How to Handle Overlapping of Copyright

Qin Yuanming,[Copyright]

Qin Yuanming
Presiding Judge of the Third Civil Division (Intellectual Property Court) of Supreme People’s Court (SPC)
 
 
The 5th "China IP Judges Forum" organized by China IP was held on January 13 , 2019, focusing on the topic of "Probe and Study of Cutting- Edge Judicial Issues" with the participation of dozen s o f renowned IP judges and scholars to share their views and wisdom on the hot topics of cutting edge issues in judicial practice of IP. This article is compiled on the basis of the speech by Qin Yuanming, presiding judge of the Third Civil Division (Intellectual Property Court) of Supreme People's Court (SPC), entitled "The Overlapping and Related Legal Issues of the Copyright Law and Unfair Competition Law."
 
In the entire judicial practice of intellectual property matters, the number of copyright cases are the most, with tremendous impact. Every right enumerated under copyright relates to people's life in every respect, a far cry from what many believe relates only to works of arts. As to its importance, the copyright occupies a major key position in the entire IP judicial realm. The overlapping issues of the Copyright Law and the Unfair Competition Law has always been disputed in the IP circle, which became a hot spot again due to a recent case of a fan-fiction in Guangdong.
 
Branch of IP Law in relation to Unfair Competition Law
The Copyright Law is closely related to Unfair Competition Law. In the Treaty for Establishing World Intellectual Property Organization, it was mentioned that intellectual property rights (IPR) encompass prohibition of unfair competition, apart from works, inventions, indicia, copyright, patent and trademark. That China promulgated the Unfair Competition Law in October 1993 was precisely the result of the 1992 Sino-American memo of understanding for the protection o f IPR, which required that China crack down on unfair competition activities. In fact, all three major IP laws originated from the trade disputes with the US or from the pressure from the US. In the past two decades, the legislative motive of China's IP laws shifted from external to internal drive, such as the recent revision of the Patent Law and the Copyright Law due to the need of China’s economic development.
 
As to the relations between the Copyright Law and Unfair Competition Law, scholars hold many views which could summed up as follows:
 
One view favors independence. According to this view, the Copyright Law, though closely related with the Unfair Competition Law, is different from the latter in terms of legislative intents and purposes, and never overlaps with the latter. Theoretically, all IPRs, including patents, trademarks and copyrights, are basic rights defining the range of protection for their owners and subject matters; while the claims of unfair competition are derived from litigation , relating to assertions which are passive and not compulsively exclusive. For example, trade secrets take up the bulk of unfair competition case, but the Law does not preclude others from holding similar trade secrets, and trade secret, once disclosed, loses its protectability.
 
The other view favors supplementation. According t o this view, the Unfair Competition Law is an organic component in the institution of the intellectual property regime, and a catch-all protection of IPR, constituting interactive relations with IP laws. Prof. Zheng Chengsi made an analogy of patent, trademark and copyright as icebergs floating on the ocean whereas the Unfair Competition Law is the water that keeps the iceberg afloat. He believed that the two were a unibody. Prof. Wu Handong also took the view that Unfair Competition Law is to protect the intellectual fruits of the competition law. From the perspective of subject matters, the Unfair Competition Law protects patents, trademarks, and copyrights from misuse, and prohibits the right holders from using these subject matters for unfair competition; meanwhile, it also covers the interests left out by the three statutory IP laws, such as trade dress, corporate names and business names, etc. Therefore, the Unfair Competition Law compensates intellectual property systems, including the Copyright Law.
 
Qin Yuanming holds the opinion that the right to claim unfair competition is not derived from IPR, and is gravely different from copyright, patent right or trademark right. It is a very negative right that exists in litigation only, but the Unfair Competition Law is still part of the IP regime. From the perspective of right holders and legislative intent, the various branches of IP laws are laws about rights, while Unfair Competition Law is a regulatory law on behaviors, with a great gap between the two. They are neither special law and general law relation, nor genus and species relation. The IP laws define basic rights, signifying exclusive rights and rights to exclude by centering around rights, and they are private laws. The IP regime has the function of social management, but a single right alone (e.g., a single patent , trademark or copyright) may not be enough to play the role of social management. Unfair Competition Law, is primarily purported in its legislative purposes to curtail unfair competition and maintain fair competition in the marketplace, which exists as a claim of damages. From the jurisprudential development perspective, the competition law is part of the traditional economic l a w ; and from the contents of the competition law, it contains public law provisions such as commercial briberies.
 
In view of the complicated relationship between Copyright Law and Unfair Competition Law, great care must be taken in judicial practice when handling cases involving both copyright and unfair competition claims.
 
The joinder of applicable Copyright Law and Unfair Competition Law
Joinder of crimes refers to a single criminal offense covered by two or more criminal provisions, but only one crime could be prioritized as applicable in punishment, which is unique in criminal justice. Take the theft of fire arms for example: A criminal, in stealing a gun, commits both the crime of a theft, and a theft of fire arms. A theft is a common crime, applicable in many places; but theft of fire arms is a specialized crime. Therefore, in applying punishment, a judge may only impose punishment for the crime of stealing fire arms, and not two punishments both for the theft and for the theft of stealing fire arms.
 
Imaginative joinder of offenses refers to a single criminal act that may give rise to multiple causes of action, but statutorily these causes do not overlap. A imaginative joinder of offenses encompasses felonies and misdemeanors, and the absorbing relationship of general provisions and special provisions. For example, a criminal suspect committed a murder with a gun. The bullet, while hitting the victim, went to damage the surrounding works of art or public facilities. He would be guilty of two crimes: murder, and crime of destroying works of art or damaging public facilities.
These two causes of action are defined under different criminal law provisions, for which a court may impose penalties only on murder, rather than on crime of destroying works of art or damaging public facilities. In civil cases, a joinder may involve much more complicated relationships.
 
Joinder of liabilities refers to a single wrong which meets several statutory liabilities , resulting in multiple forms of liabilities. Joinder of crimes and imaginative joinder of offenses both refer to a single offense satisfying multiple statutory provisions under which the cause of action may be brought.
The provisions may be under a single statute, or under separate statutes. Joinder of crimes is premised on a single offense, for which the juncture or overlapping exists at the beginning of legislation. A judge merely faces the question of selecting the statutory crime. Whereas, imaginative joinder of offenses has nothing to do with statutory provisions. A plaintiff may wish to throw in as many causes of action and statutory provisions as possible, and by imaginative joinder of offenses to assert one to maximize his litigation gains. But the judge could rely on one particular statutory provision only , to avoid multiple remedies.
 
The above are the understandings of joinder of crimes and imaginative joinder of offenses in criminal law. What about the joinder of copyright infringement and unfair competition in civil areas? There is a prerequisite, viz. the alleged infringing act is covered by both the Copyright Law and Unfair Competition Law, and the same act would be both an act of copyright infringement and an act of unfair competition. For copyright infringement, the right or interest asserted by claimant must be based on a work satisfying t h e s t a t u t o r y requirements under the Copyright Law for work, copyright and other legal rights. The Unfair Competition Law provides for product names, packaging, and trade dress in Article 6, para. 1, for corporate names, social entity names, or personal names in para. 2, and domain names in para. 3; Article 11 provides for false information.
 
A joinder is possible only if an act is considered to satisfy Articles 47 and 48 of the Copyright Law, and Articles 6 and 7 of the Unfair Competition Law and the infringing act must relates to intellectual fruit as either a product name, or packaging, or trade dress, or a corporate name, a domain name, or other false information, which must also meet the requirement for copyrightable works.
 
Yet injudicial practice , a claimant's assertions would not be affected whether or not there is imaginative joinder of offenses arising from one act of infringement. In other words, a claimant is able to claim copyright infringement as well as unfair competition against a single infringing act. This is in conformity with the Supreme People's Court's requirement on causes of action that it would be more than normal to include multiple causes of action in one case. However, the remedies are different under Copyright Law and Unfair Competition Law, where an injunction issued under Unfair Competition Law may target only the act under litigation, but a copyright injunction may be applied to any kind of act.
 
Moreover, take the remedy as an example. The Copyright Law provides in Article 49 that damages can be assessed to include actual losses, unjust enrichment, and also statutory damages, and for sure, punitive damages upon the third revision though not certain as of yet as to 1 to 3 or 1 to 5 times punitive damages or the maximum of 3 or 5 million Yuan. But under Unfair Competition Law, the maximum of 3 million statutory damages would be possible only under Article 6 (corporate names and indicia), and Article 9 (trade secrets).
 
From the perspective of administrative enforcement, the Copyright Law is also different from Unfair Competition Law. Under the former, the administrative authorities may intervene only when injury to public interest is involved; while the Unfair Competition Law does not set a threshold for administrative investigations against unfair competition activities.
 
Issues of applicability of Copyright Law and Unfair Competition Law in Internet environment
In the current Internet environment, an IP judicial practitioner must adhere to the principle that the rights are statutorily defined, for any new IPR or interest must be carefully considered for its impact on the nature of intellectual property laws, factors, type of rights and scope of protection.
 
As generally known, the Berne Convention was achieved after many years of negotiation among the countries, in which the rights, with their connotations and extensions, and the type of works, were not made protectable per se.
Similar was the applicability issue of Article 2 of China’s Unfair Competition Law. The SPC once pointed out, if an issue for protection has been exhausted under the Copyright Law, it may not be reached again under the Unfair Competition Law.
 
The legislative purpose o f the Unfair Competition Law is to maintain fair market competition, but in any given IP case, it is quite a difficult task to determine whether IP infringement is an injury to a particular party’s interest, or i t is a detriment to social orders or the orderly market competition . In the current Internet environment, when a new type of IP interest emerges, hard pressed to be taken as a work, and the infringement of which does not square with the explicit behaviors specified in the Unfair Competition Law, can a judge generally apply Article 2 of the Law? It is a question deserving careful study and reflection, and a test for IP judges' wisdom.
 
(Translated by Zheng Xiaojun)
1 Compiled by: Zhang Yixiang, Liao Fenghua, China IP

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