Just like virtually all nations, the internet is a critical part of China’s economy. Unfortunately, just like all nations, the citizens and businesses of China experience problems with a variety of online issues, including copyright infringement. Under Chinese law, civil lawsuits must generally be brought in the defendant’s principal location, and this requirement could prove cumbersome to both plaintiffs and the court system. To expedite cases, China established special courts to handle matters related to the internet. One such court was established in Hangzhou, in large part because it is home to numerous technology and e-commerce companies, including Alibaba. A decision issued in February 2019 by the Hangzhou Internet Court may have significant consequences for ISPs engaged in an ongoing battle against copyright infringement.
About the Case
The plaintiff in the case, Daodou, holds an exclusive license for the online dissemination of a copyrighted series of tutorials. The primary defendant made copies of these tutorials available through WeChat mini-programs run via its public account platform. Mini programs are essentially apps within apps; that is, they operate as if they are separate apps, but they function inside different, larger apps. Public account holders can make a mini-program accessible through the WeChat portal without the need for a separate download, and the mini-program will run in parallel with the WeChat app.
Like most nations, China has laws to protect copyrighted material. In 2010, legislation was enacted that included the steps to be taken by the rightful owner of the material should infringement occur. The rightful owner should notify the ISP of the infringement and request that the ISP delete the material or take other appropriate actions. The principle of safe harbor states that the ISP is not automatically held liable for the infringement until it is notified of the infringement. If the appropriate actions are not taken by the ISP once it has been made aware of the infringement, the ISP and the direct infringer could be held jointly liable.
However, new regulations enacted in 2013 established exceptions to the existing rules, and subsequent cases have set new precedents. In the case of Daodou v Baizan and WeChat, the court ruled that different categories of ISPs exist, and since they have different levels of control over content and editing rights, they also have different liabilities. Essentially, since WeChat does not have control of or store a mini-program developed by a user, it is not liable for the infringement. The notification and removal of the content regulations were ruled to be applicable only if an ISP provides storage, linking, searching, or ranking services.
What the Decision Means for ISPs
Although the decision did not relieve ISPs of all monitoring obligations, it clarified the boundaries of ISPs that provide access without having control of the user’s content or the server on which the content is stored. The decision could conceivably strengthen an ISP’s arguments against being held jointly liable for infringements. However, it is likely to be an unpopular ruling among the rightful owners of copyrighted material, making the online notification and takedown procedure less effective than it has been in many instances. Nevertheless, ISPs may want to consider automating as many processes as possible to ensure that they gain the maximum advantage from safe harbor provisions. One fact is certain, however. Technology does not stand still, and the more that it changes, the more frequent regulations will have to change to keep pace. Regardless of whether an ISP sides with the infringer or the rightful owner, it will make the other party unhappy, potentially sparking additional lawsuits for the internet courts to handle.
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