TYGlobe

01 Case Information

Trial Court

Shanghai Pudong New Area People's Court

Case No.

Case No. (2024) Hu 0115 Xingbao 2

Applicant

Shanghai miHoYo Yingtie Technology Co., Ltd.

Respondent

Chen Mou

Date of Ruling

March 24, 2024

Cause of Action

Application for Pre-litigation Conduct Preservation

02 Case Summary

Chen Mou was recruited to participate in the closed beta test of the game *Honkai: Star Rail* developed by miHoYo, and signed the corresponding confidentiality agreement. However, during multiple closed beta tests held from October 2023 to February 2024, Chen Mou, without authorization, used self-carried electronic devices to photograph and record the test content and relevant footage, stored the above-mentioned content in his own devices, and disclosed such information and content to others on multiple occasions.

miHoYo maintains that the unreleased character images, skills, test footage and other materials generated during the game test constitute trade secrets as stipulated in the *Anti-Unfair Competition Law of the People's Republic of China*. Should Chen further disclose the aforesaid trade secrets, irreparable harm may be caused. Accordingly, miHoYo filed an application for pre-litigation conduct preservation with the Pudong New Area People's Court on March 22, 2024. Upon timely trial and deliberation, the court confirmed that the application complies with relevant legal provisions, and that the granting of the preservation measure is of urgency and necessity. On March 24, 2024, the court rendered a ruling to grant miHoYo's application.

Court Ruling

It is hereby ruled as follows: The respondent Chen shall not disclose, use, or permit any third party to use the game content of *Honkai: Star Rail* to which the applicant Shanghai miHoYo Yingtie Technology Co., Ltd. holds lawful rights, which was filmed or recorded without authorization by the respondent during his participation in the game test. The aforesaid restriction shall remain in force until the date when the case initiated by the applicant through litigation or arbitration application takes legal effect.

This Ruling shall be enforced immediately upon service.

03 Case Observation

Q1: Why do the undisclosed [character images and continuous dynamic footage of skills] during game testing (hereinafter referred to as "the involved game footage") constitute trade secrets?

A1: Pursuant to the provisions of Article 9 of the *Anti-Unfair Competition Law*, a trade secret refers to business, technical or commercial information that meets three requirements: "unknown to the public", "of commercial value", and "subject to confidentiality measures". In this case, first, the game graphics involved have not been released to the public; second, the game enjoys high popularity, large volumes of downloads and fans, has won various awards, and can directly generate economic benefits, while the involved game graphics are sufficient to boost the popularity and public attention of the game, hence they also have actual or potential commercial value; third, miHoYo has taken confidentiality measures by signing a *Confidentiality Agreement* with Chen; fourth, although the involved game graphics are not a common form of business information, they obviously possess the basic characteristics of business information. Business information under trade secret protection usually requires long-term unremitting innovation, creation and accumulation, and often carries core competitive value for the business operation of the right holder. In the game industry, dynamic game graphics composed of elements including game character images, movements, skill casting effects and others are fundamental elements that bring players pleasant gaming experience. Such graphics require operators to devote a large amount of creative work, long-term unremitting efforts and investment, and also constitute the core competitiveness of game operators. Therefore, the game graphics involved in this case may constitute a trade secret and be granted judicial protection.

Q2: What irreparable harm will be caused if pre-litigation conduct preservation measures are not adopted?

A2: First, it will undermine the balance and fairness of the game involved. If players obtain access to yet-to-be-officially-released game content in advance, they will adjust their in-game strategies accordingly (such as different team formation/combat combinations), thereby creating an unfair situation for other players. Second, it will reduce the popularity and public attention of the game involved. The unauthorized early disclosure of unreleased game content will shatter players' imaginative space for the game, weaken their sense of mystery and freshness towards the new version of the game, and even lead to player churn. Third, it will disrupt the commercial and operational arrangements of the right holder. The unauthorized disclosure of game content will disrupt the pace of pre-planned publicity and distribution schemes of the game operator, resulting in unsatisfactory commercial outcomes and additional unnecessary operating costs. Fourth, it will damage the commercial reputation and social evaluation of the right holder. On the one hand, the early leak of game content will lead to negative evaluations of the game as a whole; on the other hand, it will make players question the management capacity and legal compliance level of the game operator.

Q3: What are the main factors examined by the court when rendering a ruling on pre-litigation preservation of conduct?

A3: (1) Whether the applicant's claim has factual basis and legal basis, including whether the applicant enjoys legitimate rights and interests over the involved game and its character design, whether the information the applicant claims to protect may constitute a trade secret, and whether the respondent has committed the alleged acts; (2) Whether the failure to adopt pre-litigation conduct preservation measures will cause irreparable harm to the legitimate rights and interests of the applicant; (3) Whether the adoption of pre-litigation preservation measures will lead to a significant imbalance of interests between the parties; (4) Whether the adoption of pre-litigation preservation measures will impair national and social public interests.

04 Summary

This case involves a pre-litigation conduct preservation ruling issued in response to the suspected leakage of game footage by closed beta players. Its core gist lies in the determination that the unreleased "continuous and dynamic footage of character images and skills" generated during the closed beta test period of the game falls into the category of business information, which can be recognized as a trade secret and be protected accordingly. Judging from the analysis and reasoning of the court in the ruling, the aforementioned business information actually refers to game footage rather than the unreleased character design itself, and there is a subtle distinction between the two. The author holds that the reason for this determination is that the information conveyed to players by mere game character images and designs is relatively unitary and sparse, far less abundant than that contained in game footage, which makes it hard to justify their classification as "business information" or meet the requirement of having "commercial value". By contrast, game footage (including unreleased designed characters) is a different scenario. When combined with common operation and business models, it indeed has certain actual and potential commercial value, and also conforms to the common characteristics of business information.

[1] Note: This refers to the dynamic game footage composed of a combination of elements including the game character's image, movements, and effects of skill casting (combat skills, finishing skills), among others.

[2] Note: Materials such as update descriptions of each version of the game involved in the case may be used as evidence for proof.

[3] Note: It refers to the circumstances enumerated in Article 1 of the *Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases Involving Infringement of Trade Secrets*.

[4] Note: The basis hereof is Article 7 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Examination of Cases Involving Behavior Preservation in Intellectual Property Disputes and Article 13 of the Opinions of the Supreme People's Court on Regulating and Strengthening the Work of Handling Pre-litigation Preservation Cases.

[5] Note: It refers to the practice whereby game operators adopt a long-term operation strategy in the course of game operation, carry out irregular upgrades and updates to game products by means of continuous modification, updating, content addition and other approaches, and keep undisclosed content confidential during the aforesaid process, so as to increase the popularity and public attention of game products and maintain the vitality and longevity of the games.