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. 

 

 

When the music stops - TikTok's legal dance with a Vietnamese music titan

Major online Vietnamese content platform VNG is suing TikTok in Vietnam. VNG Corporation is a Vietnamese tech platform, founded in 2004, which focuses on digital content, online entertainment, social networking, and e-commerce. One of it’s subsidiary is app and web based a music streaming service, Zing MP3. Zing also owns rights to certain music especially Vietnamese music.

TikTok is huge in SE Asia, a relatively uncontentious region in the current global political environment. Its owner Bytedance counts Vietnam as one of its fastest growing countries. It has avoided political risk there by blocking certain content (it faces a double whammy risk of being big tech and Chinese, both highly sensitive in Vietnam). By steering clear of risk Vietnam is supposedly now among its most profitable markets in Asia.

VNG accuses TikTok of using music owned by Zing  without consent, in a number of its short videos. These are likely user posted videos probably with accompanying Vietnamese music. An analysis report from Zing showed a total of 150 Zing music tracks used in more than 11 million videos on TikTok's website and app. VNG says it sent a cease and desist letter alleging copyright infringement to Tiktok and requested Tiktok to review and remove all the music owned by Zing.

The case was filed in the People’s court of Ho Chi Minh City. The complaint demands removal of the music videos both from the TikTok app and also it’s website, as well as a damages claim for 221 billion VND (over USD9 million).

This is a huge damages claim, probably not likely to be upheld by the court. However copyright cases make up most of the infringement seen in the courts in Vietnam so judges do have some experience of this area. The case could take a year or so if it proceeds to trial. in most countries such ISP cases settle, on the basis that the ISP removes the content. Settlements have happened in other copyright litigation cases in Vietnam.

Vietnam civil copyright decision

A copyright dispute in Vietnam indicates that civil litigation is increasingly common. This month the Hanoi People’s Court ruled in a civil decision on copyright.

 

It concerned a musical called Tinh Hoa Bac Bo (Quintessence of Tonkin). This is an open-air water stage musical about the region of Tonkin, in north Vietnam. It premiered in late 2017 and met with critical success and awards. The show was produced by Tuan Chau Hanoi JSC. It is alleged to have reproduced components of another musical play called Ngay Xua (Back Then). This was produced by TCHN and directed by renowned director Viet Tu in June 2017. Tu’s show was not a success and stopped running after 10 shows. Tu used to be an employee of Tuan Chau Hanoi JSC.

 

Expert evidence from the Vietnam Stage Artists Association was provided during the case. TCHN defended in court that The Quintessence of Tonkin was a separate product solely researched and created by directors Hoang Huu Nhat Nam and Dao Thuy Phuong Thao. Nam argued that he was the author of The Quintessence of Tonkin, and had already been granted an independent copyright for his work by the Copyright Office on July 31, 2017.  However when summoned to give evidence he did not appear.

The panel of judges decided that The Quintessence of Tonkin was a derivative work of Back Then. They awarded Viet Tu VND660 million ($28,000) in damages from TCHN. They calculated 10 percent of ticket sales, royalties, and interest for late payment.

 

There has already been an appeal and a separate defamation case has been filed by Name against Tu in in the People's Court of Binh Thanh District, Ho Chi Minh City.

Copyright works for the visually impaired in SE Asia

The Marrakesh Treaty of 2013 sets copyright exceptions for works which benefit the visually impaired. The exceptions allow the creation of derivative works in braille, audio, special font size etc without Copyright owner consent. It is usually estimated that up to 10% of works might need to be made into such formats. 74 countries are members so may now amend their copyright laws once it comes into effect in October 2019. WIPO administers the treaty. So far only Singapore has joined in SE Asia, but Vietnam  is thinking about it, according to delegates at a November 2018 seminar in Hanoi by the National Committee for the disabled. 

Blockchain and IP in SE Asia

Everyone is getting excited by the Blockchain’s application to IP. Copytrack is a Singapore based business that hopes to revolutionise image based copyright licensing, by creating a secure blockchain based log of rights based information for a photograph. Even more, your camera’s metadata can be automatically integrated into the system. Then licensing and royalties can be claimed through an online enforcement mechanism.  They hope to expand into other content like music and text.

 

Vietnam is a hotspot of blockchain development. The Vietstock Blockchain Summit was held last week. Bitcoin is part of the story, but Vietnamese companies are also working on copyright verification systems on the blockchain, such as Copyrobo which has operated a web- and app-based service which can provide timestamped evidence of documents, video and music for over a year with its CopyrightKey technology. 

 

The general consensus is that the next wave of tech giants could come from a coffee shop in South East Asia as much as Silicon Valley. Last week. Google announced an investment in Indonesia’s Go-Jek, alongside Tencent, JD, Sequoia and other VC giants.  What is interesting for the IP industry is the rush of SE Asian companies looking to develop blockchain based IP tools.

Copyright royalty collections in Vietnam

Collection of copyright royalties for music paid in public is a complex business. There are multiple rights involved and multiple copyright owners. In SE Asian countries a number of disputes have played out as copyright owners, royalty organisations and businesses utilising music work out who should pay what, to whom and why. 

In Vietnam a backlash put on hold attempts by the Vietnam Center for Protection of Music Copyright (VCPMC) to collect its royalties. VCPMC is a non-profit collective copyright management association. It represents 4,000 songwriters and copyright holders of Vietnamese music, and through its international associations another 4 million overseas authors and composers. 

The issue began in May when the VCPMC began demanding royalties from smaller hotels in central Vietnam. Hotels claimed they were unaware of these fees. Many refused claiming there was no music in many of them. One important issue was music being played on TVs in hotel rooms. However VCPMC had been charging 4 and 5-star hotels in major cities music licensing fees for many years. They also ran events to inform hotel owners of copyright rules. 

So due to the backlash in May, the Copyright Office of Vietnam instructed the VCPMC to temporarily halt collections. It began to mediate and devise a clearer plan for music royalty collection. The Ministry of Culture this week announced the resumption of collections. So the VCPMC will be charging all hotels VND25,000 ($1.1) per year for each room equipped with a TV. 80% of royalties  go to copyright holders and the remainder funds the VCPMC. 

 

Now for the hard part. The VCPMC expects hotels to collect lists of songs played and submit them so that payment can be calculated. How they will do this and which songs it applies to they have not explained. Perhaps a flat fee may have been easier.

Domain name cases and cybersquatting in Vietnam

On 8 June 2016, the Ministry of Information and Communication (MoIC) and Ministry of Science and Technology (MoST) jointly held a meeting to sign a new circular on handing domain name infringements. For some time domain name infringements have been impossible to handle effectively due to uncertain ministerial responsibilities for enforcement of decisions. See here for more detail. 

However this new joint circular surprised everyone. It only covers (i) domain names identical or similar to others' IP along with content on associated websites which infringe others' IP; (ii) domain names used for publishing content infringing IP laws. This is inconsistent with a previous 2015 Circular which covered bare cybersquatting (registering domain names similar without actually using the names or merely intending to resell the names or to prevent the IP holders from securing the names).  

This is disappointing. The most typical problem has not been addressed. To enable administrative action, IP holders must prove infringement on the associated websites. The MoIC has in effect sent a message: cybersquatting disputes must be resolved in court, not through the administrative route. This is in fact consistent with what the Law on Information Technology says but there is still arguably a conflict between the Law on Intellectual Property and the Law on Information Technology. Only serious content infringements will be resolved by the administrative authorities, less serious cybersquatting must go to the civil courts.

Vietnam Civil Copyright Case

On 12 May 2015, the Court of Hai Chau Ward in Da Nang City awarded compensation of  VND14,000,000 (approx. US$700)  in an action for infringement of copyright in a photograph. Although the case itself is relatively straightforward and the amount of compensation modest, the decision is noteworthy because copyright infringement actions of this sort rarely reach the courts in Vietnam, owing partly to the lack of detailed regulations for the assessment of infringement and damages and partly to the complex court procedures that exist. 

 

On 20 July 2014, a photographer,  Mr Mac Bao Khanh,  found that his work ‘Da Nang – toward future’, a photograph of Da Nang City Bridge, had been modified and was being used, without his consent, by Toan Cau Xanh Ltd. for advertising purposes. He subsequently initiated communications with Toan Cau Xanh Ltd. in an attempt to resolve the issue amicably and then, after a series of unsuccessful discussions, commenced copyright infringement proceedings in the Court of Hai Chau Ward, claiming  compensation of VND 25,000,000 (approx. US$1,146).

On 9 March 2015, the Court of Hai Chau Ward established a price assessment committee, made up of representatives of five relevant organizations, to evaluate the photograph in dispute. The committee valued the photograph at VND20,000,000 (approx. US$917).

 

At the trial on 12 May 2015, the Defendant argued  that: (i) the photograph in dispute had been downloaded from a tourist forum, not from Mr Khanh’s personal website; (ii) Mr Khanh had asked for a royalty of only VND200,000 (approx. US$9) per day in a deal with Vnexpress, a local newspaper, so the compensation being sought in this action was unreasonable. In its verdict issued on the same day, however, the Court found in favour of Mr Khanh and  ordered Toan Cau Xanh Ltd. to pay compensation  of VND14,000,000 (approx. US$700). Hopefully, the case will serve as an useful precedent, encouraging copyright owners to seek relief from the courts when their copyright is infringed.

On March 5^th the USTR announced its regular review of the world's notorious markets, the largest counterfeit and pirated products centres in the world. These comprise physical locations selling hard goods as well as online sites distributing pirated content. China features heavily of course (its AIC head even this week announced how important it was to stem the tide of fakes in China). But many other regions also feature.

 

SE Asia has over time been improving. The Philippines has excitedly announced its removal from the list. However 3 key SE Asian problems remain:

 
in Indonesia Harco Glodok, the consumer goods and electronics market in North Jakarta remains a key centre of counterfeit hard goods, largely imported from China.

Thailand has a number of physical areas of concern including Talad Nat on Wireless Road which is very close to the US Embassy in Bangkok.

Vietnam's zing.vn is primarily a social media site, but continues to provide access links to unauthorized music content. Years of negotiations to legitimize its content distribution have still not yielded results.

Despite the recent growth in online business in the last few years, so far SE Asia has not seen online fake sales take off in the same way as other parts of the world. Only Zing.vn so far has been named as a serious problem.