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01 Case Information

Trial Court

Shanghai Intellectual Property Court

Case No.

(2023) Hu 73 Civil Final No. 840

(2021) Hu 0115 Min Chu No. 90428

party

Guangzhou Dalan Network Technology Co., Ltd. (Appellant: Defendant of First Instance)

Shanghai Shulong Technology Co., Ltd. (Appellee: Plaintiff of First Instance)

Beijing Douyin Technology Co., Ltd. (Defendant of First Instance)

Date of Judgment

April 29, 2024

Cause of Action

Disputes over Copyright Infringement and Unfair Competition

02 Case Summary

As a classic 2D side-scrolling online game in China, *MapleStory* has been officially operated in China since 2004. After 20 years of meticulous operation and brand building, the *MapleStory* intellectual property (IP) has accumulated extremely high popularity and favorable reputation in the Chinese market.

However, a game entitled *Rainbow Tale* on the market has committed an act of infringement against the game *MapleStory*. In its publicity videos repeatedly promoted on the Douyin platform, the game not only uses a large quantity of official game images and materials of *MapleStory*, but also adopts a great number of advertising slogans that directly refer to the official *MapleStory* game, including "Produced by the original South Korean production crew", "Adventure mobile game developed by the original South Korean team", and "The adventure game is now available as a mobile version!".

After hearing the case, the Shanghai Intellectual Property Court ruled that *Rainbow Story* constitutes copyright infringement and unfair competition with respect to *MapleStory*. The infringing party shall issue a public statement to eliminate the adverse effects, and compensate the right holder more than RMB 1.22 million for economic losses and reasonable expenses incurred for rights protection.

Claims

1. Order the two defendants to immediately cease the acts of infringing upon the plaintiff's copyright and engaging in unfair competition.

2. Order the two defendants to forthwith compensate the plaintiff for economic losses in the sum of RMB 5,000,000.

3. Order that the two defendants compensate the plaintiff for reasonable expenses amounting to RMB 221,890 (including RMB 21,890 in notarization fees and RMB 200,000 in attorney fees);

4. Order the two defendants to publish a statement in a prominent position on their official websites in respect of their infringing acts to eliminate adverse effects, and the content of the aforesaid statement shall be subject to confirmation by the plaintiff.

Note: The plaintiff in this case has not included the claim that the defendant shall bear the litigation costs among its claims.

Judgment Result

I. The Defendant, Guangzhou Dalan Network Technology Co., Ltd., shall immediately cease the acts of infringing upon the copyright in artistic works enjoyed by the Plaintiff, Shanghai Shulong Technology Co., Ltd., as well as the unfair competition act of false publicity, upon the entry into force of this Judgment.

II. The Defendant, Guangzhou Dalan Network Technology Co., Ltd., shall, within ten (10) days from the date when this judgment takes effect, publish a public statement on the official website of the game *Rainbow Story* (chwy.aidalan.com) for fifteen (15) consecutive days (the content of the statement shall be subject to the review of this Court), to eliminate the adverse impacts caused to the Plaintiff, Shanghai Shulong Technology Co., Ltd. by its acts of copyright infringement and unfair competition. Where the Defendant fails to perform the aforesaid obligation, this Court shall publish the main content of this judgment on relevant media, and the expenses incurred therefrom shall be borne by the Defendant, Guangzhou Dalan Network Technology Co., Ltd.

III. The Defendant, Guangzhou Dalan Network Technology Co., Ltd., shall, within ten (10) days as of the date when this Judgment takes effect, compensate the Plaintiff, Shanghai Shulong Technology Co., Ltd., RMB 1,000,000 for economic losses and RMB 221,890 for reasonable expenses incurred to stop the infringing acts, totaling RMB 1,221,890.

IV. Dismiss the remaining claims of the plaintiff, Shanghai Shulong Technology Co., Ltd.

[Note] Given that the infringement acts targeting the audio-visual works involved in the case have already ceased, there is no reference to cessation of infringement in the terms of the judgment.

[Note] The court of second instance dismisses the appeal and affirms the original judgment.

03 Case Observation

Key Point 1: Elements such as game characters and scenes may be protected by claiming them as works of fine art. In the present case, Shulong Company asserted that characters and scenes including "Trojan Knight", "Flower Mushroom" and "Flame Dragon" in the game *MapleStory* are works of fine art with requisite originality. Without authorization, Dalan Company used characters or scene elements substantially similar to the aforesaid works in the *Rainbow Story* game it operates, as well as on the game's official website and the Douyin advertisements involved in the case, which constitutes infringement upon the right of communication through information networks.

Point 2: The overall screen display of a game may constitute an audiovisual work The overall screen display of a game refers to the continuous dynamic images presented on the screen, which are generated when players operate game characters in compliance with specified game rules, and the game engine calls game materials such as storylines, pictures, music and interface designs in accordance with the functional design of its software. Notwithstanding the existence of the factor of players' "interactive" operations, there is no significant dispute in judicial practice over directly deeming and handling such screen display as an audiovisual work.

Point 3: Infringement Comparison Method for Audiovisual Works In the present case, the comparison is conducted between "dynamic game footage" and "advertising video footage". The two are similar in aspects including scene layout, frame movement and even the setting of Non-Player Characters (NPCs), which constitutes substantial similarity. In essence, this is a comparison between "footage" and "footage", rather than an infringement comparison between "footage" and "static image screenshots".

Point 4: Video Advertisements Launched on Douyin App In the present case, Dalan Company used frames of the game *MapleStory* as advertising materials in the involved advertisements without permission, which infringed the copyright of *MapleStory* as an audiovisual work, constituting an infringement of the right of communication through information networks. For example, the involved advertisements used such game frames from *MapleStory* as "Pearl Harbor", "Little Snail", "Dream Path", "Bat Demon's Graveyard", "Archer Village", "Black Heaven" and "Abandoned City" in the form of videos. Although the relevant dynamic game frames used in the advertisements are of relatively short duration, they can still be perceived and identified by the relevant public.

Key Point 5: Improper expression in game advertisements constitutes false publicity. Pursuant to Article 8 of the Anti-Unfair Competition Law of the People's Republic of China, false publicity is divided into two categories, namely "false commercial publicity" and "misleading commercial publicity". In the present case:

(1) Dalan Company promoted the game *Rainbow Story* as "created by the original South Korean production crew" and "an adventure mobile game developed by the original South Korean production team". However, upon verification, the aforesaid promotional contents are untrue, and therefore constitute false commercial publicity.

(2) In its publicity, Dalan Company deliberately emphasized and used expressions such as "return", "classic", "new departure", "continuing childhood classics", "the adventure-themed mobile game is now launched" and "islanders" to imply that *Rainbow Story* is a sequel. Combined with its copyright infringement acts, its relevant publicity is directly directed at the game *MapleStory*, which causes confusion and misidentification among relevant audiences and players, and therefore also constitutes misleading commercial publicity.