By Zhan Yi

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At the beginning of 2012, Apple Inc. (the “Apple”) was sued by some noted local writers in China for copyright infringement. This aroused wide concentration amongst the public on the copyright issue in App Store. Will Apple be liable for the free or paid download by law? The answer to this question, in my perspective, shall focus on the determination of its legal nature which shall be considered within the regulations of the copyright law based on App Store’s commercial and technological model of App Store.

I. Is App Store a sort of information storage space and could it be covered by Safe Harbor Rule?

Technically, information storage space is a sort of disk space of cyber service provided by ISP to its user by which the user could transmit works, performance or video & sound recordings. App Store is an online transaction platform launched and supported by Apple, and any third app developers could sell or provide their apps for free to the users applied on iPad or iPhone. Therefore, App Store has the technical feature of information storage space and could be technically the information storage space. Then should Apple take the liability when the third party developers released any contents of others’ copyright without the license in App Store, such as the lawsuit between Chinese writers and Apple as mentioned above? The regulation concerning the safe harbor rule[1] on the information storage space is provided in Article 22 of Regulations on the Protection of the Right to Information Communication by Networks. Apple may be exempt from the compensation liability when the commercial and technical model of App Store is in compliance with the liability free regulations which could make App Store a sort of information storage space. Subsequently the liability of App Store is fully determined by its legal nature based on the commercial and technical methods.

In the case of the free apps published by the third party in App Store, if Apple has made no modification to the app, then it shall be with no copyright obligation of Apple even it has regulated the prior examination procedure on the app. This is due to the huge amounts of apps in the Store which make it impossible to examine the apps individually either in commerce or technology. Moreover, neither in China[2] or Western countries, there are no legal regulations governing the active copyright examination obligation by the information storage space service provider in technology. As was seen in the Directive on Electronic Commerce of EU, Paragraph 1 of Article 14 of the directive prohibits EU members to set a general copyright supervision obligation on the ISP[3]. Therefore, when the app provided by the third party constitutes infringement while it is not listed in the App Store’s ranking, app introduction, the home page or frequently viewed location, which results in Apple having no awareness of it or the chance to be aware of the infringement[4]. In the meantime Apple has gained no profit from it, then App Store shall be the information storage space in technology comparing with the apps by the third parties. In this situation Apple will take no liability of compensation when deleting the infringing contents following a given notice. Meanwhile when the third party developer or the content of the app is of repeated infringement[5], Apple shall take a higher duty of care, to enforce an active supervision over the copyright and to delete the infringing contents in time, otherwise it will take joint liability to the infringement.

II. The obligation and liability when not be deemed as an information storage space by the Copyright Law

For the charged apps in App Store, with the consideration of the direct income sharing mechanism, it shall be the “direct economic gains” regulated in Article 22 of the Regulations. Apple will consequently not be able to refer to the Safe Harbor Rule when there is an infringement against the copyright or the right to the information communication by networks; but will the company still take the compensation? In my view, the question will also be judged by the operation and technological model for Apple’s obligation and liability. Firstly, the “direct economic gains” is not an essential condition of the establishment of infringement in Chinese laws and regulations. Secondly, information storage space is still the profitable network service with the combination of technology and commerce, and the service provider could not survive and develop when it chases no economic benefits. In the case of the App Store, there is no foreseeable difference in law or policy whenever Apple gain profits from the profit sharing or through the advertising. Subsequently Apple will not naturally take the fault when participating in the profit sharing, but will take a higher duty of care under the legal principle of equality of rights and obligations; namely to make an active and prior examination over the charged apps published by others. Once Apple has verified the license and signature of the app in proper manners, it shall take no liability of compensation.

When Apple arranges the ranking or introduction to the apps, irrelevant if it is charged or not, like those in App Store of iPad, Apple will also take a higher duty of care. In such situations, Apple is not only providing a platform of transaction to app developers and iPad, iPhone users, but also the effort to promote commercial connotation and overall income, which makes Apple take a higher predicable capacity to the infringement within the scope of ranking, introduction or classification. Apple will then take proper technological measures on the protection of the right to the information communication by networks and the prevention of infringement, otherwise, it shall take the liability of compensation for aiding the infringement.

Summary

Without doubt the App Store and Google Play, have both made great achievement in technology and commerce, and from the stance of copyright law, the commercial model of it is of a substantive legal purpose and could not be restricted for expansion with a normal copyright infringement fault and the infringement liability thereby produced. With regard to the the issues concerning App Store, they shall still be judged by its legal nature based on the specific facts and thereby its obligation and liability will be determined. Meanwhile, the current status of App Store’s protection on copyright is less than satisfying, and the rule of deletion of notice seems to have had less effect on the infringement prevention. The development of it in commerce and technology is unbalanced with its copyright protection; the equity of interests is the basic principle of law.[6] It has been suggested to properly introduce the vicarious liability adopted by USA judicial practices, which feature “a legal entity shall take the liability of compensation to other’s infringement when it is capable or liable to prevent the infringement but actually gains from it. It shall say that the vicarious liability could be kind of thinking or method to retrieve the interests balance of App Store in the Copyright Law. (need to close the quotation but I am not sure when it ends).

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