Increased Protections for Intellectual Property in the PRC Internet Industry

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Internet Service Providers (“ISP”) that typically provide video-sharing platforms, online shopping websites, or online digital libraries such as Baidu, Youku, and Tudou in China face increased penalties for intellectual property infringement. ISPs have been able to find protection provided by a safe harbor provision of the Regulations on the Protection of the Right to Network Dissemination of Information1 when their users post materials that violate copyright laws. However, with the passing of the Tort Law of the People’s Republic of China (the “Tort Law”) on July 1, 2010, ISPs should be aware of the increased liability they face related to the conduct of their users.

The Tort Law marks a significant step by the Chinese government to introduce statutory protections for various forms of tortious liabilities. Protections for consumers under the Tort Law provide for a wide range of liability, including limited network services provider liability, vicarious liability, product liability, medical malpractice liability, and environmental pollution liability. In particular, the Tort Law also establishes vicarious liability for intellectual property infringements. Under Article 36 of the Tort Law, an ISP may be held liable for damages that may occur after the ISP receives notice that the ISP’s website hosts content that infringes intellectual property rights.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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