In recent years, private cinemas (also known as on-demand cinemas, movie cafes, and micro cinemas) have sprung up throughout the country, serving as a box office supplement to traditional cinemas and meeting the personalized viewing needs of different groups of people. In 2018, the former State Administration of Press, Publication, Radio, Film, and Television promulgated and implemented the "Regulations on the Management of On-Demand Cinemas and On-Demand Cinema Lines", starting to standardize the management of On-Demand Cinemas and On-Demand Cinema Lines. However, due to the fact that a large number of private cinemas were established before the promulgation and implementation of the aforementioned regulations, there are very few private cinemas in the market that have registered and obtained a "Film Screening Business License" in accordance with the aforementioned regulations, and the aforementioned regulations have not been fully implemented. Due to the nonstandard development of the industry, there are increasing cases of infringement of the right to network dissemination of work information by private cinemas, and private cinemas often lose lawsuits in such cases. This article aims to analyze the reasons for the failure of private cinemas by sorting out such cases, and explore whether the legitimate source defense can be applied to such cases, as well as how to apply it if applicable.

 

1、 The Status Quo of Disputes over Private Cinemas' Infringement of the Right to Network Dissemination of Work Information

 

In the case database of Peking University's magic weapon, the author selected the cause of the case as "infringement of the right to network dissemination of work information", and entered the keyword "private cinema" into 70 judgments retrieved. The defendants included both private cinemas (including movie hotels) and providers of film and television works from private cinemas. All of the defendants lost the case.

 

After sorting out, in this type of case, the defense reasons proposed by the private cinema as the defendant mainly include the following: 1. The plaintiff has the right to disseminate information on the network rather than the right to show the works. The private cinema's broadcasting of film and television works involves the right to show the works, so the plaintiff's subject is not qualified; 2. The film and television works involved in the case were rarely ordered, and the losses claimed by the plaintiff were too high; 3. The amount of loss claimed by the plaintiff has no factual or legal basis; 4. The film and television production playback system of private cinemas is provided by a third party, and private cinemas are not at fault and are not infringers. However, the judgment result of the case is that the court does not support the above defense reasons. As long as the private theater does not obtain the authorization of the obligee, the court will determine that the private theater constitutes an infringement and judge the private theater to lose the lawsuit.

 

This article analyzes why the above defense reasons for private cinemas have not been supported by the court as follows:

 

Regarding defense reason 1, whether the private cinema plays a film or television work involves the right to show or the right to disseminate information through the network is related to the way in which the private cinema plays the film or television work. There are three common ways of showing in private cinemas: 1. Setting up a local area network in private cinemas and storing film and television works on a server, where consumers can play on demand through terminal devices; 2. Storing film and television works in separate specific devices in each private room for consumers to demand; 3. Set up a set-top box and connect to the Internet. Consumers can request movies and television works that already exist on the Internet through terminal devices. The common view in judicial practice is that the first screening method, which has "interactivity", enables consumers to obtain works at the time and place they choose, and involves the right to network dissemination of work information. The second and third screening methods are the public reproduction of film and television works through technical equipment, involving the right to show the film and television works. Therefore, the court does not support the defense that the plaintiff does not enjoy the right to show and the subject does not qualify in the private cinema using the first screening method.

 

The above defense reasons 2 and 3 are proposed by private cinemas from the perspective of reducing the amount of compensation for infringement, not to defend whether it constitutes infringement. Therefore, this article will not discuss them.

 

Regarding the defense reason 4, although the court has not supported it from the existing cases that the author has checked, the author believes that it is worth exploring whether such defense reasons can be exempted from liability.

 

2、 The Rationality of Private Cinema's Defense of Legal Origin

 

Article 59, paragraph 1, of the Copyright Law of the People's Republic of China (hereinafter referred to as the "Copyright Law") stipulates: "If the publisher or producer of a copy cannot prove that his publication or production is legally authorized, and if the publisher of the copy or the lessor of a copy of an audio-visual work, computer software, or audio and video product cannot prove that the copy he issues or leases has a legitimate source, he shall bear legal liability." This clause is the main basis for the defense of legitimate sources in the field of copyright, but its applicable subjects only include the issuer and lessor of the copy. "The Copyright Law" does not provide that legitimate source defenses may be applied to cases of infringement of the right to network dissemination of work information.

 

However, Article 4 of the "Notice of the Supreme People's Court on Doing a Good Job in the Trial of Cases Involving Copyright Disputes in Internet cafes" (hereinafter referred to as the "Notice") gives Internet cafe operators who disseminate works through information networks the right to raise legitimate source defenses. Article 4 of the Notice stipulates that: "An internet cafe operator who can prove that the film and television work involved was lawfully obtained from a qualified film and television work provider and who, based on the specific circumstances at the time of acquisition, did not know and had no reasonable reason to know that the film and television work involved infringed upon the rights of others such as the right to information and network dissemination, shall not bear civil liability for compensation for losses. However, if an internet cafe operator fails to take necessary measures in a timely manner after being notified by the obligee, it shall bear corresponding liability for the expanded portion of the damage." Civil liability. "

 

The above judicial interpretation clarifies the legitimate source defense right of internet cafe operators to disseminate works through information networks, but does not address the issue of the legitimate source defense right of private cinemas to disseminate works through information networks. The author believes that in disputes over infringement of the right to network dissemination of work information, private cinemas and internet cafe operators, as the subject of the alleged infringement, have the following common points:

 

Private cinema operators and internet cafe operators acquire film and television works in a similar manner. Private cinemas usually obtain their films and television works by purchasing a film and television works playback system, which is sold by film and television works providers. Film and television works providers provide hardware equipment including servers and playback devices for film and television works, and provide services such as media resource management and update procedures. Internet cafes usually pay for the installation of playback software, playback systems, and other access to film and television works. Both obtain massive amounts of film and television works from third parties. Private cinema and Internet cafe operators transmit movies from servers to playback terminals for playback through local area networks; Private cinema and internet cafe operators are downstream of the dissemination of works. For a large number of film sources with frequent dissemination and circulation, there is no condition to verify whether each film and television work obtained has obtained the authorization and sublicense of information network dissemination rights from the obligee.

 

Based on the above common points, the author believes that private cinemas can refer to the above judicial interpretation of internet cafe operators in disputes over infringement of the right to network dissemination of work information, in order to propose their own legitimate source defense reasons.

 

3、 The Constitutive Elements of the Defense of Legal Origin

 

According to Article 4 of the Notice, the legitimate source defenses available to internet cafe operators mainly include the following components: 1. The film and television works involved in the case were legally obtained from the film and television works provider; 2. The provider of film and television works has business qualifications; 3. The internet cafe operator has no subjective intention of infringement.

 

If private cinemas refer to this provision to assert a legitimate source defense, they should also meet these constitutive requirements, namely: 1. The film and television work involved was legally obtained from the film and television work provider; 2. The provider of film and television works has business qualifications; 3. The private cinema has no subjective intent of infringement.

 

4、 How to adduce evidence in the defense of legal origin

 

By sorting out the cases where internet cafe operators have proposed legal source defenses that have been supported by the court, and combining the characteristics of private cinemas, the author believes that private cinemas should provide the following evidence when asserting legal source defenses:

 

Evidence proving that the film and television work involved was lawfully obtained from the film and television work provider:

 

For private cinemas that have not obtained the on-demand theater qualification, they can provide relevant contracts, payment records, invoices, delivery or receipt vouchers, such as contracts for purchasing a film and television work playback system from a film and television work provider or franchise contracts signed with the film and television work provider The list of film and television works provided by the film and television works provider (if the film and television works in the film and television works broadcasting system will be updated, the updated list should be provided together) or other evidence provided by the film and television works provider for the film and television works involved;

 

For private cinemas that have obtained the on-demand cinema qualification, it is necessary to provide a franchise or cooperation contract signed with the on-demand cinema line, a screenshot of the on-demand cinema publicity in the national on-demand cinema management information system (showing the on-demand cinema line to which it belongs), and a "Film Screening Business License" for private cinemas A list of film and television works provided by the on-demand cinema line (if the film and television works provided by the on-demand cinema line are updated, the updated list should be provided together) or other evidence provided by the on-demand cinema line for the film and television works involved.

 

2. Evidence to prove the business qualification of the film and television works provider:

 

For private cinemas that have not obtained the on-demand cinema qualification, copies of the qualification certificates of the film and television works provider such as the Business License for Enterprise Legal Person, the Business License for Network Culture, the Business License for Internet Information Service Value-added Telecommunications, and the License for Information Network Communication Audiovisual Programs are required.

 

For private cinemas that have obtained the qualification for on-demand cinemas, in addition to the aforementioned qualification certificates, copies of the "Film Distribution and Operation License" or the preparation certification documents of the on-demand cinemas they have joined should also be provided.

 

Regarding the subjective intentional element, if the obligee has sent a lawyer's letter or warning letter to a private cinema requesting the removal of infringing film and television works, the private cinema should provide evidence that the infringing film and television works have been removed from the shelves after receiving the above letter, such as evidence that the infringing film and television works have not been found in the film and television works playback system. If the obligee fails to request the private cinema to remove the infringing film and television works by sending a lawyer's letter or other means before receiving the lawsuit from the obligee, the private cinema shall immediately remove the infringing film and television works and submit corresponding evidence after verifying that no legal authorization has been obtained after receiving the lawsuit from the court.

 

5、 Legal Suggestions on Reducing the Legal Risks of Private Cinemas Infringing the Right to Network Dissemination of Work Information

 

Private cinemas should obtain on-demand cinema qualifications according to law and sign franchise or cooperation contracts with on-demand cinema lines

 

In 2018, the former State Administration of Press, Publication, Radio, Film, and Television promulgated and implemented the "Regulations on the Management of On-Demand Cinemas and On-Demand Cinema Lines", starting to standardize the management of On-Demand Cinemas and On-Demand Cinema Lines. If the operator is preparing to build a private cinema, it should meet the conditions specified in Article 5 of the "Regulations on the Administration of On-Demand Cinemas and On-Demand Cinema Lines", namely: (1) The projection equipment, projection quality, and billing system should meet the technical specifications stipulated by the competent film department under the State Council; (2) The screen width of a single cinema set up shall not exceed 6 meters, and the number of effective seats for the audience shall not exceed 20; (3) There are on-demand cinema lines to be added or in the preparation period; (4) The legal representative or main responsible person is not in the period of prohibition of film industry. "If the aforementioned conditions are met, the competent film department will issue a Film Screening Business License.".

 

When setting up private cinemas, operators should join a legally established or certified on-demand theater line. The established on-demand cinema line can be found in the national on-demand cinema management information system. Private cinemas should require the on-demand cinema line to provide a copy of the "Film Distribution and Operation License" within the valid period when joining the on-demand cinema line. If a private theater joins a on-demand theater line that is under preparation, the private theater should require the on-demand theater line to provide a copy of the approval document for the preparation, and after the successful preparation of the on-demand theater line, require the on-demand theater line to provide a copy of the "Film Distribution and Operation License" within the valid period. In addition, private cinemas should require on-demand cinemas to provide copies of their valid Business License for Enterprise Legal Person, Business License for Network Culture, Business License for Internet Information Service Value-added Telecommunications, and License for Information Network Communication Audiovisual Programs.

 

Private cinemas should sign a franchise or cooperation contract with on-demand cinemas, which stipulates that on-demand cinemas provide movies to on-demand cinemas, and on-demand cinemas only play movies provided by on-demand cinemas that have obtained a film release license. The on-demand cinemas promise that the movies they provide to on-demand cinemas have obtained authorization permission to be shown in on-demand cinemas, as well as authorization and sublicense permission for information network dissemination rights from the right holders, If the film and television works provided by the on-demand cinema line infringe upon the copyright of any third party, the on-demand cinema line shall bear corresponding legal liability and be liable for breach of contract to the on-demand cinema.

 

If the operator has established a private cinema but does not meet the establishment conditions specified in Article 5 of the "Regulations on the Management of On-Demand Cinemas and On-Demand Cinema Lines", it shall rectify the situation in accordance with the establishment conditions specified in the preceding regulations, and sign the aforementioned franchise or cooperation contract with the on-demand cinema lines to obtain the qualification of the on-demand cinema.

 

For private cinemas that have not yet obtained the on-demand theater qualification and cannot obtain the on-demand theater qualification for a short period of time, when selecting a film and television work provider, they should select a film and television work provider with operational qualifications, and require the film and television work provider to provide their valid Business License for Enterprise Legal Person, Business License for Network Culture, Business License for Internet Information Service Value-added Telecommunications Business A copy of the "Information Network Communication Audiovisual Program License". When signing an agreement with a film and television work provider, it should be noted that the film and television work provider undertakes that the film and television work it provides to private cinemas has obtained authorization and sublicense of the right to information network dissemination from the obligee. If the film and television work provided by the film and television work provider infringes on the copyright of any third party, the film and television work provider shall bear corresponding legal liability, and shall be liable for breach of contract to private cinemas.

 

Private cinemas should, as far as possible, require on-demand cinemas or providers of film and television works to provide a list of their provided film and television works (if the film and television works in the film and television works broadcasting system are updated, the updated list should be provided together) to prove that the film and television works are obtained from on-demand cinemas or providers of film and television works.

 

"When a private cinema learns that its own film and television works infringe upon the right to network dissemination of work information, it should notify the film and television works provider to remove the infringing film and television works from the shelves as soon as possible after retaining the evidence that the infringing film and television works are provided by the film and television works provider.". After the infringing film and television works are removed from the shelves, private cinemas should also retain evidence of the infringing film and television works being removed from the shelves to prove that private cinemas have no subjective intent to infringe.

 

reference:

 

1. Copyright Research and Analysis Group of Chengdu Intellectual Property Court. Typical Copyright Cases and Evaluation of Chengdu Intellectual Property Court in 2018. China Copyright, 2019,01

 

"The Intellectual Property Court of Changsha Intermediate People's Court, Hunan Province. Application of Exemption from Liability for Compensation by Operators. People's Justice. Application, 2011, 23."

 

3. Chen Zhongshan. Examination and Determination of Legal Source Defense. People's Justice. Application, 2019, 28

 

Ding Wenyan. On the Constitutive Elements of Defense of Legal Origin in Intellectual Property Infringement Litigation. Intellectual Property, 2017,12

 

Wang Qian. Discussion on Copyright Infringement of "Xiaoying Bar" Dissemination Films. China Copyright, 2015-05

 

6. Wang Jun, Wen Handong, Wang Qian. Internet+On Demand Cinema: What rights have all been "subscribed" to? Copyright China, February 2019

 

(This article is translated by software translator for reference only.)