International Law

China IP Infringement: Thinking About Settling That Case?

By Stan

Judges in China have been under a lot of pressure to push parties into settling cases. Some of this has to do with pronouncement from on high that mediation and settlement is preferable over litigation in a “Harmonious Society.”

Many foreign litigants have come across this problem, particularly when the settlement appears to favor the other, domestic, party or is otherwise seen as unfair. There are many reasons to reject a court-sanctioned settlement, and without knowing the details of a given case, I wouldn’t make any generalizations between going for a judgment or settling the matter out.

However, I do like to point out once in a while that many of these problems plaguing foreign IP owners are issues faced by domestic companies as well, and that settlement that may seem to be a situation where a Chinese judge is siding with a Chinese company is simply a “normal” award.

Case in point, this recent dispute in Ningxia involving 24 Internet cafes that were distributing copyrighted materials (movie files). The Beijing-based copyright owner sued the Net cafes for copyright infringement.

The judge pushed for a settlement, which the copyright owner and 22 of the Net cafes agreed to. Under the terms of the settlement, each Net cafe agreed to pay RMB 3,000 to the copyright owner, or a total of RMB 66,000 (roughly USD 9,700). Not much, yes, but it was a domestic copyright matter and the location was Ningxia.

Even more interesting, the two Net cafes that refused to settle had to pay RMB 6,000 apiece, still a small amount but double the settlement amount and therefore significant.

This case does not necessarily tell us anything about the merits of settling cases in China. If the copyright owner had held out for 6K apiece from all litigants, for example, who knows what might have happened? On the other hand, it’s encouraging to see that the judge did what he/she could to move things along, and when the two holdouts refused the settlement, they had to pay the price.

Here’s an intro with a link to more details (couldn’t find English):

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Post tags: china litigation, china mediation, copyright infringement, Intellectual Property

Full post as published by China Hearsay on March 02, 2010 (boomark / email).