By Meph Jia Gui

On the morning of June 23, 2014, the Supreme Court held a news conference in coordination with publication of the outcome of five representative cases, including a right of dissemination via information network dispute case involving CCTV International and Quantudou Company. The case is a quintessential dispute case on rights of dissemination via information network of internet works. The work and the parties involved all enjoy a high reputational status. The following article introduces the case and briefly comments on the main content of the case.

Case Introduction:

A Bite of China, a large food documentary produced by CCTV, was highly regarded and caused a widespread social interest after the broadcast. CCTV authorized the plaintiff CCTV international network co., LTD. (hereinafter referred to as "CCTV International") to have an exclusive right of dissemination via information network over the documentary. After the broadcast, the plaintiff discovered that the defendant Shanghai Quantudou Culture Communication co., LTD. (hereinafter referred to as "Quantudou Company") was also providing an online on-demand service on Tudou website which broadcasted the documentary without permission. The plaintiff filed a lawsuit and requested the defendant to stop the infringement and to compensate for economic losses of RMB 800,000 Yuan and reasonable expenses of RMB 50,000 Yuan.

Shanghai Minhang District People's Court (hereinafter referred to as "Minhang Court") held that the documentary A Bite of China is protected by copyright law. Accordingly, it was held that the plaintiff had an exclusive right of dissemination via information network to the documentary authorized by CCTV. Further, it was held that the defendant had provided online on-demand service of the involved documentary in its prime-time period without authorization, which infringed the rights of the right owner, and that the defendant must fulfill the corresponding responsibilities. Minhang Court also held that the defendant had not adequately proved with actual uploading information and other evidence that the involved work was uploaded by an internet user. Meanwhile, the Minhang Court held that the defendant’s behaviour of deleting the original data made it impossible to find out the actual truth, so the defendant should bear the adverse consequences. On October 22, 2013, Minhang Court announced its judgment that the defendant Quantudou Company must compensate the plaintiff CCTV International for economic losses and reasonable costs totalling RMB 248,000 Yuan. After Minhang Court made the judgment, the defendant appealed to the Shanghai No.1 Intermediate People's Court (hereinafter referred to as “Shanghai First Intermediate Court”). On December 23, 2013, through the trial, Shanghai First Intermediate Court concluded that the original sentence was reasonable, and made a decision to reject the appeal and upheld the conviction.

Brief Comment:

According to "Regulations on the Protection of Right of Dissemination via Information Network," a right of dissemination via information network means the right to make a work, performance, or sound or visual recording available to the public by wire or wireless means, through which the public may access the work, performance, or sound or visual recording at times and places of their respective choices. The purpose of the legislators for the protection of this right regulates transmissions of works through the network without authorization of the right owner. As the Internet plays a more and more important role in the economic and social life, there has been a trend towards an increase of disputes over rights of dissemination via information network year by year.

The case involves two focal points on the dispute: first, on whether the plaintiff should have right of dissemination via information network of the involved work; and second, whether the defendant infringed the right of dissemination via information network of the involved work and whether they must fulfill the corresponding responsibilities. To the first point, the defendant argued that the plaintiff’s proof, the "authorization letter" issued by CCTV did not explicitly specify the work’s name, as a result, the plaintiff's authorization was incomplete. Minhang Court concluded that the copyright of the documentary A Bite of China was owned by CCTV. The "authorization letter" of the CCTV did not name specific works, but the letter showed that CCTV had authorized all TV programs, including documentaries’ right of dissemination via information network to the plaintiff. Since the involved work was a documentary, which belongs to the related work within the scope of authorization, therefore the plaintiff should have the right of dissemination via information network of the involved work. 

On the second point, Minhang Court held that according to the plaintiff's evidence, the defendant had provided online broadcasts of the involved work directly to the public on its web site without authorization. This behaviour violated the plaintiffs’ right of dissemination via information network of the involved work, and also damaged the plaintiff’s legitimate interests as owner of the right. The Minhang Court then concluded that the defendant must fulfill the corresponding responsibilities according to the law.

Quantudou Company was dissatisfied with the decision and appealed to Shanghai First Intermediate Court. Quantudou Company argued that its website neither did nor ought to have known of the existence of the video because the defendant did not have any prior review obligations to the broadcasted content. To this point, Shanghai First Intermediate Court held that the actually uploaded information was within the sphere of the defendant’s scope of the control and management, and burden was with the defendant to demonstrate that Quantudou’s activities were actually conducted beyond that scope. But Quantudou Company deleted the video as well as the original data after litigation had been commenced, which made it impossible to learn the actual facts which could prove their case. The defendant must therefore bear the consequences of the lack of evidence. In the end, Shanghai First Intermediate Court upheld the conviction.

However, Minhang Court held that the plaintiff failed to provide effective evidence to prove their economic losses. The court determined the amount of compensation by considering those factors such as the type of involved work, social awareness, the nature of the infringing behaviour, the infringing website’s business scale, business model and other influencing factors, to make a total of RMB 248,000 Yuan in compensation.

At present, rights of dissemination via information network disputes have occurred between large network video providers and the holders of the work. The work involved in this case, A Bite of China, has strong originality and higher visibility. Meanwhile, the infringing website Tudou is currently one of the largest network video platforms in China, with strong industries and social influence. The Court's decision took various objective factors into account, and awarded reasonable compensation, which not only would make up for the obligee's economic losses, but also would encourage network practitioners to strengthen their consciousness to protect Internet intellectual property. A senior official of the Supreme Court concluded that the case will promote the Internet video providers’ self-discipline and industry management, and also will act as a warning about the increased risk of internet video infringement cases.

Mr. Meph Jia Gui is a Beijing-based partner with Global Law Office who specializes in intellectual property (IP) laws and litigation and arbitration. (E-mail: meph.gui@glo.com.cn)