V.

----------------------------------------------------------------------------------------------------------------------

The Second Intermejate People' S Court of Shanghai

1994-Hu-Zhong-Min-( Zhi)-Chu-109

Plaintiff:

Wu Guanzhong, male, horn in July 1919, professor in the Na tional institute of Arts and Crafts, with home address at 34 Dong San Huan Zhong Road, Caoyang District, Beijing.

Authorized Attorneys: Shen Zhigeng, attorney-at-law of Zongheng Law Firm, Beijing

Liu Sanhong, attorney-at-law of Tianren Law Firm, Shanghai

Defendants:

Shanghai Duoyunxuan

Address: 422 Nanjingdong Road, Shanghai

Legal Representative: Zhu Junho, general manager

Authorized Attorneys: Dai Xiaojing, employee of Shanghai Duoyunxuan

Tao Wuping, attorney-at-law of Shen-da Law Firm, Shanghai

Hong Kong Yongcheng Antiques Auction Ltd-Address: 273-C Queen's Road Central, basement of Xili Building, Hong Kong

Responsible Person: Huang Hao

This Court, after filing the case of copyright infringement Wu Guanzhong (plaintiff) V. Shanghai Duoyunxuan and Hong Kong Yongcheng Antiques' Auction Ltd. (defendants), has duly orgamzed a collegial panel and held a public trial. Shen Zhigeng and Liu San-hong, the authorized attorneys of plaintiff Wu Guanzhong, Zhu Junho, the legal representative of defendant Shanghai Duoyun Xu-an; and Dai Xiaojing and Tao Wuping, the authorized attorneys of Shanghai Duoyunxuan, appeared at the trial for argument and the hearing of the case has now come to a close.

Plaintiff Wu: Guarirhong alleges that on October 27, 1993, the defendants Shanghai Douyunxuan and Hong Kong Yongcheng Antiques Auction, Ltd. jointly held in Hong Kong an auction at which they sold a painting Portrait of Mao Zedong. The portrait carried the inscription "Bombarding the Head quarters-a Big Character Poster of Mine", as well as a signature of Wu Guanzhong, dated 1962 at the Institute of Arts and Crafts. Before the auction, plain-tiff sent word through relevant agencies to Shanghai Duoyunxuan, requesting that the painting be withdrawn from the auction, and

asserting that the painting was a counterfeit and the signature that appeared on it was a forgery. Shanghai Duoyunxuan, after receiving the notice and a formal letter to the same effect, went ahead with the joint auction with Hong Kong Yongcheng Antiques Auction, Ltd. , and even produced some experts' opinions on the authenticity of the picture, alleging that the piece was indeed created by Wu Guanzhong. As a result, this piece of counterfeited work was sold for HK $ 528, 000. In so doing, alleges the plaintiff, the defendants infringed upon his copyright, causing damage to his reputation, and adversely affected the sales of his works. On the basis of these assertions the plaintiff asks the court to enjoin the defendants to refrain from further infringements, eliminate the negative effects of their infringing acts, make a public apology, and pay damages in the amount of HK $ 528,000.

Defendant Shanghai Duoyunxuan did not submit its written answer within the within the period by law, but alleges at trial that plaintiff failed produce adequate evidence to prove that the piece of work in question is indeed a counterfeit. The auction by the defendants of a work of art, asserts the defendant, did not constitute an infringement upon the plaintiff's copyright in the eye of law. Auctions by consignment &e not sales at shops. They are acts of an intermediary agent by commission. Besides, claims Shanghai Duoyunxuan, as a matter of fact Shanghai Duoyunxuan was not a joint auctioneer in the Hong Kong auction, and the court should dismiss the complaints of the plaintiff.

Defendant Hong Kong Yongcheng Antiques Auction Ltd. did not respond to the summons.

This court has found, after investigation, that defendants Shanghai Duoyunxuan and Hong Kong Yongcheng Antiques Auction Ltd. (hereinafter referred to as "Hong Kong Yongcheng") reached an agreement in December, 1992, in which they agreed to have a joint auction of modern Chinese paintings and calligraphic works in Hong Kong in March (spring) and September (fall) of4993. They also agreed on matters regarding the selection and verification of pieces to be auctioned, the minimum prices to be asked, insurance premiums, commission charges and the method of profit sharing. In July 1993, the two defendants started preparing for the fall auction. On July 27, Shanghai Duoyunxuan, in accordance with the agreement, air transported some pieces in its possession to Hong Kong, and sent its personnel to Hong Kong to help verify, select, and fix the minimum prices of the pieces which Hong Kong Yongcheng

collected overseas.

On October 2 of the same year, a Hong Kong resident Zhao entered into a consignment agreement with Hong Kong Yongcheng, under which Zhao authorized Hong Kong Yongcheng to auction the No.231 painting Portrait of Mao Zedong with the signature of Wu Guanzhong and the words "Bombarding the Headquarters". The price was estimated to be between HKD3OO, 000 and 350,000, and in the column for notes it was stated, among other things, that the date for the auction was to be on October 27, 1993. The parties also specifically agreed on matters regarding the ownership of the piece to be auctioned, security, insurance against risks, etc.

Early in October of the same year, Hong Kong Yongcheng had a Picture Catalogue printed of the 382 pieces of painting and calligraphic works which were collected by it. or provided by Shanghai Duoyunxuan. On the cover of this Picture Catalogue it was stated that Hong Kong Yongcheng Antiques Auction Ltd and Shanghai Duoyunxuan would jointly hold an auction of modern Chinese paintings and calligraphic works and ancient paintings. Picture 231 in this Catalogue was a painting Portrait of Mao Zdong with the signature of Wu Guanzhong. On its upper right corner were words written vertically in a running hand "Bombarding the Headquarters-a Big Character Poster of Mine, Mao Zedong" mid on the lower left corner were words, also Written vertically and in a running hand, "painted by Wu Guanzhong in 1962 at the Institute of Arts and Crafts." The painting was 38 cm by 66 cm.; The appraised price was hK $300,000-350, 000. Hong Kong Yongcheng, in distributing the Picture Catalogue, also gave Shanghai Duoyunxuan 50 copies of it4 Shortly before the date for the auction, Shanghai Duoyunxuan gave the copies to relevant institutions and individuals.

In mid-October of the same year, Wu Guanzhong learned of the matter and after closely examining the Picture Catalogue, deter-mined that the two paintings in it which had his signature were both counterfeits, and Portrait of Mao Zedong, in particular, was some-thing he never painted. The date 1962 was even more absurd. Thereafter, he authorized another person to report the matter to the relevant department, hoping that unlawful acts of this kind would be stopped. On October 25, 1993, the Administrative Office of Cultural Affairs of Shanghai Municipality, in document 95-flu-Wen-She-Zi(93), notified Shanghai Duoyunxuan that "if the above mentioned paintings are indeed counterfeits, they must be withdrawn immediately from the auction. Other counterfeits, if there are any, should also be handled in the same way and .the results of the verifying work should be reported to this Office". Shanghai Duoyunxuan responded to the notification as follows: 1) The painting in question was not provided by Shanghai Duoyunxuan. It was consigned to Hong Kong Yongcheng for sale at the auction in Hong Kong; 2) The auction was to be held in Hong Kong and presided over by a Hong Kong legal person, and only Hong Kong Yongcheng had the power to decide; and 3) Shanghai Duoyunxuan promised to forward the opinion of the administrative office and the request of the artist, and to try its best to persuade Hong Kong Yongcheng into with-drawing the pieces in question. Meanwhile, it contacted the inspecting team it had sent to the Hong Kong auction by telecommunication and told it to inform Hong Kong Yongcheng of the opinion of the administrative office and the request of the artist. Shanghai Duoyunxuan also said that it did some verification with respect to the piece of work in question.

After receiving the notice and opinion forwarded by Shanghai Duoyunxuan, Hong Kong Yongcheng responded by saying that it had handled the matter in the following ways: 1) It invited relevant experts to verify the piece of work in question, and they held that the artist' 5 accusation of counter-feisance and forgery were ground-less after they made close analysis of the style of the work, the quality of the paper, the color of the ink, and the style of the words and the signature. At the same time they also confirmed that the painting was created in 1966 instead of 1962. 2) It also summoned the guarantor, who told about the circumstances under which Portrait of Mao Zedong was purchased, and guaranteed that the purchase was made from an unquestionable source and auctioning it would not involve any problems. Acting on the rules of the auction film and re-lying on the information provided by the Consignor, who was the owner of the painting and whose guarantee was legally effective, Hong Kong Yongcheng made the decision to go ahead with the auction of this painting. In addition, Hong Kong Yongcheng provided a certificate, in which it was stated that "the consignment, advertising and bidding with respect to the said piece shall all he dealt with by this company in accordance with its rules, and they have nothing to do with Shanghai Duoyunxuan. ... This company is of the opinion that, according to the laws of Hong Kong and the rules of auction of this company, we have the power to decide to go ahead with the auction". Consequently, Hong Kong Yongcheng did not withdraw the

question from the Picture Catalogue.

Late in October 1993, experts from Shanghai Duoyunxuan went to Hong Kong to work for the auction. On October27, the auction of modern and ancient Chinese paintings and calligraphic works jointly organized by Shanghai Duoyunxuan and Hong Kong Yongcheng Antiques Auction Ltd. was held as planned in Haicheng Restaurant, Kowloon. The bidding on the painting Portrait of Mao Zedong, numbered 231, started at HK $ 300,000 and after several bids, the hammer fell at the price of 480, 000, and the deal was

closed at that price plus commission, 528, o()o in the aggregate. Of this price, HK $ 48, 000 went to: the auctioneer as commission. Thereupon, Wu Guanzhong instituted this action with the former Intermediate People's Court of Shanghai on July 16, 1994 , alleging that the two defendants infringed upon his copyright.

Upon investigation, it was found that the personal opinion provided by the person in charge of Hong Kong Yongcheng on April 2, 1994 in connection with the painting Portrait of Mao Zedong stated that judging from the visual impression of the lines, coloring, strokes and perspectives, the painting was by the hand of Wu Guanzhong. The appraisal 1 Six Points of Opinion Regarding the Painting Portrait of Mao Zedong With a Signature of Wu Guanzhong", which was made by experts of Shanghai Duoyunxuan from their recollections on April 3 of the same year, also held that on the basis of their analysis with respect to the year of its creation, the ability of the artist, the color of the ink and the quality of the paper, etc., no one could have counterfeited this painting.

On May S, 1994, Wu Guanzhong's employer the National Institute of Arts and Crafts submitted the printed picture of the No.231 painting Portrait of Mao Zedong in the Picture Catalog and hand-written material of Wu Guanzhong in the -years.- before and after 1966- to the second -research section under the Department of Public -Security of the People's Republic of Chira4 requesting an expert's opinion as to whether the words in the signature --and date of the painting in question was by the hand of Wa Guanzhong.-' --Upon examination -the said section held that the words "painted by Wu Guanzhong in 1966 at the Institute of Arts and Crafts .were written by a slow and steady hand with a writing brush, that the characteristics of the handwriting were consistent, . and that -they could he subjected -to further examination. Comparing- these words with the words by the hand of Wu Guanzhong, it was found that the two sets of words were of different styles, the words Wu Guan Zhong, painted, in, arts, crafts, institute, 1, 9, -6, 6 (repeated) were written in different ways, with different arrangements of the strokes, different beginnings and endings of the strokes and different strengths, and the choice of words also had an apparent difference, all of which reflected the different writing habits of different persons. The conclusion was that "the words 'painted by Wu Guanzhong in 1966 at the Institute of Arts and Crafts' on the painting Portrait of Mao Zedong, which was listed as lot 231 in the Picture Catalogue of the auction held by Shanghai Duoyunxuan -and Hong Kong Yongcheng Antiques Auction Ltd. And which has been submitted to us for examination, are not by the hand of Wu Guanzhong".

The above facts have been verified by the testimony of the parties, depositions of witnesses, affidavits, and experts' opinions.

This court holds that a citizen shall have the right to indicate his identity in and affix his name to his works. At the same time he shall have the right to enjoin others from creating and selling works of fine art that have a forged signature of his. These rights are protected by the law. Judging from the evidence we have in our hands, the painting in question, Portrait of Mao Zedong, is a work of fine art that carries the forged signature of Wu Guanzhong. With regard to the painting in question and other paintings and works of calligraphic w6rks, the defendants Shanghai Duoyunxuan and Hong Kong Yongcheng had an agreement of joint auction. The Picture Catalogue also stated that the auction would be held jointly, and the two defendants in fact jointly organized all. the activities in connection with the auction. All this shows that the auction of the painting question was completed by both defendants, and consisted of a series of activities including collecting paintings and calligraphic works, printing and distributing the Picture Catalogue, and con-ducting the bidding and settling' the accounts. Auction is a special of sale. Auction of calligraphic works and paintings is the sale of works of fine art. The two defendants, after learning of the challenge of the plaintiff to the authenticity of the painting in question, offered the piece for bidding and finally sold it and realized a profit,in spite of the fact that they had no conclusive evidence as to the authenticity of the piece and its signature. On account of this, plaintiff Wu Guanzhong claims that in selling works of fine an that had his forged signature the two defendants caused damage to his reputation as an artist as well as to the sale of his works, and infringed upon his copyright. We hold that this claim of the- plaintiff is supported by well-established facts as well as the law, and we hereby give our support to such claim. Defendant Shanghai Douyunxuan contends that auctions are not sales, and that Shanghai Duoyunxuan is, as a matter of fact, not a. joint auctioneer of the painting in question. These contentions are lacking in factual as well as legal support, and we therefore do not give our support to them.

Defendants Shanghai Duoyunxuan and Hong Kong Yongcheng Antiques Auction Ltd. insisted on jointly auctioning Portrait of Mao Zedong with a forged signature of Wu Guanzhong, in spite of efforts of others to dissuade them from doing so, and thus violated relevant provisions in the copyright law of this country. What they did jointly constitutes a gross infringement upon the copyright of Wu Guanzhong and has brought about material damage as well as mental sufferings to the plaintiff, and they shall be held jointly and severally liable for the consequences of their acts, and be enjoined to refrain from further infringements, to eliminate the negative effects of their infringing acts, to make a public apology and to pay damages. Upon deliberation, this Court hereby decides as follows pursuant to Clause 7 of Article 46 of the Copyright Law of the People' s Republic of China and Clauses 1, 7, 9 and 10 of Article. 134 of General Principles of Civil Law of the People 'is Republic of china:

1. Defendants Shanghai Duoyunxuan and Hong Kong Yongcheng Antiques Auction Ltd., in jointly auctioning a piece of fine art Portrait of Mao Zedong which carries a forged signature of Wu Guanzhong, jointly committed a gross infringement upon the copyright of Wu Guanzhong, and they shall be enjoined from further infringements;

2. Both defendants shall make a public apology in the' People' 5 Daily (Overseas Edition) and Guangming Daily, and the contents of such an apology shall be examined and approved by this Court.

3; The defendants shall pay jointly to plaintiff damages in the amount of RMB73, 000.

Decisions in 2 and 3 of the above shall be implemented within 15 days after this judgment takes effect.

The cost of this case is RMB2, 700, and shall be borne jointly by Shanghai Duoyunxuan and Hong Kong Yongcheng Aritiques Auction Ltd.

If a party refuses to accept this judgment as final, it may submit its appeal petition to this Court within 15 days after service of this judgment, together with a sufficient number of duplicated copies for each person of the opposing party to have one copy, and the appeal shall be filed with the Higher People' S Court of Shanghai.

Presiding Judge:   Wang Liren

Judge:           Yang Jun

Judge:            Xie Chen

Date:       Sept. 28, 1995

Court Clerk:     Wu Aihua

                                     seminar@attorney.net.cn

Homepage »Seminar »Copyright1 »Copyright2 »Copyright3