For What Reason Should an E-Group Administrator Be Brought to Account for an Unauthorized Piece of Work Transmitted through the E-Group: Indirect or Direct Infringement?

(By Albert Chen)Last year Beijing Intellectual Property Tribunal dealt with an infringement case involving a QQ group and made the same decision as the first-trial court that the group’s administrator should be responsible for the infringement, but with different reasons. Detailed analysis of differences in the reasons for decision given by the two courts will help you answer the question of whether the group administrator should be brought to account for direct or indirect infringement.

Case Introduction

Beijing Science and Technology Press Co., Ltd. (“the Press”) with the right to transmit online the book “Learn How Junzhi Bakes” (“How Junzhi Bakes”) claimed that Wuhan Taihe Electrical Equipment Co., Ltd. (“Taihe Company”) gave people who had bought its electric ovens from Taobao access to the e-book How Junzhi Bakes uploaded by a person alias “Zixi”. Details of how to download the book are as follows.

  1. Taihe Company publicized information about “a free electronic menu of baked food with a life-long baking guide, joining an online group to discuss new ideas about baking, and the customer service for those who had placed an order”, on its outlet’s website, in a way that suggested customers who had bought products contact the customer service for further information.
  2. Customers who contacted the customer service would be told to join a particular QQ group.
  3. A person from Taihe Company was the group’s administrator, and anyone who wanted to join the group would be asked to give a correct password.
  4. Members of the group could download the e-book How Junzhi Bakes in the group’s file section.

Based on the above and considering that Taihe Company did not know the identity of the person who uploaded the e-book, the Court of Xicheng District, Beijing found in the first trial that what Taihe Company did about transmitting the e-book was to keep its promises about sales services and encourage customers to download the information, so that Taihe Company should have the ability to manage information uploaded by other users, should keep aware of intellectual property rights to all information available in the QQ group, and should take reasonable precautions against infringement, including publicizing the name, contact information, etc. of the right holder in order to deal with complaints, and warn members of the QQ group of not transmitting any information that might cause an infringement on others’ intellectual property rights.

For these reasons, the first-trial court decided that Taihe Company should be deemed as an internet service provider responsible for the infringement.

Beijing Intellectual Court, to which Taihe Company appealed, found that Taihe Company was the administrator of the QQ group who created the group based on internet services provided by Tencent, rather than an internet service provider, so it should not be asked to take the liability or given an exemption from the liability, of an internet service provider.

The second-trial court further found that Taihe Company failed to provide detailed contact information, address and personal information of the person uploading the book, shown in records of what customers had bought and what they said to the customer service and authentication information, to prove that the person uploading the book was a customer not a staff member of the company, and therefore should bear the responsibility for the inadequate evidence, and based on this, it could be deemed that Taihe Company uploaded and should be responsible for uploading the book.

Lawyer’s Comment:

  1. Partially Right for the First-Trial Court to Decide on the Ground of Indirect Infringement

Intellectual property rights are a type of rights in laws used to protect “objects”. The way of deciding on an intellectual property infringement is similar to that of deciding on a property infringement which relies only on the action that has caused the infringement but does not rely on the subjective motivation.

Indirect intellectual property infringement does not directly harm others’ proprietary rights but only helps the intellectual property infringement happen or aggravates its adverse effect. In order to claim against this “help”, you have to check if the person doing the action has done something wrong deliberately.

Look at the first-trial court’s decision which contains three important statements:

a. It was a third party rather than Taihe Company who uploaded the book in dispute.

b. Taihe Company was the creator and administrator of the platform where the book in dispute was transmitted.

c.  As an internet service provider, Taihe Company failed to fulfill its reasonable duty of care.

The first statement above meant what Taihe Company did not constitute a direct infringement. The second statement affirmed that Taihe Company assisted in transmitting the work in dispute. The third statement meant that Taihe Company did something wrong deliberately. Based on these statements, the first-trial court found that Taihe Company should take the responsibility for indirect infringement as an internet service provider.

We think the first-trial court did well to analyze the responsibility of Taihe Company from the angle of indirect infringement, but not well enough to consider Taihe Company as an internet service provider. The statement that Taihe Co mpany was an internet service provider and had the obligation of taking active actions against the infringement was conflict with the generally accepted responsibility cognizance principle.

  1. Reasonable for the Second-Trial to Decide Direct Infringement on the Ground of Inadequate Evidence

The second-trial court did not follow the way in which the first-trial court decided on the ground of indirect infringement, but decided on the ground of direct infringement without considering the motivation and by taking the actual action and the result of the action into account. In this case the result of the infringement was definite that the book in dispute was transmitted between the group members without authorization. The only question was who actually did the act of uploading the book.

The electronic book was uploaded by the person using the name “Zixi” on the internet. Was it right for the second-trial court to decide that Taihe Company uploaded the book itself and should be responsible for adverse consequences of it, when Taihe Company did not provide records of what customers had bought or what they said when chatting with the customer service or information used to authenticate the identity of the person wanting to join the group?

We think it was right because of the principle of high probability in civil litigation. As only those who had bought a particular product and passed the authentication of Taihe Company were allowed to join the group, and the information about the purchase, customer service and authentication could prove “Zixin” really existed as a third party independent of Taihe Company. It is generally believed that e-commerce Taobao keeps records of what customers said when chatting with the customer service and what they have bought. Taihe Company concealed these records deliberately, making people associate it with “Zixi” and suspect they were closely connected or even the same. Based on the principle of high probability and taking the environment where the group existed into consideration, it could be concluded that Taihe Company uploaded the book in dispute itself.

 

  1. Opinions on the Second-Trial Court’s Decision that Taihe Company Was Not an Internet Service Provider

The judgment by the second-trial court stated that Taihe Company was not an internet service provider as it had “different qualities from those of internet service providers”. Unfortunately the court failed to explain in detail about this right decision.

Internet service providers mainly include access service providers (like Telecom and Unicom), platform service providers (like Sina Weibo, Tencent WeChat) and information positioning service providers (like search engines). Despite different services they provide, they all serve users throughout the internet domain.

As a creator and administrator of a QQ group with an upper limit on the number of its members that is easy to manage, Taihe Company is apparently unable to provide basic internet services for the whole internet domain or on a large scale. Added to the power it had and the activities it did all relied on the platform services provided by Tencent. Therefore, Taihe Company did not even meet necessary standards for internet service providers.

On the other hand, the main aim of deciding if it is an internet service provider in a case where indirect infringement is alleged to exist is to decide how active they should be in taking the duty of care. In general, the more areas their services target at, the less active they should be in taking the duty of care. Internet service providers do not usually take the active examination liability. In most cases, despite a limited number of exceptions, the fact that “the service provider refuses to remove the information infringing a right of another person who has sent an infringement notice” is used to prove that the service provider has deliberately done something wrong. This is because lawmakers want to keep a balance between benefits of right holders and the internet sector, in a way that not only protects copyrights but helps service providers easily find what infringes their rights in a very huge amount of information available.

It would be unreasonable if the court accepted that Taihe Company who had a simple and easy job to manage the group was an internet service provider and gave it a minor duty of active care.

 

  1. What If Deciding on the Ground of Indirect Infringement

If the second-trial court followed the way how the first-court decides on the ground of indirect infringement, it could also be found that what Taihe Company did caused an infringement. Moreover, as mentioned above, the standard of the active examination obligation should be raised for the group administrator with an easy job and high authority to manage a group with an upper limit on the number of its members.

Furthermore, Taihe Company had to answer a lot for its act of transmitting the infringing book. First, it is not difficult to find right holders, publication times and other information about a book and see whether the book is copyrightable accordingly. In this case the group administrator’s act of letting the infringing work available in the area he was responsible for at least constituted a misconduct whether he had an intention to do it. Second, there was no proof that Taihe Company had given a warning of infringement to the group members so that it could be deemed as an administrative negligence.

Above all, considering the intention to avoid passive examination and the rights obviously protectable, even if the book in dispute was uploaded by a third party, the group administrator should be responsible for indirect infringement caused by its delay in taking an examination and giving a warning which resulted in the infringement in an indirect way.

Lawyer Contacts

You Yunting86-21-52134918  youyunting@debund.com/yytbest@gmail.com

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