Visual China Group (VCG),Getty Images’ Chinese counterpart, recently caught public attention. Because of its controversy in charging users for pictures in public domain and/or without a legal license, VCG apologized and shut down its website after being criticized for selling public-domain images — including those of Chinese national flag and emblem, as well as the first-ever photo of a black hole.

‘Earnest Rectifications’ Going On

In a statement posted to its Weibo (Chinese version of Twitter) account, VCG said it had ’removed the non-compliant photos’ and voluntarily shut down its website ‘for rectification.’ The company had reportedly met with cyberspace regulators in the northern city of Tianjin the evening before issuing that statement.

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“The company will learn from this lesson, make earnest rectifications, and voluntarily accept the regulations implemented by the Tianjin internet Information Office,” VCG announced.

The scandal was sparked by Weibo users who observed that VCG had watermarked the first photo of the black hole after it was released. One day later, the Communist Youth League questioned why images of China’s national flag and emblem could also be found in VCG’s database. Under that post, netizens and companies — including Chinese technology giants Tencent, Baidu, and Xiaomi — commented that images of their own watermarked logos had been added to the photo database without any permission.

Following the Communist Youth League’s post, VCG issued a statement Thursday saying it had obtained non exclusive rights to the black hole images from a partner institution, the European Southern Observatory in Munich. However, this claim was denied by the observatory in an email to Chinese media outlet National Business Daily. VCG also apologized for its images of the national flag and emblem, saying they had been provided by contributors and had not been properly screened before being added to the database.

VCG Tried to Manage the Crisis But Got Caught Up By Netizens

Although Visual China did publish a statement saying that the image of Black Hole belongs to Event Horizon Telescope,and obtained Non-exclusive authorization of editorial using of the image through its partner, but no for commercial using. However, in the comment zone, a user posted a chatting record that Visual China’s sale told a client that they need to pay for the Black Hole image to use it in a poster.

People’s anger could not be calmed as more and more join to expose Visual China’s wrong doings. A focus of accusation was that the company intentionally make money from suing others for photo infringement. Some users even accuse them of blackmail celebrities by threatening of presenting their photos with bad quality, which may damage celebrities’ public image.

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Among the public outrage, China’s two State Media also made their voice on Weibo. Xinhua Net said:

“A company that claims to be known for copyright protection, even clearly priced the images of National flag and the National emblem and hurried to correct it until the public discovered it. Is it a negligence or a blind eye?”

People’s Daily said: “The question is, do you really have the copyright? Does the platform have a clean copyright pool? Can the business model stand up to scrutiny? Avoiding copyright protection as a ‘black hole’ is as important as promoting copyright.” — Edited from Ethan Zhao, Business Times

From A Copyright Defender to A ‘Law Breacher’

Founded in 2000, VCG own over 40 million editorial images, 30 million creative images, and 1.25 million videos, according to its website. On April 10, VCG’s share price on the Shenzhen Stock Exchange was 25.2 yuan (AU$5.3), having fallen the daily maximum of 10% from the day before.

News of VCG’s transgressions has gone viral on Chinese social media: A Weibo hashtag translating to ‘VCG apologizes’ had been viewed 290 million times by the very evening of release, with many netizens accusing the company of profiting from unauthorized images. A photographer claimed that VCG had watermarked his photos without permission, and an actor alleged that the company had tried to charge her for using her own photo.

Closeup of metallic padlock and chains against black background

Chen Jun, a lawyer at Anhui Tianhe Law Firm who has represented VCG in intellectual property cases, told a Chinese online media that the company has won all of the copyright infringement cases he has handled for them and asserted that many of the company’s claims in the past have been valid.

However, Chen said that VCG has ‘no right to charge others’ if it cannot prove it is the copyright owner or the licensee. ‘VCG can only claim its copyrights and accuse others of copyright infringement for photos that it creates, or that it has been granted an exclusive license to by the copyright owner.’

The black hole and national flag photos belong to the public domain, Chen said. As for the companies’ logos, he added, ‘VCG surely cannot claim such copyrights.’

Another intellectual property expert went a step further, saying VCG may have violated copyrights and put itself at risk of being sued.

‘For works that are neither proprietary nor authorized by the copyright owner, VCG certainly has no right to license them out, and the agency is not entitled to charge licensing fees. Moreover, VCG itself may be guilty of infringing copyrights,’ said Xu Xinming, an intellectual property researcher at China University of Political Science and Law. ‘Users who subscribe to VCG could sue the company for breach of contract.’

The website of another Chinese photo agency, Quanjing, was also inaccessible on Friday amid reports that it had been selling images of the country’s former leaders. And the same day, China’s National Copyright Administration announced that it would increase its efforts to protect image copyrights as part of a 2019 campaign to tackle online piracy. Edited from Sixth Tone

VCG Share Price Dropped 10% in 24 Hours

As mentioned above, Visual China Group’s share price plunged by the daily maximum of 10 percent on April 10, after being caught with unlawful copyright claims over numerous images it had no legal rights to.

The company was summoned by China’s Internet regulators in Tianjin City on Friday for selling images that it held no copyrights to, including the first-ever black hole, logos of multiple Chinese companies, as well as China’s national flag and national emblem.

The company made the black hole image available for sale shortly after its release without attributing copyright to Event Horizon Telescope (EHT) project, the planet-scale telescope array that captured the image of the black hole.

Visual China has since issued a formal apology for claiming copyright of the pictures and charging for their uses. The company has removed the photos and shut down its website temporarily (now accessible again) after being placed under scrutiny.

The incident began when netizens noticed that Visual China’s has indicated on its website that it held full copyright over the first ever black hole image. Criticisms of the company’s misconduct piled up on Chinese social media within hours after Weibo users posted screenshots of the company confirming copyright hold.Edited from David Lee, Pandaily

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In the end of the day, VCG’s case may be viewed as an absolute shame of the Chinese Intellectual Property status. It at least reflects the legal environment in IP Protection is getting mature there, while service provider can no longer find easy loopholes to steal and make huge profits. A ‘gospel’ for overseas investors, isn’t it?

Edited by Joreal Qian