Five MPA member companies - Disney, 20th Century Fox, Paramount, Columbia and Universal -jointly filed complaints in the Shanghai court late last year against Jeboo, Shanghai East Cyber Cafe Tongxin Road Shop Co and San Yi Industry and Trading, for the unauthorised use of 20 films, including Click, Hitch and Pirates Of The Caribbean 2: Dead Man's Chest as part of a subscription and downloading service commonly available in cyber cafes throughout China.
It's understood that the compensation demanded for the complaints was around $450,000 (RMB3.2m).
The unauthorised films were found available in cyber cafes that subscribe to the Jeboo Bar entertainment content platform, which contains movies, TV shows, sports, music, and cartoon programming designed for internet cafes.
The cafes pay a monthly subscription fee to Jeboo for the installation of a LAN system, with Jeboo updating the content daily and providing customer service support. Users at the internet cafes can watch or download the titles from Jeboo Bar. They cannot generally access these services from their own computers. Although most of the content offered on the Jeboo Bar is authorised, the Hollywood titles were not.
While the precise terms of the settlement remain confidential, the defendants confirmed they agreed to cease the infringing activities, apologized for their prior actions, pledged forbearance against future infringement, and paid a significant sum to the plaintiffs in compensation.
'We're very pleased with the outcome. Services like Jeboo have profited from copyright infringement and undermined the development of legitimate online services,' said Frank Rittman, vice president and Asia-Pacific regional counsel for MPA.
It is seen as the studios' first intellectual property rights suit against a Chinese cyber cafe and its content provider.
It is estimated that there are 130,000 cyber cafes in China and 30% of customers use the cafes to watch movies. Apart from Jeboo, NetMovie and BBVod are also major companies that provide entertainment content to internet cafes.
The settlement is also seen to have ramifications for China's other rising internet companies which offer entertainment programs.
Established in 2004, Jeboo is one of the earliest companies to purchase internet distribution rights from production companies. It owns internet rights for Chen Kaige's The Promise and Feng Xiaogang's The Assembly. Jeboo also purchases rights from Singapore MediaCorp and Han Media Culture for Thai entertainment programmes.
Jeboo plans to try to acquire more rights to overseas programmes, according to Xie Jiangping, marketing director.