The year 2022 mark the time when many platforms have been "making peace" in the direction of secondary authoring, but related lawsuits and claims have never stopped.

At the beginning of November 2022, Xi'an Intermediate People's Court made a first instance verdict on Tencent's lawsuit against TikTok for the copyright infringement of the adventure drama “云南虫谷” (pinyin: Yunnan chóng gǔ; Eng.: Yunnan Insect Valley) broadcasted by Tencent. The court held that a large number of users on the TikTok platform have published videos of the drama without authorization.

Although TikTok has taken measures to reduce the number of infringing works, the infringement has not been effectively curbed. Indeed, for the Court perspective, TikTok should immediately take effective measures to delete, filter and intercept relevant videos, and compensate Tencent for economic losses and reasonable expenses of more than 32.4 million yuan.

Prior to this, TikTok has reached cooperation with other broadcasting platform such as Sohu Video and iQiyi asking the authorization to publish film and television works. However, in the process from confrontation to embrace, there are still many problems to be solved.

“云南虫谷” is a 16-episode online drama of suspense and adventure theme produced by Penguin Film and Television, adapted from the world's dominant novel Ghost Blowing the Lamp in Yunnan Insect Valley, which will be broadcast independently on Tencent Video from August 30, 2021. 

The plaintiff Tencent said that after the play was broadcast, there were a large number of clips of the drama uploaded by users on the TikTok platform. On September 22, 2021, Tencent filed a lawsuit with the Xi'an Intermediate People's Court, requiring TikTok to immediately take down the videos and compensate economic losses and reasonable expenses of 10 million yuan.

The case was formally accepted by the court on October 8, 2021. Before the hearing of the case, Tencent changed its claim and increased the claim amount to 90 million yuan. 

The defendant TikTok argued that the relevant videos were uploaded by users themselves, and the number of platform users was large, so it was impossible for TikTok to conduct substantive review of massive information. 

Additionally, TikTok platform only provides information network storage services, without the obligation of content review. The platform has reminded users that the uploaded content shall not infringe the intellectual property rights of others, and has fulfilled the obligation to notify deletion, so it does not constitute infringement.

The court held that TikTok should have known and clearly knew that there were a large number of infringing acts against Tencent and had the ability to effectively manage the infringing content of the platform.

t did not take appropriate measures to control and manage the infringing content of the platform within a reasonable period of time and found that it met the constitutive requirements of helping the oblige with the infringement of the information network communication right of the works involved in the case, and there were acts of helping the infringer.

Effective measures should be taken immediately to delete, filter and intercept relevant videos.

Considering the types of works involved, popularity, possible losses, expected earnings, rights protection, the scale of the defendant's infringement, duration, subjective malice, possible benefits and other factors, the court decided that the plaintiff suffered an average loss of economic benefits of 2 million yuan per episode of the network drama, so the economic losses and reasonable expenses totaled more than 32.4 million yuan.

This is also the highest amount of compensation Tencent has received in film and television copyright litigation. According to the judgment, the production cost of a single episode of "云南虫谷" reached more than 6.6 million yuan, and the total production cost of 16 episodes reached 334 million yuan.

In recent years, short video infringements have been rampant, causing great damage to the legitimate rights and interests of obliges, and courts around the country have increased their efforts to award compensation.

How to determine the amount of compensation in a case is based on the influence of the works involved, production costs and the licensing fees of the episodes that can be referred to, especially the severity of the alleged infringement and the infringement profits.

However, short videos creators of film and television works must eventually move towards compliance. "Authorization before use" is one of the best solutions at the moment. While protecting the legitimate rights and interests of the oblige, it also meets the needs of short video creators to use content flexibly.

Of course, to some extent, the short video platform has become an important content dissemination channel. Producers choose to open accounts to release materials, and some platforms will also jointly launch short videos with creators. 

Also, some users lamented that the reason why they would like to see a play is that they "feel good" after brushing some clips. In other words, the existence of secondary creative content can promote users to watch content on the long video platform.

However, the platforms have not disclosed more information about the current authorization cooperation for publishing of short videos. After all, the endless re-creation of content means the accumulation of traffic. The creators earn subsidies from the short video platform, but it is the long video platform that pays for the cost of content, which is also the crux of the imbalance between the demands of both sides. As for the revenue of long video platforms and producers, more perfect cooperation models and solutions are needed.

This decision is highly disputable for below reasons:

1. the infringement claim was filed against TikTok solely based on secondary infringement;

2. notice-takedown principle seemed to be override: The court ruled that TikTok shall be aware of the large volume of infringement occurred on it platform in the case of repeated prior warning, complaints, lawsuits, and applications for preservation of conduct by rights holders filed by the copyright owner. The court also make the judgement based on the reason that TikTok also has the ability to make sufficient management over the infringement content in the platform.

The ruling by the court seemed suggesting mega platforms like TikTok should've been able to manage the infringement on the platform only based on a letter from right owner (without even indicating the specific link). If TikTok can do that for Tencent, can it do the same for all other right owners?

3. The court override the process of infringement comparison: The court deemed that a detail comparison between the original works and all the claimed infringing pieces are “not the only option” in this case. Instead, the court ruled on substantial similarity based on the “highly consistency and repeatability” in the accused infringing videos.

We understand the court aimed to attack infringing conducts like mechanical video-reclipping or one of those short videos like “5-minutes to finish a movie”, but the court also seemed to sacrifice the interest of secondary creation who indeed constitute fair use.

4. Similar decisions nationwide would only award damages below RMB 1 million. Most people would expect a higher damage would occur, but more likely in the court of Shanghai or Guangzhou. A sudden damage award for RMB 50 million in Xi'an seemed to be surprising.

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