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Interpretation of rules closely related to the live broadcast industry in the Civil Code (Part II)

Time:2020-07-27 18:06:00Browse:

WangJing & GH Law firm Internet and High-Tech Department has launched a new Internet-relatedlegal column. This column lists the most controversial and discussed legalissues in the Internet industry at present, and a team of senior lawyersinterprets both the legal level and the practical level, so as to betterprovide professional legal services for Internet enterprises.

Afterfive drafts, the Civil Code of the People's Republic of China (hereinafterreferred to as the "Civil Code") was officially promulgated on May28, 2020 and will take effect on January 1, 2021.

Atthat time, with the repeal of separate laws such as the “Contract Law of thePeople's Republic of China”, the “Property Law of the People's Republic ofChina” and the “Tort Liability Law of the People's Republic of China”, we willbid farewell to the past of "loose" separate laws in the civil fieldand officially enter the "code era".

TheCivil Code has a total of 1260 pieces with more than 100,000 words. In terms ofcontent, it is not a simple combination of many separate laws and judicialinterpretations, but a “new law” that combines economic and social developmentsand responds to many new issues in the civil field.

The"new laws" respond to a number of new issues in the civil sector,including some that are closely related to the explosive growth of thelive-streaming industry this year.

Wesorted out the contents of the Civil Code, interpreted the eight rules relatedto live broadcasting in combination with the industry hot spots, and dividedthem into two parts for reference.

Thisis part II.

1. About the quality standards of e-commerce live broadcastgoods

Livee-commerce has brought the real shopping scene online, and "visible but intangible"is a major feature of online shopping. In the case that the quality of the goodsis not clear, users may have disputes with the platform over the quality ofgoods due to the "psychological gap" after receiving the goods.

Accordingto the current law if the quality requirements are not clear, the two partiescannot reach a supplementary agreement and cannot be determined in accordancewith the relevant provisions of the contract or the transaction habits. Performin accordance with national standards and industrial standards; In the absenceof national or industrial standards, the performance shall be in accordancewith the usual standards or specific standards conforming to the purpose of thecontract.

Theabove-mentioned standards refer to the unified technical requirements in theservice industry and other fields in accordance with the Standardization Law ofthe People's Republic of China. It includes national standard, industrystandard, local standard, group standard and enterprise standard. Among them,national standards are divided into mandatory standards and recommendedstandards, and industry standards and local standards are recommendedstandards. Mandatory standards must be implemented, and the State encouragesthe adoption of recommended standards.

Basedon the standard system construction situation in our country, the Civil Code hasmade a ranking of the application of national standards and industry standards:

1. If there is a mandatory national standard, it shall be performed inaccordance with the mandatory national standard (no. GB);

2. If there is no mandatory national standard, it shall be performed inaccordance with the recommended national standard (No. GB/T);

3. If there is no recommended national standard, it shall be performed inaccordance with the trade standard (e.g., The Trade Standard of the People'sRepublic of China for Domestic Trade, (No. SB/T)).

Theseterms and arrangements are more operable for both parties in the dispute.

2. Regarding the streamer’s name and voice rights

Comparedwith general e-commerce, live e-commerce relies more on the performance of thestreamers. All parties need to invest a large amount of cost to realize the useof the "celebrity effect" to attract goods and form a brand. At thispoint, once the name has a damaged reputation, it is likely to cause an irreversiblenegative impact on the brand.

Accordingto the Supreme People's Court's Interpretation on Certain Issues concerning theApplication of Law in the Trial of Civil Cases of Unfair Competition, the nameof a natural person used in the operation of a commodity shall be deemed as the"name" as provided for in item (3) of Article 5 of the Law against Unfaircompetition; the pseudonym or stage name of a natural person who has certainmarket popularity and is known to the relevant public may be identified as the"name" prescribed in Item (3) of Article 5 of the Anti-UnfairCompetition Law.

Onthe basis of this interpretation, the Civil Code expands the protection of theright to refer to names and names to include "pen names, stage names,online names, translated names, font names, name and abbreviation of names thathave a certain social popularity and are used by others to cause publicconfusion". At the beginning of the design of streamer brands, attentionshould be paid to the potential risk of infringement on the right of naturalperson's name and the right of enterprise's name, and the preliminary investigationshould be done to avoid the use of other people's names, pen names and stagenames with certain popularity.

Inaddition, the Civil Code will include for the first time the voice of a naturalperson in the category of personal right protection. The voice of naturalpersons, as an independent new type of personality right, will refer to therelevant provisions applicable to the right of portrait protection

Theright to sounds mainly includes the following two aspects:

1. Self-use: the right holder uses his/her voice to express his/her will orcreate property interests.

2. Licensing others to use the voice, that is, the right holder exercises theright of disclosure, allows others to use his own voice, and can obtainproperty interests.

Whena live broadcast platform uses identifiable natural person audio materials, itneeds to pay attention to obtaining permission from the right holder.

3. Regarding the infringement liability of the streamer inthe execution work

Underthe premise of a labor contract signed between streamers and live streamingplatforms or MCN organizations, according to the current law, if streamerscause damage to others due to their performance of work tasks, their employershall bear the tort liability.

TheCivil Code has made major changes to this, stipulating that the employer hasthe right to recover compensation from the staff members who have committedintentional or gross negligence after assuming the tort liability.

Accordingly,when streamers cause damage to others, if the following three conditions aremet, live-streaming platforms or organizations have the right to claimcompensation from streamers:

1. There is a labor contract relationship between streamers and livestreaming platforms or MCN organizations.

2. Streamer causes damage to others due to his/her work.

3. The streamer has willful intent or gross negligence.

Itis suggested that when signing labor contracts with streamers, live-streamingplatforms or MCN organizations should clearly agree on the specificcircumstances that constitute intentional or gross negligence in work, so as toensure the effective realization of the right of compensation recovery in thecase of streamers' infringement.

Asfor the labor relationship between individuals, the Civil Code makes similararrangements, stipulating that the party accepting the labor has the right torecover compensation from the labor personnel with intent or gross negligence. However,the platform or institution is usually a legal or unincorporated organizationand is not an individual as defined in this section.

Inpractice, individuals and units can also form a labor relationship. Whetherthis provision can be referred to and applied under the premise that the laborrelationship is formed between streamers and live-streaming platforms or MCNorganizations still depends on the judicial practice after the implementationof the Civil Code.

4. Punitive damages on intellectual property rights

Thelive broadcast industry is an industry with intensive intellectual propertyrights, and the trademarks and trade secrets involved in business developmentare of high commercial value. In 2019, China's Trademark Law and theAnti-Unfair Competition Law were both amended to stipulate a punitive compensationsystem for trademark infringement and unfair competition.

Accordingto the newly revised "Anti-Unfair Competition Law", if the act ofmalicious infringement of commercial secrets is serious, the obligee (权利人) may claim the amount of compensation withinone to five times of the actual loss or the profit of the infringer (newlyadded after the amendment).

Atthe same time, if it is difficult to determine the actual losses of the rightholder and the interests of the infringer as a result of the infringement, thenewly revised Anti-Unfair Competition Law will increase the maximum amount ofcompensation that the court can decide from 3 million yuan to 5 million yuan.

Thenewly revised Trademark Law also focuses on raising the upper limit of punitivedamages, that is, the amount of compensation for infringement of the exclusiveright of the trademark will be determined according to the actual loss sufferedby the owner.

Ifthe loss is difficult to determine, it may be determined in accordance with thebenefits obtained by the infringer; If it is difficult to determine both theloss and the benefit, they shall be reasonably determined with reference to themultiple of the trademark license fee. If the loss, profit and trademarklicense fee cannot be determined, the court will impose a compensation of lessthan 5 million yuan (the upper limit before the amendment was 3 million yuan)according to the circumstances.

Formalicious infringement of the right to exclusively use of a trademark, if thecircumstances are serious, the court may determine the amount of compensationwithin 1 to 5 times the amount determined in accordance with the above-mentionedmethod (the range before the amendment was 1 to 3 times). Some courts havedecided to apply punitive damages after considering the following factors inrecent judgments:

1. The duration of the alleged trademark infringement and unfair competition;

2. Brand value of the plaintiff (proof of fee standard for prior businesscooperation with a third party can be submitted);

3. Whether it is a well-known trademark (it can be recognized byadministrative and judicial means, such as being recognized as a well-knowntrademark in the earlier judgment of the court);

4. The infringing party's registered capital and company size, theplaintiff's trademark popularity and market influence, etc.

Inconclusion, the system of punitive damages for intellectual property rights asdefined in “the Trademark Law” and “the Law against Unfair Competition” hasbeen determined in the Civil Code.

Atthe same time, after the formal implementation of the Civil Code, theindividual laws related to intellectual property rights shall not be repealedand shall continue to apply.

Inthe face of common trademark infringement and unfair competition behavior, the protectrights expected and infringement cost of live stream practitioners will also besignificantly increased.


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