From the international perspective, on the surface there is not a consensus yet concerning secondary liability of copyright infringement: None of the major international conventions or treaties, such as the TRIPS Agreement,52 the Berne Convention,53 the Rome Convention54 or the so called “WIPO Internet Treaties” (WCT and WPPT),55 provides any provision on this issue. However, a closer and more in-depth look reveals a very different picture: Secondary liability for copyright infringement has become not only a common, but indeed one of the most critical issues that every nation must grapple with, regardless of the legal tradition of a given nation, be it continental (civil) or common law. There is clearly an international trend emerging, treating secondary liability just as serious as, if not more than, direct infringement liabilities.
For instance, in Japan, the Supreme Court has recognized indirect infringement liability since 1988.56 On peer-to-peer issue, the Tokyo High Court on 31 March 2005 affirmed the Tokyo District Court’s decision in Nippon Columbia, Co., Ltd., et al. v.
Yugen Kaishia Nippon MMO, holding that both the defendant company (which provided the so called “file rogue” peer-to-peer services) and its president Michihito Matsuda are liable for secondary copyright infringement and that the Limited Liability Law of Internet
52 Agreement on Trade-Related Aspects of Intellectual Property Rights, as Annex 1C of the Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations (Marrakesh, 15 April 1994)(Final Act), MTN/FA-A1C, 1869 U.N.T.S. 299, 33 I.L.M. 1125 (1994).
53 Berne Convention for the Protection of Literary and Artistic Works (1971 Paris Text), 828 U.N.T.S.
223 (1972), as amended on Sept. 28, 1979, WIPO Document AB/X/32 (1979).
54 International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, done at Rome on October 26, 1961, entered into force on May 18, 1964, 496 U.N.T.S. 43 (1964).
55 World Intellectual Property Organization (WIPO) Copyright Treaty (WCT), adopted in Geneva on December 20, 1996, 36 I.L.M. 65 (1997); WIPO Performances and Phonograms Treaty (WPPT), adopted in Geneva on 20 December 1996, 36 I.L.M. 76 (1997). Note that WCT entered into force on 6 March 2002, see WIPO Copyright Treaty Notification No. 32 (6 December 2001); whereas WPPT entered into force on 20 May 2002, see WIPO Performances and Phonograms Treaty Notification No. 32 (20 February 2002).
56 Case 1984 (o ()) No. 1204 on the infringement of copyright by the singing at a karaoke outlet (Supreme Court judgment of 15 March 1988), Minshu, vol. 42, No. 3, at 199 (a/k/a the Club Cat’s Eye Case). The Supreme Court held that although the karaoke bar has paid a fee for the production of music tapes, it has nevertheless infringed the performing rights by allowing the hostesses and other employees and customers to sing, accompanied by the copyrighted karaoke music. This is known as the Japanese Dance Hall case. See also The Karaoke Equipment Leasing Case, Osaka District Court judgment of 17 May 1994, Hanrei Jiho, No. 1516, at 116; and
“Sangokushi III” case, Tokyo District Court judgment of 14 July 1995, Hanrei Jiho, No. 1555, at 218.
Intermediary Services does not apply.57 Using the concept of “expanded scope of users,”
the High Court held that the defendants’ acts amounted to users-in-fact, and rendered the defendants “indirect joint tortfeasors” to the copyright infringement.
In the Republic of Korea, the Seoul High Court in Asia Media, Inc. et al. v. Yang, et al. (commonly referred to as the Soribada case) generally affirmed its Suwon District Court’s decision that the peer-to-peer service has indirectly infringed on the copyrights of members of the Recording Industry Association of Korea.58 While holding that the user’s collective, direct downloading of unauthorized MP3 music files onto a computer hard drive constitutes infringement of the right holder’s reproduction rights, the individual conversion from the original CD music to MP3 format and for personal consumption may qualify as fair use under Section 27 of the Korean Copyright Law.
The High Court sought to clarify that Soribada does not constitute a “joint tortfeasor”
under Section 760, Paragraph 1 of the Civil Code, since the mere connection to its service as a necessary step to complete the music download is insufficient to suggest that Soribada has engaged in the “meeting of minds” with all of its users to accomplish the tort.
On the other hand, the court indicated that the defendants knew that its users are engaged in illegal copying, nevertheless installed and improved the Soribada services to make the acts more easily but failed to take any actions other than merely posting a warning label on its website. The case has been appealed to the Supreme Court of Korea.59
57 Case 2004 (Ne ()) No. 446 on Copyright Infringement and Damages (Tokyo High Court Judgment of 31 March 2005). The district court judgment can be found at 2002 (Wa ()) Case No.
4249 (Tokyo District Court, 29th Civil Division, interlocutory judgment of 29 January 2003). See also Article 113 (2) of the Copyright Law of Japan: “An act of using on a computer, in the conduct of business, copies made by an act infringing copyright in a program work (including copies made by the owner of such copies in accordance with the provision of Article 47bis, paragraph (1) as well as copies of a program work imported as mentioned in item (i) of the preceding paragraph and copies made by the owner of such imported copies in accordance with the provision of Article 47bis, paragraph (1) shall be considered to constitute an infringement on that copyright, so far as a person using such copies is aware of such infringement at the time when he has acquired an authority to use these copies.”
58 (2003) NA 21140 on opposition to injunction (4th Civil Division, Seoul High Court), affirming Case No. (2002) KAHAP77 (Suwon District Court, Seongnam Branch, First Civil Department, 9 July 2002). In a separate decision, the Seoul High Court held that the two founding members of the service, Yang Jung-hwan and Yang Il-hwan (brothers), were not criminally or personally liable for the infringement. See Case No. 2003N04296 on copyright infringement (5th Criminal Division, Seoul Central District Court, 12 January 2005). These cases have been referred to as Korea’s Napster case (although technically the two are not quite similar) and received widespread attention in the copyright community of the Asian region and elsewhere. The Korean word소소소소 (soribada) means “sea of sound.”
59 Meanwhile, the Seoul Central District Court issued another injunction against one of defendant’s
In South Africa, Section 23 of its Copyright Act of 1978 specifically provides secondary infringement liabilities, although later judicial opinion holds that it is also necessary to demonstrate the knowledge of guilt on the part of the infringer.60
In Australia, the Copyright Act clearly recognizes secondary infringement liability, and the federal courts have confirmed that as well.61 With regard to peer-to-peer services, the Federal Court in Australia in its very first such case, Universal Music Australia Pty Ltd. v. Sharman License Holdings Ltd., which involves the popular peer-to-peer software known as KaZaA (or Kazaa), held that Kazaa’s owners and distributors (altogether six of the ten defendants), led by defendant Sharman License Networks, Ltd., took no action to rein in illegal file-sharing despite posted warnings on their website urging Kazaa users not to swap copyrighted materials.62 The court found that each of the defendants was aware that a major use of the Kazaa system was the transmission of copyrighted material, and none of them had an interest in preventing or curtailing that predominant use; if anything, the contrary. Each of the respondents was at least acquiescent in the use of Kazaa for copyright-infringing activities. Similar to the U.S.
approach, Section 101(1) of Australia’s Copyright Amendment (Digital Agenda) of 2000 proscribes direct “authorization” of infringement. Here the court elaborated on this prohibition and developed a three-prong test on secondary liability:
(a) the extent (if any) of the person’s power to prevent the doing of the act concerned;
servers, coded as “Soribada 3,” that contain centralized indexing system. As a result, Soribada announced that it has shut down that service and dropped approximately 22 million of its subscribers effective 7 November 2005. See Soribada Shuts Down P2P Site After Court Verdict, CHOSUN ILBO (ENGLISH EDITION), 7 November 2005, available at
http://english.chosun.com/w21data/html/news/ 200511/200511070017.html.
60 Copyright Act No. 98 of 1978, as amended by the respective Copyright Amendments Acts, No. 56 of 1980, No. 66 of 1983, No. 52 of 1984, No. 39 of 1986, No. 13 of 1988, No. 61 of 1989 and No.
1125 of 1992, plus the Intellectual Property Laws Amendments Act of 1997. Section 23 provides, inter alia, “(1) Copyright shall be infringed by any person, not being the owner of the copyright, who, without the license of such owner, does or causes any other person to do, in the Republic, any act which the owner has the exclusive right to do or to authorize.” [Emphasis added.] See also Frank and Hirsch (Propriety) Ltd. v. A. Roopanand Brothers (Propriety) Ltd., 1993 (4) SA 279 (A).
61 Copyright Act of 1968, Act No. 63 (27 June 1968), as amended by the Copyright Amendment (Digital Agenda) Act of 2000, §§100, 101(1)(A), and 112(E). For the most recent decision on peer-to-peer problems, see also Universal Music v. Cooper, [2005] FCA 972 (14 July 2005). Here the Federal court held that the proprietor of the website (Cooper) was held liable for authorizing infringement by knowingly allowing others to place on his website hyperlinks to infringing material and encouraging website users to access infringing files via the links.
62 [2005] FCA 1242 (5 September 2005).
(b) the nature of any relationship existing between the person and the person who did the act concerned;
(c) whether the person took any other reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.63
The court further added, in addition to the above indicated statutory requirements, that “[k]nowledge, or lack of knowledge, is an important factor in determining whether a person has authorized an infringement.”64 Interestingly, in addition to holding defendants’ action (or the lack thereof) constituted infringement, the court imposed an affirmative duty on their part (despite their claim that the backbone of Kazaa’s
“FastTrack” technology carries no centralized server, hence they have no control over their users) to employ technical measures (such as a filtering mechanism) to ensure no copyrighted work is infringed.65
In the People’s Republic of China (PRC), the Beijing First Intermediate People’s Court (BFIPC) got its first taste of online copyright infringement in Wang Meng, et al. v.
Beijing Cenpok Intercom Technology Co., Ltd. (also known as the Beijing Online case) in 1999.66 Here the court affirms the lower court’s ruling that the defendant’s unauthorized posting of plaintiffs’ works on the Internet constitutes copyright infringement and the damage rendered by the lower court is appropriate. This is the third known copyright infringement lawsuit in the PRC concerning the liability of an Internet service provider.
Yet it has gained national prominence from the outset. The plaintiffs are all celebrity writers, the defendant is the leading Internet firm, and the outcome will no doubt have a profound impact on the future of e-commerce in the PRC.67 Instead of simply applying
63 Id., at ¶ 359.
64 Id., at ¶ 370.
65 While the appeal is pending (oral argument is scheduled for February 2006), on 17 November 2005, Judge Murray Wilcox further ordered the defendants to take active steps to screen out music files that contain key words within 48 hours since an updated list is provided by the plaintiffs. Unable to do so, Sharman closed down its services on 5 December 2005, the court-imposed deadline. See Universal Music Australia Pty., Ltd. v. Sharman License Holdings, Ltd. (with corrigendum), [2005]
FCA 1587 (17 November 2005).
66 [1999] First Intermediate Zhōng No. 185 Civil Judgment (17 December 1999). It needs to be pointed out that this case dealt only with direct infringement, albeit in the network environment.
67 For example, the lead plaintiff, Mr. Wang Meng, was one of most well-known writers/novelists in the PRC. The case gained more attention by the official Chinese Central Television’s national live broadcast of the entire trial on September 18, 1999. The names of the other five plaintiffs are: Zhang Jie, Bi Shumin, Zhang Kangkang, Zhang Zhi and Liu Zhenyu.
Article 2(1) of the Berne Convention (of which PRC is a member and such application would automatically supersede the PRC’s domestic law), the court took a more creative approach and literally stretched the meaning of the existing statute to its limits (or, arguably exceeding its limits) to encompass online publication within the scope of copyright protection.68 Section 10, subsection (5) of the Copyright Law states that the right of exploitation is “the right of exploiting one’s work by reproduction, live performance, broadcasting, exhibition, distribution, making cinematographic, television or video production, adaptation, translation, annotation, compilation and the like.”69 In the Chinese language, “and the like” in connotation can be either exclusive (i.e., after an exhaustive list) or inclusive. For instance, to describe that there are four factors that need to be considered in a given issue, it can be said that they are factors A, B, C, D and the like to be considered. However, it can also be said that there are elements A, B, … and the like to be considered.70 Sensing online publication was clearly not covered by the statute at the time, the court took on this language ambiguity by simply incorporating it into the scope of the statute. This issue was eventually addressed by the enactment of the Copyright Law of 2001.71
In light of the authorization granted by the 2001 Copyright Amendment, on 30 May 2005, the PRC began to implement the Regulations on Internet Copyright Administrative Protection, a new set of rules designed to clarify the liabilities of online service and/or content providers.72 Article 11 of this Regulation grants the governing administrative agencies, i.e., the National Copyright Administration and the Ministry of Information
68 Article 2(1) provides, “The expression ‘literary and artistic works’ shall include every production in the literary, scientific and artistic domain, whatever may be the mode or form of its expression ….”
Therefore, online publication can easily fit into this category as long as it meets other criteria for being copyrightable. Note that in later domain name disputes, recognizing the insufficiency of existing Trademark statutes, the Beijing court did go ahead with the application of Articles 6bis (concerning well-known marks) and 10bis (concerning unfair competition) as well as the PRC’s own Anti-Unfair Competition Law as primary authority in resolving the disputes. The court did not stretch any provision of the Trademark Law to cover domain names as a protectable subject matter.
69 Emphasis added. The original Chinese language for the emphasized words is deng (等). This is based on the official translation. See DOCUMENT AND ARCHIVE CENTER, NATIONAL COPYRIGHT
ADMINISTRATION OF CHINA, COPYRIGHT LAW OF THE PEOPLE’S REPUBLIC OF CHINA, at 54-55 (1993).
70 An analogy to this is the usage of “consists of” as opposed to “comprises of” with the former being exclusive and the latter being inclusive.
71 A newly added Subsection 12, which clearly makes reference to WCT and WPPT, expressly provide the exclusive “right of communications to the public” to the copyright holders. Section 58 further authorizes the State Council to implement measures over the protection of this exclusive right.
72 Its original Chinese name is: 互聯網著作權行政保護辦法. See Order No. 5 jointly issued by the National Copyright Administration and Ministry of Information Industries of the People’s Republic of China (30 April 2005). This set of regulations took effect on 30 May 2005.
Industry, the authority to impose administrative penalties on the service providers if and when they knowingly keep the copyright infringing materials on their services or, although without such knowledge, fail to take down such materials after being notified by the copyright holder, thereby causing damages to the public interest. In addition, Article 4 of the Supreme People’s Court Interpretation on Certain Questions Concerning Copyright Disputes Related to Computer Network provides, inter alia, states that a network service provider shall be a joint tortfeasor if it aids or abets others to engage in copyright infringing activities.73 These developments clearly indicate that both the courts and governing administrative agencies have now come to recognize both direct and secondary liabilities. While the Chinese Copyright Law has yet to formally address this issue, the overall trend nevertheless suggests that China may be inching toward recognizing secondary liability, particularly infringement in the online or network environment.
In Germany, while the German Copyright Act (Urheberrechtsgesetz, or UrhG) does not specifically touch on the issue, the Federal Supreme Court has repeatedly held that the organizer or promoter of a public performance of musical or literary works, or the proprietor or manager of a dance hall or a restaurant may be subject to copyright infringement liability for another party’s direct infringement, even though they themselves did not engage in such infringing activities.74 Both contributory and vicarious liabilities are principles well established by the German courts.75
The court in the Netherlands, however, has held otherwise. In Kazaa B.V. v.
Buma-Stemra, t