According to news reports, Microsoft along with Autodesk, filed a lawsuit in the Foshan Intermediate Court (note: the link is in Chinese) against a renowned company admitted in Foshan City, claiming computer software copyright infringement. The plaintiffs stated that the accused company had been using their software without any licenses or approvals. Based on this, the plaintiffs demanded compensation of RMB 8 million yuan, elimination of influence, cessation of infringement, and an apology. This case is not black and white and the court certainly has its own opinions, but today I would like to take this chance to discuss how to determine the legitimacy of evidence collection in cases of computer software infringement.
The main difficulty in software infringement lawsuits is that, unlike normal property, computer software programs run on computers and are easily removed. For this reason, evidence collection plays a key role in dispute settlement. Software, however, requires a great amount of expertise. Therefore, the process of evidence collection always involves issues of legitimacy. If evidence is collected in an illegal way, the court is very likely to not admit it. This problem has arisen in the Foshan case.
As stated in the report, in order to prove use of the server software by the defendant, the plaintiff’s lawyers used Firefox browser with Firebug installed to open the defendant’s official website and analyze it. Plaintiff discovered that the website used the system Jinhe C6, which is designed to run on Microsoft’s operating system. Yet, the defendant struck back by saying that the server system version is not publicly disclosed and is cannot be accessed by normal browsers. Therefore, plaintiff’s behavior violated defendant’s trade secrets. On the other hand, plaintiff maintained that its evidence collection process was legitimate because it was done publicly and did not use any decoding or illegal measures.
As the report is somewhat specialized, I will give an analogy: A believes B has taken A’s possession and hidden it in B’s home. But, B’s window is too high for a regular person to see in from outside, so A borrows a ladder to look inside. In the lawsuit, B’s main argument is that his window is too high to see inside, and A’s use of the ladder to see inside is a violation of privacy that is clearly illegal. In fact, however, in most software cases, in order to prove unlicensed use of the source code by the infringing software, the rights holder has to reverse engineer the infringing software to get evidence. So, to use the above example, A waited until B was not at home, had a locksmith open the door, found his lost property, and took a picture.
In court, attorneys for both parties will fiercely debate this evidence. By A’s logic: you took my things and hid them in your house; without using a ladder, how could I get evidence? By B’s logic: normal people would not be able to see into my home; therefore, regardless of whether you climbed a ladder to look in or opened the lock, the evidence was collected illegally and is invalid.
Everything in the case shall be decided according to law. The essence of the argument between the parties is whether the evidence collection has infringed defendant’s trade secrets. From this, the issue can be analyzed through the laws and regulations regulating trade secrets. As provided in Article 10 of the Anti Unfair Competition Law:
“ ‘Business secret’ in this Article means technical information and operational information which is not known to the public, which is capable of bringing economic benefits to the owner of rights, which has practical applicability, and which the owner of rights has taken measures to keep secret.”
With regard to this case, there are two questions:
1) Could the website’s back end information constitute a trade secret?
2) Did the software used for evidence collection conduct reverse engineering in the evidence collection process?
In the case, the issue emphasized by the defendant’s attorney is that the normal browser could not get access to the website’s back end information. Therefore, this information was not known to the public and could only be checked by using a browser equipped with a special plug in. For this reason, the back end information is a trade secret. The key issue emphasized by the plaintiffs’ attorneys, on the other hand, is that the evidence was collected through legitimate means, for it was done openly, utilized no deciphering or illegal measures, and it was clear that defendant had instituted no confidentiality measures. Therefore, its conduct does not constitute infringement against the trade secret. The attorneys for both parties might enhance their evidence after the hearing, and looking at the arguments put forth by both parties, the plaintiff may submit documents introducing the Firefox browser and Firebug in order to demonstrate that the plug in is normal software rather than a hacker tool for reverse engineering. As to the defendant, they may submit evidence that the website’s back end data was ciphered or specially set and that the non-official staff would not have access to it.
I believe that, in reality, there are still many more things the defendant could do. Because the evidence put forward in this case is taken from the internet, visitors do not sign a confidentiality agreement or a non-reverse engineering contract with the website. Therefore, according to judicial interpretations from the Supreme People’s Court, even if reverse engineering has cracked the ciphered date in the back end of the website, it does not necessarily constitute infringement against trade secrets. Therefore, the defendant could instead lay emphasis on whether the information displayed by Firebug is by legitimate or has been distorted. My experience is that, in order to avoid liability, the developers of many similar free plug ins or software stipulate in their user agreement that they make no guarantee of the quality of the software and state that the software only be used for teaching or research purposes and not be put into commercial use. Also, I once encountered a lawsuit where there was an objection to the website used by the opposite party as evidence. So, I sent an email to the developer of the software to inquire about the facts involved in the case. And, the email reply by the developer was also adopted as crucial evidence in the case. In this dispute, if the defendant’s lawyer can find similar content, it could pose trouble for Microsoft’s rights protection and would be a great bargaining chip in the reconciliation stage.
In conclusion, Microsoft has introduced its Windows 8 system and Surface tablet, which are not satisfying expected sales. So, to increase its profits, there are already reports that Microsoft has increased the charge for some company clients (note: the link is in Chinese). In my opinion, Microsoft may place more of its effort in rights protection and try to get more profit through intellectual property protection. So, domestic companies should pay attention to the legal risk coming from this shift.