CATR’s Report on Copyright Enforcement in the On Line Enviroment

The China Academy of Telecommunication Research (CATR), at the request of the National Copyright Administration,  released a report on April 26, 2016 on Copyright Protection in the Online Environment.

The report noted that  there were 2,118 on line civil copyright cases in total, an increase of 28.3% from last year (this total number seems smaller than I would have guessed).  The SPC White Paper reported that overall there were 66,690 civil cases, an increase of 12.1% from 2014.  Regarding civil on line copyright enforcement, 44% of the online cases involved music and 18% involved audiovisual infringement.  Amongst the IP courts, Guangdong had the highest percentage of cases (39.5%), followed by Shanghai (33.5%) and Beijing (16.5).  However, the province with the most cases was Hubei (476), followed by Beijing, Guangdong, Zhejiang, Shanghai and Jiangsu) (see chart below).

graphofcivilcases

The report also notes several important legal and policy initiatives, including directives from the National Copyright Administration on online liability, and a revision to the Criminal Code, making it clear that on line technology providers can be held criminally liable for copyright infringement.  The report also singles out the release of a draft of  proposed rule on Copyright Administrative Enforcement. (著作权行政处罚实施办法 (修订征求意见稿)as well as new rules Concerning Specifications of the Copyright Order In Online Transmissions (关于规范网络转载版权秩序的 通知),  Stopping Online Music Service Providers Transmitting Unauthorized Content(关于责令网络音乐服 务商停止未经授权传播音乐作品 的通知)and the Rule Concerning Specifications of the Order of Cloud Driver Service Provider Copyright (关于规范网盘服务 版权秩序的通知).

Data on copyright administrative and criminal enforcement in the online environment was not made available in this report.   According to the SPC White Paper, there were 523 criminal copyright cases, involved 547 people.  Moreover, news reports accompanying its release reported the following data: during the Sword Network Campaign in 2015, there were 383 administrative enforcement actions, with fines of 4.5 million RMB, 59 cases transferred to criminal prosecution, and 113 websites closed.

The World of Injunctions: Guangzhou Makes Its Mark

According to various press reports, on March 9, 2105, the Guangzhou Specialized IP court issued a preliminary injunction in a copyright matter, Blizzard Entertainment and NetEase versus Chengdu Qiyou Limited (“Seven Games”),Beijing Fenbo Times Internet Technology Co., Ltd (“Rekoo”) and Guangzhou Dongjing Computer Technology Co., Ltd (“UCWeb”), regarding developing, operating, distributing and disseminating over the internet the game titled Everyone WarCraft: War of Draenor (formerly known as Chieftain Thrall: The expedition of WarCraft). The injunction calls for the above named defendants to cease reproduction, distribution and/or online dissemination of this game.

Eric Roeder, General Counsel of Blizzard is quoted in the media as saying ““We welcome the efficient and timely injunction of the Guangzhou IP Court based on Chinese…It provides a fast and effective remedy and fully demonstrates the determination and power of the Chinese courts to protect intellectual property…”

The case is notable for three factors

A) Its rarity. According to the Supreme Peoples Court, in 2013, there were 88,583 first instance civil IP cases, yet there were only 11 cases in which a preliminary injunction was accepted, and, according to the Court, “77.78%” were “granted approvals.” (Note: I can’t quite figure out how many of these 11 were granted approvals based on this percentage).

B) The importance of having an active licensee. From press reports, it appears that Blizzard and Netease have had a multi-year licensing relationship. As Chinese licensees become more interested in US content and establish collaborative relationships, I expect we will also see more strategic and path breaking judicial decisions.  As Eric Priest has discussed in his work, one approach to dealing with high piracy may be finding business models that work for licensor and licensee.

C) Political timing. The desire of the newly established Guangzhou IP Court to show its authority may  have been a positive factor in this case being acepted and the relief granted.  Although preliminary injunctions remain rare, there appears to be an interest in clarifying procedures and, one hopes, in increasing their availability.  In another important development, on February 26, 2015, the SPC issued a draft Judicial Interpretation for public comment on Act Preservation [Preliminary Relief] Measures in IP and competition civil cases. The measure seems to be directed to preliminary injunctions, but may also have an important impact on asset and perhaps evidence preservation matters. Comments are due March 30. Attached is an unofficial translation.