Introduction
Wolf Warriors II is a very successful movie in China, which has ranked the first place in box office in China as well as the first movie which listed into the top 100 movie in box office. The leading Chinese online video provider Youku has got its exclusive license right of communication through information network (“Right of Network Communication”). Youku recently brought a suit against a Chinese well-known media company Toutiao for its providing hyperlinks to another website which can provide online user the movie Wolf Warriors II for their play. Youku sued both Tou Tiao and the company which operated the website for infringing Right of Network Communication and claimed liquidated damages and economic loss around US$160,000.
In recent years, copyright infringement has been a significant issue in Chinese online video industry. During the past several years, Chinese courts have been confronted with a large number of such cases. Copyright disputes concerning online video industry mainly involves the Right of Network Communication. This right was newly provided in Article 10 of 2001 Chinese Copyright Law. Such provision is derived directly from the right of making available to public provided in Article 8 of 1996 World Copyright Treaty (“WCT”).
However, as a result the definition of the Right of Network Communication under Article 10 (12) of the 2001 Chinse Copyright Law is virtually a verbatim translation of part of the second half of Article 8 of the WCT. The scope of Right of Network Communication in China is narrower than that of the right of mass communication under Article 8 of the WCT. The Right of Network Communication in China would limit the right to (1) communication through network; and (2) interactive communication.
The legal system of the Right of Network Communication was mainly borrowed from WCT and the US case laws have been indirectly affecting the practice of Right of Network Communication in China. However, even in the US there are still a number of disputable issues concerning determination of liabilities of network service providers. Thus in practices, there are still a number of pending disputable issues to be further discussed.
Definition of Act of Information Network Communication
Although Chinese national statutes have provided the Right of Network Communication for copyright holders, performers and producers of sound recording and video recording, they do not have any term, definition or explanation on the act of information network communication. However, it’s really not avoidable to discuss what the act of information network communication is to enforce the Right of Network Communication. In practice, it has been a hot and disputable topic on the definition of the act of information network communication in China. The key issue is that whether the act of providing network service by the ISP should be determined as an act of information network communication. This is actually an essential and basic issue to be resolved with respect to enforcing the Right of Network Communication as the determination of liabilities of ISP has been the key issue on enforcing the Right of Network Communication.
The meaning of act of information network communication has been assumed that it should be inferred from the definition of the Right of Network Communication. However, as discussed above, the definition of the Right of Network Communication under Article 10 (12) of the Copyright Law (2001) is virtually a verbatim translation of part of the second half of Article 8 of the WCT. The scope of Right of Network Communication in China is narrower than that of the right of mass communication under Article 8 of the WCT. It has caused serious problems in understanding the meaning of act of information network communication.
Article 10 (12) of the Copyright Law defined the Right of Network Communication as “the right to provide a work to the public by wire or by wireless means, so that people may have access to the work from a place and at a time individually chosen by them”. Under the above definition, the act of information network communication has been wrongly understood as the act of providing works, performance and sound and video recordings to the public by wire or by wireless means. It appears that the Right of Network Communication only covers the right of providing works through information network. Thus in practice the act of information network communication has been misunderstood as only including the act of providing works through network like uploading works onto network but not including the act of providing network service by the ISP such as providing service of storage, hyperlink and search.
This issue was first discussed in the case Universal Music Group v chinamp3.com (Beijing No. 1 Intermediary Court, Civil Judgment (2004) Yi Min Chu Zi No. 400; Beijing Higher People’s Court, Civil Judgment (2004) Gao Min Zhong Zi No. 713). The defendant operated a professional music website, but did not store any music files on its web server. Instead, it created categories of music files on its site such as ‘Hong Kong and Taiwan Zone’ and ‘US and European Zone’, in which the names of artists were displayed by alphabetical order. When a user clicked the name of an artist, it displayed hyperlinks to the artist’s songs. By clicking those hyperlinks, a user could directly download music files stored on other websites. The trial court held that the defendant’s website was in the position of communicating works from beginning to end, while the linked websites only functioned as “periphery storage”. The court determined that the defendant had a duty of care on the legitimacy of its downloading service and was negligent for not screening the linked resources. The court held that ‘the defendant’s act of providing hyperlinks did not provide a “corridor” to the works, but was rather “an act of communicating works to the public”. Clearly the trial court determined the service of providing hyperlinks as an act of information network communication.
But the appellate court Beijing Higher People’s Court overruled the judgment of the trial court and held that the service provided by the appellant in the present case is still a service of providing a corridor. The appellant does not reproduce or communicate to the public the linked sound recordings. It is evident that Beijing Higher People’s Court did not agree to the trial court’s determination that the service of providing hyperlinks is an act of information network communication.
Under Articles 2-4 of Circular of Beijing Higher People's Court on Printing and Distributing the Guiding Opinions on Issues Concerning Trial of Copyright Dispute Cases under Internet Environment (I) (for Trial Implementation) which was issued in 2010, the act of providing network service by the ISP shall not be determined as an act of information network communication. Shandong Higher People's Court also issued similar guiding opinions in 2011.
But in the case Kong Que Lang Co. v Lian Feng Co. and Shanghai Mobile Co.(Shanghai No. 2 Intermediate People’s Court, Civil Judgment (2009) Hu Er Zhong Min Wu (Zhi) Zhong Zi No. 4), the court held that the act of providing hyperlinks is an act of information network communication. In the case Sheng Shi Hua Co. v Tudou.com (Shanghai Pudong District People’s Court, Civil Judgment (2009) Pu Min San (Zhi) Chu Zi No. 85), the court held that the act of providing hyperlinks is an act of information network communication.
However, the opinions that the act of providing network service by the ISP shall not be determined as an act of information network communication is actually not consistent with the Chinese legal context, the technical environment, the business situation and the context of the WCT.
Under Article 48 of the Chinese Copyright Law, the provisions relating to infringing the Right of Network Communication are as follows:
(1)…communicating the work to the public via information network…;
(3)…communicating the performance to the public via information network…;
(4)…communicating such a recording to the public via information network….
It is evident that the Chinese Copyright Law has provided that the act of communicating works rather than only the act of providing works would infringe the Right of Network Communication. Although Chinese Copyright Law failed to positively define what the act of information network communication is, it clearly provided that all the acts of communicating works through information network may be infringing acts. From technical perspective, the act of providing network service by the ISP should be the primary act to achieve the goal to communicate the works via network to the public. From business perspective, the copyright holders should mainly concern the acts of providing network service by the ISP. If there is no network service provided by the ISP, the large scale of communicating works through information network would not take place. Thus the Chinese Copyright Law should certainly aim to regulate the act of providing network service by the ISP as an act of information network communication.
Actually, the Regulations on the Protection of Right of Communication through Information Network (“Network Communication Regulation”) which was promulgated by the State Council in 2006 and amended in 2013 has distinguished the act of providing networks and other acts of information network communication. Articles 6, 10, 11 and 18 of Network Communication Regulation defined liabilities of act of providing works, and Articles 20-24 defined liabilities of acts providing network service by the ISP like providing information storage space, search, hyperlink, automatic access and automatic transmission. Obviously, based on the Network Communication Regulation, the acts of information network communication include the act of providing works and other acts of providing network service by the ISP like providing information storage space, search, hyperlink, automatic access and automatic transmission.
Under the Network Communication Regulation, although both the act of providing works and other acts of providing network service by the ISP are acts of information network communication, there are totally different rules with respect to bearing the infringement liabilities. The act of providing works would constitute direct infringement and shall bear infringement liabilities based on the principle of non-fault, but the acts of providing network service by the ISP shall bear infringement liabilities based on the principle of fault. Substantively the act of providing works is direct infringement and the acts of providing network services by the ISP are indirect infringement.
Direct Infringement and Indirect Infringement
There is still no clear definition of indirect infringement with respect to copyright infringement and other areas of torts based on the practice of Chinese tort law. In China, copyright infringement is a special type of tort, and there is no concept of secondary infringement in Chinese tort law, and similarly, no provisions of secondary infringement is found in Chinese copyright laws and relevant judicial interpretations either. Under Chinese tort law theory, the equivalent concept to secondary infringement is joint infringement. Before the Chinese Tort Law was promulgated in 2009, the major legal basis for joint infringement is Article 130 of the General Principles of Civil Law of PRC (1986) which provides that if two or more persons jointly infringe upon another person's rights and cause him damages, they shall bear joint liability. It was further clarified in the later judicial interpretation that those who aid and abet other person to infringe are the joint infringers and they shall bear joint and several liability. As a type of civil right, copyright is certainly protected under civil law and the above legal provisions concerning joint liability also apply to copyright infringement. Joint fault usually requires conspiracy of direct and indirect infringers. However, in the case of online copyright infringement, ISP’s fault usually falls short of conspiracy, there might be only knowledge or even no knowledge.
With respect to the acts of providing network service by the ISP, under Article 7(3) of 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 Communication through Information Networks (“Network Communication Interpretation 2012”) which was issued in December 2012, the acts of providing network services by the ISP shall be regarded as contributory infringement, which is substantively equivalent with the definition of indirect infringement under the common law system.
In practice, most courts would first determine whether the acts of defendant would constitute direct infringement, i.e. whether providing works. The acts of defendant include both the acts of online users and the acts of ISP. The Chinese courts have realized that it’s really difficult to distinguish the nature of the acts of defendants just based on the identity of ICP or ISP as ISP sometimes would provide contents (works) and network services to communicate the works. For example, Article 19 of Zhejiang Higher People's Court’s Answer Opinions Concerning Trial of Copyright Dispute Cases under Internet Environment has reflected this trend of business development. It clearly pointed out that determination of infringing Right of Network Communication shall be based on the particular acts and services of the service provider. In other words, the “act” criteria other than the “identity” criteria should be adopted in determining the infringement of Right of Network Communication.
In the case Beijing San Mian Xiang Copyright Agency Co. v People Search Network Inc. and Beijing Tiexue Technology Co. (Beijing No. 3 Intermediate People’s Court, Civil Judgment (2013) San Min Zhong Zi No. 01229), the appellate court overruled the trial court’s decisions and first determined that the defendant Beijing Tiexue Technology Co. (“Tiexue”) does not provide the works at issue and thereby determined that Tiexue does not constitute direct infringement of the Right of Network Communication. Then the court determined that Tiexue provided the service of providing storage space for the works at issue. With respect to the act of providing storage space for the works at issue, the appellate court also overruled the trial court’s decisions and determined that Tiexue deleted the works at issue within reasonable period after receiving the plaintiff’s take-down notice. Thus the court determined that Tiexue does not constitute contributory infringement of the Right of Network Communication under the rules of Article 36 of the Chinese Tort Law and Article 7 (3) of the Network Communication Interpretation 2012. The rules of Article 36 of the Chinese Tort Law and Article 7 (3) of the Network Communication Interpretation 2012 both concerns regulating liabilities of acts of providing network services by the ISP. Similar to the Safe Harbor Rules in DMCA of US, China also has gradually developed its safe harbor systems in the past years. Most of the rules are actually borrowed from the DMCA. But in practice there still are a number of disputable issues as it’s the key concern to balance the interests of copyright holders, IT developers and the public.
Safe Harbor Rule
Safe harbor rule refers to the rules of restricting the liabilities of acts of providing network services by the ISP other than all the ISP’s acts (this is misunderstood long term in China) to promote the development of IT technology. Articles 21-23 of Network Communication Regulation provide detailed provisions on safe harbor rules. They distinguishes three different types of internet services – access and transmission service, hosting service and searching and linking service. Internet access and transmission services providers will be exempted from joint liability if they only function as an automatic conduit of contents transmission, i.e., the access service is made automatically at the direction of and to the information recipients only without any selection of modification of the transmitted contents. For hosting service providers, the joint liability will not be imposed if they clearly indicate their identity as hosting service providers, makes no modification of the contents, have no actual nor constructive knowledge of the specific infringement, do not have direct financial benefit from the infringement and remove the infringing contents after receiving written notice of the infringement by the proprietors. Information location service providers which provides searching and linking services will not bear joint liability if have no actual nor constructive knowledge of the specific infringement and remove the infringing contents after receiving written notice of the infringement by the proprietors. Detailed provisions are also given relating to the requirements for proper written notice made by copyright holders under Articles 14-17 of the Network Communication Regulation.
In judicial practices, different courts have different understandings of factors for determining the liabilities of acts of providing network services by the ISP with much uncertainty, which in turn affected the business model of IT developer. The major issues mainly include the determination of fault of ISP, the legal consequence of failure to indicate the identity of service provider, the assessment of economic benefit and the effectiveness of notice and take down.
In the case Xinran v Mengzhichuang (Beijing No. 1 Intermediate People’s Court, Civil Judgment (2009) Yi Min Chu Zi No. 5038), the defendant provided video search service, the court held that the defendant search service is ordinary search realized with the user entering keyword, it is impossible for a reasonable person to know whether the disputed video provided by a third-party website infringes copyright or not.
However, in most of lawsuits against online video providers, a higher degree of duty of care is required because the online video providers usually have access to the infringing contents according to the specific circumstances of their operations. Most of online video providers provide special column of “Movies and TV Series”, such contents require a lot of investment, and their distributions are mainly commercial, the copyright owners usually will not provide or license others to provide them online for free. In a dispute relating to the movie “Cape No.7” (Beijing No. 1 Intermediate People’s Court, Civil Judgment (2009) Yi Min Chu Zi No. 3028), the court held that a higher degree of duty of care should be imposed regarding contents in the special column of “Movies and TV Series” to keep an eye on all the contents in the column and timely remove the infringing contents.
After the Regulations on Administration of Internet-based Audio-Video Program Services took effect January 31, 2008, all online video providers are obligated to review the legitimacy of contents, many online video websites have employed contents reviewers to check the legitimacy of contents. Although such review aims at preventing unhealthy contents instead of targeting at infringing contents, it does provide access to the contents by the online video providers. So, in infringement cases involving online video providers, a higher degree of duty of care is required. In the case Shanghai Guanshi Culture Communication Co., Ltd. v 6.cn (Beijing Haidian District People’s Court, Civil Judgment (2008) Hai Min Chu Zi No. 31332), the court decided that the defendant is capable of conducting review and verification of contents, but it only makes a declaration concerning notice-and-takedown, such duty of care is not proper considering the scale of its business operation.
These different standards of duty of care seem to be contradicted with each other, but in reality, they reflected the courts’ attempt in accommodating the reasonable person standard required by general tort theory in Chinese tort law to the actual complicated circumstances in the practice of network service providers. It is also through these attempt that the transplanted “Safe Harbor Rule” was gradually localized to achieve the overall coherence of legal provisions.
In practice, there are different understandings regarding whether the duty of takedown only covers the websites listed in the notice by the right owner. In the case Go East Entertainment Co., Ltd v. Alibaba90 (Beijing No. 1 Intermediate People’s Court, Civil Judgment (2008) Yi Min Chu Zi No. 21740), the court held the defendant jointly liable because it only removed the links to the websites listed in the notice by the plaintiff but failed to remove other links to infringing contents. However, in the case Dizhi v Baidu (Beijing Higher People’s Court, Civil Judgment (2006) Jing Min Zhong Zi No. 1483), the court held that deleting linking to all relevant websites according to the name of the copyrightable work would affect the interests of these websites, so it is sufficient to delete the linking to infringing websites specified by the right owner. But in reality, if the right owner has clearly stated in the notice that no websites are authorized to communicate the work through internet, the defendant should remove the linking to all the relevant websites even if the plaintiff fails to provide exhaustive list of website URL addresses. The statement in the notice is clear enough to make the defendant have actual knowledge of infringing activities of other websites, if the defendant still fails to remove, he should be liable.
So, the “notice-and-takedown” is not the only way to determine the actual knowledge of the ISP. The courts still rely on the general theory of tort to determine the fault of the ISP. In practice, there are also ISPs who remove the infringing contents or linking to the infringing contents with much delay, and such takedown was also regarded insufficient, and the ISPs should be jointly liable (Beijing Haidian District People’s Court, Civil Judgment (2008) Hai Min Chu Zi No. 21740).
To unify different practices of various courts, Article 7 (3) of the Network Communication Interpretation 2012 provided that the People’s Court should hold that ISPs are contributing the infringement if they fail to take necessary measures such as deletion, blocking and disconnection or to provide technical assistance if they have actual knowledge or constructive knowledge of the infringement by the users of the right of communication through information network. Such provision clarified the logical relation between the “notice-and-takedown” rule and “Knowledge”, it is also in consistent with Article 36 of the Chinese Tort Law and the general theory for requiring fault as one element for constituting joint liability.
New Technology Challenges to Right of Network Communication
As discussed above, the Right of Network Communication should limit to the interactive communication of works only. But with the development of internet technology, non-interactive communication of works particularly videos like webcasting, simulcasting, real audio and internet radio has also become very popular in China. In addition, the telecommunication networks have merged with the computer networks, which has made the broadcasting and TV like IPTV become interactive and real-time other than the original character of non-interactive communication. This technology development has made the distinction between Right of Network Communication and broadcasting right not so clear. In practice, there are also a number of disputes on whether the non-interactive communication of works should be regulated by protection of the Right of Network Communication.
In the well-known case CCTV International Network Co. v Baidu (Beijing No. 1 Intermediate People’s Court, Civil Judgment (2013) Yi Min Zhong Zi No. 3142), the plaintiff CCTV International got the exclusive license of the Right of Network Communication, right of broadcasting (including but not limited to real-time rebroadcasting or delayed rebroadcasting) and the right to provide all TV programs of CCTV and was authorized as the exclusive distributor of CCTV in the world. The defendant Baidu provided searching service. When the user entered the keyword “Spring Festival Party”, the first item on the result list was “2012 CCTV Spring Festival Party iQIYI which is one of the leading online video providers in China, and the second item is “Spring Festival Baidu video”, the third is the logo “Baidu’s application, My application” with play-button of the Spring Festival Party video at the bottom. The user could directly click the “Play” button and the video of the Spring Festival Party can be viewed directly online. The plaintiff probably felt it difficult to define Baidu’s communication of the video, it claimed that such “life online broadcasting” by Baidu was copyright infringement infringing it’s other right as provided in Article 10 (17) of the Chinese Copyright Law. According to the decision of the trial court, the right CCTV international enjoyed under its license agreement with CCTV was actually the right to communicate by wire or to rebroadcast, which fall into the right of broadcasting. So, CCTV international’s claim for infringing “other rights” was ungrounded and thus rejected by the court. Regarding the communication of the Spring Festival Party by Baidu, the court further elaborated that the video directly played by clicking the “play” button on the website of Baidu was actually provided by Sohu.com, a third party, such play was not “broadcasting by receiving wireless signals” either, so it didn’t infringe “the right of broadcasting” enjoyed by CCTV International. Therefore, CCTV International’s claim was not supported by the trial court.
CCTV International was not satisfied with the decision of the trial court and appealed. In the final decision, the appellate court analyzed the play of video by providing searching service by Baidu in great details. According to the appellate court, the disputed infringing act should be called “online real-time rebroadcasting”. Although CCTV International claimed it to be “online life broadcasting” by mistake, the court would still decide according to the genuine expression of will by the appellant. Then the court went on to decide whether CCTV International had right to prohibit the “online real-time rebroadcasting” by Baidu. Due to the absence of interactive nature of such communication, the disputed infringing act didn’t constitute the infringement of the right of communication through information network. According to the Copyright Law, the “right of broadcasting” covers initial broadcasting and rebroadcasting of the initial broadcast. Initial broadcast should be made by wireless means while the rebroadcasting can be made by both wire means and other technical means which carry signals, audio and visual signals. Regarding the disputed real-time rebroadcasting, the initial broadcasting might be by wireless means (by television organizations) or by wire means (e.g. from other websites). If it is the former case, the real-time rebroadcasting will fall within the scope of the right of broadcasting, in the latter case, it will fall outside the scope of the right of broadcasting. Since the real-time rebroadcasting with initial broadcasting by wire means does not infringing either the right of broadcasting or the Right of Network Communication, the court had to determine whether it should be covered by “other rights” under Article 10 (17) of the Chinese Copyright Law. According to the court of final instance, legal enumeration of rights is the basic principle for establishing rights in China, so “other rights” under Article 10 (17) should be applied with great prudence, and it can only be applied when it is obviously unfair if the relevant acts are not explicitly prohibited. Regarding the disputed real-time rebroadcasting, the distinction between the real-time rebroadcasting with initial broadcasting by wireless means and that by wire means is sheer technical, and is caused by the deficiency of legislation. Treating these two types of real-time rebroadcasting differently is thus obviously unfair, and relying on Article 10 (17) can make up for the legislative deficiency. Finally, the appellate court held that the real-time rebroadcasting with initial broadcasting by wireless means is covered by the right of broadcasting and that with initial broadcasting by wire means as covered by “other rights”.
In the case Shanghai Guanshi Culture Communication Co. v Shanghai PPLive Media Technology Co. (Shanghai Pudong District People’s Court, Civil Judgment (2008) Pu Min San (Zhi) Chu Zi No. 483), the defendant provided online streaming of the TV serial of “Live-in Son-in-Law”, there was program forecast schedule provide on the website of the defendant and free PPLive1.9 software for downloading by the users. With the downloaded software, after clicking the specific TV serial they want to view on the program forecast schedule, the TV serial will be played. If the users wanted to watch a specific episode of the TV serial, they had to wait till episode is shown according to the automatic rotation, the automatic real-time streaming prevented the users from watching specific episode at the time they selected. In determining whether the defendant infringed the Right of Network Communication by providing such service, the court held the defendant liable on the ground of infringing other rights provided by Article 10 (17) of the Chinese Copyright Law but without detailed reasoning.
Conclusion
China has been endeavoring to protect the Right of Network Communication. But China is also trying to pursue a balance of the interests among copyright owners, ISPs and public. There are still some misunderstandings on the essential issues concerning the Right of Network Communication particularly the acts of communication through information network in practice. There are still some uncertainty and inconsistency to enforce the Right of Network Communication in different courts. Thus it’s important to choose the right courts in advance while planning to enforce the Right of Network Communication in China.