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Using Friendly Jurisdictions to Enforce Copyrights in Difficult Jurisdictions

Posted by Chris Luijten on April 17, 2020

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Using Friendly Jurisdictions to Enforce Copyrights in Difficult Jurisdictions

Fightingcorporate software piracy can be a difficult challenge, especially as the world gets simultaneously bigger and smaller.   A rogue Chinese company can, for example, use illegal or unlicensed software as a global competitive advantage, and because of the protection provided by the Chinese government, there is no legal recourse.  This practice has serious ramifications in Western economies.

The argument could be that it’s going to happen one way or another, so why bother doing anything at all?  That’s not exactly true.  You just have to figure out a path to success.

Where one course of action works in one place, it doesn’t guarantee that it will work in another.  The old real estate adage, “Location, location, location” is key, and shutting down this rampant software piracy can take a little more effort.  One can use the laws in a friendly intermediary jurisdiction to battle software piracy occurring on another. 

The United States is generally very diligent when it comes to copyright and trademark law and there are unique ways to bring their force into use, even if a company’s headquarters is located outside the territory.  The company AWR managed to settle a dispute and received compensation from ZTE, one of the world’s largest mobile phone manufacturers based in China. 

How did that happen?  By bringing the US’ copyright laws into effect against a subsidiary of ZTE’s located inside the United States, who is subject to that authority.  In this case, they used the End User License Agreement, commonly known as EULA, a frequently used click through agreement within software that forces all end users to comply in order to use the software.  By setting a US jurisdiction in their EULA, they made piracy not just a copyright issue, but a contractual one. 

ZTE argued that since they weren’t end-users, the EULA didn’t apply to them (as they didn’t pay for it – and weren’t bound to it), but the US judge dismissed that defense.  Ultimately, the intent to pirate the software did not equate to not being bound to the EULA.  Forensics proved that the original downloads of the software that was pirated was inside the United States, and since ZTE had a US-based subsidiary, AWR was able to show that it was subject to the terms of the agreement.  It probably didn’t hurt that AWR showed the president of ZTE visiting the opening of their US-based company.  The summary judgement was handed down, and a settlement was reached.

AWR vs. ZTE Complaint for Injunctive Relief & Damages by Chris Luijten