Background: Sanmianxiang (三面向) is the name of a company in Beijing. It was established on October 27, 2004 with registered capital of 2 million RMB and 10 employees. Sanmianxiang is headed by the venerable Zhan Qizhi, a former assistant professor at Henan Finance and Economics University. Sanmianxiang has signed copyright transfer contracts with 150 authors that include over 1000 articles. With copyright contracts in hand, Sanmianxiang has sued hundreds of government, university, and other websites over unlawful transmission and downloading of copyrighted articles. While initially promising authors that Sanmianxiang would publish large collections, instead Sanmianxiang focuses on prosecuting intellectual property scofflaws.
"The 'Guerilla Warfare Tactics' of Sanmianxiang Company"
According to Li Mingde of the China Academy of Social Sciences Intellectual Property Center, traditional Chinese culture has two ideas that deal with copyright and IPR: one is “to steal a book is not to steal” or “to steal a book is an elegant offence.” The meaning of this is that the propagation of knowledge is inherently good, and knowledge is immaterial. Books are only paper and ink, and have not value; software is only magnetic tape and ones and zeros, essentially worthless. Two is “pass to the son not the daughter.” Daughters are married out, so if they know the families commercial or intellectual secrets, those secrets will pass out to other families who will steal the bread and butter. The ideal method for protecting intellectual property is to have closed, small-scale development. (See here).
How do the twin ideas that immaterial things have no value and closed, small-scale development is ideal become conflicted in Internet society? Since the reform and opening of China, has the protection of different kinds of property been influenced by these two ideas?
“Fuzzy” property rights are a common occurrence during the reform and opening era. From the ownership system of township and village enterprises to the “small public family” apartments in danwei, to privately-run enterprises “wearing a red hat” and even to pirated software, free mp3 downloads, and copied Hollywood movies, there is no clear interpretation of property rights in contemporary China. Then, in this situation, is the behavior of Sanmianxiang appropriate? Has Sanmianxiang’s “guerilla war” blocked the development of copyright, knowledge, and social awareness in China?
In my opinion, the answer is no. The reason is that China’s information industry, Internet software, and technology development—the high-tech industry—has already developed to an advanced degree in China. In order to protect the future earnings and continued development of companies and institutions, China needs more companies like Sanmianxiang to strike against fuzzy property rights.
It is a myth that the Internet is basically free: one of the criticisms of Sanmianxiang is that it bought out publicly-shared materials, infringing on the basic spirit of the Internet. But, whether it is the West or China, the Internet is not developed as a free, publicly-shared entity. China’s QQ, Baidu, Youku, Tudou all signed agreements with advertising companies and receive fees in order to sustain development. These intellectual products appear to be free to install and use, but in reality every use is participation in marketing activity.
Two detractions could be raised at this point: one, Sanmianxiang Company enforces property rights as its main business, and never had the goal of publishing or disseminating knowledge. In that case, Sanmianxiang’s “buy out” of copyrights is its business strategy, using its legal contract with scholars to invest and publish some articles and make money. Whether or not Sanmianxiang will create a “certificate”-type of product, that could be leased or paid for dissemination of article, we have no way of knowing. But Sanmianxiang has clarified the legal copyright issues in the publishing and issuing of articles. Because, in China, after publication, the rights to the article stay with the author rather than the press, the onus is on the author in how he/she uses these rights.
The second opposition is that Sanmianxiang bought out articles related to the “three peasant” problems, so the content of the articles far outweighs any individual or company’s ownership rights. I think this type of thinking is directed at the wrong subject. If one article is so important to China’s three peasant problems, and not the knowledge, lectures, or research results of professors, then selling the article is tantamount to belittling the three peasant problem. I believe in the future that this type of issue will not reoccur.
Lastly, I would like to present two examples on Internet society and IPR: the first is from my mother. My mother is a college-preparatory tutor, a college coach. After divorcing from my father, she founded her own company to help high school students get into the college of their dreams. In 2006, she received a notice (from Getty Photographer-Representing Company): the images on her website were copyrighted and the copyright owner was preparing to sue her, and she should pay 2000-4000 USD. After that, she bought a “certificate” for the 2-year use rights to the images for 3,730 USD.
The second example comes from Zhongguancun. There is a small company on the campus of Tsinghua University that researched and developed a product called “electronic nose.” Once it was invented and patented, production and sales began. Soon, however, other companies—mostly in Shenzhen—opened the cover of “electronic nose” and copied the circuit board and functions. As a result, because the Shenzhen companies did not have R&D or marketing fees, they could sell for a much cheaper price. The boss of the Tsinghua company would not sue the Shenzhen companies because, “for one thing, they are outside Beijing. If I sue them, I will have to pay a lot of money. Then the Shenzhen company will disappear. And another company will be founded that does exactly the same thing” the boss said. In 2004, this boss finally did sue a company: Baidu [the Google of China]. The reason for his suit was that Baidu had accepted advertising dollars from the Shenzhen companies (so that when you search for “electronic nose” you get advertisement from those companies) causing his company loses. On top of that, Baidu is a big company, and can’t run.
To summarize: China’s Internet society is more and more development. From certain respects, you might say Internet society has surpassed society. Will fuzzy property rights always bring benefits to the developed Internet society and the developing civil society? From a small-scale perspective, fuzzy property rights lower the cost of starting businesses, promulgating knowledge, and developing products. But, at the same time, fuzzy property rights negatively affect earnings and reduce opportunities to open businesses, promulgate knowledge, and develop products for companies and institutions. In this respect, Sanmianxiang has given us a very timely wakeup call.