Eastern China Internet Cafe Copyright Infringement Case: 7,000 RMB Damages Awarded for Unauthorized Film Streaming

Eastern China Internet Cafe Copyright Infringement Case: 7,000 RMB Damages Awarded for Unauthorized Film Streaming

Case Overview

A Chinese film distribution company successfully sued an internet cafe for unauthorized streaming of the blockbuster movie “If You Are the One.” The Eastern China court ruled that the cafe operator violated the plaintiff’s information network dissemination right by making the film available on its local area network without a license. The defendant was ordered to pay 7,000 RMB in damages and legal costs and to immediately cease the infringing activity.

Case Background and Facts

The plaintiff, Beijing ShiX Times Technology Co., Ltd., held exclusive rights to distribute the 2008 film “If You Are the One” in mainland China. This popular comedy, directed by a famous director and starring well-known actors, was a major commercial success. The plaintiff obtained its rights through a chain of agreements from the original co-producers, including Huayi Brothers Media Corporation. The authorization granted the plaintiff the exclusive right to reproduce and disseminate the film in local area network environments, such as internet cafes, and to take legal action against infringers.

In late 2009, the plaintiff discovered that the defendant, Shenzhen XiX Network Technology Co., Ltd., was operating an internet cafe in Eastern China. The defendant had allegedly copied the film onto its local server and allowed customers to watch it on demand without obtaining any permission from the copyright holder.

Court Proceedings and Evidence

The plaintiff filed a lawsuit demanding that the defendant stop the infringement, delete the film, and pay 40,000 RMB in economic damages plus 6,000 RMB in legal costs. The defendant did not appear in court or submit any written defense, leading to a default judgment.

The plaintiff presented crucial evidence, including a notarized copyright chain showing its exclusive rights. A key piece of evidence was a notarial deed from a Beijing notary office. According to this deed, on December 29, 2009, notaries and an operator visited the defendant’s internet cafe. The operator paid for a computer, logged in, and accessed a local server page titled “Visual Impact.” From this page, the operator selected and played portions of “If You Are the One.” The entire process was recorded using screen capture software. The recorded video was saved and later sealed in an evidence bag. During the trial, the court played the video from the sealed disc, confirming that the content was identical to the plaintiff’s copyrighted film.

Court Findings and Judgment

The court found that the plaintiff had validly acquired the information network dissemination right for “If You Are the One” in mainland China. The court held that the defendant, by operating a for-profit internet cafe and making the film available to the public on its local area network without a license, had directly infringed upon this right.

Since the plaintiff could not prove its actual losses or the defendant’s profits from the infringement, the court used its discretion to determine damages. It considered several factors: the film’s high popularity and production cost, its release date, the defendant’s fault and business scale, and the nature of the infringement. The court also accounted for the plaintiff’s reasonable expenses, including notarization and attorney fees. Based on these elements, the court ordered the defendant to pay 7,000 RMB in total compensation and to immediately stop the infringing activity. The plaintiff’s request for a higher amount was denied.

Key Legal Principles

The court applied the principle of information network dissemination right, which gives copyright owners the exclusive right to make their works available to the public online. This right covers streaming content over a local area network in a commercial setting like an internet cafe. The ruling also reinforced that a copyright holder can license its rights to a third party, who then has standing to sue for infringement. When actual damages are difficult to quantify, courts may award statutory damages based on the circumstances of the case.

Practical Insights

This case serves as a clear warning for businesses that provide public access to copyrighted media. Internet cafes, hotels, and similar venues must obtain proper licenses before allowing customers to stream movies, music, or software over their networks. Relying on personal copies or unverified sources is not a defense. For rights holders, this case demonstrates the importance of maintaining a clear chain of title and using notarized evidence to prove infringement. Even when a defendant does not appear in court, strong documentary evidence can lead to a successful default judgment.

Legal References

Copyright Law of the People’s Republic of China (2010): Article 10, Article 48, Article 49.
Supreme People’s Court Interpretation on Copyright Civil Disputes: Article 25, Article 26.
Civil Procedure Law of the People’s Republic of China (2007): Article 64, Article 130.

Disclaimer

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