As a new-generation peer-to-peer file sharing software, BitTorrent or BT has quickly developed into the most popular tool for file swapping on the internet. It represents the biggest challenge to the movie industry, as it enables netizens to swap and download movies at a fast speed. However, the wide usage of BT around the world may assume legal liability, according to the judicial practices in many countries.
    BT follows a doctrine that “everybody adds fuel to the fire”, i.e. the more people that use BT to swap files, the faster the downloading speed becomes. It distinguishes BT from other file swapping software and consequently BT, since its inception, has become the most favored tool for data exchange on the Internet.
    Since other file-sharing software products are not as fast as BT, when it comes to the downloading of large movie files, BT has become the biggest menace to the movie industry. The Motion Picture Association of America (MPAA) has even tried to interfere with the normal running of BT by uploading incomplete or erroneous files. However, BT seems to be immune to this interference. When users conduct a search, some decentralized software products, like Kazaa, directly list the users’ computers containing the file searched. The simple and direct connection makes them vulnerable to the interference of the MPAA. What BT provides is only labels or “seeds” for the file. BT searches and obtains data from each seed before it “assembles” the pieces into a complete file. In this way, BT is able to assess whether the file is complete before assemblage and avoid interference from the MPAA.
I. The Legal Liability of End Users
    Undoubtedly, BT is good news for movie lovers since they can download or upload movies at fast speeds on the internet. However, end users who use BT to download movies may not be aware that they may encounter legal liability for copyright infringement. The following is an analysis of this issue.
    (1) Uploading
    Uploading is a process in which a file is transferred from a local computer to a remote one through the internet. On October 19, 2005, the Sentencing Commission of the United States approved an emergency set of rules. By the rules, the commission adjusted the standard for copyright infringement using peer-to-peer technology, modified the definition of “uploading”, and stipulated clearly that it could be treated as an illegal publication if one placed another’s works on a file-transfer network, like Kazaa, for downloading.
     According to Article 47  of the Copyright Law and Article 18  of the Regulation on Protection of the Right to Network Dissemination of Information, in China anyone who uploads the work of another without the permission from the copyright holder may have infringed the copyright (especially the right to network dissemination). From this, the content provider, i.e. the first seeder, who uses BT or other peer-to-peer websites to upload unlicensed works (i.e. labels) for free downloading by others, is suspected of infringing the copyrights and should be liable for legal consequences.
    On October 24, 2005, a court hearing began at Tuen Mun, Hong Kong, on an infringement case involving an individual who used BT to illegally publish movies on the internet. It was the first infringement case involving individuals. The defendant, Chan Naiming, was found to have violated the Copyright Ordinance and found guilty. In the judgment, the presiding judge stated that since the defendant copied the movie files to a computer, made them into streaming files, released and started them through newsgroups, and had his PC connected to the internet for downloading by others, this series of steps constituted an illegal publication or an attempt to do so. Moreover, upon publication by the defendant, about 30~40 people downloaded the movie files, so that they would not need to buy authentic CDs afterwards. The court held that the defendant's conduct actually damaged the interests of the owner and the movie market, and the defendant was held for having violated the Copyright Ordinance , with the maximum sentence being a fine of HK$50,000 plus a 4-year imprisonment.
    However, in the reality of current internet usage, many users upload others’ works anonymously or store them on public networks or foreign servers. As it is very hard to find the “initiator” who publishes works illegally in the free space of the internet, the owners have difficulty realizing any remedy.
    (2) Downloading
    “Downloading,” means the process of copying files from other computers and storing them on one’s own computer through the internet. With the internet, many netizens can download and obtain free software, documents, or audiovisual works, or almost any thing they want, in an easy and fast manner. In fact, many end users freely download unlicensed audiovisual works, or store them on their own computers hard disks for free use or enjoyment, or re-upload and publish them. These kinds of conduct, which causes serious damage to the interests and rights of copyright holders, should be subject to a “fair use” standard.
    For one thing, end users should go to legal websites and legally download data or software they want. If after having downloaded others’ works or copying them, whether licensed or unlicensed, end users who use them for private study, research or enjoyment, are determined to use them “reasonably” according to Article 22 of the Copyright Law ; if they employ them in any commercial use or re-upload and further spread them on the internet, they exceed the limits of “fair use”.
    (3) BT downloading and network dissemination
    If a user willfully uses BT to download any movie from computer networks, the downloading conduct (or copying) may lead to network dissemination at the same time since in the process of his downloading, he also supports the downloading by others. This is a characteristic of BT. Although the transfer is beyond the control of the end users and each actually contributes one part to a movie so transferred, the many users who jointly complete the network transfer of the movie may still be subject to contributory liability for infringement  upon prosecution of the owner, because they disseminate other’s works through a common open network. In other words, since an end user communicates others’ works to the public by using BT for downloading, he enjoys much less space for “fair use” and his conduct may lead to copyright infringement (especially the right to reproduction and network dissemination), although he does not provide a website for downloading. Except for the “fair use” provision in the Copyright Law, the network dissemination that is caused by BT downloading is much less likely to be found “fair”, and is highly likely to be found to infringe copyrights.
According to the Copyright Ordinance in Hong Kong, it is a crime currently to upload infringing files or use peer-to-peer technology (such as BT) to share a file; the downloading of infringing files does not constitute a crime, in which case owners can only resort to civil proceedings to recover losses.

II. BT websites/service providers
     BT websites and service providers have raised many excuses to fend off liability for infringement, for example, by claiming BT technology is neutral (which is designed to enhance the spreading efficiency of large files rather than to swap illegal files), that what they provide is labels rather than content, or that their business is non-commercial. However, these excuses are incapable of excluding BT websites and service providers from liability, according to the laws, regulations and judicial practices in China.
     (i) From a “technology neutral” perspective, China’s first P2P case involving Kuro received a first-instance judgment at Beijing No. 2 Intermediate People’s Court ion December 19, 2006 , and the developer and network service provider of Kuro was found guilty of “contributory infringement”; (ii) as to whether a label or content is provided, the Regulation on Protection of the Right to Network Dissemination of Information provides in Article 18 that anyone shall be liable who provides others’ works to the public through the information network without permission, or has not taken technical measures to prevent others beyond the service objects from obtaining others’ works or to prevent acts of reproduction by the service objects from causing essential infringement of the owner’s interests according to this regulation; (iii) as to non-commercial operation, whether the business is commercial or non-commercial is not a standard for infringement. The non-commercial websites are also not allowed to infringe others’ rights. The National Copyright Administration in China is strengthening its efforts to combat infringing commercial websites, as well as infringing non-commercial ones.
    (1) BT websites
    At the end of 2005, MPAA reached an agreement with the developer and inventor of BT, in order to reduce the illegal transfer of unlicensed movies on the internet. According to the agreement, the 30-year old BT designer, Bram Cohen shall remove illegal links to content which is owned by MPAA’s member companies from the bittorrent.com website, and stop the exchanging of hot unlicensed movies on the website. Although the agreement cannot stop users from downloading movies using other tools, or from other websites, a blow was given to bittorrent.com users, which was one of the hottest BT flagships. The agreement represents the latest achievement of the entertainment sector in combating illegal network downloads. It also clarifies Cohen’s attitude towards unlicensed works, so that his BT technology will be more attractive in the future.
    (2) BT service providers
    MPAA is the workhorse in combating BT service providers and unlicensed movies on the internet. It has sued 6 websites including ShunTV, Zonatracker, Btefnet, Scifi-Classics, CDDVDHeaven and Bragginrights. Websites with a tracker, like SuperNova.org, are most likely to be targeted and other similar websites, like Youceff.com or Torrentbits.org, have already disappeared. It was reported that police raided a fairly popular local BT website in Finland, confiscating the machines and arresting 4 operators as well as about 30 volunteers who helped to maintain the website.
These series of efforts will possibly cause the following outcome – it will become harder to find files for swapping; however, according to well-informed people, some swapping activities have been transferred to private or smaller forums.  
III.  Legal Liability of those Helping Disseminate Infringing Content
    In addition to BT end users, BT websites and BT service providers, any individual or service provider may also assume legal liability for assisting with the dissemination of BT-related infringing works.
    (1) Translators
    According to the Copyright Law in China, the right to a translation is included in the copyright, and anyone who uses others' works by means of translation without the permission of the copyright holders shall be liable for infringement . Anyone who translates the subtitle of a movie without permission and uploads and communicates it on the internet shall also be liable for infringement according to the provisions above.
    (2) Telecom Carriers
    Our fellow netizens may fear that Netcom or other telecom carriers will restrict BT downloading sooner or later, even though it cannot be prohibited by law. This is reasonable because the BT’s downloading mechanism is “everybody adds fuel to the fire”, which causes a drain on the bandwidth of telecom carriers. Not to mention their interest and strategies, from a legal liability standpoint, telecom carriers enjoy “safe harbor” treatment from any infringing works transferred on the internet using BT, according to Article 22 of the Regulation on Protection of the Right to Network Dissemination of Information . However, they should be responsible to remove and disconnect infringing works upon notice from owners with sufficient evidentiary support.
    The entire world is focusing their attention on the development of BT. The technology is expected to develop in two ways: (i) with the lessons and experiences in the music sector, MPAA plans to combat network piracy by providing a legal way for purchasing movies online. As the success of iTunes of Apple Computer Inc. has shown, network users are willing to purchase music legally online as long as the price is reasonable. Currently a few movie producers have laid a basis for movies that can be legally transferred digitally. (ii) BT technology has many other legal uses and the means of dissemination can save costs with bandwidth usage for large content publishers. Some online websites have tried to integrate BT and RSS feed technology in a new way to disseminate audiovisual content. However, the question remains: following BT, will network piracy gain more vigor and vitality once a new-generation of network transferring technology arises in a legal business form?

Dong Ying is an IP lawyer working for GE Healthcare Life Sciences China.