As a follow on to yesterday's post about cyber-litigation and the next wave of challenges, we have this interesting (if not unexpected) development, courtesy of ChinaTechNews:

Ifeng.com, the authorized online broadcaster of Phoenix Satellite TV's programs, has sued Ku6.com, one of China's leading video websites, for "maliciously" uploading programs of Phoenix and gaining illegal profits through these programs.

The lawyer of Ifeng.com told local media that Ku6.com should gain authorization from Ifeng.com if it wants to broadcast the programs of Phoenix on its website. However, the video website use the programs of Phoenix in without the consent of Ifeng.com. It has seriously infringed the copyright of Phoenix Satellite TV and Ifeng.com. Ifeng.com has reportedly completed the evidence notarization about the infringements of many websites, including Ku6.com and Youku.com, and has sued the two in court.

The infringement activities of video websites have been tough problems in China. Video websites always say the videos are uploaded by netizens and take that as an excuse and the markets of content suppliers are illegally occupied by pirated copies. In regards to this situation, the National Copyright Administration jointly promoted a special action with the Ministry of Public Security and the Ministry of Industry and Information Technology in 2008 to fight piracy.

I think we can narrow the focus of this matter considerably by first stating that, for the most part, this is not an argument about whether these works are protected by copyright or not, or even whether they should be posted on these sites. If these are sufficiently-long segments of television programs whose copyrights are owned by Phoenix (and distributed by Ifeng), then their distribution on these sites is a clear violation. This should not shock anyone's sensibilities.

What this is all about, dovetailing nicely on my post yesterday, is enterprise liability. Between the individual uploader/downloader and the platform operator and the ISP, who is responsible?

IP owners will always rather go after the operator — this is just on the basis of practicality. Going after individuals is expensive and inefficient. It also can make industry look bad (e.g. when RIAA sues kids, which is bad PR). Going after ISPs is another possibility, but since they are one more step removed from the infringing activity, it's harder to argue about things like knowledge, duty to police, and so on. Moreover, as we've seen with Comcast and file sharing in the U.S., ISPs that take efforts to filter or block systems run the risk of being sued by other users regarding quality of service provision. Tough to be an ISP these days.

Then we have the operators. I talked about music searching platforms, deep linking, etc. yesterday. The story above on video sites presents a classic liability problem and is a local example of the kind of suit brought against Google by Viacom.

Most of these sites have take-down policies, whereby infringing material will be removed by the operators once notice has been given by the copyright owner. Courts in many countries have examined these kinds of policies to determine whether they are adequate — such an analysis might take place in the Ifeng.com case.

However, there is another issue here to deal with. Unlike file sharing sites/networks (e.g. torrent networks) that do not involve storage of copyrighted works by the platform operator, video sites involve uploading of works by users — the files are stored on the operator's servers. That means that the operator is directly distributing protected copyright works to third parties and not merely facilitating such a transfer. That's pretty tough to deal with from an operator's standpoint, since it opens them up to a charge of joint liability:

If a network service provider takes part with another person in the infringement upon copyright through networks, or abets or aids others to infringe upon copyright through networks, the people's court shall investigate such network service provider and other wrongdoers or the wrongdoer who directly commits such infringement for their joint liability[.] (Article 5, Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Laws in Hearing Cases Involving Computer Networks Copyright Disputes (Amended in 2006))

I have no idea whether that above provision is at issue in the Ifeng.com case — just guessing, and including it fools everyone into thinking I'm a learned individual.

In these kinds of cases, the alleged infringer's argument is that its business model, which involves allowing millions of users access to upload material, also means that it is not possible to screen out all copyrighted works, much the same way eBay cannot screen out all counterfeit goods offered for sale on its site. In other words, yes they might provide infringing content, but they do so unknowingly; moreover, the activity ceases once they are given notice and the infringing work is taken off the site.

To the extent that these sites have crappy (or non-existent) take-down policies, I think they could be screwed.