Dispute over Copyright Ownership and Infringement Among Li Mou and A Technology Company, A Huaxia Company, A Culture Company and Zhao A
Dispute over Copyright Ownership and Infringement Among Li Mou and A Technology Company, A Huaxia Company, A Culture Company and Zhao A
[Facts]
A Technology Company and A Huaxia Company sold six paintings created by Li A on the “X Light Year” NFT platform. These paintings include “Painting of Buddha Preaching”, “Reversed Pipa”, “Flying Apsaras”, “Two Bodhisattvas”, “Pensive Bodhisattva”, and “Dunhuang Bodhisattva”. Li A believed that the above acts of A Technology Company and A Huaxia Company without his consent, infringed upon his rights to reproduce his works and disseminate them on information networks. Therefore, Li A filed a lawsuit with the Hainan FTP Intellectual Property Court, seeking an injunction to order A Technology Company and A Huaxia Company to cease their infringement of rights and compensate for economic losses.
[Judgment]
The Hainan FTP Intellectual Property Court held that the six paintings created by Li A had originality and belonged to works of art under the Copyright Law, and that Li A enjoyed copyright over these works in accordance with applicable laws. A Huaxia Company cast the six paintings into NFTs, constituting an act of reproduction. Making these NFTs available for transaction circulation through the “X Light Year” NFTs platform operated by A Technology Company, constitutes an act of providing the public with works via wired or wireless means, which is a form of information network dissemination. Therefore, the acts of A Technology Company and A Huaxia Company constituted infringement. The Hainan FTP Intellectual Property Court ruled that A Technology Company and A Huaxia Company should be jointly and severally liable to compensate Li A for economic losses of over RMB 260,000 and reasonable expenses of RMB 5,000. A Huaxia Company, unsatisfied with the first-instance judgment, appealed. The court of the second instance dismissed the appeal and affirmed the original judgment.
[Significance]
The NFT trading provides network services for the casting and trading of NFTs based on blockchain and smart contract technology. In the trial of cases involving disputes over copyright infringement involving NFTs, the infringement responsibilities of casters and trading platforms shall be differentiated. Casters, who have cast any NFT without obtaining the prior authorization of the relevant IPR from the right holder, will be convicted of infringing the legal legitimate rights and interests of the right holder and shall bear the corresponding responsibility. As e-commerce platform operators, NFT trading platforms shall also perform a reasonable review and higher duty of care, and need to take necessary measures to review whether the casters of NFTs are the copyright owner or enjoy legal authorization, thus preventing the infringement of IPR. In this case, the responsibilities of the caster and the NFT trading platform were determined in accordance with, effectively guiding and regulating the risk of copyright infringement in the NFT trading market.
