Suspected core IP ownership, Central and South cultures respond to "ghosts blow out the lamp" copyright dispute

Zhongnan Culture's acquisition announcement has resurfaced the complex copyright dispute of "Ghost Blows Out the Lantern". Focusing on the issue of ownership of this super IP, the two parties to the confrontation-Shanghai Xuanting Entertainment Information Technology Co., Ltd.(plaintiff) and Beijing Xinhua Pioneer Culture Media Co., Ltd.(defendant)-sued the court, involving a compensation amount of 50 million yuan. Currently, both parties are waiting for a court decision

Zhongnan Culture's acquisition announcement has resurfaced the complex copyright dispute of "Ghost Blows Out the Lantern". Focusing on the issue of ownership of this super IP, the two parties in the confrontation-Shanghai Xuanting Entertainment Information Technology Co., Ltd.(referred to as "Shanghai Xuanting", the plaintiff) and Beijing Xinhua Pioneer Culture Media Co., Ltd.(referred to as "Xinhua Pioneer", the defendant)-sued the court. The lawsuit involved a compensation amount of 50 million yuan. Currently, both parties are waiting for the court's decision.

"These disputes have historical causes and deserve reflection from the industry." On July 15, a veteran of a well-known IP platform operator said in an interview with reporters that some popular IPs have brought huge economic benefits in recent years, and more and more companies are competing for the IP market. However, there is a certain chance that IP is popular, and the probability of success is not high. Some listed companies have entered this field across borders, but the industry has not accumulated enough and there are certain risks.

Zhongnan Culture responded to a written interview with reporters on July 17, saying that the seller had promised the listed company that if the target company incurred litigation before this acquisition and caused losses, the seller would bear all losses.

Behind

the huge economic benefits of Super IP "Ghost Blows Out the Light", the seller promises to bear contingent losses, there are many copyright lawsuits involved. Zhongnan Culture has attracted attention due to a 450 million yuan acquisition.

On June 22, the Zhongnan Culture Shareholders 'Meeting passed a resolution to acquire 100% equity of Xinhua Pioneer for 450 million yuan. This is also the largest acquisition in the history of the private book industry, attracting attention from many parties.

According to Zhongnan Culture, Xinhua Pioneer is currently one of the few modern new media "Internet +" companies in China that simultaneously has Internet publishing rights (Xinhua Reading Network), physical book publishing and film and television adaptation integration throughout the industry chain. It owns a large number of famous writers such as Wang Meng, Yan Geling, Liang Xiaosheng, Tianxia Ba Chang (original name "Zhang Muye"), Liu Meng, Ji Lianhai, and Xu Kaizhen. It also launches a group of newcomers every year. After the acquisition of Xinhua Pioneer, the company can open up the entire industry of culture and entertainment. In the future, it is expected to achieve good market synergy between movies, TV series, games and derivatives with the same high-quality IP, and become a cultural company with comprehensive layout from IP source to derivatives. enterprise.

However, behind the seemingly perfect deal, Xinhua Pioneer, the target of the merger, has involved multiple lawsuits.

The litigation list provided by Shanghai Xuanting to reporters shows that the company has filed or plans to file a total of 13 series of cases involving infringement of Ghost Blows Out the Lantern IP in the court, and the total amount of compensation required in the lawsuits is 50 million yuan. A person from the Xuanting Legal Department in Shanghai said that in addition to requiring Xinhua Pioneer and other infringing parties to stop operating infringing IP, they also filed a compensation request of more than 50 million yuan and have applied to the court to seal up Xinhua Pioneer Bank accounts.

Data from "Qixinbao", a well-known domestic corporate credit data inquiry service platform, shows that from June 17, 2010 to March 11, 2016, a total of 9 court decisions involving Xinhua Pioneer, including Xinhua Pioneer and Shanghai Xuanting. Litigation between.

Wang Dongdong, the actual controller and president of Xinhua Pioneer, confirmed to reporters on July 12 that there was a lawsuit with Shanghai Xuanting.

According to the audit report issued by Jiangsu Gongzheng Tianye Certified Public Accountants (Special General Partnership), as of December 31, 2015, Xinhua Pioneer's total assets were 42.5686 million yuan and its net assets were 36.1689 million yuan. Some investment bankers said that based on this calculation, the above-mentioned litigation compensation amount exceeded 5% of the transaction price, and also exceeded the audited absolute value of Xinhua Pioneer's net assets at the end of 2015 by more than 10%, and the amount exceeded 10 million yuan. According to relevant regulations, it is a "major lawsuit".

However, Zhongnan Culture did not disclose the above litigation in its announcement on the acquisition of assets. The announcement stated,"The target of this acquisition is 100% equity of Xinhua Pioneer. There is no mortgage, pledge or other third-party rights in the equity, there are no major disputes, litigation or arbitration matters involving the equity, and there are no judicial measures such as seizure or freezing."

The reporter sent an interview letter to Central South Culture on relevant issues. Zhongnan Culture responded in writing on July 17:1. The subject matter of this lawsuit is all book copyrights. These copyrights are currently attributed to the original shareholder related company "Beijing Xinhua Pioneer Publishing Technology Co., Ltd.". This company is not within the scope of the acquisition by the listed company. The subject matter of the acquisition "Beijing Xinhua Pioneer Culture Media Co., Ltd. and Horgos Pioneer Culture Media Co., Ltd." will be mainly responsible for copyright operations other than book copyrights in the future (Including movies, TV series, online dramas, games, stage dramas, variety shows, animation adaptations, etc.);2. The company learned from the seller that Shanghai Xuanting Entertainment Information Technology Co., Ltd. only owns the property rights of eight works of "Ghost Blows Out the Light" written by Zhang Muye (The World Banquet), and in the lawsuit, the subject matter of this time is not within the scope of these eight works. Xinhua Pioneer owns all copyrights of more than 20 works of Zhang Muye (The World Banquet) except these eight works; 3. Except for the book copyright, the subject matter of the lawsuit has not yet been developed and currently does not contribute any income or profits to the listed company;4. The seller has promised to the listed company that if the target company arises from litigation before this acquisition, all losses will be borne by the seller; 5. According to the "Equity Transfer Agreement", if the contract signed by other affiliated companies of the seller before the acquisition involves Xinhua Pioneer's main business, the seller will promptly or at the request of the listed company change the contract subject or relevant rights and interests to or transfer it to Xinhua Pioneer's name; At the same time, the counterparty has also made a profit commitment for this transaction and agreed on profit compensation measures, which are conducive to protecting the rights and interests of the listed company.

Doubt about core IP ownership The

above series of lawsuits were triggered by the IP ownership issue of Ghost Blows Out the Lamp.

Four electronically scanned versions of the "Cooperation Agreement" provided by Shanghai Xuanting to reporters show that Shanghai Xuanting signed relevant agreements with Zhang Muye, creator of "Ghost Blows Out the Lantern", in March and April 2006, and in January and August 2007 respectively. "The one signed at the beginning was essentially a 'share contract', and the one signed later was a' buyout contract'." The above-mentioned Shanghai Xuanting legal person explained,"Based on this contract, Zhang Muye has transferred all the copyright rights of" Ghost Blows Out the Lantern "to Shanghai Xuanting, and the company has authorized it to adapt and form books, games, comics, movies and online dramas, etc. IP operation industry chain, so Shanghai Xuanting is the only legal owner of" Ghost Blows Out the Lantern "IP."

In response to this statement, Wang Dongdong pointed out that in previous court cross-examination, some of the above-mentioned contracts "the signature of the world's bully singer is fake", and some provisions in the contract took advantage of the author's lack of legal knowledge to sign the "bully clause."

In this regard, the above-mentioned person from the Shanghai Xuanting Legal Department confirmed the false signature. He explained that in 2006, the contract signing method between the "Qidian Chinese Network" operated by the company and the creator was "postal signing", that is, the Qidian Chinese Network staff contacted the author on QQ and asked the author to provide contact information, and then mailed the cooperation agreement to the author, and then mailed it back to the company after the other party signed the contract. "Because the contract was signed off-site at that time, it was impossible to confirm whether the agreement was autographed by the other party." However, he emphasized that the company then transferred the signing fee to "Zhang Muye" personal account. In addition, in the signing of follow-up agreements in January 2007 and April 2008, they were all changed to "on-site signing", and Zhang Muye also tacitly agreed to the cooperation agreement not signed by him.

In response to the overlord clause, a lawyer from a Sichuan law firm specializing in copyright disputes pointed out after reading the electronically scanned version of the "cooperation agreement" issued by Shanghai Xuanting that the terms of the above agreement are in compliance with relevant national laws and regulations.

The reporter made requests to Xinhua Pioneer and Shanghai Xuanting to "provide Zhang Muye's contact information" respectively. However, Xinhua Pioneer refused to provide it on the grounds of existence of trade secrets. Shanghai Xuanting said,"The company has been trying to contact Zhang Muye to negotiate a copyright dispute, but has so far been unable to contact me. It has previously requested Xinhua Pioneer to provide contact information in court, but the other party refused."

On July 12, Wang Dongdong told reporters that Xinhua Pioneer had signed an exclusive agreement with Tianxia Baqu to operate the copyright of its works under the authorization of Tianxia Baqu. This is also the usual model for Xinhua Pioneer to cooperate with its authors."We have thousands of writers under our jurisdiction. In the past, Tianxia Ba Sing was not a very important position in our writer resources, but it has recently increased very rapidly. Now Tianxia Ba Sing's several IPs are the top IPs on the market."

Xinhua Pioneer did not provide the relevant agreement signed between the company and Zhang Muye. Zhang Muye could not be reached through third-party channels for comment on the copyright dispute.

It is understood that the real name of Tianxia Ba Singer is "Zhang Muye" and is the creator of "Ghost Blows Out the Lantern I" and "Ghost Blows Out the Lantern II". There are a total of 8 books in these two books. Xinhua Pioneer is involved in litigation in the adapted versions that have appeared in the subsequent market-"The Ghost Blowing the Lantern's Holy Spring Searching","Ghost Blowing the Lantern's Farming Poison Gu","Ghost Blowing the Lantern's Mountain and Sea Demon Tomb","Ghost Blowing the Lantern's Mysterious Tomb in Xiangxi","Ghost Blowing the Lantern's Town Warehouse and Crazy Sand","Golden Coffin Ling Beast"(the prequel of Ghost Blowing the Lantern), and "The Commander of the Nine Youths of the Jin Dynasty". The above works are all paper books.

"Since the company signed a buyout agreement with Zhang Muye, the adaptation rights of his work cannot be infringed." On July 17, the above-mentioned person from the Shanghai Xuanting Legal Department stated that Xinhua Pioneer was suspected of violating the company's copyright (adaptation rights). In addition,"The Golden Coffin Tomb Beast", which is known as the "Prequel of Ghost Blows the Lantern", actually has "nothing to do with" Ghost Blows the Lantern ". It is marketed under the banner of" Ghost Blows the Lantern "and is suspected of" unfair competition." Based on this, Shanghai Xuanting decided to sue the relevant infringement company. The person said that before the court issued a judgment, relevant parties should not use the "Ghost Blows the Lamp" IP to avoid misleading investors. He also emphasized that Zhang Muye has many works, but Shanghai Xuanting only claims the relevant rights in the "Ghost Blows Out the Lantern" series through legal form, and does not care about the rights of other unrelated works.

Xinhua Pioneer and Shanghai Xuanting both told reporters that they are currently waiting for the final verdict of the court.

The copyright market urgently needs to regulate

the "Ghost Blows Out the Lamp" IP disputes have historical reasons and deserve reflection from the industry.

On July 15, a veteran person from a well-known domestic IP platform operator said in an interview with reporters that from 2005 to 2014, the domestic IP market was chaotic, authors 'copyright awareness was not strong, and the phenomenon of "multi-party buying and selling the same copyright" was relatively common. After some IP generated huge economic benefits, problems arose. In the past two years, authors 'copyright awareness has gradually increased, and IP operators have also paid more attention to the legal risks of IP and taken various measures to prevent them. This is conducive to the healthy development of the IP market.

On April 26, the "2015 China Online Copyright Protection Annual Report" commissioned by the National Copyright Administration by China Information and Communications Research Institute pointed out that as the market gradually matures, IP has moved from single-line authorization and sporadic development in the past to a chain or even network new business format that connects the entire entertainment industry. However, the disorderly sale, resale, and hoarding of IP makes it difficult to effectively realize the reasonable allocation of IP resources, and the homogenization of works is serious.

The "Report" also pointed out that in 2015, disputes arising from copyright authorization emerged one after another: disputes such as the authorship rights of writers and the adaptation rights of film and television dramas occurred on popular IPs such as "Legend of Mi Yue","Ghost Blows Out the Lantern", and "Flower Thousand Bones". This reflects the chaos in copyright ownership and cross-licensing methods in China's IP market, resulting in more and more copyright disputes between companies. The number of cultural works with the same name presented to users is too large. Various chaos urgently needs industry regulation.

The source pointed out that the IP market originated from e-books. Due to the stable scale of the e-book market and the slowdown in revenue and user growth, some IP platform providers began to expand into the IP derivative market, including books, games, comics, movies and online dramas, etc. The entire upstream and downstream IP industry chain operates. In particular, super IP releases a huge money-making effect, driving various capitals to chase each other.

According to statistics, since the second half of last year, A-share listed companies have launched a fierce battle for IP. In June of that year, Huawei acquired Dream Xingsheng Garden, which had reserved more than 20 important literary IPs, for 1.2 billion yuan; in July, Ciwen Media, which produced film and television works such as "Flowers Thousand Bones" and "Seven Swords Down the Tianshan Mountains" and reserved more than 40 IP copyrights, was approved for listing with Hexin shares for 2.4 billion yuan; in September, Century Culture, which owns super IPs such as "Zhu Xian","Loulan", and "Kunlun", purchased a shell *ST Xingmei at a price of 3 billion yuan. The most recent one is Zhongnan Culture's plan to acquire 100% equity of Xinhua Pioneer for 450 million yuan.

In the fierce battle, the copyright prices of IP resources, especially Super IP, have soared. With the super IP aura of "Ghost Blows Out the Lamp", the IP copyright of the novel of the world's bully is so popular that it "has been sold before writing." "Except for the eight controversial books" Ghost Blows Out the Light ", we have not developed all other works of Tianxia Ba Sing, including games, movies, TV series, online series, stage drama, theme park, and various derivatives. The copyright of the works of the world's tyrants, especially the copyright of new books, is very high. For example,"The West City Wind and Cloud", the individual rights quoted on the market amount to tens of millions of yuan, and all the rights add up to hundreds of millions of yuan." Wang Dongdong said.

The above-mentioned veteran of the well-known IP platform operators said that due to the huge economic benefits generated by some popular IPs, more and more companies and even layman companies are competing in the IP market. However, IP is popular with a certain chance, and the probability of success is not high. Some listed companies have entered this field across banks, but the industry has not accumulated enough and there are greater risks. "The cultivation of IP takes a long time and consumes considerable financial and material resources. We cultivate 100 IP at the same time, but only two or three may eventually mature." He said that even though his company has been operating in the IP field for more than ten years, it has often adopted the form of cooperation with professional institutions when developing IP follow-up products to further reduce risks.

It is worth noting that the actions of some listed companies to acquire IP at high prices have triggered secondary market hype and been widely criticized. On July 14, the Shenzhen Stock Exchange issued the "Shenzhen Stock Exchange GEM Industry Information Disclosure Guidelines No. 1-Listed Companies Engaging in Radio, Film and Television Business (Revised in 2016)." This amendment requires companies to disclose the range of operating income derived from high-grossing films, and emphasizes the difference between box office revenue and the company's actual identifiable operating income, and requires companies to remind relevant risks.

Editor: yvette