The Intellectual Property Court rendered the 103-Min-Zhu-Shang-Yi-Zi-1 Civil Decision on October 2, 2014 ("Decision"), which held that when the copyright holder is seeking damages based on joint and several liability regarding an infringement of the copyright holder's works of music, the copyright holder shall have the burden of proof to provide supporting evidence showing the infringer knowingly or negligently infringed on the copyright owner's rights to the works of music at issue.
In this case, the appellant is the author of three songs labeled 1, 2 and 3 ("Songs") in 1981 and successfully registered copyright on the Songs with the Ministry of Interior. Appellant asserted that Appellee Cui Feng Co. reproduced the Songs without a license and provided the Songs to Appellee Mei Hua Co., which then reproduced the Songs in the digital karaoke machines that it manufactured and sold to nonspecific end-users. Appellant thus sought damages from Mei Hua under joint and several liability as a result of its infringement of Appellant's copyright in the Songs.
The Decision ruled that as Appellant was seeking damages against Appellee in the capacity as a copyright owner of the Songs on a joint and several liability basis, Appellant has the burden of proof in providing facts and evidence that support the assertion that Appellees infringed on the copyright of the Songs out of willfulness or negligence. The Intellectual Property then made the following findings of fact:
- Sufficient facts exist to conclude that Appellee Cui Feng's license to Appellee Mei Hua was lawful without intent to infringe:
Appellant had planned to produce an album to be published by "A" which contained Appellant's greatest hits of songs in a signature style and included the Songs at issue. The "Mother" album published by "A" that Appellant supervised included a song titled "Homesick Lovers", which was also one of the Songs at issue. As it is not disputed that Appellant and A were teacher and student, whether A obtained a license to the Songs from Appellant was an internal issue between Appellant and A and not something that Appellees would readily be aware of. Therefore, the Appellees subjectively had no intent to infringe the Appellant's copyright to the Songs.
- Appellees did not negligently infringe on the Appellant's copyright to the Songs.
Since the Songs were provided by "A" to Appellee Cui Feng to produce karaoke recordings, A was obliged to take reasonable care that a license to the Songs has been obtained before providing the Songs to Appellee Cui Feng. "A" asked Appellee Cui Feng asked A to produce karaoke MVs for the Songs, and as A was both the singer and the publisher of the "Mother" album while also having a teacher-student relationship with Appellant, it was obviously difficult for Appellee Cui Feng to ask the Appellant for a separate license for each of the Songs with respect to their incorporation into the production of karaoke MVs, or to request A to provide for Appellee's review and verification the licensing status of each of the Songs. Appellee Mei Hua is engaged in the business of karaoke video recordings and digital karaoke systems. According to its past experience in song licensing, very few songwriters or composers personally sign licensing agreements, and Appellee Mei Hua had reached an agreement with A for A to obtain licensing for the Songs. If Mei Hua is also tasked to verify the licensing source that its counterpart is required to name under the license agreement for each of the songs that Mei Hua wanted to obtain a license of, the transaction costs will skyrocket while also unduly increase the risks of karaoke operations publishing karaoke recordings and manufacturing digital karaoke systems. This is inconsistent not only with the consideration of transaction safety and transaction cost, but also with the music licensing practices.
- A's behavior constitutes apparent authority:
Since A is the publisher of the "Mother" album, and A was the person who negotiated with Appellee Cui Feng to produce a karaoke MV for the finished "Mother" album, who then subsequently licensed Appellee Mei Hua to the karaoke MV in its karaoke systems. Even if Appellant never actually licensed the Songs, A's actions carried the effect of apparent authority to Appellees.
Based on the foregoing reasons, the Intellectual Property Court rejected Appellant's appeal for lack of sufficient basis.