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Charles Feng of Tahota Law Firm concludes a two-part series on intellectual property protection in China by looking at copyright, unfair competition, and a change to the appeals procedure for technology-related disputes
There have been many significant cases since the revision of the Chinese Copyright Law in 2020, and copyright cases are the largest portion of intellectual property (IP) cases handled by Chinese courts. Cases related to non-fungible tokens (NFTs) and AI-generated content (AIGC) have attracted significant attention and discussion.
The Hangzhou Internet Court heard the ‘Fat Tiger’ vaccine case on April 20 2022, relating to a cartoon of a tiger receiving a vaccine, and issued its judgment shortly afterwards. It found for the copyright owner.
The court found that a transaction of an NFT digital work is subject to the copyright owner’s right of information network dissemination under the law. The court held that the defendant contributorily infringed the plaintiff’s right, and ordered the defendant to destroy the infringing NFT digital work by sending it to an inaccessible address (i.e., ‘burning’ the NFT) and pay damages to the plaintiff.
The court confirmed in its decision that an NFT platform may be liable for copyright infringement in China. It held that, as an internet service provider, an NFT marketplace should implement an IP review mechanism and conduct a preliminary ownership check of the digital works on its platform. The court noted that even without receiving a notice from a copyright owner, the platform should generally assess the likelihood that an NFT digital work infringes copyright and take appropriate measures; otherwise, the NFT platform may be liable for copyright infringement. The decision was upheld in the second instance, the Intermediate People’s Court of Hangzhou City.
The court highlighted the following in finding that the defendant has a heightened obligation to take reasonable measures to prevent copyright infringement:
NFT transactions involve the reproduction and dissemination of NFT digital works;
NFT transactions involve the reproduction and dissemination of NFT digital works;
The operator of a platform should therefore be aware that, in addition to owning the digital work, a seller must be the owner of the copyright in a digital work;
The operator of a platform should therefore be aware that, in addition to owning the digital work, a seller must be the owner of the copyright in a digital work;
If ownership were not guaranteed, it could only serve to weaken the certainty and trust in NFT transactions, which are at the core of the NFT ecosystem;
If ownership were not guaranteed, it could only serve to weaken the certainty and trust in NFT transactions, which are at the core of the NFT ecosystem;
The platform has significant control over the digital works and possesses the ability to review and monitor the IP without incurring additional cost; and
The platform has significant control over the digital works and possesses the ability to review and monitor the IP without incurring additional cost; and
The Sichuan Higher People's Court has issued a final judgment in the case of Wang Mouyu v Hainan Lianhe Technology Co. (iBox) concerning an appeal in a dispute over infringement of the right of network transmission of work information.