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Topics covered in our latest newsletter:
Google Wins against Authors Guild
Last month, Google finally won a dismissal of the long-standing lawsuit between Google and the Authors Guild, in which authors accused Google of digitally scanning and copying millions of books without permission. United States Circuit Judge Denny Chin issued the decision, holding that even if the authors were to establish a prima facie case for copyright infringement, Google's actions constituted "fair use" under U.S. copyright law.
Google began creating its online library in 2004 when the company agreed with several major research libraries to digitize current and out-of-print works. All in all, Google has scanned approximately 20 million books in full in order to launch the now widely-known Google Books. Google Books allows users to search digital texts online and helps readers find books they might not otherwise be able to locate. In the event that the copyright holder did not grant Google permission to scan the book, Google Books only allows users to view "snippets" of the book.
The Authors Guild subsequently filed suit in 2005, alleging that Google's scans constituted copyright infringement. After years of failed settlement negotiations and complicated attempts at class certification, the case was ultimately sent back to Judge Chin to resolve the fair use issue at hand. He went through the four established fair use factors and ultimately decided that the factors weighed in favor of a finding of fair use.
First, he evaluated the purpose and character of Google's use, including whether such use is commercial or whether it is for non-profit educational purposes. He held that this factor weighed strongly in favor of Google because the purpose and character of Google's use is "highly transformative." He explained that Google Books is an important educational tool that digitizes books and transforms them from simply words on a page to a searchable word index that helps readers, scholars, and researches locate books. He admitted that although Google is a for-profit, commercial enterprise, it does not sell the scans themselves and therefore does not engage in the direct commercialization of the copyrighted works.
Secondly, he evaluated the nature of the copyrighted work. The judge also found this factor to favor a finding of fair use. He explained that because most of the books that Google uses are published, non-fiction books, the works are entitled to a lesser degree of copyright protection.
Third, he considered the amount and substantiality of the portion used in relation to the copyrighted work as a whole. Because Google scans the full text of the books verbatim, the judge found this factor to weigh against a finding of fair use.
Lastly, in evaluating the effect of the use upon the potential market for or value of the copyrighted work, the judge held that Google Books actually boosts rather than reduces book sales. Google, he explained, assists in a book being discovered, allowing the reader to then locate the book and go buy it. The scans do not serve as a replacement for the purchase of the book. Accordingly, the judge found this factor to favor a finding of fair use.
Paul Aiken, Executive Director of the Authors Guild, said the group is disappointed in the decision and plans to appeal.
Protecting Your Trademark through Government Entities in China
In China, there are three major government entities with the function of enforcing trademark law. They are the Administration of Industry and Commerce (AIC), Technology Supervision Bureau (TSB), and Public Security Bureau (PSB). All of these entities act at a local level. Among these entities, the AIC is the most active in the fight against counterfeiters.
The AIC is responsible for market supervision and administrative law enforcement. Companies also register and file annual reports with local AIC branches. When a trademark owner finds its products have been counterfeited, the quickest way to stop the counterfeiting is to file a complaint with the local AIC providing evidence of trademark infringement. If the AIC finds the evidence reliable, it usually takes quick action against the counterfeiter. The most common action is to raid the counterfeiter and issue a punishment decision, which may include confiscation of the seized goods, and/or a fine.
Although it is a relatively simple procedure to file a complaint with the AIC and request action against counterfeiters, there are limits to this option. Local AIC branches usually only take action when the infringer uses exactly the same trademark on exactly the same goods. Therefore, if a counterfeiter uses a confusingly similar trademark, or if it uses the exact same trademark on goods that the trademark owner does not produce, the AIC is reluctant to take action.
Compared to the AIC, the TSB is less known to trademark owners. The TSB is responsible for quality supervision of production. Although technically TSB may investigate and raid counterfeiters, it is seldom asked to act on a local level because it does not have as many local offices as the AIC, and its function is somewhat overlapping with the AIC. However, in cases where there is evidence that counterfeit products will pass customs, a trademark owner can ask the TSB to raid and seize the counterfeit products at customs. This provides an enforcement option when a trademark is not registered with customs and therefore customs will likely not stop the shipment. Like the AIC, the TSB can also confiscate infringing products and impose a fine.
The PSB is responsible for criminal cases only. The PSB can raid and initiate a criminal prosecution against a business enterprise engaging in counterfeiting activity where the value of illegal goods is equal to or more than RMB 50,000 (around USD 7,800). The PSB is very effective in cracking down large counterfeiting networks.
Sometimes an AIC or TSB raid may recover a large amount of counterfeit products. If the value of the seized goods is equal to or more than RMB 50,000, the trademark owner may also seek criminal prosecution in addition to the AIC or TSB punishment. If a party is not satisfied with the AIC or TSB punishment decision, it can also sue the AIC or TSB in civil court. This rarely happens though, since government entities in China usually shield each other, and courts hardly ever render judgments against other government entities.
Disclaimer: The contents of this newsletter are presented for information purpose only, and as such are not intended to constitute legal advice and should not be construed as such or acted upon without seeking advice of legal counsel. This information is not intended to and shall not create an attorney-client relationship of any kind or nature with IpHorgan Ltd. Please contact the firm with queries, concerns or for further details regarding the information presented herein. The entire contents are current only as of the date of the newsletter and are not to be interpreted as the opinions of our clients past, present, pending or future. (c)2013, IpHorgan Ltd. All Rights Reserved.