10 Typical Cases of IPR Protection —— Case Example 3

Implementing the most stringent judicial protection of IPR
To Guarantee the Innovation-Driven Development of the FTA
——T Company v. W Company and other companies over infringements of right of producer of sound or video recordings

[Case Summary]
Company T was authorized an exclusive license for the 178 recordings involved in the case. In 2017, Company T and Company W signed the "Music Licensing Cooperation Agreement", authorizing non-exclusively Company W to provide music services on its music website for a period extending from April 1, 2017 to March 31, 2018. The contract stipulated that after expiration, Company W shall immediately stop transmitting authorized tracks and delete the relevant authorized works on its server. At 17:23 on March 31, 2018, Company T informed Company W by e-mail that it should immediately remove all the songs involved due to the expiration of the contract. At 23:44 on the same day, W Company published a message on its official Weibo advising users to purchase related songs immediately. On April 1, 2018, W Music website still provides download service of the music products involved.
[Ruling Results]
The court held that after the contract of the case expired, W Company's music website continued to provide download services constitute infringement. Company L, the operating company of the W music website, has not yet obtained a value-added telecommunications business license. In fact, it is dependent on Company Y who has obtained legal license for operation. Therefore, Company Y and Company L should be deemed as joint infringer. When the authorization contract expires and Company T has explicitly asked to remove the recordings involved in the case, Company W not only failed to take corresponding measures in accordance with the agreement in time, but also notified the user to download as soon as possible, indicating that Company Y and Company L have the intention of joint infringement, therefore shall be jointly held responsible for civil liability. The court ruled that the three defendants should pay T company 4500 yuan in compensation for each recording, and supported T company's reasonable expenses incurred to stop the infringement.
[Significance]
The parties involved in this case are all well-known Internet companies in the country, and the infringement involved in the case has caused widespread media attention. In this case, the infringing platform, the actual operating company, and the company with legal qualifications are not the same subject. On the basis facts, the court ruled the three parties to jointly bear the tort liability, which effectively protected the rights of the rights holder. In the case where the actual loss of the right holder and the illegal gains of the infringer could not be ascertained, statutory compensation was applied in this case. In determining the specific amount of compensation, the extent of the W Company’s subjective fault, business scale, the nature of the infringement, and the consequences were taken into consideration. As a result, a higher amount within legal limit for compensation was decided, and T company’s litigation requests for reasonable attorney fees and expenditures for safeguarding the rights was supported by the court, fully reflecting the spirit of punitive compensation. In this case, the most stringent judicial protection of IPR was implemented, and the legitimate rights and interests of the IPR holders were safeguarded. It is of exemplary significance for creating a business environment that protects innovation-driven development.