Last week, four executives of Shenzhen QVOD Technology Inc., a Chinese online peer-to-peer video-hosting platform, stood trial in Beijing. It was alleged that the company allowed pornographic websites to access its streaming technology and approximately 21,000 pornographic materials have been distributed on three servers run by QVOD. The four executives, who pleaded not guilty, if found guilty, will each face at least 10-year prison sentence.

Once one of China’s most popular peer-to-peer file sharing Internet service providers with more than 300 million users, QVOD allowed its users to watch and download videos that were uploaded by others onto websites not run by QVOD. In May 2014, the Chinese government revoked QVOD’s Internet business license and forced it to shut down all the servers due to copyright infringement and Internet pornography. QVOD was later fined 260 million yuan ($40 million), and some of its executives were arrested.

According to the Chinese criminal code, where, for profits, the founder or directly responsible manager of a website, knowing that any other person is producing, reproducing, publishing, selling or disseminating pornographic electronic information, allows or connives at the person’s publishing such information on the website or webpage owned or managed by the founder or manager, the founder or manager shall be convicted of and punished for the crime of disseminating pornographic items for profits.

By far, most of you would have probably analogized the QVOD trial with A&M Records v. Napster, Inc. Similar to QVOD, Napster was an early peer-to-peer file sharing network that allowed its users to share files such as music in the mp3 format. Unsurprisingly, major record companies were upset with the distribution of their music for free on Napster and sued it for copyright infringement. The Ninth Circuit held Napster liable for contributory infringement because Napster’s peer-to-peer technology materially contributed to its users’ infringing activities and Napster had actual knowledge that specific infringing material was available using its system but failed to remove the material when it could have. In reaching its holding, the court noted that under Sony Corp. v. Universal City Studios, Inc., a computer system operator cannot be liable for contributory infringement merely because the structure of the system allows infringing uses in addition to substantial noninfringing uses. The court also held Napster liable for vicarious infringement because Napster financially benefited from the infringing activities and it failed to police the system when it had the power to patrol and control.

Although the burden of proof is much higher in criminal trials than in civil trials, the elements the prosecutors need to prove in the QVOD trial are quite similar to those in Napster. The knowledge element in the Chinese criminal code is similar to the knowledge prong for contributory infringement in Napster. Likewise, the connivance element emphasizes on the failure to exercise the power to patrol and control, and together with the for profits element, is similar to the requirement for vicarious infringement in Napster. In other words, if we analogize the porn spreading activities on QVOD with the infringing activities on Napster, the prosecutors in the QVOD trial at least need to prove that QVOD is liable for both contributory and vicarious infringement. Of course, the four executives can raise the Sony type of defense that the technology itself is neutral and available for substantial noninfringing uses, as they have done so in the trial.

It is worth noting that the QVOD trial has received wide publicity in China. The trial was broadcast live, and more than 1 million people have watched it online. It is also worth noting that the courage of the four executives to not plead guilty and the excellent performance of their attorneys in the trial were applauded by many Chinese mainstream media. No matter what the outcome will be, the QVOD trial will be an important case for setting up the boundary of what Chinese online service providers should and should not do in matters related to copyright and pornography.

Peiyuan Guo

 

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