In recent years, Attorney Shao has represented numerous programmers or technical teams who faced criminal liability for providing technical services, including:
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Representing the legal representative of a technology company accused of aiding information network criminal activities for providing software development services;
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Representing an NFT digital collectibles platform charged with fraud;
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Representing a well-known Web3 news platform subject to cross-regional law enforcement proceedings due to compliance issues;
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Representing members of the founding team of a certain exchange (CTO) suspected of operating a casino (with an involved amount exceeding RMB 100 million);
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Representing a technical team accused of operating a casino for providing payment and settlement services to online gambling platforms (with an involved amount reaching billions of RMB);
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Representing technical employees of a loan facilitation company accused of fraud (with an involved amount exceeding RMB 100 million);
The commonality among these cases, or rather, the unavoidable question when lawyers formulate defense strategies for such cases, is:
Can "technological neutrality" be invoked to seek lighter or mitigated punishment, or even acquittal, for the client?
Depending on the specific charges and case circumstances, lawyers' defense arguments regarding "technological neutrality" are often tailored. While the specific defense strategy concerning the client's conduct forms the skeleton of the defense, what truly determines its depth is its foundation—namely, the legislative intent, the evolutionary trajectory of legal provisions, and the logic applied in judicial decisions regarding this principle.
Only by adopting a macroscopic perspective on institutional evolution and understanding the judicial functional positioning of the principle of technological neutrality at different stages can defense counsel provide adjudicators with persuasive reasoning paths in cases characterized by strong controversy and ambiguous legal application. Truly effective defense involves "guiding the adjudicator onto the path you have laid out."
Accordingly, this article begins with typical cases from domestic and international jurisdictions, systematically reviews the historical development and judicial evolution of the principle of technological neutrality, analyzes the attitude and adjudication standards for its application within China's legal system, and ultimately returns to the context of criminal law to explore defense strategies and legal boundaries for technical parties involved in criminal cases.
I. Author: Attorney Shao Shiwei
1
The Origin and Development of the Principle of Technological Neutrality
1. Foundational Cases: The Sony Case and the Grokster Case
The principle of technological neutrality originated in the field of patent law, specifically from the "Staple Article of Commerce Doctrine" in U.S. patent law. This doctrine holds that if a product sold or produced by an actor has substantial non-infringing uses, the actor cannot be presumed to have infringing intent or held liable merely because users of the product employ it to commit infringement.
In the 1984 U.S. Supreme Court case "Sony Corp. of America v. Universal City Studios, Inc.",the Court borrowed the "Staple Article of Commerce Doctrine" from patent law, ruling that Sony's Betamax video cassette recorders did not constitute contributory infringement because they had "substantial non-infringing uses" (such as recording non-copyrighted content). This marks the starting point of what is traditionally understood as the "principle of technological neutrality."
This case established the protective boundary for technological innovation—as long as a technology has substantial non-infringing uses, its developers may be exempt from liability. This rule later became known as the "Sony Rule" or the "principle of technological neutrality."
Universal City Studios, Inc. v. Sony Corp. of America:
In the 1970s, Sony Corporation of Japan sold Betamax video cassette recorders in the United States, which allowed users to record television programs. In 1976, Universal City Studios, Inc. and Walt Disney Productions filed a lawsuit against Sony in U.S. courts, seeking damages and an injunction against the production and sale of such recorders.
After proceedings in the District Court and the Court of Appeals, Sony appealed to the U.S. Supreme Court.
Ultimately,the U.S. Supreme Court held thatSony's video cassette recorders had multiple lawful uses: the time-shifting function allowed users to watch programs at their convenience, constituting "fair use" of copyrighted works; and the recording of non-copyrighted content or content licensed by rights holders. Therefore, although some users might have used the recorders to commit infringement, Sony, as the technology provider, did not bear liability for contributory infringement.
However, the subsequent rise of P2P technology (Peer-to-Peer, a decentralized network architecture allowing nodes (user devices) to interact and share resources directly without relying on central servers) posed a severe challenge to the Sony Rule.
Inthe 2005 Grokster case(MGM Studios, Inc. v. Grokster, Ltd.), the "Active Inducement Rule" was established, reshaping the boundaries for applying the principle of technological neutrality.
The significance of the Grokster case lies in its breakthrough from the mechanical application of the Sony Rule, establishing the "intent standard" as central to the defense of technological neutrality, and providing a more refined framework for determining the liability of internet service providers in subsequent cases.
MGM Studios, Inc. v. Grokster, Ltd.:
The P2P file-sharing software developed by the defendant, Grokster, was widely used by users to distribute pirated music and movies. More than twenty film and record companies, including MGM, sued the defendants, alleging that they induced users to infringe copyrights. The defendants invoked the "principle of technological neutrality" established in the 1984 Sony case (Sony Corp. v. Universal City Studios).
The trial court strictly followed the Sony Rule, holding that Grokster's software had "substantial non-infringing uses" (such as sharing public domain works or authorized content), and thus exempted it from liability for infringement.
However, the U.S. Supreme Court reversed this judgment, stating that "the substantial non-infringing uses standard is not the sole basis for determining legal liability." When there is evidence proving that the product provider had the intent to induce infringement, they should still bear liability for contributory infringement.
2. The Safe Harbor Principle
In the 1990s, with the rapid development of technologies such as P2P file sharing and user-generated content (UGC) platforms, internet service providers (ISPs) faced massive amounts of user-uploaded content and could not effectively conduct prior review. The lack of a uniform standard for whether ISPs constituted "contributory infringement" by providing technical tools led to a surge in litigation, hindering industry development.
In 1998, the United States enacted the Digital Millennium Copyright Act (DMCA). The "Safe Harbor Provisions" were one of the core systems of this Act, aiming to provide a mechanism for exempting internet service providers (ISPs) from liability for copyright infringement, thereby balancing technological innovation with copyright protection.
The "Safe Harbor Principle" specifically means that when internet service providers (such as social media, cloud storage, search engines, etc.) merely provide a technical platform and do not actively create or edit infringing content, they may be exempt from joint and several liability for infringing content uploaded by users, provided statutory conditions are met. However, the application of this principle requires satisfying the following conditions: lack of knowledge and no active participation in infringement, designation of a copyright agent, timely removal of infringing content, and no inducement of infringing acts.
2
The Development and Application of the Principle of Technological Neutrality in China
1. Legal Application of the Principle of Technological Neutrality
Within China's legal system, the principle of technological neutrality is not an exclusive concept in any single field but is a cross-cutting legal principle permeating various areas, including internet regulation, intellectual property, and electronic evidence rules.
In the field of internet content regulation, on August 25, 2017, the Cyberspace Administration of China published the "Provisions on the Administration of Internet Forum and Community Services," emphasizing that platforms must not shirk their management responsibilities for user-published content by invoking "technological neutrality," particularly requiring active intervention against illegal information such as obscenity, pornography, and fraud.
In the field of electronic evidence, according to the Civil Procedure Law, the authenticity of electronic data provided or confirmed by neutral third-party platforms (such as WeChat and Weibo) can be presumed without notarization.
In the field of intellectual property, China's "Regulations on the Protection of the Right of Communication through Information Networks," formulated in 2006, incorporated the aforementioned"Safe Harbor Principle"specified in the U.S. Digital Millennium Copyright Act, stipulating the principle of"Notice and Takedown". This means that internet service providers are not required to review materials uploaded by users individually. When someone discovers infringing material, they notify the internet service provider and provide relevant evidence, upon which the provider must promptly take measures to delete articles or videos or disconnect links.
Simultaneously, exceptions to the "Safe Harbor Principle" were added, namely: if the ISP knows that infringing content is as "obvious as a red flag" (such as featuring pirated hit movies prominently) or induces dissemination through algorithms, the defense of technological neutrality is invalid. This is also known as the"Red Flag Principle"”。
Regulations on the Protection of the Right of Communication through Information Networks (2013 Revision)
Article 23: Where an internet service provider provides search or link services to service objects and, after receiving notice from the right holder, disconnects links to infringing works, performances, or audio-video recordings in accordance with these Regulations, it shall not bear liability for compensation; however, if it knows or should have known that the linked works, performances, or audio-video recordings infringe rights, it shall bear joint and several liability for infringement.
Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Civil Disputes over Infringement of the Right of Communication through Information Networks (2020 Amendment)
Article 7: Where an internet service provider instigates or assists network users in committing acts that infringe upon the right of communication through information networks while providing network services, the people's court shall order it to bear liability for infringement.
Where an internet service provider induces or encourages network users to commit acts infringing upon the right of communication through information networks by means of speech, recommending technical support, rewarding points, etc., the people's court shall determine that it constitutes instigation of infringement.
Where an internet service provider knows or should have known that network users are using network services to infringe upon the right of communication through information networks, and fails to take necessary measures such as deletion, blocking, or disconnection of links, or provides technical support or other assisting acts, the people's court shall determine that it constitutes contributory infringement.
2. Typical Domestic Cases
iQiyi v. Damo Network Advertising Blocking Unfair Competition Case
iQiyi's business model is "ads + free videos," generating revenue through advertising fees. Damo Company developed and operated the "ADSafe" Net Master software, which blocked responses to ad data requests within video program requests, thereby achieving the goal of intercepting pre-roll video ads and playing video content directly. Consequently, iQiyi requested that Damo Company cease infringement and compensate for losses.
This case was an unfair competition dispute triggered by ad-blocking software shielding advertisements. In discussing the nature of the disputed software "AdSafe" Net Master, viewpoints clashed intensely, with one focal point of contention being whether "AdSafe" constituted technological neutrality.
In 2016, the Shanghai Intellectual Property Court rendered a judgment in the case of "Damo Company v. LeTV Company." The court held that Damo Company, knowing that the software in question would directly harm iQiyi's commercial interests, still promoted the software by leveraging consumers' psychological reluctance to incur time costs or pay monetary costs. By relying on iQiyi's user base to increase its own market transaction opportunities and seek competitive advantages, Damo Company constituted unfair competition.
Fanya Company v. Baidu Music Box Infringement Case
Zhejiang Fanya E-Commerce Co., Ltd. (Fanya Company) held copyrights to a large number of musical works, including property rights in lyrics and compositions, property rights within performers' rights, and rights of phonogram producers. Baidu Company operated the Baidu website, providing MP3 search and Music Box services. Fanya Company believed that Baidu Website's provision of its songs and lyrics without permission infringed upon its copyrights.
The court held that Baidu's MP3 search engine service linked to third-party websites upon user clicks; Baidu did not download or store the songs in question, thus not constituting infringement. Similarly, Baidu Music Box service did not constitute infringement. However, Baidu's lyric "snapshot" and "cache" services objectively facilitated users obtaining lyrics directly from its servers, thus constituting infringement.
From the above introduction to the historical evolution of the principle of technological neutrality and typical domestic cases, it can be seen that the principle of technological neutrality has broad application in the field of intellectual property.However, does the principle of technological neutrality have room for application in the field of criminal justice?This is precisely the key point to be discussed next.
Part II of this article ➡️
"Can Technological Neutrality Serve as an Effective Defense in Criminal Cases? (Part II) Limitations on the Application of Technological Neutrality in Criminal Law and Defense Strategies"
Recommended Reading
Programmers Transitioning to Web3: How to Assess Job Reliability and Avoid Pitfalls?
How Do Legal Risks in Web3 Projects Actually "Emerge"?
#PrincipleOfTechnologicalNeutrality #PlatformLiabilityBoundaries #Web3LegalRisks #LegalAwarenessForProgrammers #InstitutionalEvolutionAndJudicialApplication
