By Luo Yanjie

According to a recent news report (note: the link is in Chinese), the Huanju Inc (namely duowan.com), the holding company of YY.com submitted the prospectus to SEC of USA, applying for the IPO in NASDAQ for $ 100 million funding, and the code of it is YY. As indicated in the prospectus, the achievements of YY music have been the most bling-bling part. YY music is actually the music channel of YY instant messenger, introduced in March of 2011, and mainly broadcasting live shows of music performance. The performer could interact with the spectators by Karaoke, singing match or live videos. Furthermore, amounts of virtual products are available on YY music, which could be got on payment or as gifts. Yet to the statement of someone skilled in the art, the mode of YY music is facing the copyright risk. Today’s post would share our opinions on the issue.

I. What copyright license is concerned with YY music?

By our experiences on YY music, the main mode of it is the spontaneous uploading of the music performance by users, and other users could enjoy such music on YY.com. Although the music is mainly uploaded by the user, due to the introduction and sharing on YY’s platform, we do notice the risk of copyright infringement thereby produces. The main exclusive copyrights involved in the music cover are as follows:

1. The right of information communication by networks

The online streaming of music work is typically the network communication of information. But it shall be specified that despite the work communicated is by covering, what broadcasted online are still the lyrics and tunes of the original work. For this reason the infringement to the right could also be constituted.

2. The right of performance

This right refers to the right of performance to the public and ways to spread out the performance. In YY’s mode, the music cover by users is actually the performance of the work, and therefore the uploading of it to the public shall also be approved by the right holder.

II. Whose approval is necessary for YY music?

As described above, YY music’s operation has involved many exclusive rights of the copyright holder, and the right holders of the music work may include the copyright owner, recorder and performer. Then whose approval is demanded for YY’s mode?

1. The author of lyrics and tunes

The author of lyrics and tunes is the sole copyright holder of a music piece, and naturally granted the right of information communication by networks and performance. Despite the current laws’ provision that the covering of the music could with no consent from the copyright holder, in practices, however, such statutory license would be excluded by the statement of the copyright holder. Therefore, in general, to cover other’s work and afterwards to upload and share it shall be agreed by the author of the lyrics and tunes.

2. The recorder

The recorders mean those who record the original version of the music work, and generally the record company instead of the work’s copyright owner. Therefore, it shall enjoy no right of performance, yet the right of online communication shall still be their legal right. So, it could be naturally concluded that once the accompany used in the performance of the user is the product of the recorder, the recorder may inhibit the unlicensed performance by the user on the Internet. And being opposite to it, if the performance is concluded through other means, like no accompany in the acting, then it is of no business of the recorder.

3. The performer

The performer shall mean those who first perform the music work, and he/she shall only have the right over his/her acting, and the essence of the cover version is to exclude the original performer. Therefore, the covering demands no approval from the performer.

III. Is it possible to be approved in amounts by the collective management group for YY?

The music on YY.com is uploaded by users, and therefore it is infeasible to judge what copyright shall purchase in advance. Then could the copyright license be granted within an approval from the collective management organization? To our understanding, the grant from the organization is possible in parts, but to be sheltered under the safe-harbor principle is of difficulty.

According to the existing Management Regulation on Copyright Collective Management, the organization shall refer to those organizations licensed by the right holders and exercise the copyright in collective means. Therefore, the user of the music work shall pay the fees to the collective management organization, yet it could only bring them the license within the license to the organization rather than covering all the music they wanted. The main domestic collective management organizations include MCSC (Music Copyright Society of China), representing the interests of the lyrics and tunes author, and CAVCA (China Audio-Video Copyright Association), representing the interests of the video-audio recorder and manufacturer of TV programs. Basing on the above analysis, if YY would like the license from the right holder, the right grant from both organizations is necessary.

So, to YY.com, the most feasible way is to first pay the organizations or other subjects the fees for the license in order to establish a music library, and afterwards all the uploaded works shall be limited to those stored in the library. Thus to our understanding the copyright risk could be reduced.

Lawyer Contacts

You Yunting：86-21-52134918  youyunting@debund.com/yytbest@gmail.com

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