China: Annual online piracy crackdown campaign 2017: Results announced

The results of the 2017 edition of China’s annual online piracy crackdown campaign, called the “Sword Net Action” (剑网行动), were recently published. As we announced earlier, the 2017 crackdown campaign promised to take a heavy hand against the unauthorized online distribution of films, games, TV programs and other online copyrighted content.

The crackdown campaign was a joint effort of four ministerial bodies and resulted in the following measures: 1,655 infringing websites were taken down, 274,800 infringing links were deleted, 1.51 million of infringing works were confiscated, and 37 cases were transferred for criminal investigation.

We highlight some of the most interesting enforcement cases of the crackdown campaign below:

1. Large scale online piracy of digital library system uncovered. The Beijing Cultural Market Administrative Law Enforcement Team conducted an investigation into a local company offering a “foreign digital library system” to the public, containing over 30,000 pirated works including a large range of full-version professional journals. , thereby realising an illegal revenue of 177,600 RMB (28,000 USD). In June 2017, the law enforcement team shut down the illegal business, and imposed an administrative fine of 400,000 RMB (62,000 USD).
2. Illegal online video-on-demand service shut down. Following a complaint by the Motion Picture Association of America, the Beijing Cultural Market Administrative Law Enforcement Team conducted an investigation into a company offering a virtual reality APP providing, inter alia, international blockbusters such as Fast and Furious 7, Doomsday etc. on demand. The Beijing Copyright Department shut down the business and imposed a fine of 30,000 RMB (5,000 USD). The case was the first case in China to involve VR technology to spread pirated audio-visual works.
3. Criminal online film piracy case. Following complaints by IP owners, the public security department of Tianjin conducted an investigation into the “Ji Ji” online cinema. The infringing scheme involved renting a server to run the online cinema, offering no less than 70,000 films and television shows. The bulk of the illegal revenues came from pop-up ads, commercials and other means of advertising. The online cinema had an average of 10 million individual daily users, yielding an estimated illegal turnover of about 40 million RMB (6 million USD). In August 2017, a criminal indictment was filed to the Tianjin Nankai District People’s Court, and the operators of the online cinema were convicted on the count of infringing copyright and sentenced with imprisonment of 42 months and a fine of 400,000 RMB (61,000 USD).
4. Online piracy of photographs case. The Copyright Department of Xuzhou City , Jiangsu Province, conducted a joint investigation with the police (namely the public security department) into the copyright infringements involving a set of connected websites ( http://www.7kk.com/ http://www.4j4j.com/, http://www.99kk.com/, http://www.9kk.com/) which were used to illegally upload nearly ten thousand pictures, thereby realizing advertising revenues of nearly 2 million RMB (308,000 USD). Four suspects who were running the websites are currently being detained, while a criminal procedure is being prepared.
5. Criminal enforcement of online game copyright infringements. Following complaints by right holders, the Copyright Department of Enshi Prefecture in Hubei Province conducted a joint investigation with the police (namely the public security department) into an online game copyright infringement case. The investigation focused on a set of illegal plug-ins sold for online games such as “Clash of Kings ” and “League of Legends”, thereby realising an illegal revenue of RMB 1.32 million (203,000 USD). The Enshi City People’s Court handed down a conviction and the infringers were sentenced with imprisonment ranging from 18 months to 36 monthis, with a 2-year probation period imposed on some infringers.
6. Software piracy case. Following complaints by right holders, the Copyright Departments of Foshan City, Guangdong Province, and Loudi City, Hunan Province, investigated a software piracy case. The case involved a scheme whereby 44 sets of specialised engineering software programs as well as 100 sets of other pirated software programs were sold resulting in an illegal turnover of 55,000 RMB (9,000 USD). In July 2017, a fine of 60,000 RMB (9,500 USD) were imposed.

The results of this year’s campaign are encouraging, as they include a large list of criminal charges and a limited number of cases where the fines imposed on large-scale infringers are higher than their illegal revenues. These results may serve as a reminder for IP owners to time their enforcement efforts with crackdown campaigns such as the Sword Net Action, to benefit from swifter and stricter enforcement.