Translator：Wang Qiyu

On August 19, 2020, after a two-year-long legal battle over copyright infringement of a music work, the Zhejiang High People's Court rendered a second-instance verdict, ordering Songcheng Performing Arts Development Co., Ltd. and Lijiang Tea Horse Ancient Town Tourism Development Co., Ltd. (hereinafter referred to as "Songcheng Company" and "Tea Horse Company") to compensate Beijing Bermuda Culture Development Co., Ltd. (hereinafter referred to as "Bermuda Company") with 700,000 RMB. This case represents the highest compensation amount awarded for a single musical work in copyright infringement cases nationwide, with representation by Senior Partner Yuan Chunsong of Shanghai Landing Law Offices.

Case Overview

Bermuda Company held exclusive authorization for the disputed music work "Naxi Love Song." Following its creation, the song was performed by artist Chen Sisi on various platforms such as the 2012 CCTV Spring Festival Gala and the program "Resounding Echo." It garnered substantial online engagement on platforms like Baidu Music. Songcheng Company's subsidiary, Tea Horse Company, developed a themed park with performances like "Lijiang Eternal Love" as its centerpiece, including the use of "Naxi Love Song" in the first act of "Lugu Daughters' Kingdom." In January 2019, Bermuda Company filed a lawsuit against Songcheng and Tea Horse Companies for unauthorized use of the music work, alleging copyright infringement, at the Hangzhou Intermediate People's Court. The first-instance court ruled in case (2019) Zhe 01 Min Chu 213 that while the defendants infringed upon the copyright, the compensation amount sought based on their illicit gains was not supported. Instead, the court awarded 250,000 RMB in statutory compensation, based on Tea Horse Company's payments to the China Audio-Video Copyright Association for similar usage rights, along with reasonable fees of 50,000 RMB. Discontent with the first-instance ruling, Bermuda Company appealed to the Zhejiang High People's Court, asserting that compensation should be calculated based on illicit gains, ultimately resulting in the 700,000 RMB award.

Legal Services

Represented by Attorney Yuan Chunsong of our firm, a variety of points were presented to the appellate court: 1) The methodology for determining compensation, proposing several calculation methods based on illicit gains to demonstrate the reasonableness of the plaintiff's claim. 2) The calculation basis for illicit gains, asserting that the music work was integral to the theme park experience and its revenue, which was established through Songcheng and Tea Horse Companies' promotion and pricing mechanisms for "Lijiang Eternal Love" performances. 3) The statute of limitations, arguing that Bermuda Company initiated the lawsuit within the statutory period and the three-year calculation range for continuous infringement should apply. 4) The consideration of factors like the fame of the music work and the nature of the infringement.

Judicial Significance

The Zhejiang High People's Court employed calculations and estimations to explore compensation based on illicit gains, aligning the approach with the actual benefits reaped by infringing parties. This case underscores the legal emphasis on deterring intellectual property infringement and enhances the scientific and rational calculation of compensation, reflecting a more robust judicial policy.