Protecting Chinese Broadcasts …. In the United States

As I noted recently, a Beijing district court recently decided that live broadcasts of sports events can be protected under China’s copyright law (June 30, 2015).

Only a few weeks earlier, a US district court decided in CCTV et al vs. Create New Technology (HK) Ltd.  et al.  (June 11) (Case No. CV 15-01869 MMM (MRWx) (C. D. Cal) (Morrow, J). that the pirated streaming of live and time-shifted CCTV and TVB  (Hong Kong) channels  through media boxes  and apps on a peer-to-peer network and/or through servers in the United States to large numbers of users who had no right to access the content constituted copyright infringement.   The CCTV and content covered by the court’s preliminary injunction included live news, sports, and television.

The U.S. case underscores the availability to Chinese plaintiffs of strong civil remedies in the United States, including preliminary injunctions. Although Chinese courts normally dispose of first instance cases in six months, this case was filed on March 13, 2015 and the preliminary injunction was granted June 11 – precisely 90 days later, not including the end date.  In other words the preliminary injunction in this case was rendered in case involving foreign interests in less time than a Chinese court would have rendered its first instance decision in a domestic case (time frames are expanded if there is a foreign litigant).

Of about 90,000 civil IP cases in the Chinese courts in 2012, there were only  27 cases involving preliminary injunctions.  By contrast, US courts are, by all accounts, more willing to grant provisional relief of all kinds.  Judge Morrow, in her decision, noted that “unauthorized and uncompensated internet streaming that competes directly with the television programming of a  copyright owner and its authorized licensees causes harm that is ‘neither easily calculable, nor easily compensable.’ ”  She further stated that “given the extensive nature of the infringement alleged … it is unclear that defendants would be able to satisfy any damages award entered. This further supports the conclusion that injunctive relief is appropriate in this case.”

These two recent cases are positive steps in protecting broadcasts, including live sports broadcasts.  The U.S. case is also a good guide post for Chinese courts looking to extend the availability of provisional remedies in civil IP adjudication for foreigners and Chinese alike, including in cases involving online infringement and live broadcasts.

Draft JI Issued by SPC for Action Preservation Measures in IP and Competition Law Matters

On February 26, the Supreme People’s Court published for public Comment a draft SPC Judicial Interpretation on Concrete Issues in Application of Law in Determination of Action Preservation Measures in Intellectual Property and Competition Controversies (最高人民法院关于审查知识产权与竞争纠纷行为保全案件适用法律若干问题的解释)(征求意见稿). Comments are due Mach 30.  The SPC also issued an accompanying explanation of the draft JI.

When final, this JI will supersede prior JI’s involving preliminary injunctions in patent and trademark cases, which also served as reference for copyright matters.  The JI also further solidifies the extension of the civil procedure law reforms involving provisional measures to trade secrets, while also clarifying its expansion to civil competition law matters. The JI may open up the possibility of greater use of the civil courts for antimonopoly law litigation.

“Action Preservation” measures in the draft include measures to require a party to act by the court, or to prohibit them from acting. The draft JI specifically clarifies the circumstances by which licensees (exclusive or non-exclusive) may seek injunctive relief.   The time frame for rendering a preliminary injunction decision is a non-emergency matter may be as long as 30 days.  The draft JI also details such aspects of preliminary injunctions as the jurisdiction of the court, what constitutes “irreparable harm”, nature of guarantees, handling of appeals of cases and handling of oppositions to provisional measures, the effect of changed circumstances, fees, and other matters.

US-China IP Cooperation Dialogue Report Released

The “US-China IP Cooperation Dialogue Report” was released last week. The Report was prepared by experts from both the US and China, including co-chairs Professor Liu Chuntian of Renmin University and Joseph Papovich, former Assistant US Trade Representative. I was an also a member of the expert committee, first as an academic with Fordham Law School, and later as an advisor when I returned to USPTO, in an otherwise private sector initiative.

The Report reflects the consensus reached during several days of meetings among this experienced team. Here are some of its suggestions:

  1.  Civil Enforcement: the Report urges greater use of precedents through a guiding case system, experimenting with amicus briefs for important cases, expanding evidence preservation and preliminary injunctions, and greater civil deterrence in damage awards.

  2. Criminal Enforcement: the Report calls for adjustments to the criminal enforcement system and an expanded and stable role for criminal IP enforcement.  The US experts sought greater clarity over “for profit” requirements in criminal IP convictions, while the Chinese side believed that current judicial practice will ultimate reduce these difficulties.  Both sides agreed that criminal enforcement should be directed towards repeat offenders, large scale criminal activity, and cross-border criminals.  In addition, officials should be encouraged to increase the volume of criminal prosecutions.  Authorities should also consider plea bargaining and proportional criminal fines, as well as criminal settlement and victim-offender reconciliation.  Victims’ compensation (fudai) claims should also be allowed.  Specialized IP enforcement teams and specialized prosecutors were suggested, as well as clearer IP criminal investigation guidelines.

  3. Customs: Greater support of Chinese customs, with more resources, and more engagement with foreign countries.

  4. Copyrights: The experts supports the 2012 Supreme Peoples Court Judicial Interpretation on intermediary liability and commended the court’s openness in accepting outside comments and evaluating foreign practices.  Both sides also encouraged foreign companies to more aggressively use legal remedies to stop infringement.  While China has made significant improvements in end user piracy, the necessity of criminal liability was also underscored.  The experts also believed that live sports programming should be protected under China’s copyright law, and expanded protection should be afforded to technological protection measures.

  5. Trademarks: The experts expressed support for SAIC’s efforts to address online sales of counterfeit goods, and urged the SPC to consider leveraging its experience in dealing with secondary liability in the copyright context to the trademark context, in order to encourage more cooperation between platform owners and brand owners.  The experts also urged the CTMO to adhere to the principle of good faith TM registrations to deal with squatting, and to expand cooperation with express mail services to deal with global counterfeiting organizations.

  6. Patents: The experts agreed that the courts should continue to play a central role in adjudicating patent cases.  The experts also suggested that China should consider centralized jurisdiction over patent cases to ensure specialization and predictability.  If a centralized patent court cannot be established, the experts considered that the SPC might wish to reduce the number of courts that hear patent litigation cases from the current 89.  The experts also expressed their concern about the low rate of injunctive relief for invention patent cases, and consider means of improving evidence collection, particularly in process patent cases.  The experts also discussed Article 26.3 of the Patent Law (enablement), and problems with retroactive application of examination guidelines and restricting data supplementation.  In evaluating appeals from the PRB to the Beijing courts, some experts also pointed to low reversal rates by the courts, and too much involvement by PRB officials in the court’s decision making process, which can impair impartiality.  The experts also recommended a study on the impact of the short statute of limitations (two years) in China on protection of patent rights.  The Chinese side also thought that foreigners also need better protection and planning for litigation in China.

  7. Trade Secrets: The experts agreed that theft of trade secrets, whether the victims are foreign or Chinese, is “not tolerable.”   The experts further noted that trade secret theft “harms business value and destroys trust” and that trade secret cases can have a big impact on “sustaining the growth of R&D facilities and technological collaboration in China.”  The experts pointed out that parties in trade secret disputes need to be given a fair opportunity to discover key facts and to examine evidence.  Police officers should be able to conduct undercover investigations (Criminal Procedure Law, Art. 51).  Chinese experts also cautioned that criminal prosecutions may be abused and that in some cases the civil and criminal results of the same trade secret cases have had conflicting results.

This eight page bilingual Report is a very useful read for policy makers in the United States and China.  What is perhaps even more important is that it was a joint collaborative effort, which showcases the potential for future cooperation on IP policy efforts.

Comments on the PRC Trademark Law Amendments

by Joe Simone

 

The National People’s Congress (NPC) issued a draft revision of the PRC’s Trademark Law for public comment in December, setting a deadline of January 31, 2013, for the receipt of comments.  The NPC’s Standing Committee is expected to pursue two or three readings of the draft before enacting it, perhaps as early as mid-2013.  The NPC is unlikely to provide further drafts for public comment. Continue reading