Thirty local karaoke bars yesterday filed a lawsuit against two Hong Kong music companies for allegedly harming their reputation.

The Shanghai No. 2 Intermediate People's Court heard the case yesterday.

In addition to Go East Entertainment Co Ltd and Sony Music Entertainment (Hong Kong) Ltd, the defendants also include the International Federation of the Phonographic Industry, an international organization that represents phonographic companies, and three law firms that were entrusted by the music companies to file lawsuits, Beijing Tenwei, Beijing Yingke and Shanghai Tenwen.

The karaoke bars are seeking a public apology and 1.01 million yuan (US$121,687) in damages.

The plaintiffs said the two music firms and the IFPI last March entrusted the three law companies to issue a lawyer's notice to karaoke bars nationwide, claiming that the bars had violated their copyrights by screening their MTV products for business purposes without paying royalties to the producers.

"Their accusation has seriously harmed the reputation of karaoke bars, causing economic losses. Fewer customers have frequented karaoke bars fearing a price hike due to royalties and many employees had quit, alarmed that the trade may soon disappear," said Wang Haizhen, a lawyer for the plaintiffs.

Wang also said it is illegal for music companies and IFPI to collect royalties, according to Chinese laws.

He said IFPI, as an institution that authenticates who owns the right of music products, has no right to collect royalties for the music companies because it hadn't received approval from the state copyright administrative department.

The defendants denied they had damaged the reputation of the 30 bars.

The music companies said they sent the notice to the karaoke bars in private and never revealed their names. The media reports were not in their control.

IFPI said the payment standard the music companies set is a compensation requirement and not about royalties.

Insisting that they had not released anything to the media, the three law firms said they had just fulfilled the commission of the music companies.

Weng Cailin, the lawyer representing Tenwen, said the music firms were on the right side of law because they have won all lawsuits in the country.

Two local intermediate courts recently ordered five karaoke bars to pay 1,000 yuan for each infringing song to the music companies.

(Shanghai Daily July 20, 2005)