Xiaojun Tian，Yushan Bai

Digital network technology has changed the interest pattern among copyrighted content owners, communicators and users, and realized the conversion from “printing copyright”, “electronic copyright” to “network copyright”. Technological development promoted the establishment of China’s copyright system in digital network, marked by the enactment of Regulation on the Protection of Right of Communication to Communicate Works to the Public over Information Networks since July 1, 2006. After ten years’ evolution of the system, new business models and new technologies continue to impact and change the original interest distribution system, thus hindering the co-development of the industry, technology and system. In view of this circumstance, it’s necessary to re-examine the new situation driven by network industries and technology. We should carefully assess the influence of digital technology on the interest in communicating works, and rationalize the existing copyright system in China.

1 The Current Status of China’s Copyright System Evolution in Digital Network

• Copyright protection of sports event programs recognized in judicial practice

With the rapid rise of the sports industry, enormous potential of the “Internet + sports” has been gradually excavated. However, there are no provisions on sports event programs in current copyright law. Also, there are disputes in judicial practice and academic study on whether sports event programs are copyrighted works, what kind of work they are, and how their broadcasting over digital network shall be controlled. As only a small part of the infringed would file a lawsuit, sports industry is faced with serious legal risks despite huge investment. At present, judicial practice is still at the stage of trial and error based on specific cases.

It’s noteworthy that images of sports event relaying are confirmed for the first time to satisfy the requirements of copyrighted works in Beijing SINA Internet Information Service Co., Ltd. v. Beijing TianyingJiuzhou Network Technology Co., Ltd.((2014) Chaoyang District People’s Court of Beijing, Civil Division (Intellectual Property), Initial Ruling, Case No.40334.). The Court found that the formation of images of sports event relaying is the result of directors selecting and arranging multiple shots taken by multiple devices. So it’s influenced by different device settings, different image selection and different organization, which reveals the originality of programs eventually presented. The judgment will have a positive effect on the protection of sports event programs and the development of sports industry, which will also provide reference to the legal protection of online game broadcasting.

• Breakthroughs achieved in administrative regulation of network disk infringement

Network disk service providers take advantage of existing law system’s deficiency to indulge, help, lure and abet users’ infringement. What’s worse, some of them even initiatively provide illegal works together with others, blurring the boundary between network service providers and content providers. Network disk is most severely hit by copyright infringement, and has become the center of new infringement patterns. Large numbers of pirated videos, music and novels are illegally uploaded to the various types of network disks for users to watch, download and share, especially after Notice on Further Implementation of Regulations on Management of Online Foreign Movies and TV Dramas was issued. The notice causes a gap between copyrighted works first broadcasted in original countries and first legally introduced into China. Then, opportunistic infringers use the gap to attract great number of audience by uploading illegal works. Consequently, legal content providers can hardly get their payback. Nevertheless, service providers and other infringers often get exempted from their liability due to misuse of “safe-harbor rules” or the difficulty to collect evidences, thus obstructing the protection of copyrighted content.

In such case, the regulation of cloud storage was included in “Jianwang 2015” special action(“Jianwang” is a special action against copyright infringement in digital network, conducted by National Copyright Administration, Ministry of Public Security and Ministry of Industry and Information Technology every year since 2005.). On October 14, 2015, National Copyright Administration issued Notice on Regulating the Copyright Order of Network Disk Services, which defined the obligations and responsibilities of network disk service providers. According to the notice, service providers shall strengthen cooperation with copyright owners. Copyright owner shall be provided with clear and definite means to send notifications and complaints, which require to be dealt with in time. Besides, service providers shall strengthen self-management. Effective measures shall be taken to stop infringement when providers know or should have known users uploading, storing or sharing pirated works. In a similar way, they shall not facilitate illegal sharing of users. Moreover, service providers shall strengthen the management of users, by cooperating with related authorities to save user information. They shall guide users to respect copyright and refuse infringement by blacklisting, suspending or terminating services and other measures. This notice further refines and improves “safe-harbor rules”, but also regulates the function and use of network disks, which indicates that National Copyright Administration is gradually tightening the regulation of network disk copyright issues.

• Illegality of deep-linking and content aggregation confirmed in judicial practice

The essence of deep-linking and content-aggregating APPs is network information platforms builted up with support of related technologies and player platforms, in the form of player nesting, directional links and web page aggregation. This sort of APPs turns out to be replacement of legitimate video websites, actually stealing legitimate sites’ servers and bandwidth resources. Moreover, those APPs attract numerous users by blocking ads. The distortion of business patterns will finally prevent the smooth development of the Internet video industry. However, bounded by “server standard” and other existing technical or judicial reference standards, experts in related fields take different attitudes towards whether deep-linking satisfies requirements of direct infringement or copyright infringement.

While more and more judgments indicate the limitations of “server standard”, in several recent cases, operators whose APP is considered to be replacement of legitimate sites have been identified as direct infringers. In Leshi Internet Information & Technology Co., Ltd., Tianjin v. Shanghai Huandian Information Technology Co., Ltd.((2015) Pudong District People’s Court of Shanghai, the 3rd Civil Division (Intellectual Property), Initial Ruling, Case No.595 and No.600.), the Court found videos were played directly on the defendant’s website, which had become replacement of linked website by providing unauthorized works to the public. In Shenzhen Tencent Computer System Co., Ltd. v. Beijing Yilianweida Technology Co., Ltd ((2015) Haidian District People’s Court of Beijing, Civil Division (Intellectual Property), Initial Ruling, Case No.40920.)., the Court found the defendant’s APP was not just providing linking services, but also playing involved video works. It could control and manage involved works’ spreading beyond authorized channels and ranges, which led to economic losses of copyright owners and violation of right of communication via information network.

• Significant progress made in the management of digital music copyright market

While the unauthorized communication of music works continues to be one of the hottest issues of public concerns, relevant law suits filed by major digital music platforms occur frequently. In order to regulate the order of digital music copyright market, National Copyright Administration issued “Notice on Ordering Online Music Service Providers Stopping Unauthorized Distribution of Music” on July 8, 2015. The notice required all online music service providers to delete unauthorized works within the time limit. According to statistics, in the ordering period, the number of music works which 16 online music service providers deleted is more than 2.2 million.

In view of the industrial chain, regulation of digital music copyright market will help establish healthy business patterns, and advocates legal circulation of copyrights. Hopefully, it will also promote the development of related fields such as online broadcasting and offline performances. At the beginning of 2015, an alliance was founded to promote network copyrighted music in China, spontaneously by copyright collective management organizations, domestic and foreign well-known record companies, together with leading domestic online music platforms, other relevant organizations and musicians. As an industry self-regulatory organization, the alliance will initiatively safeguard the legitimate right and interest of copyright owners, regulate market order of music copyright trade, and promote development of music industry. In addition, digital music platforms are also seeking business cooperation between each other, for instance, QQ Music and Netease Cloud Music announced on October 13, 2015 that they had accomplished authorization of more than 1.5 million works.

2 The Challenges of China’s Copyright System Evolution in Digital Networks

• • Cautious expansion of copyright protecting scope under digital network technology

The change of times and technology often result in the change of copyright system. For example, films were generated from electronic imaging technology, while computer fonts were generated from the development of IT technology. Nowadays, digital network technology imposes an unprecedented impact on copyright system in work forms, transmission mode and interest structure, posing great challenges to the theory and practice of copyright law.

One manifestation of expansion of copyright protecting scope is that there are more objects protected by copyright law system. With the development of the industry and communication means, new forms of works like sports event programs and images of online game broadcasting are available to users. Then whether they should be protected is more frequently discussed and more extensively recognized in practice. Another manifestation is that more infringement is regulated by copyright system, such as such as network disks, mobile aggregation, linking without authorization and OTT aggregation. Through clarifying the original meaning and principles of copyright law and civil law, more infringement is stopped or prevented to a certain extent. Essentially, cautious expansion of copyright protecting scope in digital environment is a necessary adjustment to the development of copying and communicating technologies, contributing to a more reasonable distribution of benefits from communication of copyrighted works.

• Decentralized and amateur infringement as a typical feature of a new stage

With the development of digital technology, infringers’ “business pattern” develops accordingly and experiences three stages: firstly via server storage, then mostly via P2P downloading and client downloading, and currently via linking without authorization, network disks, mobile aggregation and OTT aggregation.

Network copyright infringement involves in many different parts, and the actions are increasingly decentralized. Take network disk as an example, the entrance, the players, and the content storage are usually provided by different people. That will make it more difficult to deal with liability issues under current copyright law system, especially with easy access to network disk service, deficiency of real-name system and decentralization of the service pattern itself. Moreover, infringement is more amateur than before due to a lower threshold of technology and investment, caused by development of P2P, rapid building of websites, cloud computing and other new technologies. Small personal sites can benefit directly from advertisement alliances, making it more likely for common people to get involved in infringement. As has been stated, how to effectively deal with the increasingly decentralized, amateur network copyright infringement calls for wisdom of copyright law system.

• “Right of reproduction” gradually replaced by “right of communication” as the core of copyright control

As the foundation and core of copyright system, “right of reproduction” is the most original meaning of copyright. It derives from publishing revolution as the promotion of printing technologies generated the printing franchise that reflected publishers’ interest demands. Reproduction is the prerequisite for both exercising copyright and conducting infringement. That’s why during a considerable time before the popularity of digital technology, the best way to protect copyright is to control unauthorized reproduction.

The popularity of digital technology and the Internet causes fundamental changes in the communication of works. Complete copy of digital works only needs very low costs; also, tangible copies are no longer necessary to communication. As to consumers, instead of ownership of a hard copy, they pay more attention to acquisition of content. Communication plays a more important role in obtaining economic benefits from copyrighted works in digital environment; therefore, control of communication, rather than control of reproduction is much more effective in preventing infringement. That’s to say, digital technology highlights the important role of communication in the distribution of copyright benefits. Consequently, it will fundamentally overturn the balance of reproduction-centered interest structure, and challenge current regulation system of copyright.

3 The Countermeasures of China’s Copyright System Evolution in Digital Networks

• • Adjustment of the network copyright system according to business patterns and technological evolution

The innovation of technology has triggered the innovation of industrial ecology, object types, communication actions and interest. In view of the coordination between laws and industrial evolution, we should initiatively adjust network copyright system, in response to expansion of protected subjects, evolution of infringement and adjustment of interest distribution.

First, whether a new subject is copyrighted should be rationally assessed, instead of totally denied. The assessment should be based on protection of industrial investment, balance of interest, and the original meaning of copyright law. According to different extents of originality, different subjects can be protected by copyright or neighboring right. Second, the analysis of new infringement, including network disk, mobile aggregation, linking without authorization and OTT aggregation, should avoid getting trapped in technical details. The analysis should be based on essence of actions and value orientation of legislation. A certain technology should be responded legislatively and judicially, if its application would inevitably detract interest from the exclusive right and change existing pattern of distribution. Third, the application of specific technical standard should be clarified, especially its historical background and technical environment. Judgment of infringement should be based on “making available” standard. The standard requires consideration on whether specific action could make copyrighted works available to the public or communicate copyrighted works to the public, and whether it could be considered as exercising copyright or directly infringing copyright.

• Improvement of network copyright protecting environment promoted by multiple governance

Improvement of network copyright protecting environment is not easy work. So it’s necessary to involve legislative, judicial and administrative authorities, industry associations and copyright owners. It’s the tenth anniversary of “Jianwang action” and enactment of Regulation on the Protection of Right of Communication via Information Network. Looking back on the past, multiple governance pattern of China’s network copyright environment has achieved fruitful results in the areas of videos, music and literature. But undeniably, continuous emerging of new infringement brings new challenges to the governance of network copyright environment, urging relevant social forces to deal with.

First, at the administrative aspect, it’s necessary to continue to carry out “Jianwang action”, and strengthen the coordination between administrative and judicial control against new infringement. Moreover, to build up market order and operating ecology, authorities should enhance guidance, management and support to advocate paying for copyrighted content, and set up blacklist for piracy sites. Second, at the judicial aspect, it’s critical to make an appropriate increase in the statutory compensation, promote application of judicial interim injunction. For malicious infringement, punitive damages should be applied in such case. Third, at the industrial aspect, there’s an urgent need to evoke and aggregate power of the whole industry to adapt to the “active protection” of network copyright. Internet companies have become the backbone of the process in multiple governance structure. Having invested in accumulating qualified content and initiatively engaged in self-regulation and copyright protection. Strength of market participants will be fully reflected, and self-regulated organizations and conventions will also play a more important role in the formation of copyright order.

4 Conclusion

Just as the flap of a butterfly’s wings in Brazil can set off a tornado in Texas, the current status of China’s copyright system evolution in digital network reveals the competing and blending interactions between industry, technology and regulation. Furthermore, the conversion of Internet industry from “barbarism” to “civilization” is driven by the power of industry and technology, which also leads to the copyright system’s continuous adjustment and adaption to new circumstances. With the initiative evolution of the law system, Internet content industry will keep heading against various challenges and obstacles along the way.

[1] Xiaojun Tian, researcher of Tencent Research Institute; Yushan Bai, Master’s candidate in Laws at China University of Political Science and Law.