According to Articles 22(1) and 26-1(1) of the Copyright Act, an author has the exclusive right to reproduce and publicly transmit his or her work.  In practice, once a copyright owner sells or transfers ownership of his/her original work or a lawful copy, the purchaser may freely resell it, which is known as the "exhaustion of rights" principle.  However, as the digitization of works becomes increasingly widespread, and because the reproduction of digital content constitutes "reproduction," the transfer or sharing of digital content, unlike physical works (such as physical books or original software), is not wholly protected by the "exhaustion of rights" principle and thus such digital content may not be freely transferable. The foregoing restriction is particularly evident in membership-based services or online courses.

 

In the case facts of Judgment No.: 113-Ming-Chu-Su-71 rendered by the Intellectual Property and Commercial Court ("IPCC"), the plaintiff established an online course platform that sells courses through a membership system.  The defendant joined the platform as a member, purchased online course(s), recorded the course videos, downloaded the course materials from the platform, and then made them available for download to other internet users, with an agreement to split the cost of the online course.  The IPCC stated that, by enabling other internet users to download these course videos and teaching materials, the defendant intentionally infringed upon the plaintiff’s rights of reproduction and communication to the public.  Furthermore, by facilitating group purchases of the courses, the defendant deprived the plaintiff of opportunities to sell the courses to other members, causing the plaintiff to suffer reduced sales revenue, and is therefore liable for damages.

 

As for the calculation of damages, the court held that the course videos constitute audiovisual works in which the instructor records the course content, whereas the course materials constitute literary works presenting that content in written form.  Because the two fall under different categories of copyright, damages for course videos and the course materials should be calculated separately.  The court further took into consideration several factors, including that the price of the disputed 13 courses ranged from NTD 8,000 to 19,960, that the defendant paid an actual purchase price of NTD 6,130, that the defendant jointly purchased the course with 21 internet users, and that the plaintiff's lost sales revenue was calculated to be at least NTD 128,730 (6, 130 × 21 = 128,730).  The court eventually determined that the disputed 13 courses should be calculated at NTD 60,000 (30,000 each for videos and materials) or NTD 40,000 (20,000 each for videos and materials), and ordered the defendant to pay NTD 340,000 as compensation.  This amount of damages exceeds the sales revenue lost by the plaintiff.

 

According to the rulings that the IPCC cited above, online courses are protected by copyright law, and any act of copying, recording, downloading, or sharing (such as transmitting files, sharing accounts, or publicly uploading) without the copyright holder’s permission may be deemed an infringement of copyright.  If infringement is established, the damages awarded may exceed the plaintiff's loss of revenue resulting from the fact that other members did not purchase the course.