Guiding Opinions of Beijing on Ascertainment of Compensation Liabilities for Copyright Infringement

 2018-06-22  47


· Area of Law: Intellectual Property Judicial Assistance Legislative Affairs

· Level of Authority: Local Judicial Documents

· Date issued:01-11-2005

· Effective Date:01-11-2005

· Status: Effective

· Issuing Authority: Beijing Municipality

 

Guiding Opinions of Higher People's Court of Beijing Municipality on the Ascertainment of Compensation Liabilities for Damages Relating to the Copyright Infringement
(No.12 [2005] of the Higher People's Court of Beijing Municipality January 11, 2005)
With a view to earnestly maintaining the lawful rights and interests of the copyright owners and other right holders relating to the copyright, effectively cracking down on infringement, regulating the order of the cultural market and unifying the law enforcement standards, the following opinions on the ascertainment of compensation liabilities for damages relating to copyright infringement are put forward pursuant to the General Principles of the Civil Law of the People's Republic of China, the Copyright Law of the People's Republic of China and the Interpretations of the People's Supreme Court on Some Issues Concerning the Application of Law to the Trial of Civil Disputes of Copyright, and in consideration of the actual situation of the copyright trial of the courts in Beijing Municipality:
Ascertainment of Compensation Liabilities for Damages
Article 1 In case a defendant infringes on the lawful rights and interests of the copyright owners and other right holders relating to the copyright and causes damages, he shall bear the civil liability of paying compensation for the damages.
The plaintiff shall submit relevant evidence to prove the infringement of the defendant. In case the defendant claims himself as innocent, he shall assume the burden of proof, otherwise he shall bear the unfavorable legal consequences.
Article 2 A defendant may be found faulty if he is under any of the following circumstances:
(1)The defendant has been given warnings, as supported by good evidence produced by the copyright owner, but fails to suspend his infringing acts without justifiable causes;
(2)The defendant fails to fulfill the obligation of conducting examination as prescribed by any law, regulation or administrative rule;
(3)The defendant fails to exercise reasonable duty of care in line with the age, educational level, profession and social experiences of a citizen, and the scope of business and industrial requirements of a legal person;
(4)The defendant infringes on the copyright and other rights relating to the copyright of the other party of the contract when the contract is performed or after it is terminated; or
(5)Any other circumstance under which the defendant may be found as faulty.
Article 3 Where the defendant is faultless when it infringes on the lawful rights and interests of a copyright owner or any other right holder relating to the copyright and causes the damages, he may be exempt from the liability of paying compensation for damages, but may be ordered to return the profits incurred from the infringement. In the event that the infringement results in the defendant's big gains or the plaintiff's comparatively great losses, the defendant may be ordered to give proper compensation to the plaintiff by taking the circumstances into consideration and pursuant to the principle of fairness.
Article 4 Where the joint infringement by joint defendants is constituted, they shall assume the joint and several liabilities for compensation.
In case a person is fully aware or should be aware that any other conducts infringement but continuously provides business sites or gives help in any other form to him, he shall assume joint and several liabilities for compensation.
In case a trademark licenser or franchiser of a commercial franchiser is fully aware or should be aware that the licensee is conducting infringement and has the obligation and ability to deter it but fails to take effective measures, he shall assume joint and several liabilities for compensation.
Two or more defendants that constitute an infringement but without joint fault shall separately assume the liability for compensation.
Principles and Methods of Compensation for Damages
Article 5 The amount of compensation for infringement as determined shall comprehensively and fully make up the plaintiff's losses from the infringement.
Within the amount as claimed by the plaintiff, the profits of the defendant from the infringement may be taken as the amount of compensation if there is evidence showing that the profits of the defendant from the infringement are higher than the actual losses of the plaintiff.
Article 6 The main methods for determining the amount of compensation for damages relating to the copyright infringement are:
(1)Actual losses of the obligee;
(2)Illegal proceeds of the infringer; and
(3)Statutory compensation.
When any of the said calculation methods is applied, the reasonable expenses for the plaintiff to deter the infringement shall be incorporated into the scope of compensation and be circulated as the amount of compensation in the text of the judgment together with other losses.
Where the actual losses of the obligee and the illegal proceeds of the infringer can be fundamentally found out, or by applying the market rules, the amount of compensation may be determined according to the specific conditions of the case and the sufficient evidence, the method of statutory compensation may not be directly applied.
Article 7 The “actual losses of the obligee” as mentioned in Item (1) of Paragraph 1 of Article 6 of these Provisions may be calculated pursuant to the following methods:
(1)The amount of reduced profits of the plaintiff due to the infringement of the defendant;
(2)The author's remuneration as provided for by the State may be used as a reference if the defendant conducts infringement in the form of newspapers, periodicals or books or in a similar form;
(3)Reasonable royalty of the plaintiff;
(4)The reduced sales amount of the copies of the plaintiff multiplied by the profit of each copy;
(5)The amount of the infringing copies of the defendant multiplied by the profit of each copy of the plaintiff;
(6)The losses of anticipatory profits incurred from the plaintiff's failure to perform the licensing contract or from the difficulty in normally performing the said contract due to the infringement of the defendant;
(7)The losses from the devaluation of the plaintiff's work due to the infringement of the defendant; and
(8)Other methods by which the actual losses of the plaintiff can be determined.
Article 8 The “illegal proceeds of the infringer” as mentioned in Item (2) of Paragraph 1 of Article 6 of these Provisions include the three following circumstances :
(1)Profits from selling the products;
(2)Profits of business; and
(3)Net profits.
As a general rule, the profits of business of the defendant shall be the amount of compensation.
Where the infringing circumstance or consequence of the defendant is serious, the profits from selling the products may be the amount of compensation.
Where the infringement of the defendant is lenient and is effectively suspended during the duration of the action, the net profits may be the amount of compensation.
In applying any of the aforesaid methods, the defendant shall produce evidence for defence after the plaintiff has primarily produced evidence relating to the defendant's illegal proceeds from the infringement or set forth the reasons; if the defendant produces no evidence or insufficient evidence to prove his claims, the claims of the plaintiff shall be supported.
Article 9 The amount of compensation shall be comprehensively determined pursuant to the following factors when the “statutory compensation” as mentioned in Item (3) of Paragraph 1 of Article 6 of these Provisions is applied:
(1)Possible losses of the plaintiff or possible proceeds of the defendant for general circumstances;
(2)Type of the work, reasonable amount of royalty, popularity and market value of the work, popularity of the obligee, and originality of the work, etc.; and
(3)The subjective fault of the infringer, ways of infringement, and the time, scope and consequence of the infringement, etc.
Article 10 If the method of statutory compensation is applied, each work shall be the unit for calculation.
Article 11 In case a plaintiff claims for nominal compensation, it shall be supported if the infringement is established and the basic facts regarding the plaintiff's actual losses are found out.
Article 12 If the accused infringement is still continuing during the process of action, and the plaintiff claims to increase the amount of compensation and provides corresponding evidence prior to the conclusion of court debate of the first instance, the plaintiff's losses augmented during the process of action shall be incorporated into the scope of compensation.
If the plaintiff's losses have augmented during the process of second instance and are required to be incorporated into the scope of compensation, the court of second instance shall conduct mediation in the aspect of the amount of compensation. If the mediation fails, another judgment on the amount of compensation may be made and an explanation shall be made in the judgment.
Article 13 The “reasonable expenses” as mentioned in Paragraph 1 of Article 6 of these Provisions include:
(1)attorney fees;
(2)notarization fees and other fees for investigation and evidence;
(3)audit fees;
(4)expenses for traffic, boarding and lodging;
(5)expenses for printing materials relating to the action; and
(6)other reasonable expenses for the obligee to stop the infringement or to file the lawsuit.
The reasonableness and necessity of the said expenses shall be examined.
Article 14 The “attorney fees” as mentioned in Item (1) of Paragraph 1 of Article 13 of these Provisions refers to the attorney fees as legally agreed on by the party involved with his attorney. The amount of compensation to be supported may be determined pursuant to the following principles:
(1)The entrustment of an attorney for representing in action is necessary pursuant to the specialty and complexity of the case;
(2)The attorney fees to be supported shall be determined pursuant to the proportion of the amount of compensation as determined by the judgment to the claimed amount if the infringement of the defendant is fundamentally established and the compensation liability for damages shall be assumed. The amount of compensation shall be properly increased if other claims are supported by the judgment; and
(3)The attorney fees to be supported shall be properly determined pursuant to the claims of the plaintiff if the defendant does not assume the compensation liability but is ordered to assume such civil liabilities as stopping infringement and making formal apologies. However this kind of fees shall be no more than 1/3 of the attorney fees.
Article 15 The “notarization fees” as mentioned in Item (2) of Paragraph 1 of Article 13 of these Provisions shall be assumed by the defendant if the following conditions are met:
(1)The infringement is fundamentally established; and
(2)The notarization certificate has been taken as the evidence to ascertain the facts of the case.
Article 16 The “audit fees” as mentioned in Item (3) of Paragraph 1 of Article 13 of these Provisions shall be supported according to the proportion of the amount of compensation as determined by the judgment to the claimed amount.
Article 17 Where a defendant infringes on the copyright or the rights relating to the copyright, and has been subject to criminal, administrative or civil liabilities for more than two times, a heavier compensation amount shall be determined within the limit of compensation as determined pursuant to these Provisions.
Article 18 The details of explanations concerning the amount of compensation in the judgment shall be based on the complexity of the case, the number of disputes between the parties involved and other specific conditions.
Article 19 If a defendant conducts an infringement as prescribed in Article 47 of the Copyright Law and the circumstances are serious, which has damaged the public interests, the following civil punishments may be imposed thereon:
(1)A fine, the amount of which may not be more than three times the amount of compensation as determined by the judgment;
(2)Forfeiture and destruction of infringing copies; and
(3)Forfeiture of materials, tools and equipment used for producing infringing copies.
Article 20 Where a plaintiff files a lawsuit based on unjustifiable purposes and makes up facts, and his action is dismissed or his claims are denied, the plaintiff may be ordered to assume the reasonable expenses of the defendant for the lawsuit, which include:
(1)attorney fees;
(2)expenses for traffic, boarding and lodging;
(3)expenses for investigation and evidence;
(4)charge for loss of working time; and
(5)other reasonable expenses for the lawsuit.
Compensation for Mental Injury
Article 21 Where the circumstances of infringing the copyright-related personal right of the plaintiff or the personal right of the performer are serious, and the application of stopping the infringement, eliminating the ill effects and making formal apologies is not sufficient for the consolation of metal injury suffered by the plaintiff, the defendant shall be ordered to pay a consolation money for metal injury to the plaintiff.
In case a legal person or any other organization files a lawsuit for compensation of mental injury for the alleged infringement upon its copyright-related personal right or the personal right of the performer, it may not be accepted.
Article 22 A defendant may be ordered to pay a consolation money for metal injury to the plaintiff if it is under any of the following circumstances:
(1)publishing the plaintiff's work without his permission, seriously breaching his wills, and causing unfavorable impacts to the credit and social appraisal of the plaintiff;
(2)plagiarizing the plaintiff's work in a large quantity, which has produced a vast impact, and the defendant has obtained a big reputation therefrom;
(3)seriously distorting and tampering a work of any other;
(4)publishing a joint-authorship work with the plaintiff being the main author as a work created solely by oneself, without the permission from the plaintiff, and the defendant has obtained a big reputation therefrom;
(5)having his name affixed on a work created by the plaintiff in order to seek personal fame and gain, where he has not taken part in the creation of the work;
(6)seriously distorting the performer's image and having thus caused unfavorable impacts to the social appraisal of the plaintiff;
(7)producing or selling a work where the signature of the plaintiff is counterfeited, which has produced a comparatively great impact;
(8)Other circumstances in which the consolation money for metal injury shall be paid to the obligee.
Article 23 The amount of the consolation money for metal injury shall be determined by comprehensively taking into account the fault of the defendant, the infringing means and circumstances, scope of influences, proceeds incurred from infringement and the ability to assume the compensation liability, etc.
As a general rule, the consolation money for metal injury may not be lower than 2000 yuan but no more than 50000 yuan.
Article 24 Where a copyright owner or a performer dies, and his close relative files a lawsuit for the compensation for mental injury for his metal sufferings from the alleged defendant's infringement upon the copyright-related personal right or the personal right of the performer, it shall be accepted.
Ascertainment of Common Amount of Compensation for Infringement
Article 25 Where the losses to the plaintiff are determined pursuant to the methods as described in Item (2) of Paragraph 1 of Article 7 of these Provisions, the amount of compensation may be determined as three up to five times of the author's remunerations as prescribed by the State by taking the following factors into consideration:
(1)the popularity of the work and the impact on the market during the process of infringement;
(2)the popularity of the author;
(3)the degree of the defendant's fault; and
(4)the difficulty of the creation of the work and the cost invested for the creation.
A written work of no more than 1000 characters shall be computed as 1000 characters.
The reasonable standard of the author's remuneration for similar conditions as proved by the plaintiff shall be taken into consideration.
Article 26 In the case of spreading written, artistic and photographic works through the internet, the amount of compensation may be determined pursuant to the author's remuneration as prescribed by the State.
Article 27 In the case of using written, artistic and photographic works for advertisements, including press advertisements, outdoor advertisements, network advertisements, storefront advertisements and written instructions on products, etc., the amount of compensation may be determined by comprehensively taking into account the advertising investment of the advertiser, the production fees charged by the advertisement maker, the advertising fees charged by the advertisement publisher, and the popularity of the work, the role of the work in the advertisement, the business scale of the defendant, the infringing means and scope, etc..
The reasonable royalty for similar conditions as proved by the plaintiff shall be taken into consideration.
Article 28 In the case of commercial use of written, artistic and photographic works, such as the package, decoration and design of commodities, securities and postal items, etc., the amount of compensation may be determined by comprehensively taking into account the popularity of the work, the notability of the work in the product, the business scale of the defendant, infringing means, scope and profits obtained, etc., and as a general rule, the amount of compensation determined thereby shall be more than that as determined pursuant to Item (2) of Paragraph 1 of Article 7 and Article 25
Article 29 The amount of compensation may be determined according to the following methods if the copyright of a musical work or the right of the obligee to an audio-video product is infringed upon:
(1)The reasonable royalty of the plaintiff;
(2)The royalty standard as set down by a copyright collective management organization if the action is filed thereby; and
(3)The methods for determining the amount of compensation as prescribed by Article 28 of these Provisions may be referred if the said musical work or audio-video product is for commercial use.
Article 30 In the case of providing downloading services such as photographs and music, the amount of compensation may be determined according to the following methods:
(1)The reasonable royalty of the plaintiff;
(2)The royalty standard as set down by a copyright collective management organization if the action is filed thereby; and
(3)The proceeds of the defendant from his infringing services.
Article 31 In case the final user of a software infringes on the copyright of the computer software, the amount of compensation may be determined according to the following methods:
(1)The reasonable royalty of the plaintiff; and
(2)The market price of the official software.
Article 32 If the amount of compensation is determined pursuant to the methods as described in Articles 26 through 31 of these Provisions, the specific amount of compensation may be determined as three up to five times any said amount by concurrently taking into account the factors as prescribed in Paragraph 1 of Article 25.
Article 33 If the stated quantity of infringing copies of the accused infringing publications or advertisements is larger than that as stated in the action, the basis for determining the amount of compensation shall be the quantity of infringing copies of publications or advertisements unless the defendant denies it by providing evidence or reasonable causes.
Article 34 In case a publisher, duplicator or issuer of books or audio-video products infringes on the copyright or any other right relating to the copyright, but refuses to produce evidence concerning the specific quantity of infringing copies if it can do so, or the evidence produced thereby can not be accepted, the quantity of infringing copies may be determined according to the following quantities:
(1)No less than 3000 volumes for books; and
(2)No less than 20000 sets for audio-video products.
Supplementary Provisions
Article 35 These Provisions shall be implemented as of the date of issuance.