) is involved in the most copyright litigations, with a total of 223, yet it only files 23 lawsuits. Similar to Shenzhen, most of the copyright lawsuits in Hangzhou are settled, and the plaintiffs win frequently in cases judged by the court. With a lawsuit (The code of the case is (2012) Chao Civil No. 32654.) filed by Huashu as an example, Huashu had exclusive right of network transmission on certain TV series, and found that the series were also broadcast on another website without licensing; thus, Huashu filed a case in the court and was supported in law.

#### **6. Concluding Remarks**

The article analyzes the development of CCI and the role of copyright in China using Shenzhen and Hangzhou as cases. Representative CCI enterprises from Shenzhen and Hangzhou are identified, and enterprise information is matched using an external database to support the analysis.

It is found that city-region matters in the development of CCI. The CCI structures in the two cities share both similarities and differences: (1) Shenzhen and Hangzhou are both developed in the sub-industries of creative design, new media and cultural information service; (2) Shenzhen is advantaged in high-end arts and crafts, high-end printing, while Hangzhou is advantaged in animation and game, cultural software industry, film and television; (3) Shenzhen has more FHMT enterprises, while Hangzhou is rich in domestic private enterprises. Concerning copyright, the majority of CCI enterprises in Shenzhen (74 out of 98) and Hangzhou (95 out of 127) have experience with copyright registration. In Shenzhen, enterprises who frequently use copyright come mainly from the sub-industries of creative design, new media and cultural information service, high-end arts and crafts, and high-end printing (Table 6); in Hangzhou, the CCI enterprises that use copyright come mainly from the sub-industries of animation and game, new media and cultural information service, film and television, and creative design (Table 8). These findings are in line with the logic of regionalism [50–52], arguing that city-regions are the key units in the national and global economy. Previously, Liang and Wang [12] traced the development of CCIs in China and paid special attention to urban development, and noticed the spatial characteristics of CCI. Thus, the implication for policy-makers and practitioners concerning CCI is that regional factors (e.g., location, history, culture, etc.) should be considered when making decisions.

CCI enterprises are applying a holistic IP strategy. Copyright is highly correlated with other types of IP, meaning that those enterprises that are using copyright are also frequently using patents, trademarks, etc. This finding is in line with prior conclusions arguing that different types of IP together can coordinate and complement as a whole to bring about better benefits [53,54]. Recently, the rapid progress of new emerging technologies, particularly the development and application of the internet and communication technology, not only poses challenges to copyright protection, but also promotes CCI development, and an increasing number of CCI enterprises rely on technology to develop. The findings to some degree challenge the previous conclusion by Montgomery and Potts in 2008 [35]. In their paper, they argued that a weak IP regime is evolutionarily superior to a strong one, in that it advances operational value over the prospects of global value added, over the incentive to reuse ideas and business model adaptation [35]. They concluded that the creative industries in China have far less reliance on IP, but the present paper finds that CCI enterprises are making use of copyright as well as other types of IP.

Filing copyright lawsuits has become a popular way of enforcing copyright. Filing lawsuits is an important strategy for enterprises to use IP, including copyright. The practice in Shenzhen and Hangzhou shows that, some CCI enterprises actively file lawsuits, and some are accused of infringing on others' copyright. This indicates that the majority of them have strengthened their awareness of using copyright. At the same time, the large number of copyright lawsuits shows the efficacy of China's court system and the fierce competition of the CCI. The findings supplement the research by Pager [22], who wrote that "Until recently, copyright law played little or no role in China's content industries. However, this has begun to shift." It has been agreed that IP in most countries have been and will continue to dynamically change [55–57], and the IP protection in China has been improved a lot in the past years [58]. As a result, how enterprises and industries use IP also changes over time. This implies that scholars and practitioners have to understand the role of copyright in CCI using a dynamic perspective.

The study makes three contributions to theory. First, prior studies on CCI [59–61] lack an empirical focus on CCIs, and this paper uses practical evidence to depict the model and characteristics of CCIs by analyzing select enterprises from CCIs. Second, regions and cities are important units of the economy [50]. Considering the disparity of regional resource endowment, the development of CCI can be affected by regional characteristics [39]. It is necessary to conduct an analysis at the regional level [62], and this paper contributes to the knowledge about how CCIs develop, and how CCIs motivate regional development. Third, in a creative economy and knowledge economy era, copyright becomes more closely related to CCI [40], and this paper investigates the exact role of copyright; at the same time, using China as the context, the research adds knowledge about the role of IP or copyright in CCI in developing countries [22].

This work has some limitations and needs to be studied in the future. First, copyright can be protected with or without registration. In practice and in law, the protection of copyright is not based on registration, while the unregistered part is not observed; thus, there should be more enterprises using copyright. This article only considers registered copyrights since there is no available data on the unregistered copyright. How unregistered copyright is related to CCI needs to be explored by conducting interviews in the future. Second, two typical cities are selected as cases, and more regions need to be analyzed to test the findings; however, the present work provides an analytical method. Third, I only analyze select CCI enterprises that are identified via official publications from the local governments. These enterprises are recognized by the government because they are performing well in sales or income, and they contribute to a majority of the CCI. However, the relationship between small CCI enterprises and copyright is also of interest, these enterprises may not generate too much added value but are rich in number and are important in the local economy.

**Funding:** This research received no external funding.

**Institutional Review Board Statement:** Not applicable.

**Informed Consent Statement:** Not applicable.

**Conflicts of Interest:** The author declares no conflict of interest.

## **References**


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