NPC Passes Revised Copyright Law — Concluding a Robust IP Legislative Agenda For the Past Two Years

According to press reports, an amended Copyright Law was passed on Singles Day, November 11, 2020.  The prior NPC drafts was discussed here, and the State Council draft was discussed  here.  An earlier NCA draft from 2012 (!) was discussed here.

With the passage of the Copyright Law, China has completed the unenviable and huge task of revising all its major IP laws in the space of approximately two years, including its: Patent Law, Anti-Unfair Competition Law (which includes trade secrets), Trademark Law, Technology Import/Export Regulations, as well as numerous judicial interpretations, rules and other guidance and the Civil Code itself. 

Prof. Jiarui Liu translated the prior draft of the copyright law.  Based on a cursory review, the law removes onerous public interest provisions, which I objected to here  It maintains the use of audio-visual works to encompass motion pictures, which I hope will be useful in protecting against piracy of live streaming sports broadcasts.  It also continues the expansion of administrative copyright authority to the county level.  This is also consistent with other trends towards increasing administrative involvement in China’s IP enforcement regime.  I most recently discussed this long-term trend in my blog on the Horse Before the Cart in China’s Patent Linkage Regime (Oct. 28, 2020).

Although the Copyright Law appears to have backed off from giving copyright authorities a vague antimonopoly law-like authority to address “disruption to the order of communication” and “abuse of rights” that causes “harm to public interests”, there are other administrative rules regarding online service providers that have since emerged to address regulation in the on-line environment.  One day prior to the Copyright Law passage, SAMR released its Notice of Public Comment on the draft Antitrust Guidelines for Platform Economy (关于平台经济领域的反垄断指南) (Nov. 10, 2020). Comments are due November 30, 2020.   The stocks of Alibaba and JD.Com both dropped despite record singles day receipts on November 11, most likely due to the proposed rule. 

In another unrelated development, SAMR promulgated on October 20 a draft for public comment of its Measures for the Supervision and Administration of Online Transactions (网络交易监督管理办法). Comments were due November 2. This document primarily concerns protection of consumer interests in online transactions.  However, it does address some IP issues, including misleading indications of the source of goods, as well as establishing time frames for publication of information regarding IP notices or counter-notices  as provided in the e-commerce law (Art. 30).

The revised IP laws provide fertile ground for analysis and research regarding general trends in China’s IP regime in such areas as administrative and civil law, civil remedies and compensation, and employee ownership of the IP they have created. The new e-commerce provisions and the IP laws together, once finalized, will likely provide additional insights into Chinese regulation of e-commerce platforms and merchants.

Revised Copyright Administrative Enforcement Punishment Rules Available for Public Comment

NCAC has published a  public comment draft of revised Copyight Administrative Punishment Implementing Measures “著作权行政处罚实施办法(修订征求意见稿)”, with comments due Sept 30, 2015.  The new draft addresses certain important emerging issues for administrative enforcement, including: punishment of network service providers, harmonizing administrative enforcement with recent judicial interpretations and enforcement guidance, including lowering thresholds for what constitutes a “serious circumstance” and providing for seizures of servers used for providing infringing network service, and clarifying time lines and procedures for enforcement. I speculate that the timing of this draft may also be linked to NCA’s needs to ramp up enforcement of copyright protection in light of delays in the copyright law revisions.  As with the patent law amendments, NCA may wish to be making the case that it needs improved enforcement in the copyright law, by first taking the steps within its control to improve administrative enforcement.

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

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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.

第十条网络服务提供者在提供网络服务时,对热播影视作品等以设置榜单、目录、索引、描述性段落、内容简介等方式进行推荐,且公众可以在其网页上直接以下载、浏览或者其他方式获得的,人民法院可以认定其应知网络用户侵害信息网络传播权。

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.