Three United States film giants have won a lawsuit in Shanghai against local DVD sales companies who sold pirated discs of Hollywood films, local court sources said.

The Shanghai No 2 Intermediate People's Court issued a verdict on Wednesday ordering the Shanghai Hezhong Enterprise Development Co and Shanghai Yatu Film Culture Broadcasting Co each to pay 101,000 yuan (US$12,200) in compensation to 20th Century Fox Film Corp; 35,000 yuan (US$4,200) to Disney Corp; and 35,000 yuan to Universal Studios.

The two Shanghai DVD companies must also issue a public apology via the local Chinese-language Xinmin Evening News and confess to having sold pirated discs.

Pan Shishen, a court publicity officer, told China Daily yesterday: "It is first time foreign film companies have sued local DVD sellers.

"Pirated DVDs, especially copies of Hollywood movies, are rampant in the local market but foreign film companies seldom take legal action," he said.

The case will hopefully warn off others tempted to produce pirated DVDs as the US firms have pledged to take further court action if necessary, he added.

Local media said the lawsuit foreshadows action by the Motion Picture Association of America against those violating US movie copyrights on the Chinese market.

The association, which brings together nine major US film producers, is reportedly set to launch a series of legal procedures later this year against those manufacturing and selling pirated discs in China.

On February 25, agents of the three US film companies pretended to be ordinary customers and, accompanied by notaries, bought a series of popular pirated DVDs such as "Moulin Rouge," "Jurassic Park III" and the fourth series of "The X-Files" at outlets of the two defendants.

The US companies then sued the two Chinese firms on the basis of the evidence collected.

The plaintiffs noted in court that they had registered the copyright of the relevant movies in the United States and had not yet granted any others the right to issue DVDs of those movies on the Chinese mainland market.

The court ruled that, under the Berne Convention for the Protection of Literary and Artistic Works, signed by the Chinese Government in 1992, the three US companies enjoy the copyright to those movies in China, and the accused Shanghai DVD firms had infringed the US companies' legal rights and interests by selling pirated discs of their movies.

The defendants admitted selling pirated discs from the very beginning but did not manage to reach any out-of-court settlement with the US companies.

The Ministry of Culture and other Chinese authorities have launched irregular campaigns against DVD piracy since 2001 to make the video market safe for foreign intellectual property rights but piracy is far from being eradicated.

(China Daily August 8, 2003)