New Oriental Fined 10M Yuan for Copyright Infringement
New Oriental, China's largest test preparation company,
was ordered to pay 10 million yuan (US$1.2 million) for
copyright and trademark infringement to the US-based Educational
Testing Service (ETS) and the Graduate Management Admission
Council (GMAC). The two American companies administer,
respectively, the TOEFL (Test of English as a Foreign
Language) and GRE (Graduate Record Examination), which
are both pre-requesites for admission to graduate schools
in English-speaking countries.
Beijing No. 1 Intermediate Peoples' Court made the judgement
after a trial which lasted two years. New Oriental said
that although it could afford the penalty, it considered
the judgement unfair, and would appeal.
The case sheds light on the highly profitable cram school
industry in China. For ambitious younger Chinese, the
path to future success depends on getting a foreign degree,
and the first step on that path is passing the TOEFL and
GRE exams, high scores of which are necessary for admission
to the better business schools. The result has been the
growth of the cram school industry, which prepares students
for the exams. Since the schools test the students on
reading, writing and comprehension, the tests focus on
these areas of English study.
Schools with the best exam success rate regularly brag
about how successful their students were with their exams,
and even mention photos, names and test scores in their
advertising. Successful teachers have classes with hundreds
of students and teach using microphones, and even megaphones.
Previous exams are copied and distributed, with the standard
answers. Emphasis is given to the nature of the questions,
and what questions the testers are likely to ask; and
little emphasis is given to understanding the grammatical
reasons for the correct answers.
Because the market is so huge in China, ETS refuses to
publish test materials in China, and sells directly to
Chinese students. In all other countries, it has appointed
agents or distributors, and sells through them. New Oriental
has repeatedly tried to get authorization from ETS to
print TOEFL and GRE papers, but has always been rebuffed.
As a result, New Oriental has organized teams of "students".
Their job? To take the exams, and memorize 5-10 questions
with their answers. After the exam, the exams are "re-assembled",
complete with correct answers, within 3 hours. They are
then taught to their students nation-wide in China in
New Oriental schools.
The case raises interesting copies about copyright, such
as, "Does memorization and re-assembly of publicly
given exams constitute copyright infringement?" The
judgement of the Beijing No. 1 Intermediate Peoples' Court
is that it does.
Looking at the question from a bigger picture, it shows
that teaching and memorization by rote are not something
which only Chinese schools do as standard practice, but
is something which is re-inforced by a few American companies
when it is in their own business interest.
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