Tudou Encounters a “Hot Potato” In Distributing A “Bite of China”


From April this year, the Supreme Court launched started releasing “model cases” (典型案例) in order to assist the courts and public to better interpret the law.

On June 23, 2014 the Supreme People’s Court released five “model cases” decided by the lower courts, which for the first time included an IP-related case, CCTV International [央视国际网络有限公司] vs. Shanghai TuDou Network Technology Co., Ltd. [上海全土豆文化传播有限公司]. These model cases, as I have previously blogged are an effort to instruct the lower courts and the public on how IP cases are adjudicated, and are an effort to establish a kind of “case law with Chinese characteristics.”  The case has been briefly discussed by Jerry Fang at the Supreme People’s Court Observer website.

 “A Bite of China” is a food documentary.  It was filmed by CCTV. It was first broadcast in May 2012. One week after broadcast Tudou.com offered a link to watch the video on-line. CCTV thereafter sued Tudou for damages and reasonable costs.

The Shanghai Minhang District People’s Court determined that the action of the defendant constituted infringement of the right of communication through information networks (the “making available right” in other jurisdictions).   In particular, the court relied on Article 3 of the 2012  Judicial Interpretation on on-line infringement [The Provisions of the Supreme People’s Court on Several Issues concerning the Application of Law in Hearing Civil Dispute Cases Involving Infringement of the Right of Dissemination on Information Networks]. In this case, the defendant provided the online on-demand service of the infringed work to the public and allowed users to watch the asserted work in their personal selected time.

Tudou (which means potato in Chinese) argued that it only provided space storage services and that the asserted work were uploaded by the network users.  However, it was not able to provide evidence to illustrate who was the actual person to upload the videos, so the court did not find this argument to be credible. In regard to the economic loss claimed by the plaintiff, since the plaintiff couldn’t submit the evidence about benefits from the infringement of the actual loss suffered by the defendant, the court considered the popularity of the asserted work, that the defendant directly provided the asserted work to view online, that the subjective fault of the defendant was large, and the infringement was occurred during the “hot” [热播] broadcast period for the TV show. The court also looked to Tudou’s business size, business model, and the nature of the its website to demonstrate the effect of the infringement.

According to the judgment of the first instance CCTV International filed a lawsuit after it obtained notarized evidence of the infringement. Thereafter, Tudou deleted the asserted video on its website. It appears that CCTV International did not give an opportunity to give Tudou time to take down the video before filing the lawsuit.  The court instead relied upon the fact that Tudou, a sophisticated company, uploaded the content itself, and that the content was “hot”. Under Article 10 of the 2012 Judicial Interpretation on on-line liability, where there is such “hot” content, knowledge of infringement can be imputed:

Article 10    Where a web service provider, when providing web services, by establishing charts, catalogues, indexes, descriptive paragraphs or brief introductions or other ways, recommends hot movie and television programs which can be downloaded or browsed or are otherwise accessible by the public on its webpage, the people’s court may decide that it should have know that its web users are infringing upon the right of dissemination through information networks.


This case appears to be directed to the application of what constitutes “hot” content according to the 2012 Judicial interpretation, as well as related issues involving application of the JI.  It may also be timed to coincide with the current comment period for the recently released draft of the State Council Legislative Affairs Office of the proposed revisions of the Copyright Law.  Article 73 of that draft outlines addresses “actual” or “constructive” knowledge of infringement which can result in liability for an ISP, without specific reference to any “hot” content.

After some searching, it appears that this case is not yet available on line in its second instance decision.   This blog has therefore relied on the press release and first instance decision.  If a reader has a copy, please post it or email me at chinaipr@yahoo.com. 

These cases show that China is laudably utilizing its extensive IP case adjudication experience to guide the judiciary and is therefore evolving its own approach towards case law.  However, if the cases are to have an  even greater impact, it is also important for the case to be published or made readily available at least by the time it is listed as a model case.

Choice of Law in IP Contracts with China: A Sleeper Issue?


Practical Law (Thomson Reuters) has recently made available its analysis of a survey (free sign in required) on the use of governing law for China-related agreements which reveals trends in choice of law for foreign-related IT and IP contracts in China.

In my own experience, if you require enforcement in China, choosing a foreign court (other than arbitration) to resolve a dispute, or a non-Chinese law for a dispute in China, is often a mistake.  The survey data generally agrees: it shows that if local enforcement is going to be an issue for an IP or IT contract, the majority of respondents will choose Chinese law.

The Chinalawblog put the general proposition it this way: “China’s laws do technically allow for contracting parties [in transnational transactions] to make their own decisions regarding a contract’s governing language and law, but in the practical world of Chinese litigation, having an English language contract or a contract calling for foreign law is nearly always going to be a mistake.”

For intellectual property and information technology contracts, choice of PRC law remained significant (31% of respondents).  After Chinese law, New York law (21%) “blazed ahead” of Hong Kong (17%) and English law (10%). ‘Other’ jurisdictions accounted for 19% of responses.   The jurisdiction of enforcement was cited as an important factor by 86% of respondents, and the availability of certain remedies was cited by 80% of respondents

The global nature of information technology and IP transactions may also explain why respondents in this practice area are comparatively open to contracting under unfamiliar laws.   Only 69% of respondents cited familiarity with a body of law as an ‘important’ or ‘very important’ factor in this practice area, against 77% of respondents overall.

Generally speaking, for those lawyers negotiating commercial contracts who choose Chinese law, the key drivers were jurisdiction of enforcement (87%) or of performance (77%) and the location of the contracting entity (71%) or counterparty (63%). Fewer respondents who preferred China rated the neutrality of the legal system as “important” (52%).

I had previously encouraged readers of this blog to complete the survey, as I believe choice of law in IP and technology transfer contracts is a “sleeper” issue – i.e., one that is too infrequently considered for all its strategic implications.  There may be situations where foreign law is preferred for a Chinese contract, or when Chinese law is preferred for a contract to be implemented overseas, or where choice of Chinese law brings some unhappy surprises.  Those, however, are topics for another blog.

Unfortunately the response rate for this survey was relatively low.  In total 127 respondents answered the survey. In addition, the survey did not address choice of law considerations in international technology transfer agreements, where there are mandatory provisions of Chinese law that contracting parties may wish to avoid.

What has been your experience in technology transfer or IP contracts?

IP Discovery With “Chinese Characteristics”

Will China ultimately introduce civil procedures to guarantee that evidence not only won’t be manipulated or adulterated, but that it will also be produced to an adverse party? What would such procedures mean to the Chinese civil system that prides itself on a high degree of efficiency and depends upon each party unilaterally meeting both a burden of proof and a burden of production?

Mark Schroeder at Deloitte China has written an interesting blog “China’s potential future…eDiscovery and CJR [Civil Judicial Reform].”  Schroeder documents current Chinese experiments at expanding discovery and links it with the pervasive growth of electronically stored information in litigation.  He believes that “China … will ultimately begin to resemble and utilize similar common law mechanisms particularly in “discovery”. 

I agree.  I have discussed elsewhere here the possibility of increased administrative litigation discovery,  calls for increased discovery in civil litigation, and discussions on this topic at a highly successful program held at Renmin University on IP adjudication with over 200 Chinese judges in 2012, and in more recent engagements with the Chinese judiciary.

Interestingly, no one seems to be urging China to adopt the US system wholesale because of its potential for abuse.  However, greater production of evidentiary information in the hands of an adverse party would help in adjudicating cases, particularly in difficult cases such as software piracy or trade secret cases where proprietary information may be in the exclusive hands of a defendant.   These difficulties in “satisfying evidentiary burdens” have also been identified by the Chinese courts as a particular difficulty  in trade secret cases.  

I am less certain than Schroeder that a reason that introduction of discovery mechanisms has been delayed is the necessity of “forming safeguards mainly for security reasons.”  In fact, some courts, such as Jiangsu, have introduced model protective orders to provide for production of confidential information.  In addition, China’s more expansive use of preliminary or final evidence preservation orders can also serve a quasi-discovery function.    China has also introduced new provisions regarding civil procedures that also provide a greater role for the parties in producing and substantiating evidence

Schroeder (like me) also identifies Hague convention discovery as problematic.  According to Schroeder “The Hague “letter of request” process may require 6 months or more and will only retrieve data with a “direct and close connection with the subject matter of the litigation.”   Perhaps, as China permits more robust discovery type procedures and integrates more closely with other legal systems, these limitations may change.

Schroeder concludes that concurrently, common law jurisdictions in trying to contain discovery, have serendipitously legislated discovery rules that look similar to China’s proposed rules as they have promoted the courts control over the evidence gathering process. In light of these developments and the need to produce electronically stored information, Schroeder believes that China will ultimately develop a discovery system like a common law jurisdiction but “with Chinese Characteristics”.