Shenzhen Tencent Computer Systems Co., Ltd. V.
Guangzhou NetEase Computer Systems Co., Ltd., NetEase (Hangzhou)
Network Co., Ltd., China United Network Communications Limited Hubei Branch,
Guangdong OPPO Mobile Telecommunications Co., Ltd. (2014) YWHZZJZ Nos.
00005 and 00005- 2, Wuhan Intermediate People’s Court of Hubei Province
Cause of action: Dispute over infringement of a right to
disseminate musical works via the Internet
Collegial panel members: He Zhen | Xu Jixue | Chen Feng
Keywords: cloud music platform, preliminary injunction, right to
network dissemination of information
Relevant legal provisions: Civil Procedure Law of the People’s
Republic of China (as amended in 2012), article 100 Copyright Law of the
People’s Republic of China, article 50
Basic facts: In a dispute over copyright arising between claimant Shenzhen Tencent Computer
Systems Co., Ltd. (hereinafter “Tencent Computer Systems”) and respondents
Guangzhou NetEase Computer Systems Co., Ltd. (hereinafter
“Guangzhou NetEase”), NetEase (Hangzhou) Network Co., Ltd.
(hereinafter “Hangzhou NetEase”), Hangzhou NetEase Leihuo Co.,
Ltd. (hereinafter “NetEase Leihuo”), China United Network Communications
Limited Hubei Branch (hereinafter “Hubei Unicom”) and Guangdong OPPO Mobile
Telecommunications Co., Ltd. (hereinafter “Guangdong OPPO”), Tencent Computer
Systems filed an application for preliminary injunctions with the Wuhan
Intermediate People’s Court of Hubei Province on November 10, 2014, requesting
that the court order:
(a) Guangzhou NetEase, Hangzhou NetEase and NetEase Leihuo to
stop the dissemination to the public via the “NetEase Cloud Music”
platform (music.163.com, and its PC and mobile client) of songs in which Tencent Computer
Systems enjoyed an exclusive copyright, of which there were 623, including
“Where Has the Time Gone”, “The Support of Love”, “Painted Heart”, among
others;
(b) Hubei Unicom to stop rendering the free data packaging service for NetEase Cloud
Music; and
(c) Guangdong OPPO to stop delivering NetEase Cloud Music as a
built-in feature within its OPPO-branded smartphones.
In applying for these injunctions, Tencent Computer Systems submitted
relevant evidence including notarial certificates from Wuhan Qintai Notary
Public Office in Hubei ((2014) EQTNZZ Nos. 13911, 14057, 15782, 15783, 15784,
15785 and 15786), music albums and printouts of related web pages, as well as
Internet Protocol/Internet Communications Protocol (IP/ICP) file information
inquiry results from the Ministry of Industry and Information Technology, to
support the fact that the copyright in the music-andlyrics products
involved (hereinafter collectively the “musical works”) belonged to Tencent.
At the same time, Tencent Technology (Shenzhen) Co., Ltd., Guangzhou
Branch, undertook to guarantee Tencent Computer Systems’ application
by providing as security a bank deposit of RMB3 million.
Held: With regard to the application for preliminary injunctions
filed and evidence submitted by Tencent Computer Systems, the Wuhan
Intermediate People’s Court of Hubei Province formed a collegial panel under
law. After reviewing the case, the court legally granted the following
injunctions.
(a) As of the effective date of the ruling, Guangzhou NetEase,
Hangzhou NetEase and NetEase Leihuo were ordered to
stop providing to the public, through the “NetEase Cloud Music” platform,
some 623 musical works (as listed in an appendix attached to the ruling).
(b) As of the effective date of the ruling, Hubei Unicom was ordered to stop
rendering mobile network services to its mobile clients by means of the free
data packaging of NetEase Cloud Music for the 623 musical works
involved.
(c) Guangdong OPPO was ordered to stop disseminating the 623 musical works
involved to its mobile clients by building the NetEase Cloud Music
client into its smartphones branded “OPPO R830S” (contracted phones) within 10
days of the date immediately following the effective date of the ruling.
(d) 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. 2005xxxxxxx0001) was to
be frozen.
(e) Other injunction applications filed by Guangzhou NetEase were
dismissed.
(f) Tencent Computer Systems was ordered to bring its case to court
within 30 days of the ruling coming into force; otherwise, the injunctive
measures specified were to be released.
After the court issued these injunctions, Hubei Unicom and Guangdong OPPO
immediately stopped their allegedly infringing acts and confirmed that they
would actively adhere to their injunction obligations. Guangzhou NetEase,
Hangzhou NetEase and NetEase Leihuo, however, applied for
permission to appeal against the injunctions to the Wuhan Intermediate People’s
Court of Hubei Province. On December 3, 2014, the court reviewed their
application for reconsideration in a public hearing and held that their reasons
could not be established, and hence the court dismissed their application.
During the court’s review, it became apparent to Tencent Computer
Systems that allegedly infringing acts were still ongoing and hence it
submitted a written application to the Wuhan Intermediate People’s Court of
Hubei Province asking the court to penalize the respondents for their violation
of the injunctions. The court conducted a hearing, finding Guangzhou NetEase,
Hangzhou NetEase and NetEase Leihuo in violation of
its orders and imposing punitive measures accordingly. Upon the court’s
issuance of its decision regarding the application for reconsideration, the
three respondents ceased their allegedly infringing acts, pursuant to the
requirements under the injunctions.
Reasoning: On reviewing the case, the Wuhan Intermediate People’s
Court of Hubei Province held as follows.
(a) Based on the music copyright licensing contracts, the music albums involved
and other copyright documents submitted by Tencent Computer Systems,
the claimant should be entitled to the rights to network dissemination of the
623 musical works, including “Green Rose” (as listed in the appendix attached
to the judgment).
(b) According to the notarial certificate ((2014) EQTNZZ No. 14057) submitted
to Tencent Computer Systems by Wuhan Qintai Notary Public
Office in Hubei, the respondents Guangzhou NetEase, Hangzhou NetEase and NetEase Leihuo jointly
ran the NetEase Cloud Music platform (music.163.com), sponsored by
Guangzhou NetEase, and communicated to the public via this platform the
623 musical works listed in the appendix attached to the judgment. The three
respondents were suspected of infringing Tencent Computer Systems’
right to network dissemination of the 623 musical works.
(c) According to the contents of the notarial certificate of Wuhan Qintai Notary
Public Office in Hubei ((2014) EQTNZZ No. 13911) submitted to the court
by Tencent Computer Systems, it could be confirmed that the
respondent Hubei Unicom cooperated with the NetEase Cloud Music
platform and disseminated to its mobile clients the 623 musical works listed in
the appendix, as prepared by Tencent Computer Systems, via the free
data packaging of NetEase Cloud Music. These acts were suspected of
infringing Tencent Computer Systems’ right to network dissemination
of the musical works involved in the case.
(d) According to the contents of the notarial certificate of Wuhan Qintai Notary
Public Office in Hubei ((2014) EQTNZZ No. 13911) submitted to the court
by Tencent Computer Systems, Guangdong OPPO has built in a mobile
client on its smartphones branded “OPPO R830S” (contracted phones) that
accesses the “NetEase Cloud Music” platform for production and sales, and
hence, by those means, has acquired the 623 musical works (as listed in the
appendix attached to the judgment). Such acts were suspected of
infringing Tencent Computer Systems’ right to network dissemination
of the 623 musical works listed in the appendix.
(e) Substance specified in printouts of relevant NetEase Technology
web pages, as submitted to the court by Tencent Computer Systems,
included the following facts.
(i) The legal representative of Guangzhou NetEase and Hangzhou NetEase claimed
that they applied various Baidu, Alibaba and Tencent (BAT) modes;
Alibaba and Baidu adopted the traffic mode, while NetEase was a
content provider. The aggregate profits of the three large companies (JD,
Xiaomi and Qihoo 360) were still less than those of NetEase.
(ii) According to NetEase Technology’s website on August 18,
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 was played 170,000 times in only one week.
(f) The secured assets provided by the guarantor Tencent Technology
(Shenzhen) Co., Ltd. Guangzhou Branch, were verified to be genuine and the
court froze the bank deposits of RMB3 million that it had provided.
Considering all of these factors, the court held that Tencent Computer
Systems owned the right to network dissemination of the 623 musical works
listed in the appendix attached to the judgment. It found that the five
respondents had made available to the public the involved musical works by
means of the Internet, the free data packaging of NetEase Cloud Music
in smartphones and the built-in mobile client for NetEase Cloud
Music, among other things. Not only were such acts suspected of
infringing Tencent Computer Systems’ right to network dissemination
of these musical works, but also the respondents offered the musical works to
the public in so significant a volume that they caused Tencent to
suffer huge economic losses. In the view of the court and in light of the
networked environment, if such acts were not prohibited in a timely manner,
Guangzhou NetEase could further grow the market share that it had
acquired by taking improper advantage of others’ rights, which would cause
irreparable harm to Tencent Computer Systems’ interests. The court
therefore ordered that all suspected infringement by all respondents via
network dissemination of the 623 musical works listed in the appendix should be
prohibited. The security that the guarantor provided to cover the risk of the
injunctions lodged was verified and the security procedure for the application
of injunctions was legitimate.
When asked for a reconsideration, Wuhan Intermediate People’s Court of Hubei
Province held as follows.
(a) Upon preliminary verification by the court, Tencent Computer
Systems had submitted its copyright licensing contract, music albums, song
lists and other evidence of its rights, which were sufficient to support the
fact that it was the exclusive owner of the right to network dissemination of
the involved musical works. Considering the dissemination feature of the “NetEase Cloud
Music” platform and based on the prima facie evidence of the
rapid market growth of the platform, the court determined that it was not
improper to hold that failure to take injunctive measures might cause
irreparable losses to Tencent Computer Systems.
(b) Tencent Computer Systems had lodged an application for
injunctions against Hubei Unicom, which provided the 623 musical works involved
to its mobile users via the mobile service project of “free data packaging
for NetEase Cloud Music” and hence was suspected of infringing Tencent Computer
Systems’ right to network dissemination, and that application was related to
the application for review that the respondents had filed.
(c) Other than the written statements issued by NetEase Leihuo that
the platform involved was operated and managed by NetEase Leihuo independently,
the three respondents who applied for review of the injunction order failed to
submit any evidence that “NetEase Cloud Music” was jointly operated by the
three such as may have been sufficient to overturn the injunction order. On the
basis of evidence including the network domain applied by the “NetEase Cloud
Music” platform, the Internet business license and NetEase Technology’s
declaration that Hangzhou NetEase was the developer of the software
supporting the “NetEase Cloud Music” platform, as well as the title and
copyright disclaimer on the NetEase Cloud Music website, it was not
inappropriate to determine that Guangzhou NetEase, Hangzhou NetEase and NetEase Leihuo jointly
operated the platform.
(d) During the course of hearing the case, and as demonstrated by both the
claimant and those respondents who applied for reconsideration, the musical
works involved could be directly played by clicking the link code at the end of
the web page provided by the “NetEase Cloud Music” platform, but such
musical works could not be obtained online via the domain address provided by
the three respondents. At the same time, the three respondents who applied for
review failed to submit any evidence that may have supported their assertion
that the “NetEase Cloud Music” platform merely provided web link
technology and that the involved musical works had been lawfully licensed.
(e) Songs #216 and #217 on the list of prohibited songs attached to the
judgment in the case were not copies, but musical works of the same name
performed by a different artist. Other works on the list were verified to be
authentic. On the basis of the musical works involved that were
disseminated via the “NetEase Cloud Music” platform, the court had reason
to confirm that these music products were the same as those for which Tencent Computer
Systems claimed injunctions and there was no need to compare the sound sources.