The dispute over copyright infringement between CITIC XX Group Co., Ltd. and Tonghua City Dongchang District XX Bookstore and Shanghai XX Information Technology Co., Ltd.

Keywords: Copyright; Right of distribution; Online infringement

Counseling Attorney: Huo X

Basic Facts of the Case: CITIC XX Group Co., Ltd. holds the exclusive publishing rights to certain books. In early 2020, CITIC XX Group Co., Ltd. discovered that online stores registered on the mobile app “PinX Duo” were extensively selling pirated and infringing copies of books published by CITIC XX Group Co., Ltd., which are protected by its exclusive publishing rights. Subsequently, CITIC XX Group Co., Ltd. filed multiple complaints with the PinX Duo platform; however, each time after a product was removed from sale following a complaint, the store would simply change the product link and re-list it for sale. Therefore, CITIC XX Group Co., Ltd. has brought a lawsuit against both the operator of the online store and the operator of the online platform, requesting that they cease the infringement and compensate for the losses incurred.

After trial by the Intermediate People’s Court of Tonghua City, the operator of the online store was ordered to cease the infringement and pay damages totaling 30,000 yuan. Following the judgment, the infringer did not file an appeal and voluntarily fulfilled its obligation to pay compensation.

Case Highlights: The copyright holder has evidence demonstrating that the infringer knowingly engaged in acts that infringed upon the copyright of others and, after being warned to cease such infringing behavior, continued to do so, exhibiting clear subjective malice.

Typical significance: In copyright infringement cases, the standards for calculating damages claimed by the rights holder against the infringer are as follows: 1. The amount of compensation shall be calculated based on the rights holder’s actual losses; 2. If the rights holder’s actual losses are difficult to calculate, compensation may be awarded based on the infringer’s illegal gains; 3. If neither the rights holder’s actual losses nor the infringer’s illegal gains can be determined, the people’s court shall, taking into account the circumstances of the infringing act, award compensation not exceeding 500,000 yuan.

Although the compensation standards may seem straightforward, in practice they are often difficult to prove: 1. The actual losses suffered by the copyright holder can be calculated based on the profits that the holder would have earned under normal business operations or the revenues that could reasonably have been anticipated from the use of the copyrighted work. However, profitability is influenced by numerous factors, making it extremely challenging to predict accurately. 2. As for the illegal gains made by the infringer, the copyright holder typically finds it difficult to obtain relevant evidence. Moreover, the infringer is unlikely to voluntarily provide such evidence when it would be detrimental to them. Consequently, proving the infringer’s illegal gains is highly problematic. 3. For damages below 500,000 yuan, courts determine the amount at their discretion, taking into account the specific circumstances of the infringement. Any award below 500,000 yuan falls within the court’s broad discretionary range, with no detailed regulations governing this process. Furthermore, different courts across various regions apply inconsistent standards in their rulings.

Therefore, when seeking compensation for damages, in addition to providing as much evidence as possible to prove the infringer’s illegal gains, it is also important to gather evidence demonstrating that the infringer engaged in particularly serious infringing conduct. For example, in this case, the rights holder repeatedly filed complaints about the infringer’s infringing activities. After these complaints were verified, the infringing products were removed from shelves and prohibited from being sold. At this point, the infringer should have been aware that its actions infringed upon the copyright of others; yet, despite this awareness, the infringer repeatedly changed the product links and re-listed the products for sale after a period of time—clearly demonstrating the depth of its subjective malice in committing the infringement. The court took this circumstance into account when rendering its judgment and ultimately ordered the infringer to pay damages totaling 30,000 yuan.