U.S. STUDIOS WIN DVD PIRACY SUITS IN CHINESE COURT

Following guilty verdict in Shanghai No 2 Intermediate People’s Court Aug. 6, court ordered Shanghai Hezhong Enterprise Development Co and Shanghai Yatu Film Culture Bcstg. Co each to pay $12,200 in compensation to 20th Century Fox Film, and $4,200 each to Disney Corp. and Universal Studios. Shanghai companies also must issue public apology in local Chinese-language Xinmin Evening News and confess to having sold pirated discs, China Daily reported. Although fines appear small, studios recently won similar cases and awards in suits against Beijing-based retailers of pirate DVDs. Pan Shishen, Shanghai court publicity officer, told newspaper: “It is first time foreign film companies have sued local DVD sellers. Pirated DVDs, especially copies of Hollywood movies, are rampant in the local market but foreign film companies seldom take legal action.” Studios have pledged to take further court action if necessary, he said.

Cases led to speculation on new actions by MPA and MPAA against those violating U.S. movie copyrights in Chinese market. Groups reportedly are contemplating series of legal procedures later this year against those manufacturing and selling pirated discs in China. MPA also is investigating recent crop of pirated DVD exports from China. Haul of 60,000 discs confiscated in U.K. recently was first time pirated DVDs from China outnumbered those from Malaysia, until lately major source of counterfeits (CED Aug 6 p5).

Shanghai action began Feb. 25 when agents of 3 studios accompanied by notaries bought series of popular pirated DVDs such as Moulin Rouge, Jurassic Park III and 4th series of The X- Files at outlets of 2 defendants. Studios then sued 2 Chinese firms on basis of evidence collected. Plaintiffs told court they had registered copyrights to movies in U.S. and hadn’t granted any others right to issue DVDs of those movies in China. Court ruled that under Berne Convention for the Protection of Literary and Artistic Works, signed by Chinese govt. in 1992, defendants had infringed on companies’ rights and interests by selling pirated discs of their movies. Although defendants had admitted selling pirated discs, they were unable to reach any out-of-court settlement with studios.

Chinese authorities have conducted intermittent campaigns against DVD piracy since 2001 to make video market safe for foreign intellectual property rights, but piracy remain rampant there despite nation’s accession to World Trade Organization. Meanwhile, new laws going into effect next month are expected give authorities greater ability to prosecute piracy investigations.

As of Sept. 1, officials will be able to take stronger measures to prevent vendors of pirated goods from disposing of evidence. Under current rules, when finding people selling or producing pirated products, antipiracy officials can’t confiscate goods or materials used for production as evidence until case is filed with courts. As result, by time case is filed and officials return to seize evidence, infringers already have hidden or destroyed it.

Under new amended rules, authorities don’t have to wait for filing, but can register and secure evidence at scene of investigation as soon as there’s sufficient cause. Revised rules also mandate procedures that law enforcement officials should follow in dealing with cases, and procedures for storing evidence. “The amendment gives administrative officials a stronger hand in law enforcement and improves efficiency,” Wang Ziqiang, official with National Copyright Administration, told China Daily. Law enforcement officials can decide on either applying administrative penalties against violators or referring cases of gross violation to judicial bodies.