1. Illegal Copy of Cover Design of Yi Zhongtian’s Book “Commentary on the Three Kingdoms"

【Case Briefing】

Plaintiff: Shanghai Literature and Art General Publishing House

Defendant: Beijing Book Mansion Co., Ltd.

Defendant: People’s Publishing House.

In May 2006, Shanghai Literature and Art Publishing House, a subsidiary to the Plaintiff Shanghai Literature and Art General Publishing House obtained the exclusive publishing right through bidding for the book “Commentary on the Three Kingdoms” (Book I) written by the famous scholar Yi Zhongtian (hereinafter referred to as “Commentary on the Three Kingdoms"), and the book was published in the whole country in July, 2006. With major commercial operations by the plaintiff, this book became a best seller, with a total print of 1.4 million. In August, 2006, the plaintiff found the two defendants were publishing and selling the book “Biographies of Influential Figures of the Han Dynasty, Before Commentary on the Three Kingdoms” (hereinafter referred to as “Biographies Before Commentary on the Three Kingdoms”), which was quite similar to “Commentary on the Three Kingdoms” in the name, cover design, size, author signature and plate setting style, and therefore submit the case to the court on ground that the act of both defendants constituted unfair competition, demanding both defendants to stop infringement and to apologize, and to compensate the plaintiff for economic loss. For this claim, the defendant People’s Publishing House held opposite view that there was no competition relationship between the “Biographies Before Commentary on the Three Kingdoms” and the “Commentary on the Three Kingdoms”, and the two books were different in name and content and the cover design was made independently by the defendant. The similarity of thickness, size and fonts used by the two books were normal in the trade. These two books will not cause confusion on market and will not be mistaken by readers. Therefore, this act was not unfair competition.

【Result of Trial】

In the trial, the People’s Court of Huangpu District considered that the book “Commentary on the Three Kingdoms” is a famous commodity of the plaintiff, and the cover design of the book is specific of the known commodity of the plaintiff. The “Biographies Before Commentary on the Three Kingdoms” of the defendant is identical or similar to the “Commentary on the Three Kingdoms” of the plaintiff in appearance, design and size, and also in similar overall visual effect, which is sufficient to cause mistake by relevant consumers. This act has constituted unfair competition with the plaintiff. Therefore, the two defendants were ordered to stop the act of infringement, and the defendant People’s Publishing House should make an open apology on “China News and Publication” and compensate the plaintiff for economic loss of RMB 80,000 RMB yuan.

【Case Analysis】

I. The appearance of books is decoration of commodity

In (II) of Article 5 of the “Law of the People"s Republic of China Against Unfair Competition”, it is specified that operators must not use names, package and decoration specific to known commodities or use names, package and decoration similar to known commodities without authorization. The focus of dispute of this case is whether the appearance of a book is the decoration of commodity as referred to in this law. The court holds that the decoration referred to in (II) of Article 5 of the “Law of the People"s Republic of China Against Unfair Competition” covers the additional text, patterns, colors and their combined arrangement on the commodity or its package for the identification or beautification of the commodity. The cover, back and backbone etc. of the book “Commentary on the Three Kingdoms” form the appearance of the book and were created by the plaintiff independently, which contain text, patterns colors and their combined arrangement with strong and obvious features, therefore the appearance of the book is a specific decoration of a known commodity of the plaintiff, and should be protected by law.

II. Act of defendants has constituted unfair competition

It was found by the court in trial that before publishing the “Biographies Before Commentary on the Three Kingdoms”, the defendant People’s Publishing House published a book “Commentary of Influential Figures of the Han Dynasty by Yi Zhongtian” with the same content as the former, and the latter was in different name, appearance and plate setting style from the former. After the publication of the “Commentary on the Three Kingdoms” by the plaintiff, the defendant changed the appearance of the above mentioned book and deliberately used appearance and plate style consistent with that of “Commentary on the Three Kingdoms” of the plaintiff, so this act was sufficient to lead consumers to mistakes, believing that the two books similar in appearance have some links, or they are series works, or sister books, thus causing confusion on the market. In addition, the content of “Biographies Before Commentary on the Three Kingdoms” is about the history of early period of the Han Dynasty, with no relation at all to the history of the Three Kingdoms. Therefore, the practice by the defendant People’s Publishing House to use the name “Biographies of Influential Figures of the Han Dynasty, Before Commentary on the Three Kingdoms” for the book with the highlighted use of “Biographies Before Commentary on the Three Kingdoms” is sufficient to indicate its subjective intent to “get a lift”. Therefore, the court believes that the act of the defendant People’s Publishing House has constituted unfair competition with the plaintiff, and shall also take corresponding legal liabilities.

2. Selling of Counterfeit LEVI"S Jeans

【Case Briefing】

The plaintiff Levi’s Company is a US Company making and marketing garment, and has registered the trademark “LEVI"S” by law in China. Since July 2004, the defendant Zhong Xiaoying purchased from Guangzhou large quantity of fraud jeans, including those with the brand of LEVI’S, and sold them in four shops in Qipulu Market. In March 2005, the public security organ found that Zhong Xiaoying has sold over 38000 pieces of jeans with fraud registered trademarks, for an amount of over 1.65 million RMB yuan, including over 14500 pieces of counterfeiting LEVI"S jeans, for an amount of nearly 700,000 RMB yuan. The public security organ also found in the shops of Zhong Xiaoying over 28600 pieces of counterfeiting jeans in store, including over 12,000 pieces bearing LEVI"S brand. In January 2006, the People’s Court of Zhabei District sentenced Zhong Xiaoying 3 year of imprisonment with a suspension of execution for 4 years, with a penalty of RMB 40,000 yuan and confiscating the illegal income and the captured goods. In June 2007, LEVI’S Company brought in a lawsuit to No. 2 Intermediate Court on ground of infringement of trademark, demanding Zhong Xiaoying to stop infringement and compensate for economic loss of RMB 500,000 yuan, and publish a statement on “Xinmin Evenings” to eliminate the adverse effect.

【Result of Trial】

After trial, Shanghai No. 2 Intermediate Court considered that, the LEVI"S Company is the owner of LEVI"S registered trademark and the exclusive right of its registered trademark is protected under the law of China. As a business person of garment, Zhong Xiaoying sold the jeans with fraud LEVI"S trademark which she knew clearly. She infringed the exclusive right of registered trademark of LEVI"S, therefore should bear the civil liabilities to stop the infringement, compensate for losses and eliminate the adverse effect. Therefore, Shanghai No. 2 Intermediate Court ruled in Sept. 2007 that Zhong Xiaoying shall stop the infringement, compensate the LEVI"S Company for economic losses of RMB 500,000 RMB yuan at the legal maximum amount of compensation, and publish a statement on “Xin Min Evening News” to eliminate the adverse effect.

【Case Analysis】

This case is a civil damage compensation dispute from infringement of trademark dealt by the court after criminal punishment of Zhong Xiaoying for the crime of selling commodities with fraud trademarks. The “LEVI"S” brand jean and leisure garment series products from LEVI"S enjoy high reputation both at home and abroad. Zhong Xiaoying has obvious deliberate intent of infringement, with large amount of infringement commodities in store, therefore the court supported the request from the plaintiff at the maximum amount of compensation by law. The legal rights and interests of the trademark owner are strongly protected by the combination of criminal and civil means.

3. Infringement to Olympic Symbol by Local Paint Company

【Case Briefing】

On July 9, 2007, the Qingpu Branch of Shanghai Industrial and Commercial Administration found in daily law enforcement inspection that a paint company in Shanghai used the Beijing 2008 Olympic Games Emblem on the outer package of the its wood paint products without permission by the owner of the Olympic symbols, therefore the case was reported for investigation.

According to investigation, the paint company specialized in the production of various paint and coating materials. Starting from April 13, 2007, without permission from the owner of the Olympic symbols, it used the Beijing 2008 Olympic Games Emblem on the outer package of the wood paint cans of a number of varieties produced by it. When the case is revealed, the company concerned has got unlawful income of RMB 18738 yuan by selling such wood paint bearing the Beijing 2008 Olympic Games Emblem.

【Result of Disposal】

The Beijing 2008 Olympic Game Emblem is one of Olympic symbols referred to in Article II of “Regulation on Protection of Olympic Symbols”. The act of the company concerned using the Olympic symbol on its commodity package and container for the purpose of making profit without the permission from the owner of the Olympic symbols has violated the relevant regulation in Articles IV and V of the “Regulation on Protection of Olympic Symbols”. Therefore, according to the stipulation in Article X of the “Regulation on Protection of Olympic Symbols”, the Qingpu Branch of Shanghai Industrial and Commercial Administration imposed the punishment on the company concerned that the infringement act be stopped immediately, the unlawful income of RMB 18738 yuan be confiscated, with an administrative penalty of RMB 74952 yuan.

【Case Analysis】

This is a typical case of the local industrial and commercial administration exercising its legal duties to protect the exclusive right of Olympic symbols in daily inspections. As the 2008 Olympic Game will soon be held in China, the industrial and commercial administration in Shanghai conducted a series of active rectification actions for the protection of exclusive right of the Olympic symbols, to definitely protect the rights and interests of the owners of the Olympic symbols, making positive contribution to creating a favorable environment in Shanghai for intellectual property protection. The Beijing Olympic Games Organizing Committee also sent an official letter, expressing their “full confirmation and high appraisal on your administration in punishing infringement acts and protecting the Olympic symbols by law.”

4. Exporting Sewing Machines with Trademark Infringement to SINGER

【Case Briefing】

On April 28, 2007, Xingyu Co., Ltd. of Jinyun County, Zhejiang Province declared to Shanghai Customs for exporting to the Democratic Republic of Congo a batch of multi-purpose sewing machines in the form of general trade. The examiner conducted risk analysis according to the declaration information: First, Jinyun of Zhejiang Province is the area with concentrated sewing machine producers, and a number of producers have been found by the customs in exporting infringement sewing machines during recent years. Second, the destination of the goods is also of high risk in exporting infringement sewing machines. Considering these risk factors, it was believed that this batch of goods had high risk of infringement. Therefore the order to control the “possibility of infringement” was issued. Then, it was found after opening the container that this batch of goods included the heads and bases for 555 sewing machines with the fraud trademark “SINGER”, at a value of over RMB 230,000 yuan. The trademark owner confirmed that these were infringement products, and requested the customs to detain it.

After the suspected goods were detained, the officers made an in-depth investigation of the case. And after complete analysis and collection of full evidences, it was clear that the person concerned, Xingyu Co., Ltd. of Jinyun County, Zhejiang Province, not only directly signed foreign trade contracts with foreign firms and organized production of infringement goods, but also exported the infringing goods directly by its name. Moreover, this company was punished administratively by the technological supervision authority for producing sewing machines with fraud trademark “SINGER” before this case. After active investigation to get evidence, the written document on administration punishment on the company by the Technological Supervision Bureau of Jinyun County, Zhejiang Province was also obtained. In summary, the company concerned in this case has subjective deliberation to conduct this illegal act, and the case involves a large value and negative effect, with the suspicion of criminal commitment in intellectual property. Therefore, Shanghai Customs immediately finished the relevant documents and notified the Investigation Brigade on Economic Crimes of Shanghai Public Security Bureau according to the requirements in the “Tentative Regulation of the Ministry of Public Security and General Administration of Customs on Strengthening Cooperation in Intellectual Property Law Enforcement”. The case clue was then transferred to the Public Security Department of Zhejiang Province by the Investigation Brigade upon receipt of the notice.

【Result of Disposal】

After receiving the case notice from the customs on October 19, the Public Security Bureau of Jinyun County, Zhejiang Province agreed that the company concerned was truly suspected of crime, decided to conduct scouting of Xingyu Co., Ltd., and handled case takeover formalities with Shanghai Customs. At present, the Public Security Bureau of Jinyun County has undertaken Zhu, the legal representative of Xingyu Co., Ltd. upon bail, and further criminal scouting is under way.

【Case Analysis】

The Customs has increased the power in combating infringement acts in intellectual property protection, and enhanced the contact and cooperation with the public security department. Cases with serious clues and possibility of crime have all been notified to the public security department, files on cases placed in the public security department are transferred, and active efforts are made to collect information to assist the investigation by the public security department, thus strengthening the power of attack on infringement acts. This is one of the successful cases of joint combat on infringement acts by cooperation between the customs and the public security department.

5. Six Defendants Imprisoned for Forging “Tamiflu”

【Case Briefing】

In Feb. 2006, the Investigation Brigade on Economic Crimes of Shanghai Public Security Bureau found that Shanghai Xidi Pharmacy Science and Technology Co., Ltd. and Shanghai Jiewei Pharmaceutical Co., Ltd. were selling fake “Tamiflue” on the Internet. These two companies were under the actual control by Wang Xun, who is from Zhejiang Province and has another company Shanghai Xinwei Chemical Co., Ltd. under his name, and he has the previous record of making and selling fake medicines.

Investigation showed that Wang Xu has registered and set up Shanghai Xidi Pharmacy Science and Technology Co., Ltd., Shanghai Jiewei Pharmaceutical Co., Ltd. and Shanghai Xinwei Chemical Co., Ltd., and rented the workshops and equipments from 4 enterprises: Luodian Town Zineng High-tech Co., Ltd. of Baoshan District, Shanghai Lanshui Chemical Plant at Waigang Town of Jiading District, Lianyungang Dongya Chemical Plant of Jiangsu Province and Shipu Hanfei Chemical Plant of Kunshan, and organized employees to produce fake medicine. He contacted customers via the Internet as selling platform with the names of Xidi and Jiewei companies and sold the fake “Tamiflu” raw material powder to Heilongjiang, Guangdong and to Pakistan. It was found at the same time that Wang Xun ganged up with Li Rongquan and others from Taiwan to make fake “Tamiflu” capsules with fake “Tamiflu” raw material powder in mountain areas of Guizhou Province and sold them overseas. It was also found that the production platforms, the faking process and the raw materials used by Wang Xun in Shanghai had high hidden perils of explosion.

On May 24, 2006, with the unified deployment by the No. 2 Bureau of the Ministry of Public Security, the Investigation Brigade on Economic Crimes of Shanghai Public Security Bureau and the polices in Guangdong, Jiangsu, Heilongjiang and Jilin concurrently launched the “Sea wave action”, and the main criminals including Wang Xun were first seized in Shanghai. According to the well organized plan made in advance, our Investigation Brigade took effective measures in conjunction with the fire control department, to shut down the fake making equipments in sequence safely, thoroughly eliminating the hidden perils and safeguarding the residents in the areas. At the same time, the Investigation Brigade found large amount of unfilled capsules and aluminum foils for making “Tamiflu” capsules, over 300 fake “Tamiflu” capsules and “Tamiflu” raw material powder, as well as over 30 ton of inflammable and explosive chemical raw materials. Our Investigation Brigade then continued pursuit and dispatched people to Guizhou and Zhuhai to seize Li Rongquan and others who participated in making fake medicines, and found relevant equipments for filling fake capsules and the fake “Tamiflu” capsules. In this operation, a total of 13 suspects of crimes were seized. According to the investigation of our Investigation Brigade, the police in Guangzhou, Jiangsu Province, Heilongjiang and Jilin also seized a number of suspects participating in the case.

【Result of Trial】

On Sept. 19, 2007, the Shanghai No. 2 Intermediate People’s Court ruled after trial that Shanghai Xinwei Chemical Co., Ltd. under Wang Xun produced a number of fake raw materials and medicines, obtaining illegal income of RMB 1.78 million yuan. On this ground, Shanghai Xinwei Chemical Co., Ltd. was judged as having committed the crime of illegal operation, and a penalty of RMB 4 million yuan was imposed, and Wang Xun was sentenced to having committed the crime of illegal operation, 6 years of jail with a penalty of RMB 100,000 yuan, and other defendants were sentenced imprisonment of 3 years, 1 year and 4 months, etc. together with penalties.

【Case Analysis】

The disposition of this case enhanced the protection of legal rights and interests of right owners, maintained the reputation of China, eliminated the hidden perils to safety during the “Summit Conference of Six Countries”, and ensured the security of residents. It also demonstrated the commanding ability of No. 2 Bureau of the Public Security Ministry in combating trans-regional and trans-border crimes, in coordinating the operations by public security organs of a number of provinces and municipalities and by police of different categories in concurrent operations and cracking criminal cases.

6. Copyright Infringement by “Hero Broadband Network”

【Case Briefing】

Shanghai Copyright Bureau received the appeal claiming that “Hero World” Website illegally provided to some local networks “the Jimmy Hat” and several other pieces of film and television works without the permission of the owners. Upon the receipt of the appeal, Shanghai Copyright Bureau immediately carried out administration investigation by law and found out that the “Hero World” Website was operated by some digital technology company. The legal enforcement officers detected from the servers of several local networks in relation to “Hero World” pieces of appealed film and television works offered by “Hero World” Website, validating the infringement of “Hero World” Website to provide unauthorized film and television works to others.

【Result of Disposal】

In accordance with Chinese copyrights laws and regulations, Shanghai Copyright Bureau made the administrative penalty decision of stopping infringement and imposing a fine of RMB 50,000. 

【Case Analysis】

The behavior of the party concerned in this case to provide unauthorized film and television works to some local network operators not only severely infringed the interest of the owners of film and television works copyright but also seriously and illegally damaged the public order of copyright administration, which undoubtedly deserved the severe examination and punishment of the copyright departments of legal enforcement and corresponding administrative sanctions.

This typical case reflects the fact that while the rapid development of digital reproduction technology and network transmission technology is bringing great conveniences to the public communication of works, it also exerts negative influences on the protection of works. Particularly, the popular films, television programs, music, novels, software, etc are now becoming the major objects of copyright infringement. Some people even obtain illegal benefits by means of disseminating the infringing and pirate works and products, which not only damages the legal interests of copyright owners and owners of rights related to the copyright and dampens the enthusiasm of the creator to create new works, but also destroys the legal order of copyright, stagnated the development of innovation ability of the society and the development of the national cultural industry and intensified the contradiction between the supply of spiritual and cultural products and the need of the people. 

This case also shows that the legal awareness of the public needs to be further enhanced. The social atmosphere of respecting knowledge, work and creation should be further established and the force of administrative and judicial protection needs to be further strengthened, which not only speaks out the voice of the copyright owners and the expectations of the public but also meets the requirements for the construction of cultural and metropolitan Shanghai.

  7. The First Copyright Dispute of “Electronic Map” in China

【Case Briefing】

The plaintiff Shanghai Survey and Mapping Institute is a specialized survey mapping institution with national grade A qualification in mapping, and produced the high precision digital road map of Shanghai at the scale of 1:2000 on the basis of the data accumulated by it over long time of survey and mapping. In Oct. 1999, the plaintiff, according to the 3-year contract signed by it and Shanghai Motian Network Information Technology Co., Ltd., the predecessor of Shanghai City Tong Network Information Technology Co., Ltd. (hereinafter referred to as City Tong), provided to this Company the data for 1:2000 digital road map of Shanghai in the form of optic disk. After the expiration of the contract, the plaintiff found that the defendant City Tong and its associated companies were still using the above-mentioned 1:2000 digital road map of Shanghai, in a way of licensing or selling to outsiders the electronic map made processed with the 1:2000 digital road map of Shanghai as the basic map plus search engine software, and providing paid inquiry services at the “City Tong” website and the manual message cooperation project with Unicom Guomai Company. The processing of the basic map by City Tong was mainly the format conversion for use with corresponding associated software, and increasing or deleting information according to customer demand or need in setting up website inquiry functions. It was found after a comparison of the respective digital road maps of the plaintiff and defendant by both parties concerned that there were many similarities in the expression of the same constituting elements in the two maps, despite the different file format.

【Result of Trial】

The Shanghai No. 1 Intermediate People’s Court judged by first trial: 1. stop the infringement; 2. publish a statement on “Wenhui Newspaper” and the front page of “City Tong” website to eliminate the adverse effect; 3. compensate the plaintiff for economic loss of RMB 1 million yuan.

After the judgment, the defendant instituted an appeal, and the court of the second trial rejected the appeal and maintained the original judgment.

【Case Analysis】

The 1:2000 digital road map of Shanghai is actual the digital form of graphic works of map category as defined in the copyright law. As different plotters will use different comprehensive processing forms for the expression of the same geographic phenomenon, the creativity embodied in it brings the digital road maps under protection by law as traditional paper maps. Because the defendant City Tong has access to the 1:2000 digital road map of Shanghai of the plaintiff due to the contractual relations between its predecessor and the plaintiff, and similarity in expression was proved in the comparison, it can be deduced under condition that City Tong is unable to prove with evidence that there is other source of the electronic map under charge, that the electronic map sold to outsiders or used on the website is a product infringing the copyright of the 1:2000 digital road map of Shanghai of the plaintiff. The City Tong Company as the provider of the infringement product and owner of the website being sued, Shanghai Yitutong Information Technology Co., Ltd. as the website operator and the New World Digital Science and Technology (Shanghai) Co., Ltd. that has been proved by evidence as having joined in the implementation of infringement act, shall all undertake the corresponding legal liabilities. To definitely protect the legal rights and interests of copyright owners, in one of the cases based on the infringement fact of selling or licensing the use, the court determined a compensation of RMB 900,000 yuan, which exceeds the legal upper limit of RMB 500,000 yuan, on ground of the usual profit from the plaintiff permitting other persons to use the 1:2000 digital road map, the sales of the infringement product or the licensed period and method of use and reasonable outlay by the plaintiff; in the other case mainly based on the fact of infringement by the website, the court ruled a compensation of RMB 100,000 yuan according to the claim for legal compensation by the plaintiff, with consideration on the subjective fault of the infringing and circumstances of infringement, and the plaintiff has got a total compensation of 1 million yuan for the two cases.

8. “3.10” Transnational Copyright Infringement

【Case Briefing】

From Mar. 2006 to July 2007, the Investigation Brigade on Economic Crimes of Shanghai Public Security Bureau conducted law enforcement operations in combating infringement of intellectual property in cooperation with the US police under the unified commanding by the No. 2 Bureau of the Ministry of Public Security and the Municipal Public Security Bureau. After 16 months, the police of China and US jointly and concurrently launched the case cracking operation with the coded “Summer Arrival Operation” on July 6, 2007, which successfully cracked an extra severe case of making and selling pirated computer software with case amount exceeding 9 million US dollars and which was committed in China, the US, Canada, the UK and Australia and also in Shanghai, Shenzhen and Beijing, seized 11 members of the crime gang with Ma Jingyi (former name: Ma Kepei, male, 49 years of age and native of Shanghai) and Yu Yifan (male, 52 years of age and native of Shanghai) as the heads. Nine of them including Ma Jingyi were arrested on Aug. 10 by No. 1 Branch of Shanghai People’s Prosecutor’s Office for suspension of infringement to copyright, and the case was brought to prosecution on Jan. 9, 2008.

In Feb. 2003, the criminal suspect Ma Kepei absconded back to China, who was wanted for arrest by the New York police in the US for selling pirated computer software in collusion with others. Back to Shanghai, he changed his name as Ma Yingyi. Starting from July 2003, he colluded with Yu Yifang to set up Shanghai Anyi Investment and Management Co., Ltd. (hereinafter referred to as Anyi Company), Shanghai Sili Electronic Commercial Co., Ltd. (hereinafter referred to as. Sili Company) and Shanghai Shili Investment Co., Ltd. (hereinafter referred to as Shili Company), employed a number of staff including Li Xi, Xia Lei and Wang Xiaodong, rented network space from companies such as Alibaba, ebay, Shanghai Hotline and Toll Telecom and set up websites and E-mail boxes, specifically for contacting and discussing with customers outside China on selling of pirated computer software. After obtaining orders, Ma Jingyi instructed his gang members in the US such as “Alan” to mail the pirated software to these customers via the express mail service of Fedex in the US; they also used their accounts opened in the US and Canada banks and the PAYPAL E-settlement system to collect money from selling such pirated software, to sell pirated software in large amount across countries.

In the meantime, to maximize profit, Ma Jingyi also colluded with Lu Yi, Shen Haitao, Wang Wenzhou and Zhang Xiaoqing to develop the integrated production of mastering disc making, the making of films for printing the cover designs of discs and discs recording of pirated software through the optic disc producers in Zhu Hai, Shenzhen and Guangzhou. The products were mailed via express mail service to the gang members of Ma Jingyi in the US such as “Tai” for selling.

There are evidences that, up to the clearing up of the case, the criminal gang of Ma Jingyi sold over 540,000 (sets) of pirated discs, with illegal operation amount of over 9 million US dollars; these discs were sold in the US, Canada, the UK and Australia; the pirated software were mainly copies of over 100 computer software versions from 21 well-known overseas companies such as Norton, in over 430,000 discs.

This criminal gang organized production, selling, dispatching and money collection activities in China, the US and Canada, and sold the pirated software mainly to the companies and individuals in the US. After knowing the case and in order to completely crack down this fake making and selling network, the No. 2 Bureau of the Ministry of Public Security, PRC contacted with the Department of Justice and FBI of the US, both parties held discussions in China and the US, agreeing initially the working plan to jointly investigate and crack down this transnational criminal case. Both parties also exchanged relevant evidence materials. In May 2007, the No. 2 Bureau of the Ministry of Public Security, PRC called the “Coordination Meeting on Major Transnational Intellectual Property Infringement Criminal Case” at Shenzhen, which was attended by the general economic investigation brigades of Shanghai and Guangdong, to make detailed deployment for the clear-up of the “Ma Kepei case” investigated by Shanghai Investigation Brigade, and this operation was named “Summer arrival operation”.

In the night of July 6, 2007, “Summer arrival operation” was launched, and all 11 gang members involved in the case were arrested in Shanghai, Beijing and Shenzhen, large amount of pirated computer software selling accounts, 159 sample discs of various pirated computer software, the films for printing cover designs of discs and 20 computers used in the case were seized.

【Result of Trial】

On Jan. 10, 2008, this case was transferred to No. 1 Branch of Shanghai People’s Prosecutor’s Office. It is now in the hearing procedure.

【Case Analysis】

This case is one of the criminal cases on copyright infringement investigated by Shanghai Investigation Brigade, with the highest amount of money involved, covering many countries and large scale in infringement crime. We spent 16 months to successfully clear up this case, fully demonstrating the efforts and working style of our Brigade in cracking down transnational infringement crimes and intellectual property protection.

9. Zhao Imprisoned for Selling Pirated Products

【Case Briefing】

From the end of 2006 to the beginning of 2007, the General Brigade for Administrative Law Enforcement of Shanghai Culture Market (hereinafter referred to as the General Brigade) conducted in-depth analysis of the information collected from a number of suppressed whole-sale spots for pirated audio & video products, and detected a whole-sale gang of pirated AV products headed by a person called “Akang”. According to the requirements of the General Brigade leaders, the No. 2 Survey Branch and the Culture Law Enforcing Brigade of Putuo District conducted investigation and scouting for more than two months, basically making clear the activities of the whole-sale gang of pirated AV products headed by Zhao Dehao (with the nickname “Akang”). After summing up the information obtained from investigation, a special team for the case was set up in mid-March, led by the leaders of the General Brigade and formed by officers from No. 2 Survey Branch of the General Brigade and Public Security Branch and the Culture Law Enforcing Brigade of Putuo District. After further in-depth investigation and scouting of over a month, in the night of Apr. 16, 2007, a joint operation was launched by over 120 members from the General Brigade, and the Public Security Detachment, Special Police Detachment and Culture Law Enforcing Brigade of Putuo District. In the operation, two illegal pirated AV products whole-sale spots in Minhang District were searched, and 12 persons including the head Zhao Dehao (with the nickname “Akang”) of the gang were seized, and 616,253 pieces of pirated AV products were found. This is the underground whole-sale warehouse with the largest amount of pirated AV products in a single case cracked in Shanghai in recent years.

【Result of Trial】

The Identification Center of AV products in Shanghai proved that all these products were illegal copies. As this case involved huge amount of pirated AV products, and was suspected of criminal crimes, the General Brigade transferred the case to Putuo Branch of Shanghai Public Security Bureau for investigation and punishment of criminal liabilities.

On Sept. 25, 2007, the People’s Court of Putuo District, according to the relevant provisions in the “Criminal Law of the People"s Republic of China”, sentenced Zhao Dehao, Qian Xiaomei, Chenshitao and Wu Mingfu with fixed imprisonment and penalty for the crime of selling pirated articles. Among them, Zhao was sentenced fixed imprisonment of one year and three months, Qian was sentenced fixed imprisonment of ten months, Chen and Wu were sentenced with detention of 6 months respectively, and the 4 persons were imposed with penalty of RMB 35,000 yuan. All the detained tools and illegal AV products were confiscated according to law.

This case is listed as one of the “Ten Major Cases on Intellectual Property Protection in 2007” by the State Ministry of Culture, and as one of the “Twenty Major Cases on Intellectual Property Protection in the Second Quarter of 2007” by the National Office of Cracking Down Pornographic and Illegal Publications.

【Case Analysis】

(I) Features of the case

1. Concealed storing places. The underground whole-sale warehouses as found were located at boundaries of four districts of Minhang, Putuo, Changning and Jiading, and the goods were transported via different routes in the four districts, therefore it was quite difficult to find their traces of movement.

2. Family style management. All gang members are from Anhui, and they worked and lived in an almost enclosed way, using false or nicknames, therefore outsiders could not know their internal activities.

3. Use of IT technology in illegal operations. It was found that the making of disc covers, content quality and logistic movement of the pirated products were completed mainly via the Internet, and the money paid was transferred via a number of commercial banks. There was no paper work involved in the whole process, making it very difficult to scout and take evidence.

(II) Experience gained from the case

1. In cracking this case, the General Brigade and the Culture Law Enforcing Brigade of Putuo District first found clues from daily inspections and reports from residents. As in Putuo District, some people often deliver cargo by trucks to some shops (stalls) selling pirated AV products without license, so it was believed that there was a gang for whole-sale of pirated products hidden behind. The General Brigade coordinated the public security organ in follow-up scouting of the clues and the delivery vehicles. After nearly 4 months of scouting, the spot in a living quarter in the far suburb area was fixed, laying a solid foundation for successfully cracking the case.

2. The gang was improving its ability to resist scouting. The law violating activities were conducted by a gang instead of by individuals. The links of collecting, dispatching and selling were separated, and different means were used to prevent scouting by the law enforcing organs. They often changed call numbers and contact places, and often changed driving routes and got rid of follow-up of the law-enforcing personnel by entering a road (or gas station) with a number of exits and then escaping from different exits. The orders were placed via Internet without the use of paper; the records were destroyed after completion of transaction. This increased the difficulty in taking and fixing evidences, and required the close cooperation and joint operations by different law enforcing organs. In cracking down the “Apr. 16 case of whole-sale of pirated AV products”, the culture law-enforcing organ and the public security organ worked hand in hand, and the case was cleared up with a complete success after 4 months of efforts, and the gang members selling pirated products were sent to the court for criminal punishment, resulting in great frightening effect to criminals in the society.

10. Copyright Infringement to “Short Messages on Love”

【Case Briefing】

The plaintiff Fu Zhanbei is the copyright owner of the 190 pieces of “Short Messages on Love” collected in the book “Both of Us” published by the North Literature and Art Publishing House. On Jan. 30, 2005, Fu Zhanbei signed the book publication contract with the Jinmofang Culture Development Co., Ltd. of Jinhua City, granting the exclusive right of use of “Both of Us” on China Mainland to this company. On Jan. 31, this company signed with the defendant Beijing Sohu New Times Information Technology Co., Ltd. the agreement on short message cooperation, agreeing that both parties establish a cooperation page in the short message channel on sohu.com website, and publish the 190 messages for browsing and use by website users for a valid period of one year. The defendant Beijing Sohu Internet Information Services Co., Ltd. is the owner and operator of sohu.com website. However, after the expiration of the cooperation period, the 190 messages involved in the case can still be read from the message channel of the sohu.com website and can be downloaded to mobile phones. Therefore Fu Zhanbei instituted the case to No. 2 Intermediate People’s Court, requesting ordering the two defendants to stop the use of above-mentioned messages, publish an apology statement and compensate for economic loss of RMB 3.201 million yuan.

【Result of Trial】

After hearing, No. 2 Intermediate People’s Court was of the opinion that the plaintiff is the copyright owner of the 190 short messages, and starting from March 2006, the Sohu Internet Information Services Company spread the 190 messages to the public via the short message channel of sohu website without permission from the plaintiff, without putting on the name nor paying remunerations to the plaintiff, thus infringing the right of plaintiff to sign the name, to spread the information over network and to obtain remunerations for the 190 short messages involved in the case. Therefore the defendant shall take the civil liabilities of stopping infringement, making apology, eliminating adverse effect and compensating losses. For the claim of the plaintiff that Sohu New Times Company constituted joint infringement, the court is of the opinion that the two defendants are two different and independent companies, the registered owner and operator of sohu website is Sohu Internet Information Services Company, and the plaintiff has no evidence to prove that the sohu website is jointly operated by the two defendants, nor evidence to prove that both defendants had the intention of joint infringement and infringement actions. Therefore, this claim will not be supported. On this ground, No. 2 Intermediate People’s Court ruled that the defendant Sohu Internet Company should immediately stop infringement, compensate the plaintiff for economic losses of RMB 100,000 yuan, and publish an apology statement on the front page of the message channel of sohu website (sms.sohu.com).

【Case Analysis】

This case is the first one of infringing the information network spreading right of mobile message text works, attracting extensive concern by the media. The defendant, Sohu Internet Company, as the operator of a well-known website, infringed the information network spreading right of the plaintiff by spreading the message text works of the plaintiff via the Internet even after the expiration of the cooperation period with the plaintiff. For the problem of weak awareness of intellectual property law and negligence in website management on the part of the defendant Sohu Internet Company, as reflected in the case, No. 2 Intermediate People’s Court added the judge’s word to the court judgment, requiring the company to improve the awareness of intellectual property protection and the internal management, to avoid recurrence of similar cases.