How to Appropriately Deal with a Lawyer Letter- about Copyright

(By Xiong Leizhi) Some popular We Chat accounts recently received a lawyer letter about copyright infringement from a well-known picture library. Before that some We Media were sued for picture infringement. Content creators are in trouble since 2015 when capital flooded in and proceeds surged. In the circumstances where start-ups abound and the gross national attention remains constant, each start-up tries to attract customers quickly and keep their interest for a long time. However, it takes much time to create an original piece of content. As a result, increasingly more unauthorized copies of works appear. The above cases that recently happened arose out of infringement.

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In What Ways Can Startups Obtain Competitive Advantages from Intellectual Property?

(By You Yunting) Large number of business opportunities have arisen from the rapid development of wireless and mobile technologies. As a result, new startups appear one after another, scrambling for these opportunities. However, the faster a market grows, the fiercer competition it involves. The process of Entrepreneurship is a race with other outstanding entrepreneurs, in which they use reasonable efforts to gain competitive advantages and win their rivals. If properly used, intellectual property rights can be very helpful in creating advantages. Here, let’s talk about what advantages can startups create by using intellectual property.

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Case Analysis: Legal Risks in Franchise Business

(By Yu Zhiyuan) I recently represented a client who was finally the winning party to a typical franchise dispute case, from which we can learn most legal risks possibly facing franchisors and franchisees during their performance of franchise business as well as operational standards and risk control measures for businesses in the brand chain industry.

  1. Case Facts  

In this case, the franchiser, owner of a well-known early childhood education brand, entered into a franchise agreement with each franchisee to perform franchise activities as a chain store dealing in the franchiser’s brand. As mutually agreed, in addition to one-off franchise fees and deposits, each franchisee should pay royalty fees in advance before each royalty year begins, and if there is any overdue payment of royalty fees, penalties.

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Litigation in China–A Long and Rocky Road

(By Dr. Wenbao Qiao) For foreign companies doing business in China, dispute and litigation may sometimes be inevitable. Once a dispute cannot be resolved out of court, there is a long and rocky road to the final success, with several important points to be considered for planning and handling of litigation in China:

Documents and Evidence

The first step of each procedure is to collect and prepare all necessary documents and evidence. According to Chinese law, documents and evidence from another country (such as excerpts from the commercial register or powers of attorney) have to be first notarized in their country of origin and then certified by the Chinese Embassy or Consulate in the respective country. Only notarized and certified documents and evidence will be accepted by Chinese courts. While preparing the documents and evidence, attention should be paid to the timeline required for the notarization and certification. There are several important statutory deadlines shown below. Failure to meet these deadlines can lead to the loss of a case. Notarization and certification in Germany usually takes two to three weeks, which in turn may play a critical role for the time schedule of trial preparation.

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DeBund Succeeds in Pushing Copycat Game App from AppStore

Recently, DeBund takes a big step forward in providing mobile internet legal services that You Yunting Team, on behalf of clients, succeeds in pulling a popular game from the AppStore by more than 10 lawyer’s letters.

The Developer of the complained game copied large amounts of background elements of a well-known game, including graphic design, plots, role names and geographic names, and also used the brand of the original game. The Developer also made a cartoon modeling on the game characters, and did a slight change to the game name, not exactly the same as the original game. The infringed benefits greatly from the complained game to millions of yuan every month.

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Does Proposed Anti-Monopoly Investigation against the Merger of Didi and Kuaidi Affect Innovation?

(By You Yunting) China’s two largest Taxi apps Didi Dache (“Didi”) and Kuaidi Dache (“Kuaidi”) confirmed merger on the Western Valentine’s Day, triggering the whole industry, which also lead to the suspicion of a monopoly. Afterwards, the Taxi apps Didi and Kuaidi responded this with much larger travel markets, and told that their merger does not lead to a monopoly, because mobile taxis only count a small proportion with lots of participators. As for whether their merger is accused of monopoly, there are hot discussions among legal professions. At present, third parties were tending to make anti-monopoly investigation from the Ministry of Commerce, and I am no exception. But after full consideration, I fell into confusion.

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China Laws and Regulations Update in February 2015

  1. The New Foreign Investment Law(Draft) Published for Public Comments

On 19th of January 2015, the Ministry of Commerce of PRC published the Foreign Investment Law of PRC (Draft for Comments) (referred to as ‘draft FIL’ below). Opportunities to offer comments on the draft FIL will remain open to the public until 17th of February 2015.

Significantly, the draft FIL transforms the current foreign investment administration system by introducing the administration model combining pre-establishment national treatment policies and the Negative List and stipulating that foreigners intending to invest in one of the areas as specified in the Negative List shall apply for and obtain a foreign investment entry permit beforehand. Also, foreign investors throughout PRC shall perform the reporting obligation regardless of the Negative List. Under this new administrative system, foreign investment in most areas can be admitted to PRC without prior approval by relevant departments. In addition, the draft FIL includes provisions on China’s national security review system, the foreign investment promotion and protection system, supervision and inspection of investment and operational actions taken by foreign investors and foreign invested enterprises, strengthened in-process and after-the-fact administration.

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Is Integrated Circuit Layout Design Protected by China Judicial Judgment?

(By You Yunting) Introduction to the case:

Appellant (plaintiff at first instance): Hi-Trend Technology (Shanghai) Co., Ltd (the “HTT”)

Appellant (defendant at first instance): Shenzhen Rui Micro-Technology Inc. (the “RMT”)

Respondent (defendant at first instance): Shanghai Yachuang Electronic Component Co., Ltd. (the “YEC”)

Court of first instance: Shanghai No.1 Intermediate People’s Court  No.: (2010)沪一中民五(知)初字第51号

Court of second instance: Shanghai Higher People’s Court  No.: (2014)沪高民三(知)终字第12号

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Is It Illegal for WeChat to Block Sharing Link of Alipay?

WeChat vs Alipay_副本

(By You Yunting) Recently, China Internet giant enterprises generated an intense competition during their hand-to-hand combat, but this time the main character is the Tencent which successively block sharing link with Alipay, Xiami Music App and NetEase Cloud Music App on its WeChat platform. It means that WeChat users could not use the mobile applications to link the contents of Alipay Red Envelope Gifting, Xiami App and NetEase Cloud Music App on its WeChat platform.

Afterwards, Tencent implied externally that the act of sharing link with Alipay Red Envelope Gifting is a malicious marketing and promotion on its WeChat platform, even a shattering experience, and its blocking should have something done with the uninstallation of WeChat Payment on Alipay platform (Chinese Link: http://tech.techweb.com.cn/thread-642700-1-1.html) For cutting off link with Xiami App and NetEase Cloud Music App, Tencent implied to have relationship with its content piracy (Chinese Link: http://tech.sina.com.cn/i/2015-02-05/doc-ichmifpx7018268.shtml).

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Will China New Foreign Investment Law Wipe Out VIE Structure?

(By You Yunting) Abstract: The Foreign Investment Law (Draft for Comments) has shifted the standard of a company based upon the actual controller, instead of the shareholder of the company, and regulated that the domestic company must not engage in any industries where operation by foreign investors is prohibited. In case the Draft becomes law, it will cut off the survival basis of VIE structure, so that the VIE company controlled by foreign investors cannot be operated, that the overseas listed company controlled through the VIE structure by Chinese will lose its survival basis of oversea listing, and that the startup companies of VIE structure controlled by Chinese will be forced to abandon the VIE structure.

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Youku Steals the Originality, How Can the Student Fight Against Plagiarism?

追气球的熊孩子

(By You Yunting) A post named the Teenagers Cannot Be Bullied was made by a 19-year-old student to complain that Youku.com ripped off his idea, causing a big stir online. The 19-year-old student and his fellows succeeded in taking photos of the earth from flying a hot-air balloon and then published their experience named the Kids Who Chase the Balloon and photos online. Afterwards, staffs from Youku.com contacted him, saying that they would like to address a short video to write down their behaviors. Then they reached an agreement through emails that the 19-year-old student and his fellows would cooperate with Youku.com in making a creative short video from the post the Kids Who Chase the Balloon.

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Will Alibaba’s App Information Leakage Trigger Strict Supervision and Regulation on Mobile Games?

alibaba

(By You Yunting) “疯狂来往” App, an in-game of China’s leading e-commerce Alibaba(NYSE: BABA)’s Messaging App Laiwang, was blamed for user’s private data leakage, according to the news. “疯狂来往” App (pronounced as “Feng Kuang Lai Wang”) was made to record players as one persons holds up a mobile device displaying words and others use gestures to provide clues to an answer, a little like guessing game. Considering that “疯狂来往”App is an interactive game among friends and acquaintances, many of the players were dressed rather casually when caught on the videos and some videos shows users in their underwear or naked while playing the game at home with family or friends. Worsen the videos also involved private information of teenagers under eighteen. Regardless of its sharing features into social networking websites such as Wechat and Qzone, some sharing videos were also automatically stored on Youku.com, a video website, which anyone can read online.

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Is It Legal for Foreign Company to Transfer User Data out of China?

(By Wang Ting) Recently, China State broadcast CCTV, imposed Apple Inc. that its iPhone’s ability to track and time-stamp user’s frequent locations without user’s permission infringed user’s privacy. Even though the news impacts turned out to be small in western countries, large amounts of Medias in China reported the news (Note: the link is in Chinese). Within the quicker development of internet and mobile internet, personal data and information has become increasingly frequent cross region and even breaking national boundaries, thus making the transfer of personal data more smoothly. In today’s post, at the beginning of Apple’s device’s location tracking abilities, we will introduce regulations and legal risks concerning how enterprises transfer user data from China to third countries.

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Could Toutiao.com Achieve a Settlement with Traditional Media?

toutiao

(By You Yunting) Toutiao and its investors would never have thought that a bomb from traditional media would come close on the heels of the Toutiao announcement that it had secured $100 million USD of Series C financing at a valuation of $500 million USD. The Beijing News made a comment “Toutiao.com: Whose headlines are they?” to attack the copyright infringement of Toutiao.com. Afterwards, Toutiao instantly replied, categorically denying infringement. However, just as the trees may wish to be still, the wind doesn’t stop, Toutiao may prefer the criticism to stop, but the traditional media will not subside. Soon, the copyright infringement of Toutiao soon became a public focus, being the subject of a variety of media’s collective enforcement on the grounds of copyright infringement.

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Linking Copyrighted Movies Constituted Non-infringement

youku

(By Luo Yanjie) Recently, our team represented a client who developed an App offering a linking service, in an infringement case over the linking of a copyrighted video on the mobile internet. The court made a final judgment in favor of our client, on the grounds that the safe harbor principle applied in this case. In today’s post, we will introduce this case below.

Introduction to the Case:

Plaintiff: China Film Media Asia Audio Video Distribution Co. Ltd (the “China Film Media Co. Ltd”)

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