(By You Yunting) It is well known that China is facing a serious problem over piracy. When claiming for his enforcement over cases suspected to involve criminal offences, the right holders often report to the Police attempting the use of criminal laws to strike with piracy. Furthermore, in accordance with Chinese laws and regulations, upon the completion of criminal proceeding, the party against the piracy may, on the basis of criminal judgment paper, file civil lawsuits against the pirated to receive compensation. Today we will introduce a case concerning Symantec Corporation’s enforcement against the pirated party, where Symantec Corporation instituted lawsuits against the pirated, as well as the companies which contributed to make pirated CDs and print the envelopes of the pirated software. As such, its lawsuits and claims are being backed by Shanghai courts.
Introduction to the Case:
Appellant (Defendant at the first instance): Ma Jingyi (other used name Ma Kepei)
Respondent (Plaintiff at the first instance): Symantec Corporation (NASDAQ: SYMC)
Court of first instance: Shanghai No.1 Intermediate People’s Court No.: (2009)沪一中民五(知)初字第146号
Court of second instance: Shanghai Higher People’s Court No.: (2011)沪高民三（知）终字第88号
Symantec Corporation has copyrights on 14 software, including Norton Antivirus which provides malware prevention and removal during a subscription period. After discovered that a company founded by Ma Jingyi sold Norton Antivirus and other software online, Symantec Corporation reported it to the Police. After entering into a criminal proceeding, Shanghai No.1 Intermediate People’s Court made the following criminal judgment:
In February 2003, the United States District Court for the Eastern District of New York issued a warrant for the defendant Ma Kepei’s arrest, who sold the pirated CD over computer software. After he returned to China, the defendant changed his name as Ma Jingyi. Since July 2003, the defendant founded three companies and teamed up with his wife Li Di employing and instigating others (the “Ma Jingyi’ Team”), who know selling its products without authorization from the copyright owner, still in the name of Symantec Corporation, to sell its pirated products outside China through the Internet, with the total illegal business revenue of 5,448,740.56 Dollars.
For these reasons, the court decided Ma Jingyi to constitute the crime against copyright. Furthermore, the defendant Ma Jingyi is sentenced to seven years in prison, one year’s deprivation of political rights and a RMB 8600,000 fine in restitution. Others in Ma Jingyi’s Team are also sentenced into prison.
The criminal judgment also discovered that, the Shenzhen JiaChangYuan Industrial Co., Ltd was contributed to burn the said software into 3,000 CDs without asking the defendant for authorization letters, and the Guangdong WeiYa Optical Disc Co., Ltd played the role of the manufacturing more than 253,000 CDs for the defendant. Also, Ma Jingyi provided the business license, authorization letter and processing letters and other certifications but made clear that he was unable to provide the authorization of copyright.
Shanghai Xuguang Printing Co. Ltd was engaged in printing envelopes of the CDs and getting a RMB 1560 in processing fee, with an estimated net income of RMB 318.
After the termination of criminal proceeding, plaintiff Symantec Corporation filed civil lawsuits against all the Ma Jingyi’s Team as well as the companies engaging in piracy, including Shenzhen JiaChangYuan Industrial Co., Ltd, Guangdong WeiYa Optical Disc Co., Ltd and Shanghai Xuguang Printing Co. Ltd.
Meanwhile, on November 6, 2006, Symantec Corporation brought the Ma Jingyi’s Team into the United States District Court for the Central District of California, alleging that the defendant was illegally sold the pirated products of Symantec Corporation in America. The court decided in the defendants’ absence that they must assume liabilities for the compensation of 11,000,000 dollars to Symantec Corporation. For the above reasons, the defendant argued that Symantec Corporation shall not be entitled to file such lawsuit on the basis of same facts and reasons in China.
Upon the argument, the court of first instance held that, this case did exist partial overlaps with the judgment backed in the United States, especially over the facts where Ma Jingyi attempted to sell the products through the Internet in the name of Anyi Company and obtained benefits. However, considering that the judgment backed in the United States was not took steps to fulfil, as such, the plaintiff still is entitled to file a lawsuit against Ma Jingyi.
When mentioned about the suspects against Shenzhen JiaChangYuan Industrial Co., Ltd, Guangdong WeiYa Optical Disc Co., Ltd and Shanghai Xuguang Printing Co. Ltd, the court of first instance decided that, these companies accepting commission from Ma Jingyi’s Team to manufacture large numbers of pirated CDs constituted copyright infringement against Symantec Corporation who owned the copyright over the said software. Even though the Guangdong WeiYa Optical Disc Co., Ltd signed commission contracts and provided the commission letter of production and the certificate of copyright in the litigation, the certificate of copyright provided is proved to be in question. Besides, Guangdong WeiYa Optical Disc Co., Ltd did not ask the commissioned party for providing the reproduction entrustment letter of electronic publications and the written authorization from the copyright owner in accordance with the Administrative Provisions on Electronic Publication.
Under the fact that Shanghai Xuguang Printing Co. Ltd acknowledged to accept commission in printing some such outer package as envelopes, color pages and barcodes, considering the insufficient evidences, the court could not confirm if Shanghai Xuguang Printing Co. Ltd were already printed the outer packages and other logos over the disputed software and thus are less likely to judgment whether Shanghai Xuguang Printing Co. Ltd constituted copyright infringement against Symantec Corporation. For these reasons, the court of first instance shall not sustain the request that Shanghai Xuguang Printing Co. Ltd constituted infringement.
Therefore, to conclude, the court of first instance made the judgment in favor of Symantec Corporation below: firstly, Ma Jingyi shall make compensation of RMB 9,900,000; Secondly, Guangdong WeiYa Optical Disc Co., Ltd must make compensation of RMB 99,000; Thirdly, Shenzhen JiaChangYuan Industrial Co., Ltd shall compensate RMB 1,000 for the losses of Symantec Corporation. After the judgment of the first instance, Ma Jingyi appealed but was unsuccessful, because the court of second instance determined that the facts were clearly found and the law was correctly applied in the original judgment, and then rejected the appeal of Ma Jingyi.
Lawyer’s Comment:
1. Could a case be repeatedly filed in China if it had been indicted in United States?
Article 306 of the Opinions of the Supreme People’s Court on Several Issues Concerning the Application of the Civil Procedure Law of the People’s Republic of China stipulates that:
“In the event that both a court of the People’s Republic of China and that of another country have jurisdiction over a case and one party has institute a lawsuit to a foreign court and the other to a court of the People’s Republic of China, the people’s court may accept the case. Where after judgment, a foreign court or a party applies to the people’s court for recognizing or enforcing the judgment or ruling made by the foreign court to this case, such application shall not be approved, unless otherwise provided for by an international convention which both countries participate in or conclude.”
Pursuant to Article 306, Chinese courts may accept the case which a foreign court has already accepted. If bout a Chinese court and a foreign court make judgments on the same case, generally, Chinese court will enforce the judgment of its own. When referring to the case over Symantec Corporation, repeatedly accepting the case is good to Symantec Corporation because Ma Jingyi has no property in the United States unavailable for the implementation of the judgment made by United States courts. Where China and United States have not yet enter into agreement for the reciprocal recognition and enforcement on the judgment under consensual jurisdiction, considering the judgment by the court of United States is unavailable to enforce in China whilst Ma Jingyi has property in China, therefore Symantec Corporation may repeatedly filed a lawsuit in China for the purpose of the enforcement of the available property.
2. Why does the company who burned the software into CDs assume responsibilities of infringement?
Actually, China has strict governmental regulations upon publication industry. The Administrative Provisions on Electronic Publication stipulates that, to duplicate the electronic publications upon entrustment, two certificates, consisting of the reproduction entrustment letter of electronic publications with signatures of the entrusting and entrusted entities, and the certificate of authorization from the copyright owner, shall be provided. The reproduction entrustment letter of electronic publications shall be issued by the administrative department of press and publication. In the Administrative Provisions on Electronic Publication, the publication refers to the publication units of electronic publications approved by governments. Such publication units are almost operated by the government, i.e., the state-operated enterprises, more formal publication units.
However, under the fact that Guangdong WeiYa Optical Disc Co., Ltd and Shenzhen JiaChangYuan Industrial Co., Ltd did not require the commissioned party to provide the regulated documents pursuant to the laws and regulations and thus the two companies broke the administrative regulations, the court determined the failure of two company failure to fulfil their obligation shall assume the liabilities of infringement. Upon the methods of bearing liabilities, there exist essential differences between the two companies and the Ma Jingyi’s Team, because the two companies were undesirable to constitute joint crime which failed to form a joint deliberation of Ma Jingyi’s Team. For these reasons, the two companies shall be taken part of liabilities for copyright infringement.
Lawyer Contacts
You Yunting：86-21-52134918 youyunting@debund.com/yytbest@gmail.com
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