China's online literature industry suffered losses of nearly 10 billion yuan ($1.5 billion) due to online piracy in 2014, according to a recent report by the Shanghai-based iResearch Consulting Group.

Online piracy from PC terminals accounted for 4.32 billion yuan in losses, with 3.45 billion yuan from mobile devices while counterfeit products were responsible for 2.18 billion yuan in losses, according to the report.

"The work to improve legislation on protecting digital copyrights in China has continuously improved, but the laws and regulations are more or less falling behind the development of the industry. It is difficult to keep up with the industry's rapid pace," the report said.

But it pointed out that effective regulation requires effective law enforcement.

It also said it is inexpensive to pirate online literature, which essentially entails copying the original work and posting it on another website. Pirated copies of online literature are nearly always posted immediately after the original work is published, an attractive aspect of pirated literature, the report said.

The report said servers for websites that contain pirated literature are often hosted overseas while other websites take the pirated works offline or suspend site operations when suspicions are raised. Websites that are shut down can re-emerge using a different domain name.

These issues make it difficult for law enforcement to obtain evidence while also driving up the cost of investigating websites that contain pirated online literature.

Making it more difficult is the rapid development in mobile technology, which allows for pirated works to be readily accessible. Websites also employ workers to manually type out original works to be sold on the street.

The report suggested that authorities in charge of copyright protection cooperate with online literature producers and establish a literature database that is equipped with a search engine to filter out pirated content.

It called for cooperation between authorities and online advertisement providers to crack down on illegal advertising services and

increase the punishments handed down to websites posting pirated materials.

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