Newsletter
Risk of Copyright Infringement in Sale of Digital Set-Top Boxes
I. Overview
With the rapid development of digital technology, the illegal activities related to digital set-top boxes and applications thereof have been increasingly rampant. Such illegal set-up box vendors attract consumers to purchase such products featuring "one-time purchase, and lifetime viewing" for accessing unauthorized TV programs, videos, and livestreaming programs, which has seriously infringed copyright holders' legal rights, making the fight against and prevention of such digital crime become a global concern.
Taichung District Court Criminal Judgment's 111-Zhi-Yi-Zi-No. 15 dated 20 August 2024, determined that the sale of "clean versions" of set-up boxes without illegally built-in software still constitutes copyright infringement even though vendors did not assist users with installing illegal applications.
II. Subparagraph 8, Paragraph 1, Article 87 of the Copyright Act and its legislative reasons:
Subparagraph 8, Paragraph 1, Article 87 of the Copyright Act as amended and promulgated on May 1, 2019 stipulates the following: "Any of the following circumstances, except as otherwise provided under this Act, shall be deemed an infringement of copyright or plate rights: 8. Knowing that the works broadcast or transmitted publicly by another person infringe copyright property rights, with the intent to provide the public access to such works by the Internet, acting as follows, and to receive benefit therefrom: (1) To provide the public with computer programs which have aggregated the Internet Protocol Addresses of such works. (2) To direct, assist or preset paths to the public for using computer programs in the preceding item. (3) To manufacture, import or sell equipment or devices with built-in computer programs of the first item.
The legislative reasons indicate that the addition of the provision mainly aims to address the emerging digital infringements such as providing illegal audio and visual content via set-up boxes or applications. Vendors may often explicitly or implicitly encourage, induce or incite users to take advantage of such computer programs to connect to illegal websites by advertising promises of unlimited viewing audio and video content, lifetime free access, free cable TV plans, and collecting advertising fees, monthly fees, or sales benefits. It is worth noting that the legislative reasons indicate that the set-up boxes without built-in, pre-loaded or direct access to illegal audio and video content are not subject to the said provision based on the principle of technology neutrality. However, it is still controversial in practice as to whether vendors' sale of "clean versions" of set-up boxes without built-in illegal computer programs can avert the legal responsibility of copyright infringement prescribed in the aforementioned provision.
III. Facts and Judgement of the Case
The two defendants, acting on behalf of their company, imported digital TV set-top boxes (hereafter "the disputed set-up boxes") from unknown manufacturers based in China. They encourage and incite others to purchase such products with sales pitches such as "free access to cable TV networks," "free access to movies," "free access to TV channels in Taiwan" and "identical total number of TV channels." The set-up boxes are sold to unspecified consumers or retailers.
The disputed set-up boxes were not built in with any applications. However, consumers might connect with third-party customer representatives by scanning the LINE QR code after they turn on the set-up boxes. Then the set-up box users might download the "super version of GLOBAL TV" application by following customer service representatives' directions. By clicking the "TV LIVE" interface, the application would send hardware equipment information (the media access control [MAC] address, MODEL code and IP address) to the connected cloud servers. Once the verification was completed, all users within the servers would be allowed to send files to one another and engage in P2P downloading; thus consumers were allowed to watch unauthorized TV programs as well as audio and video content.
The judgment held that consumers' purpose of purchasing set-top boxes was to avoid paying for rental fees yet watch the related audio and video programs for free. With that, the defendants were unlikely to be unaware of the fact that the disputed set-up boxes users can download the authorized and illegal application with guidance, assistance and teaching from the third parties when selling the disputed set-up boxes. Further, the advertisements indicated "identical channel number across TV channels," "free access to TV channels in Taiwan" and "free cable TV services," which could be determined that the defendants had the intention of encouraging and inciting consumers to purchase the set-up boxes to watch the TV programs in Taiwan for free.
As a result, taking advantage of the aforementioned resources to assist consumers with downloading illegal applications to promote the sale of the set-up boxes in the case regardless of who provides the customer services and the defendant's purposeful non-investigation has constituted "intent" provided in Item 2, Subparagraph 8, Article 87 of the Copyright Act. This demonstrates the subjective unlawful intent of "the intent to provide the public to access such works by the Internet, thus infringing the copyright property rights."
IV. Conclusion
The judicial practice in Taiwan has not achieved a consensus regarding whether the sale of "clean versions" of set-up boxes without built-in illegal applications constitutes an infringement of copyright as stipulated in Subparagraph 8, Paragraph 1, Article 87 of the Copyright Act. In practice, there are judgments held that the sale of set-top boxes without built-in illegal applications did not constitute copyright infringement on the ground that the users downloaded the illegal applications to view unauthorized audiovisual works without built-in illegal applications. (see Intellectual Property and Commercial Court's Civil Judgment 110-Ming-Zhu-Su-Zi No. 121). However, the ruling in the case determined that the so-called "technological neutrality" inferred by Subparagraph 8, Paragraph 1, Article 87 of the Copyright Act is not a comprehensive basis for averting copyright infringement. The court may still determine that the sale of digital set-top boxes by vendors constitutes copyright infringement after reviewing the advertising materials and relevant specific evidence.