July 4, 2018   China Intellectual Property News   Page 09

Reporter Feng Fei, Correspondent Chen Yingying

Following a highcompensation of RMB 9million yuan for aninfringementon software copyright in early June this year, Shanghai Intellectual Property Court recently awarded another huge compensation of RMB 15.05 million yuan for copyright infringement on the same series of software.

The plaintiff in this case, Dassault Systemes S.A (hereinafter referred to as "Dassault "), believed that the defendant, TJ Innova Engineering & Technology Co., Ltd. (hereinafter referred to as "TJ"), had used its CATIA series software on a large scalewithout authorization and therefore filed a lawsuit to Shanghai Intellectual Property Court. After the trial, the court made a first-instance judgment that TJ should stop the copyright infringement and compensate for Dassault's economic losses and reasonable expenses totaling RMB 15.05 million yuan.

The relevant responsible person of Shanghai Intellectual Property Court said, “The amount of compensation was determined reasonably based on the statutory compensation limit, and with consideration of the evidences submitted by both parties on the sale price of the software, the quantity of infringing softwarethat has been ascertained, the price of Dassault's CATIA series software, TJ's infringement duration and subjective bad faith, etc, showing the court's determination to severelypunish wilful infringement of software copyright. ”

Unauthorized use of other's software

Dassault, the copyright owner of CATIA series computer software, found that TJ, an independent automotive engineering technology company, posted job adson various recruiting websites to recruit professionals skilled in CATIA software. Believing that there was enough evidences proving TJ's unauthorized massive use of its CATIA series software, Dassault filed a lawsuit to Shanghai Intellectual Property Court and applied for pre-litigationevidence preservation.

After investigation, Shanghai Intellectual Property Court ruled to preserve the evidences in TJ's computers at its office with regard to the installation, uninstallation and usageof CATIA series software.

On May 11, 2017, the executivejudges of Shanghai Intellectual Property Court went to TJ's office to preserve the evidences in TJ's computers by way of sampling inspection and videotaped the entire process. According to the on-site preservation, TJ had 180 computers and the executive judge conducted random inspection in a 10% proportion. Among the 18 computers inspected, only 2 had no installation records of CATIA series software. In the course of evidence preservation, the judges found that TJ had deleted the CATIA series software from some computers.

Believing that TJ's commercial use of itscopyrighted CATIA series software in its office computers constituted infringement of its software copyright, Dassault requested the court to order TJ to stop the infringement immediately and compensate for its economic losses totaling RMB 15 million yuan and reasonable expenses totaling RMB 10, 000 yuan. 

In response to Dassault's complaint, TJ argued that computers with no CATIA software worklog or with incomplete worklog shouldn't be considered as having used the alleged infringing software; besides, the software involved was reasonably used for teaching purpose. Therefore, TJ didn't commit the copyright infringement.

Four factors contributed to a high compensation

After the trial, Shanghai Intellectual Property Court confirmed three key issues in this case, including how to determine the amount of compensation. According to existing evidences, the court awarded a large amount of compensation, which made a stir in the industry.

When determining whether TJ infringed upon the software copyright of Dassault, the court held that according to the evidence preservation record, relevant video recordings and the appraisal opinions of the Judicial Expertise Center, it can be concluded that TJ did install CATIA series software on the computers in its workplace. Meanwhile, it can be inferred from the date of modification of the log files in the 18 computers inspected by the appraiser that TJ had deleted relevant software during the period of evidence preservation. In view of TJ's destruction of evidence, the court made a presumption against TJ, that is, the CATIA series software installed on TJ's computers was the software of which Dassault had claimed copyright. In this case, TJ is a business company specialized in automobile design rather than an educational institution or a public welfare organization, whether based on its business scope, corporate introduction, or the recruitment information. It's a commercial user of CATIA series software, and therefore, its use of the software without authorization wasn't reasonable. To sum up, Shanghai Intellectual Property Court held that TJ's act of installing Dassault's copyrighted software on its computers without authorization infringedupon Dassault's right of reproduction of the software involved. It shall bear the civil liability of stopping the infringement and compensating for the losses according to law.

"In this case, although it's difficult to determine Dassault's actual losses and TJ's illegal proceeds, the existing evidence provided by Dassault can prove that the losses suffered by Dassault as a result of the infringement exceeded the statutory compensation limit (RMB 500,000 yuan) under the Copyright Law, " the presiding judge said.

When determining the amount of compensation, the court mainly considered four factors, including, as the presiding judge introduced, i). quantity of infringement. According to the on-site evidence preservation, TJ had about 180 computers and the judge decided to inspect 10% of them after negotiating with the relevant responsible person of TJ. It's found that 16 out of 18 computers installed the infringing software, and it can be inferred that the defendant installed 160 sets of the infringing software in total; ii). the price of Dassault's CATIA series software. The evidence submitted by Dassault showed that the software involved was sold at about RMB 200,000 yuan, while the evidence submitted by TJ showed it was sold at about RMB 100,000 yuan; iii). duration of the infringement. TJ didn't purchase the software involved or pay for its upgrading since 2006; and iv). TJ's subjective bad faith. As a business company engaged in automobile design, TJ should have been fully aware of the copyright owner of the software involved and the way in which it's legally used. Given this, Shanghai Intellectual Property Court made the above judgment. As of the press release, the case was still subject to a period of appeal.

According to the relevant responsible person of Shanghai Intellectual Property Court, “Following the decision of high compensation for a copyright infringement upon the same series of software in early June this year, the court has once again cracked down on willful infringement by software piracy to effectively safeguarded the legitimate rights and interests of the right holders.”