American company cnYES.com, Inc. was accused of plagiarizing the news content of the Commercial Times and the China Times Express and reproducing the content on its website in violation of Article 24 of the Fair Trade Law
Case:
American company cnYES.com, Inc. was accused of plagiarizing the news content of the Commercial Times and the China Times Express and reproducing the content on its website in violation of Article 24 of the Fair Trade Law
Key Words:
cnYES.com, Inc., to plagiarize, Commercial Times, China Times Express, Article 24 of the Fair Trade Law
Reference:
Fair Trade Commission Decision of August 30, 2001 (the 512th Commissioners' Meeting); Letters (90) Kung Yi Tzu No. 8912474-012 and 8912474-013
Industry:
News Provision (7322)
Relevant Law:
Article 24 of the Fair Trade Law
Summary:
1. The complainant, China Times Website Technology Inc., alleged in a letter to the Fair Trade Commission (FTC) as follows: The content of the complainant's website ("China Times Electronic Newspaper") is provided and authorized for publication by the China Times Corp. and Commercial Times Digital Inc., with whom the complainant is an affiliated company. The respondent, U.S. company cnYES.com, Inc., repeatedly reproduced and plagiarized news reported by the Commercial Times and the China Times Express and posted them on the cnYES.com website without authorization from the Commercial Times and the China Times Express. The aforementioned reproduced news content used by cnYES.com also carried the following warning statement: "The copyright for the news, image, data and other content published on this website is held solely by U.S. company cnYES.com and may not be reproduced, disseminated, published, or broadcast in any form by any person without the express written consent of cnYES.com. This company will prosecute violators to the fullest extent of the law." The reproduced content and the language of the warning statement can easily mislead readers unfamiliar with the situation to conclude that the website operated by the Respondent maintains a cooperative partnership with the Commercial Times and the China Times and that information from both the Commercial Times and the China Times Express may be obtained from the cnYES.com website, potentially prompting them to stop browsing and reading the complainant's website. The uninformed general public could easily be misled into believing that information published in the China Times Express and the Commercial Times are both available at the cnYES.com website, thus decreasing the numbers of "hits" by readers browsing and reading the complainant's China Times Electronic Newspaper, and eroding the willingness among businesses to place paid advertisements on said website, resulting in lost business opportunities for the complainant. 2. The respondent posted news reports taken from the Commercial Times, the China Times Express and other major newspapers on its own cnYES.com website from February 2000 through March 2000. This is a fact that neither the complainant nor the respondent disputed. With respect to the Commercial Times and China Times Express content used by the respondent, that such content was used without the complainant's authorization is clear. Also, on 6 April 2000, the Commercial Times sent a certified registered letter to the respondent objecting to cnYES.com's reprinting practices. The respondent responded with a letter dated 15 April 2000 stating that the information compilation methods of cnYes.com could indeed be misleading and informing the newspaper that cnYES.com, Inc. had taken corrective measures the previous month and had already deleted from its website all materials to which the newspaper had objected. Re-examination of the cnYES.com website revealed that, although the attributions beneath the headlines of each news item clearly indicated the source of the material, the website still carried the warning statement, "The copyright for the news, image, data and other content published on this website is held solely by U.S. company cnYES.com and may not be reproduced, disseminated, published, or broadcast in any form by any person without the express written consent of cnYES.com. This company will prosecute violators to the fullest extent of the law. If you are interested in subscribing to the news, image or database content of this website, please send an email to: sales@cnyes.com." The respondent later admitted that the language of the preceding warning statement indeed easily mislead others. 3. Findings by the FTC are as follows: (1) The news report content of the "China Times Electronic Newspaper," the complainant's (China Times Website Technology, Inc.) website, has been authorized by the Commercial Times Digital Corp. and the China Times Corp. The website is mainly a provider of political, financial, economic, social, technology, literature, arts, lifestyle, travel and employment news and advertising information services for Internet users. Its major source of revenue is generated from commissioned Internet advertisements. Since its establishment as a company, the complainant has, in addition to huge monthly personnel costs and marketing expenses, invested heavily in software and hardware for communications networks and other infrastructure construction, the training of technicians and the development of web page technology, both in terms of capital and effort. According to reports in relevant trade magazines and periodicals, the complainant's website is the domestic market leader among news-oriented websites with respect to page views, overall hits and click-through rate. The leading market position of the complainant's website has been the result of long-term effort and investment of the complainant. In contrast, the respondent, who has not made comparable long-term effort and investment, did during February and March 2000, using testing of the operational capabilities and efficiency of the company's computer systems and equipment as a pretext, post a daily summary of the news content of the Commercial Times and other newspapers for inquiry by unspecified visitors to the cnYES.com website. On 6 April 2000, the Commercial Times sent a certified registered letter to cnYES.com objecting to the unauthorized reprinting of its news content on the cnYES.com website. The respondent responded with a letter dated 15 April 2000 stating that the information compilation methods of cnYES.com could indeed be misleading and informing the newspaper that cnYES.com, Inc. had taken corrective measures the previous month and had already deleted from its website all materials to which the newspaper had objected. Re-examination of the cnYes.com website revealed that, although the attributions beneath the headlines of each news item clearly indicated the source of the material, the website still carried the warning statement "The copyright for the news, image, data and other content published on this website is held solely by U.S. company cnYES.com and may not be reproduced, disseminated, published, or broadcast in any form by any person without the express written consent of cnYES.com. This company will prosecute violators to the fullest extent of the law. If you are interested in subscribing to the news, image, or database content [of this website], please send an email to: sales@cnyes.com." The respondent later admitted that the language of the preceding warning statement indeed easily mislead others." (2) The respondent defended that "cnYES.com's practices of using news reports from major newspapers occurred during the period between February and March 2000, a fact which is not disputed by the complainant. Said citing practices ended on or around 21 March 2000 and all cited news content was deleted from the cnYES.com website on 24 March 2000. The cnYES.com website was formally established on 9 May 2000 and invitations for the grand opening reception attest to this, although in reality, the cnYES.com website did not actually begin formal operations until June 2000. Based upon these facts, it is apparent that cnYES.com's practices of citing news reports from major newspapers was purely for purposes of testing the system's function. As cnYES.com at that time had not yet begun formal operations, no acts of seeking trading opportunities per se had yet occurred, a clear indication that the acts at issue were not competitive practices and thus not sufficient to affect fair market competition let alone affect the trading order." However, if the practices in dispute contravene accepted principles of commercial competition, constituting obviously unfair practices that disrupt the trading order, they need not be actual trading practices, as this already constitutes a violation of the provisions of Article 24 of the FTL. Moreover, cnYES.com's objective in its consistent and continued misappropriation of the complainant's work and passing it off as that of the respondent on the cnYES.com website was to solicit more visitors to its website, thereby increasing the advertising profit potential of its website once it began operations. This should be considered an attempt to reap inappropriate profits and is clearly a contravention of the accepted principles of commercial competition. Examining the respondent's practices in this case, where the fruits of another's labor have been misappropriated, harming the trading order in terms of such core competitive functions as price, quality, and service, such practices, with regard to other competitors who respect the essence of fair competition, constitute obviously unfair practices which contravene accepted principles of commercial competition and thus meet the criteria for "obviously unfair" and "affecting the trading order" as provided in Article 24 of the FTL. (3) The respondent also defended that the copyright warning statement appearing on the cnYES.com website was a "a standard arrangement used by all websites. This is clearly attested to by the copyright statement following the full text of headline news items from major newspapers appearing on the Central News Agency website." The means by which other websites make such copyright warning statements, however, and whether or not those websites have obtained the relevant authorization to reprint the materials of other persons are entirely separate matters from whether the respondent disrupted the trading order by engaging in acts of misappropriating information that was the fruit of another's labors for use on its own website while claiming to hold the copyright to said misappropriated information. These acts make it difficult to exonerate the respondent of responsibility for disrupting the trading order and the above statements by the respondent are clearly aimed at evading responsibility. (4) In summary, the respondent, without making the commensurate effort, engaged in acts of misappropriating information that was the fruit of another's operational efforts for use on its own website while claiming to hold the copyright to said misappropriated information; acts sufficient to be construed an unfair trading practice that disrupted the market trading order, constituting a violation of Article 24 of the FTL. Under the provisions of the forepart of Article 41 of the FTL, the respondent was fined NT$350,000 and ordered to immediately cease its relevant unlawful practices. Appendix: cnYES.com, Inc.'s Uniform Invoice Number: 70756129 Summarized by Mai, Huei-Li; Supervised by Cheng, Chia-Ling