XII

Although the operator cannot directly make profits by playing background music in the business place, the operator shall still obtain authorization from the copyright owner and pay reasonable royalties to the copyright owner if playing background music is beneficial to create a good atmosphere and then improve customers’ enjoyment when they go shopping, which can promote the business; otherwise, it will constitute infringement.

Case 1: Company A played a well-known Chinese popular song X in the mall it operates without authorization, and the Music Copyright Society of China became the right owner of the song through authorization.After learning about the situation, the Music Copyright Society of China applied to the notary office for preserving evidence of Company A’s infringement and filed a lawsuit in court.Finally, the court ruled that Company A should immediately stop using the case-related musical works and compensate Music Copyright Society of China for economic losses and reasonable expenses of RMB 3,500 yuan.((2019) Min 0102 Min Chu No.147)

The court held that: Company A publicly played the case-related musical work as background music in the business place without permission, infringing on the relevant right owners’ rights of performance,and shall bear the corresponding civil liability.Regarding the amount of compensation, Music Copyright Society of China cannot prove the loss it suffered caused by the infringement of case-related musical work.Furthermore, no evidence can be cited to prove the illegal gains of Company A, so the court of first instance comprehensively considered the type and popularity of this song, and the location of Company A’s business premises, the actual operating area, ways of use, the extent of subjective intention of the infringement and other factors to determine the amount of compensation.In addition, the court supported that Music Copyright Society of China shall be compensated for the notarization fee, attestation consulting service, copy comparison fee, costs for transportation and accommodation costs and other necessary and reasonable expenses generated by Music Copyright Society for conducting evidence preservation and filing a lawsuit to stop infringement.(https://www.daowen.com)

Case 2: Company B’s branch company played the musical work “W”as background music publicly in its business place without permission and did not pay royalties.After discovering the infringement, the Music Copyright Society of China that enjoys the copyright of the song negotiated and sought counse with the Company B, but Company B and its branch refused to resolve the issue of copyright authorization with the Music Copyright Society of China by negotiation.Therefore, the Music Copyright Society of China filed a lawsuit in court.((2013) Hang Bin Zhi Chu Zi No.55)

The court held that: The right of performance refers to the right to publicly perform works, and to publicly broadcast the performance of works by various means.The copyright owner may permit others to exercise the right of performance, and receive remuneration accordingly.Company B argued that it had signed a Background Song Playing License Agreement with an outsider Company C and had obtained legal authorization of the case-related song, but it did not submit evidence to prove this fact within the period specif ied by the court, so it should bear the legal consequences.Although Company B’s branch cannot directly make profits by playing background music in the business place, it shall pay reasonable royalties to the copyright owner because playing background music was beneficial to create a good atmosphere and improved customer’s enjoyment when they went shopping, which promoted the business.

Company B’s branch publicly played the musical work “W” as background music at its business place without permission and did not pay the remuneration, which infringed on the Music Copyright Society of China’s right of performance for the work involved.Company B shall bear the civil liability for stopping the infringement and compensating.Since Company B’s branch had no independent legal personality, Company B and its branch shall jointly bear the corresponding liability for compensation.Regarding the amount of compensation for infringement in this case, as Music Copyright Society of China did not provide relevant evidence of its actual loss and infringers’ profits gained from the tortious acts, the court considered the type, popularity of the music work involved, the defendant’s business model, the scale of business, the infringement plot, and reasonable royalties to use the case-related musical works to determine the compensation fee Company B and its branch shall pay for the economic losses of the Music Copyright Society of China and the reasonable costs incurred by instituting a lawsuit, the amount of which is RMB 3,200 yuan.