TYGlobe

I. Introduction

With the rapid development of China's game industry, disputes over game copyright infringement are increasing day by day, and infringements such as "skin-changing games", gameplay plagiarism, misappropriation of art resources and other related acts emerge in an endless stream. In such disputes, the determination of the amount of compensation has always been a core difficulty in judicial practice. On the one hand, as composite works, games have particularity in value assessment; on the other hand, the profits obtained from infringement and the losses suffered by right holders are often difficult to quantify accurately. This paper will sort out and analyze the issue of the amount of compensation for game copyright infringement from the dimensions of legal basis, factors taken into account for compensation, evidence investigation methods, typical cases and comprehensive analysis.

II. Legal Basis

(I) Copyright Law of the People's Republic of China (2020 Amendment)

Article 54 establishes a system consisting of four-level progressive calculation of the amount of compensation plus punitive damages:

Tier 1: Actual Losses of the Right Holder The actual economic losses inflicted on the copyright owner by the infringing act include reduction in sales revenue, loss of market share, loss of licensing fees, etc. resulting from the infringement.

Second tier: Illegal gains of the infringer. Where the actual loss is difficult to calculate, the amount of damages may be calculated on the basis of the profits derived by the infringer from the infringing act. In the gaming sector, such profits are generally manifested as the operating revenue, recharge turnover, advertising revenue and other incomes of the infringing game.

Tier 3: Reasonable Multiple of Royalties The amount of compensation shall be determined by reference to the reasonable multiple of the corresponding copyright licensing royalties. In the gaming industry, the licensing fees for similar games may be used as a reference.

Level 4: Statutory Damages Where the actual loss suffered by the right holder, the illegal gains obtained by the infringer, and the royalty for the right are all difficult to determine, the people's court shall, in light of the circumstances of the infringing act, render a judgment to award compensation of no less than 500 yuan and no more than 5 million yuan. Following the 2020 amendment, the upper limit of statutory damages was significantly raised from 500,000 yuan to 5 million yuan.

In addition to the aforementioned four-tier compensation system, for serious intentional copyright infringement, punitive damages are applied to further deter infringements and safeguard the rights and interests of copyright holders: Where a person intentionally infringes copyright or rights related to copyright and the circumstances are serious, damages may be awarded at an amount of not less than one time and not more than five times the amount determined in accordance with the aforementioned methods. This is a major breakthrough made in the 2020 revision of the Copyright Law of the People's Republic of China, which provides a powerful weapon for combating malicious infringement. Meanwhile, on April 26, 2026, the Supreme People's Court issued the *Interpretation of the Supreme People's Court on the Application of Punitive Damages in the Trial of Civil Dispute Cases Involving Intellectual Property Infringement*, providing more specific normative guidance for the application of punitive damages.

(II) Relevant Judicial Interpretations

Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Civil Copyright Dispute Cases (Fa Shi [2002] No. 31): It sets forth detailed provisions on the calculation methods for actual losses and illegal gains, and explicitly stipulates that reasonable expenses (including attorney fees, notarization fees, investigation and evidence collection fees, etc.) may be included in the scope of compensation.

Interpretation of the Supreme People's Court on the Application of Punitive Damages in the Trial of Civil Cases Involving Infringement of Intellectual Property Rights (Judicial Interpretation No. 7 [2026]): It clarifies the conditions for the application of punitive damages, including the criteria for the determination of "willfulness" and "serious circumstances", specific applicable circumstances, as well as the methods for determining the base amount and multiple of damages.

(III) Supplementary Application of the Anti-Unfair Competition Law of the People's Republic of China

In game infringement disputes, the Copyright Law of the People's Republic of China and the Anti-Unfair Competition Law of the People's Republic of China are often applied concurrently. Where an infringement act also constitutes unfair competition (such as free-riding, acts of confusion, etc.), the right holder may simultaneously claim compensation under the Anti-Unfair Competition Law of the People's Republic of China, but the people's courts usually avoid double counting.

(IV) The Tort Liability Part of the Civil Code of the People's Republic of China

The principle-based provisions on punitive damages for intellectual property rights as set out in Article 1185 of the Civil Code of the People's Republic of China provide further basis for compensation for game copyright infringement.

III. Factors to Be Considered in Determining the Amount of Compensation

Legal basis serves as the yardstick for courts in trying cases. However, in judicial practice, the greater difficulty often lies in how to align facts with legal norms, and realize the principle of "taking facts as the basis" while preparing to apply legal norms. The following are the factors usually comprehensively considered by courts when determining compensation for game copyright infringement, as summarized by the author during legal practice:

(I) Relevant Factors Concerning Torts

Nature and Forms of Infringement: The infringement may be categorized as overall reproduction (e.g. private servers), substantial similarity (e.g. reskinned games), or infringing copying of partial elements (e.g. art resources, music and storylines). Generally, the damages awarded for overall reproduction are higher than those for infringement involving partial elements.

Scope and Scale of Infringement: including the dissemination scope, number of downloads, number of registered users, number of active users, and covered platforms and regions of the infringing games, etc.

Duration of Infringement: Refers to the time span from the launch of the infringing game to the cessation of the infringement. The longer the duration of the infringement lasts, the higher the amount of compensation will generally be.

Degree of Subjective Fault of the Tortfeasor: whether the tortfeasor still commits the infringing act when it knows or should have known that such act constitutes infringement; whether the tortfeasor continues to commit infringement after receiving a warning letter or being notified of litigation; and whether any malicious circumvention conduct exists.

(II) Relevant Factors Relating to Rights-Bearing Works

Popularity and Market Value of Rights-Bearing Works: Where the well-known IP of a reputed rights-bearing work is infringed, the amount of compensation granted is usually higher. The people's court shall take into consideration factors including the market influence, brand value and user base of the rights-bearing work, among others.

Investment in the Creation of Works: Factors including the research and development costs, development cycle and team size of original games reflect the intellectual and economic investments of the right holders.

Types of Works and Degree of Originality: As a composite work, a game may involve a variety of copyright objects such as computer software, works of fine art, musical works, literary works (storylines), and audiovisual works. The higher the degree of originality, the stronger the protection intensity.

(III) Factors Related to Economic Data

Revenue data of infringing games: including recharge turnover, advertising revenue, revenue from in-game prop sales, etc. This is the core data for the calculation of illegal proceeds.

Loss data of the right holder: including loss of users, decline in revenue, reduction in market share, etc. arising from infringement.

Reference for Licensing Royalties: The standard licensing royalty for games of the same type may serve as the reference basis for determining the amount of compensation.

Profit Margin of the Gaming Industry: It is used to calculate the actual profit from revenue data, and generally requires reference to the average profit margin of the industry or the financial data of specific enterprises.

(IV) Other Considerations

Reasonable expenses for safeguarding legitimate rights and interests: including attorney fees, notarization fees, investigation and evidence collection fees, appraisal fees, travel expenses, etc.

Business scale and solvency of the tortfeasor: Although they are not statutory consideration factors, they may affect the court's discretion in judicial practice.

Industry Practices and Market Environment: business models, profit models, competitive landscape and other relevant aspects of the game industry.

IV. Investigation of Compensation Factors and Evidence Collection

Evidence materials relating to compensation factors and factors for compensation award, as well as evidence materials obtained through effectively organized collection, are a vital link and key component in the case handling process. In the following, the author briefly sets forth the investigation of compensation factors and evidence acquisition:

(I) Fixation of Tortious Acts and Evidence Preservation

Notarized Evidence Collection: The notary office conducts notarized operations including downloading, installation, operation, screenshot capturing and screen recording of infringing games to fix the facts of infringement. This is the most fundamental and critical evidence collection method in cases involving game copyright infringement.

Timestamp Evidence Collection: Electronic evidence is fixed by using trusted timestamp services, so as to ensure the authenticity and integrity of the evidence.

Pre-litigation Evidence Preservation: In case of emergency, an application for pre-litigation evidence preservation may be filed with the court to request the preservation of key evidence such as server data and operation data of infringing games.

(II) Investigation into Profits from Infringement

Public data of application stores: Public data such as the number of downloads, ratings and rankings of infringing games are obtained through platforms including the App Store, Google Play and major Android application stores.

Third-party Data Platforms: We use third-party data analysis platforms including Qimai, App Annie (data.ai) and Gamma Data to obtain data such as estimated download volume, estimated revenue and user activity of infringing games.

Industrial and Commercial Information and Financial Data: The infringer's industrial and commercial registration information, shareholder information and affiliated company information shall be inquired through platforms such as Qcc and Tianyancha; the infringer's financial statements, tax payment records, bank transaction records and other relevant materials shall be obtained by virtue of a court investigation order or upon application to the court for collection.

Industry Reports and Market Data: Industry reports issued by institutions including the Game Publishing Committee (GPC) of China Audio-Video and Digital Publishing Association and Gamma Data are cited as references for calculating the industry's profit margin and market scale.

# Application to the Court for an Order to Produce Evidence Pursuant to the *Several Provisions of the Supreme People's Court on Evidence in Civil Litigations Concerning Intellectual Property Rights*, where a right holder has made reasonable efforts to adduce evidence, it may apply to the court to order the infringer to provide account books, materials and other documents in the infringer's possession that relate to profits obtained from the infringement. Where the infringer refuses to provide the aforesaid materials without justifiable reasons, the court may determine the amount of compensation by referring to the claims and evidence submitted by the right holder.

(III) Burden of Proof for Losses Sustained by the Right Holder

Comparison of Own Operating Data: Data including but not limited to changes in revenue, changes in user growth rate, and changes in market share before and after the occurrence of the infringing act shall be provided to prove the causal relationship.

Market Investigation Report: A professional institution shall be entrusted to conduct market investigation to evaluate the impact of infringements on the right holder's market share and brand value.

Evidence of License Fees: Game licensing agreements previously executed with third parties shall be provided to prove the market price of the license fees.

(IV) Professional Appraisal and Evaluation

Judicial Appraisal: Entrust a qualified judicial appraisal institution to conduct technical appraisal on the substantial similarity of games, including source code comparison, art resource comparison, game rule comparison, etc.

Asset Appraisal: Entrust an asset appraisal institution to conduct professional appraisal of the market value of game copyrights, losses caused by infringement, etc.

Expert Assistant: Game industry experts or intellectual property experts shall be retained as expert assistants to appear in court, and present opinions on specialized issues such as the technical features, market value and industry practices of games.

V. Typical Cases

The following sets out a brief analysis of two cases for reference, with a view to enabling the understanding of classic judicial cases and court practices in relation to copyright infringement cases in the gaming sector.

Case 1: Pokémon Copyright Infringement Case

Case Summary: The Pokémon Company has filed a lawsuit against Guangzhou Maichi Network Technology Co., Ltd., Horgos Fangchi Network Technology Co., Ltd. et al., alleging that the mobile game *Pokémon: Remaster* operated by the above-mentioned defendants has infringed upon the copyright of the Pokémon series and constituted unfair competition. The plaintiff claims damages amounting to RMB 500 million.

Judgment: The Guangdong High People's Court delivered a first-instance judgment ordering the defendant to pay RMB 107 million (approximately USD 14.7 million) in compensation. During the second-instance proceedings, the two parties reached a mediation agreement.

Case Analysis: This case is one of the cases with the highest compensation amounts in the field of game copyright infringement in China, which reflects the significant improvement in the intensity of game intellectual property rights (IPR) protection by Chinese courts. When determining the amount of compensation, the court took comprehensive consideration of factors including the global popularity of the Pokémon brand, the operation scale and profitability of the infringing game, and the degree of bad faith of the infringing conduct.

Case 2: The Case of NetEase v. Miniwan Concerning *Mini World*'s Infringement of *Minecraft*

Case Summary: As the operator of *Minecraft* (officially named *My World* in Chinese) in China, NetEase, Inc. filed a lawsuit against Shenzhen Miniwan Technology Co., Ltd., claiming that the *Mini World* operated by the latter constitutes copyright infringement and unfair competition, and alleging that the overall screen presentations of the two games are highly similar.

Judgment Result: The court ruled that Miniwan shall cease its infringing acts and pay RMB 50 million in damages to NetEase.

Significance of the Case: This case involves the issue of the boundaries of copyright protection for "sandbox games", a specific game category. The court conducted an in-depth analysis of the copyright protection for the overall graphics of games, and clarified that even for games of the same type, substantial similarity in specific expressions still constitutes copyright infringement.

VI. Dynamic Analysis

Based on the author's analysis of relevant cases and industry observations, game-related infringement cases present the following characteristics at present:

(I) The amount of tort damages has shown an upward trend.

As demonstrated by relevant cases, the amount of compensation for game copyright infringement in China is on an upward trend: while the amount mostly ranged from hundreds of thousands to millions of RMB in the early years, the compensation awarded in landmark cases in recent years has reached tens of millions or even hundreds of millions of RMB. Following the amendment of the Copyright Law of China in 2020, the upper limit of statutory damages was raised from RMB 500,000 to RMB 5 million, and the introduction of the punitive damages system has further provided a legal basis for the granting of high-value compensation.

(II) The Transition from "Taking Statutory Damages as the Primary Approach" to "Refined Calculation"

In early game copyright infringement cases, courts widely applied statutory damages due to difficulties in adducing evidence, resulting in generally low compensation amounts that could hardly produce an effective deterrent effect. In recent years, alongside the following changes, the calculation of compensation is becoming increasingly refined. Courts have adopted a more refined allocation of the burden of proof, which, at the same time, also imposes higher requirements on copyright holders in their rights protection efforts.

(III) There remain disputes over the determination of game copyright infringement.

Game infringement is diverse and complex in types, involving a wide range of contents. There are still disputes and discussions over the judicial determination of relevant issues by courts in China, such as the compensation determination for "skin-changing games", infringement compensation arising from game live streaming and short videos, compensation issues relating to cross-border infringement, and copyright infringement compensation for AI-generated game content, etc. Constrained by the length of this text, the author will not elaborate on the aforesaid complex contents one by one herein. Please look forward to the subsequent discussion and analysis of the above issues by the author.

VII. Conclusion and Recommendations

Determining the amount of compensation for game copyright infringement is a complex multi-dimensional issue involving multiple aspects such as application of law, fact-finding and economic analysis. The continuous improvement of current judicial practices and norms in China has effectively protected the sound development of the game industry. However, the field of game copyright infringement compensation still faces many challenges, including great difficulty in evidence production, inconsistent compensation calculation standards, and imperfect infringement determination rules under new business forms, among others. Drawing on personal practical experience, the author puts forward the following suggestions for right holders and alleged infringers:

(I) Recommendations for Right Holders

Improve copyright registration and evidence preservation: Conduct copyright registration for game software, fine art works and other relevant works in a timely manner, and establish a complete chain of evidence for the creation process (including design documents, development logs, version iteration records, etc.).

Establish an infringement monitoring mechanism: Conduct continuous monitoring over major application stores and game platforms through technical means and third-party services to detect infringing acts in a timely manner.

Emphasis shall be placed on the collection of evidence for damages. Upon discovery of an infringement, evidence of the infringement shall be preserved immediately by such means as notarization and timestamp, and relevant economic data of the infringing game including its download volume, revenue data and user reviews shall be collected concurrently.

Rationally select the compensation calculation method: The most favorable compensation calculation method shall be selected in light of the specific circumstances of the case. Where it can be proved that the infringer has obtained relatively high profits, priority shall be given to claiming compensation on the basis of illegal gains; where the right holder's own losses are definite, a claim for actual losses may be filed.

Actively Assert Claims for Punitive Damages: For cases involving intentional torts with grave circumstances, we will proactively collect evidence to assert claims for punitive damages, so as to maximize the amount of compensation.

(II) Suggestions for the Accused Infringers

Compliance Review in the Development Phase: An intellectual property rights compliance review mechanism shall be established during the game development phase to avoid inadvertent infringement.

### Timely Cessation of Infringing Acts Upon receipt of an infringement warning or a lawsuit, promptly assess the infringement risks, and voluntarily cease the infringing acts where necessary, so as to reduce the amount of compensation and avoid the application of punitive damages.

Active Evidentiary Defense: Submit evidence such as evidence of independent creation and evidence of lawful source to effectively defend against infringement allegations.