China: Guide to commonly used measures and strategies for the protection of IP rights online

Last Updated: 16 July 2015
Article by Qu Miao

The Internet has introduced a new era of economic opportunity and growth, leading to the disruption of a large number of industries. It has also, however, given rise to a new set of issues and a new rights protection environment for traditional intellectual property (IP) professionals to contend with. This guideline will briefly summarize the challenges of IP protection online and offer measures and strategies for responding to such challenges.

I. Challenges and Countermeasures

Online rights protection is difficult mainly because of the nature of the Internet itself. The Internet is an open network with no central control system. Users can freely access terminals located in different geographic locations, and proceed to engage in a variety of activities without identifying themselves. Unless the user is using special public resources, there is no effective and accurate geographic tracking mechanism for Internet users; access and disconnection is free and flexible. This has resulted in the following challenges for rights protection:

  1. It is difficult to determine the identity and address of infringers

Common solutions to this problem in practice are:

  • Obtaining real-name authentication information from the network;
  • Obtaining information on the operator, the domain name WHOIS, ICP records and other information indicated on the related website
  • Obtaining information from infringers by means of transactions with them;
  • Requesting information from Internet information service providers.
  1. High rates of repeated infringement

Common solutions are:

  • Where domain name infringement is taking place, domain name arbitration and other means can be used to eliminate the basis of the infringement;
  • Where other types of infringement are taking place, rights holders should consider litigation to deter others from infringement and increase the costs of illegal activities;
  • Where an Internet service provider is involved, rights holders should consider working with the Internet service provider to establish a mechanism to prevent the repetition of infringement.
  1. Online evidence is easily changed and destroyed, while professional evidence collection standards are high

Due to its variability, Internet information needs to be captured and stored by means of notarization in a timely manner. Given the need to balance cost and volume of evidence collection, decisions should be made on the basis of the relevance of the information and who controls it. If the information is in the control of third parties, the likelihood that it will be changed due to rights protection actions is relatively small. However, if the infringer controls the information, evidence preservation should be done before taking any rights protection measures.

II. Common means of rights protection

In view of the situation described above, we often make use of the following methods to help clients carry out rights protection on the Internet.

  1. Sending a cease and desist letter

If the identity and address of the infringer can be ascertained, a rights holder may consider safeguarding their rights by sending a cease and desist ("C&D") letter, with the hope of achieving their goals by encouraging the infringer to terminate their infringement voluntarily.

Sending a C&D letter is not a statutory precondition for legal action under PRC law; it is, rather, a voluntary remedy. However, if after receiving the C&D letter, the infringer does not stop, they may be considered in subsequent proceedings to be acting willfully and maliciously. This may qualify as "aggravating circumstances" in subsequent proceedings and may serve to increase the amount of compensation awarded.

Sending a C&D letter has the advantage of being inexpensive and effective. If the infringer changes their behavior after receiving the letter, rights protection has been achieved at a low cost. This method is suitable for cases of minor or negligent infringement.

The disadvantage of sending C&D letters is that they are ineffective for over 60% of infringers – the letter may not receive any reply and may not succeed in stopping infringers in many cases. In fact, a C&D letter may alert the infringer to a potential action against them. Therefore, a C&D letter should only be sent after evidence has been preserved, in order to avoid possible difficulties in carrying out evidence collection work.

Moreover, a C&D letter must have a sufficient legal and factual basis and can only be sent directly to the main infringer. A C&D letter should not be sent to an infringer's customers, suppliers, or other third parties – doing so would incur the risk of a claim of commercial defamation, along with other legal risks, if infringement cannot be established. In addition, the sender should be aware that once a letter is issued, if the infringing party does not agree that they have committed infringement, they will have the right to ask the sender to submit the dispute to judicial or law enforcement agencies within a certain deadline. Otherwise, the infringing party will have a prior right to file for a declaration of non-infringement.

  1. Submitting complaints to the Internet service provider

Internet service providers are key nodes and entities on the Internet. Internet service providers provide platforms, search functions, access, aggregation, sorting, etc. allowing infringement to result in damages to the rights holder.

Article 36 of "Tort Law of the People's Republic of China," expressly provides that:

"Internet users and internet service providers shall bear tortious liability if they infringe other people's civil rights and interests over the Internet.

Where an Internet user engages in tortious conduct through internet services, the injured party has the right to inform the internet service provider that they should take whatever actions are necessary to halt the infringement, such as deleting content, screening, deleting links, etc. Where an Internet service provider fails to take action after being informed, it shall be jointly and severally liable with the internet user with regard to the additional injury or damage suffered.

Where an Internet service provider knows an internet user is infringing other people's civil rights and interests through its Internet service but fails to take necessary action, it shall be jointly and severally liable along with the Internet user."

This provision confirms Internet service providers' responsibilities and obligations; it allows an injured party to make a legal complaint aimed at those who fail to take necessary actions to halt infringement - deleting content, screening, deleting links, etc. In addition, because most countries have adopted mechanisms similar in principle to provisions of the U.S. Digital Millennium Copyright Act on harboring Internet service providers, complaints regarding rights protection can be made effectively in many countries and regions.

Advantages of this strategy include its low cost, effectiveness, and multinational reach. A disadvantage of this method is that it can only result in removing content, etc. As this method does not entail substantial penalties, the infringement is likely to re-occur. Also, where infringement is not obvious or doubtful, Internet service providers will be hesitant about whether or not to take action in response.

In making use of this method, the following issues should be considered: (1) complaints should have a sufficient legal and factual basis; (2) complaints should be submitted only after the evidence is preserved; (3) complaints should be carried out in accordance with the complaint procedures and rules published by the service provider, and the corresponding evidence should be provided. Otherwise, the complaint is not likely to receive a response or be handled appropriately; (4) Complaint documents and documents related to communications with the service provider should be kept in order to prepare for any further legal action(s).

  1. SAIC (State Administration of Industry and Commerce) administrative complaints

A SAIC complaint is a common practice in traditional intellectual property rights protection. If an infringer's identity and address can be verified, this method can still be used as an effective remedy for online infringement.

However, SAIC's activities are considered administrative law enforcement and the SAIC itself undertakes enforcement actions. In comparison to more traditional rights protection cases, online infringement tends to be more complex and possibly more controversial. Therefore, the SAIC tends to take a cautious approach towards online infringement.

  1. Administrative complaints to the communication management bureau responsible for the area where the infringement took place

In addition to the more traditional channels for intellectual property rights enforcement, communication management bureaus, as the government organ responsible for the communications industry and the telecommunication network in their area, also represent an important channel for safeguarding rights online.

A large number of infringing websites often carry out website ICP registrations that do not conform to regulations, due to their desire to conceal identity information and evade supervision. In so doing, they violate the Administrative Measures for Internet Information Services, the Measures for the Archival Administration of Non-operational Internet Information Services and other relevant PRC regulations on telecommunications management.

If this illegal activity is reported to the appropriate Telecommunications Administrative Bureau, the Bureau can quickly close the website, delete its links, etc. The Bureau's actions tend to be quicker and more effective than those of other IP law enforcement agencies.

  1. Administrative complaints to other competent authorities

A large number of issues that are emerging in the field of online IP rights protection are not clearly defined or regulated in the current IP law framework. For example, the problem of parallel imports is not addressed in the Trademark Law of the People's Republic of China. In this context, protecting legal rights requires flexible and creative thinking in order to achieve results through indirect means.

If infringement involves other illegal acts, the infringement may be halted through administrative complaints directed at those actions – which can result in having products banned, removed from shelves, having sellers fined etc. For example, parallel imports often do not conform to PRC market regulations: their packaging or labeling is often not in Chinese, or the product may not have undergone the compulsory certification and registration process; the seller may not have obtained the relevant business license and qualification, etc.

  1. Domain name arbitration

Domain name arbitration is another means of protecting rights online. This strategy is used to deal with a domain name's attribution or validity problems. Because a domain name is often a basis for infringing actions, requesting that the relevant domain name's registration be revoked or transferred to the rights holder can usually solve the problem of infringement completely.

It should be noted that institutions which accept applications for domain name arbitration need to be selected based on the nature of the domain name. For example, disputes related to .cn, China's national domain name, must be submitted to the Chinese domain name dispute resolution center of the China International Economic and Trade Arbitration Commission designated by the China Internet Network Information Center (CNNIC). Disputes related to .com, .net and other international domain names can be submitted to any Domain Name Dispute Resolution Center designated by the Internet Corporation for Assigned Names and Numbers (ICANN) for arbitration. In China, we often use the Asian Domain Name Dispute Resolution Center (ADNDRC) to carry out arbitration.

  1. Civil Litigation

Civil litigation is still the preferred means of resolving disputes that are complex, serious, new or typical. The main reason is that cases are tried by a judge, who usually has strong professional judgment and experience in dealing with complex problems. Civil litigation has a strict procedure and high evidence requirements, and the remedies available are diverse, including injunctions (orders to stop infringement), compensation for damage suffered, orders to eliminate the effects of the infringement etc. Civil litigation is an effective way to deter infringement, obtain compensation and increase costs for the infringer.

A number of causes of action are available for Internet-related cases, depending on the circumstances of the infringement. In addition to traditional causes of action related to trademarks, copyright, unfair competition, patent infringement, and trade name infringement, specific causes of action related to the Internet in the Supreme People's Court Regulations on Causes of Action in Civil Cases include network domain name contract disputes, ownership of the Internet domain name and infringement disputes, network infringement disputes, etc.

It is also worth noting that network infringement disputes may be applicable not only to IP rights, but also to rights of personality, such as name rights, portrait rights, rights to reputation, rights to receive, retain and give up honors, and privacy rights. The choice of cause of action must be determined with reference to the specific circumstances of each case.

  1. Police reports

Serious cases of online infringement that may constitute a criminal offence can be reported to the police.

The current Criminal Law of the People's Republic of China, Articles 285 to 287 describe a number of crimes associated with computer systems, such as illegally intruding into computer information system; illegal access to computer information system data, illegal control of a computer information system; facilitating intrusion and illegal control of a computer information system, programs, and tools; destroying a computer information system, etc. If a person uses the Internet or a computer as a means to commit elements of another crime, they may also be charged under the above provisions.

  1. Technical solutions

Using technology carry out rights protection directly is particular to the Internet. For example, after the discovery of the infringing websites, it may be possible to redirect visitors to the website, provide warnings on sites containing infringing information, or blocking and prohibiting access to the websites, etc., directly obstructing or halting infringement through technical means. These techniques require the services of professional technology companies and/or software providers. However, using these tools entails legal risks due to their lack of public supervision and intervention. If using this tactic, rights holders should obtain the advice of legal counsel in a timely manner, and ensure that their means of rights protection does not itself violate the law.

III. Strategic recommendations

In summary, those involved in IP rights protections should adopt the following strategic recommendations in dealing with rights protection online:

  1. Become familiar with the Internet's basic technical aspects and regulation

Understanding the Internet's basic technical aspects, operating mechanisms, layout, main entities and participants, regulatory agencies, and means of regulation is a prerequisite for successful Internet rights protection. Only understanding and becoming familiar with this basic background knowledge can help in generating creative solutions and strategizing for rights protection in the context of proliferating infringement activities online.

  1. Establish internal management mechanisms and processes adapted to the characteristics of Internet infringement

Traditional companies that do rights-protection work tend to have traditional anti-counterfeiting rights protection mechanisms aimed at the offline environment. In order to cope with the special problems of the Internet, those that are carrying out rights protection work must redeploy their internal and external resources and take measures to adjust their activities. One good example: many companies have established positions focused exclusively on online rights protection; individuals are assigned responsibility for monitoring Internet infringement activities and for communicating with Internet service providers, thereby providing more effective online rights protection.

  1. Update traditional concepts of IP protection, be goal-oriented, develop creative action plans, and dare to try new things

As the above guide shows, protecting rights online brings with it inherent problems and difficulties. In the course of rights protection work, it is particularly appropriate to set reasonable goals (such as removing links, prohibiting access and other goals which are different from that of the non-Internet environment). Professionals and lawyers involved in rights protection also need to have a wider vision and broader knowledge, thinking outside of the box rather than relying on traditional intellectual property laws, and use a variety of flexible methods and attack infringement from different angles in order to safeguard rights more effectively.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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