Curbing damage awards in copyright infringement cases

Over the past few years, the distribution of information through the internet has rapidly developed. This has brought disputes between internet service providers (ISPs) and copyright owners. Due to the anonymity, expediency and convenience associated with uploading works to the internet, copyright owners frequently hold ISPs liable for infringement, which takes place over the virtual space under the ISP's control. In most cases, as the infringing works have already been removed or deleted by the ISPs, the main goal for copyright owners bringing lawsuits is to seek damages. For example, in Beijing, Haidian District People's Court recently ruled in favour of the Writers Copyright Protection Alliance against Baidu, whose online library, Baidu Wenku, offered copyrighted works for free without authorisation. The Court awarded Rmb145,000 ($23,250) in damages. In another case before the Beijing No 2 Intermediate People's Court, the Encyclopaedia of China Publishing House recovered Rmb520,000 in damages against Apple, for infringing works available for download from their App Store using an iPhone or iPad.

The PRC Copyright Law (中华人民共和国著作权法) entitles a copyright owner whose work has been infringed to actual damages, infringer's profits or statutory damages, with the actual damages as the primary form of compensation. As many ISPs only provide a platform for distribution of a wide range of materials, the infringing works on their websites often have a minimal effect on the traffic to the website, so the benefit that ISPs derive from the infringement is often minimal. This renders proof of actual damages critical to digital copyright infringement cases.