Analysis of the Copyright Infringement Case between Great Wall Computer Company and Shenzhen Nanfeng Color Printing Company

I. Case Recap

In November 1998, Shenzhen Jiexian Advertising Design Co., Ltd. (plaintiff in the original trial, hereinafter referred to as Jiexian Company) dispatched Tian Xianguang to Zhouzhuang Town, Jiangsu Province to take photographs intended for use as themes in printed wall calendars. At the end of 1999, Jiexian Company delivered the film of the aforementioned 7 works to Shenzhen Nanfeng Color Printing Co., Ltd. (defendant in the original trial, hereinafter referred to as Nanfeng Color Printing Company), commissioning Nanfeng Color Printing Company to print a batch of "Dreamy Water Town" wall calendars. After the calendars were printed, Jiexian Company's film remained at Nanfeng Color Printing Company. In 2000, China Great Wall Computer Shenzhen Co., Ltd. (defendant in the original trial, hereinafter referred to as Great Wall Computer Shenzhen Company) commissioned Nanfeng Color Printing Company to design and print the 2001 wall calendars. Nanfeng Color Printing Company provided calendar samples to Great Wall Computer Shenzhen Company, and personnel from both companies selected Jiexian Company's 7 works from "Dreamy Water Town" among the samples. After obtaining Jiexian Company's verbal consent, Nanfeng Color Printing Company printed 5,000 copies of the calendar and delivered them to Great Wall Computer Shenzhen Company, which distributed them free of charge to its employees and customers.

On July 9, 2001, Jiexian Company filed a lawsuit with the Shenzhen Intermediate People's Court on the grounds of copyright infringement, requesting the court to order the two defendants to cease the infringing acts, destroy the infringing calendars, publicly apologize in Shenzhen media, and compensate for economic losses of RMB 175,000, and to order the two defendants to bear joint and several liability and pay all litigation costs.

After trial, the Shenzhen Intermediate People's Court rendered the following judgment [Civil Judgment (2001) Shenzhen Intermediate People's Court IP First Instance No. 113]:

1. Defendant Great Wall Computer Shenzhen Co., Ltd. and Defendant Shenzhen Nanfeng Caiyin Printing Co., Ltd. shall immediately cease their acts of infringing upon the copyrights of the plaintiff Shenzhen Jiexian Advertising Design Co., Ltd. in the 7 works of "Dreamlike Water Town".

2. Within 10 days after the judgment takes effect, each of the two defendants shall compensate the plaintiff for economic losses of RMB 20,000 yuan, totaling RMB 40,000 yuan, and the two defendants shall bear joint and several liability for compensation.

III. Dismiss the plaintiff's other claims. The case acceptance fee of 5,010 yuan shall be borne by the two defendants, each paying 2,505 yuan.

All three parties, dissatisfied with the judgment, filed appeals. After a hearing, the Guangdong Provincial Higher People's Court rendered the following judgment [(2001) Yue Gao Fa Zhi Zhong Zi No. 142]:

The appeal is dismissed and the original judgment is affirmed.

II. Case Focus

The three appellants' claims are as follows:

(I) Jiexian Company appeals, requesting: a ruling upholding the first judgment item in the original judgment, amending the second judgment item to order the two appellees to jointly compensate the appellant for economic losses of RMB 175,000, and amending the third item to order the two appellees to publicly apologize to the appellant in the Shenzhen Special Zone Daily. The reasons are as follows:

1. The court of first instance has already established that the two appellees' infringement of the appellant's copyright is substantiated. Pursuant to the Copyright Law and its Implementing Regulations, the two appellees shall publicly apologize to the appellant in the Shenzhen Special Zone Daily.

2. The amount of compensation awarded by the court of first instance to the two appellees is obviously too low, for the following reasons:

(1) The appellant incurred considerable expenses and costs in completing the work of creating the photographic works in this case.

(2) Compensation for copyright infringement should be determined from a punitive perspective; the lack of serious consequences should not preclude our claim. The amount of compensation in this case is too low to deter further copyright infringement.

(3) The author of the photographic works in this case, Tian Xianguang, is a Chinese photographer, and the value of his works should be higher than that of ordinary works.

(2) Great Wall Computer Shenzhen Company appealed, stating:

1. Our party does not bear subjective fault. Jiexian Company cannot prove our company's infringement merely by asserting that our party is the actual user of the infringing work, as subjective intent is a very important factor. Our party commissioned Nanfengcai to print the calendar, and our party was unaware of whether the work constituted infringement. Subjective intent cannot be presumed based on objective facts that emerged afterward.

2. Jiexian Company emphasized that Tian Xianguang is a "famous" photographer, but the membership card of the Chinese Photographers Association and the award certificates submitted by Jiexian Company during the court trial are insufficient to establish that Tian Xianguang is a "famous" photographer.

3. We do not possess subjective malice, nor have we objectively caused serious consequences or any losses to Jiexian Company, so there is no need to support its claim for an apology. The calendars we printed totaled only 5,000 copies and were distributed solely as gifts to employees, not for profit-making purposes. The first-instance judgment ordering us to pay compensation of 20,000 yuan is inconsistent with the facts, and we request that the appellate court render a fair judgment.

(3) Nanfengcai Company stated in its appeal:

Our use of the 7 works involved in this case was with the consent of Jiexian Company. Our company had always had a good working relationship with Jiexian Company, and the film negatives of Jiexian Company's "Dreamy Water Town" had been stored at our company for over a year. Before our company and Great Wall Computer Shenzhen Company decided to use these 7 film negatives, we promptly contacted General Manager Ye of Jiexian Company and inquired whether they agreed to our use. Only after receiving an affirmative reply did our company sign the printing contract with Great Wall Computer Shenzhen Company. Since the contact between the two parties was by verbal communication, no written documentation was produced. Moreover, after the calendars were printed, Jiexian Company sent Manager He Gaoguo to pick up 5 calendars and issued a letter to our company on March 30, 2001, without raising any objection. The first-instance judgment ordering our company to pay 20,000 yuan in compensation is inconsistent with the facts, and we request the court of second instance to render a fair judgment.

III. Case Analysis

According to Article 23 of the Copyright Law of the People's Republic of China and Article 32 of the Implementing Regulations of the Copyright Law of the People's Republic of China, the use of another person's work shall obtain written permission from the copyright owner (except for works published by newspapers and periodicals). Although Nanfengcai Company obtained the other party's oral consent in advance when using Jiexian Company's work to print calendars, due to insufficient legal knowledge and weak legal awareness, it failed to obtain the other party's written permission in a timely manner. The conclusion of the first-instance judgment that Nanfengcai Company and Changcheng Computer Shenzhen Company infringed Jiexian Company's copyright is already irreversible. All three parties in this case filed appeals. Jiexian Company continued to insist on its claims in the first instance and made careful preparations. Therefore, Attorney Zhiming, representing the two defendants in the original trial, faced a very severe offensive and defensive posture. The direction of representation in this case was to strive to mitigate the infringement liability of the two defendants and reduce the amount of compensation, with the focus on closely adhering to the following key points to elaborate and debate, and finally the relevant viewpoints were supported and adopted by the court of second instance:

(一)杰先公司事先知道南凤彩公司使用它的作品印制挂历。一审审理杰先公司否认事先知道的说法，一审判决书对此予以支持：“本院认为，——被告对原告事先知道未能提供 证据证明，原告对在事先知道一说予以否认;——原告坚持没有同意被告使用其7幅摄影作品，被告的抗辩理由不成立。” 二审审理知明律师详细分析原告发给被告的函件内容和关键字眼，双方通过激烈辩论，原告最终不得不承认事先知道的事实，在其最后答辩中坦承：“南凤彩公司一直强调我方‘知道’并‘容忍’ 侵权行为，对此我方并不否认”。二审判决书纠正一审判决书的错误认定 ：“本院认为，——该函表达的是对侵权行为的知情和容忍”。原告对被告“侵权行为的知情和容忍”虽然不等于“书面许可”，不能改变被告侵权的事 实，但已经可以理解对被告使用原告作品的默许，这是造成被告侵权的直接原因，也是原告的过错行为，二审的认定对减轻被告侵权责任有利。

(II) The two defendants did not possess subjective malice, and objectively did not cause serious consequences, nor did they cause losses to Jiexian Company. The second-instance judgment supported this view, stating in the judgment: "Regarding whether an apology should be issued. Jiexian Company argued that Great Wall Computer Shenzhen Company and Nanfengcai Company should publicly apologize, but provided no evidence of what damage the infringement caused to its business reputation, and therefore this court does not support this appellate claim." "Regarding the amount of compensation, Jiexian Company also failed to provide evidence of the actual losses caused by the infringement or the infringer's profits, and the original trial court's discretionary judgment was not improper, and this court upholds it."

The fact that the two defendants were able to obtain a result of upholding the original judgment despite being in a highly disadvantaged position is indeed no easy feat.

(Compiled and commented by Guo Tianxi)

Zhiming Office

March 22, 2001