Why sports broadcasters in China cannot currently rely on copyright law to protect against unauthorised livestreams (and possible solutions)Guo Cai
“Reach for Gold: IP and Sports” was the theme set by WIPO (World Intellectual Property Organisation) for this year’s World Intellectual Property Day on 26 April 2019. As part of the awareness raising initiatives in China, the first Forum for Sports and Intellectual Property was held in the campus of Beijing Sport University（北京体育大学）where participants discussed the current issues surrounding intellectual property protection concerning sports.
What particularly drew the author’s attention is how difficult it is for authorised broadcasters of live sports events (i.e. the rights holder) to assert their rights against entities engaged in the unauthorised livestreaming of the same event on the internet. Most of the broadcasters who have brought claims to Court have argued that the broadcast was a “work” capable of protection under the PRC Copyright Law. However, as to date the courts have not agreed.
This article examines the recent case law (which exemplifies the current limitations facing broadcasters) and analyses the main issues, namely:
whether live/real-time broadcasts qualify as “works” that can be protected by PRC Copyright Law; and
why the Courts are unwilling to take a more expansive interpretation of PRC Copyright Law so that it can apply to new forms of infringement emerging from technological developments (such as livestreaming).
By way of synopsis, unless the Copyright Law and relevant regulations are amended, or the Supreme People’s Court issues judicial interpretation or case guidance with respect to online livestreaming, it currently seems necessary for broadcasting rights holders to find alternative legal arguments beyond Copyright Law to protect against unauthorised livestreaming in China. The author invites rights holders and relevant stakeholders to work on alternative legal arguments based on property rights – the exclusive right to commercially benefit from livestreaming of sporting events, as one of the possible solutions.
The inability to rely on PRC Copyright Law – lessons from recent case law
Five major broadcast-related cases in China (four of which are examined in detail below) have recently brought the application of the PRC Copyright Law to live broadcasts under the spotlight.1
Unfortunately, the results have not been promising for rights holder. In essence, the courts consistently held that:
live broadcasts or livestreams of sporting events cannot be defined as “works” that qualify for copyright protection for the purpose of Article 10(11) of the PRC Copyright Law;2 and
the Copyright Law is not applicable to livestreaming because the “right to communicate information on the Internet” under Article 10(12) of the PRC Copyright Law was not, at the time of drafting, intended to encompass this specific act.3
The courts have however managed to strike some balance by extending some protection to rights holders under the PRC Anti-Unfair Competition Law (PRC Competition Law) (discussed below). However, the level of damages awarded pursuant to the Competition Law has been relatively insignificant.
CCTV Network v Wo Ai Liao Internet Technology Co. Ltd (Wo Ai Liao)4
In the dispute between CCTV Network and Wo Ai Liao Internet Technology, Wo Ai Liao launched a web application that allowed users to access programs on CCTV Network, including the real-time display of the 2012 London Olympics, without the authorization of CCTV Network.
The court of first instance, endorsed by Beijing No.1 Intermediate People’s Court, took the view that sporting events productions fell short of “works” under PRC Copyright Law. Although CCTV Network could rely on a TV station’s right to prevent unauthorized rebroadcasting or copying of its programs, the relevant provision, Article 45 of the PRC Copyright Law, was not intended to extend the right to online streaming.5 The Court indicated its “reluctance” to expand the legislative intention simply due to the emergence of a new technology.
Wo Ai Liao was eventually ordered to compensate CCTV Network the modest amount of RMB400,000 (c.$58,000) for violation of Article 2(1) of the PRC Competition Law on the basis that Wo Ai Liao’s unauthorised livestreaming diverted visitors from CCTV Network and thus deprived CCTV Network of business opportunity.6
CCTV Network v. Hua Xia Cheng Shi Internet TV Co. Ltd7
In CCTV Network v. Hua Xia Cheng Shi Internet TV, the alleged violation was similar to the Wo Ai Liao case, only relating instead to the 2014 FIFA World Cup in Brazil. The court of first instance, Shenzhen Futian District People’s Court, held that sporting events productions could not qualify for “works” under the PRC Copyright Law due to sporting events’ unpredictability and lack of originality. However, the court was again willing to compensate CCTV Network under the PRC Competition Law in the amount of RMB120,000 (c$17,000), much less than the claim of RMB 4 million. The amount of damages was decided by the court in its discretion, taking into account the duration of unauthorised livestreaming, the popularity of the sporting events concerned (i.e. the FIFA World Cup held in Brazil), as well as the viewing habits of audience etc.
Sina v. Tian Ying Jiu Zhou Co. Ltd8
In Sina v. Tian Ying Jiu Zhou, Sina acquired the exclusive right to livestream Chinese Super League (CSL) events from 1 March 2012 to 1 March 2014. While being explicitly excluded from doing so, the website operated by the Defendant livestreamed two CSL soccer matches in August 2013. The court of first instance, Chaoyang District People's Court (Chaoyang Court), took the progressive view that sporting events productions would be original enough to qualify for “works”. As the productions consist of series of images, each image could qualify as a “work”. The Court reasoned that each producer would present the match in a different way. Presentation by different producers would reflect the producer’s own taste and interpretation of actions on and off the pitch by using an original selection of techniques such as close-up, slow motions and commentaries etc. Although the Court was not convinced that the “right to communicate information online” under Article 10(12) of the PRC Copyright Law would entitle the rights holder to prevent unauthorized livestreaming online (due to restricted statutory interpretation), it invoked the Miscellaneous Provision (Article 10(17)) of the PRC Copyright Law and ordered the Defendant to pay Sina RMB 500,000 (c$72,000).
The case was appealed and the issue of whether sporting event productions qualify for “works” was thoroughly examined by the court of appeal, Beijing Intellectual Property Court (hereinafter Beijing IP Court). The answer from Beijing IP Court, delivered in a judgment dated 30 March 2018, was in the negative. The Beijing IP Court assessed the originality of sporting events productions by scrutinising the CSL TV Broadcasting Public Signal Production Manual. It concluded that producers of sporting events would be restrained by too many rules to effectively express their originality. The Beijing IP Court further found that live-broadcasting or live-streaming of sporting events did not meet the “fixation” prerequisite necessary to qualify for “works produced analogous to movies”. As a result, real-time sporting event productions could not be protected as “works” under PRC Copyright law. Due to procedural rules in the appeal proceedings, Sina was unfortunately prevented from turning to the PRC Competition Law as last resort. Sina therefore lost the case on all counts and was left without judicial means to assert its exclusive right to stream the CSL events online.9
CCTV Network v. Baofeng Group10
In CCTV Network v. Baofeng Group, another appeal judgment issued by the Beijing IP Court on the same day of the Sina case, the scenario was a little different. The items under contention in this case were short videos clips (rather than livestreaming) from the 2014 World Cup in Brazil. The Claimant, CCTV Network, acquired the exclusive right to stream the 2014 World Cup online in mainland China. The Defendant, Baofeng, made video clips from the World Cup production available on its website. The Beijing IP Court endorsed the court of first instance view that sporting events productions fell short of “works” under the PRC Copyright Law. This is because, although the items under contention were video clips (rather than livestream) and thus had been “fixed” on a medium (as compared to the “unfixed” livestream), the clips were from sporting event productions that could not be original enough to qualify as “works”.
However, the Beijing IP Court reasoned that such video clips would qualify as “video recordings”, for which CCTV Network would be entitled to video recorders’ right to prevent unauthorized, on-demand distribution online under Article 10(12) of the PRC Copyright Law. CCTV Network in this case was compensated in full for a record high amount of RMB 4 million (c$580,000).
When assessing the damages, the Beijing IP Court considered, among other things, the licensing fee of RMB 40 million charged by CCTV Network for the right of displaying such video clips on exclusive basis for two months, the high volume of video clips (totalling 1663 clips, covering all 64 matches of the 2014 World Cup in Brazil), and the high popularity and commercial value of the 2014 World Cup. For these reasons, the Court held that the claim for damages in the amount of RMB 4 million was justified in full. If the same video clips wew distributed live (rather than on demand, as in this case) without authorization, the result of the case would have been different – the position taken by the Beijing IP Court in the Sina case suggests that the current copyright legal framework was not ready to protect sporting events rights holders from unauthorized online livestreaming.
A number of academics are critical of the “originality assessment” exercise undertaken by the Beijing IP Court. The view is that any such assessment would necessarily be subjective, thus making it unpredictable to assess whether productions qualify as “works” based on the level of originality, as each panel of judges will have their own interpretation of “originality”.
Some academics have argued that the primary benchmark should instead be “individuality”.11 There are also views that the requirement of “fixation” for productions to qualify for “works” (if original enough) or “video recordings” (if less original) should be removed, because:
the addition of such requirement is not consistent with the legislation principles of the Berne Convention and PRC copyright legal framework, and
live broadcasting or streaming must have been recorded and thus “fixed” already to some extent.12
Summary and comment
The current judicial position in China is that live sporting events productions fall short of “works” for the purpose of copyright protection.
The Beijing IP Court took the position that productions that are broadcast or streamed live would not even qualify as “video recordings” as they were not “fixed” due to their ‘live’ nature. Until the Supreme People’s Court sets guidance either in the form of judicial interpretation or case guidance, the nature of sporting events productions, especially live sports events, whether being defined as works, video recordings or something “unfixed” falling outside of copyright protection, is not yet completely settled. Such uncertainly is a major obstacle that exists in the current PRC copyright framework.13
Although individual lower courts (such as the Chaoyang Court) have occasionally taken a more progressive or expansive approach in an attempt to protect rights holders from unauthorised online livestreaming, such expansive interpretations have always been rejected by higher courts. Therefore, the current authoritative judicial position is that broadcasting rights holders of sporting events cannot rely on the current copyright regime against unauthorized livestreaming online conducted in China.
A Possible Solution: Broadcasting Rights as Property Rights
Rights holders could of course resort to detection or enforcement technology to pre-empt unauthorised livestreaming. But in the event that such incidents do arise in China, how could broadcasting rights holders effectively protect their interest through judicial means? From a lawyer’s perspective, it is certainly worthwhile to continue engaging in productive discussion with the judiciary, and to consistently defend the position that sporting events productions, broadcast or streamed live online, qualify as “works”. Given the apparent limitations of the current copyright statutes, it seems necessary to find alternative legal solutions.
In China Sports Media Co. Ltd. v. Shanghai Tudou Network Technology Co. Ltd.,14 the Claimant tried to build its case based on commercial property rights, namely - the right to commercially benefit from the exclusive online streaming of the Asian Football Confederation (AFC) Asian Cup match. The Court of First Instance denied that property rights under PRC law encompassed the “broadcasting rights” acquired by the Claimant, China Sports Media, from the AFC. The Court of Appeal, Shanghai First Intermediate People’s Court, confirmed the appealed judgment, as the Claimant “was unable to clarify the nature of right it is claiming for”.
However, there is positive sign, as Shanghai First Intermediate People’s Court acknowledged that “broadcasting rights” were in nature commercial rights arising from sporting events organisers’ constitutional documents or relevant commercial agreements.15 The so called “broadcasting right” is, the Shanghai Court reasoned, a right from which the rights owners may benefit commercially through displaying the events productions.
The Shanghai Court therefore took the view that a “broadcasting right” in the context of sporting events production shall not be rigidly limited to the copyright legal framework. Indeed, the PRC Copyright Law was drafted in 1990 (and last amended in 2010), so when defining “broadcasting right” in the Statute, the draftsmen can only have had wireless broadcast or radio dissemination in mind. However, as technology advances and internet streaming of events increasingly takes centre stage, “broadcasting” in the sporting context today has transcended wireless broadcast by TV or radio station. In a nutshell, there is a huge gap caused by technological developments between the “broadcasting right” as defined in PRC Copyright Law and the same term as used in the international sporting context. It is therefore unsuitable to rely on the “broadcasting right” as strictly defined in the PRC Copyright Law, for protection of the broadcasting right that evolves with technological developments and international practice in sports.
It is perhaps too adventurous for broadcasting rights holders to argue that their exclusive right to broadcast or livestream is a “movable property” under the PRC Property Law, as China Sports Media did. The difficulty lies in the fact that PRC Property Law only recognizes two categories of property: movable property and real estate. Intangible assets are not expressly recognized. To assert rights, rights holders might consider finding support from the General Provisions of Civil Law, of which Article 127 acknowledges the property nature of data and internet virtual properties. The General Provisions of Civil Law did not exist at the time when China Sports Media brought the property claim against Tudou in 2011, which was probably the reason why China Sports Media took a rather bold approach to rely on the PRC Property Law.
Another possibility is to rely on the PRC Tort Law, of which Article 2 acknowledges “property rights” as part of “civil rights and interests” protected by the PRC Tort Law. Article 36 of PRC Tort Law further provides that perpetrating acts occurring on the Internet in violation of others’ rights and interests shall be subject to tortious liability.
In a nutshell, it is currently necessary for broadcasting/streaming rights holders in China to turn to legal provisions beyond PRC Copyright Law to assert rights against unauthorised livestreaming online. The PRC General Provisions of Civil Law and Tort Law might offer alternative grounds, but the validity of these alternative grounds is yet to be tested before the PRC courts. Though a significant level of uncertainty is involved, rights holders should not refrain from trying every possible means to defend the position that broadcasting right is property in nature – it is entitled to protection under either copyright or property right legal regime.
If the sports industry is to prosper, the legal framework must be prepared to afford justified protection. It is thus critical for the courts to transcend the traditional, legalistic construction of property – because intangible assets are indeed at heart of the commercial value of sports.
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- Tags: Broadcasting | China | Copyright | Football | Intellectual Property | Media Rights | Olympic | World Cup
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About the Author
Attorney, Jin Mao Law Firm
Ms. Guo Cai oversees the LexVeritas Sports and International Law Group, Jin Mao Law Firm (People's Republic of China), the first Chinese law firm to have a practice group dedicated to the sports industry. Ms. Cai graduated from Harvard Law School and China University of Political Science and Law. She also held an LLM in Human Rights (distinction) from the University of Hong Kong. Admitted to practice in China and the US (New York), Ms. Cai specialises in international dispute resolution and sports law, growing with the Chinese sports industry and connecting international best practice with sports in China.