Infringement in Software Modification and Similar Activities

Issue 26,By Zhou Xiaobing,[Copyright]

Whatever civil, administrative, or criminal liability results from modifying copyrighted software, the basic, yet essential prerequisite is that such a modifying act be determined to be an infringement. For this determination, a few infringing circumstances need to be discussed.

(I) Acts of reproducing and disseminating another’s software

This appears to be a simple question: any unauthorized act of reproducing, publishing or disseminating via internet another’s copyrighted work is an infringement. Yet in specific cases, infringement may be difficult to find due to nebulous factual surroundings as in, e.g., establishing “un-authorization” in light of the controversial possibility of “de facto consent.”

The Copyright Law of China mandates assignment of copyright must be done in writing. However, there is no such mandate for licensing. As generally understood, one who uses the work of another must execute a license agreement. In the absence of a license, the parties may still be bound if contractual relations are sufficiently supported by material facts, e.g., by oral agreement, or de facto license, or even ex post facto consent.

(II) Acts of modifying another’s software and disseminating the modified software

This appears to be another simple question: any act of unauthorized modifying distributing or disseminating of another’s copyrighted computer software via internet would infringe upon the rights of the software proprietor, including the rights of reproduction, modification, distribution, or dissemination through the information network. Of course, it may also bear on the rights of signature, display, or the right of integrity, or other exclusive rights under copyright.

There is, however, a relatively special circumstance. The actor may bundle the computer software simply with other programs or plug-ins for dissemination. Does such an act infringe upon the right of the computer software proprietor to modify the software? Generally it is believed that it should not be determined to be an infringement of another’s exclusive software-modifying right, because the bundled programs are independent and can be separated from each other.  Also, the bundling and disseminating does not change the source program of the underlying computer software. If the bundled program or plug-in is run, which leads to a change to the source or target program of the computer software, then it is the users, not the bundler or disseminator, that executes that change. The bundling of programs and plug-ins will be discussed further in the following sections.

(III) The act of modifying the software by breaking the TPMs

Technical protection measures (TPMs) are effective technology, devices, or parts that prevent unauthorized viewing, browsing, or providing to the public through the information network any work, performance and/or audio/visual work. They can be divided generally into access-control measures and use-control measures. For acts involving intentionally bypassing or damaging the TPMs, the infringement determination should focus on whether the act damages or restricts the TPMs from taking effect, or whether it affects the ability of the TPMs to control access to or use of the software. A technical device that requires serial numbers to activate and use the software is an access-control TPM. If the software with this access-control TPM is modified so that it can be used without activation codes, then such a modifying act is an act that damages the TPM and constitutes a copyright infringement under the Regulation on Protection of the Right to Network Dissemination of Information of China. However, great controversies remain in the theoretical field regarding whether “it is copyright infringement to intentionally bypass or damage the TPMs.”

In some TPM-related cases, the actor, on the one hand, has acted to bypass or damage the TPM, and thereafter, has engaged in unauthorized copying and dissemination of the work protected by the TPM. Generally, the court judgment would hold that the unauthorized copying and dissemination constitute an act of copyright infringement. However, if the act of bypassing or damaging the TPM is separately determined to be an act of copyright infringement, then it is hard to explain this situation theoretically. In such a case, what exclusive copyrights have been infringed by such an act? Some theorists often compare TPMs to a lock that one uses on his/her property. If damaging the lock is one infringement and taking the property after damaging the lock is another infringement, then, can the same thinking be applied to understand the intentional bypassing and damaging of TPMs? Some theoretical papers say that the act of bypassing or damaging TPMs can constitute infringement upon the “things” in the “right of things”. However, the relationship between TPMs and the “things” in the “right of things” cannot be understood without further research.

In one interesting case, the defendant interfered with the plaintiff’s software setup program so that the plaintiff’s software could not be downloaded, installed, or used properly.  In that case, the plaintiff complained that the defendant had infringed upon its right to the information network dissemination of its computer software; however the plaintiff’s claim was not affirmed by the court. When discussing the case, I jokingly asked a colleague: if you are going to the newspaper office today to have your work published and exercise your right of publication, and I tie you up to prevent you from publishing your work, have I infringed your right of publication? The answer is very clear that my act is not an act of copyright infringement and does not infringe upon your right of publication. Similarly, only the unauthorized act of disseminating a work through the information network is an act that infringes upon the right of information network dissemination.  It does not infringe upon the right of information network dissemination to set up a software conflict and prevent the normal downloading of another’s software. This is quite similar to the previous issue of bypassing or damaging TPMs. Therefore, the simple act of bypassing or damaging TPMs, by itself, does not prevent the use or dissemination of the work, and should not constitute an act of copyright infringement.

There is also an opinion that employs the reasoning of “imminent infringement” to understand the act of bypassing or damaging TPMs: if the copyright owner uses a TPM, which is like a “lock” on his or her property, then an actor should be held liable they have broken the “lock” so that the copyrighted work can be snatched effortlessly by others, thus increasing the likelihood that the work will be infringed upon by the actor or the general public. This explanation is hardly relevant. It will not be further discussed here, as the explanation has been provided clearly in the Copyright Law and the Regulation on Protection of the Right to Network Dissemination of Information of China.

(IV) The act of solely providing programs or plug-ins to modify the software

This circumstance is different from the above acts mostly because the actor does not act to copy or modify the software copy written by another. According to Chinese law, it infringes upon a person’s copyright to maliciously manufacture, import, or provide others with devices or parts that are primarily intended to bypass or damage TPMs, or to deliberately provide technical services to others for the same purpose. Therefore, the act of providing “programs or plug-ins which are intended to bypass or damage the TPMs of the computer software of another” should constitute copyright infringement. Also, if the provided program or plug-in maliciously deletes or changes the electronic rights management information of the work, performance and/or audio/visual product transmitted to the general public through the information network, such an act may also constitute copyright infringement, unless such deletion or change cannot be avoided due to technical reasons. Moreover, if the actor provides to the general public through the information network any work, performance, and/or audio/visual product whose electronic rights management information has been deleted or changed without the authorization of the rights owner, that the actor knows or should have known, such an act is also copyright infringement. In fact, even if the Regulation on Protection of the Right to Network Dissemination of Information had not restricted such an act explicitly, the same conclusion can be drawn through deduction using other provisions of the regulation.

To view this from another perspective, the act of providing the modified program or plug-in may also be deemed as “contributory infringement,” which is combined with direct infringement to become joint infringement. It is provided in the Interpretation on Several Law Application Issues in Hearing Cases of Computer Network Copyright Infringement Dispute by the Supreme People’s Court of China that if the NSP (“Network Service Provider”) participates, through the network, in any copyright infringement by others, or abets or helps, through the network, others engage in copyright infringement, then the NSP, together with such other actors or the direct infringer, shall be held by the people’s court as liable for joint infringement. Shanghai Busheng v. Fly Network was just such an infringement of neighboring right case that involved P2P technology and was tried by the Beijing No. 2 Intermediate People’s Court. In the case, the court used this explanation to conclude that the NSP’s act of providing certain P2P software and services constituted infringement. Moreover, the Interpretation on Several Law Application Issues in Handling Criminal Cases of Intellectual Property Rights Infringement by the Supreme People’s Court and the Supreme People’s Procuratorate, effective on December 22, 2004, provides that anyone may be held as a joint offender in an intellectual property rights infringement crime if he or she knowingly provides others with loans, money, account numbers, invoices, certificates or licenses, or places for production or operation, or transporting, warehousing or import/export representation services, or other conveniences or assistance, used by others to commit a crime by infringing intellectual property rights.

In addition to the above provisions, the Implementing Regulations of the Trademark Law of China contain explicit requirements for contributory infringement, which were used by the Beijing No. 2 Intermediate People’s Court in the trademark infringement dispute against the Silk Market. Based on this, we can conclude, based on the lack of explicit legal provisions, that the “contributory infringing act” cannot constitute infringement in a common copyright or patent infringement dispute, except when the case involves a computer network copyright or trademark infringement dispute. In the opinion of this author, even if no provisions are available regarding the “contributory infringing act” in such common copyright or patent infringement disputes, the court may still, based on the circumstances of the case, control or restrict the contributory infringing act by employing the provisions of the General Rules of Civil Law regarding joint infringement.

(V) About the NCP and NSP

This question is worth further study, i.e. how to determine the liability of a Network Content Provider (NCP) that provides infringing software or unauthorized copies, and the Network Service Provider (NSP) involved in the transmission of the software.

In the opinion of this author, the NCP’s infringement liability should be determined using the doctrine of presumptive faults. The establishment of subjective faults should use “due diligence” as a criterion. The due diligence of the NCP has several different situations. It should be decided by considering the knowledge of common netizens and that of network companies, and should be less than that of the publisher.

The determination of the NCP’s infringement liability is mostly governed by the well-known “safe harbor” doctrine. However, there is still one thing to note:  the application of the doctrine is preconditioned on the fact that the NCP knew or should have known the content was infringing content. If, with other evidence, it is found that the NCP knew or should have known this, then it can be determined forthwith, without notification from the rights holder, that the NCP or the actor contains a subjective fault and should be liable for the damages. In Eleven International Music Companies v. Yahoo China, which involved neighboring rights infringement and was tried by the Beijing No. 2 Intermediate People’s Court, the court held that Yahoo China contained a subjective fault that led to the infringing result by virtue of its special search service; 1 Yahoo China’s actions helped others to infringe through the network; and thus, Yahoo China was liable for the infringement.

(VI) About the advertiser that bundles advertisements into the infringing software

Does the advertiser engage in infringement by bundling advertisements into the infringing software? If yes, then what legal liability the advertiser should be held liable for? These are very complicated questions. To decide these questions, we may start from the following perspectives: 1. The advertiser’s fault. Is there any evidence available that the advertiser knew or should have known that the software into which the advertiser bundled its advertisements infringed upon a copyright held by others, in order to determine whether the advertiser or is presumed to be at fault? 2. The nature of the advertiser’s act. Obviously, the advertiser does not intend to copy, modify, or disseminate the infringing software. But, does the advertiser’s act contribute to the infringement? This needs further study. 3. The harmfulness of the advertiser’s act. This question is significant. Although the advertiser’s act infringes or is improper, does it necessitate a restriction by legal means?

However, when considering this question, if we simply hold that the advertiser provides a drive for the wide spread use of the infringing software, this thinking is an economic analysis towards the market, rather than a proper criterion for determining infringement.

(VII) Comments on related issues and events

Sensibility and reasonableness often contradict or conflict with each other. Certainly, the law is a collection of reasonable social rules of conduct, and even if the law contains what is sensible, they are hidden deep in the reasonable rules.

For counterfeits and piracies, many are more willing to talk about the interest of the masses and the vertical comparison of intellectual property rights protection. In the opinion of this author, the interest of the masses that we now talk about is a totally different thing from the user’s interest as in the theoretical balance of intellectual property rights, or the social public interest. If we look further, we will see that these interests are divided into short-term interests and long-term interests, actual interests and potential interests. For the horizontal or vertical comparison of intellectual property rights protection, it is the opinion of this author that it does not bear much practical significance to blindly talk about the primitive accumulation by developed countries or to continuously argue that counterfeits or piracy are a necessary stage in the economic development. After all, depending on how a country has developed, whatever the difference is in economic development or science or technology between nations, global economic integration can never be stopped and the intercourse between and fusion of the legal regimes brought by such integration can never be avoided.

Some say that the purpose of piracy is to break the monopoly by companies that own the genuine software. To discuss this issue, we should first understand the Anti-Monopoly Law, but not use anti-monopoly as an excuse. We say that the Anti-Monopoly Law, in substance, protects competition, but not the competitors.  It restricts business operators from abusing their market dominance, but does not prevent market dominance from forming.  The Anti-Monopoly Law focuses on protection of free competition, and the competition law focuses on the protection of fair competition. Based on these legal realities, the relationship between the software rights holder and unauthorized software modifiers or pirates is never the same as the relationship between monopoly and anti-monopoly competitors.  Rather, it is about the relationship between the rights holder and the infringer.

Of course, whether these business operators are engaged in any act restricted by the Anti-Monopoly Law is another issue. But, it is never wise to blindly hate the powerful or the rich. The Anti-Monopoly Law has been implemented to lay sufficient legal basis against any monopolistic act. To attack monopolies by infringing their intellectual property rights is never a wise choice by a civilized man, nor does it add to the grounds that “infringement is always justified.”

1. The term “Special Search Service” is comparative to the “Common Search Service”, and refers to an internet information services provider that, at its own will, builds up works, performances, or audio/visual products in a systematic way by categorizing and listing them on the basis of search, sorting, and classifications.

About the author:

Zhou Xiaobing is a judge of the IP Division, the Beijing No. 2 Intermediate People’s Court.

 (Translated by Ren Qingtao)

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