Local karaoke bars are paying close attention to a court case that opened in the city yesterday and could force many clubs to close their doors in the near future.

The Shanghai No. 1 Intermediate People's Court began hearing Sony Music Entertainment (Hong Kong) Ltd's lawsuit against Cashbox Karaoke Bar for screening musical video discs without permission.

Sony Music is seeking 350,000 yuan (US$42,169) in compensation and a public apology. It is also asking Cashbox to be banned from screening the discs in public.

Sony Music said it discovered on March 7 last year that the outlet of Cashbox Karaoke Bar in Fuxing Park was screening videos of Hong Kong pop star Leon Lai.

Few, if any, local karaoke bars pay royalties to foreign music companies to screen their video disks, meaning a ruling against Cashbox could devastate the local industry.

Lawyers for Sony told the court the videos take a lot of time, creativity and money to make, so they should be viewed as films and their copyright should be protected.

The company wants local bars to pay the same royalties karaoke clubs pay in Hong Kong, which is between HK$50,000 and HK$500,000 per song for unlimited use.

Since Leon Lai is one of Hong Kong's most famous pop stars, the company is seeking 100,000 yuan for each video Cashbox played.

"The domestic recording industry has developed slowly in recent years because their rights and interests aren't well protected," said Sony's attorney Guo Chunfei.

Cashbox argued that it pays licensing fees every year to the Music Copyright of China, an association that acts on behalf of composers and writers.

"If we must pay royalty fees as the Hong Kong standard requires, the karaoke industry will disappear," said Mao Huigang, the attorney for Cashbox.

Sony has precedent in its favor. Last year, courts in Beijing ordered karaoke bars in the capital to pay compensation to music companies for illegal use of their video disks.

"After winning those two cases, overseas music companies have become more confident and will extend their copyright protection action nationwide," said Guo.

The local branches of Sony Music, EMI Music and Universal Music said they have never received any payment from the local karaoke clubs for the public use of their disks, while similar bars in other countries such as Japan and South Korea pay up to 50 percent of their revenues to the studios.

"It is difficult for us to charge the Chinese karaoke clubs since the market still lacks discipline," said Zhang Zhenyu with Shanghai Epic Entertainment Co Ltd, a local subsidiary of Sony Music.

(eastday.com February 17, 2004)