Beijing Dream Castle Culture CO., Ltd. (Dream Castle) owns the copyright to the popular "Ali" animation short film series. Finding out that the "Ali" film clips were provided to the public on the Dubbing Show app as dubbing materials, Dream Castle sued the app's operator Hangzhou Xiuxiu Technology Co. Ltd. (Xiuxiu) in the Beijing Internet Court (BIC), alleging infringement of its information network dissemination right.

The BIC released its judgment of the first instance on June 12, 2020, determining that the defendant Xiuxiu infringed the plaintiff Dream Castle’s information network dissemination right by disseminating the "Ali" animation clips on its Dubbing Show app.

Case summary:

Plaintiff: The dissemination of the animation clips involved on the Dubbing Show app constituted infringement of Dream Castle’s information network dissemination right.

The Dubbing Show platform used the "Ali" animation clips as dubbing materials on its app without authorization, attracting users to dub or tip the clips. In doing so it infringed the plaintiff’s information network dissemination right. The plaintiff requested an order stopping the infringement and compensation for its losses.

Defendant: Xiuxiu claimed it only provided an information storage space and the user’s behavior to upload the involved clips was fair use.

The dubbing materials were uploaded by online users for purposes of learning, research and appreciation. The clips were mostly one to two minutes which did not constitute substantial replacement of the work involved, a use that belongs to the category of fair use. Xiuxiu only provided information storage space, and fulfilled its deletion obligation in a timely manner, and thus should be exempt from liability by application of the Safe Harbor Rule.

Moreover, it argued that given the experimental nature of the Dubbing Show app as a new type of network service, the determination of infringement would mean the end of that business model, which was not conducive to the dissemination of dubbing art on the internet. The defendant therefore requested rejection of all the claims by Dream Castle. 

Focus of dispute:

1. Did Dream Castle own the copyright of the work involved?

2. Did the app involved provide information storage space only?

3. Did the users' uploading behavior constitute fair use?

4. Did Xiuxiu constitute contributory infringement?

Fact checking:

After reviewing the evidence submitted by both parties, the BIC determined that Dream Castle owns the copyright of the short animation film involved. There were 14 clips of the work involved as dubbing materials on the app, and over 20,000 clips of dubbing videos based on them. Xiuxiu submitted some uploaders’ information and their user agreements for the dubbing materials to prove its role was limited to information storage service provider. As to the fact that users could tip the dubbing videos, Xiuxiu claimed that it only profited about 100 yuan ($15.76) from the allegedly infringing videos and submitted related financial statistics to prove its claim. Both parties confirmed that all the relevant videos were deleted.

Considerations for ruling:

1. The defendant provided not only information storage space.

Among the 14 clips of work involved as dubbing materials on the app, the defendant provided detailed information for 10 clips including the uploaders' IP addresses and cell numbers which could prove that the defendant provided information storage service only. The defendant didn't provide the same information for the other four pieces. Also, it could not be confirmed that all the dubbing videos based on the dubbing materials involved were uploaded by real online users. On that point the defendant had the onus of proof.

2. Even if the videos involved were uploaded by online users, the defendant still constituted contributory infringement.

A. The users' uploading behavior was not fair use.
Using others' public works for personal learning, research and appreciation is fair use and does not require the copyright holder's authorization or payment. In this case, the uploading was not for individual usage, but was open to the public, which means the uploading behavior falls in the scope of information network dissemination right, and constituted direct infringement.

B. The business model of the Dubbing Show app objectively posed grave risks of inducing uploading of infringing videos.

First, given that the Dubbing Show app is a mobile phone software providing dubbing services to the public, its users tend to upload well-known film and TV show clips as dubbing materials in order to boost entertainability and interaction. Rights owners of such works will usually not upload them online for free, nor will they authorize users to upload them online.

Under the circumstances, the business model of the defendant posed extreme risks of inducing uploading of infringing videos. The defendant could also predict the existence of videos with potential infringement. Second, the works involved had a certain popularity, thus the defendant only needed to exercise a regular duty of care to spot infringement.

Lastly, as the defendant made direct profit from the videos involved it should bear a higher duty of care in regards to the uploading of content, regardless of the amount of profit.

3. The defendant was liable in tort

The BIC determined that the works involved were animated short films with a certain popularity. Although the alleged infringing videos were short, they objectively presented the classic parts of the works involved. 

The works involved were mostly disseminated on the internet. The fact that the defendant provided clips of the work on its app would inevitably cause economic losses for the plaintiff. The purpose of the defendant’s business was not simply as a communication platform for dubbing enthusiasts, but to enrich its platform contents by its users' uploading so as to attract more users and eventually profit from them. Therefore the BIC supported the plaintiff's claim of reasonable compensation for economic losses and expenses.
The BIC also concluded that the Dubbing Show app had positive contributions in enriching people’s cultural life. However, as a content-oriented online service provider, the defendant should pay full attention to copyright protection in its business operations.

The defendant was advised to introspect on its own services, strengthen content audit, implement a real-name user registration system, and strive for sustainable development based on a healthy and legitimate business model. 

Details of the judgment:

The defendant Xiuxiu was ordered to compensate 15,000 yuan as economic losses and 250 yuan as reasonable expenses to the plaintiff Dream Castle. Other claims by the plaintiff were rejected.

This article is transferred from Beijing Internet Court, and I would like to thank you.