Case 6
Copyright Dispute over “PROCKO” Building Block
Toys Trial Docket: (2015) NingZhiMinChuZi No. 126 Appeal Docket: (2016) NingMinZhong No. 482
[Headnotes] The finished model of a building block toy is a copyrightable work, unaffected by whether the building blocks are subject to design patent application or expiration of such patents. Although infringer manufactures and sells the building blocks which are sold together in sets, and when put together to form a three-dimensional model identical with that of the proprietor’s, it is a reproduction of the copyrighted work, and its sale is the distribution thereof.
[Synopsis] Appellant (Defendant below): DongXing Electronic Toys Co., Ltd. of Jinjiang City (DongXing); JinBaoLai Trading Co., Ltd. of Nanjing (JinBaoLai) \
Appellee (Plaintiff below): Procko (Nanjing) Educational Toys Co., Ltd. (Procko); Blocko (China) Company Limited (Blocko)
Procko and Blocko are the copyright holders of 19 building block toys including “Old Train Station.” Procko and DongXing used to be business partners who had a production agreement in June 2010 specifying that Procko would provide production modes for DongXing to process the plastic building block toys, for which Procko would be responsible for sales; and that DongXing should not sell except to Procko any third party the same products or pay liquidated damages in the amount of five million yuan to Procko. The two parties started some disputes in the process of the agreement, which ended by court decree. After that, DongXing continues with production of relevant toys, and makes during trade fairs and on its website promotions and sales of the toys and authorizes JinBaoLai for sales of the toys.
Procko and Blocko claim that the production and sales of the toys by DongXing and JinBaoLai infringe their copyright, and file suit in Nanjing Intermediate People’s Court, praying for an injunction and damages in the amount of five million yuan plus reasonable expenses against DongXing and JinBaoLai.
The court at first instance trial finds infringement by DongXing and JinBaoLai of the copyright of Procko, and orders injunction and payment of five million yuan and four million yuan to Procko for damages and litigation cost against the two defendants, with joint liability for JinBaoLai on the second order.
Dissatisfied with the trial court orders, DongXing and JinBaoLai appeal to the High People’s Court of Jiangsu, which dismisses the appeal and affirms.
[Judge’s Comment] Whether utilitarian work of art made of building block toys is copyrightable subject matter is the fundamental legal question to be tackled in this case. Here the focal point of the parties’ dispute centered on the originality of the building toys, or whether it is an imitation of another’s toys. By the evidence submitted from both parties, the court finds that the building block toys, as a whole, possesses originality and is copyrightable under Copyright Law.
After decades since the Opening up and reform, China has become a major country for toy manufacture and consumption, and at the same time the intellectual property competition for toys becomes fierce. This case, on basis of analyzing the characteristics of Procko’s works and the form of DongXing’s infringement, heightens enforcement, playing an important role for intellectual property in pushing forward t ransformation of economi c development, and in upgrade of industrial structure, being a leading example of a typical case.
Case 7
Copyright Dispute over a Statement of Litigation Argument Trial Docket: (2017) Zhe06MinChu No. 57 Appeal Docket: (2017) ZheMinZhong No. 478
[Headnotes] Statement of court argument by its very nature is outside the range of “a document for legislative, administrative or judicial process,” incapable of judicial protection under Article 5 of Copyright Law. Therefore, it may be subject to copyright protection if the wording satisfies originality requirement.
[Synopsis] Appellant (Plaintiff below): ZHANG Wenjiang
Appellant [sic] (Defendant below): QIAN Wenzhong
In 2014, ZHANG Wenjiang was engaged by Mr. ZHANG to be his defense counsel in a case of obstruction of testimony, and submitted a defense statement to the procuratorial court of Zhejiang Province on 15th of October. QIAN Wenzhong, together with another attorney, was engaged by Mr. Xu, who was an accomplice of Mr. ZHANG accused in a separate case, to be his defense counsel for the arraignment, and submitted in the early part of 2015 a Defense Argument for the Arraignment to the procuratorial court of Xinchang. Upon comparison, this Defense Argument had so many identical expressions as the Defense Statement. ZHANG Wenjian believes that he has copyright for his Defense Statement, and QIAN, by copying the main part of his Statement, has committed infringement. He therefore sued to claim an apology and seek damages of 68,000 Yuan.
The Intermediate People’s Court of Shaoxing at trial finds: that ZHANG Wenjiang’s Statement is a literary work, protectable under the law; that their clients are accomplices of separate cases, for which QIAN Wenzhong may, when he reviews the cases, het his hand on ZHANG’s Statement; that QIAN, whose Defense Argument is largely lifted from ZHANG’s Statement and is literally similar thereto, has infringed ZHANG’s copyright, and should be liable; and that ZHANG is not entitled to an apology since he fails to show by evidence that his reputation is injured. The court decrees: QIAN Wenzhong is liable to ZHANG Wenjiang for damages in the amount of 20,000 Yuan.
Both ZHANG and QIAN are dissatisfied and appeal to the High Court of Zhejiang. The High Court dismisses and affirms on October 27, 2017.
[Judge’s Comment] The court believes that ZHANG’s Statement, though following the basic format of defense statements, is a personal choice and expression with originality and a copyrightable literary work of logical reasoning to support his innocence argument by relating to relevant facts, evidence and his understanding of statutory provisions over the actual dealing, the absence of intention to causing injuries to other creditor, the absence of forgery, and illegal collection of evidence by the police, etc. Meanwhile the defense argument is the writing and opinion by the defense counsel in favor of the defendant, having no public interest involved and falling outside the provision of “legislative, administrative or judicial documents” defined by Article 5 of Copyright Law. Since the clients they represent are accomplices in separate cases, it is possible that QIAN may get his hand on ZHANG’s Statement as his Arraignment Defense Argument so highly coincidental to ZHANG’s Defense Statement as to be substantially similar, which is substantial copying of ZHANG’s work without permission, infringing ZHANG’s copyrighted work. As the civil liabilities, since the Argument lifted from ZHANG’s Statement is used for a criminal case with limited public access without obvious damage to ZHANG’s persona, it is not inappropriate for the trial court to deny the request for an apology.
As to whether the writings of a defense argument can be a copyrightable work, there is no clear provision in Chinese law, and opinions are split among professionals. The decision of this case clarifies that a defense statement is within the meaning of the uncopyrightable “legislative, administrative or judicial document” under Article 5 of Copyright Law, and if it reflects the personal choice and expression of a counsel, satisfying the originality requirement, it will be a copyrightable literary work. But a court, when making a comparison of substantive similarities, should take into account the special features of the defense statement by ignoring the defense points of view, the basic formats, facts of a case, allegations, and other common constituents, for a heightened standard, so that the protection will match the originality to avoid over-protection against fair use and further creation.
Case 8
Copyright Infringement and Unfair Competition in Internet Rebroadcast Programs
Trial Docket: (2015) PuMinSan(Zhi)ChuZi No. 312 Appeal Docket (2017) Hu73MinZhong No. 25
[Headnotes] Generally, a player as a hardware does not provide online services without installing third party software, which would not cause any infringement. But a hardware manufacturer would be jointly liable with a seller, if there is evidence that it has knowledge that the seller will install infringing software on it.
Although user cognizance standard is not a recognition standard of network dissemination of information behavior, the external expression of the behavior produces a significant impact on the distribution of burden of proof, as a party claiming link has the obligation to come forward with the evidence, or it will have to face the burden of proving it.
[Synopsis] Appellant (Defendant below): Kaiboer Technologies Co., Ltd. of Shenzhen (Kaiboer)
Appellee (Plaintiff below): CCTV International Network Co., Ltd. (CCTV International) De f enda n t b e l o w : C l o v e r International Trading Co., Ltd. of Shanghai (Clover)
China Central Television (CCTV) has licensed all of its copyright in all of its channels to CCTV International. CCTV International claims that the K760 player made by Kaiboer contains software capable of live broadcast, selected viewing, and replay of CCTV program. Clover admits that it buys a bare player from Kaiboer, and installs the infringing software on it. Kaiboer indicates on its official website that Clover is its general sales rep in the Shanghai area, and displays a customer video of the actual effect of live broadcast, selected viewing, and replay, as well as download site and upgrade services. Clover’s website also carries similar information.
CCTV International contends that the K760 player is an infringement for providing live broadcast , selected broadcast and replay of the copyrighted programs of CCTV International through the Internet to the customers, and violates the doctrines of fair dealing and good faith, constituting therefore unfair competition resulting in tremendous economic loss for CCTV International, for which it prays for an immediate injunction and a published declaration to eliminate the effect, in addition to payment of compensatory damages of one million yuan plus reasonable cost of 50,000 Yuan.
The trial court is of the opinion: that the K760 player made by Kaiboer and sold by Clover is not shown to have preloaded with the infringing software, but even so, Kaiboer must be jointly liable. The functions promoted on Kaiboer’s website of “television live broadcast, replay (viewing), online platform, free of charge,” etc., obviously cannot be achieved on a bare machine. Clover is not just a seller, but one introduced by Kaiboer officially as an area’s general sales rep, having close relations between the two. Kaiboer not only does so on its own website, but also on its official Tmall.com sales booth. Kaiboer and Clover must have had a clear idea that the machine delivered to the end user will be installed with the relevant applications, and therefore Kaiboer not only consents to but supports the acts of Clover among others for the collaboration of “selling a bare machine + loading by rep” to make gains for both, for which both should be jointly liable. The trial court holds: that Clover and Kaiboer are immediately enjoined from infringement; that Kaiboer is liable to CCTV International for damages plus cost of 250,000 Yuan, of which Clover is jointly liable for 50,000 Yuan.
After the trial decision, Kaiboer is dissatisfied and appeals on the grounds: that first the Kaiboer HD player is a hardware product unloaded with the software at issue, which is to be downloaded and installed by sales rep or customers themselves; and that second, the server standard is recognized reasonable standard for network dissemination of information, where as here, the software installed on the player at issue is linked to appellee’s program, i.e., CCTV International’s server, rather than a third party infringing website, which link by no means constitutes infringement of network dissemination of information right. It therefore petitions to vacate the first instance decision, and remand the case for dismissal of all of CCTV International’s claims.
The second instance court is of the opinion: siding with the first instance court below, that Keiboer cannot be absolved first of all from its infringement liabilities even if the software is loaded by Clover; that second CCTV International has satisfied its initial burden of proof showing the player can do live broadcast, selected broadcast, and replay of the CCTV programs, during which it is not redirected to any third party website, displaying no third party website, and indicating no other source. Kaiboer contends that the software provides a link service, which Kaiboer has to prove, rather than presuming that “the CCTV programs are so voluminous as to be incapable to be controlled by others, and can only be reached by links,” which, in the absence of any evidence to prove, has to be dismissed. The court therefore dismissed the appeal and affirms.
[Judge’s Comment]
Nature of Retransmit of Live Broadcast on the Internet
Serious dispute exists in judicial practice over the nature of retransmit over the Internet. This case follows Article 10, Section 1, paragraph 17 of Copyright Law, which provides for other rights that a copyright holder is entitled to. The Law has limited provision for broadcast right, which could be understood as to include through the Internet, the right to broadcast controls retransmission over the Internet. In judicial practice, through courts’ expansive interpretation of the broadcast right, retransmission of live broadcast is believed to constitute infringement of broadcast right.
Standard for Determining Joint Liabilities for Hardware Manufacturers
Generally speaking, hardware manufacturers are incapable of providing Internet services, and since a player needs to load up a third party software for the above function, a manufacturer without preinstalling the software may not commit infringement. But if evidence exists to show manufacturer’ clear knowledge of a seller’s installment of the software, the manufacturer will be jointly liable with the seller for infringement. The uniqueness of this case is Kaiboer as hardware manufacturer , knowing that infringing software will be loaded to its players, not only brags about it but also provides download services. Even though the software is uploaded by the seller, manufacturer should also bear joint liability for the infringement.
Standard of User Cognizance Has Significant Impact on Distribution of Burden of Proof
Server standard is a reasonable standard for recognizing network dissemination of information acts, and user cognizance standard should not be a standard for recognizing network dissemination of information acts. But external expression of an act has significant impact on the distribution of burden of proof. In judicial practice, courts usually will take the external expression of an act to be plaintiff’s prima facie evidence for the presumption that the accused act is an act of network dissemination of information, shifting the burden to the party providing the link service to disprove. In this case, CCTV International has satisfied the burden of proof. Kaiboer merely presumed without providing evidence. Therefore its argument is not convincing.
Case 9
Copyright Infringement Dispute Between Computer Programs and Computer Documents
Trial Docket: (2016) Yue73MinChu No. 1205
Appeal Docket: (2017) YueMinZhong No. 2207
[Headnotes] Coincidental functions and interfaces may exist for different computer programs. So long as the interface does not display plaintiff’s software name or other secret marks, nor is a fact established for defendant’s software developer having contact with plaintiff’s source programs, the mere coincidence that two programs’ functions, interfaces or user methods are the same may not be sufficient to establish a prima facie case, and the burden of prove does not shift at this point to defendant to show a comparison of the alleged infringing software’s source codes.
When a computer program is not infringement, the document generated therefrom may still be protected as a work of computer software. But determination of its originality infringement comparison should be made on basis of the specific expressions. Due to specific function or purposes of describing the program, the threshold of computer documents should not be set too high.
[Synopsis] Appellant (Plaintiff below): MingJing Spotlight Equipment Co., Ltd. (MingJing)
Appellee (Defendant below): Oulang Spotl ights and Sound Equipment Factory at Shijing Township, Beiyun District of Guangzhou City (Oulang)
MingJing is the copyright owner of record for a computer software duly registered at Copyright Center for a “Jingang 1024 Computer Lighting Control Panel Master Program V2.0.” MingJing purchased a set of the alleged infringing product with user’s manual made and sold by Oulang, claiming that the infringing product and the products loaded with its software has, in the process of use, substantial the same screen display, function, function keys and methods of uses. It prays for: 1. Immediate injunction of infringement from, including the infringing acts of, reproduction and distribution, and destruction of the copied products; 2. Payment for economic losses and reasonable cost for abating the infringement activities in the amount of 200,000 Yuan.
Oulang admits that it referred to MingJing’s user’s manual, but claims that since the two products use the program “POWER1024 Spotlight Control Panel Master Program V1.03” independently developed by itself, there is no infringement. Regarding the coincidence between the accused software and its own software, MingJing requested for judicial authentication, but upon receipt of the fee notice for 200,000 Yuan from the authentication center it refuses to pay the pre-charge on grounds of the increased fee due to Oulang’s refusal to submit its source code. The court considers the request for authentication is withdrawn.
The trial is of the opinion that because of MingJing’s reason the judicial authentication process is terminated, and no determination can be made on the merits of whether the accused products and the computer software at issue are identical or substantially similar based on the evidence presented, MingJing must bear the brunt of failure to prove. In the present case, determination of degree of coincidence between the two softwares’ codes cannot be made simply on basis of similarity involved in the users’ manuals, products appearances, functions, function keys and methods of usage, etc., nor are the similarities or dissimilarities among these within the issue of copyright dispute of computer software infringement. Therefore, MingJing’s claims are dismissed.
Not satisfied with this result, MingJing appeals to the High Court of Guangdong, which is of the same opinion as the trial court on the infringement issue for Oulang, and on the evidence issue since MingJing insists on refusing the authentication without Oulang’s submission of its source codes.
As to Oulang’s infringement of computer document, MingJing’s user’s manual carries an imprint of its choice and arrangement to some extent in organization and framework of its contents. The document’s originality is prominently expressed in its language, giving it copyright protection. According Oulang’s confession, the court is of the opinion that the fact establishes Oulang’s contact with MingJing’s user’s manual. A comparison of the two manuals shows substantially similar expression, and in several p laces Oulang’s copying of MingJing’s unique expression is found to exceed reasonable fair use of another’s work, to be an infringement of MingJing’s copyrighted computer document.
The court of second instance therefore vacated trial court’s decision and remands for an order of injunction against the reproduction and distribution of product manuals in infringement of MingJing’s copyright computer document, for destruction of all the remaining manuals in stock , and for payment of 30,000 Yuan to MingJing for damages.
[Judge’s Comment] Article 2 of the Regulation for the Protection of Computer Software provides protection for computer programs and documents. As is generally known, computer programs include source codes and object codes. In judicial practice, the evidence adduced is usually the accused product of defendant. The determination of whether the software used in this product “coincides” with the one asserted by plaintiff, due to the technicality involved, can hardly be made without judicial authentication, which can be made by source code authentication and object code authentication in case the defendant provides complete source codes. Since source code authentication is relatively cheap with controllable error risk, a plaintiff would generally favor this choice; whereas, a defendant would more likely prefer the opposite. If the authentication is interrupted by the disputes between the parties as to choice of material, and no facts could be established, the court needs to decide whether a plaintiff has carried the initial burden of proving defendant’s infringement. In this case, MingJing has not done so, and its request for a court order for Oulang to disprove the dissimilarity by submitting the source code lacks support by both facts and law.
Whether the user’s manuals of both MingJing and Oulang can be copyrightable hinges on originality, and originality of such works, due to the functional aspects of the contents, lies mainly in the way its words and diagrams describe and are arranged, for which the threshold should not be set too high. The files have independent values for protection. So the appeals court’s remand on infringement i s sue over computer fileis sustainable.
This case offers some test result in long disputed issues, providing useful solution for reference for future cases.
Case 10
Copyright Infringement Dispute over “Miracle MU” Online Game
Trial Docket: (2015) PuMinSan(Zhi)ChuZi No. 529 Appeal Docket: (2016) Hu73MinZhong No. 190
[Headnotes] An online game is similar to a motion picture work in terms of expression of its entirety and method of creation, and can be recognized, when satisfying or iginality requirement as protectable as a movie-like work. Gamers’ interaction may generated continuous pictures, but in no way beyond what is preset by the game developer, and does not change the nature of a game. Similarities between different game pictures should be made by comparing the overall impression according to ordinary noticeability of the public in general by way of comparing the scenarios, characters, maps , scenes, weapons, and and monsters, etc.
[Synopsis] Appellant (Defendants below): ShuoXing Information Technology Co., Ltd. of Guangzhou (ShuoXing); WeiDong Internet Technology Co., Ltd. of Guangzhou (WeiDong)
Appellee ( P l a intif f below): ZhuangYou Information Technology Co., Ltd. of Shanghai (ZhuangYou)
Defendant below: HaWang Information Technology Co., Ltd. of Shanghai (Hawang)
ZhuangYou is exclusive operator in China of the online game Miracle MU which began operation in China in 2003. ShuoXing finished development of a webgame Miracle Mistery in December 2013, and authorized WeiDong the following January for exclusive operation in China. HaWang has on its webpage “99YOU” a link to the game operation website. Both games are of Korean style, in magic background, and with character roles upgradable for beating monsters.
Upon comparison, Miracle Mystery before grade 400 has 18 map names identical with or substantially similar to those of Miracle MU, with many of identical scenes or composition elements in appearances, with same or substantially similar role names, symbol, and same or highly similar monsters, weapons or equipment. In Miracle Mystery’s promotional articles, there are phrases like “as if time rolls back to a decade ago,” and “a decade of mystery, return of the miracle ….” In Miracle Mystery official comments, users call it webgame of Miracle MU. In addition, it is established that plaintiff has licensed another to convert Miracle MU to webgame for a basic license fee of 3 or 8 million Yuan and divides the monthly income. Plaintiff contends that defendant’s act has infringed its copyright for Miracle MU pictures, its trademark rights for the “MU” mark, and constituted unfair competition by unauthorized use of the characteristic name of a well known product with false advertisement. It claims against each and every defendant for an injunction, and compensatory damages of 10 million Yuan, plus reasonable expenses of 105,000 Yuan in addition to eliminate the influences. Defendants argue that Miracle MU pictures do not constitute movie-like works or any other work, and the two games are not similar. The Pudong court finds that online game pictures are original and can be reproduced in tangible form, and therefore subject to copyright protection. Since their creation process, form of expression, etc., are similar to motion pictures, they could be protected as “movie-like”
works. Comparison of the stories, characters, scenes and other elements of the games to determine the similarity. Upon such a comparison, it can be determined that Miracle Mystery in its entirety constitutes similarity to Miracle MU, thereby infringing the right of reproduction and dissemination of the plaintiff. Moreover, the two defendants’ acts also constitute unfair competition by unauthorized use of the characteristic name of plaintiff’s well known products and false advertisement. Because the loss for plaintiff has exceeded the maximum amount of statutory damages, the court assesses an amount above the statutory damages by taking into account of the factors of commercial value of plaintiff’s game, the seriousness of infringement, etc. The court therefore orders immediate injunction against defendants for copyright infringement acts, and unfair competition acts for unauthorized use of characteristic names of well known products and false advertisement, in addition to damages of 5 million Yuan, plus reasonable expenses 104,990 Yuan, and for elimination of influences.
After the first instance decision, defendants ShuoXing and WeiDong appeal. In the second instance trial, plaintiff withdrew its contention for well known product which is granted by the second instance court. It gives the final order of immediate injunction against the two defendants for copyright infringement of the games at issue, and for the unfair competition act of false advertisement, plus damages of 4 million Yuan and reasonable expenses 104,990 Yuan, and for elimination of influences.
[Judge’s Comment] In this case, plaintiff contends that the series of pictures are presented in a movie-like work, so as to determine substantial similarity to the work, which is innovative to some extent.
Determination of Similarity of Online Games Pictures
1.Online game pictures are defined within the meaning of motion pictures. That Miracle MU is a work subject to copyright protection is not questionable.
As to the type of work, the game appears in its presentation form is composed of a unity of stories, pi ctures, musi c , etc. , which develops as the gamer operates it with the stories develop also by the characters, so as to produce a series of continuous pictures with audio/visual effect like a motion picture work. Moreover, the creation process is similar to that of a motion picture, by following a line of story, with a conductor, script writer, artistic editor, etc. Because the presentation form and creation process are highly similar to a traditional motion picture, it can be recognized as movie-like work subject to copyright protection.
2.The user interface does affect the characterization of the online game as a whole. Currently, characterization of online games as a whole hinges on the interface operation of gamers. Of course, compared with traditional movie works, online games are different for their two-way communications and interface, but these features should not be used to deny the movie characteristics, because the game pictures follow the game engines by predetermined rules to pick preselected elements automatically, and the resulting audio/visual effects are the same no matter who is operating, as long as certain conditions are met. For this reason the gamers do not create works, and will not affect the originality of the online pictures as a whole.
II. Determination of Substantial Similarity of the Online Game Pictures In terms of standard for determining substantial similarity for such congregational work with multiple elements, the overall comparison principle should be followed on basis of ordinary noticeability of the public in general for the similarity of the entire pictures.
Online games are a sunrise industry having great potentials in China for extensive development, but also posing great challenges for traditional judicial protection with strong stories and exquisite characters. In copyright protection of online games, types of work can be defined from two approaches: as computer software work by the game engine as computer programs and documents; as literary work, artistic work, musical work or movie-like work judged from different game elements of words, pictures, music and visuals.
In this case for the first time, the online game pictures with characters are recognized as a “movie-like” work, being treated as an organic unity for definition and protection of its legitimate interest for clarified status of a work in overlapping sections to be protected as online game, which is beneficial for operator to have clear expectation in transfer of rights, and for the promotion of ordered and prosperous development for cultural innovation industry.
