Why the Cybercafé could be Exempted from the Liability of Pirate Video Broadcast?

By You Yunting

In the past few days, a Beijing court published a case (note: the link is in Chinese) involving a cybercafé who has purchased the Video-on-demand (VOD) system, and that made the court refuse the claims of the plaintiff though the right holder proved the piracy in the VOD.

VV8.com Company, a professional video system provider to cybercafé invested by IDG and Disney, detected the pirated TV drama against its copyright in the video system of a cybercafé. And then, the right holder filed a lawsuit against the piracy. The cybercafé afterwards argued that the system was purchased by it from Hero Inc. Company, who is a third party video provider, and in that transaction, both parties has agreed that all the copyright dispute shall be handled by Hero Inc.. Moreover, all the contents in the system are updated and ciphered by Hero Inc. with remote control, thus the cybercafé could not delete any videos in it. In the lawsuits, VV8.com expressed no intention to add Hero Inc. as the co-defendant and make no claim thereby.

To the consideration of the court of 1^st instance, VV8.com gained no license for its broadcast of the dramas in local area network, also no evidences to the license to such broadcast in the system was submitted by the cybercafé. So it could be judged that the above using of the video infringed the information communication right on network of VV8.com. VV8.com demanded the infringement liability by the cybercafé, yet in the case the infringing videos were provided by Hero Inc., and therefore the liability shall be decided with the consideration of the cybercafe’s reasonable care obligation as well as its fault. Furthermore, the reasonable care obligation shall be judged on its business activity, the foresight and the foreseeable scope.

By the judgment of the court: 1) the cybercafé was established on the approval of the administrative department of industry and commerce and could provide the business of internet visit, and its service includes the provision of the places and equipments of the internet surfing. 2) the cybercafé used the video system in the case and pay the consideration to Hero Inc.. 3) Hero Inc. is qualified in the service of internet audio and visual program providing and internet culture business and the transaction between it and the cybercafé meets the “purification” demands on the internet bar market from the administration. Furthermore, the cybercafé cerified the licenses and certificates of Hero Inc. and ask for the guarantee of copyright liability from Hero Inc..

For these reasons, the court judged the cybercafé has fulfilled its obligation of reasonable care and made no fault, and then shall take no civil liability. As to the deletion of the video, due to the remote control by Hero Inc., the internet bar has no access to execute that operation, yet that does not mean the cybercafé shall not take further measures to prevent a further damage. So the court of the 1^st instance refused the claims of VV8.com with the reference to paragraph 2 of Article 106 of The General Principle of Civil Law of PRC. On the dissatisfaction with the judgment, VV8.com made the appeal which was finally rejected by the 2^nd instance court, and the original judge was maintained and came into effect.

The followings are our comments on the judgment:

I. What’s the legal basis for this judgement? The Supreme People’s Court published The Notice on Further Work in the Hearing on Cybercafe Copyright Dispute on 25^th November 2010, Article 4 of which regulated that

On the evidence that the operator of the cybercafé has legally purchased the video form the qualified provider, and the operator has no way to know or shall be known with any reasonable reasons that the purchased works has infringed others’ right when it acquired the works, the operator shall take no liability to the losses suffered by the right holder by the civil law. However, the cybercafé operator shall take the liability to the enlarged damage resulted by its delayed action after the notice sent by the cybercafé runner.

This clause could be the mainl legal reference to the free liability of the cybercafé.

II. What the cybercafé shall buy the video system? There are abundant amounts of free online contents in China, and as to the video and audio works, we could find the free broadcast of the hot videos on Youku, Tudou, Baidu iQiyi or Sohu Video, but as a cybercafé runner, he shall face the current service to hundreds of visitors, and when network may be paralyzed when more than a dozen video watcher are in the bar. Meanwhile on the other hand, one of the main tasks of the cybercafé video system provider is to synchronize the videos to the bars through P2P technology when less visit in the bar. And after that the audience is actually wachting the videos from the local server.

III. Why there could be piracy in the video system? In China, the provider of the video system is dual-identified, one is the technology provider who will synchronize the contents to local bars with P2P technology and ensure no influence will come to the bandwidth of the internet visit, and the other identity is the content provider who shall purchase adequate videos to meet the demands of the audience, yet considering the high expenses thereby may occur, some internet bar system providers choose to update the unlicensed videos to its clients. And that leads to the complaints against the piracy in the cybercafé.

Lawyer Contacts

You Yunting

86-21-52134918

youyunting@debund.com, yytbest@gmail.com

For further information, please contact the lawyer as listed above or through the methods in our CONTACTS.

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