Computation of the loss

Under the Copyright Law, compensation for copyright holders or neighboring right holders mainly is usually paid under the three circumstances:

（1）Compensation shall be paid according to the actual loss of the right holder. The actual loss of the right holder refers to the reduction of distribution of the right holder’s reproductions, or the sales of the infringing reproduction times the unit profit of these works. In case the reduction of distribution is difficult to be ascertained, compensation shall be paid according to market sales of the infringing reproductions.

（2）If the computation of the actual loss is difficult, compensation may be paid according to the illegal profits gained by the infringer. The compensation shall also include the reasonable expenses of the right holder for preventing the infringement. The reasonable expenses include the costs the right holder or any of his agents paid for investigating and collecting evidence, and the attorney’s fees.

（3）If the actual loss of the right holder or the illegal profits gained by the person who committed the infringement could not be ascertained, the people’s court shall award the compensation not exceeding 500,000 yuan depending on the circumstances of the act infringement. The specific amount shall be determined by the people’s court on the comprehensive consideration of type of works, reasonable expenses of use, nature and consequences of the infringement.