Study On Copyright Infringement of Video-Sharing Websites

Front.
Law China 2009, 5(2): 275–301

DOI 10.1007/s11463-010-0013-4
RESEARCH ARTICLE
Qian Wang
Study on Copyright Infringement of Video-Sharing

Websites
© Higher Education Press and Springer-Verlag 2010
Abstract If any video-sharing websites, without authorization, directly upload

film and television works to a server to be shared by subscribers, and do editing
and verification in advance on the infringing videos uploaded by subscribers, it is
regarded as “direct infringement.” However, the overwhelming majority of
video-sharing websites provide information platforms for subscribers to
automatically upload videos, and in such case, how to determine the tort liability
of those websites remains ambiguous. The Regulations on Protection of the Right
of Communication through Information Network of China impose harsh
liabilities on video-sharing websites by incomplete reference to the US
“vicarious liability,” consequently hampering the development of normal
business. It shall be reasonably identified whether the operator of a website
“should have known” there exist infringing videos uploaded by subscribers
according to the “Red Flag Test,” in reference to the columns set by the
video-sharing website. In condition that a mature and effective filtering
technology has been accepted by the market, it shall be taken as the subjective
fault for a video-sharing website to refuse shielding the uploading of infringing
videos with such technology.
Keywords video-sharing website, indirect infringement, contributory infringe-

ment, vicarious liability
The “video-sharing websites” initially refers to those websites that provide

information storage space and release platform for subscribers to upload, view or
download online video files (or conduct of “sharing”). Subscribers may use such
Translated from Fashang Yanjiu 法商研究 (Studies in Law and Business), 2008, (4): 42−53
Qian Wang ( )
School of Intellectual Property, East China University of Political Science and Law, Shanghai
200042, China
E-mail: wangqian@ecupl.edu.cn
276 Qian Wang
websites to register and upload video content, while the websites automatically
receive the videos uploaded by subscribers and then provide prompt release. The
intent to establish such websites maybe encourage subscribers to share videos
taken by home video cameras with cyber friends. Nevertheless, with the
increasing advancement of video compression technology, films, TV programs,
sports competition videos and other videos, originally of a gigantic capacity, can
be significantly compressed and maintain a good definition. They directly
triggers numerous subscribers to upload fragments and even entire pieces of
blockbuster films, TV programs and sports competition videos into video-sharing
websites, while many network subscribers are also wild about downloading or
viewing online blockbuster film and television works and sports competition
videos in various video-sharing websites. Obviously, the act of subscribers to
compress films or TV programs with copyrights enjoyed by others, and upload
them to video-sharing websites for the public to appreciate or download at the
time and place individually chosen by themselves, constitutes a direct
infringement of the “right of communication through information networks” and
also causes serious losses to the interests of the copyright owners, because such
act will necessarily lead to the decline of box office income and audience rate of
TV programs as well as sales of corresponding audio-visual products.
As far as the right owners of film and television works are concerned, it is not
the best strategy to directly file a lawsuit against those individual subscribers
who upload their videos without authorization. Any legal act against the
uploaders without authorization belongs to “post remedies,” since the infringing
activity has been completed, film and television works being disseminated on the
video-sharing websites, the harmful consequences having happened, and it is
hard for the right owners to protect their own interests by filing lawsuits against
individual subscribers. On the one hand, the subscribers of video-sharing
websites are extremely dispersed geographically who may adopt various
technical means to conceal their true identities and website addresses, so it is
extremely difficult to find such subscribers and file lawsuits against them. In case
a subscriber uploads videos from abroad, it will be more difficult for the right
owner to directly sue his/her liability for infringement. On the other hand,
individual subscribers have rather limited capacity of compensation, since those
who are most wild about uploading videos are often students, and it is very hard
for the right owner to acquire full liquidated damages from them.
Therefore, whether the video-sharing website offering the platform of video
dissemination to individual subscribers shall bear legal liabilities is a highly
outstanding issue. Though many countries including China have passed laws
aiming at the liability of the Internet service providers, with established basic
principles completely applicable to video-sharing websites, the existing
legislations lag behind the rapidly developing technology to some extent after all.
Study on Copyright Infringement of Video-Sharing Websites 277
For instance, in recent years various kinds of technological means to protect the
right of digital works emerge in an endless stream, and the ability of network
operators to filter infringing content is enhanced greatly, which is unexpected by
the then legislators. The author tries to combine the existing legislation and the
development of technology and conduct an analysis on the legal liability the
video-sharing websites shall bear for uploading of infringing video files by their
subscribers so as to facilitate the perfection of the copyright law of China.
1 Direct Infringement of Video-Sharing Websites

Currently, the theory of the copyright law of China divides the infringement of
copyrights into “direct infringement” and “indirect infringement.” “Direct
infringement” is closely linked with the “exclusive right” enjoyed by the
copyright owner. Copyright is the congregation of a series of “exclusive rights”
including “right of reproduction,” “right of distribution” and “right of
performance.” The legal effect of “exclusive rights” is to render the right owner
to control others in conduct of such acts. If some act to use works falls into the
control range of an “exclusive right,” any other person who conducts such
specific act without authorization and specific legal basis (such as “fair use” or
“statutory license”) may constitute “direct infringement.” Based on the nature of
“exclusive rights” as absolute right, a subjective fault is not the constitutive
element of a “direct infringement,” and it only affects the methods for bearing
legal liabilities.1 For instance, Article 20 of the Interpretation of the Supreme
Court on Several Issues Concerning the Application of Law to Hearing Civil
Cases of Copyrights provides: “Where a publisher has performed his/her duty of
reasonable care and the copyright owner has no evidence to prove the publisher
should have known that his/her publication engages infringement.... the publisher
shall bear the civil liability to stop infringement and return the profits from
infringement.” This is just the typical reflection of the relations between “direct
infringement” and “exclusive rights,” regardless whether the publishing house
has the subjective fault (namely, whether the publishing house has performed its
duty of reasonable review), the conduct of reproduction under control by the
“right of reproduction” or publication under control by the “right of distribution”
without authorization constitutes “direct infringement,” 2 provided that no
1
Canadian legislation has very clear provisions in this regard, such as “it is an infringement of
copyright for any person to do, without the consent of the owner of the copyright, anything
that by this Act only the owner of the copyright has the right to do.” See (Canada) Copyright
Act Sec. 27 (1).
2
See Article 20 of the Interpretation of the Supreme Court on Several Issues Concerning the
Application of Law to Hearing Civil Cases of Copyrights.
278 Qian Wang
compensation liability is required without fault.

In network environment, the most important “exclusive right” for the right
owner is the “right of communication through information networks.” The
Regulations on Protection of the Right of Communication through Information
Networks provides: “The right of communication through information networks”
is “the right to make it available to the public by wire or wireless means in such a
way that the public may access the work at a place and at a time individually
chosen by oneself.” To “upload” works or audio/video recordings to open
network servers is to make available such works or audio/video recordings in
such a way that members of the subscribers may “acquire” the corresponding
works and audio/video recordings at the time individually chosen by them and on
any networking computer. Hence, “to upload” works constitutes the
“communication through information networks” controlled by the “right of
communication through information networks.” Any subscriber of a
video-sharing website who uploads film and television works in the protection
period after change of formats onto the video-sharing website without
authorization constitutes the “direct infringement” of the “right of
communication through information networks.”
Any video-sharing website which directly uploads without authorization the
copyrighted film and television works for its subscribers to make them available
for online appreciation or download doubtlessly constitutes the “direct
infringement” of the “right of communication through information networks,” for
which it shall bear the corresponding legal liability. However, at present, the
overwhelming majority of Chinese and foreign video-sharing websites do not
directly unload any video but provide a storage space and publishing platform for
subscribers to upload video files. In such a case, if there appear film and
television works uploaded by a subscriber without authorization in the
video-sharing website, could such video-sharing website be considered as a
“direct infringer?” It relies on the operation mechanism of the video-sharing
website.
On the one hand, if a video-sharing website conducts antecedent review on the
videos uploaded by all its subscribers, its staff are responsible to judge whether
videos are lawful or not and before deciding whether or not to permit it to
disseminate on the website, and the legal status of the video-sharing website is of
no substantive difference from traditional newspapers and periodicals. A
subscriber uploading videos to a video-sharing website is just like a writer
contributing to traditional newspapers and periodicals, and the information he or
she provides may be published to the public only after verification. The final
publisher of the information is actually the video-sharing website, which has
made review on it and known its content, can anticipate the consequences when
deciding on consent to offer the video uploaded by its subscriber to the public. If
a video-sharing website explicitly knows the video may infringe the rights of
others when deciding to disseminate the video uploaded by its subscriber, it has
the intention of infringement. If it should have had the care to the extent
equivalent to a reasonable person to find the video is infringing but fails to find it
by negligence, it has subjective fault. In such two cases, the video-sharing
website publishing infringing videos is just like a magazine publishing
plagiarized works, with its act constituting “direct infringement” of the “right of
communication through information networks,” and it shall bear the joint
liabilities for infringement with the uploader.
At present, some “video-sharing websites” have set up a “review team,” with
its major work being “reviewing the videos uploaded by subscribers” and making
“program recommendations.” 3 If the videos uploaded by subscribers are
published upon selection and edition by the “review team,” the video-sharing
website may be taken as the publisher of such videos. If those videos are
infringing, the act of the video-sharing website constitutes a “direct
infringement.”
On the other hand, if a video-sharing website is just like the overwhelming
majority of BBS, which does not conduct any review on the videos uploaded by
subscribers or decide whether to publish them but allow subscribers to upload
videos freely, whereby the uploaded videos will be automatically “posted” on the
web pages for other subscribers to make online appreciation or downloading, the
legal status of the video-sharing website is quite different from general
newspapers and periodicals. Now that the publishing of videos on the website is
automatic without selection or intervention by the website, the publisher of such
videos is not the video-sharing website but the subscriber who uploads the videos.
In other words, in such situation, the video-sharing website does not conduct a
“communication through networks.” Even if the act of uploading videos
infringes the “right of communication through information networks” of others,
it is not possible for the act of the video-sharing website to constitute a “direct
infringement.”
A video-sharing website often designs a set of procedures in advance for
automatically changing of formats of the videos uploaded by subscribers so as to
control the size of videos and provide downloading for other network subscribers
in a uniform format. It is held that the video-sharing website is actually
“reproducing” videos through software, and if the video concerned is still in the
protection period and uploaded without authorization, the act of the site
constitutes a “direct infringement” of the “right of reproduction.” In the pending
US infringement action filed by Viacom, the right owner of film and television
3
See http://tag.tudou.com/%E5%9C%9F%E8%B1%86%E5%AE%A1%E7%89%87%E7%B
B%84, 2007-5-30.
280 Qian Wang
works against YouTube, the video-sharing website, Viacom raised a cause of

action that YouTube reproduced its works without authorization.4
It shall be pointed out that the transmission of data files in the networks
generally requires a process. For instance, IP phones require the systems of
service providers to automatically compress and decompress sounds, both of
which cover the actual reproduction of data, while the actual reproduction differs
from the “act of reproduction” controlled by the “right of reproduction.” The “act
of reproduction” shall be a voluntary act under the control of the will of man.
However, the automatic format transformation mechanism in the video-sharing
website is passive in receiving the video files uploaded by subscribers. The
transformation of automatic format of such files is only a step of accessory
technology in the process of the transmission of video files by subscribers.
Such process cannot be taken as a new act independent of the uploading by
subscribers. For instance, we shall firstly put the reprographic works into the
photocopier and then press the reprographic button when using a digital
photocopier to copy works. Then, the photocopier will firstly automatically
take photographs and scan the content of the works before printing it. As a
technological phenomenon, the “photograph and scan” of the works by the
photocopier is “reproduction,” but it can never be deemed that besides the
operator of the photocopier, the photocopier itself conducts a separate
reproduction through automatic “photograph and scan.” In other words, to copy
works by a photocopier is a complete process and one-time act of reproduction
and the duplicator is the person who puts the works in the photocopier and
presses the copy button. The “photograph and scan” of works by the
photocopier in accordance with preset procedures is merely a step of accessory
technology rather than a separate act of reproduction. Similarly, if the
reproduction by the system according to the procedures and the instructions of
others is only an essential technical step of other operations (such as uploading
and transmission), it cannot be considered that the administrator of the system
conducts the “act of reproduction.” Consequently, the format transformation
automatically conducted by the video-sharing website of the videos uploaded
by subscribers cannot be taken as an act of infringing the “right of
reproduction.”
2 Indirect Infringement of Video-Sharing Websites

The indirect infringement in the theory of copyright law refers to the intentional
inducing or abetting others to conduct the infringing activity or offering
substantive facilitation while knowing others intend to conduct or are conducting
4
See Viacom International Inc. v. YouTube Inc., Complaint, paras. 3, 45 and 52.
the infringing activities.5 (Nimmer, 2003; Goldstein, 2002) Hence, “inducement

of infringement” and “contributory infringement” are two typical forms of
indirect infringement.
It shall be emphatically pointed out: “Indirect infringement” is not a synonym
of “indirect liability.” “Indirect liability” covers all the situations where a person
who fails to conduct the act of “direct infringement” bears the liability for the act
of “direct infringement” of others based on statutory reasons. In other words,
“indirect infringement” is only one of the reasons causing “indirect liability.” In
general tort law, the liability borne by an employer for its employees due to the
infringing activity in the scope of employment is a kind of “vicarious liability,”
which is a typical “indirect liability.” Though an employer may bear the liability to
the victim in subrogation of its employee for his/her infringing activity, it cannot
conduct the infringing activity in subrogation of its employee.6 (Von Bar, 2003)
Therefore, some scholars translate the “vicarious liability” in the US copyright
cases as “vicarious infringement,” (Zhang, 2003) and take it as a kind of “indirect
infringement,” which is obviously inappropriate. The author will make a separate
analysis on the “vicarious liability” of a video-sharing website later.
Though such terms as “indirect infringement” or “inducement of
infringement” and “contributory infringement” do not appear in the Copyright
Law, the Supreme Court explicitly provides in the Opinion on Several Issues
Concerning Implementing the General Principles of Civil Law that “any person
who abets and aids others in conducting the infringing activity is the joint
tort-feasors,” which actually interprets the “joint infringement” set forth in
Article 130 of the General Principles of Civil Law of the People’s Republic of
China (hereinafter refers to as the General Principles of Civil Law) as including
“direct infringement.” Article 4 of Interpretations for Several Issues Concerning
the Applicable Law to Trial of Cases Involving the Disputes over Computer
Internet Copyrights (hereinafter refers to as the Interpretations) revised in 2003
by the Supreme Court provides accordingly: “With respect to the Internet service
providers who participate in the act of infringement of copyrights of other
persons through networks or abet and aid other persons in the act of infringement
of copyrights through networks, the court shall, in accordance with the provision
of Article 130 of the General Principles of civil Law, prosecute for the joint
5
See Melvile B. Nimmer & David Nimmer, Nimmer on Copyright, §13. 05 [2], Matthew
Bender & Company, Inc., (2003); Paul Goldstein, Copyright (2nd Edition) Vo1. 2, Part Three,
§6. 0, 6. 1, Aspen Law & Business (2002).
6
Christian Von Bar pointed out: In most legal regimes, employer liability is the best example
of undertaking liabilities for the act of others, while “vicarious liability” is an issue of
“quasi-infringement act.” He further believed that the real quasi-infringement act is applicable
to only the circumstance where the defendant shall still be liable though his or her act is
appropriate.
282 Qian Wang
liability for tort of him/her and other actors, or the actors who directly conduct
the infringing activity.” In the theory of copyright law, the elements of “indirect
infringement” and “direct infringement” are different. No act that can be
recognized as “indirect infringement” is in the scope of control by the “exclusive
rights” of the copyright. “Indirect infringement” prescribed in law aims at
appropriately strengthening the protection of copyrights, and such legislative
purpose shall be concerted with the basic principle of maintaining the freedom of
action of the public. Hence, to be recognized as an act beyond the control of
“exclusive rights” as infringement of copyrights, any act shall be condemnable,
whereby the actor has a subjective fault. Specifically speaking, the actor not only
objectively abets, induces or aids other persons to conduct “direct infringement,”
but also knows the acts of other persons are “direct infringement.” In other words,
the recognition of “indirect infringement” requires for concurrent consideration
of both subjective and objective elements. If an actor has no subjective fault, he
cannot be recognized as conducting “indirect infringement” even though his act
indeed aids other persons in “direct infringement” objectively.
This is very important in the network environment. From the angle of
technology, no act of “direct infringement” occurring in the network is separate
from the hardware facilities and software system of network service providers.
As far as a video-sharing website is concerned, if there is no network storage
space or platform, neither can subscribers upload infringing videos nor can occur
“direct infringement” of the “right of communication through information
networks.” Hence, the video-sharing website meets the constitutive conditions of
an “indirect infringement” in the objective aspect when offering facilities and
service for subscribers to upload videos.
Thus, whether an act of the video-sharing website constitutes an “indirect
infringement” mainly lies in whether it has a subjective fault or not, i.e., with
intention or by negligence, or specifically speaking, whether the video-sharing
website offers the substantive help to other persons when knowing they are engaged
in “direct infringement.” However, “knowing” is after all a subjective mental state,
and law shall establish a series of rules on judging whether the actor “knows” from
external acts and the relevant facts. Prior to the appearance of video-sharing
websites, some countries have set up a set of rules on determining the “indirect
infringement” of network service providers, which are actually those rules on
judging their subjective faults. However, for video-sharing websites, such set of
rules are both applicable in principle and challenged by technological development.
2.1 Video-Sharing Websites Have Subjective Fault Due to the Appearance of

Infringing Videos
At present, there is an undisputable fact: Many video-sharing websites have

become the tools for numerous subscribers to conduct infringement since

subscribers may upload film and television works very easily. In Viacom v.
YouTube in the US, Viacom claimed that YouTube had stored the clips of 150,000
film and television works with copyrights enjoyed by Viacom, which had been
watched 1.5 billion times. 7 In numerous video-sharing websites of China,
including www.tudou.com and www.youku.com, there are also a large number of
blockbuster films and TV programs uploaded without authorization. Then,
whether can it be recognized that the purpose of network service providers to set
up video-sharing websites is to induce or aid their subscribers to upload film and
television works and sports competition videos without authorization so as to
seek for illegal benefits from them? If the answer is positive, the operators of the
video-sharing websites possess a generally subjective fault.
The answer to such question shall be negative. The test of “substantial
non-infringing uses” established in the famous Sony Corporation of America by
the US Supreme Court in 1984 may be completely applicable to video-sharing
websites. In such case, the US Supreme Court stated: If a product is “capable of
substantial non-infringing uses,” it cannot be presumed that the manufacturer and
the seller intentionally induce and aid other persons in infringement and
accordingly constitute “contributory infringement” even if they know their
equipment may be used in infringement. In that case, the video recording devices
were of “substantial non-infringing use,” i.e., private, noncommercial time-shifting
in the home. Accordingly, the majority of judges ruled that the act of Sony selling
video recording devices to the public did not constitute “indirect infringement,”
even if some consumers used video recording devices in infringement of
copyrights.8 The test of “substantial non-infringing use” is of a significant impact
on the development of the rule of “indirect infringement,” which means that, as
long as a product is of “substantial non-infringing use,” it cannot be “presumed”
that the product provider has the subjective fault of aiding other persons in
infringement merely because many people use such product in infringement. This
clears of the obstacles in law in the development of hi-tech products.
In the famous case Grokster, tens of film companies and record companies
including the US MGM Studios found: Billions of files were “shared” by
subscribers through the defendant’s two styles of P2P software monthly, among
which 90% were works protected by copyrights, and 70% of those works were
films or music with copyrights enjoyed by such film companies and record
companies.9 In other words, the infringing use of such two styles of P2P software
7
Ibid.
8
See Sony Corporation of America v. Universal City Studios, Inc., 464 US 417 at 442 (1984).
9
See Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 259 F. Supp. 2d 1029, at 1036,
1042, 1044–1045 (C. D. Cal. 2003); 545 US 913, at 939 (2005); 518 F. Supp. 2d 1197 (2007).
284 Qian Wang
was as high as 90%, but the court still failed to conclude the provider of such two
styles of P2P software had the intention of helping subscribers conduct
infringement.10
Obviously, according to the test of “substantial non-infringing use,” it cannot
be “presumed” that the operator of a website has the general subjective fault of
inducing and aiding other persons in infringement only on the ground that many
people use the video-sharing websites in the conduct of infringement, for the
video-sharing platform is of an undeniable legitimate use in itself. The
subscribers may upload self-shot fragments of family life or entertainment to
net-friends for appreciation, and what’s more, a large number of subscribers have
also used such video-sharing platform in doing such legitimate acts.11 Therefore,
the acts of network service providers constitute “contributory infringement” only
after it has been proven the video-sharing website knows clearly its subscribers
upload infringing videos but fails to adopt effective measures, including deletion,
for preventing the continuity of the infringing activity or the expansion of
harmful consequences. Of course, the operator of the website who induces
subscribers to upload the infringing content by words or other means constitutes
an “inducement of infringement.”
2.2 Video-Sharing Websites Indulging for Infringement Constitute Contributory

Infringement
Now that it cannot be presumed that a network operator has a subjective fault
merely for appearing infringing videos or a video-sharing website or such
website is mostly used to share infringing videos, the most feasible way for the
right owners to prosecute the legal liability of the video-sharing website is to
issue a warning on infringement to the network service provider and inform of
infringing content stored in the network system under his/her administration or
control. Upon receipt of the warning on infringement, if the video-sharing
website still does not delete the alleged infringing videos, it is equivalent to the
10
The US Supreme Court judged that the provider of the two styles of P2P software should be
liable for its willful inducement of subscribers to use its P2P software by infringement and that
the intention to induce infringement was proven by other evidences rather than presumption
from infringing use of P2P software by a number of subscribers.
11
At the 15th Annual Fordham IP Conference held in the School of Law, Fordham University
in New York in April 2007, the legal staff of Google which had just acquired YouTube
video-sharing website played to the attendants of the conference a section of video on
YouTube, and such video was a news slip from US Foxnews. The legal staff of Google invited
the attendants to judge at site whether such video is infringing. Most of the attendants believed
such video was recorded and uploaded by subscribers without consent by Foxnews, which
constituted an infringement. Surprisingly, such video was uploaded by Foxnews itself. The
substantially legal use by the video-sharing website was self-evident.
video-sharing website knowing well the “direct infringement” (uploading the

infringing content) by subscribers and expanding the harmful consequence of
such infringement by maintaining the infringing videos, which consequently
constitutes a “contributory infringement.” However, if the video-sharing website
deletes the alleged infringing videos, and the right owner has no other evidence
to prove the website operator should have known that other persons have
uploaded infringing content onto the website, it cannot be recognized that the
network service provider commits “contributory infringement” even if there
exists infringing content in the video-sharing website. The Digital Millennium
Copyright Act (“DMCA”) creates a safe harbor for online service providers
against copyright liability if they adhere to and qualify for certain prescribed safe
harbor conditions and promptly block access to allegedly infringing material (or
remove such material from their systems) if they receive a notification claiming
infringement from a copyright holder or the copyright holder’s agent.12 Article
22 of the Regulations on Protection of the Right of Communication through
Information Network also takes “deleting the works, performance, audio-visual
products which the right owner considers have constituted infringement upon
receipt of the notice of the right owner” as one of conditions to exempt such
network service providers from liability.
The rules of “notice and takedown” created by DMCA and accepted and
copied by the legislation of other countries still adopt the subjective fault test on
liability. Once the right owner finds there exists infringing information in the
system of the network service provider and informs the network service provider
of it in statutory forms, the network service provider may be aware that the
infringement is happening. With the continuous dissemination of infringing
content in the network, if the network service provider who knows the fact that
he is providing infringing content still declines to adopt measures for preventing
the expansion of harmful consequences, obviously he has the subjective fault and
shall bear the “liability of contributory infringement.” Such rule creates a
procedure featured by highly formal judgment of the liability of network service
providers while following the basic principles of tort law, which may, on the one
hand, urges the right owner to proactively seek and discover infringing content
and protect his own interests, and on the other hand, facilitates the network
service provider to timely curb the infringing activity and prevent the pervasion
of the infringement consequences, very economically and effectively indeed.
It shall be pointed out: In the current Chinese judicial practices, some courts
misunderstand the mechanism of “notice and take down.” Notably, some courts
take the notice issued by the right owner to the network service provider as the
precondition of imposing infringement liability on the service provider. They
12
17 USC 512(c),512(c)(1)(A), 512(m), 512(c)(1)(B), 512 (i)(1)(B), 512 (i)(2).
286 Qian Wang
require the right owner to show the evidence that he has issued the notice to the
network service provider.
Such practice of courts reflects the deviation in understanding law for the
following two reasons: Firstly, the mechanism of “notice and take down” aims at
solving the issue of recognition of the subjective fault of the network service
provider. In law, the receipt by the network service provider of the notice in
compliance with statutory requirements is taken as the basis for recognizing that
he has known there exists infringing content in his network. Obviously, such
mechanism is only applicable to the “indirect infringement” with subjective fault
as an element. If a network service provider puts the infringing content by itself
on servers for dissemination, his act has constituted the “direct infringement,”
where the right owner may file a lawsuit against it for infringement liability
without need to send a notice to the network service provider. Even if the right
owner has issued a notice to the network service provider, which then timely
deletes the infringing content it has stored, the right owner may still file a lawsuit
against the network service provider and require it to bear the liability for the
harmful consequences caused prior to the deletion of infringing content.
Secondly, the notice by the right owner merely is one of the methods, by which
the network service provider is proven to have known that there exist infringing
contents in the network under its administration. If there are other evidences to
prove that the network service provider should have known the fact that there
exists infringement, why must the right owner issue a notice to it? For example,
an administrator of the website once explicitly stated to others: He clearly knows
that there exists infringing content uploaded by others but intentionally reserves
it for the purpose of improving the clicking rate of the website. The right owner
may file a lawsuit against the network service provider for a “contributory
infringement” upon obtaining the related evidences.
2.3 Video-Sharing Websites Indulging in Infringing Activities Constitute

Contributory Infringement
Before the promulgation of the Regulations on Protection of the Right of

Communication through Information Network, Article 5 of the Supreme Court
Judicial Interpretation of Network provides for the conditions for the liability of
infringement undertaken by the network service provider which offers the
information platform service: “With respect to any network service provider
offering content service which actually knows a network subscriber conducts the
act of infringing the copyright of others through network, or is given a warning
with evidence raised by the copyright owner but still refuses to adopt the
measures including removal of the infringing content to eliminate the
infringement consequences, the court shall, in accordance with the provisions of
Article 130 of the General Principle of Civil Law, prosecute its joint liability for
tort with the network subscriber.” Accordingly, a network service provider does
not bear the liability for his subjective fault until he has “actual knowledge” that
his subscriber conducts the act of “uploading” infringing content or has “actual
knowledge” of the existence of infringing content by the warning from the right
owner but refuses to remove it.
However, it is very difficult to prove that a network service provider has
“actual knowledge” that its subscriber has the act of infringement, which requires
the external expression by the network service provider of admitting that he
knows the act of infringement, such as its responsible person expresses that he
knows the fact in oral or written form. Otherwise, the notice from the right owner
to the network service provider alleging that there is infringing content in its
network is actually the only way to prove the “actual knowledge” of the network
service provider. However, under many circumstances, the court may completely
conclude from the related facts that the network service provider has the
reasonable reason to know the existence of the act of infringement.
For instance, a subscriber has uploaded the new movie Spider-man III to a
video-sharing website without authorization, and the website has the “ranking
list” in a prominent place, which displays automatically the video of a larger
volume of clicks. Spider-man III has been at the top of the “ranking list” for
several weeks. Since the operator or technician of the video-sharing website
necessarily conducts daily maintenance of the site, it is impossible for them to
fail to find Spider-man III at the top of the “ranking list” at the home page. Then
based on common sense, he will necessarily know the uploading of the film is
infringing for it is not possible for the right owner of a blockbuster film to allow
anyone, especially an individual, to freely disseminate his film in networks. But a
video-sharing website may turn a blind eye, indulge other subscribers to
download it for appealing the clicking rate and claim that it does not know there
exists such pirate film on its site. As it is very hard to find the evidences to prove
the “actual knowledge” of the video-sharing website, the right owner of the film,
if failing to issue “a warning with sufficient evidences,” will have no way to
prosecute for “liability of contributory infringement” of the video-sharing
website. The consequence thereof is, regardless how obvious the infringing
content is on the video-sharing website, as long as he has no way to acquire the
evidence of the “actual knowledge” of the video-sharing website, the right owner
shall put forward a written notice to the video-sharing website. But before
sending the written notice, the right owner has no way to get the compensation
for the damages caused by the video-sharing website implicitly allowing for
dissemination of infringing content. Meanwhile, even if it may find the
infringing activity by exercise of the duty of reasonable care, the video-sharing
288 Qian Wang
website may also adopt the “ostrich policy” to intentionally neglect the obvious
existence of the infringing activity. Hence, to take the notice of the right owner as
the only basis to recognize the subjective fault of a network service provider may
increase the cost for the right owner to protect its rights and foster the tendency
laches of the network service provider in performing the duty of care.
In fact, DMCA has not taken the notice of the right owner as the only way to
determine whether a network service provider knows that its subscriber has
committed the infringing activity. DMCA provides: Any network service
provider offering the information platform service may be exempt from the
“liability for contributory infringement” for its subscribers only when it meets
certain conditions, one of which is the network service provider promptly deletes
the allegedly infringing material if it receives a notification claiming
infringement from a copyright holder. Besides, the network service provider shall
also meet the condition of “not have actual knowledge or have reason to know”
the infringing activity of its subscribers. Such other conditions prescribed by
DMCA include if the service provider: (i) With no actual knowledge that the
material or an activity using the material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of facts or
circumstances from which infringing activity is apparent; and (iii) upon obtaining
such knowledge or awareness, acts expeditiously to remove, or disable access the
material.13
Accordingly, even if the right owner fails to send a notice to the network
service provider to inform it of its subscribers uploading infringing content, as
long as the network service provider is aware of the “facts or circumstances from
which infringing activity is apparent,” but fails to “acts expeditiously to remove,
or disable access the material,” its act constitutes “contributory infringement.”
The US Congress calls this test on recognizing the “subjective fault” of a
network service provider in its report on DMCA “Red Flag Test”: “If a service
provider fails to adopt measures after it is aware of the ‘red flag’ from which
infringing activity is apparent, it may lose the qualification of the limit of
liability. …in deciding whether those facts or circumstances constitute a ‘red
flag’ in other words, whether infringing activity would have been apparent to a
reasonable person operating under the same or similar circumstances an objective
standard should be used.”14
Obviously, when the fact that there exist infringing videos on a video-sharing
website is flying in front of its operator like a bright red flag so that a reasonable
person in the same circumstance may apparently discover it, if the operator still
13
Ibid.
14
See Senate Report on the Digital Millennium Copyright Act of 1998, Report 105–190, 105th
Congress, 2nd Session, p. 44.
adopts the “ostrich policy” like an ostrich to bury its head deeply into the sand to
pretend not to see the infringing videos, it can also be recognized that it “should
have known” the existence of the infringing materials at least. (Nimmer, 2003)
The EU Electronic Commerce Directive adopts almost completely the same
test.15
“Red Flag Test” requires a video-sharing website to exercise its duty of
reasonable care and not adopt a hand-off “ostrich policy” for apparently
infringing videos, which is actually the adoption of an objective standard
(whereby in the same circumstance, a reasonable person may be aware of the
existence of the infringing activity) to infer the subjective mental state (whereby
it is impossible not to know the infringing activity). If an ordinary person can
discover the existence of the infringing video based on related facts, it means that
the infringing video is very apparent and easy to find and recognize, and as long
as the video-sharing website exercise its duty of reasonable care, it can find the
infringing video uploaded by its subscribers. In such case, if the video-sharing
website still indulges the dissemination of the infringing video and fails to adopt
measures to curb it, it has the subjective fault and shall bear “the liability for
contributory infringement.”
Article 22 of the Regulations on Protection of the Right of Communication
through Information Network learns from the “Red Flag Test,” and takes “not
have actual knowledge or have reasonable grounds to know that the works,
performance or audio/video recordings offered by its service objects are
infringing” as one of requirements for exemption of the network service
providers that provide information platform services. This means that even if the
right owner has not sent a notice to the video-sharing website and has no way to
prove the video-sharing website’s “actual knowledge” of its subscribers’
infringing activity of uploading videos, as long as it can been recognized
according to the related circumstances that the website operator “has reasonable
grounds to know,” it shall bear the “liability for contributory infringement.”
At present, some video-sharing websites have such columns as “special
recommendations” on their home pages, among which there are the names and
pictures of the videos uploaded by subscribers. In such circumstance, the website
operators may make preliminary judgment on their legitimacy through the names
of the videos, where the “Red Flag Test” is completely applicable, and those
infringing videos (especially blockbuster films and TV programs) that can be
discovered only by reliance on the common sense of ordinary people and general
attention constitute the “red flags” publicly flying in front of the operators of the
video-sharing websites. Thus, it is impossible for the operators to “turn a blind
eye.”
15
See E-Commerce Directive, Article 14.1(a).
290 Qian Wang
Some video-sharing websites specifically set up the “film and video column”
on their home pages as well as sub-level directory by categories, such as “war
movie,” “sentimental film” and “horror film,” and even posting film posters and
profiles. The operators of such websites shall bear more duty of care since the
overwhelming majority of the films subscribers are wild to upload are still within
the protection period. The films, which have actually exceeded the protection
period, for instance, comedies of Chaplin at his early stages, are limited in the
market of subscribers after all. An operator must be aware that it is very likely
that subscribers may upload corresponding films by the content of categories
when setting up film columns and sub-contents of categories, while uploading of
those films is of high possibility of infringement. In other words, in such case,
any operator at an equivalent status may on the basis of reality and common
sense strongly suspect the film and television videos uploaded by subscribers in
those columns are infringing. In the famous US case Hard Rock Café v.
Concession Services, the Seventh Circuit Court of Appeals pointed out: For the
operators renting stalls to sell goods, if the market administrator “fails to conduct
investigation intentionally in the circumstance of high suspicion of the existence
of the infringing activity,” it is a “willful blindness to the infringing activity,”
and it shall be recognized that it knows the existence of the infringing activity.16
Therefore, the operator of a video-sharing website shall bear the corresponding
duty of care, especially a higher duty of care for the content under its established
film column and sub-contents of categories, and adopt appropriate measures for
preventing the dissemination of the infringing videos in the columns. If the
operator turns a blind eye and takes an attitude of complete indulgence, it shall
be recognized that it has facilitated with fault the act of the “direct infringement”
of its subscribers.
The classification of videos in some video-sharing website may even be made
by its editorial staff. For instance, the same film and television work may
concurrently concerns such themes as war, love and ethics, and different
subscribers may upload it onto completely different categories based on their
own understanding, thus causing chaos of the classification in the content of
videos on websites. The editorial staff may, accordingly, reclassify the video
titles or themes uploaded by subscribers. Therefore, some websites even require
the job applicants to have the knowledge of films and videos and experience
related to the profession when recruiting the administrators of the websites. For
example, a video-sharing website recruits the “editor of film and television
channel,” dedicated to the “edition, maintenance and updating of new films” and
requires the applicants “love films and have certain basic common sense in the
16
See Hard Rock Cafe Licensing Corporation v. Concession Services, 955 F. 2d 1143, at 1149
(7th Cir. 1992).
field of films” or “have engaged in the works of domestic film and television
media.” Such editorial staff of professional knowledge has certainly the ability to
conduct preliminary judgment on the legitimacy of videos by the titles or
subjects of videos based on common sense and professional knowledge. If the
editor of a website completely neglects the legitimacy of videos when
reclassifying the videos uploaded by subscribers, his subjective fault is relatively
apparent.
2.4 Obligation of Video-Sharing Websites
In recent years, in the legislation of the countries prescribing the liability of

network service providers for infringement, network service providers are not
required to bear the obligation for monitoring the information content in the
network system. For instance, DMCA explicitly provides: The network service
provider is not obliged to monitor the networks and seek for the infringing
activities.17 Article 15 of the EU Electronic Commerce Directive also declares:
Member States shall not impose a general obligation on providers to monitor the
information they transmit or store, nor a general obligation actively to seek facts
or circumstances indicating illegal activity. European Parliament, EC
Commission and European Economic and Social Committee specially point out
in their report on the EU Electronic Commerce Directive: This is important, as
general monitoring of millions of sites and web pages would, in practical terms,
be impossible and would result in disproportionate burdens on intermediaries and
higher costs of access basic services for users.18 This means that if a network
service provider fails to monitor actively network activities, it cannot be
presumed that it has a fault; and even if a network service provider actively
adopts monitoring measures, when there is no evidence to prove that it should
have discovered the infringing content, it cannot be recognized that it has a fault
merely for he has not discovered the infringing content indeed. In other words,
the fault of a network service provider can only be proven by the evidence raised
by the right owner or presumed by statutory approaches, but not merely from the
fact that the network service provider fails to monitor the networks, discover and
curb the infringing activity.
The author holds that such provision is based on the policy reason for
encouraging the development of the network service industry and the
17
17 USC 512(c), 512(c)(1)(A), 512(m), 512(c)(1)(B), 512 (i) (1)(B), 512 (i) (2).
18
See Report from the Commission to the European Parliament, the Council and the European
Economic and Social Committee, First Report on the Application of Directive 2000/31/EC of
the European Parliament and of the Council as of 8 June 2000 on certain legal aspects of
information society services, in particular electronic commerce, in the Internal Market
(Directive on Electronic Commerce). p.14 (2003).
292 Qian Wang
consideration in technology. In technology at that time, there is no way to

identify whether the information content uploaded by subscribers is infringing,
let alone the determination of its subject of right. Hence, the network service
provider had no way to use an economical and effective filtering tool to identify
and delete infringing content. To provide for the statutory monitoring obligation
in such technological condition will force network service providers to employ
tremendous manpower to adopt the means of manual monitoring and control of
the entire information, hence resulting in the increase of network service cost.
This may not only affect the development and popularity of network service, but
also seriously obstruct the free exchange of information and greatly lower the
speed of information dissemination, which runs in the opposite direction from the
basic goal and value orientation of the development of network technology,
facilitating information exchange and dissemination.
However, the development of technology has surpassed the expectation of the
legislators of DMCA and the EU Electronic Commerce Directive at that time.
The technology of digital watermark and fingerprint has enabled the right owner
to insert marks invisible to naked eyes in digital works so as to indicate the
description, right ownership, authorization information of works and trace their
use and dissemination status. What’s more, various filtering technologies spring
up. Presently, the relatively advanced “content identification software” may
compare the music and videos uploaded by subscribers with the music and films
and television works stored in the database by the right owner and identify those
music and videos uploaded without authorization. The US Audible Magic
Company once presented to the public: Download a fragment of two-minute
video from YouTube, which was shot with a home camera in a cinema with dim
light. Consequently, the quality of its pictures was poor with the sounds dubbed.
However, very quickly, it was identified that such set of system was the fragment
of a US film Kill Bill 2. (Stone, Helft, 2007) The famous blog site
www.myspace.com has cooperated with Gracenote in adopting the similar
technological means to prevent subscribers from uploading music without
authorization. (Litterick, 2006) US video-sharing websites www.guba.com,
Grouper, www.break.com as well as P2P system iMesh have adopted similar
filter systems to prevent uploading of infringing videos. (Lee, 2007) YouTube
also cooperates with those companies willing to authorize it to use their videos in
adopting filtering technology to prevent uploading of the videos in violation of
their copyrights. (Stone, Helft, 2007)
If similar filtering technologies have been quite mature and broadly recognized
by markets with reasonable cost, the video-sharing websites that decline to adopt
them to prevent subscribers from uploading infringing videos shall be recognized
having the intention of indulging the infringement of subscribers. Especially in
the circumstance where other video-sharing websites have adopted the filtering
technology, any video-sharing website which refuse to use such technology will
be in an obviously advantageous position for competition, for subscribers will
necessarily turn to the video-sharing websites that fail to adopt the filtering
technology where the videos of blockbuster film and television works can be
found when they have no way to freely download blockbuster film and television
works from other video-sharing websites.
In Grokster ruled by the US Supreme Court in 2005, the providers of two
kinds of P2P software were recognized having constituted “inducement of
infringement.” Besides the act of the two software companies of boasting the
infringing use of their software indicated their intent of inducing the
infringement of subscribers, the Supreme Court also held “neither respondent
attempted to develop filtering tools or other mechanisms to diminish the
infringing activity using their software.” While the court had not recognized that
the respondent software companies had statutory duty to monitor their users’
activity, “this evidence underscores their intentional facilitation of their users’
infringement.”19
In the wake of the ruling of Grokster by the US Supreme Court, the defendant
Grokster commenced to apply the filtering technology to the new generation P2P
software to prevent copyrighted works from sharing by subscribers without
authorization. The filtration approach adopted by Grokster was to collect the
name list of music composers from the Recording Industry Association of
America and made it a database for comparison of the titles of files, and
consequently, if a file uploaded by the subscriber contained the name of a music
composer identical to that in the database, it could not pass the P2P software of
Grokster for dissemination. However, the plaintiff Metro-Goldwyn-Mayer of
Grokster and others argued that it was ineffective for Grokster to apply such
filtering technology, for its subscribers could still use the P2P software of
Grokster to download pop music video files, the reason for which lied in that
many defects existed in the design of the filtering technology, which only
detected the names of composers but not the titles of files, failed to distinguish
ordinary spelling errors, and the film filter could not detect TV programs or
specific file types. Accordingly, Metro-Goldwyn-Mayer filed another lawsuit
against Grokster for its aiding and inducing subscribers to infringement. The
California District Court made a ruling to issue a permanent injunction to
Grokster in October 2007, ordering it to use “the most effective means available
to reduce the infringing capabilities of such system” in its P2P software, and
designate a “special expert” to select a kind of “the most effective technology”
19
See Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 259 F. Supp. 2d 1029, at 1036,
1042, 1044–1045 (C. D. Cal. 2003); S45 US 913, at 939 (2005); 518 F. Supp. 2d 1197 (2007).
294 Qian Wang
for Grokster so as to reduce the infringing capabilities of its P2P software.20

In Google in the Court of the First Instance of Paris, the plaintiff was the right
owner of a documentary. The plaintiff had issued a notice to Google to require
deletion of a documentary immediately after finding that the subscribers of
Google uploaded it to a video-sharing website of Google without authorization.
The subscribers reposted it soon after Google deleted it. After the right owner
issued another notice, Google deleted it once again. When the same documentary
(uploaded by subscribers) appeared in Google for the third time, the right owner
no longer issued a notice, but directly filed a lawsuit against Google. The court
admitted that Google was not the uploader of the documentary but the provider
of information storage service, and still more, deleted the documentary
immediately upon receiving the notice thereof. However, the court stressed
Google had clearly known that the documentary was uploaded without
authorization, so it should adopt all measures for preventing the documentary
from being spread once more without authorization in its website. Especially, it
should be noted that: Though Google claimed that the uploading subscribers
were different from time to time and it could not control them, the court still held
that the documentary uploaded by subscribers was the same and covered the
same right, so Google could have prevented the same infringing activity aiming
at the same documentary.21 This was equivalent to requiring Google to adopt
appropriate technological means to prevent uploading the same infringing
content.
Hence, it can be seen that though the present representative legislation has not
prescribed the statutory obligation of the network service provider for monitoring
its information content, intentional failure to adopt a reasonable filtering
technology to prevent the occurrence of the infringing activities may become an
important factor in judging the subjective fault of a video-sharing website indeed.
In the lawsuit of Viacom and YouTube, YouTube was much criticized for its dual
attitudes toward the filtering technology: On the one hand, for those right owners
who were willing to cooperate with and permit YouTube to provide video content,
YouTube promised to protect their videos by use of the filtering technology,
whereby YouTube would adopt the filtering tool developed by Audible Magic
Company to prevent the videos of such right owners uploaded by subscribers
without authorization; on the other hand, for those right owners who declined to
permit YouTube to provide video content, YouTube did not adopt any
technological means to prevent the uploading without authorization of their
20
Ibid.
21
See 10 October 2007, Google Inc. v. Zadig Productions and others TGI Paris 3rd Ch. 2nd Sect,
2007-10-10.
videos.22 YouTube adopted the filtering technology to protect the partial interests
of the right owners, which indicated that such filtering technology was reliable
and effective. However, YouTube declined to use the filtering technology to
prevent the infringing videos from being uploaded only on the condition that the
right owners were unwilling to permit it to use them, which is very likely to be
recognized by the court that it had the subjective intent of indulging subscribers
to infringe the interests of such right owners.
As mentioned above, some Chinese video-sharing websites not only set up
film and television columns, but contain brief introduction to the majority of the
films, including the year of their production. Even if such brief introductions are
uploaded by subscribers, the video-sharing websites may adopt quite simple
technological means to filter those film works still in the protection period based
on their production time. The refusal of video-sharing websites to adopt any
filtration method may prove their subjective faults together with other evidences.
What deserves special attention is: Though the EU Electronic Commerce
Directive prescribes that the network service provider does not have the duty of
monitoring, it points out that member countries may in their national
legislations provide for the monitoring obligation of the network service
providers under special circumstances. 23 If the technology of filtering
infringing content has been mature, the monitoring obligation specified in law
aiming at the services including provision of video-sharing platforms that are
designated to disseminate infringing content easily does not go against the
trend of international legislation.
3 Vicarious Liability Involved in Video-Sharing Websites

In tort law, “vicarious liability” generally refers to the liability borne by a person
for the act of others. In the Anglo-American law system, it refers in particular to
the liability borne by the employer for the infringing activities of its employees
in the employment period, (Xu, 2004) while the “vicarious liability” in the field
of copyrights develops by the US through long-term judicial precedents, with its
constitutive requirements far looser than those of “vicarious liability” in the
general law of tort, which consequently becomes a great contribution by the US
to the “indirect liability” regime in the copyright field.
In common law of the UK and the US, the employer shall bear the “vicarious
liability” for the infringing activity related to the work and task of its employees
22
See Viacom International Inc. v. YouTube Inc., Complaint, paras. 3, 45, 52.
23
See Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on
Certain Legal Aspects of Information Society Services, in particular Electronic Commerce, in
the Internal Market. Recital 47.
296 Qian Wang
under its direct control during the employment period, while the appointing party
of “independent contractors” is not required to bear any liability for the
infringing activity of its “independent contractor” related to employment, the
reason for which is that though the “independent contractor” accepts an
appointment and completes a task, he may freely choose the ways to complete
the work (Garner, 2004) without direct control by the appointing party.24 If such
rule is directly applied to the copyright field, such entertainment agencies as
dance halls and night clubs will not bear the liability for the infringing
performances by their hired bands, for such temporarily hired bands are of the
legal status of “independent contractors.”25 (Harpwood, 2000) However, the US
courts have gradually reached a consensus in the judicial practices, holding that
the bands perform music to attract clients, enabling the operators of dance halls
to acquire direct interests. If the copyright owner has no way to prove the
operator of a dance hall knows that the band performs music without
authorization in advance, there will be no way to require the operator to bear the
“liability for contributory infringement,” or the “vicarious liability” according to
the employment relationship, which is unfair to the copyright owner.26 Therefore,
the US courts have modified the rule of “vicarious liability” as follows: If a
person has the right and ability to supervise the infringing activities of others and
simultaneously gains direct economic interests from such act, he shall bear the
liability for it even if not knowing the infringing activity of others.27 This means
that it may be possible for the appointing party to bear the “vicarious liability”
for the infringing activity of an “independent contractor.” As far as such
entertainment places as dance halls and night clubs are concerned, when a band
performs music without authorization, as long as the operator, according to
contract or in fact, has the right to manage the place of entertainment and
simultaneously gains economic interests from the audience appreciating the
fee-based performance, it shall bear the liability for the band even if not knowing
24
See Restatement of the Law, Second, Torts, §409.
25
Though there are some exceptions to the rule that “the employer is not required to bear any
liability for the infringing activity of its independent contractor,” no such exception is
applicable to the field of copyrights directly.
26
The US court emphasized that “knowing” should not be taken as an element of “vicarious
liability,” otherwise, the operator of a profit-making entertainment place might well benefit
from the numerous infringing performance of music bands and claimed for exemption of
liabilities by alleging not knowing the happening of the infringing acts. See Famous Music
Corp. v. Bay State Harness Horse Racing & Breeding Ass’n, Ine., 554 F. 2d 1213, at 1215 (1st
Cir. 1977).
27
See Gershwin Publishing Corp. v. Columbia Artists Management, Inc., 443 F. 2d 1159, at
1162 (2nd Cir. 1971): Polygram Intern. Pub., Inc. v. Nevada/TIG, Inc., 855 F. Supp. 1314 (D.
Mass. 1984); Melvile B. Nimmer & David Nimmer, Nimmer on Copyright, Matthew Bender
& Company, Inc., Chapter 12. 04 (2), (2006).
the illegal act of performance of the band.28 Likewise, the owners of leased stalls
are subject to such rule. In the famous Fonovisa, the court found the operator of
the second-hand market explicitly agreed with stall-keepers in the contract that
he had the right to terminate the contract on leased stalls of vendors for violation
of law. Meanwhile, as the vendors leasing stalls attracted a large number of
customers by selling pirated compact discs, and the operator of the second-hand
market gained considerable incomes from the entrance fee, parking fee and sales
loyalties, the ruling was made for the operator of the second-hand market to bear
the “vicarious liability” for the infringing activity of the vendors leasing stalls in
selling pirated compact discs.29
“Vicarious liability” is also embodied in DMCA. According to the provision of
DMCA, the network service provider offering information platform services shall
not be liable for the infringing content uploaded by users, if the service provider
does not have actual knowledge or should not have known that the content
uploaded is infringing and does not receive a financial benefit directly attributable
to the infringing activity, i.e., the act of uploading the infringing content, in a case
in which the service provider has the right and ability to control such activity.30
With respect to the “financial benefit directly attributable to the infringing
activity,” the US Congress explained: If the network service provider charges a
one-time set-up fee and flat periodic payments for service or fees based on the
length of the message or by connecting time from a person engaging in infringing
activities, the service provider is not required to bear the “vicarious liability.” But if
the charge of fees by the service provider is obviously linked with the infringing
content, it may be possible for it to bear the “vicarious liability.”31 However, the
Congress did not explain what is the “right and ability to control,” and in this
respect, the interpretations of the US courts in different precedents are not identical.
In the famous Napster case, Napster, as a P2P system service provider,
administered the central server in charge of collecting information on the songs
in the “Shared Contents” in the computers of the subscribers of P2P software and
preparing a catalogue, while the majority of the songs exchanged by the
subscribers with P2P software were not authorized by the right owners. The court
28
See Buck v. Jewell-LaSalle Realty Co. , 283 US 191, 198–199, 75 L. Ed. 971, 51 S. Ct. 410
(1931); Dreamland Ball Room, Inc. v. Shapiro, Bernstein & Co., 36 F. 2d 354 (7th Cir. 1929).
In Shapiro where “vicarious liability” was first introduced in the field of copyright law, the
court held that the imposition of vicarious liability in the case before us cannot be deemed
unduly harsh or unfair, because the defendant was entitled to prevent the infringing act of the
direct infringer and had obtained obvious and direct economic benefits from such infringing
act. See Shapiro Bernstein and Co. v. H. L. Green Co., 316 F. 2d 304 (2nd Cir. 1963).
29
See Fonovisa, Inc. v. Cherry Auction, Inc., 76 F. 3d 259, 263 (9th Cir. 1996).
30
See 17 USC 512(c), 512(c)(1)(A), 512(m), 512(c)(1)(B), 512 (i) (1)(B), 512 (i) (2).
31
See Senate Report on the Digital Millennium Copyright Act of 1998, Report 105–190, 105th
Congress, 2nd Session, p. 44.
298 Qian Wang
held: Napster is capable to prevent the subscribers from using its system to
conduct infringing activities, which indicated Napster has the right and ability to
supervise its subscribers, 32 finally determining that Napster should bear the
“vicarious liability” for the infringing activities of its subscribers. According to
such explanation, any website that provides information platforms, including
video-sharing websites, has the “right and ability to supervise its subscribers,”
for the operator of any website can prevent specific subscribers from using its
system to upload infringing content.
In Hendrickson v. eBay, someone sold pirated films on the auction website of
eBay, and the film copyright owner claimed that eBay should bear the “vicarious
liability.” The court pointed out: “The right and ability to the infringing activity
cannot simply mean the ability of a service provider to remove or block access
materials posted on its website or stored in its system,” and “eBay’s voluntary
practice of engaging in limited monitoring of its website for ‘apparent’
infringements cannot, in and of itself, lead the court to conclude that eBay has the
right and ability to control infringing activity within the meaning of the DMCA.”33
In a similar case Costar Group v. Loopnet, the defendant’s website allowed its
subscribers to upload photos, while the plaintiff filed a lawsuit for the
infringement by the photos uploaded of its copyright. The court held: The
defendant has no right and ability to control its subscribers except for the ability
to control the access of its subscribers in its website. But the “right and ability to
control” the infringing activity, as the concept is used in the DMCA, cannot
simply mean the ability of a service provider to remove or block access to
materials posted on its website or stored in its system.34 Such explanation on the
“right and ability of control” is obviously inconsistent with Napster. Before the
US Supreme Court stated its authoritative opinion on such issue, the application
of “vicarious liability” to network service providers remained uncertain.
Article 22 of the Regulations on Protection of the Right of Communication
through Information Network provides: The network service provider “providing
information storage space for service objects” “shall not directly gain economic
interests from the works, performances or audio-visual products provided by
service objects” for exemption from the liability for its subscribers’ activities of
uploading infringing content. The author believes that this should be the result of
learning from the “vicarious liability” in the DMCA. But such learning set forth
in the Regulations is not perfect. Firstly, there was no legal basis in the previous
Chinese legislation and judicial practices similar with the US “vicarious
liability.” The “vicarious liability” in the General Principles of Civil Law only
32
See A & M v. Napster, 239 F. 3d 1004, 1021 (9th Cir, 2001).
33
See Hendrickson v. eBay, 165 F. Supp. 2d 1082, at 1093, 1094 (C. D. Cal. 2001).
34
See Costar Group Inc. v. Loopnet, Inc., 164 F. Supp. 2d 688, at 702, 704 (D. Md. 2001).
refers to the liability of corporate legal persons for the infringing activities of
their staff and workers.35 Furthermore, neither the General Principles of Civil
Law nor the Copyright Law or related administrative laws and regulations or
judicial interpretations expands the “vicarious liability” of the employer for its
employees to “independent contractors.” Hence, the “vicarious liability” of the
appointing party for its “independent contractor” established in the copyright
field by the US court through judicial precedents does not exist in China at all.
Accordingly, the learning by the Regulations of the “vicarious liability” in
DMCA is just like “water without source” and “trees without root.” Secondly,
there are two indispensable constitutive requirements for the “vicarious liability”
in DMCA: The financial benefit directly attributable to the infringing activity,
and the network service provider’s right and ability to control the infringing
activity. But there is only one requirement in the Regulations. If the Regulations
are implemented by word, a stricter liability will be imposed on the network
service provider than in the US, which is not tenable. For example, there are
films uploaded by its subscriber without authorization in some video-sharing
websites. There is no evidence to prove that the operators of the websites actually
know or have reasonable grounds to know the existence of infringing films, and
thus the operators of the websites do not constitute “indirect infringement.” But
as long as the clicking volume of each video in the websites is connected with
the advertising income, it means that the operators of the websites get the
“financial benefit directly attributable” to the infringing films, for more times the
infringement films are clicked to appreciate or download, the more advertising
income the operator of the website will gain, and the infringing activities of
subscribers bring forth direct benefits to the operators of the websites. In such
case, it shall be recognized directly according to the Regulations that the
video-sharing websites shall bear the liability for the infringing activities of their
subscribers without the need to consider whether they can control the infringing
activities of their subscribers, which will make all the video-sharing websites
that link clicking volume to advertising incomes liable for infringement and the
auction websites, such eBay, liable for sales by subscribers of infringing goods,
for eBay will get paid from the revenues of sale of goods by its subscribers.
Consequently, it will seriously hamper the normal commercial development of
the network service industry, including video-sharing websites.
4 Conclusion
In the circumstance where a video-sharing website directly uploads film and
35
See Article 43 of General Principles of Civil Law of the People’s Republic of China.
300 Qian Wang
television works to a server for its subscribers to share without authorization, or

makes antecedent edition and review on the infringing videos uploaded by its
subscribers, the video-sharing website conducts the act of “direct infringement.”
But the overwhelming majority of video-sharing websites merely provide a
platform of automatic receipt and release of information for subscribers to upload
videos. Based on the above-mentioned analysis, the author hereby further puts
forward suggestions on clarifying the recognition of the legal liability of
video-sharing websites.
(1) The condition for application of the “vicarious liability” rule, which is in
the Regulations on Protection of the Right of Communication through Information
Network, is worth discussing. The Regulations lacks the legal basis for partial
learning from the “vicarious liability” in the DMCA, which may hinder the
development of normal commercial modes. As the application of the “vicarious
liability” set forth in DMCA in the network environment is also debatable in the
US, China shall detail and perfect such system by continuously observing its
development in foreign countries and shall be cautious for its application in reality.
(2) The legal standard on “should have known or should have reasonable
grounds to know” shall be further specified. When the right owner has no way to
prove the operator of the website “actually knows” that there exist infringing
videos uploaded by subscribers in the website for failure to send a warning on
infringement meeting the requirements of the regulations to the video-sharing
website, judgment shall be made whether the operator of the video-sharing
website “should have known or should have reasonable grounds to know” the
existence of infringing videos based on the extent of care of a reasonable person
in the same industry under the equivalent circumstance. Considering the reality
that the overwhelming majority of the current online films are infringing, a
higher requirement for the duty of care shall be imposed on the video-sharing
websites that have set up classified contents of film videos.
(3) Whether a video-sharing website adopts the economical and effective
filtering mechanism accepted by markets shall be taken as the factor to judge
whether it performs the duty of reasonable care. When conditions become mature,
the industry association may recommend video-sharing websites to adopt the
reasonable filtering mechanism. The competent governmental departments may
also consider promulgating technological standards that video-sharing websites
shall meet, including the standards on adoption of filtering technology. DMCA
specifically take the compliance of standard technological measures by network
service providers as the precondition for exemption of network service
providers.36 However, the “standard technological measures” is defined as the
technological measures used by copyright owners to confirm or protect works,
36
See 17 USC 512(c), 512(c)(1)(A), 512(m), 512(c)(1)(B), 512 (i) (1)(B), 512 (i) (2).
which, according to the consensus reached by copyright owners and service

providers through open, fair, voluntary and cross-field negotiations, and available
to anyone according to reasonable and non-discriminatory clauses, may neither
cause too much cost to network service providers, nor impose overload on
network systems.37 In the circumstance where related technological standards
have been promulgated, video-sharing websites which still refuse to adopt the
filtering mechanism shall be considered having obvious subjective fault, that is,
they have the intent or fault to aid and induce subscribers to use their
video-sharing platforms to disseminate infringing content of videos.
References
Goldstein P (2002). Copyright (2nd Edition) Vo1. 2, Part Three. Aspen Law & Business, §6.0,
6.1
Harpwood V (2000). Principles of Tort Law (4th Edition). London: Marshall Cavendish
Publication Ltd., 554–558
Lee E (2007). Firms Working to Halt Pirates. The San Francisco Chronicle, Section: Business,
C1. 2007-3-19
Litterick D (2006). Internet MySpace Gets in Tune with the Copyright Owners. The Daily
Telegraph Section City, 1. 2006-10-31
Nimmer M B, Nimmer D (2003). Nimmer on Copyright. Matthew. Bender & Company, Inc.,
§12B. 04 ⑴, §13. 05 ⑵
Stone B, Helft M (2007). New Weapon in Web War over Piracy. The New York Times,
Section C, Column 6, Business Desk, 1. 2007-2-18
Von Bar C (2003). Gemeineuropaisches Deliktsrecht. Zhang X B, trans. in Chinese. Beijing:
Law Press, 141
Xu A G (2004). 英美侵权行为法 (Anglo-American Law of Infringing Act). Beijing: Peking
University Press, 250
Zhang G L (2003). 知识产权侵权民事救济 (Civil Remedies for Infringement of Intellectual
Property). Beijing: Law Press, 30
Author
Qian Wang got his LL.M from the University of Toronto, Canada and Ph.D from
Peking University, China. His main publications include 网络版权法 (Internet
Copyright Law), 著作权法 (Copyright Law), 知识产权法教程 (The Course of
Intellectual Property Law), etc. He co-authored 中欧网络版权保护比较研究
(Comparative Study on Copyright Protection in the Internet in China and EU),
知识产权间接侵权研究 (Study on Indirect Infringement of Intellectual Property
Rights). Moreover, he has released more than 70 papers and commentaries
published in key journals.
37
Ibid.
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Law China 2009, 5(2): 275–301

Study on Copyright Infringement of Video-Sharing

© Higher Education Press and Springer-Verlag 2010

Abstract If any video-sharing websites, without authorization, directly upload

Keywords video-sharing website, indirect infringement, contributory infringe-

The “video-sharing websites” initially refers to those websites that provide

1 Direct Infringement of Video-Sharing Websites

compensation liability is required without fault.

works against YouTube, the video-sharing website, Viacom raised a cause of

2 Indirect Infringement of Video-Sharing Websites

the infringing activities.5 (Nimmer, 2003; Goldstein, 2002) Hence, “inducement

2.1 Video-Sharing Websites Have Subjective Fault Due to the Appearance of

At present, there is an undisputable fact: Many video-sharing websites have

become the tools for numerous subscribers to conduct infringement since

2.2 Video-Sharing Websites Indulging for Infringement Constitute Contributory

video-sharing website knowing well the “direct infringement” (uploading the

2.3 Video-Sharing Websites Indulging in Infringing Activities Constitute

Before the promulgation of the Regulations on Protection of the Right of

2.4 Obligation of Video-Sharing Websites

In recent years, in the legislation of the countries prescribing the liability of

consideration in technology. In technology at that time, there is no way to

for Grokster so as to reduce the infringing capabilities of its P2P software.20

3 Vicarious Liability Involved in Video-Sharing Websites

television works to a server for its subscribers to share without authorization, or

which, according to the consensus reached by copyright owners and service

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