II.Trial of Copyright Cases

7.Presumable Attribution of the Copyright of Work Created in the Course of Employment

According to Article 16.2 of the Copyright Law of the People's Republic of China（the Copyright Law），the ownership of the copyright of a work created in the course of employment can be agreed upon in the contract，but the clause thereof fails to define the specific form of the execution of the contract therein.

In the copyright infringement dispute case of Chen Junfeng v.Jindun Press House［（2009）MJZ No.361］，the SPC presumed that the acts of both parties showed the will that the copyright of the involved works was enjoyed by Jindun Press House，thus affirming that the ownership of the copyright of a work created in the course of employment could be determined by presumption.

The basic facts of the case are as follows：Chen Junfeng acted as the editor of Jindun Press House from November 1,1997 to December 25,2007.Nine books including the Trans-century Perpetual Calendar（published in January 2000 and printed in August 2007 for the ninth time），the Pocket Calendar Utility（published in December 2000 and printed in September 2007 for the ninth time）and the Work Efficiency Manual that were published from 2002 to 2008（one edition published every year）involved in the case were subject to publication planning and compilation organization by Jindun Press House.As the editor in charge，Chen Junfeng was responsible for selecting the subjects and compiling the books.Moreover，Chen Junfeng was attributed as the editor of the editions of the Work Efficiency Manual published from 2003 to 2008，and‘Jin Yishi’was attributed as the editor of the other involved books.On December 29,2007，Chen Junfen lodged a lawsuit to Haidian District People's Court of Beijing alleging that Jindun Press House had published the involved books without paying him remuneration，which could infringe upon his copyright，and requesting the court to order the defendant to terminate the sales of the involved books and pay him the due remuneration.Upon the identification and investigation of the facts，Haidian District People's Court of Beijing found that Jindun Press House had specified，through the Interim Provisions for the Implementation of the Quantitative Appraisal of Editors，the Interim Provisions for the Implementation of Incentive Mechanisms for Editors and other documents，that the workload of editing books shall be calculated according to the word count of the corresponding pages，multiplied by a certain coefficient.After being agreed or authorized by the leaders of Jindun Press House，the remuneration for books compiled by an editor in charge can be calculated according to the word count of the corresponding pages multiplied by 3 or 2.5，and the remuneration for manuals of various kinds shall calculated according to the word count of the corresponding pages multiplied by 1.5.The statistics table of Chen Junfeng's book editing and the statistics table of his salaries and bonuses in the corresponding years submitted by Jindun Press House revealed that the remuneration for all of the involved books had been paid to Chen Junfeng based on the word count of the corresponding pages multiplied by the corresponding coefficient，and an extra bonus had also been awarded.Furthermore，Chen Junfeng had never raised any objection to the quantitative appraisal and calculation of his remuneration by the corresponding coefficient.In the first instance，Haidian District People's Court of Beijing considered that all of the involved books were works compiled by Chen Junfeng during the course of his being employed to complete such tasks.Moreover，Chen Junfeng had been paid the corresponding remuneration and awards for his editing workload in line with the relevant provisions of Jindun Press House.Therefore，the defendant's actions did not constitute an infringement，and all of Chen Junfeng's claims were dismissed.However，Chen Junfeng refused to accept the judgment and filed an appeal.In the second instance，Beijing No.1 Intermediate People's Court sustained the judgment of the first instance.After that，Chen Junfeng filed to the Beijing High People's Court for a retrial.The Court dismissed his petition.Chen Junfeng then lodged a petition to the SPC for a retrial.The SPC made a judgment on October 26,2009，rejecting his petition.

Upon investigation，the SPC found that the nine books involved herein were works compiled by Chen Junfeng during the course of his being employed to complete such tasks.Jindun Press House specified in its relevant policies that the remuneration and award for the books compiled by the editor in charge，after being agreed or authorized by the leaders of Jindun Press House，should be calculated and paid according to the word count of the corresponding page multiplied by the corresponding coefficient.The facts identified by the original judgments revealed that Chen Junfeng had actually obtained the remuneration and award for the books involved herein according to the aforesaid payment policies.From 1999 to 2007，when those books were compiled and published，Chen Junfeng had never raised any objection about the copyright or the remuneration.It can be presumed that the aforesaid acts of the press house and the editor in charge were carried out with the will that the copyright of the involved works was enjoyed by the press house，thus the editor in charge cannot claim for the copyright of those works other than the right of authorship.Therefore，thepresshouseisnotliabletopayanyadditional remuneration to the editor in charge who compiled the books.According to Article 16.2 of the Copyright Law，the copyright of nine books involved shall be enjoyed by Jindun Press House.The publication of the books by Jindun Press House never infringed upon the copyright of Chen Junfeng，so no additional remuneration is required to be paid to him.

8.Statutory License for Producing，Reproducing and Distributing Sound Recordings by Exploiting a Musical Work that Another Person has Duly Made

Article 39.3 of the Copyright Law provides for a statutory license system specifying that a producer of sound recordings who exploits a musical work that another person has duly made into a sound recording to produce further sound recordings may not obtain permission but shall pay remuneration to the copyright owner as prescribed by the regulations.Such a work cannot be exploited if the copyright owner has declared that such exploitation is not permitted.In addition，Article 41.2 of the Copyright Law specifies that any person who is authorized to reproduce，distribute or communicate a sound recording or video recording to the public on an information network shall also obtain permission from and pay remuneration to the copyright owner and performer as prescribed by the regulations.However，the Copyright Law fails to clearly define the relationship of application between the two said paragraphs.To this issue，if a producer of sound recordings exploits a musical work that another person has duly made into a sound recording to produce further sound recordings，he/she still needs to obtain permission from the copyright owner when reproducing and distributing the sound recordings he/she has made.That is to say，Article 41.2 of the Copyright Law is restrictive to Article 39.3.

In the retrial judgment of the copyright infringement dispute case of Guangdong Senses Culture Communication Co.，Ltd.（Senses Company）v.Wang Haicheng，Wang Haixing and Wang Haiyan（Wang Haicheng et al.），Chongqing Sanxia Disc Development Co.，Ltd.（Sanxia Company），Jiujiang Liansheng Square Supermarket Co.，Ltd.and Nanchang Department Store Co.，Ltd.［（2008）MTZ No.57］，the SPC clarified the relationship of application between Article 39.3 and Article 41.2 of the Copyright Law，and specified that the reproduction and distribution of sound recordings that have been produced according to a musical work by others upon the permission of the copyright owner shall apply to the statutory license as prescribed in Article 39.3 of the Copyright Law，and no longer apply to‘obtain permission from the copyright owner’as prescribed in Article 41.2.

The basic facts of the case are as follows：‘Yaxshi’is a musical work revised and written in 1957 in the style of the Turpan ballad by Wang Luobin.After Wang Luobin passed away，his children Wang Haicheng et al.inherited it and authorized the right of public performance，broadcasting，recording and publishing to the Music Copyright Society of China（hereinafter referred to as the‘MCSC’）.In 2004，Luo Lin（stage name‘Dao Lang’）signed a contract with Senses Company authorizing the right to produce and publish his own copyrighted music album（CD）Kashgar Populus Euphratica.Later，Senses Company signed a contract with the Guangzhou Audio&Video Publishing House（GAVPH）designating GAVPH to take charge of producing，publishing and distributing said album.Senses Company also signed an entrustment contract with Sanxia Company agreeing for the latter to reproduce 200,000 copies of the album.On December 8,2004，GAVPH entrusted Sanxia Company with the reproduction of 900,000 copies of the album.Afterwards，GAVPH applied to MCSC for the use of the copyrighted works‘Saussurea Involucrata in Iceberg’，‘Play the Tambourine and Sing a Song’and‘Yaxshi’which featured on the new music album Kashgar Populus Euphratica，with 200,000 copies for distribution，and at a wholesale price of RMB 6.5 for each copy.GAVPH paid MCSC royalties of RMB 21,900 for the said three works，and MCSC issued a receipt for the royalties.Wang Haicheng et al.accused the defendants on the grounds that the album reproduced and published by the defendants without permission had infringed their right of reproducing and publishing，and sought a judgment to terminate the infringement，compensate for their losses and issue an apology.In the first instance，Jiujiang Intermediate People's Court of Jiangxi Province held that‘Yaxshi’was a musical work that had been published publicly and reproduced as a sound recording before the distribution of Kashgar Populus Euphratica.According to Article 39.3 of the Copyright Law，the production of the sound recordings made by GAVPH and Senses Company of the musical work involved herein was indeed within the statutory license，so they could not obtain permission other than by paying the remuneration.Wang Haicheng et al.entrusted MCSC to manage the involved musical work，so MCSC enjoyed the right to authorize.The use of the involved musical work by GAVPH，Senses Company and Sanxia Company fell within the scope of the statutory license.GAVPH paid the remuneration for the 200,000 copies to the copyright owner，but failed to pay the remuneration for the other 700,000 copies，thus infringing upon the right of Wang Haicheng et al.to obtain that remuneration.According to the Interim Provisions for Remuneration Standards for the Statutory PermissionofSoundRecordingspromulgatedbytheNationalCopyright Administration of the People's Republic of China（NCAC）in August 1993，Jiujiang Intermediate People's Court of Jiangxi Province affirmed that the damages should be twice the wholesale price（RMB 6.5）×3.5%×700,000，making a total of RMB 318,500.However，the actions of Sanxia Company did not constitute an infringement upon the copyright of the involved musical work.Senses Company and GAVPH refused to accept the judgment and filed an appeal.In the second instance，the High People's Court of Jiangxi Province held that，according to Article 41.2 of the Copyright Law，it is necessary to obtain permission from and pay remuneration to the copyright owner of the musical work，likewise to the performer，before reproducing，publishing and releasing any sound recording.Although MCSC had the right to license and charge for the sound recordings based on the musical work，it could not replace the copyright owner on the license and receive payment for the reproduction and publishing of those sound recordings.In the first instance，the court's method of calculating the damages for one of the musical works（twice the total remuneration of the entire album）lacked rationality.The High People's Court of Jiangxi Province thus withdrew the first instance judgment and ordered Senses Company and GAVPH to compensate Wang Haicheng et al.RMB 150,000.However，Senses Company refused to accept the judgment of the second instance and filed an appeal to the SPC for a retrial.The SPC issued a ruling to review and retry the case and delivered the judgment of the retrial on March 6,2009，withdrawing the judgments of the first and second instances and ordering Senses Company，GAVPH and Sanxia Company to pay Wang Haicheng et al.royalties of RMB 14,477.

In the retrial，the SPC held that Article 39.3 of the Copyright Law provided for a statutory license system restricting the right of the copyright owners of musical works.It specifies that a producer of sound recordings who exploits a musical work that another person has duly made into a sound recording to produce further sound recordings may not obtain permission from the copyright owner as prescribed by regulations，but the intention of such provisions is for the convenience of the spreading of musical works，which also applies to the reproduction and distribution of sound recordings made based on such types of musical works.However，it does not apply to Article 41.2 of the Copyright Law.Therefore，once the sound recordings have been released publicly with the license of the copyright owner，it is unnecessary for others to obtain permission from the copyright owner to reproduce and distribute other sound recordings containing that copyrighted musical work，although the copyright owner should still receive payment.Moreover，the musical work‘Yaxshi’involved in this case has been reproduced as sound recordings many times and spread extensively，and the copyright owner never made any announcement forbidding its use.Therefore the distribution of the involved album complies with the provisions of the statutory license，and does not constitute an infringement.

9.Liability for the Direct Infringement of Network Service Providers who Provide a Linking Service

Any network service provider committing any act that directly infringes upon the copyrightofothersthroughthenetworkshouldassumeliabilityfordirect infringement.Moreover，Article 23 of the Regulations on the Protection of the Right to Information Transmission through Networks restricts the liability of network service providers by specifying that a network service provider that provides searching or linking services to a service object，and has disconnected the link to a work，performance or audio-visual recording infringing on another's right after receiving notification from the owner，shall not be liable for damages.However，in judicial practice，the network service provider always claims that it only provides a linking service and has disconnected the link upon receipt of the notification from the owner，so it should not be liable for damages.Therefore，judging whether a network service provider actually provides a linking service is the key to determining whether it should assume liability for direct infringement.

In the copyright infringement dispute case of Beijing Ciwen Film&TV Production Co.，Ltd.（Ciwen Company）v.Hainan Branch of China Netcom Group Co.，Ltd.（Hainan Netcom）［（2009）MTZ No.17］，the SPC defined the conditions for assuming the direct infringement liabilities of network service providers who provide a linking service.The retrial judgment of the case held that if any network service provider claims to provide a linking service in showing the contents of the linked page or website to the public，but fails to indicate the corresponding domain name，website name or other information that can show that the linked page or website belongs to a third party，then it cannot be judged that the network service provider only provides a linking service，and it should assume direct liability for the alleged infringement of the linked page or website.

The basic facts of the case are as follows：Ciwen Company owns the copyright of the movie The Seven Swords in mainland China.Hainan Netcom set up a sub-page named‘Movie Channel’on its homepage‘www.hai169.com’，and the public could click‘Movie World’（IP Address：221.11.132.112）under‘Movie Channel’and watch The Seven Swords on Hainan Netcom's website.Ciwen Company filed a lawsuit to Haikou Intermediate People's Court of Hainan Province，suing for the copyright infringement and requesting a judgment ordering Hainan Netcom to terminate the infringement and compensate for losses.In the first instance，the evidences presented by Hainan Netcom indicated that the user could access‘116.com.cn’after clicking‘Movie Channel’on its homepage，not the alleged‘Movie World’.The Haikou Intermediate People's Court held that Hainan Netcom had removed the internet link after being accused of copyright infringement and thus should not assume liability for the infringement，and the claims of Ciwen Company were dismissed.Ciwen Company then appealed to the High People's Court of Hainan Province，which upheld the original verdict.Afterwards，Ciwen Company filed an appeal to the SPC for a retrial.The SPC issued a ruling to review and retry the case and delivered the judgment of the retrial，revoking the judgments of the first and second instance and decreeing that Hainan Netcom compensate Ciwen Company with RMB 80,000 for economic loss，litigation costs and other reasonable expenses.

After the trial，the SPC held that Hainan Netcom's users could access the linking page and watch the movie The Seven Swords after clicking‘Movie Channel’on the homepage.Although the website bore the title‘Movie World’，it did not show any corresponding domain name，site name or other information which indicated that the page belonged to a third party.Moreover，the IP address of the website could not provide the information that the website belonged to an entity different from the general link；this misled the users to believe，at least on the surface，that the linked website belonged to Hainan Netcom.If Hainan Netcom wanted to prove that the website to which it linked was owned by a third party，and it should not therefore assume liability for damages for the infringement of the linked website，Hainan Netcom was required to submit the corresponding evidence.Because the IP address of the linked website fell within the scope of Hainan Netcom's IP address section，Hainan Netcom was in a position to present evidence to prove that it was impossible for the social public，including Ciwen Company，to obtain.If Hainan Netcom did not present the relevant evidence，its claim that it was only a linking service provider could not be supported，and it should assume liability for the infringement of illegally disseminating the movie to which Ciwen Company has the copyright.Despite the fact that the website was indeed owned and operated by a third party，Hainan Netcom placed its‘Movie Channel’link alongside its‘Homepage’，‘News Channel’and‘Literature Channel’links，thus implying to the public that‘Movie Channel’was its own content channel.Moreover，the notary documents submitted by Hainan Netcom in the first instance indicated that it changed the contents of‘Movie Channel’soon after being accused of infringement，and that this was consciously conducted by Hainan Netcom.Therefore，the actions of Hainan Netcom were not restricted to providing links to the websites of third parties，and Hainan Netcom had a duty of due care to examine and ascertain the actual users or operators of the websites it linked to.In this case，Hainan Netcom alleged that at no time up to the present did it know the actual operator of the involved website，proving that it had failed to perform its minimum duty of due care and was thus jointly liable for the infringement of the involved website.