Court Overturns 1500 Yuan Ruling: Internet Cafe Not Liable for Copyright Infringement of TV Series Streaming Content
Court Overturns 1500 Yuan Ruling: Internet Cafe Not Liable for Copyright Infringement of TV Series Streaming Content
CASE OVERVIEW
A higher court in Eastern China has overturned a copyright infringement ruling against an internet cafe operator, holding that the cafe did not infringe the exclusive information network dissemination right of a television series when it provided access to the program through a licensed third-party content platform. The court ruled that the cafe had fulfilled its reasonable duty of care and lacked the necessary subjective fault to be held liable.
CASE BACKGROUND AND FACTS
The case involved the television series “Weather in Kenting,” produced in 2007. The copyright was held by a foundation, which granted exclusive information network dissemination rights for Mainland China to a series of companies. Ultimately, the plaintiff, Shanghai Youdu Broadband Technology Co., Ltd. (Mr. Youdu’s company), obtained an exclusive and sublicensable right to distribute the series online in Mainland China from February 20, 2009, to February 19, 2012.
The defendant, Hangzhou Fumake Computer Information Service Department (Mr. Fumake’s company), operated an internet cafe. In August 2009, Mr. Youdu’s company discovered that customers at Mr. Fumake’s internet cafe could access and play the full series by clicking an icon on the desktop. The content was stored on the cafe’s local area network server. Mr. Youdu’s company filed a lawsuit, claiming Mr. Fumake’s company had infringed its exclusive information network dissemination right and sought damages of 7,000 yuan and legal costs of 3,000 yuan.
COURT PROCEEDINGS AND EVIDENCE
The initial trial court ruled in favor of Mr. Youdu’s company, ordering Mr. Fumake’s company to pay 1,500 yuan in damages. Mr. Fumake’s company appealed, arguing it had a contract with a qualified content provider, Shanghai Kuangyu Digital Technology Co., Ltd. (Mr. Kuangyu’s company), and had exercised reasonable care. Mr. Fumake’s company claimed it could not control the content on the platform and was not the true infringer.
During the appeal, Mr. Fumake’s company submitted new evidence, including the user agreement with Mr. Kuangyu’s company and evidence of Mr. Kuangyu’s company’s business licenses. The agreement showed Mr. Kuangyu’s company was responsible for installing and maintaining the “Hero Broadband” video system and for resolving any copyright issues. Mr. Fumake’s company only provided the server and network connection. The court accepted this evidence, finding it relevant to the issue of reasonable care.
COURT FINDINGS AND JUDGMENT
The appeals court reversed the lower court’s decision. It found that Mr. Fumake’s company had entered into a valid agreement with Mr. Kuangyu’s company, a content provider that held the necessary business licenses, including an Internet Culture Business License and an Information Network Dissemination of Audio-Visual Programs License. The court determined that Mr. Fumake’s company did not have the technical ability to upload, modify, or delete the video files on its server. Its role was limited to keeping the server and network running.
The court held that an internet cafe operator’s duty of care is limited to verifying the legality of its content source. Since Mr. Fumake’s company had obtained the content from a licensed provider for a fee, and had no reason to know that Mr. Kuangyu’s company’s content was infringing, it had fulfilled its reasonable duty of care. The court concluded that Mr. Fumake’s company lacked subjective fault and could not be held liable for copyright infringement. The original judgment was overturned, and all of Mr. Youdu’s company’s claims were dismissed.
KEY LEGAL PRINCIPLES
The court applied the principle that liability for copyright infringement requires subjective fault. An internet cafe operator is not strictly liable for content streamed through licensed third-party platforms. The operator’s duty of care is proportionate to its role and technical capabilities. When an operator contracts with a qualified content provider and lacks the ability to control the specific content, its primary obligation is to ensure the provider has the proper legal standing and licenses. This principle balances the protection of copyright with the practical realities of running a business that relies on aggregated content from external sources.
PRACTICAL INSIGHTS
This case provides a significant defense for internet cafes and similar businesses that offer content through third-party platforms. To avoid liability, operators should enter into written agreements with content providers that clearly assign copyright responsibility to the provider. Operators should also verify that the provider holds the necessary business licenses, such as an Internet Culture Business License and an Information Network Dissemination of Audio-Visual Programs License. Maintaining records of these agreements and licenses is crucial. This decision clarifies that a business cannot be held liable for content it cannot control, provided it has acted in good faith with a legitimate provider.
LEGAL REFERENCES
General Principles of the Civil Law of the People’s Republic of China: Article 106, Paragraph 2
Copyright Law of the People’s Republic of China (2010): Article 10, Paragraph 1, Item 12
DISCLAIMER
This article is for informational purposes only and does not constitute legal advice. Laws and regulations may vary by jurisdiction. You should consult with a qualified legal professional for advice tailored to your specific situation.