TYGlobe

01 Case Information

< class="MsoGrid" border="1" cellspacing="0" style="border: none;">Trial Court

Beijing Internet Court

Case No.

(2020) Jing 0491 Min Chu No. 5335

party

Cheng Mou (Plaintiff)

Tianjin Yunchang Technology Co., Ltd. (Defendant)

Date of Judgment

August 4, 2022

Cause of Action

Disputes over Internet Tort Liability

02 Case Summary

Yunchang Company is the operator of the online game *Sword Art Online: Black Swordsman*. It claimed that the game was the only officially licensed mobile game of the relevant intellectual property in China, and failed to conclude a detailed online service agreement when providing online services to game players. On October 31, 2019, it issued the *Announcement on Game Service Suspension*, which stipulated that the recharge service for *Black Swordsman* would be officially suspended at 10:00 on November 30, 2019, and the operation of *Black Swordsman* would be officially terminated at 10:00 on December 31, 2019. On the same day, it released a compensation plan: other online games under Yunchang Company would be provided for game account migration, and bound ingots equivalent to 5% of the total historical recharge amount would be granted to players of the online game *Sword Art Online: Black Swordsman* as compensation.

Cheng Mou is a player of the online game in question and holds two accounts for the game, namely a Huawei AppGallery account and a TT Play account, with cumulative recharges of RMB 132,977.43 and RMB 294,888 made to the two accounts respectively. Cheng Mou contends that: (1) Yunchang Company failed to make a public announcement on the authorization term of the game, which led him to mistakenly believe that the game would be operated indefinitely, and thus he made large-value recharges; (2) As a player of *Sword Art Online: Black Swordsman*, he has invested a substantial amount of time, energy and effort into the game, attained a certain "identity and status" in the game, and obtained corresponding diamonds, accessories, equipment, props, character cards and other in-game items. The acts of Yunchang Company will result in the permanent loss of his virtual identity and achievements in the aforesaid online game.

Therefore, Cheng Mou held that the acts of Yunchang Company had caused property losses and mental distress to him, which constituted a tort, and he thus filed a lawsuit with the people's court. Finally, the court rendered a judgment and found that: The virtual property (including in-game currency and in-game items) owned by Cheng Mou in the involved game is protected by law. Yunchang Company's unauthorized suspension of game operation without statutory grounds or prior service agreement constitutes a tort against the player Cheng Mou, and the company shall be liable for compensation.

< class="MsoGrid" border="1" cellspacing="0" style="border: none;">Plaintiff's Claims (Cheng Mou)

1. Order that Yunchang Company shall refund to Cheng RMB 32,093.60, which is equivalent to the value of Cheng's unused online game virtual currency, as well as the interest loss incurred therefrom;

2. Order Yunchang Company to compensate Cheng for the losses caused by the upgrade equivalent to RMB 79,411.76 and the loss of interest.

3. Order that Yunchang Company shall, due to its termination of operations, pay Cheng compensation in the amount of RMB 1,044,993 (equivalent to the value of Cheng's yet-to-expire game services) plus interest thereon.

4. It is hereby ordered that Yunchang Company shall pay Cheng Mou RMB 10,000 as solatium for mental damage.

< class="MsoGrid" border="1" cellspacing="0" style="border: none;"> The defendant (Yunchang) argues

1. Cheng Mou is not the real-name registrant of the TT Play+ platform account involved in the case, i.e. not the legitimate right holder of the account involved in this case, and has no standing to initiate the present action. The people's court shall render a ruling to dismiss the action in accordance with the law.

2. Even if Cheng is a proper party, Cheng does not hold any unused in-game virtual currency, so Yunchang Company shall not be obligated to make restitution.

3. Even if Cheng is a qualified party, Yunchang Company has actually fully compensated for the losses caused by the upgrade.

4. Even if Cheng is a proper party, the game props claimed by Cheng are not unexpired services, and there is no reasonable basis for the calculation of their value. Accordingly, Yunchang Company shall not be liable for compensation.

5. Cheng Mou's claim for solatium for mental damage has no legal basis whatsoever. Pursuant to the *Interpretation of the Supreme People's Court on Several Issues Concerning the Determination of Liability for Compensation for Mental Damage in Civil Torts*, claims for mental damage compensation only apply to compensations for infringement of the right of the person and personality rights. For infringement of property rights and interests, such compensation is only eligible under the circumstance where the infringed property is of specific commemorative significance, which does not apply to this case. Therefore, Yunchang Company shall not be liable for paying any solatium for mental damage.

6. Yunchang Company has no fault in terminating its online service operations, and shall not bear tort liability.

< class="MsoGrid" border="1" cellspacing="0" style="border: none;"> Court Judgment

1. Within seven days from the date on which this judgment takes effect, the Defendant Tianjin Yunchang Technology Co., Ltd. shall compensate the Plaintiff Cheng Mou the sum of RMB 36,257 and interest thereon (such interest shall be calculated on the basis of the principal of RMB 36,257, paid at the Loan Prime Rate (LPR) published by the National Interbank Funding Center for the corresponding period, and accrues from December 31, 2019 to the date of actual full payment of the aforesaid sum).

2. The other claims of the plaintiff Cheng Mou are hereby dismissed.

03 Case Observation

Q1: Is virtual property in online games protected by law?

A1: Shall be protected by law. The in-game currency (directly purchased with RMB) and in-game props (obtained via in-game exchange or purchase) involved are all categorized as virtual property, and shall be protected by law in accordance with Article 127 of the Civil Code of the People's Republic of China and relevant provisions thereof.

Q2: Does the suspension of online game services constitute infringement?

A2: Yes. In the absence of legal provisions, convincing proof of commercial practices, or network service agreements, an online game operator's unauthorized suspension of game operation constitutes an infringement on the rights and interests of online game players, and the operator shall be liable for compensation. Accordingly, during the operation of online games, it is highly necessary to explicitly and specifically stipulate the handling plans and relevant grounds for game operation suspension in the user agreement, so as to avoid unnecessary litigation risks.

Q3: Where a person conducts real-name registration using the identity of another person, while the account is actually primarily used for gaming and controlled by the aforesaid person, is the aforesaid person entitled to assert rights over the virtual property in such account?

A3: Yes, this is permissible. You only need to have the other person who has completed real-name registration issue a written statement of circumstances. The people's court will make a determination after comprehensively considering the needs arising from the development of real life. In the present case, the judge holds an approving attitude towards such conduct.

Q4: Are online game players entitled to claim compensation for mental harm in the event of online game service shutdown?

A4: Theoretically, yes. For example, where the virtual property in a game is a specific thing of personal significance to the player, the relevant claim may be supported. However, it is highly difficult to adduce relevant evidence in practice. In the present case, the plaintiff's claim for compensation for mental distress was not upheld by the court.

Q5: How may game players adduce evidence in relation to their virtual property?

A5: (1) Video recording with timestamp and notarization by a notary public may be adopted to fulfill the initial evidential burden. Where the operator raises an objection to such data, it may be required to produce its back-end data; refusal to do so shall entail adverse legal consequences. (2) A party may request the people's court to issue a letter of assistance in investigation to require other relevant entities to retrieve relevant recharge data. (3) The value of in-game currency may be calculated with reference to the exchange rate specified in the game. With respect to the value of in-game props, the people's court shall make a comprehensive discretionary determination based on actual circumstances, such as the duration of the player's gameplay and whether the player has already enjoyed the corresponding services.

Q6: What is network virtual property?

A6: The court has rendered corresponding definitions and elaborations thereon: Online virtual property refers to the virtual network per se and property-bearing electromagnetic records existing on the network, which is a new type of digital property whose value can be measured by existing measurement standards. Online virtual property covers an extensive scope. Apart from the network per se, it also includes specific online service accounts, instant messaging numbers, online stores, online game characters, equipment, props, etc.

04 Summary

This case addresses the issues concerning whether game server shutdown constitutes infringement and the disposition of players' virtual property after such shutdown. First, it clarifies that

An online game operator that unilaterally suspends game operation without justification of legal provisions, proven commercial practices or stipulations in the network service agreement shall be determined to be at fault, and such act constitutes a tort against game players in respect of the loss of their virtual property. Second, the court defines and expounds on "online virtual property", and divides the components of virtual property in online games into two categories: one is in-game currency (which can be purchased and exchanged with fiat currency), and the other is in-game props (which are not purchased with fiat currency).

As for the property value of in-game props, the calculation method claimed by the plaintiff in this case was not upheld by the court due to lack of relevance and reasonableness. The court finally made a discretionary determination after taking into account circumstances including the total amount of the plaintiff's recharges and the length of game time, among others. In addition, with regard to the issue of players claiming compensation for mental damages arising from game service suspension, such claims are theoretically tenable, but face significant difficulties in adducing evidence. The aforementioned claim of the plaintiff in this case was also not upheld by the court.