01 Case information
Court of Appeal
Guangzhou Intellectual Property Court
Case number
(2022) Yue 73 Min Zhong No.4331
(2021) Yue 0192 Min Chu No.25154
party
Hangzhou Yite Technology Co., LTD. (appellant; plaintiff in the first instance)
Guangzhou Aike Information Technology Co., LTD. (appellant; defendant in the first instance)
Shenzhen Whale Network Technology Co., LTD. (appellant; defendant in the first instance)
Youyou (Beijing) Technology Co., LTD. (appellant; defendant in the first instance)
Date of judgment
29 April 2024
cause of action
Copyright infringement and unfair competition disputes
02 Case summary
"Yomi no Sh," a 3D Japanese-style turn-based RPG mobile game launched by a web-based company in 2016, quickly gained popularity with its unique art style and Heian-period setting, becoming a phenomenal hit that consistently generated substantial revenue for the company. In 2018, a similar game titled "Hyakumonogatari" was released by You Company and operated by Jing Company, distributed through Ai Companys platform.
A companys investigation revealed that "Hyakumonogatari" not only shares core elements art style and character designs with "Onmyoji," but also directly incorporates 86 artwork pieces from the latter. Furthermore, another company published articles on Ais platform, attempting to boost "Hyakumonogataris" competitiveness by disparaging "Onmyoji."
The case of "Onmyoji" v. "Hyakumonogatari" was adjudicated by Guangzhou Internet Court and Guangzhou Intellectual Property Court through first and second instance trials. The court ruled that Jing Co., Ai Co., and You Co. tly infringed Net Co.s right of communication through information networks, constituting unfair competition through imitation confusion. Jing Co. was additionally found guilty of unfair competition through commercial defamation. The court ordered Jing Co. to compensate Net Co. 1 million yuan, with You Co. bearing t liability up to 900,000 yuan and Ai Co. up to 300,000 yuan. All parties were required to publish clarification statements on prominent positions of designated homepage websites and WeChat official accounts for ten consecutive days.
claim
1. Order the company to delete one infringing promotional poster published on the Internet (www.32r.com/app/77XXX.html, dl.XXXXline.com.cn/download/27XXXXX.html);
2. Order Company A and Company Whale to publish the clarification statement approved by the court on their respective homepages (URLs are www.Xgame.cn, www.kingXXXXXgame.cn) and in a prominent position of WeChat official account XXgamer operated by Company You for ten consecutive days, so as to eliminate the adverse impact on Net Company;
3. Order Whale Company and You Company to tly compensate Net Company for economic losses and reasonable expenses incurred in safeguarding rights, totaling 5 million yuan, and A Company shall be tly and severally liable for 1 million yuan of the compensation;
4. Order A Company, Whale Company and You Company to bear all the litigation costs of this case.
[Note] In the first instance, Wang Company made it clear that the game "Hyakki Monogatari" involved in the case had been removed from the shelves. In this case, it claimed the right of information network dissemination and reproduction of 86 pieces of artistic works, and claimed punitive damages. The compensation base was 5 million yuan, and the total amount of compensation was still 5 million yuan.
result of judgment
1. Love Company and Whale Company published statements on their respective home pages (the website is www.Xgame.cn, www.kingXXXXXrgame.cn) and You Company published statements in a prominent position on its WeChat official account "xxgamer" for ten consecutive days to eliminate the impact (the content shall be reviewed by the court);
2. Whale Company shall compensate Net Company for 1,000,000 yuan within 15 days from the effective date of this judgment, You Company shall be tly and severally liable for 900,000 yuan thereof, and Ai Company shall be tly and severally liable for 300,000 yuan thereof;
3. Other claims of the company are rejected.
[Note] The appeal was rejected and the original judgment was upheld in the second instance.
Appeal petition (Net Company)
1. The second item of the first-instance judgment shall be revoked, and Jing Company and You Company shall compensate Net Company for economic losses and reasonable expenses incurred in safeguarding rights totaling 5 million yuan, and Ai Company shall be tly and severally liable for 1 million yuan of the compensation.
2. Order Company A, Company Whale and Company You to bear all the litigation costs of this case.
Appeal petition (Whale Company)
1. Revoke the first and second items of the first-instance judgment, send it back for retrial or amend the judgment according to law to reject all the claims of Net Company, or amend the judgment to make You Company bear legal responsibility;
2. Net Company shall bear all the litigation costs of the first and second instance.
Case observations 03
Key Point 1: Reproduction Right Infringement Covered by Information Network Dissemination Right: In this case, Wang Co., Ltd. claimed that Aii Co., Ltd., Jing Co., Ltd., and You Co., Ltd.s "Hyakki Yagyo" infringed the information network dissemination right and reproduction right of the artistic works in "Onmyoji". As game developers, operators, and platform providers respectively, You Co., Ltd., Jing Co., Ltd., and Aii Co., Ltd. collaborated to enable the public to access 86 artistic works from "Onmyoji" at their chosen time, thereby constituting infringement of information network dissemination rights and should bear t liability. Regarding reproduction right claims, since the infringing act involved storing the work in digital format on media, creating a new copy, and uploading it to a server, such acts do not have [independent harmful consequences] and can be absorbed by information network dissemination right infringement. Therefore, after confirming the infringement of information network dissemination rights, the court no longer supports claims regarding reproduction rights.
Key Point 2: Platform Operators t and Several Liability: In this case, the platform operator Aix Company is not merely a network service provider offering technical services such as automatic access, data transmission, information storage, search, and linking. It has substantially participated in operational activities including "payment processing, promotion, review, and revenue sharing". As these actions demonstrate collaborative division of labor, the company is tly liable for infringing upon the right of communication through information networks and shall bear t and several liability accordingly.
Key Point 3: Game protagonists can serve as distinctive identifiers to recognize product sources. (1) Generally, a games popularity tends to extend to its characters and imagery, similar to how the fame of the protagonist Qiao Feng in the novel *Demigods and Semi-Devils* rises with the games success, creating a mutually reinforcing relationship. (2) In this case, Net Company claimed that the characters Seimei, Luo Xinwu Shishen, and Lunyu Dao Yuhun from *Onmyoji* possess significant influence and can serve as identifiers for products and services. This is because the games characters have been widely and consistently used by Net Company over an extended period, establishing a strong association between these characters and *Onmyoji* among the relevant public. (3) The game *Hyakki Yagyo* is a competitive product to *Onmyoji*. Given the latters established popularity and cultural resonance, the developers and operators of *Hyakki Yagyo* using protagonist images similar to Seimei could easily mislead the public. Therefore, Ai Company, Jing Company, and You Company violated Article 6 of the Anti-Unfair Competition Law by engaging in misleading competition through source confusion.
Key Point 4: Abuse of Comparative Advertising Constitutes Commercial Defamation: (1) In this case, Whale Co. and Net Co. are competitors in the same industry. Whale Co. posted on platforms Ai Co. "The most criticized aspect of YYS is its excessive grind gameplay, requiring players to spend massive time... In Hyakumonogatari, grinding doesnt exist. The games core feature is idle gameplay – just idle time and leisurely relaxation, making it a must-have for lazy players." Net Co. s controversial point lies in its toxic card pool system, lacking guaranteed s. Even ten consecutive R draws can grant achievements. Although UP events exist now, the probability remains discouraging. In contrast, Hyakumonogataris card-drawing system is exceptionally fair. Players receive free ten-draws upon starting, with guaranteed five-star divine pets every draw – a hit-or-miss experience that feels charity work... ". This article essentially constitutes comparative advertising, using terms " criticized "and" toxic "to describe YYS, while labeling Hyakumonogatari as" a must-have "and" chari". Such comparison misleads gamers, damages Net Co. s reputation, and undermines its competitive edge. Therefore, Whale Co. s publication of the involved article violates Article 11 of the Anti-Unfair Competition Law, constituting unfair competition through commercial defamation. (2) Regarding operators (advertisers) publishing comparative advertisements: They are no longer ordinary consumers, so their freedom of commercial speech differs from general free speech. The "objectivity and fairness" of comparative advertising content will also be subject to "stringent scrutiny". (3) Furthermore, it should be recognized that commercial disparagement constitutes unfair competition because such statements are biased against competitors, misleading consumers judgments about product or service quality and distorting market competition mechanisms. Generally, false statements that damage competitors reputation often qualify as commercial disparagement. However, even comments appearing fact-based may still constitute unfair competition if they are distorted through [misrepresentation or ive interpretation], ultimately misleading consumers.
