(By Luo Yanjie) Abstract: The Supreme People’s Court’s decision concerning jurisdiction in terms of determining the domicile of a transit server seems rather amiss against the principle of the doctrine of the plaintiff accommodating the defendant. The place where a plaintiff discovers infringing content should be the final choice of jurisdiction in cases involving network and online infringement. Unfortunately, laws and judicial interpretations in our country do not currently make a distinction between the right of goodwill and a legal person’s right of reputation.
A few years ago, the battle between QQ and Qihoo360 (the “3Q battle”) caused shockwaves throughout the Chinese Internet. During the battle, QQ and Qihoo360 filed a number of lawsuits. Our website previously introduced and discussed in a previous post one of the cases between the QQ and Qihoo360 named Does 360’ s QQ Guard Constitute Unfair Competition against Tencent? In that case, other than a worthy discussion regarding the final substantive decision, the procedural issues between QQ and Qihoo360 still grabbed our attention. In today’s post, we’ll discuss an objection to a ruling on jurisdiction.
Case Introduction:
Tencent QQ filed a lawsuit against Qihoo 360 with the Guangdong Higher People’s Court (the “court”), alleging that Qihoo’s 360QQ Safeguard software (QQ is a free and popular software in China used for communication and exchange, similar in function to Skype, while the 360QQ Safeguard software was one that removed QQ’s ads, removed supplemental and additional functions found within QQ’s software, and prevented computer viruses from stealing QQ account information) constituted unfair competition and infringed Tencent’s right of reputation. Based on these allegations, the Guangdong Higher People’s court accepted and heard Tencent’s case. But, Qihoo objected to the court’s jurisdiction, its primary reasoning being that the allegedly infringing acts on Qihoo’s behalf took place in Beijing, and not in Guangzhou. Further, Qihoo argued that its website, named www.360.cn, was registered and administered in Beijing, utilizing servers in Beijing to upload and store the 360QQ Safeguard software. The plaintiff made use of a familiar network test, a “ping” command, in order to show that it received an IP address originating from ChinaCache’s internet servers in Beijing, rather than that of Qihoo; based on this, Qihoo held that this particular case should not apply jurisdictional powers over a legal person’s right of reputation.
The Supreme People’s Court (the “Supreme Court”), upon the final ruling, upheld that, the function of a transit server was to disseminate the 360QQ Safeguard software, so the place where the transit server is located will be considered where the defendant’s infringing act was undertaken. Additionally, since the two defendants uploaded and stored Qihoo’s 360QQ Safeguard software, it was the end-user’s active connecting and downloading of the software on an Internet server that allowed the defendant’s infringing acts to be realized. Furthermore, said downloads in fact allowed the alleged damage to occur, thereby causing the unfair competition claimed by Tencent, and ultimately constituted the infringing acts complained about by Tencent. Based on these findings and the aforesaid reasoning, the court determined that Guangdong province is in fact, as a matter of fact and law, the place where the infringing acts occurred.
Additionally, the Supreme Court held that laws and judicial interpretations in our country do not distinguish the right of goodwill and a legal person’s right of reputation, and that interpreting commercial defamation as an act of infringing the legal person’s right of reputation did not violate current relevant laws and judicial interpretations. Then, the Supreme Court held that it did not improperly apply the plaintiff’s place in determining the jurisdiction of this case. Finally, the Supreme Court overruled Qihoo’s jurisdiction objection.
Lawyer’s Comments:
The decision contained within the Supreme Court’s ruling revealed many opinions worthy of discussion:
I. Could a place where a transit server involved in network infringement is located be considered the place where the act of infringement occurred?
First, in determining the place where the internet server is located as a place where the infringing act occurred is in fact in accordance with relevant provisions in the field of copyright laws; in particular, pursuant to Article 1 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in Hearing Cases Involving Copyright Disputes over Computer Network, such a finding is warranted. Despite this case being considered an unfair competition lawsuit, when determining jurisdiction, implementing Article 1 to determine the jurisdiction may be acceptable. Nevertheless, the fact that the Supreme Court considered the place where the transit server is located to be the actual place of infringement is something of a breakthrough in regard to interpreting the law. Thus, such a practice is a worthy question to explore.
A transit server refers to an Internet server that is used as a direct result of advances made in broadband Internet technology. The sole purpose of a transit server is to “improve transmission efficiency in processing data”. Its operational mechanism can be interpreted more simply with the following: where a user in Shanghai is visiting a server computer located in Beijing, if the objects accessed cannot be altered within a short time, the Shanghai user visiting the Beijing server will utilize a transit server to obtain the contents needed after the visitor arrives at the transit server, which will then confirm the integrity of the accessed objects to ensure there has not been any alteration. Such visits greatly improve the efficiency of data processing and transmission. In other words, a transit server is a pure category of technology where it is irrelevant whether the data stored on it is infringing in the same sense that it may be on the target server. .
According to the specific characteristics of a transit server, it seems incorrect that the Supreme Court considered the location of the transit server to be the place where the infringing act occurred for the purposes of determining jurisdiction. There are several reasons we feel this way: for example, wherever end-users are, based on current broadband technology, most content provided by large popular websites are actually delivered to the end-user by way of regional transit servers; therefore, in accordance with the Supreme Court’s ruling, nearly anywhere could be found to be a place of jurisdiction in network and online infringement cases. On one hand, this is great news for rights holders, because it can also be considered a huge blow to local protectionism, which can often be a barrier to justice in many areas. On the other hand, such a ruling is clearly contrary to the accepted principle of plaintiff’s accommodating defendants when the former brings suit against the latter.
II. Is it appropriate that a place where the Plaintiff downloads data be considered the place where the infringing act occurs?
Article 1 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in Hearing Cases Involving Copyright Disputes over Computer Networks stipulates the following:
“A case relating to copyright disputes over a computer network shall be under the jurisdiction of the people’s court at the place where the tortious act occurs or that at the domicile of the defendant. The place of tortious act includes the place where the Internet server, computer terminal or any other equipment through which the sued tortious act is committed is located. In cases where the place of the tortious act is committed or the domicile of the defendant is difficult to determine, the place where the computer terminal or any other equipment, in which the plaintiff discovers the tortious content is located, may be considered as the place of tortious act.”
Based on this interpretation, it is clear that in the field of copyright legislation, the place where the plaintiff discovers the infringing content is the last choice for determining jurisdiction.
Although this case is related to unfair competition, from the point of view of considering jurisdiction, the nature of the case still does not appear to be all that different from that of copyright. However, the ruling handled down by the Supreme Court is clearly in almost complete opposition to that of the above-quoted judicial interpretation. In cases where the court can determine the place of the defendant and the place where the Internet server is located, it is interesting to consider whether the place where the plaintiff discovers the infringement can also be considered the correct place for jurisdiction.
III. The difference between the right of goodwill and a legal person’s right of reputation.
The Interpretation of the Supreme People’s Court on Several Issues Relevant to the Trial of Cases Involving Rights to Reputation stipulates,
“When receiving a case involving infringement of rights to reputation, a people’s court may take the domicile of a citizen, legal person or other organization being infringed on as the place where the result of infringement takes place.”
The Supreme Court held that, in this case the place of the plaintiff shall be considered the “domicile”, and such a finding was correct because laws and judicial interpretations in our country do not distinguish the right of goodwill and a legal person’s right of reputation. In the author’s opinion, said opinion handled down by the Supreme Court is admittedly more proper than that described above. At the same time, the Supreme Court’s opinion above seems more correct and reasonable to support a finding of “domicile” by the Guangdong High Court than any of the previously given interpretations and rulings.
Lawyer Contacts
You Yunting：86-21-52134918 youyunting@debund.com/yytbest@gmail.com
Disclaimer of Bridge IP Law Commentary
Short Link: