Tencent is an authorized broadcaster of the Tokyo Olympics and has the legal rights to broadcast Olympic events. Recently, Tencent sued four defendants to the Tianjin Third Intermediate People’s Court claiming that they illegally broadcast the Olympic events. Tencent argued that the Olympic events had high popularity and a short-cycle, so infringers could forward and spread a large number of short videos of the games in a short period of time, taking a large amount of traffic and obtaining illegal benefits. Therefore, Tencent filed a request for conduct preservation (that is, an interim injunction).
After receiving the request, the court conducted a thorough review of the ownership information, the alleged unfair competition and the urgency and necessity of taking conduct preservation measures. It was found that the website operated by the defendant provided a large number of links to the websites of pirated event programs and set up special sections such as "Olympic Zone, Olympic Hot Sections and Hot Events". In addition, the website involved also encouraged users to upload pirated content related to the Tokyo Olympics by distributing user milestones, which constituted as unfair competition with malicious intent. The court found that there was urgency to grant Tencent's application for conduct preservation and made a ruling within 49 hours of filing, requiring the four defendants to immediately stop the infringement by deleting or blocking the infringing videos and website.
The China Audio-Video Copyright Association (“CAVCA”) was established in 2008 and is the only audio and video copyright collective management organization in China. Tianhe Group and its subsidiaries are commissioned by the CAVCA to collect karaoke copyright royalties. Since the fourth quarter of 2016, it has been withholding the collected royalties and using associated companies to intercept and misappropriate the copyright royalties. in November 2018, the CAVCA announced that it had dissolved its cooperation with the Tianhe Group and also filed a lawsuit with the Beijing Intellectual Property Court.
Tianhe Group argued that first, the right to terminate at will was not established: the CAVCA required Tianhe Group to advance RMB10 million in copyright royalties at its inception in 2008, and in 2014, it also required Tianhe Group to make up the difference and "guarantee incremental revenue" on its own for copyright royalties every year from 2015-2027. In addition to the copyright royalties and the transfer of labor fees, Tianhe Group is also required to carry out the development of copyright fee channels, obtain authorization from copyright owners for the management of CAVCA to enhance its representation, preparation and initial operation costs of the CAVCA, and bear the commercial risks of copyright fees. Therefore, the series of agreements signed between CAVCA and Tianhe Group are agreements in nature and not merely commission contracts. The agreements should be strictly adhered to and should not be arbitrarily terminated. In addition, the parties agreed to a special condition for the termination of the contract, i.e., "failure to complete the amount of fees for the current year and failure to make up for the difference". In fact, Tianhe Group had completed the target amount, which not only means that termination of the agreement is not established but also means that the parties have excluded the right to terminate at will by special agreement.
On 29 July 2021, the court handed down its judgement. It held that during the performance of the contract, Tianhe Group and its subsidiaries committed a variety of continuous violations such as deliberately delaying settlement and intercepting copyright fees by taking advantage of being the exclusive executor of collecting copyright fees, which were subjective faults and objectively caused serious consequences for the CAVCA in realizing the purpose of the contract. In addition to paying the corresponding royalties, it was held that Tianhe Group should also bear the liability for the breach of contract, including the cost of infringement and loss of interest. It was held the agreement between the two parties was terminated on 2 November 2018, and Tianhe Group was ordered to pay the outstanding copyright royalties and interest amounting to RMB 95.3 million, interest amounting to RMB 4.13 million due to the delayed copyright payments, and economic loss amounting to RMB 330,000.
The case may still be appealed, and Tianhe Group has indicated that it will appeal to the Beijing Higher People’s Court.