Review and Judgment of Preliminary Injunction against “Cloud Music” Platform’s Infringement of the Right to Network Dissemination of Information
——Shenzhen Tencent Computer Systems Co., Ltd. v. Guangzhou NetEase Computer Systems Co., Ltd., NetEase (Hangzhou) Network Co., Ltd., Hangzhou NetEase Leihuo Co., Ltd., China United Network Communications Limited Hubei Branch, Guangdong OPPO Mobile Telecommunications Corp., Ltd.
[Syllabus]
An injunction, as a temporary measure, is a provisional relief measure against the party that is suspected of infringement from pursuing a certain conduct or omission thereof. Five respondents disseminated the involved musical works to the public via different communications media through the “NetEase Cloud Music” platform, and such act shall be determined as an act of dissemination of information via the internet. The court upon examining the prima facie evidence held that it was much more likely that such an alleged act would constitute an infringement. Moreover, such an ongoing alleged infringing act may cause huge economic losses to the petitioner, and under such a circumstance, an injunction should be granted.
Online music is a newly developed cultural network communication medium that combines the network industry and the music industry, and involves issues related to copyright investment and copyright protection. It is more competitive in the industry, and the online music market is also an important juncture for the National Copyright Administration to clean the network environment this year. Allowing disorderly competition in online music go unchecked may damage the expansion of online productivity and cause online regulation to go out of control. At the same time, the injunction prescribed by the Civil Procedure Law of the People’s Republic of China has strong enforceability and has a certain deterrent effect on an infringer. The issuance and enforcement of the injunction in this case has been a kind of feasible copyright protection model for cracking down online music piracy, standardizing the online music market and regulating the network environment, providing an important reference for network administrative law enforcement, rapid check and crackdown over online music piracy, and protection of the legitimate rights of music right holders.
[Case No.] (2014) YWHZZJZ No. 00005 and No. 00005-2 of Wuhan Intermediate People’s Court of Hubei Province
[Cause of Action] Dispute over the infringement of the right to dissemination of musical works via the internet
[Collegial Panel Members] He Zhen Xu Jixue Chen Feng
[Keywords] Cloud music platform, right to network dissemination of information, preliminary injunction
[Relevant Legal Provisions] Article 50 of the Copyright Law of the People’s Republic of China, Article 100 of the Civil Procedure Law of the People’s Republic of China.
[Basic Facts]
In a dispute over copyright arising between the petitioner Shenzhen Tencent Computer Systems Co., Ltd. (“Tencent Company”) and the respondents Guangzhou NetEase Computer Systems Co., Ltd. (“Guangzhou NetEase”), NetEase (Hangzhou) Network Co., Ltd. (“Hangzhou NetEase”), Hangzhou NetEase Leihuo Co., Ltd. (“NetEase Leihuo”), China United Network Communications Limited Hubei Branch (“Hubei Unicom”), and Guangdong OPPO Mobile Telecommunications Co., Ltd. (“Guangdong OPPO”), Tencent Company filed an application for preliminary injunctions with the Wuhan Intermediate People’s Court of Hubei Province on November 10th, 2014, requesting: 1. To order the respondents Guangzhou NetEase, Hangzhou NetEase and NetEase Leihuo stop the dissemination to the public of songs via the “NetEase Cloud Music” platform (music.163.com and its PC & mobile client), to which the petitioner enjoyed an exclusive copyright, wherein there were 623 songs including Where Has the Time Gone, The Support of Love, Painted Heart, etc.; 2. To order the respondent Hubei Unicom stop rendering the service of free data package for NetEase Cloud Music; 3. To order the respondent Guangdong OPPO stop its built-in NetEase Cloud Music in its OPPO brand cellphones. In applying for the aforesaid injunctions, the petitioner Tencent Company submitted relevant evidence including notarial certificates of Wuhan Qintai Notary Public Office in Hubei [(2014) EQTNZZ Nos. 13911, 14057, 15782, 15783, 15784, 15785, 15786], music albums, printouts of related web pages as well as IP/ICP file information inquiry results from the Ministry of Industry and Information Technology, to support the fact that the copyright of musical works involved (music and lyrics, products, hereinafter collectively referred to as musical works) belonged to the petitioner. At the same time, the guarantor Tencent Technology (Shenzhen) Co., Ltd. Guangzhou Branch provided a bank deposit of RMB3 million as security for the petitioner Tencent Company to apply for such injunctions.
Holding
With regard to the application for preliminary injunctions filed and evidence submitted by the petitioner Tencent Company, the Wuhan Intermediate People’s Court of Hubei Province formed a collegial panel pursuant to law to review the case. Upon review, the Court legally granted the following injunctions with respect to the application filed by the petitioner Tencent Company for the preliminary injunctions: 1. The respondents Guangzhou NetEase Computer Systems Co., Ltd., NetEase (Hangzhou) Network Co., Ltd. and Hangzhou NetEase Leihuo Co., Ltd. should stop provision to the public 623 musical works listed in the appendix attached hereto through the “NetEase Cloud Music” platform, as of the effective date of this ruling; 2. The respondent China United Network Communications Limited Hubei Branch should stop rendering the mobile network services to its mobile clients for the 623 musical works involved in the free data package of NetEase Cloud Music, as of the effective date of this ruling; 3. The respondent Guangdong OPPO Mobile Telecommunications Corp., Ltd. should stop its behavior of disseminating the 623 musical works involved, to its mobile clients via the NetEase Cloud Music client built in its mobile phones branded as OPPO R830S (contracted phones) within ten (10) days from the date immediately following the effective date of this ruling; 4. The bank deposit of RMB3 million in the account opened by Tencent Technology (Shenzhen) Co., Ltd. Guangzhou Branch at China Merchants Bank Guangzhou Branch Huanshi East Road Sub-branch (A/C No. 200583420610001) should be frozen; 5. Other injunction applications filed by the petitioner Guangzhou NetEase Computer Systems Co., Ltd. should be dismissed; and 6. The petitioner Shenzhen Tencent Computer Systems Co., Ltd. should bring the case to the people’s court within 30 days after this ruling comes into force, otherwise, injunctive measures specified herein shall be released.
After the court issued such injunctions, the respondents Hubei Unicom and Guangdong OPPO immediately stopped such alleged infringing acts and expressed that they would actively adhere to the injunction obligations of the court. Whereas, the respondents Guangzhou NetEase, Hangzhou NetEase and NetEase Leihuo appealed against such injunctions to the Wuhan Intermediate People’s Court of Hubei Province for reconsideration. On December 3rd, 2014, the Wuhan Intermediate People’s Court reviewed the application for reconsideration filed by the three respondents in a public hearing, and held that reasons for reconsideration proposed by the three respondents could not be established, and thus ruled to dismiss the application for reconsideration filed by the three respondents, i.e., Guangzhou NetEase Computer Systems Co., Ltd., NetEase (Hangzhou) Network Co., Ltd. and Hangzhou NetEase Leihuo Co., Ltd.
In the process of reconsideration, the petitioner Tencent Company discovered that the alleged infringing acts were continuing, and thus submitted a written application to the Wuhan Intermediate People’s Court of Hubei Province, to penalize the respondents for the violation of the injunctions. The Court conducted a hearing over the application of violations lodged by the petitioner and imposed punitive measures accordingly. Upon the issuance of the decision over reconsideration, the alleged infringing acts were immediately ceased, pursuant to the requirements of the injunctions.
[Reasoning]
The Wuhan Intermediate People’s Court of Hubei Province held upon review that:
I. Based on the music copyright licensing contracts, the involved music albums and other copyright documents submitted by the petitioner Tencent Company, the petitioner Tencent Company should be entitled to the rights to network dissemination of information of the 623 musical works including Green Rose, as listed in the appendix attached hereto.
II. According to the notarial certificate [(2014) EQTNZZ No. 14057] submitted by Wuhan Qintai Notary Public Office in Hubei to the petitioner Tencent Company, the respondents Guangzhou NetEase, Hangzhou NetEase and NetEase Leihuo jointly ran the NetEase Cloud Music platform (website: music.163.com) sponsored by Guangzhou NetEase and communicated to the public 623 musical works as listed in the appendix attached hereto via this platform. The three respondents were suspected of infringing the petitioner Tencent Company’s right to network dissemination of information of the 623 musical works listed in the appendix attached hereto.
III. According to contents stated in the notarial certificate of Wuhan Qintai Notary Public Office in Hubei [(2014) EQTNZZ No. 13911] submitted by the petitioner Tencent Company, it could be confirmed that the respondent Hubei Unicom cooperated with the involved NetEase Cloud Music platform and disseminated the 623 music listed in the appendix as prepared by the petitioner Tencent Company to its mobile clients, through a free data package of NetEase Cloud Music. The above-mentioned acts committed by the respondent Hubei Unicom were suspected of infringing the petitioner’s right to network dissemination of information of the musical works involved herein.
IV. According to contents stated in the notarial certificate of Wuhan Qintai Notary Public Office in Hubei [(2014) EQTNZZ No. 13911] submitted by the petitioner Tencent Company, the respondent Guangdong OPPO has a built-in mobile client to access NetEase Cloud Music platform on its mobile phones branded OPPO R830S (contracted phones) for production and sales, and by means of a build-in client on its mobile phones, acquired the 623 musical works provided by NetEase Cloud Music platform. Such acts were suspected of infringing the petitioner Tencent Company’s right to network dissemination of information of 623 musical works listed in the appendix.
V. Contents specified in printouts of relevant webpages of NetEase Technology as submitted by the petitioner Tencent Company: (1) the legal representative of the respondents Guangzhou NetEase and Hangzhou NetEase claimed that they applied various BAT modes, Alibaba and Baidu adopted the traffic mode, while NetEase was a content supplier. The aggregate profits of the three large companies (JD, Xiaomi and Qihoo 360) were still less than that of NetEase. (2) According to the webpage of NetEase Technology on August 18th, 2014, NetEase Cloud Music had 40 million users; its hot songs list English Songs that you Love to Hear on its NetEase Cloud Music platform were played 170,000 times in just one week.
VI. The secured assets provided by the guarantor Tencent Technology (Shenzhen) Co., Ltd. Guangzhou Branch was verified to be genuine, and the court froze such bank deposits of RMB3 million provided by the guarantor.
Considering all of the above, the petitioner Tencent Company owned the right to network dissemination of information of the 623 musical works listed in the appendix attached hereto. The five respondents made available to the public the involved musical works by means of internet, free data package of NetEase Cloud Music in mobile phones, built-in mobile client of NetEase Cloud Music, etc. Such acts were suspected of infringing the petitioner Tencent Company’s right to network dissemination of information of these musical works, moreover, the respondents offered such musical works to the public in a significant volume, causing huge economic losses to the petitioner Tencent Company. In the view of the Court, under the network environment, if such acts were not prohibited in a timely manner, the respondent Guangzhou NetEase may gain further growth in its market share acquired by taking improper advantage of others’ rights, which would cause irreparable harm to the interests of the petitioner Tencent Company. Therefore, the suspected infringement of network dissemination of 623 musical works listed in the appendix attached hereto by all respondents should be prohibited. The security provided by the guarantor for injunctions lodged by the petitioner Tencent Company was verified, and the security procedure for the application of injunctions was legitimate.
The Wuhan Intermediate People’s Court of Hubei province held upon reconsideration that:
I. Upon the preliminary verification by the Court, Tencent Company had submitted copyright licensing contract, music albums, song lists and other rights evidence, which were sufficient to support the fact that the petitioner was the exclusive owner of the right to network dissemination of the involved musical works. Considering the network dissemination feature of “NetEase Cloud Music” platform, and based on the prima facie evidence of the rapid development of “NetEase Cloud Music” platform, the Court determined that it was not improper to hold that failure to take injunctive measures might cause irreparable losses to the petitioner Tencent Company.
II. The petitioner Tencent Company lodged an application for injunctions against the respondent Hubei Unicom who provided the 623 musical works involved to its mobile users through the mobile service project of “free data package for NetEase Cloud Music”, which was suspected of infringing the petitioner Tencent Company’s right to network dissemination of information, and such an application for injunctions was related to the application for reconsideration filed by the respondents.
III. Except for the written statements issued by NetEase Leihuo that such a platform was operated and managed by NetEase Leihuo independently, the three respondents who applied for reconsideration of the injunction order failed to submit any other evidence which may have been sufficient to overthrow the injunction order that “NetEase Cloud Music” platform was jointly operated by the said three respondents. On the basis of evidence including the network domain applied by “NetEase Cloud Music” platform, internet business license, the fact declared by “NetEase Technology” that Hangzhou NetEase was the developer of the involved “NetEase Cloud Music” platform software, as well as the title and copyright disclaimer on “NetEase Cloud Music” website, it was not inappropriate to determine that “NetEase Cloud Music” platform was jointly operated by the three parties Guangzhou NetEase, Hangzhou NetEase and NetEase Leihuo.
IV. During the process of hearing and upon the demonstration of the petitioner and the respondents who applied for reconsideration, at the end of the page provided by the “NetEase Cloud Music” platform, the musical works involved could be directly played by clicking the link code, however, such musical works involved could not be obtained online through the domain provided by the three respondents. At the same time, the three respondents who applied for reconsideration failed to submit any evidence that may have supported the point that “NetEase Cloud Music” platform merely provided an internet link technology and that the involved musical works had been lawfully licensed.
V. No. 216 and No. 217 on the list of prohibited songs attached hereto in this case were not copies but were musical works of the same name but with different performance. Other works on the list had been verified to be true. On the basis of works involved that were disseminated via the “NetEase Cloud Music” platform, the Court had reason to confirm these music products are the same as the works for which Tencent Company claimed injunctions, and there was no need to compare the sound sources.
