Second ISP liability case in Vietnam; this time against Alibaba subsidiary Lazada

 

Vietnamese publisher First News is taking legal action against e-commerce platform Lazada.  The claim by the Saigon-based company is that many Lazada merchants sell fakes books, and despite repeated notices to take them down, the problem has worsened. 

This is the second ISP liability case filed recently in Saigon. See here for details of a similar recently filed TikTok case. It is thought they are the first such civil cases in the country.  

Some of the fakes seen include classics such as Dale Carnegie’s "How to Win Friends and Influence People" and the "Chicken Soup for the Soul" books. The prices of the copyright infringing books are half the prices of the originals they say and many buyers have apparently complained.  First News first reported on this at an event they ran in July when they announced some 700 fake books available on various e-commerce platforms in Vietnam.

First News is a publisher of many books including Vietnamese translations. It previously sued and won compensation from English language schools for reprinting it’s books locally, so is experienced at enforcing its copyrights.  Lazada is owned by Chinese e-commerce giant Alibaba, and is generally regarded as one of the more efficient e-commerce platforms for dealing with fake items in the SE Asian region. 

Vietnam has long had a pirated book problem. This includes unauthorized photocopying and illegal print piracy. From historic classics like Graham Greene’s the Quiet American to Lonely Planet travel guides, sold on streets of Ho Chi Minh City to tourists, to ELT books for those learning English, as well as journals and academic text books for students. 

ISP liability in Vietnam is split into different types of ISPs. E-commerce platforms have a specific liability under a specific Decree 52 on e-commerce regulation.  This requires platforms to take timely remedial measures upon detection or receipt of complaints about business acts in violation of the law on e-commerce platforms. E-commerce platforms must eliminate from their portals any counterfeits, illegally imported goods or IP infringing goods upon detection or receiving a fair complaint. This is therefore a form of statutory liability, without use of the concept of safe harbour.  

The law suit alleges Lazada's local operating company, a company called Recess, which is a Vietnamese subsidiary of Alibaba, repeatedly assisted in the sales of pirated books and was on notice of First News’ warnings. The case was filed in the Ho Chi Minh City District 1 People’s Court.  This court has heard copyright cases before so has some experience. It is the correct forum for two local companies to litigate this issue. 

Conversely the Tiktok case was filed in the Ho Chi Minh City Court (a provincial/city-level court) as it is a dispute between a local party and a foreign one. The grounds will also likely differ as TikTok is probably not regarded as an e-commerce platform but another form of ISP (i.e. “ an online social network service”) so not governed by Decree 52 but a different set of rules, namely Joint Circular 07.  However the underlying principles should be the same.  Platforms and IP owners will eagerly await the outcomes of both. 

 

 

The Rolling Stones get Satisfaction from the courts of Indonesia!

Musidor BV is one of the Rollings Stone’s companies which owns trademark rights in their famous Lips and Tongue logo (left).  This was supposed to be adapted from Mick Jagger's own mouth.  

An Indonesian Tony Budiman register a very similar Lips and Tongue logo with the word STONES and another with STONES & CO, both in class 25 for clothing. Musidor sued to cancel the marks and won, with the Jakarta Commercial Court ordering the Trademarks Office (TMO) to cancel the two marks from the register. Not only that but the court declared the Plaintiff’s ROLLING STONES, THE STONES and the Lips and Tongue logo trademarks are well known.

One interesting point to note was that the TMO legal team filed arguments against Musidor. This is a common problem with the TMO. The TMO is joined as a party to enable them to be bound by the cancellation order. However the Commercial Court rejected their arguments. It is not clear what they were here; typically they argue the examiner properly examined the mark and it should not be cancelled. The TMO’s role in cancellation actions is very murky in Indonesia. They really should not be filing cases arguments against plaintiffs; their arguments are almost always rejected by the Courts. It would be far better if they did not get involved in pointless court arguments about validity of marks, unless there is an allegation of fault against them. 

Tony Budiman filed a Supreme Court appeal and this was rejected. A question arose over the time limit for filing cancellation cases. The Supreme Court confirmed that in the case of bad faith (which this clearly was), the 5 year limit did not apply. 

Talent Shows and copyright infringement in the Philippines

A musical furor is developing in the Philippines arising from the outcome of a local online talent show, The Pop Stage. The copyright infringement complaint relates to the unrelated, but well known musical called “Ang Huling El Bimbo: The Musical” (“AHEB”), which is based on the songs of iconic Filipino pop rock band Eraserheads. The title refers to their most famous 1995 love song which gained global success. The musical director of AHEB, which was first performed in 2018 and subsequently on stage at Resorts World Manila, has claimed that The Pop Stage winner “ripped off” the musical arrangement in one of their entries on the show.

The Pop Stage is an online talent show run by a well known actor Matteo Guidicelli. It is sponsored by the US fried chicken chain, Popeyes. It started several months ago and has been building towards its finale last week. CJ Villavicencio was announced the winner on 2 August 2020.  He won PHP1 million cash price and a one-year management deal with Viva Artists Agency.  His entry was a music video featuring a medley of Pare Ko, Alapaap and Huwag Kang Matakot, which are all popular Eraserheads songs. 

AHEB’s musical director, Myke Salomon, has accused CJ Villavicencio of copyright infringement, specifically for copying without permission the arrangements (the musical treatment and concepts) for those Eraserheads’ songs. He also condemned The Pop Stage judges for allowing such a “ripoff”. Salomon has been supported in his views by many members of the AHEB show’s cast too and other local artists. Now Ely Buendia, formerly lead singer in Eraserheads and composer of the songs used in CJ Villavicencio’s music video, posted “I am appealing to the people, companies and corporations involved in the AHEB plagiarism issue”. He wants them to “set an example” to the music industry. 

Local news agencies have reported that The Pop Stage winner CJ Villavicencio has spoken on the issue and claimed that his performance was a tribute to his favorite artist (Eraserheads) and the musical (AHEB) and that he has no intent to plagiarize. 

The Pop Stage has not yet addressed the complaint and there is a growing popular clamor for this to be corrected. Apart from infringing the rights of the musical director of AHEB it may be unfair to other contestants of the show.  Many ordinary Filipinos have supported this position on social media, that artists’ original IP should be protected. The Philippines has a robust music industry with many performers famous far outside the country. Many forms of copyright piracy plague the industry despite clear provisions in the IP code against it.

Indonesian digital/ecommerce IP enforcement

US entertainment industry groups remain unhappy with Indonesia's progress on IP enforcement. One major complaint is weak online enforcement. Recently Indonesia stepped up its site blocking of pirate websites – see here.  However until now domain hopping meant many sites reopened with new domains soon after.  The Ministry of Communications, KOMINFO now led by a new Minister since November, runs the national site blocking system covering a range of negative content and seems keen to improve its blocking of IP violations. 

The International Intellectual Property Alliance (IIPA), makes an annual submission to the US Trade Representative each year. IIPA represents the movie, publishing, games and music industries.  IIPA is taking the position that the US should suspend Indonesia’s GSP trade benefits unless there is an enforcement improvement.  There is no doubt Indonesia has taken some steps. But more is needed.  On site blocking specifically they are asking for a more efficient system to block sites and prevent them hopping. A second problem is illegal camcording in movie theatres, so is live streaming piracy.  Piracy apps and set-top boxes deliver pirated content – this needs a program to take action against the sellers. IIPA asserts that in 2019 progress stalled or even regressed. 

There are multiple regulations and laws relating to IP violation online, and coordination across multiple ministries is needed to bring clarity and coordinated action. A UK Embassy seminar this week sought to bring all stakeholders together (IP Owners, ISPs, industry associations and 5 relevant government Ministries all attended).     

Indonesia ratifies Beijing Treaty and Marrakech Treaty

Indonesia has ratified the Beijing Treaty and the Marrakech Treaty, two multilateral copyright agreements. The Beijing Treaty covers audio-visual performances, especially reproduction, distribution and rental of these copyright works. The Marrakech Treaty allows the reproduction and transfer of specially-adapted products the visually or impaired (apparently over 3.5 million people in Indonesia) by establishing a set of limitations and exceptions to copyright law.

More specifically the Beijing Treaty protects performers by granting 4 rights: (i) the right of reproduction (direct or indirect) of the fixation of their audio-visual performance; (ii) the right of distribution of copies of the fixation of their audio-visual performance; (iii) the right commercial rental of copies to the public; and (iv) the right of making available to the public, which nowadays relates more to wireless (or wire) internet access including streaming and downloads.  

There are also rights over unfixed live performances  - the right to broadcast, communicate to the public (apart from broadcasts, i.e. online) and the right of fixation. The Treaty also give performers moral rights, including the right be identified as the performer and the right to object to distortion, mutilation or prejudicial modification. There are rules on transferring rights to producers, incorporation of the Three Step Test for exceptions and limitations purposes well as remedies against circumvention of technological measures (e.g. encryption) used by performers.

Indonesia has a vibrant creative economy and performers struggle to get fairly paid. Indonesia is the thirtieth country to ratify the Beijing Treaty, fulfilling the minimum requirement for it to come into force in April (despite the EU and US not having agreed to it).  

Both Treaties operate under the World Intellectual Property Organization (WIPO). Indonesia will therefore need to amend its copyright law to give effect to these.

Major SE Asian piracy site shuts and reopens

Indoxxi is one of the most famous movie piracy sites in Asia. Alexa ranks it in the top 1000 websites worldwide, and top 100 in most Asian countries. An Indonesian piracy group, funded by online add click systems, operates vast numbers of illegal piracy websites offering foreign and Indonesian movies. In fact Indoxxi sites have been repeatedly closed, but they reopen offshore by domain hopping to new sites immediately. It has been flagged by the USTR as a notorious illegal piracy site. But no action has been taken by authorities other than site blocking. 

Then after several years of operation, Indonesia’s newly appointed Minister of Communications and Information (KOMINFO), Mr. Johnny Plate acted to shut down a large number of piracy sites in December, citing the need to protect creativity and investment. Then at the same time Indoxxi announced that to was closing down as of January 1st. Within days mirror sites with similar domains were up again. So its not clear if this was just a ploy to hide the fact that they would reopen and just dodge the KOMINFO blocking tools. Given that Indonesia blocks many times of non approved websites (gambling, pornography), it is not clear why piracy sites are so easily able to avoid the censors. 

Thai court crackdown on pirate EPL matches

The English Premier League owns various rights, most importantly the broadcast rights to EPL games around the world. A key issue is preventing pirated live broadcasts of the games.  

In Thailand the authorities filed a series of criminal charges for copyright infringement and operating a business illegally without case against a group operating a pirated match streaming service called ThaiExpat.tv. ThaiExpat.tv used a series of domains around the SEA region, first located in Hong Kong, then also found in Indonesia, Singapore, Vietnam, and Malaysia to show live matches as well as offer a full suite of British TV content, including BBC, ITV and Sky programming. They also sold illegal streaming devices, which were preloaded with apps enabling pirate broadcasts of Premier League football.

The charges were:

• Copyright Act - infringement via making a broadcast available for commercial gain (s29(3) & s69), and circumventing technological protection measures
• Computer Related Crime Act – interception of data (s8)
• Broadcasting & Television Act – operating a broadcast business without permission (s66) and importing, selling, offering to sell or installing set top boxes for subscription broadcasts (s70)
• Foreign Business Act – operating a business not permitted for foreigners

The case was heard in the Bangkok IP/IT court following a Department of Special Investigation Technology and Cyber Crime Bureau raid in 2017. The individuals operating the pirate site were two Britons and a Thai woman. One British man originally arrested at the raid subsequently jumped bail and along with other individuals, is being sought by Thai police.  Two defendants plead guilty and the case finally reached sentencing last week.

On 29^th November the IP/IT court sentenced the two defendants a British man and his Thai wife to fines of 3 million baht as well as 2 and 1 year suspended jail sentences. They were required to hand over 7 million baht in cash found in their possession at the raid and pay damages totaling 15million baht. These are huge sums, which illustrate the amount of money IP crime can earn and in this case the severe penalties it can attract. Several of the group's foreign members remain on the run. 

Fake Aboriginal artwork from Indonesia

In October 2018, a company called Birubi Art was fined by the Federal Court of Australia for selling fake Aboriginal artworks that were actually made in Indonesia.  Between 2015 and 2017, more than eighteen thousand (18,000) units of boomerangs, bullroarers, didgeridoos and message stones were sold to retail outlets around Australia by Birubi Art falsely labelled as “Aboriginal Art”, genuine” and “Australia”.   The Federal Court of Australia confirmed Birubi Art had “breached the Australian consumer law” and fined them AUD$2.3 million. This was an unusually large penalty due to the “serious cultural harm” to genuine Aboriginal artwork,“not just direct economic loss but a weakening of the value of the authentic products”. The belief is these were imported, perhaps smuggled into Australia from Indonesia.  

Fake art in Indonesia is unfortunately well known. The Indonesian Fine Art Lovers Association (PPSI) concedes that replica art is acceptable as long it does not display a forged signature of the original artist or have the blessing of the artist’s family.  To address this issue, PPSI published a booked titled Melacak Lukisan Palsu (Tracing Fake Paintings) to address art forgery in Indonesia.  Renowned Indonesian artists such as S.Sudjojono, Hendra Gunawan and Lee Man Fong are among the most widely forged in Indonesia.

Indonesia's trademark law proves to be Kryptonite to Superman

Indonesia’s problem of trademark piracy has reared its head again. This time, DC Comics lost a recovation case against Marxing Fam Makmur‘s SUPERMAN trademark. The Supreme Court then upheld the decision. 

The problem is that this was a very old registration from 1993. Marxing Fam Makmur is connected to a large public F&B maker called Siantar Top, and they have made a SUPERMAN chocolate wafer bar for many years. DC Comics' own trademark for similar foods was rejected so they tried to cancel Marxing Fam Makmur‘s SUPERMAN trademark on the grounds of bad faith. 

Indonesia’s IP authorities usually take a narrow view of bad faith.  However the case did not get that far. Unfortunately the decision focused on procedural issues rather than the substantive case.  The suit was ruled to be vague and unclear because DC tried to combine several claims into one suit - first the trademark cancellation, then termination Marxing Fam Makmur's pending trademark applications and an order for the Co-Defendant (DGIP/IP Office) to grant registrations for Superman related marks to DC Comics.

This might not seem wrong but the latter two remedies don't exist in the law. The proper route was to cancel the registrations, deal with the pending applications separately and for DC to file its own marks which would be examined independently. DC Comics was further undone by its own Power of Attorney which was only for cancellation of Marxing’s trademark registrations but did not authorise the other claims.

Great care must be taken with litigation in Indonesia. Getting caught out on procedural issues is a common problem. Elsewhere in the world a court would just reject the bad claims; here they throw the whole case out. That is a case of judicial rigidity applying procedure over justice.