TYGlobe

01 Case Information

Trial Court

Shanghai Pudong New Area People's Court

Case No.

Case No. (2017) Hu 0115 Min Chu No. 27056

party

Hangzhou Yoka Network Technology Co., Ltd. (Plaintiff)

Guangzhou Changyou Information Technology Co., Ltd. (Defendant No. 1)

Guangzhou Dayu Information Technology Co., Ltd. (Second Defendant)

Shanghai 2345 Network Technology Co., Ltd. (Third Defendant)

Date of Judgment

January 10, 2019

Cause of Action

Disputes over Copyright Ownership and Infringement

02 Case Summary

The game *Legends of the Three Kingdoms* (hereinafter referred to as the "Rights Game") is a series of card games published and distributed by Hangzhou Bianfeng Network Technology Co., Ltd. and Beijing Yoka Board Games Culture Development Co., Ltd. Set against the background of the Three Kingdoms period, with identity as the core clue and military generals as playable characters, it has constructed a tabletop game universe integrating elements including history, literature, art and gaming. Up to now, it has been launched in a variety of forms such as the cardboard box version, PC online game version and mobile game version.

On December 1, 2015, Yoka Games accepted the entire assignment of intellectual property rights in respect of the aforesaid Rights Game, and has thus become the copyright owner of the Rights Game and its derivative works thereafter. Yoka Games found that Changyou Company and Dayu Company jointly launched a game named *Sanguo KILL*. A large number of elements used in the said game, including character names (covering role names and skill names) and character images (covering military general avatars and equipment), are substantially similar to the corresponding elements of the Rights Game. In addition, Changyou Company and Dayu Company have also carried out promotion, publicity and provision of download services for the allegedly infringing game *Sanguo KILL* through multiple channels such as the game's official website, Apple App Store, Android application stores, Weibo and WeChat Official Accounts, and have reaped enormous commercial benefits through the operation of the allegedly infringing game *Sanguo KILL* (Note: It was later renamed as *Jilue Sanguo*).

Accordingly, Youka Company filed an action with the court. It withdrew its complaint against 235 Company (the platform operator) in court, and demanded that Changyou Company and Dayu Company bear legal liability for their tortious acts. Upon trial, the court rendered the following rulings: (1) Changyou Company and Dayu Company are determined to have committed copyright infringement, and the two parties shall jointly and severally pay a total compensation of RMB 500,000 to Youka Company; (2) Inasmuch as the game involved in the case has been protected under copyright law, Youka Company's litigation claim concerning unfair competition shall not be upheld.

Plaintiff's Claims (Yoka)

1. It is ordered that Defendants Changyou Company and Dayu Company cease the acts of infringing upon the copyright of the Plaintiff's work *Sanguosha* in the game *Sanguo Kill* (including its renamed version *Jilue Sanguo*).

2. Order the 2nd, 3rd, 4th and 5th defendant companies to cease the act of providing assistance for the infringing acts committed by the defendants Changyou Company and Dayu Company;

3. Order the three defendants to publish a statement on their official websites and in *China Intellectual Property News* to eliminate the adverse effects such as market confusion caused by their acts, and the content of the said statement shall be subject to the consent of the plaintiff.

4. Order the three defendants to jointly and severally compensate the plaintiff for economic losses and rights protection expenses in the aggregate amount of RMB 5,000,000.

The defendants argue (Changyou, Dayu)

1. The plaintiff was only registered as the copyright owner of *Game of Rights* in June 2017. It was not the copyright owner at the time of instituting the lawsuit, and accordingly has no right to initiate the present litigation.

2. The text content of *Right Game* is devoid of originality and does not constitute a literary work. Text contents including the names of military generals, skill descriptions and combat achievement system in the game fall within the scope of ideas. *Right Game* is substantially similar to the Italian card game *BANG!*, the Japanese card game *Sangokushi (Records of the Three Kingdoms)*, Chinese card games *Heroes Kill* and *Sanguo Zhan*, among others, and therefore shall not be protected by the Copyright Law of China.

3. The game *Extreme Strategy Three Kingdoms* operated by Defendant Dayu Company holds independent computer software copyright. Although part of its text content overlaps with that of the game *Three Kingdoms KILL*, the two are separate game software products. The research and development of *Three Kingdoms KILL* draws references from the game *EXCEL Kill*. The content of the allegedly infringing game has material differences from that of the right-bearing game, which will not cause confusion and does not constitute copyright infringement.

4. Defendants Changyou Company and Dayu Company maintained a game development and joint operation relationship between 2014 and 2015. Given that Changyou Company held the software copyright of the involved game, Dayu Company was unable to verify whether the game constituted infringement. After taking over the aforesaid game in 2016, Dayu Company has not carried out any form of cooperation with Changyou Company ever since. The two parties neither have the intent of infringement nor have jointly committed infringing acts, thus they shall not bear joint tort liability.

5. The game products of the two defendants and the games to which the plaintiff holds rights do not constitute a competitive relationship in the market. There is no evidence proving that the defendants' games have caused substantial losses to the plaintiff. Furthermore, Defendant Changyou Company has ceased operations due to poor operational performance, and the team of Defendant Dayu Company responsible for operating the involved game has also been disbanded. Neither of the two defendants has profited from the alleged infringing game, thus the plaintiff's claim for RMB 5 million in economic loss compensation has no factual or legal basis. Even if the court adjudicates that the two defendants shall bear tort liability, the calculation of damages shall only be traced back two years prior to the date when the plaintiff filed the lawsuit.

6. The alleged infringing game *Sanguo KILL* ceased operation on April 1, 2017, so there is no necessity for actual performance of the plaintiff's claim for cessation of infringement.

The defendant argues (235)

1. The website operated by 2345 Company is a software download website, which does not conduct substantive review of any software uploaded by Internet users. The allegedly infringing game software was uploaded by Internet users through 2345 Software Collection and 2345 Mobile Assistant.

2. 2345 Company has never established business promotion cooperation in relation to the alleged infringing game software with the two defendants, nor has it reached any consensus on contributory infringement. It has never conducted such acts as publicity, promotion, top pinning or ranking for the aforesaid game software, nor has it obtained any economic benefits therefrom. As an Internet Service Provider, 2345 Company shall not bear liability for compensation in the absence of fault.

3. The alleged infringing game software is not a well-known game software, and has a relatively low download volume on the website of 2345 Company. The aforesaid company removed the alleged infringing game software immediately upon receipt of the complaint.

Court judgment

1. The Defendants, Guangzhou Changyou Information Technology Co., Ltd. and Guangzhou Dayu Information Technology Co., Ltd., shall immediately cease all acts of infringing upon the copyright in the game *Sanguosha* held by the Plaintiff, Hangzhou Youka Network Technology Co., Ltd. as of the effective date of this Judgment.

2. Defendants Guangzhou Changyou Information Technology Co., Ltd. and Guangzhou Dayu Information Technology Co., Ltd. shall, within ten (10) days from the date this judgment takes effect, jointly and severally compensate Plaintiff Hangzhou Youka Network Technology Co., Ltd. RMB 500,000 for economic losses.

3. The Defendants, Guangzhou Changyou Information Technology Co., Ltd. and Guangzhou Dayu Information Technology Co., Ltd., shall, within 10 days from the date when this judgment takes effect, jointly and severally compensate the Plaintiff, Hangzhou Youka Network Technology Co., Ltd., RMB 64,600 for reasonable expenses including attorney's fees, notarization fees, investigation and evidence collection fees, etc.

4. The defendants Guangzhou Changyou Information Technology Co., Ltd. and Guangzhou Dayu Information Technology Co., Ltd. shall, in respect of the infringing acts involved in the present case committed by them, within 30 days from the effective date of this Judgment, publish a statement on the homepage of the website www.sanguoq.com for 30 consecutive days and on the pages of *China Intellectual Property News* excluding the gutter, so as to eliminate the adverse effects (the content of the said statement shall be examined and approved by this Court);

5. Dismiss the remaining litigation claims of the plaintiff, Hangzhou Yoka Network Technology Co., Ltd.

03 Case Observation

Q1: What category of works under the Copyright Law of China does the board game *Sanguosha* constitute?

A1: Constitutes a literary work. It should be noted that it is not the board game *Sanguosha* as a whole per se that constitutes a literary work, but the comprehensive combination of the following elements contained in the board game *Sanguosha*: various basic cards (Peach, Dodge, Strike), equipment cards, strategy cards, selection of general characters and matching of their skill names, written descriptions of the generals' skills, among others. The above-mentioned elements as a whole may be deemed as a "game instruction manual" and thus constitute a literary work, which is eligible for protection under the Copyright Law of China. In addition, it should be emphasized that the above-mentioned elements, when taken individually, cannot be granted protection due to their excessively low degree of originality; only when they are combined as an integral whole can they possibly constitute a literary work.

Q2: What is the method for infringement comparison in the present case?

A2: Submit a "Comparison Table of Identical Parts of Text Expressions of Cards". It is found that there are only minor differences or wording adjustments, while the meanings conveyed are all substantially identical or similar.

Q3: What right enjoyed by the plaintiff in the literary work of its board game *Sanguosha* has the defendant in the present case infringed?

A3: "the Right of Communication through Information Networks"

Q4: How can the claim for "publishing a statement and eliminating adverse effects" be upheld by the people's court?

A4: Similarly, evidence shall be required to prove that the adverse effects caused to the plaintiff are indeed attributable to the acts of the defendant. Otherwise, many similar litigation claims, even if raised, will be futile and shall not be upheld by the people's court. Common types of evidence include media news reports, player comments, etc.

Q5: How to determine the number of downloads of infringing game software?

A5: The download times on each download platform shall be counted and aggregated. Common platforms include: Kuaiyong Platform, ZOL Mobile Application Platform, Liqu Platform, Wandoujia Platform, Tencent MyApp Platform, TapTap Platform, 360 Mobile Assistant Platform, etc.

【Summary】

Regarding the protection of board game products, especially card-based board games, this case provides a valuable reference approach: that is, to abstract the overall written descriptions involved in the board game into an instruction manual, and claim that it constitutes a written work under the Copyright Law of China, so as to obtain protection under the Copyright Law. In practice, however, this seems to be merely an expedient measure for the protection of board game products. As specified in the *Regulations for the Implementation of the Copyright Law of China*, written works cover novels, poems, essays, theses and other forms. It is obvious that all the aforesaid works enable people to acquire aesthetic or artistic expression experience through direct text reading. Board games, by contrast, are different. No player obtains aesthetic or artistic expression experience by reading the written descriptions on the cards or the instruction manual of a board game product; instead, such experience is derived from the gameplay itself with the participation of players.

It can be concluded therefrom that board game products primarily design an interaction mechanism by means of written descriptions, so that players can obtain interactive aesthetic and artistic expression experiences during gameplay. This interaction mechanism cannot be equated with overly abstract rules. The latter falls into the category of ideas and is not protected under the Copyright Law of China, while the former has a certain space for expression and may constitute a work within the meaning of the Copyright Law of China. The "interactivity" feature of such a work is obviously distinct from the common works enumerated in Article 3 of the Copyright Law of China, but this does not rule out the possibility that it constitutes "other intellectual achievements that conform to the characteristics of a work".