Highlights: The online literature in China is jeopardized by piracy. And for the safe harbor rules and massive uploading by netizens, such long-standing could not be effectively combated. Bridge IP Commentary will make analysis on such phenomenon.
In 2010, Shanda Literature (“Shanda”) sued Baidu over pirated literature works on mobiles net and its refusal to delete such works upon the complaint from Shanda. To Shanda’s claim, Baidu holds that it has removed the infringed part while others are examined of no infringement, and it shall take no liability hereby. Baidu was sentenced to take the liability in first instance, and then appealed but withdrew the suit at the end. Thus Baidu shall compensate Shanda RMB 500,000 yuan by the effective decision of the hearing. In this essay, Bridge will analyze the case and legal issues concerning the development of the original literature on the internet in China.
There are many literature fans in China, however for the rigor examination system of the publishing, many talented writers choose to publicize their works through internet. Therefore it has brought up many online platforms of literature, and Shanda takes the leading position among these webs. In the case mentioned above, though Shanda finally won the lawsuit, it takes almost one year of the hearing and the compensation is not equivalent to the registered capital of Baidu, and that highlighted he copyright dilemma of the online literature. For these, Bridge makes the following analysis:
I. The profit model of literature website is single and fragile, thus lead to the flood of infringement and prevention difficulty
The main and also the most widely adopted profit model of online literature is charged reading, which originates from Shanda, and under such model the first part of works is available to readers for free, while to view the second half or the latest chapters demands payment of RMB 2 cents for every 1000 words.
It’s obviously that the charging is quite low, for instance, to purchase a novel of 200,000 words will only cost subscribers RMB 2 yuan. Nevertheless, investigation shows that more than 90% users have made no payment for the online reading. That makes the company get embogged in the poor profit behind the apparent prosperity, and Shanda has delayed its IPO for the low profit ability（More details in news:http://www.chinadaily.com.cn/micro-reading/tech/2011-07-30/content_3353884.html）.
All these do not mean there’s no paid-reading habit for Chinese users, rather it mainly relies on the wide-spreading piracy. The website’s technical measures against piracy over the charged content, like DRM, literatures in pictures with watermarks, special script for the identification avoidance, are vulnerable and could be easily cracked down by the easy copy method of manual typewriting. Furthermore, the popularity of the mobile devices facilitates the spreading of the pirated work. A novel could be easily got by the public with the aid of forum, P2P software, search engine, and that puzzles the author or copyright owner a lot.
II. The dilemma of right protection
The right owner or the website providing copyrighted works may face difficulty when confronting the infringement, and the main reasons are as follows:
1. The crackdown of small infringing web leaves no influence on the flooding infringement.
There operate amounts of small literature website of low establishment cost, which mainly focus on the collection of pirated literature to attract the flow. It’s obviously kind of direct infringement, which is regulated against by laws. But such websites lack the compensation ability which may cause enforcement difficulty even the obligee wins the lawsuit. Furthermore, the small website will soon be retrieved and robust after being shut down. Even so, we have noticed some operators of the infringing webs have been sentenced imprisonment, like 4 years in jail for the founder of www.yunxiaoge.com, unfortunately it still could not stop the increasing online infringement.
2. The right owner’s claim of compensation may not be supported for the safe harbor rules.
The IT giant experienced in the exercising of safe harbor rules is a much tougher opponent. Though claiming to be a search engine company, Baidu also has the products of Tieba, Wenku and Zhidao under UGC model, which are uploaded with many infringing products by users, in such case, Baidu may claim it only provides storage space for the liability exemption under the safe harbor rule. As stipulated in laws, if only Baidu has made no active edit or recommendation on the infringing content and deleted such information on the notice from the right owner, it shall take no liability for once existed infringement. Actually, such infringing information is difficult to completely removed and soon retrieved for the daily uploading by great number of netizens in China. All of these add fuel to the firing online infringement.
Under the current judicial conditions in China with low compensation tend to be supported, it’s hardly to expect the instant improvement on the right protection over internet copyright. And new model of profit shall be developed for the sustainable development of the literature webs, for example, the cooperation with film makers or online game companies to adapt or license the original works. And there are also successful cases of The Adventures of Three Tomb Raiders and Jade Dynasty. We believe with such new attempt more business opportunity will turn up in the industry.
Copyright reserved by Mr. You Yunting
Founder & Editor-in-Chief of Bridge IP Commentary
Partner & Attorney-at-law of Shanghai DeBund Law Offices
Email: Bridge@chinaiplawyer.com, Tel: 8621-5213-4900,
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Bridge IP 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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