Why Youku is Reluctant to Delete The Infringing Video as Alleged by Tudou

Several Common Knowledge in Law concerning the Conflict between Tudou and Youku in China

Recently, two biggest video sharing portals in China are embroiled in the copyright dispute of some hit dramas. And it’s triggered by Tudou (NASDAQ: TUDO) ’s accusation of Youku pirating the entertainment show Kang Xi Lai Le with Tudou owns its exclusive cyber copyright in China, and Youku (NYSE: YOKU) ’s refusal on the deletion after Tudou’s allegation. Following that, Youku stated that Tudou had been long pirating its copyrighted films and television programs. According to the latest statement from the both sides, both parties have filed the lawsuit, and Tudou has made complaint to the industry association. The post of Bridge IP Law Commentary today will analyze several common knowledge in law, and give our answer on Youku’s reluctance to delete the infringing video as alleged by Tudou.

I. Could video website refer to the Safe Habor Rule?

Tudou and Youku are both the video sharing website, with most of their videos uploaded by the client. In theory, by the Regulations on the Protection of the Right of Communication through Information Network, as to the vast client-uploading videos, the website may be exempted from liability when deleting the infringing content on the notice, and that is the so called copyright safe harbor rule. However, the video website may not enjoy such right in practices, who are tend to be judged of infringement and related liability even the content involved has been deleted on the notice.

That’s mainly because the infringing content is usually the film or television programs with play time of more than half hour and expensive manufacture cost, therefore, the copyright owner is not possible to upload their own for free streaming, and the court hereby determines that the website shall be obliged to examine its content. In U.S.A., the uploading of the video longer than 15 minutes was banned by Youtube, the biggest also the very first video sharing website, for a long time, which is considering the copyright protection. Nevertheless, such limitation has never been adopted by domestic video website in China.

II. Could Kang Xi Lai Le be legally protected in mainland China?

Currently it’s still regulated by the State Administration of Radio, Film and Television (the “Administration”) that any overseas television programs or film shall be examined before broadcast in China, including those streamed on the internet. For this reason, the broadcast of the show shall first get the administrative approval from the, then what if no approval had been got by Tudou, could the show be protected? The answer is definitely yes!

For this problem, WTO once ruled on the IPR dispute in 2009, which followed China ’s revision on its Copyright Law that originally regulated that any works published or broadcasted illegally shall not be protected by law. So Tudou’s copyright over the show could be protected by law even when no official approval on the import had been made.

III. What’s the compensation standard for the cyber infringement against the show

The sharp gap between the consideration for the cyber copyright purchase and the compensation amount is quite interesting. One episode for Kang Xi Lai Le was only 10 thousand yuan 5 years ago, which was seen an astonishing increase in the coming years. Considering Tudou has paid tens of millions for the exclusive cyber copyright, the unit price of each episode could be no less than 100 thousand yuan. Meanwhile, the compensation for a pirated movie could be judged to 200 thousand yuan, while 20 thousand yuan for each episode’s compensation could be satisfying to the attorneys. For the entertainment show like Kang Xi Lai Le, we think it’s encouraging shall the compensation could be 20 thousand for each episode

The rocketing price of the copyright is the direct consequence of the commercial competition, under which a good program will be sold at a good price. For the decreasing compensation, it’s mainly for the development of the internet right protection industry, in which many lawyers involve in the case with contingent fee, and that leads to the sharp increase of the similar case in the court. Though the court is stressed out then, they still not dare to make the decision encouraging the infringement.

As to now, Youku has not deleted Kang Xi Lai Le yet. If we were the carrier of Youku, business to business, we would not delete such show either. First, the official action against infringement is over and the infringer has little risk of administrative punishment or license cancellation. Second, the sentenced compensation is most likely to be low and the trial may last at least half year, therefore it’s not late to delete such after the trial. And last, to put the disputed show on its website could not only bring the page view but also a combating measure to the competent. And that, in Bridge IP Law Commentary’s opinion, may be the so called Gresham’s law in economy.

For the other post of the series comments on this copyright dispute, pls click here.

Other posts on our website:
1. The Actual Term of Trademark Registration in China
2. How to Apply for the Trademark Record in China Custom
3. How to improve the success rate of trademark registration in China?
4. Matters for Attention in Trademark Refusal Review in China
5. Introduction of China’s Legal System of Trademark Renewal
6. Introduction on the Regulations concerning the Capital Contribution in IPR or Domain Name in China
7. The Copyright Registration in China Could Be FREE?
8. China Copyright Protection Term Longer than EU’s?
9. Matters for Attention in the Patent Preliminary Injunction Application in China(I)
10. Matters for Attention in the Patent Preliminary Injunction Application in China(II)

Author: Mr. You Yunting
Founder & Editor-in-Chief of Bridge IP Law Commentary
Partner & Attorney-at-law of Shanghai DeBund Law Offices
Email: Bridge@chinaiplawyer.com, Tel: 8621-5213-4900,
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Bridge IP Law Commentary is a website focus on the introduction of commercial laws in China, especially the intellectual property laws. All the posts here are our original works. And all news or cases referred here are from public reports, and our comments or analysis are of due diligence, neutrality and impartiality, representing our own opinions only and are our original works. You may contact us shall you have any opinions or suggestions.

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