Recent years have seen a series of copyright disputes across China concerning published articles uploaded onto the Internet, which has drawn widespread attention from both intellectual property scholars and practitioners. In particular, lawsuits involving online copyright infringement filed by the Beijing Sanmianxiang Co. Ltd., (hereafter “Sanmianxiang”) a copyright agency, sent shock waves through a number of major websites. Judgments in such cases bear not only upon the interests of the parties involved and the survival of some websites, but also upon the interests of the general public. Also, these cases touch upon the limit of an author’s copyright and the reasonable application of those rights.

What is worth noting is that almost all of the defendants in such cases argued that the uploaded articles were published articles about current events. Therefore, the key is to determine accurately whether the articles involved are current events articles. Based upon a typical case recently decided by this author, this article will explore the definition of “articles of current events” in an effort to provide some guidance for judicial and legislative practice.

I. Beijing Sanmianxiang C. Ltd. v. Hefei Bangluo C. Ltd.

On March 1, 2005, Sanmianxiang and Zhong Chaojun, one of the co-authors of the article Troubles of Chinese Cell Phone Manufacturers (hereafter referred to as Troubles), signed an Agreement of Entrusted Compilation and Copyright Transfer. The agreement later gained approval from the other co-author of the article, Tang Xiongfei.

Both sides agreed that Party B (Sanmianxiang) entrusted Party A (Zhong Chaojun) to compile the book Brand Strategy. For the above-mentioned Troubles article and every other article contained in the Brand Strategy book, the parties agreed that Sanmianxiang would own the copyright from the publishing date to the termination of the contract, but would not have the right to sign and transfer the sum agreed to in that contract. Zhong Chaojun agreed not to permit any third party to use the articles that were compiled and entrusted to Sanmianxiang, in any form, or to transfer or license those articles, either with the original or changed titles, in part or in whole to any other party.

The agreement also laid out that the ways Sanmianxiang could use the compiled work and the articles contained therein, whose copyrights the company obtained through the contract, which included, but was not limited to, editing, printing, publishing (disseminating) and the digitalizing those materials. The Troubles article was contained in that Brand Strategy compilation.

On November 1, 2004, Tang Xiongfei and Zhong Chaojun published Troubles for the first time on the website EMKT.com.cn, without including a notice stating “reprint prohibited.” Then, Hefei Banglue Co. Ltd. reprinted the article on a related page of its website “Banglue China,” indicating the source of the article as the EMKT.com.cn website. Both authors’ names and the time of the upload “2004-11-04 10:32:34” appeared at the end of the article.

In April, 2007, Sanmianxiang sued Banglue, seeking compensatory damages of 500 Yuan for using its work and reasonable costs of 3,225 Yuan for enforcing its rights. Banglue argued that Troubles, which discussed current economic problems in the mobile phone industry, should be regarded as a “current events” article involving political, economic, or religious topics, and, thus, did not constitute copyright infringement.

The court of first instance found that the Troubles article began by describing the difficult situation of home-made cell phones in domestic and international markets, followed by a description of business strategies adopted by four Chinese brands: Amoi, Kejian, TCL, and DBTEL. The article then opined that “Chinese manufacturers must decide for themselves the developing ways.” Taking Lenovo and TCL as positive examples, the article pointed out that the Chinese cell phone manufacturers must take root in their native land. Then it asserted that the way out lies in an enterprise’s “assessment of the future of the industry as well as its comparative competitiveness by resource integration.” The article ended by analyzing one-by-one the experience and lessons learned from the market operations of each of the four mentioned manufacturers.

The court held that the article featured neither study into past socio-economic questions, nor a general analysis of socio-economic trends, nor a pure theoretical discussion. Instead, the article focused on wide-ranging, present-day issues involving the tough market environment and operation difficulties facing domestic mobile phone manufacturers. The article bore a distinct character of being timely and should thus be categorized as a “current events article” involving political, economic, or religious topics within the meaning of reasonable use according to the current Copyright Law and the Regulation on the Protection of the Right to Network Dissemination of Information. “Banglue China,” to meet the public’s need for information, reprinted the Troubles article online and indicated the article’s source, title, and the authors’ names, which was first published by its author on EMKT.com.cn without any notice prohibiting its reprint. On top of this, the court found that the website did not infringe any other legal rights enjoyed by the copyright holders and that there was no legally accountable reason for infringement. Therefore, the act should be regarded as a fair use of the work and did not infringe the rights of the authors or related rights holders.

Sanmianxiang argued on appeal that “current event” refers to recent major affairs which happen domestically or internationally, and that an “article of current events” is usually a “Party or government article for a certain event, similar to an official document.” Thus, Sanmianxiang argued that the business problems faced by mobile phone manufacturers cannot be categorized as “events.” In addition, Sanmianxiang argued that mobile phones are only one kind of commodity among thousands, and the problems faced by those manufacturers, described as “major trade events,” cannot be stretched to mean “current events.”

The court of second instance found that the Contemporary Chinese Dictionary (Commercial Press, 5th edition) defines a “current event” as a “recent major national or international event.” So a “current event” has two characteristic features, “recent” and “major”. Judging from the content, style, and legislative intent of the Copyright Law and Regulations, the Troubles article should not be considered to be a “current events” article about economic topics. Therefore, Banglue infringed the rights of Sanmianxiang by reprinting the article without the permission of the copyright holders and without paying related fees after Sanmianxing had obtained the related rights to the article through a copyright transfer.

The case touched upon the following questions: 1) What is the standard for defining current events articles, and, 2) how should courts calculate the corresponding civil liability damages?

II. Standard definition for “current events articles” and the balance of rights

Reference to the so-called “articles of current events” can be found in Article 6 .7 of the State Council’s Regulation on Protection of the Right to Network Dissemination of Information: “published articles of current events on political or economic topics can be provided to the public on an information network without obtaining permission of copyright holders and paying them.” Article 22.4 of the Law of Author’s Right also stipulates: “newspapers, periodicals, radio stations, TV stations and other media can reproduce or broadcast current events articles on political, economic ,or religious topics published by other newspapers, periodicals, radio stations, TV stations, or other media, except otherwise claimed by the author.” However, both documents fail to give a definition for “articles of current events.”

It is generally believed that the term comes directly from the Berne Convention, article 10. 1: “it shall be a matter for legislation in the countries of the Union to permit the reproduction by the press, the broadcasting or the communication to the public by wire of articles published in newspapers or periodicals on current economic, political or religious topics, and of broadcast works of the same character, in cases in which the reproduction, broadcasting or such communication thereof is not expressly reserved. Nevertheless, the source must always be clearly indicated; the legal consequences of a breach of this obligation shall be determined by the legislation of the country where protection is claimed.” The original English definition for “articles of current events” were “articles published in newspapers or periodicals on current economic, political or religious topics,” without directly including the phrase “current events” in that definition. Thus, this author failed to find any clear support from the Convention.

Before the judgment, a search of numerous legal documents involving similar cases on the China IPR Judgments & Decisions website did not yield any legal definition for the phrase “articles of current events.” Other academic essays did not delve deep into the question, either. Therefore, the author decided to solve the problem on a case-by-case basis using related legal theories. 

Based on legislative intent, rules regarding “articles of current events” involving political, economic, or religious topics belong to the rational use of copyrights, the essence being the balance of rights and interests. That is why “articles of current events” appear in the rational use section of the Copyright Law. The “rational use” system shows a spirit of balance by putting contradicting factors in harmony, and displays a balance between the copyright holder’s rights and duties, the relations among authors, disseminators, and users, and also a balance between the public’s interest and individual interests. Therefore, an interpretation of the phrase “articles of current events” cannot be too broad or too narrow, and all of these balancing factors should be considered.

The Contemporary Chinese Dictionary defines a “current event” as a “recent major national or international event,” which shows two distinct features: being both recent and major. “Articles of current events” should also include the same two features. In content, the Troubles article devoted one fourth of its length to stating the difficulties faced by Chinese mobile manufacturers, and the rest of the article analyzing their respective marketing strategies. In style, the phrase “articles of current events” chiefly focuses on reporting, describing, and commenting on “current events” in an objective and rational manner. Troubles, however, was written in a rather subjective, free manner using many figures of speech.

The original judgment’s definition of a current events article as, “articles on political, economic or religious topics of current and public concern” was too broad, focusing too much on “being recent” and forgetting the fact that current events should be “major.” This broad definition fails to protect copyright holders. On the other hand, Sanmianxiang’s understanding of the phrase “current events” as a “party or government article for a certain event, similar to official document,” was obviously too narrow, focusing more on “being major” than on “being recent.” This narrow definition fails to protect the public’s right to information. Thus both interpretations are flawed. Troubles cannot be categorized as a “major national and international event” and the article, though about economic issues, cannot be considered an “article of current events” on economic topics. Consequently, Banglue infringed the rights of Sanmianxiang by reproducing the article without the permission of the copyright holders and without paying the related fees to Sanmianxing, after it obtained the related rights to the article through its copyright transfer.

III. Liability and the balance of interests

The next question is how to calculate the amount of damages. Generally, in such cases, neither the judges nor the parties involved are able to produce an exact figure for the right holders’ losses or the infringing party’s profits, statutory damages will apply in most cases.

When the panel convened, we considered all of the important factors including the nature of the work, the popularity and market value of the work, the intent of the infringing party, and, especially, the magnitude of the infringement, the author’s remuneration, and the necessity and cost of the lawsuit. When published at EMKT.com.cn, no notice prohibiting its reprint was made for the article, and when Banglue reproduced the article, Banglue indicated the online source, title, and authors’ names for the article, and simply failed to pay the related fees within a reasonable period of time. In terms of remuneration, the article was about 1,400 characters, and Banglue only needed to pay 100 Yuan (50 Yuan per 1,000 characters, rounded up to the nearest thousand words). In such a situation, Sanmianxiang, which could have realized its rights through direct negotiation, chose a less economical way of resolving the dispute by going to court, which increased its cost compared to its legal rights. 

The panel thus fixed damages at 1,500 Yuan. The civil judgment actually reflected a basic view of the court of second instance that solving such disputes by going to court, which is of relatively higher cost, should not be encouraged.

About the author:

Zhang Hongsheng is a chief judge of the IP Division for the An’hui High People’s Court.

  (Translated by Li Heng)