On October 24, Shanghai Busheng Music Culture Media Company, an EMI subsidiary also known as Shanghai Push, filed a lawsuit against peer-to-peer (P2P) software provider Kuro, operated by FashioNow Co., Ltd, alleging it had enabled users to download 59 unauthorized songs, the first P2P infringement case on the mainland.

EMI's attorney Zhuang Jianbin said they wouldn't settle until they established a precedent, after which it would be easier to file more lawsuits "to protect their rights," according to National Business Daily on October 27.

The suit was filed the same day Chan Nai-ming was convicted in Hong Kong for illegally distributing movies over the Internet using BitTorrent technology, the world's first criminal piracy case against an individual using BitTorrent software.

Chan was found guilty of copyright infringement for putting three Hollywood movies onto the Internet without authorization, a court spokesperson said, and released on bail for HK$5,000. The sentence hearing was scheduled for November 7.

Both cases have fuelled debate around what constitutes copyright infringements online and who should be held responsible for them.

Defining Infringement

In September, Shanghai Push won a case against Baidu.com, which had to pay them 68,000 yuan (US$8,410) and change the wording on its website. Baidu was also being sued by Sony/BMG, Warner, Universal and Cinepoly for the same reason: providing a facility for internet users to search for and download free mp3s.

On September 7, in response to a rumor that Shanghai Cable Corp. would ban BitTorrent, 21st Century Economy Report quoted a Shanghai Motion Picture Association insider as saying, "BitTorrent will not only affect the box office, but also seriously affect the money made from global DVD sales, which is over one-third of the gross profit of a movie."

Hou Ziqiang from the Chinese Academy of Sciences' Broadband Communication Department asked, "What is infringement? For instance, if I bought an authentic copy, could I lend it to others? If I could, could I lend it to others online?"

But a State Intellectual Property Office official said, "If over 1,000 people have downloaded a file online, the provider of the file may cross a line, in which case their actions could be regarded as criminal. If anyone downloaded over 1,000 pirated files, they could be held as a criminal too. Pirate file providers and service providers should face prosecution and punishment, because you wouldn't lend a disc to 1,000 people."

Chan Nai-ming was found guilty because under Hong Kong law you do not need to profit from distributing files that infringe copyright to be held criminally accountable, there just needs to be clear intent for others to download them.

One Hong Kong lawyer Thomas Tse used his own website to say that this should be regarded as a civil case, and that the customs department was abusing its power by treating it as a criminal case in order for the movie industry to establish a precedent.

Matthew K.O. Lee, professor at the City University of Hong Kong, said Chan's conviction would make file sharers hide their true identity but would not stop them using P2P technology.

However, the customs department said that since Chan's arrest, file-sharing activities violating copyright laws had dropped by 80 percent.

Woody Tsung, chief executive of Hong Kong's Motion Picture Industry Association, welcomed the verdict. "This should scare people off from distributing any more unauthorized files on the Internet."

Assigning Responsibility

Zhao Zhanling, an Internet legal expert, told National Business Daily that there are four parties who could be held as infringing copyright: software platforms, torrent file providers, users and torrent file distributors.

Several years ago, the Recording Industry Association of America filed lawsuits against mp3.com and Napster, two big P2P-based music-downloading networks, and early this year, the Motion Picture Association of America took actions against 100 torrent file distributing networks. 

On June 27, the US Supreme Court ruled that P2P companies could be held responsible for their customers' copyright infringements, and the popular file-sharing sites eDonkey and WinMX were closed in September.

Elite Torrents Network was shut down in the US in May, but the Hong Kong case was the first against a user of BitTorrent.

P2P's Future

Yao Hong, CEO of P2P-based POCO web, told National Business Daily that overprotection of copyright may suppress development of high-tech technology and industry.

He said his company is expecting to formulate new network technology and to charge people for content, excluding pirated files. 

According to a research report by China Labs, Chinese P2P enterprises have improved greatly in recent years both technologically and commercially, and some media have predicted that P2P will become one of the country's top new areas of economic growth.

Xie Huijia, from Huazhong University of Science & Technology, said the P2P market in China is far from maturity, and while administrative measures to protect Internet users' rights are being composed there's currently nothing at all, according to First Finance and Economy Journal on October 28.

(China.org.cn by Zhang Rui, November 3, 2005)