Internet Cafe Liable for Copyright Infringement Over $1,000 Damages for Unlicensed Streaming

Internet Cafe Liable for Copyright Infringement Over $1,000 Damages for Unlicensed Streaming

Case Overview

A Chinese civil court in Eastern China ruled that an internet cafe was liable for copyright infringement after it provided customers with access to an unlicensed streaming website showing the television drama The Gem of Life. The plaintiff, a media company holding exclusive digital distribution rights, sought 8,500 yuan in damages. The court awarded 1,000 yuan, finding the cafe failed to exercise reasonable care in directing users to a site that lacked proper licensing.

Case Background and Facts

The plaintiff, a Beijing-based media company, obtained exclusive information network dissemination rights for the television drama The Gem of Life within mainland China from the copyright holder, Television Broadcasts Limited, for the period of January 1, 2008, to December 31, 2009. In October 2009, the plaintiff discovered that the defendant, an internet cafe operator in Eastern China, was allowing its patrons to stream the drama online for a fee. The plaintiff alleged that the defendant operated its business for profit and directly facilitated public access to the copyrighted work without authorization, causing economic harm. The defendant argued that it only provided internet access and did not host the content. It claimed that the streaming service was provided by a third-party website called Internet Cafe Cinema, accessible from any location, not just the cafe. The defendant asserted it merely offered a link to that site and derived no direct benefit from the streaming of the specific film.

Court Proceedings and Evidence

The plaintiff presented several pieces of evidence to support its claim. This included notarized certificates of copyright ownership and authorization, a DVD of the drama showing the production company, and a notarized record of the infringement. The notarized record documented that on October 30, 2009, a notary public accompanied the plaintiff’s agent to the defendant’s internet cafe. Using a computer designated by the notary, the agent clicked on an icon labeled Internet Cafe Cinema on the desktop. This action led to a website where The Gem of Life could be searched for and played normally. The website’s page did not display a license for information network dissemination of audiovisual programs. It also contained a disclaimer stating it was not responsible for the legality of content provided by third parties, and its ICP filing number did not match its official record. The cafe charged customers approximately 1.6 to 1.7 yuan per hour. The defendant did not submit any evidence to counter the plaintiff’s claims. The court admitted all of the plaintiff’s evidence, noting that the notarized document was issued by a legally authorized notary office and, absent any contrary proof, must be accepted as fact.

Court Findings and Judgment

The court found that the plaintiff held the exclusive right to disseminate The Gem of Life over the internet in mainland China. It determined that the defendant, as a professional internet cafe operator, was not a typical end user. By placing a desktop icon that made it easy for customers to access the Internet Cafe Cinema website, the cafe commercially exploited that site. The court held that the defendant owed a duty of reasonable care regarding the content streamed through that link. Because the website lacked proper licenses and its ICP filing was incorrect, the cafe should have suspected that the content was unauthorized. The court concluded the defendant acted as a contributor to the infringement by providing a direct pathway to the illegal stream and was therefore liable. The court rejected the plaintiff’s full claim for 8,500 yuan, finding no proof of actual losses or the defendant’s profits. Instead, the court considered the drama’s popularity, the nature of the infringement, the cafe’s fault, and its business scale. The court ordered the defendant to pay 1,000 yuan, which included compensation for economic loss and reasonable legal costs, and dismissed the remaining claims.

Key Legal Principles

The court applied the principle that an internet service provider or intermediary that materially assists in copyright infringement can be held liable for contributory infringement. This case clarifies that an internet cafe, by actively directing users to a third-party website through its own system, has a duty to verify the legality of that website’s content. The failure to exercise such reasonable care, especially when the website displays obvious red flags like missing licenses or false registration information, constitutes fault. The principle of statutory damages was also applied, allowing the court to set a reasonable award when actual damages are not proven.

Practical Insights

This case serves as a warning for businesses that provide internet access or digital content to the public. Simply linking to or providing shortcuts to external websites does not absolve a business from liability for copyright infringement. Operators must exercise active due diligence. If a third-party website lacks proper licensing, displays disclaimers shifting responsibility, or has suspicious registration details, the business should not promote or facilitate access to that site. Failure to do so can result in a finding of contributory infringement and financial liability, even if the business does not host the infringing content itself.

Legal References

General Principles of the Civil Law of the People’s Republic of China: Article 130
Copyright Law of the People’s Republic of China (2010): Article 10, Paragraph 1; Article 48; Article 49, Paragraph 1
Supreme People’s Court Interpretation on the Application of Law in Civil Disputes over Copyright: Article 7, Paragraph 1; Article 25, Paragraph 1; Article 26, Paragraph 1
Supreme People’s Court Interpretation on the Application of Law in Civil Disputes over Computer Network Copyright (2006): Article 3
Civil Procedure Law of the People’s Republic of China (2007): Article 64, Paragraph 1

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for specific legal matters.