Record RMB32.4m over Douyin copyright breach points to trend


A lawyer believes courts will award higher compensation following the record RMB32.4 million (USD4.6 million) China’s version of TikTok must pay for contributory copyright infringement of Tencent Video’s popular TV show, The Worm Valley.

On 26 October 2022, the Intermediate People’s Court of Xi’an, Shanxi province, ruled that the lack of action by Douyin Group, China’s version of TikTok owned by ByteDance, had constituted a contributory infringement of The Worm Valley on the platform, and should pay Tencent Video RMB32.4 million (USD4.6 million) in compensation.

The case broke the national compensation record for this type of copyright infringement.

Cherry Guo

Commenting on this case, Tiantai Law Firm senior partner Cherry Guo believed increasingly higher compensation amounts will become a trend since changes made to the 2020 Copyright Law raised the upper limit for infringements from RMB50,000 to RMB5 million.

“The judgment in this case must be able to influence society, and the value of the judgment will definitely affect the development of this industry,” Guo said. “If you give a low value of compensation, it means that the cost of infringement is relatively low and this kind of behaviour may increase.”

According to the verdict, many of Douyin’s users had infringed on Tencent’s copyright of The Worm Valley by publishing video excerpts from the show. Although Douyin took measures to reduce the number of infringing works published on its platform by warning users and ordering them to delete the videos, the infringement had not been effectively curbed.

Therefore, the judgment deemed Douyin committed contributory infringement and should immediately take effective measures to delete, filter and intercept all related videos, and pay Tencent compensation for economic losses and reasonable expenses.

The court set the amount at RMB32.4 million, which covered a total of 16 episodes, with an average economic loss of RMB2 million per episode, and reasonable expenses of more than RMB420,000 in defending its rights. The court also noted in its verdict that punitive damages did not apply in this case.

Guo added that even in this case, the compensation awarded for each episode was still within the specified range and only about one-third of Tencent’s claim amount of RMB90 million.

Tencent had proposed three calculation methods for its economic losses: paid memberships and advance on-demand fees, advertising revenue obtained by Douyin from the derivative works of The Worm Valley, and the licensing fee that Douyin should have paid. But the court rejected all the methods.

Guo said that although the court did not accept the suggested calculations, Tencent’s method of qualifying infringement into data as proof was an important reason for its victory in the first instance.

“RMB10,000 is discretionary and RMB5 million is also discretionary. Why the judge awarded RMB2 million for each episode [means] he must have read the plaintiff’s various calculation methods from different angles,” she said.

Douyin’s in-house counsel said the company will appeal the verdict.

The Worm Valley is a fantasy adventure story adapted from a famous Chinese novel series titled Ghost Blows Out the Light. The Worm Valley began screening 30th August, 2021, has 16 episodes in total, each episode has 40 minutes.