When debating how to stop software piracy, there are many misconceptions about intellectual property protections in China, the processes for seeking redress, and the likelihood of success. My colleague Vic DeMarines, VP, Product Management for Software Monetization, and I recently welcomed Chris Bailey, a Principal at Rouse, and Landy Jiang, a Partner at Lusheng, (Rouse’s network law firm in China) for a video podcast discussion about pursuing software piracy claims in China.
The goal of any modern software license compliance program is to convert infringers into paying customers who will benefit from a long-term relationship with the software supplier. Rouse focuses exclusively on IP (including litigation and enforcement) and Chris and Landy are co-authors on its research report, Software Copyright Litigation in China: How Have Foreign Companies Fared in Chinese Courts? so our conversation covered a lot of ground including:
- The use of software telemetry data in China and the impact of China’s Personal Information Protection Law (PIPL),
- Statistics on software piracy litigation (the win rate for foreign plaintiffs is 85.3%),
- The role of evidence preservation orders and the lack of a discovery process in China, and
- Guidance for achieving effective settlements
Watch our discussion and let us know what you think in the comments section.
Questions Addressed in Video
Why should software companies consider China for compliance actions?
China has made significant progress in recent years, especially in applying digital evidence in civil litigation. Courts are increasingly open to technologies like telemetry and even blockchain for evidence collection. While challenges exist, companies expanding compliance programs should absolutely consider China as an actionable territory because enforcement is well-established and supported by the judicial system.
How does China’s Personal Information Protection Law (PIPL) impact anti-piracy enforcement using telemetry?
PIPL introduces principles like minimum data collection and limited usage for specific purposes. While there are gray areas, enforcing rights against piracy is generally seen as a reasonable justification for using telemetry data. Courts and government authorities are supportive of technology-based evidence, provided companies comply with due diligence around personal data masking.
What is the success rate for foreign software companies litigating piracy cases in China?
Research from Rouse and CIELA shows foreign plaintiffs have an 83.5% win rate in software copyright litigation in China. Larger companies like Microsoft, Siemens, Autodesk, and Dassault have achieved consistent wins, often with high damages awards. Recent cases even show punitive damages and increasing compensation trends.
What is an Evidence Preservation Order (EPO), and why is it important?
An EPO is a court-issued order allowing on-site searches of a defendant’s premises to collect evidence of piracy, especially critical in enterprise software cases where access is difficult. EPOs are executed without prior notice to prevent evidence tampering. Plaintiffs must present preliminary evidence (e.g., telemetry data, job postings) to justify the request.
Are settlements common in Chinese IP litigation, and what drives them?
Yes, settlements are highly encouraged by Chinese courts, which have KPIs to facilitate them. Multiple opportunities for settlement discussions exist before and during proceedings. Courts prefer efficient resolution, and in piracy cases, the goal often includes converting infringers into paying customers. Maintaining a cooperative tone and keeping negotiations open is key to successful outcomes.
