China IPPreviously on China Law Blog…

In Part 1 of this three-part series, we discussed the background of the Talpa-Canxing dispute over The Voice of China. Now we’ll see what happened after Canxing broke Talpa’s heart.

Undeterred by Talpa finding a new licensee, Canxing announced that it would keep producing a singing show. The format would be different, Canxing claimed, but the name would be virtually the same: The Voice of China 2016 and 2016中国好声音. Because – surprise! – Canxing’s distribution partner Zhejiang Television was the registered owner of the 中国好声音 trademark.

Talpa sought a preliminary arbitral award in Hong Kong against STAR Group Limited, Canxing’s Hong Kong affiliate. But the Hong Kong International Arbitration Centre (HKIAC) denied Talpa’s request (at least insofar as it pertained to the Chinese name) because Talpa had no rights to the Chinese name. Did we mention that Talpa should have registered the Chinese-language trademark?

More or less at the same time, Tangde filed suit in a Beijing IP court against Canxing, claiming trademark infringement and unfair competition, and seeking a preliminary injunction. To the surprise of some, on June 20, 2016 the Beijing court ruled in Tangde’s favor insofar as the name of the program, holding that Canxing could not call its program either The Voice of China or 中国好声音. Canxing appealed the ruling, but changed the English name to “Sing! China.” On appeal, Canxing lost again, and complied with the ruling by changing the Chinese name of the show to中国新歌声, which roughly translates as China’s New Singing Voice.

Around June 13, 2016, while all of these legal proceedings were ongoing, SAPPRFT issued a directive curtailing the airing of television programs based on foreign formats. The directive clarified that programs produced in a foreign country (like The Big Bang Theory) and programs based on a foreign format (like The Voice of China) would both be considered foreign content, and that television channels (1) would have to secure prior government approval to air such programs, (2) could only show two foreign content programs during prime time each year, and (3) could only show one new foreign content program each year, and not during prime time in the first year.

On July 15, 2016, the first season of 中国新歌声 began on Zhejiang Television. It had the same judges as last year’s season of中国好声音 and an almost indistinguishable format. As of this writing, the season is about half over, and the main difference appears to be that during the blind audition phase, instead of swiveling 180 degrees, the judges’ chairs slide down a long ramp. Everyone I know who watches the show (including my entire family) agrees it is virtually the same show. And it seems to be as popular as ever, both with the viewing audience and with the sponsors.

The coverage to date has focused on this story as a contract, copyright, and trademark dispute. That’s true enough, and as far as that goes it’s not a particularly noteworthy dispute by Hollywood standards. Indeed, the fact that this dispute is the subject of multiple legal proceedings could even be seen as a sign of China’s maturity as a media market. Twenty years ago, if a Chinese production company copied an American or European television program, no one in the West would have cared (much), because (1) the rights owner would not have had a plausible remedy in China, (2) the Chinese company never would have paid for the rights, and (3) even if it had paid, the amount paid would have been a pittance.

But there’s another story here. By making a few superficial changes to the show and changing the name, Canxing and Zhejiang Television are trying to skirt the restrictions on foreign content. According to them,中国新歌声 is a 100% Chinese content show. Canxing has also stated that it won’t purchase any more foreign formats in the future.

If Canxing and Zhejiang can get away with such copyright infringement — and thus far they have – this becomes a cautionary tale for foreign content owners licensing to China. Chinese companies may still see value in licensing foreign formats, because just copying a show isn’t as easy it looks. Indeed, that’s why Canxing and other Chinese production companies have been paying serious money for the most popular formats. But once they have received the production bible and produced a season or two, what incentive do they have to keep paying a license fee, if they can make a couple changes and call the show 100% Chinese?

It will be interesting to see how (or if) Canxing and Zhejiang Television are held accountable for 中国新歌声. Licensors of content have to look at this case and think seriously about frontloading any payments. They might not get a second bite.

Stay tuned for the thrilling conclusion, where I’ll discuss how content owners can better protect themselves when licensing to China to avoid the sort of trainwreck Talpa appears headed for.