Online infringement and ISP liability

The IP Dragon hasn’t been seen for 2 weeks now. IP Komodo wonders if his cousin might return soon and is worried about the mess, especially since IP Komodo tends to leave the remains of his lunch lying around...

Some interesting online IPR news IP Komodo has spotted:

Chinese authors accuse Baidu, China's biggest search engine of copyright violations, by its free online excerpts of unauthorized stories and books. On March 15, World Consumer Rights Day, more than 40 writers said in an open letter that Baidu stole their work and infringed their copyrights. Fang Zhouzi, (well-known for exposing academic fraud), told Xinhua that he could find almost all of his work in Baidu's online library. A welcome change to the parade of foreign complainants, IP Komodo thinks.

The State Level AIC is about to issue new regulations on internet IPR infringement aimed particularly at at tackling online piracy and counterfeiting. Evidence and jurisdiction will be covered, according to the vice Minister who announced it at the close of the National Peoples Congress session on Monday.

ISP takedown. Taobao.com, China's leading B2C website, announced on Monday that it will launch a campaign to stop online piracy and counterfeiting. The move comes after the site was labelled by USTR as a "notorious market". Last year, taobao.com deleted more than 5.7 million products involved in copyright infringement. Taobao will set up a special team responsible for checking for piracy and counterfeiting.

Guest post by IP Komodo Dragon

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Why Kaixin001 Might Not Be Too Happy About Its Victory Over Oak Pacific Interactive

Social media site Kaixin001's content was copyied by Oak Pacific Interactive (who owns social media site Ren Ren). It was put online under the domain name Kaxin.

Beijing No. 2 Intermediate People's Court ruled that Oak Pacific Interactive should pay to Kaixin001 400,000 RMB as compensation for damages, remove the copied content and stop using the name Kaixin (which means "happy") on the site. However Oak Pacific Interactive can continue to use the domain name Kaixin. So if you type in Kaixin, you will be redirected to the social media site of Ren Ren.

Read the Xinhua article via China IPR here.

A fair competition between social media sites such as Ren Ren (人人网), which focuses on internet cafe visitors and college students, and Kaixin001 (开心网), which caters to white collar workers, is laudable. However, one can pose the question about whether these two competitors reached their pole position, making use of the protection the Great Chinese Firwall gave them, de facto excluding social media sites such as Facebook and LinkedIn, is fair.

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China Appeals WTO DS 363 About Market Access of Copyrighted Goods

China is appealing the panel decision DS 363 (Measures affecting trading rights and distribution services for certain publications and audiovisual entertainment products) by the Dispute Settlement Body, in which many of the US allegations were uphold. According to the BBC, no documents with the grounds for the appeal have been released, yet.

How does a DSU (Dispute Settlement Understanding) appeal work?

• "A standing Appellate Body shall be established by the DSB. The Appellate Body shall hear appeals from panel cases. It shall be composed of seven persons, three of whom shall serve on any one case.": article 17 (1) DSU;
• "As a general rule, the proceedings shall not exceed 60 days from the date a party to the dispute formally notifies its decision to appeal to the date the Appellate Body circulates its report. In fixing its timetable the Appellate Body shall take into account the provisions of paragraph 9 of Article 4, if relevant. When the Appellate Body considers that it cannot provide its report within 60 days, it shall inform the DSB in writing of the reasons for the delay together with an estimate of the period within which it will submit its report. In no case shall the proceedings exceed 90 days." article 17 (5) DSU;
• "An appeal shall be limited to issues of law covered in the panel report and legal interpretations developed by the panel." : article 17 (6) DSU;
• "An Appellate Body report shall be adopted by the DSB and unconditionally accepted by the parties to the dispute unless the DSB decides by consensus not to adopt the Appellate Body report within 30 days following its circulation to the Members." : article 17 (14) DSU.

This case, DS 362, can be read in connection with DS 363. Restrictions of market access of copyrighted goods can be conducive to a copyright piracy rich climate.
Read Deng Shasha's article for Xinhua here.

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Well Known and Less Known Aspects Of Well-Known Marks

In the USTR 2008 Report to Congress on China's WTO compliance on page 4, one can read the following remarkable sentence:
"...the promotion of famous Chinese brands of merchandise using what appear to be prohibited forms of financial support, ..."

So it appears to be a prohibited form of financial support, but the USTR is not totally sure about it? First China was encouraged to protect well-known marks, and now that they do...? What is happening?

The USTR alleges that China subsidises Chinese "famous brands" by

• including cash grant rewards for exporting;
• preferential loans for exporters;
• research and development funding to develop new products for export;
• and payments to lower the cost of export credit insurance.

Hui Boyang, deputy director of the quality management department of the General Administration of Quality Supervision, Inspection and Quarantine, denies the claim. Read the Xinhua article by editor Sun here. Stan Abrams of China Hearsay has a nice blog 'There Are No Coincidences - trade edition', about the coincidence of the expiration of the textile deal between the U.S. and China and this new allegation.

What are famous brands or well-known marks?

Intellectual Property Rights has two pillars

• Copyrights regulated by the Berne Convention, which come into existence without any formalities at the moment of creation of a work;
• Industrial rights (also called "registered rights"), regulated by the Paris Convention for the Protection of Industrial Property, and which, generally, need to be registered before they are protected.

Well-Known Mark Exception To Second Pillar (the European Community has another exception, the unregistered Community Design right)

However, article 6bis Paris Convention prescribes to its members "to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods." So this means that marks that are well-known in a country are protected, whether they are registrated or not. Registration of these well-known marks has its advantage, as we will see below.

In December 2008 I mentioned that I would come back to Brad Luo and Shubha Ghosh's paper 'Protection and Enforcement of Well-Known Mark Rights in China: History, Theory and Future' (74 pages PDF) after finishing reading it. As I already expected it is a great paper.

Article 13 Trademark Law 2001 PR of China stipulates:

Where a trademark in respect of which the application for registration is filed for use for identical or similar goods is a reproduction, imitation or translation of another person's trademark not registered in China and likely to cause confusion, it shall be rejected for registration and prohibited from use.

Where a trademark in respect of which the application for registration is filed fdr use for non-identical or dissimilar goods is a reproduction, imitation or translation of the well-known mark of another person that has been registered in China, misleads the pub1ic and is likely to create prejudice to the interests of the well-known mark registrant, it shall be rejected for registration and prohibited from use.

Take note that transliteration is not mentioned as ground for to oppose registration or prohibit use of a mark.

Messrs Luo and Ghosh explain the advantage of registering your mark as a well-known mark in China: "the owner of the mark can exclude others from registering or using the mark, may it be reproduction, copying or translation, in goods of all types, similar or dissimilar, identical or non-identical. If a mark is unregistered and has been deemed as well-known in china, the owner can still avail itself of the accompanying protection by preventing the use or registration in similar or identical categories of goods. Notably, the 2001 CTL gives equal treatment and protection to owners of service marks and trademarks. Furthermore, the owner of a registered mark has the right to oppose the unauthorized registration and use of the mark by its agent or representative, thus enjoying an added protection for the owner where the agency relationship goes sour."

I could add that it is always good to have a mark registered in a country, including China, so that this factor may be taken into account when you want your mark be recognised as a well-known mark in another country. See in the joint recommendation below how this works:

The Standing Committe on the Law of Trademarks, Industrial Designs and Geographical Indications (SCT) has adopted a joint recommendation pages 1-12 (pdf) concerning provisions on the protection of well-known marks (June 7-11, 1999), which on its turn was adopted at a joint session of the Assembly of the Paris Union for the Protection of Industrial Property and the General Assembly of the World Intellectual Property Organization (WIPO) (September 20-29, 1999). The provisions on the protection of well-known marks do apply to conflicting marks, business identifiers and domain names, but not to geographical indicatitions nor appellations of origin.The International Bureau of the World Intellectual Property Organisation (WIPO) made some explanatory notes pages 13-20 (pdf) about the joint recommendation. the SCT has agreed that the notes will not be submitted for adoption by the Assembly of the Paris Union and the WIPO General Assembly. In cases of conflicts between the provisions and the notes, the provisions would prevail (paragraph 17 document SCT/2/5).

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