Plot Summary

A certain operating company has launched an "Accessible Film and Television" app that allows people with disabilities to stream hundreds of audiovisual works in "accessible formats" for free. A specific video website believes that the operating company has infringed its copyright. The central question is whether this constitutes infringement or reasonable use. What are the boundaries of reasonable use for "accessible audiovisual works"?

Additionally, an employee of a technology service company copied a client's confidential software code without authorization during their employment, violating the confidentiality agreement. The company demands full compensation from the employee as stated in the agreement. How will the people’s court determine the amount of compensation owed by the employee?

As new technologies create new issues, how should people’s courts participate in industry governance in these two disputes related to the internet and network technology?

Is the Dissemination of "Accessible Audiovisual Works" Considered Reasonable Use?

In the eighth episode of "Small Cases, Big Governance", Judge Tang Ruoyu of the People’s Court of Jinshan District, Shanghai, presided over a copyright infringement dispute involving "accessible audiovisual works".

"The 'Accessible Film and Television' app can provide published works in a manner that can be perceived by individuals with reading disabilities without the permission of the copyright holder, i.e., the plaintiff, and without payment, according to relevant laws. "

“Our position is that the defendant's use does not meet the statutory requirements for reasonable use, as some of the users targeted by the defendant’s app clearly do not fall under the category of 'reading-disabled individuals.'”

The courtroom featured a contentious exchange between the plaintiff, the video website, and the defendant, the operating company. The plaintiff holds the exclusive right to disseminate several film works via information networks. The defendant operates and promotes the “Accessible Film and Television” mobile app across major application markets, freely distributing the aforementioned works in accessible formats.

The plaintiff claims that the defendant has unlawfully provided these films, which they have the exclusive right to disseminate digitally, to the public through online streaming without consent, resulting in economic losses for the plaintiff.

The defendant argues that, in accordance with the spirit of the Marrakech Treaty and the revised copyright law, they can provide published works in accessible formats for individuals with reading disabilities without permission from the copyright holder or paying any remuneration, and requests that the plaintiff's claims be dismissed.

The plaintiff states that the reason for initiating the lawsuit is the defendant's suspected expansion of the "reading disability" category. The "Accessible Film and Television" app requires users to provide their disability certificate number for verification during registration. As a result, individuals with physical disabilities, speech disabilities, and mental disabilities have also been included in the registration eligibility, which the plaintiff argues clearly does not align with the definition of "reading-disabled individuals.”

As this is Shanghai's first copyright infringement case regarding "accessible audiovisual works", it carries significant demonstrative effects. The presiding judge made a special trip to the Jinshan District Disabled Persons' Federation to understand the conditions of individuals with reading disabilities in the area and their attitudes toward the "Accessible Film and Television" app.

Ultimately, through mediation by the People's Court, both parties reached an agreement: the accessible audiovisual works in question on the "Accessible Film and Television" app do not need to be taken down or deleted. Individuals who are visually impaired (indicated by the second-to-last digit of their national disability certificate number being 1), hearing impaired (2), speech impaired (3), or have multiple disabilities (7) have the right to register, log in, and use the "Accessible Film and Television" app operated by the defendant. The defendant company is required to regularly screen member information to prevent unauthorized users from accessing the accessible audiovisual works on the app.

The successful resolution of the landmark case ensures that more reading-disabled individuals can participate equally in social life and enjoy the benefits of cultural and digital economic development. However, the case also reflects the obstacles and difficulties that disabled groups encounter in sharing the fruits of societal development in recent years, emphasizing that judicial protection is essential in the construction of accessible environments.

To promote judicial accountability in protecting the civil rights of disabled individuals, a seminar titled "Promoting Accessible Environment Construction and Strengthening Civil Rights Protection for Disabled People" was held on November 27, 2023, hosted by the Shanghai High People's Court and the Shanghai Disabled Persons' Federation.

During the seminar, parties jointly released the "Proposal for Effectively Safeguarding the Cultural Rights of Reading-Disabled Individuals: 'Inclusive and Shared with Love'" (hereinafter referred to as "the Proposal") to inject new motive power into the protection of the rights of disabled individuals.

The protection of the civil rights of disabled individuals requires the joint effort of all sectors of society. At the seminar, the Shanghai High People’s Court and the Disabled Persons' Federation announced the Proposal, advocating for more attention, action, and changes from society to collectively create an inclusive and accessible environment. This aims to effectively safeguard the cultural rights of reading-disabled individuals and provide more replicable and promotable experiences for the high-quality development of accessible environments for disabled individuals and the legal protection of their rights in China.

Compensation for Breach of Confidentiality Agreement

The People's Court of Baoshan District, Shanghai, has adjudicated a labor contract dispute triggered by a breach of a company’s confidentiality agreement.

Mr. Hu, who studied computer science during his university years, began working for a software company as a developer after graduation. In October 2020, Mr. Hu joined the plaintiff company as a programmer and was assigned to assist in the software code development at a client company.

After joining the work project, Mr. Hu discovered that the code being developed was quite advanced, which greatly impressed him given his ten years of coding experience. Consequently, he developed an interest in studying this code. From October 13, 2020, Mr. Hu cut an 18GB file into approximately 1.8 million pieces for automatic external transmission. On October 23, taking advantage of the client company’s relocation, he removed the USB seal and packaged about 100GB of data from his computer onto a USB drive. Since the copied code contained important trade secrets of the client company, the company subsequently terminated Mr. Hu's employment and requested 20,000 RMB in compensation for economic losses.

On January 20, 2023, the client company deducted 1 million RMB from related service fees before paying the remaining amount to the plaintiff company. The plaintiff then realized that Mr. Hu's misconduct had caused actual losses amounting to 1 million RMB and subsequently filed a lawsuit in the People's Court, demanding that Mr. Hu assume full compensation responsibility according to the previously signed confidentiality agreement.

Mr. Hu's representative argued, "The defendant's actions were for learning and improvement, with little subjective malice. He acknowledged his mistakes afterward and did not cause any actual damage. The defendant has already compensated the plaintiff for his misconduct, and the amount exceeded his monthly salary standard. Compensation should have limits and should not be arbitrarily increased."

The main points of contention in this case were whether Mr. Hu's actions constituted a violation of the confidentiality agreement and basic professional ethics, and how much he should be required to pay in compensation.

During the trial, the plaintiff stated that Mr. Hu had signed several security and confidentiality agreements upon joining the company, fulfilling the obligation to inform him of the relevant terms. Based on the content of these agreements, Mr. Hu should compensate the company for the 1 million RMB loss.

In response to the plaintiff's hefty compensation request, Mr. Hu expressed his inability to accept it, arguing that he did not profit from his actions and that he had been assigned to the client company on his first day without sufficient pre-job training.

The People's Court of Baoshan District found that the plaintiff company had shortcomings in its information security and prevention measures. While employees are indeed obligated to perform their duties diligently and responsibly, employers also have a responsibility to manage diligently. In addition to requiring employees to sign confidentiality agreements upon hiring, employers should also provide subsequent training and education to serve as a warning. If an employer only requires an employee to sign a confidentiality agreement upon hiring and then demands that the employee bear all responsibilities, it unjustly places excessive burden on the employee. Although Mr. Hu later promptly deleted the files under the supervision of the client company and did not exacerbate the losses, his actions still violated the confidentiality agreement made with the plaintiff company and he must bear appropriate liability.

In conclusion, the People's Court of Baoshan District ruled that Mr. Hu must pay an additional 50,000 RMB in damages to the plaintiff company. The judges noted that such cases are not isolated incidents, as many enterprises and employees exhibit weak awareness regarding the protection of trade secrets. Consequently, the judges conducted in-depth research at the Baoshan District Federation of Trade Unions and identified three common issues among enterprises in the jurisdiction regarding trade secret protection:

1. After signing confidentiality agreements, there is insufficient clarification of the substantive content.

2. Provisions in the confidentiality agreements, such as liability distribution, do not comply with relevant legal regulations.

3. There is a lack of long-term supervision mechanisms, and there is no subsequent prompting or explanation of the agreement's content.

To address these issues at their source and demonstrate the concept of resolving conflicts at their origin, the People's Court of Baoshan District, with the assistance of the Federation of Trade Unions, organized an engaging legal education session for local enterprises. Through the judges’ explanations of the law, representatives from various companies expressed their commitment to enhancing their regulatory standards and raising awareness of trade secret protection.

In response to the issues exposed in this case, the People's Court of Baoshan District also issued judicial suggestions to the plaintiff company, encouraging it to regularly organize confidentiality training, conduct background checks when necessary, and continuously improve its confidentiality agreements and internal regulations while optimizing management practices. Shortly after the judicial suggestions were issued, the plaintiff company provided positive feedback.

Trade secrets are a core asset essential for the survival of a business. The courts aim to protect both the legal rights of employees and the trade secrets of enterprises. By interpreting laws through case studies and establishing long-term mechanisms, the courts strive to uphold a fair, honest, and trustworthy market order and business environment, embodying the concept of proactive justice.