Case 5
Copyright and Tort Dispute over “Mao Dun Manuscript”
Trial Docket: (2016) Su0116MinChu No. 4666 Appeal Docket: (2017) Su01MinZhong No. 8048
[Headnotes] The owner of an original work of art, by obtaining the property right, does not necessarily obtain the copyright per se. When property right conflicts with copyright, the exercise of the property right should not cause injury to the legitimate interest of the copyright owners. An auctioneer, upon entrustment from a property principal, should be responsible for taking care of the property right, in addition to the protection of reasonable copyright. Copyright Law does not restrict the expression of intellectual result to a single use, nor does it preclude the possibility that a single work be recognized as different work of arts. When a piece of intellectual achievement qualifies for both work of literary art and for artistic work under Copyright Law, it should be treated both as a literary work and as artistic work, to be entitled to appropriate copyright protection.
[Synopsis] Appellant (Plaintiff below): SHEN Weining, SHEN Danyan, SHEN Maiheng Appellee (Defendant below): ZHANG Hui, JingDian Auctions Co., Ltd. of Nanjing (JingDian Auctions) In 1958, Mr. MAO Dun wrote a critique in paint brush, A Talk on Recent Novelettes, which was published in People’s Literature. Subsequently, ZHANG Hui obtained the manuscript of the article, and in 2013 entrusted JingDian Auctions to sell it. Upon entrustment JingDian uploaded HD photos of the manuscript for promotion on company website and bloggers. The public may inspect the manuscript in its entirety while viewing the website of the auctions, and may examine the details of the manuscript using the magnifying glass function. In the end, the auction failed, and the manuscript is still in ZHANG’s possession. Upon completion of the auction, JingDian Auctions continued to display the manuscript and did not delete it until June 2017. Shen Weining, Shen Danyan, Shen Maiheng are the legitimate heirs to Mr. Mao Dun, who believe the preceding auction by ZHANG JingDian Auctions is in violation of the copyright in the manuscript, and files a lawsuit claiming: 1. An injunction against ZHANG and JingDian Auctions from infringement of the right of display, publication, reproduction, distribution, network dissemination of information for the manuscript as work of art, and of the right of reproduction, distribution and network dissemination of information for the manuscript as literary work; 2. Acknowledgment of wrongdoing and apology from JingDin Auctions and ZHANG on the Internet; and 3. Payment of economic damages from JingDin Auctions and ZHANG in the amount of 500,000 Yuan.
After the trial court decision, the Shens, not satisfied, appeal to the Intermediate People’s Court of Nanjing. The court, upon trial, finds
I. That ZHANG Hui is the rightful owner of the manuscript.
As far as the substantive rules are concerned, the manuscript is a tangible movable which is actual possession of ZHANG, which under Real Right Law is the public notice for property ownership, and the prima facie evidence of ZHANG Hui’s ownership of the manuscript unless proven to the contrary.
II. That the manuscript is both a literary work and an artistic work.
By classification, an artistic work, being a copyrightable subject matter for work of art under Copyright Law, must show aesthetic beauty, “through arrangement of lines, colors, etc.” apart from the originality and reproducibility requirement for other works in general. In this case, Mr. Mao’s manuscript, a ten thousand word long article written by paint brush taken by its entirety, shows coherence and calligraphy, using upright tips accompanied by side tips, with a taste of beauty, obviously qualifies for artistic work under Copyright Law. The Law never precludes a work from multiple expressions to be recognized as different types of works. The manuscript at issue is an intellectual achievement of a work expressed in so many words, as well as a piece of art, i.e., it is both a literary work, and a work of (calligraphic) art.
III. JingDian Auctions infringes the copyright in artistic work for the manuscript.
JingDian Auctions fails to exercise due care. In this case, JingDian Auctions not only has the duty to verify the identity, property ownership of the consignor, but also take into consideration the copyright status contained in the manuscript. JingDian Auctions fails, however, to live up to its duties of due care, by failing to verify the copyright status or the proprietorship of the manuscript at issue when first entrusted, or to take care for avoiding the copyright owner/ s’ interests in the subsequent auctions, which is intentional negligence. The upload of the manuscript in high fidelity format of 2836×4116 pixels to the auction website, revealing every detail in its entirety to the public without reservation, and the continued use of the work after the auction by JingDian, are infringement of the right of publication, reproduction, display, and network dissemination of information of artistic work in the manuscript, for which liability follows.
Finally, ZHANG Hui’s conduct is not copyright infringement. As owner of the manuscript, he has the right to dispose of his own legitimate property by means of auction, without the intention of copyright infringement or conduct of executing the infringement. JingDian Auctions’ infringement does not necessarily stem from ZHANG’s entrustment. Therefore, ZHANG Hui does not infringe upon the copyright of the manuscript.
The Intermediary Court of Nanjing decides in the second instance: JingDian Auctions is liable for an apology by publishing a statement for its infringement in Yangzi Evening and its official website, and for a payment of 100,000 Yuan in damages to SHEN Weining, Shen Danyan, Shen Maiheng.
[Judge’s Comment] I. This case specifies the duty of due care for intellectual properties on the part of an auctioneer in auction activities. As the value of an artistic work increases with time, it is usually transferred in the market by means of auction. Yet in reality, an auctioneer may not be fully aware that the original work of art may carry two sets of rights in chattel and in copyright, which result in giving more weight to the ownership of the chattel and not the copyright, leading to injuries of intellectual property proprietorship. In the past, there were cases that dealt with copyright issues in auction activities but did not reveal what rules were to be followed. The significance of this typical case is that it delineates the rights and obligations in the overlapping areas of Copyright Law, Real Right Law, and Auction Law, specifying the duty of due care for the auctioneer. When an auction item involves intellectual property, the auctioneer should conduct the auction in appropriate form, by either obtaining approval from the owner, or taking reasonable and effective measures for avoidance.
II. Balancing and protecting the legitimate interests between chattel owners and copyright holders. This case clarifies that lawful execution by owner of an original piece of work, in which the copyright and property right are separated, for disposal, profit, or display, will be protect by law, not to be interfered with by the copyright holder, and especially when the literary work is already published, the copyright holder’s claims may not be sustained in court, delineating the boundaries of different rights, and embodying the judicial concept of balancing the protection for legitimate chattel rights and copyright.
III. Showing the concept for strict protection and lucid judgment. The case reflects a heightened duty of care by imposing due diligence for auctioneers, as well as strict protection of intellectual property by requesting an apology to copyright holders on basis of injunction and compensatory damages. Meanwhile, the factual findings on the property ownership for the manuscript, the meticulous analysis for the copyright infringement, and the assessment of the amount of damages based on careful consideration of the infringing activities and consequences, all these show the lucid judicious concept for judgment, which may serve as a model.
（Translated by Zheng Xiaojun, Yuan Renhui)
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