China's Cyberspace Administration proposes amendments to the Cybersecurity Law
Issue date: September 12 2022
The Cyberspace Administration of China, together with other relevant departments, recently issued proposed amendments to China's Cybersecurity Law, seeking feedback by 29 September 2022. The introduction of the Cybersecurity Law in 2017, with the aim of comprehensively regulating cybersecurity issues, was an important milestone in the construction of the rule of law in cyberspace in China.
The proposed amendments aim generally to improve cybersecurity in China. In particular, they seek to make the law more consistent with several other relevant laws that have been introduced since 2017: the Administrative Penalties Law, the Data Security Law, and the Personal Information Protection Law. They significantly increase fines for violations of the Cybersecurity Law.
Fines for violations of network operation security protection and network information security obligations, have been increased from a maximum of 1 million CNY (approx. US$150,000,00) to 50 million CNY (approx. US$ 7,500.00) or 5% of the previous year's revenue for companies; and from a maximum of 100,000 CNY (approx. US$14.000) to 1 million CNY (approx. US$ 150,000) for individuals.
Source: Cyberspace Administration of China
'Regulations on the Administration of Internet Pop-up Push Services' issued by the Cyberspace Administration of China, the Ministry of Industry and Information Technology, and the State Administration for Market Regulation
Issue Date: September 9 2022
Effective Date: September 30 2022
In order to standardize the use of Internet pop-up push notifications and promote the healthy and orderly development of the online information industry, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, and the State Administration for Market Regulation have jointly issued Regulations on the Administration of Internet Pop-up Push Services (the Regulation).
The Regulation was issued on 9 September 2022 and came into force on 30 September 2022. It focuses on a number of key areas such as news and advertisements, and aims to solve a number of outstanding issues relating to illegal news pushes, advertisements with inconspicuous closing buttons, excessive push frequency, and excessively enticing content.
The Regulation introduces provisions to improve data security, personal information protection, and the protection of minors. Internet pop-up push service providers will be responsible for content management and are subject to certain specific obligations, including (1) to obtain an internet news information service license; (2) to set a reasonable proportion of push content; (3) to improve the review process of push content; and (4) to prevent malicious web traffic redirection.
These regulations are likely to be welcomed by Chinese Internet users as they also address quality-of-life problems in connection with apps usage, such as the spamming of mobile app notifications. Service providers must clearly notify users of the frequency of notifications and indicate how to unsubscribe; and advertisements must be clearly marked so that they won't be mistaken as news.
Source: Cyberspace Administration of China
Unauthorised dissemination of audio version of the novel 'The Three-Body Problem' on the Lizhi Platform held to Infringe Copyright – damages award of 5 Million Yuan (approx. US$700,000)
Date: September 15 2022
Shenzhen Tencent Computer Systems Co., Ltd. (Tencent) signed an exclusive cooperation agreement with Cixin Liu, the author of the novel The Three-Body Problem, and obtained an exclusive license to record The Three-Body Problem as an audio work. Without the authority of Tencent, Guangzhou Lizhi Network Technology Co., Ltd. (Lizhi Company) uploaded a large amount of The Three-Body Problem audio content to its Lychee Platform. Despite repeated letters from Tencent informing Lizhi Company that it was infringing copyright, and requesting that the works be taken down, a large number of infringing audios remained on the platform. Tencent then filed a copyright infringement action with the Shanghai Pudong New Area People's Court, requesting compensation of 5 million yuan (approx. US$700,000). It succeeded at first instance and Lizhi Company appealed to the Shanghai Intellectual Property Court.
The main issue on appeal was whether Tencent owned the relevant copyright in the works involved. Lizhi Company argued that Tencent had not acquired the Right of Dissemination via Information Network of The Three-Body Problem. The Shanghai Intellectual Property Court held that Tencent had the legal right to produce, distribute, and disseminate the audio work of The Three-Body Problem in any field (including but not limited to the Internet). In addition, the works involved in the case were well-known, and Lizhi Company should have realized that the rights owner would not allow others to disseminate the work on other platforms without payment, and that there was a high risk of copyright infringement. Besides, as the users who were uploading the material to the Lizhi platform included some popular hosts with many fans, Lizhi Company should have undertaken a higher duty of care; it knew, or should have known, that these users would be disseminating unlicensed infringing audio and failed to take action to stop them. This constituted contributory infringement; in the circumstances, Lizhi could not rely on the protection of the safe harbor rules.
In the end, the second-instance court rejected all Lizhi Company's appeals, upheld the first-instance judgment, and granted the Plaintiff's request for 5 million yuan compensation.
Source: China Intellectual Property News
Beijing Intellectual Property Court Holds Christian Louboutin red-soled shoes and the name 'red sole shoe' capable of protection under Anti-Unfair Competition Law
Date: September 9 2022
The first Plaintiff in this case, Christian Louboutin Simple Co., Ltd. (Christian Company), has been designing, producing, and selling women's high-heeled shoes with a red sole decoration since 1992. The second Plaintiff, Lanbuting Shanghai Trading Co., Ltd. (Lanbuting Company), is its Chinese distributor. The first Defendant, Guangdong Wanlima Industrial Co., Ltd. (Wanlima Company), a medium sized Chinese shoe manufacturer, produced and sold a variety of shoes with red soles, very similar to Christian Company's red-soled shoes. The shoes were sold online and at the business premises of the second Defendant, Beijing Yixi New World Department Store Co., Ltd. (New World Company), which also used 'red-soled shoes' as its trade name. The Plaintiffs considered that the acts of the two defendants violated the Anti-Unfair Competition Law of the People's Republic of China (the AUCL) and filed a lawsuit with the Beijing Intellectual Property Court.
The Court held that both Christian Company's red-sole shoe decoration and the phrase 'red-sole shoe' have a high market reputation and a stable relationship with the relevant public. The distinctive feature of the red-soled shoes serves to distinguish the source of the product and, therefore, constitutes a decoration with a 'certain influence' for the purposes of Article six of the AUCL. That article prohibits the unauthorized use of labels, packing or decorations that have a certain influence.
Wanlima Company, used the name 'red-sole shoes' and sold the red-soled shoes without authorization, thereby misleading customers to believe that it, or its products had some specific connection with Christian Company. This constituted unfair competition. As there was insufficient evidence to show that the second Plaintiff, Lanbuting Company, had established a separate relationship with the red-sole name or product, it did not have a direct interest in the case.
As a result, the Beijing Intellectual Property Court finally ruled to dismiss Lanbuting Company's case and ruled that Wanlima Company should stop the infringement and compensate Christian Company for economic loss in the sum of RMB 5 million (approx. US$ 700,000) and reasonable expenses of RMB 445,000 (approx. US$ 70,000). The second Defendant, New World Company, was ordered to pay costs in the sum of RMB 5,000 (approx. US$ 700)
Source: Beijing Intellectual Property Court
Cyberspace Administration of China, Ministry of Industry and Information Technology, State Administration for Market Regulation Issued Regulations on the Administration of Internet Pop-up Push Services
Lychee Platform Infringed the Copyright of The Three Body Problem and Paid 5 Million Yuan in Compensation
深圳市腾讯计算机系统有限公司（下称腾讯公司）与小说《三体》的作者刘慈欣签署独家合作协议，享有将《三体》录制成音频作品的独占性授权。广州荔支网络技术有限公司（下称荔支公司）的"荔枝 App" 中存在大量主播上传的《三体》音频内容。腾讯公司多次发函提醒其行为属于侵权，但平台仍存在大量侵权音频 ，于是腾讯公司向上海市浦东新区人民法院提起诉讼，请求赔偿500万元。
本案争议的焦点为：腾讯公司对案涉作品是否享有相应版权、荔支公司对其平台上的主播传播侵权音频是否承担侵权责任。浦东法院认为荔支公司构成直接及间接侵权，应对被诉行为承担相应的侵权责任。二审上海知识产权法院审理后认为，荔支公司对腾讯公司获得《三体》音频作品的信息网络传播权提出异议，但未能提供有效证据，故认定腾讯公司依法享有制作传播《三体》音频及在任何领域（包括但不限于信息网络）复制、发行和传播该音频的权利。此外，本案涉案权利作品具有较高知名度，荔支公司应当认识到版权人不会允许他人在向公众开放的网络平台免费传播其收费作品，相关音频内容侵害版权的可能性极高，且侵权主播中不乏人气极高、粉丝人数众多的主播，荔支公司对此承担更高的注意义务。因此，荔支公司明知或者应知其平台主播传播未经许可的侵权音频而未采取必要措施进行制止，构成帮助侵权，不能适用"避风港"原则。最终，二审法院驳回了荔枝公司的全部上诉请求，维持一审判决，并支持了原告 500 万元的赔偿请求。资料来源：中国知识产权报 2022-09-15
Beijing Intellectual Property Court Held that Red Bottom Shoes Constitutes a Trade Name and Packaging Decoration with Certain Influence in the First Trial
法院经审理后认为， "红底鞋"商品及红色鞋底装潢已具有较高市场知名度，在相关公众中已建立稳定联系，具有区分商品来源的显著特征，属于《反不正当竞争法》第六条中所规定的 "有一定影响的" 商品名称和装潢标识。被告万里马公司擅自使用与"红底鞋"商品名称及红色鞋底装潢相同或近似的标识，足以造成误认其与克里斯提公司具有某些特定联系，构成不正当竞争。此外，由于本案证据不能证明涉案装潢及商品名称已经与兰步婷公司建立稳定的对应关系，故不能认定兰步婷公司与本案有直接利害关系。
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