Let’s fight with gentle words Till time lend friends, and friends their helpful swords. (Shakespeare, King Richard the Second)

On January 14, 2015, the National Copyright Administration of PRC (NCAC), together with the National Internet Information Office (NIIO), the Ministry of Industry and Information Technology (MIIT), and the Ministry of Public Security (MPS), held a briefing in Beijing on the achievements of their campaign “Sword Action” (Jian Wang Xing Dong, 剑网行动) (or “Sword Network Campaign”).  This campaign is intended to address internet copyright piracy.

China has now carried out the “Sword Action” for 10 consecutive years.  According to information released at “Second China Seminar on the New Internet Copyright Issues”, this campaign has resulted in investigation of  4241 cases related to Internet piracy, including 1926 websites which were referred to MIIT for shut-down, the confiscating of 1178 servers and related equipment sets, and fines of 7.83 million RMB.  Perhaps most critically, 322 cases were transferred to judicial departments, presumably for criminal prosecution, or about a 7.6% “referral rate.”

Last year’s Sword Action covered a range of content types, including films and television programs, literature, and online games, with a particular focus on selling pirated products through Internet.  Here is a summary of these important cases, with our comments:

1.  Shanghai “Shooter net” (射手网)Infringing Audiovideo Works and Subtitle Translations

In September 2014, Shanghai Cultural Market Administrative Law Enforcement Team investigated the “Shooter Network” (www.shooter.cn) for alleged copyright infringement.  The investigation revealed that Shanghai Shooter Information Technology Co.  set up the ”shooter net” in shopping malls, for commercial purposes.  Shooter sold copies of their “2TB HD integrated video collection of resources” hard disk storage devices, “3TB HD super audio collection and other products”, with a total of about 100 units sold since May 2013.  In a separate investigation, Shooter subtitled “How to Train Your Dragon” and other television work without permission of the rightsholders and permitted users to browse, download and view these programs.  The site’s daily IP traffic was about 200,000, and daily visits were 400,000 page views.  The Motion Pictures Association of America certified that various titles were unauthorized and that films were subtitled without authorization of the copyright owner.   Shanghai Information Technology Co., Ltd. agreed to stop the infringement, and the site was shot down in November 23, 2014. A 100,000 RMB administrative punishment was imposed. This case alerted subtitle translation sharing groups that their previous sharing activities may constitute a form of copyright infringement.

2.  “Yi Dian Wang Ju” Company (一点网聚公司) Disseminating Literary Works

On December 2014, NCAC investigated on Yi Dian Wang Ju Company for allegedly disseminating literary works on-line.  The company, without the permission from Beijing weekly magazine, Beijing Finance World Culture Media Co., Ltd, and Beijing Figures World Culture Media Co., Ltd, disseminated 246 written works to public.  NCAC imposed a 100,000 RMB administrative punishment on the company.

3.  “Jian Gong Family” (建工之家) Website Software  

The copyright administrative law enforcement department of Yangzhou City (Jiangsu), together with Heze City (Shandong), investigated the “Jian Gong Family” website.  The website charged a membership fee and offered a number of cracked versions of software online and for downloading.  As of September 15, 2014, it had 1,430,332 website members, and on-line members of 6268.  The copyright administrative law enforcement department of Yangzhou imposed a 100,000 RMB administrative fine.

4.  Mr. Liu On-line Games Copyright

The Ministry of Public Security (MPS) of Heilongjiang Province together with NCAC investigated a Mr. Liu for allegedly infringing the copyright of an on-line game named “Zhu Lu Zhong Yuan”.  The infringed online games were operated through VPN proxy services, with rental servers inside and outside in China.  The companies used third-party payment platforms for cash flow.  There were hundreds of thousands of players and the scale of the website was close to that of genuine games. On July and August of 2014, Liu as well as other parties were arrested.  The court sentenced Liu and the technical directors of the computer service with maximum penalties of 3 years and 6 months imprisonment, and fines ranging from 400,000 RMB to 60,000 RMB.

5.  “HD Movies Download Website”(高清影视下载网)

MPS of Yangzhou City (Jiangsu) investigated the “HD Movies Download Website” for  infringing copyright.  Mr. Hu set up ”高清影视下载网”(www.gaoqing.tv), which he maintained and operated.  His wife was responsible for finances and procurement.  The service provided HD movies to copy and sell through their website and a Taobao store（淘宝）(affiliated with Alibaba) of a Mr. Ding.  Mr. Hu sold the membership invitation code of the website on the Taobao store, generating illegal revenue of 900,000 RMB in 2013.  The court sentenced Mr. Hu to a prison term of 1 year and 6 months and fined him 160,000 RMB.  Mr. Ding was sentenced to 6 months with a fine of 60,000 RMB.

6.  “999 Treasure Net” (999宝藏网) Software

MPS (Anhui) investigated the “999 Treasure Net”, for offering pirated Windows operating system software to download.  The website also offered advertising, bundled plug-ins and collected membership fees.  The infringers made an illegal profit of more than 2.5 million RMB.  The court sentenced 6 individuals to imprisonment ranging from 1 year to 3 years with fines ranging from 50,000 to 150,000 RMB.  NCAC gave the informer a 10,000 RMB reward.

7.  Mr. Liu Selling On-line Audiovisual Products

MPS of Zibo City (Shandong) and NCAC investigated three Taobao shops for selling pirated audiovisual products. Liu X, Song X, and Yang X, profited from downloading videos of calligraphy and education from the Internet, and employed Sun X to copy about 41,200 disks.  The illegal business profit was more than 4 million RMB.  In August of 2014, 11 related individuals were arrested, and 3,400 pirated CD’s were seized.  The case has been transferred for criminal prosecution.

8.  Hubei – A Number of Sites Suspected of Infringing “Comic Guests” 《知音漫客》Magazine

Hubei Province MPS investigated a number of sites of unauthorized dissemination of a network magazine “Comic Guests”.  Twelve key sites and organizations were identified, and three allegedly infringing website have been investigated, leading to the arrest of five suspects. The case has a value of about 13 million RMB and is being further investigated.

9.  Tan X Selling Pirated Software On-Line

In May 2014, Yongzhou Lingling District Public Security Bureau (Hubei) investigated Tan X and others for online sales of pirated software programs.  The investigation determined that Tan X had been pirating Microsoft software CD’s, printing blank software key labels with passwords, make pirated software discs, and selling on Taobao through a number of stores – “DELL　HP　IBM服务器”、“电脑软件批发”、“金英团队”、“迷彩指望”、“鑫城软件”、and “樱花肆虐的季节” (translations: “Dell HP IBM Server”, “Computer Software Wholesale”, “Kim / Gold Brave English team”, “Camouflage Expect”, “ Xincheng Software”, “Cherry Ravaged Season.”)  MPS has since arrested 5 suspects and the case has been transferred to prosecution.

10.  Guangdong “3 • 24″ Network Wholesaling Pirated Books

In March 2014, MPS together with the Cultural Market Comprehensive Administrative Enforcement team of Guangzhou, on the complaint of the China Construction Industry Publishing House, undertook a joint investigation on “3 • 24” network, which was thought to be pirating books on a wholesale scale.  The investigation revealed that Xiang X rented a room to store 28,000 copies of 53 editions of pirated books in order to wholesale these books for sale to stores at low-cost.  Based on the sales inventory, purchase receipts and other clues, the enforcement team arrested several vendors, destroyed eight “black” warehouses, four logistics companies, and a point of sale network.  Law enforcement also seized more than 500 pirated editions with 150,000 copies and more than 7 million Mayang (码洋) (book discount notices).  Enforcement authorities filed 35 cases and nine suspects were detained, of whom two were approved for arrest.

Comparing to the prior Sword Action of 2013, the “Sword Action” of 2014 entailed more interdepartmental cooperation.  It also struck at several important commercial networks, including physical and on-line stores.  These campaigns also show an impressive national scope, close coordination with MPS, a high referral rate and an interest of officials in addressing complex and emerging copyright issues.  Music piracy cases are noticeably absent from this list.

While these efforts are laudable, good cases may not be enough to drive social reform.  What remains to be seen is a comprehensive report on overall extent of copyright administrative enforcement efforts.   NCAC has not issued such a report in years.  For example, we do not know how many cases NCAC overall brings on behalf of foreigners, how many cases transferred to criminal prosecution, average fines, types of content being enforced, role of on-line and physical markets, etc.  Such data would enable meaningful identification of areas where enforcement is more likely to be aggressively pursued, as well as provide useful comparisons to other forms of enforcement in China.

We welcome any corrections or further detail on the above (prepared by Mark Cohen and Yao Yao).