Case 14
Infringement of Network Dissemination of Information Right in Light of “Three Network Commingling”
Trial Docket: (2017) Zhe0192MinChu No. 400
[Headnotes] The key to make determination in such disputes is to properly define position of each business operator in light of the “Three Network Commingling.” The network dissemination of information right to provide works to the public by cable or wireless means so that the public may get the work at a preselected time and location, in which “provide” is the source of infringement. From this perspective, if this act is infringing, then examination is made as to acts of other entities.
In finding joint activities of providing, the standard should be more strict for direct infringement, while it should be relaxed for contributory acts. In other words, when considering whether another entity has collaborating relations, it may be taken into consideration of web indications, division of fees, or promotional information, etc. Under the more likely than not standard, such collaboration would constitute joint infringement.
[Synopsis] Plaintiff: Leshi Internet (Tianjin) Information & Technology Co., Ltd. (LeTV)
Defendant: Inphic Electronics Co., Ltd. of Shenzhen (Inphic); WASU Media Network Co., Ltd. (WASU)
LeTV claims that it owns the exclusive right of dissemination for the video work of The Flowers of The War; and that the two defendant without permission in their jointly operated “INPHIC i6 STB” (Set-Top Box) platform provide Internet online broadcast services to the public, in violation of the legitimate interest of plaintiff, seeking injunctive relief and compensatory damages plus reasonable cost in the amount of 100,000 Yuan.
Inphic argues that it merely provides the STB hardware, but the assembled platform and service contents are all controlled, operated on, and managed by WASU; the dissemination of the works at issue is implemented by WASU beyond its knowledge and control. Under the Sony Doctrine (Substantial Noninfringing Use Doctrine), it is not liable for any infringement, and requests dismissal of plaintiff’s claims against it.
WASU argues that the online selection of programs is done through Inphic STBs, and since it is not an operator of the STB, it cannot be a defendant in this case. Besides, plaintiff claims unreasonably excessive amount of damages. The monthly sale of STB is very low with few clients and the impact is very limited. When the STBs are used for selection, it is well beyond the hot item period. Moreover, it is not recommended, not placed in a prominent location, no fee charged, no advertisement, and no serious bad faith. Therefore, it requests the court to dismiss all the claims.
The Internet Court of Hangzhou at trial finds that key issue in this case is whether the two defendants have infringed LeTV’s right of dissemination, and if so, how much damages they should be liable for. Upon examination, it is found that Inphic is the manufacturer of STB hardware, and WASU is the operator for the TV programs assembly manager and content service provider. According to Article 3, item 5 of The Mandates of Operation and Management for Organizations Holding Internet TV Licenses issued by State Administration for Radio, Film and Television (SARFT) WASU as operator of contents service platform fails the duty to verify the contents stored in its servers. Therefore, as service provider, WASU has infringed the network dissemination of information right for the work at issue and should be held liable for it. Inphic is the manufacturer of STB hardware, having no control over the platform’s broadcast contents, and does not share in the income of the broadcast, whose rights and obligations may be determined as exonerated in reference to Internet service provider under the “Safe Harbor” rule. Although the word “INPHIC” and its website location is displayed in various places, yet it is not inappropriate for a hardware manufacturer to do so on STBs. The case is settled under the court mediation.
[Judge’s Comment] The three net works of telecommunications, broadcasting and Internet have shown more and more consistencies in technical functions while technology progresses, and their business overlaps over one another. Most litigation cases involve multiple parties, some of which have multiple identities. In such cases, the court should carefully interpret the definition of network dissemination of information right under Article 10 of the Copyright Law by finding the source of infringement as an operator who by uploading the work to its server and providing it to the public in one way or another has individually and directly infringed the network dissemination of information right, then go on to determine whether another has committed contributory infringement for joint liabilities.
Apart from this, other parties may be considered under “notice + deletion.”
(1) Finding of a Direct Infringer
Generally, direct infringement of network dissemination of information right to a work is found where an Internet service provider uploads unauthorized work onto its server without statutory exonerations. In the new type of “Three Network Commingling” cases, it is the view of this author that whatever technical means should not be used in determining whether it is lawful to disseminating another’s contents from the accused platform. The source of any infringing act must be the uploading of a video work to a server and then deliver it to the public by whatever technical means.
Therefore, once this source is clarified for infringement issue, you get the harness of the ox, and the rest is a piece of cake.
(2) Fi,nding of Collaboration
For treatment of joint activities of Internet service providers, an important factor of consideration, in reality, is whether there is objectively any joint provision of works and sharing of interests. If the operating assembly platform merely provides search, link or hyperlink services, which does not constitute direct infringement of a copyrighted work, it should be treated by “notice + deletion”
rule. If, however, the operating assembly platform by its own will has conducted compilation, categorization and push of the contents to public for easier search of the infringing work, it is then reasonable to hold that there is knowing intention for the infringement with substantial assistance, and joint liabilities for the infringement should be imposed together with the contents platform. Moreover, if two parties have reached agreement and conducted pushing, or clearly agreed on the percentage from click rates, or use mega data to extract potential customers, then subjective intentions are present for collaboratively provide the work in joint infringement without finding negligence as needed for establishing contributory infringement.
(3) Liabilities for Hardware Manufacturers
A manufacturer of hardware provides the channel for Internet dissemination, but a software provider may control the traffic of the network dissemination of information. For this reason, a hardware manufacturer generally does not take the liability for infringement of network dissemination of information right. But in reality, it is not always possible to separate a dealer of hardware from one of software. Then, if a client merely has inserted information locator service in it, and provides automatic search link, it can be exonerated under the “safe harbor” doctrine. But if it has the aforementioned collaborative relations with the contents provider for the contents in its devices, it then should be liable for contributory infringement.
（Translated by Zheng Xiaojun, Yuan Renhui)
.jpg)