Legal update: Chinese domain names

Has this happened to you? Someone calls and says he is the local affiliate of an accredited Chinese domain name registration agency. He tells you he noticed someone trying to register your company’s name as a ‘.com.cn’ and/or ‘.cn’ domain name with CNNIC (China Internet Network Information Center), China’s official domain name register. Although registration is first come, first served, his company being affiliated with an official agency, he claims he can hold the other application to give you the opportunity to register the name first.

To show legitimacy, he sends you a fax showing his company’s name, affiliation with the authorized agency, contact information and selected provisions from CNNIC’s Domain Name Dispute Resolution Policy. The fax states that if you are the legitimate user of the name and wish to assert your first priority rights to the domain name, you must contact them by a certain time.

Suspicious, you check the CNNIC website. Sure enough, your company’s name has just been reserved the day before and is unavailable. You do not recognize the company reserving the domain name. You call the number on the fax and you are assured that they can give you priority. Relieved, you sign a long-term contract with them to protect your name. Later, you find out that the company reserving your domain name has the same address as their Chinese office and their charges are above market rates. You complain but they refuse to let you terminate the contract and threaten to take you to the small-claims court if you do not pay. Since the amount is a few thousand dollars, you decide it is not worth the time and effort to fight them.

If you receive such a call and show no interest it is unlikely they will reserve the name. Wait a day and you will find the domain name will still be available and registration is about RMB180 a year.

So please be aware.

Update

We reported earlier about Chan Nai Ming, the world’s first person convicted of using BitTorrent software to upload and share movie files online. The Court of Final Appeal just issued its judgment. Mr Chan appealed on technical grounds.

First, he argued that a digital copy has to be held in a physical storage device such as a CD or flash memory stick before it can be distributed. Since “.torrent” files do not use physical storage devices, technically speaking, it could not be a copy that can be distributed under the criminal provisions of the Copyright Ordinance. The court disagreed. Using the illustration of someone writing a book review, the Court noted that the reviewer can send a copy of the review as an email attachment to different people. The attached electronic document files are not stored in a physical device but they are capable of being distributed and indeed are distributed to the recipients of the emails. The Ordinance does not define “distributed” so, applying its ordinary meaning, the Court concluded that a physical storage device is not necessary for criminal distribution under the Ordinance.

Mr Chan also argued that his action of making available movie files for downloading was merely passive and that it was the downloaders who took the initiative to download the movies. This passive conduct cannot be considered distribution. The Court used the example of a vending machine dispensing soft drinks to reject this argument. If Mr Chan’s analogy is correct, a coin-operated vending machine does not distribute soft drinks. This defies common sense. Having taken all preparatory steps necessary for someone to download the files, the Court stated that it would be a mistake to consider such preparatory steps as mere passivity.

Finally, Mr Chan argued that there must be physical delivery and transfer of the electronic files for distribution to occur. He merely enabled others to make their own copies and did not actually transfer the files from his computer to the downloaders’ computers. After downloading was completed, his initial file remained in his computer so no ‘transfer’ occurred. The Court did not address this challenge directly but observed that the initial infringing copy remaining on his hard disk after downloading was irrelevant because the magistrate found evidence showing that his computer generated the infringing copy sent to the downloader in a stream of digital packets which were then reconstituted as a viewable movie on a downloader’s computer. The magistrate’s findings mean that he created and possessed a copy for distribution to others. The Court of Final Appeal did not review those findings but, since the Court concluded that Mr Chan’s conduct amounted to distributing, the Court ruled that that was sufficient to establish his guilt. Mr Chan’s appeal was dismissed and he was ordered to complete his three-month prison sentence.