The Supreme Court rendered the 106-Tai-Shang-31 Criminal Decision of January 5, 2017 (hereinafter, the “Decision”), holding that a sole license is not an exclusive license. Under a sole license, a copyright owner is obligated not to further license any third party after granting such license but does not preclude the copyright owner from exercising his/her own copyright.
According to the facts underlying this Decision, the Defendant operated a business of leasing computerized karaoke machines and providing relevant services. The Plaintiff owned the copyright to the songs at issue. The Defendant reproduced the songs at issue without the Plaintiff’s authorization and saved them in the computer memory card of a karaoke machine at a specific store so that they could be selected at random by customers in the store. Since this act infringed the Plaintiff’s copyright, the Defendant was penalized for the offense of copyright infringement through unauthorized reproduction with the intent to lease. Dissatisfied, the Defendant appealed.
According to the Decision, the licensed use of copyright consists of “exclusive licensing” and “non-exclusive licensing.” The former does not allow any further license to any third party for the same right and the licensor cannot exercise such right, while the latter allows licensing to multiple parties without restriction. If the agreement between the parties is not clear, the license will be presumed to be non-exclusive. However, a sole license is not an exclusive license. The similarity between a sole license and an exclusive license is merely that after the copyright owner grants a license is a party, the copyright owner is obligated not to further license any third party. A sole license differs from an exclusive license in that the copyright holder is not excluded from exercising his/her own copyright.
It was further pointed out in the Decision that although the Plaintiff had entered into an agreement under which a sole license was granted to a company for reproducing the songs at issue for use in karaoke business products along with distribution and leasing rights, the agreement specifically prohibited the company from granting a further license to any third party and required that such company inform the Plaintiff promptly in the event of any third-party infringement so that legal remedies may be sought. These facts show that this was not an exclusive licensing agreement. Therefore, the Plaintiff had the right to sue the Defendant for copyright infringement. Since the Defendant’s appeal was groundless and rejected, the decision which found the Defendant guilty was upheld.