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Ok, so this is originally attributed to Chuang Tzu who was around in the BC era. However, all the sources I can really find on it are from a translation in 1965. So what are the rules on this one? Is it ok to paraphrase the proverb?

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Copyright does not protect ideas, only forms of expression. Thus paraphrasing a copyright-protected work is not infringement, unless the paraphrase is so close that the result is a derivative work.

A "proverb " is often so short that it has no copyright at all, or lesser protection. In the case of a normal proverb, a paraphrase is unlikely to be considered infringement.

If this is under US law, such a paraphrase might well be fair use, an exception to copyright, and so not infringement. But whether something is fair use or not is a highly-fact-driven determination, and can not be finally made except by the court. There is not enough detailed context here to make even a rough determination.

You might want to post on LAW.SE with significantly more context, including the translated proverb and where it is used. Copyright and fair use questions come up there quite often. Or you might read existing answers under those tags on that site.

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  • Go to the Chinese Text Project website, see if you can trace the original text, and come up with your own translation. (ctext.org) Sep 18 at 15:48
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You are free to retell any of the stories from the Chuang Tzu in your own words, but a translation published in 1965 may still be under copyright. Websites like "The Gutenburg Project", "Sacredtexts.com" or "Amazon Classics" stick to works in the public domain, which anyone can use without restriction.

I am fairly sure that James Legge's 19th cent. translation (published in "Sacred Works Of The East") is in the public domain. Look in the "Internet Sacred Texts Archive".

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