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TMCNet:  American Chinese Service Provider iTalkTV Loses Lawsuit Against the Copyright Owner of A Chinese Movie That Had Been Bootleg Broadcasted By iTalkTV

[February 01, 2013]

American Chinese Service Provider iTalkTV Loses Lawsuit Against the Copyright Owner of A Chinese Movie That Had Been Bootleg Broadcasted By iTalkTV

NEW YORK, Feb. 1, 2013 /PRNewswire via COMTEX/ -- Beijing Capital Online Network Technology Co., Ltd ("Capital Online") has been found guilty of infringing on the copyright owner of the movie, Single No More. The copyright owner, iTV Media (Beijing) Inc. ("iTV Media"), will be compensated for the economic losses that have occurred due to the infringing act by Capital Online. Infringement was established by the People's Republic of China Beijing Second Intermediate People's Court of First Instance judgment. Capital Online has been ordered to immediately stop broadcasting the movie. The movie was being broadcasted by iTalkTV, which is jointly operated by Capital Online, and its U.S. subsidiary iTalk Global Communications, Inc. ("iTalk"). The judgment from the court went into effect as of January 10, 2013. Judgement No.: (2012) Er Zhong Min Chu Zi NO.12122.

iTalk has been growing and thriving in North America with its VoIP business and its iTalkBB telephone service, which have gained a growing reputation in the market. In recent years, due to the maturation of VoIP services, market competition has intensified and iTalk moved into the IPTV service market. After the appearance of KyLinTV and other companies, which have stepped into the Chinese IPTV service market over many years, iTalk chose to work with a partner, Charming China, while at the same time contacted iTV Media, and developed its own IPTV technology. After a while, when the time was ripe for promotion, iTalk parted ways with Charming China and began to promote its own brand, iTalkTV.

In addition to the technology, content plays an important role in deploying a successful IPTV business. It is well known in the IPTV industry that original TV service content is expensive. Charming China has vast Chinese content. This allowed TV service providers to avoid the cost of purchasing and integrating Chinese content on their own. At present, since parting ways with their partner and maintaining their own independent operation, iTalk must bear all the purchase costs of their Chinese content. But as a latecomer to the TV service market, iTalkTV was aiming at iTalkBB phone users, and launched a series of preferential policies of inexpensive TV services to attract users. As one can imagine, this strategy meant that TV service was provided cheaply but the broadcast content was purchased at a high price, making it difficult to operate their business profitably.

In 2011, iTV Media participated in the investment and shooting of the movie Single No More as well as obtaining the exclusive overseas copyright of the movie.

Each year, November 11 is celebrated as "Singles' Day" by young people in China. Due to the fact that three "11s" appeared simultaneously on November 11, 2011, that day was known as "Super Singles' Day". It was on this day that the movie Single No More was released to the public in Chinese cinemas.

In January 2012, iTalkTV provided Video-On-Demand service of the movie Single No More to North American users, which was found and evidenced by iTV Media. In May 2012, iTV Media issued a warning letter to the Copyright Department of iTalkTV and demanded an end to all violations, which in return was rejected by iTalkTV. iTV Media found that the parent company of iTalkTV is actually a Chinese company called Capital Online, so iTV Media filed a joint copyright infringement suit against Capital Online and iTalkTV.

iTalkTV tried to use "user uploading," as an argument in court so as to avoid liability for tort. iTV Media provided strong evidence in court, and the argument of "user uploading," which was a conventional excuse for video sharing websites to escape tort liability, was not accepted by the court. At this stage, the situation is very unfavorable for iTalkTV. iTalkTV proposed to reconcile with iTV Media. iTV Media rejected iTalkTV's proposal for reconciliation. Ultimately, the court in China made the judgment that the infringement of Capital Online and its North American operation enterprise iTalkTV was deliberate, and the copyright losses and reasonable expenses of iTV Media would be compensated.

In recent years, with the rapid development of the Internet video industry in mainland China, a series of copyright disputes and lawsuits have arisen. This was the first case for a Chinese court to issue a verdict regarding the bootleg broadcasting by a Chinese enterprise and its U.S. subsidiary in North America, and enforcing compensation to the plaintiff. Because the copyright infringement occurred in North America, the procedure for obtaining evidence was complex and costly. During the rights safeguarding process, iTV Media insisted on protecting its own interests with legal representation. Even though it paid considerable costs in safeguarding their rights and interests, the significance and meaning of success was much greater than the compensation obtained from iTalkTV. iTalkTV's loss shows the Chinese government and judicial departments' tolerance for copyright infringement in grey zones is getting lower and lower, and reflects their strong determination to protect intellectual property rights. The jurisdiction and judgment of overseas infringement cases by the Chinese judicial authorities gives a glimmer of hope to overseas enterprises and their effort to safeguard their copyrights. The process will help to ensure fairness in the competitive environment of the Chinese TV market in North America.

The dramatic side of this case is that iTalkTV bootleg broadcasted the movie Single No More, but the copyright owner of the movie Single No More is iTV Media, the one they originally wanted to cooperate with. Ending their relationships with Charming China and iTV Media, iTalk managed to operate on its own, but ended up getting caught in the act of bootleg broadcasting, and eventually ended up losing the lawsuit and paying reparations. It proves the old adage, "the business circles are like the battlefield." The outcome of this case will most likely cause other parties to safeguard their copyright issues, and pay close attention to the moves of iTalkTV regarding copyright issues.


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