In movies, is a ‘transformative’ use defence effective?

By Wang Yaxi and Guo Jincheng, Yuanhe Partners

Recently, the Beijing Intellectual Property Court rendered its appeal judgment in the movie blockbuster Chronicles of the Ghostly Tribe’s font infringement case. Upholding the judgment at first instance, the court held in its appeal judgment that use by the film producer, distributor and the two other defendants of the plaintiff’s calligraphic work in the film constituted infringement and ordered them to compensate the plaintiff in the amount of RMB140,000 (US$20,400).

This case involves the issue of the potential for the work of a third party appearing in a scene in a film constituting copyright infringement, an issue that has sparked close scrutiny by, and debate among, persons involved in the film industry.

Wang Yaxi
Yuanhe Partners

As is well known, to present the atmosphere of the times appropriate to its theme, a film will often do so by using carefully designed props, e.g., books, posters, paintings, sculptures, decorative objects, etc. Such props could be copyrighted works, and accordingly, if the film producer fails to carry out a reasonable copyright search and take the appropriate precautions, it could find itself embroiled in an infringement dispute.

It should be pointed out that in many copyright infringement disputes involving films, the film producer will invoke “transformative use” as defence grounds. In the Chronicles of the Ghostly Tribe case, the defendants also invoked these grounds. “Transformative use” is a concept that derives from US copyright law, and means use of a source work in a different way or for a different purpose, adding value to the source work by creating new information, new esthetics, new insights and understandings.

The classic case in this field is Campbell v Acuff-Rose, in which the US Supreme Court stated that the standard for determining whether the act constituted “transformative use” was mainly to focus on “whether the new work merely supersedes the objects of the original creation, or whether, and to what extent, it is ‘transformative’, altering the original with new expression, meaning, or message”. If it is found that the use is transformative, then the act falls under fair use and does not constitute infringement.

Guo Jincheng
Yuanhe Partners

The PRC Copyright Law does not contain any provisions that correspond to “transformative use”, with Chinese courts usually subsuming a “transformative use” defence under “fair use” for the purposes of review. The most closely related provision, namely item (2) of the first paragraph of article 22 of the Copyright Law, reads: “Appropriate quotation from a published work, where such quotation is used to introduce or comment on such work or to explain a certain issue”, is a provision concerning fair use.

Two props appear in Chronicles of the Ghostly Tribe. One is an old volume with the title Ghostly Tribe on its cover, found in a library by the film’s main character, Hu Bayi, and the second is a newspaper placed on a table by Hu Bayi, with the words “China Daily” appearing in the upper left corner. They appear on screen for one to two seconds each.

The plaintiff claimed that he owned the copyright in the seven characters that make up the two titles that appear in the film, and held that the use by the producer and the distributor without a licence constituted infringement. In their defence, the defendants claimed that their use constituted appropriate quotation as specified in the Copyright Law, that the percentage of the work in question quoted was small, appeared as a portion of the props, and was for the purpose of giving the titles of the props. The main purpose and function of quoting the work in question was not for the purpose of reproducing the aesthetics of the work of art, but rather to present and mirror the atmosphere of the times, thus constituting transformative use of the work in question.

However, neither the court at first instance nor at appeal upheld the defendants’ defence grounds of “transformative use”. The courts held that the reproduction of the protected character design of the work in question was not for the purpose of giving the titles of the props, but rather to transmit its aesthetics, and mirroring the atmosphere of the times through reproducing the aesthetic expression and artistic value of the protected work in question did not constitute transformative use.

This was not the first case involving a dispute over “transformative use”. Back in 2016, the Shanghai Intellectual Property Court tried a copyright infringement case in which Shanghai Animation Film Studio sued, claiming that use in the posters for the film The Struggle of 80’s of the images of the characters of the TV series Calabash Babies and children’s animation Black Cat Detective constituted infringement, and found in the case that the act of the defendants fell into the category of “transformative use” and thus did not constitute infringement.

The court held that the purpose of the use of the artistic works regarding Calabash Babies and Black Cat Detective, in the posters for the film The Struggle of 80’s was to accent the status and age cohort of the main character in the film, and reflect the features of the age of those growing up after 1980, making it appropriate use.

Although the outcomes of the Chronicles of the Ghostly Tribe and the Struggle of 80’s cases differ, the courts in both proceeded to do an in-depth exploration and analysis of “transformative use”, from which it is possible to derive certain common adjudication principles: (1) examining whether the objective is to exploit the artistic value of the work in question; (2) examining the percentage of the entire work accounted for by the work in question as used; and (3) examining whether the use of the work in question affected the normal use of the work, infringing the lawful rights and interests of the copyright holder.

Compared with the examination standards of US courts for “transformative use”, the adjudication approach of Chinese courts has similarities and differences. Although they both emphasize examination of the purpose of using the work in question, Chinese courts do not require the defendant to show that its use of the work in question creates a “new work” or “new value”, a relatively conspicuous difference.

Furthermore, the Chinese courts also do not require the disputed work to take the form of a direct comment on the work in question to satisfy the conditions for applying “fair use”, thus expanding the scope of application of “fair use”.

Wang Yaxi and Guo Jincheng are partners at Yuanhe Partners

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