TYGlobe

01 Case Information

Trial Court

Shanghai Intellectual Property Court

Case No.

(2023) Hu 73 Min Zhong No. 1070

party

Shanghai Xuanting Entertainment Information Technology Co., Ltd. (Appellant; Plaintiff in the First Instance)

Shenzhen Zhongshun Heying Technology Co., Ltd. (Appellant; Defendant of First Instance)

Hainan Hengxiangwan Network Technology Co., Ltd. (Appellee; Defendant of First Instance)

Date of Judgment

November 11, 2024

Cause of Action

Dispute over Copyright Infringement and Unfair Competition

02 Case Summary

Xuanting Company owns the copyright of the game *Soul Land: Wuhun Awakening*. It claims that the structure, sequence and combination of the continuous dynamic images in the game belong to specific expressions, and that *Stickman Awakening*, which is developed, promoted and operated by Zhongshun Company and Hengxiangwan Company, has made "reskinning use" of this part of content, thus constituting copyright infringement and unfair competition. This case has undergone first instance and second instance. The court held that the relevant acts did not constitute copyright infringement, but solely in accordance with Article 2 (General Clause) of the *Anti-Unfair Competition Law of the People's Republic of China*, ruled that the acts of Zhongshun Company and Hengxiangwan Company violated the principle of good faith and business ethics and constituted unfair competition, and finally ordered the two companies to pay more than RMB 3.3 million in damages.

Claims

1. Order that Zhongshun Company and Hengxiangwan Company immediately cease the acts of copyright infringement and unfair competition against Xuanting Company, including: immediately cease the operation, publicity and promotion of the infringing game *Stickman Awakening*, and destroy all versions of the aforesaid infringing game;

2. Order that Zhongshun Company and Hengxiangwan Company shall, at the prominent positions of their official websites, Sina Weibo accounts and WeChat Official Accounts, publicly make a formal apology to Xuanting Company and eliminate the adverse effects arising from their infringement and unfair competition acts. The specific websites and platforms include:

(1) The official website of Zhongshun Company: https://www.acingame.com/;

(2) The official website of the allegedly infringing game *Stickman Awakening*: https://www.hcrjx.acingame.com/

(3) The official WeChat Official Account of the allegedly infringing game *Stickman Awakening*: "Stickman Awakening Mobile Game"; (4) The official Weibo account of the allegedly infringing game *Stickman Awakening*: "Stickman Awakening Mobile Game" (https://weibo.com/u/7628203232);

3. Order Zhongshun Company and Hengxiangwan Company to jointly and severally compensate Xuanting Company for economic losses amounting to RMB 10 million.

4. Order Zhongshun Company and Hengxiangwan Company to jointly and severally compensate Xuanting Company the sum of RMB 320,000 as reasonable expenses for rights protection.

Judgment of the Court of First Instance

1. Zhongshun Company and Hengxiangwan Company shall immediately cease their acts of unfair competition as of the date when the judgment comes into force.

2. Zhongshun Company and Hengxiangwan Company shall jointly pay RMB 3,000,000 to Xuanting Company as compensation for economic losses within 10 days from the date of entry into force of the judgment.

3. Zhongshun Company and Hengxiangwan Company shall, within 10 days from the date the judgment comes into force, jointly compensate Xuanting Company RMB 310,000 for the reasonable expenses incurred by the latter to stop infringing acts.

4. Dismiss the remaining claims of Xuanting Company.

[Note: The people's court of second instance dismissed the appeal and upheld the original judgment.]

03 Case Observation

Q1: Are the specific forms of presentation of game gameplay rules protected under the Copyright Law of China?

A1: (1) Yes, but a distinction shall be made as to whether the relevant content falls under "idea" or "expression". The Copyright Law of China does not protect ideas, but may protect the concrete expression of ideas. (2) Therefore, when conducting infringement comparison (Note: expressions in the public domain and expressions without originality shall be excluded), such comparison shall also be limited to the objective manifestation of game rules, rather than being conducted on the abstracted game rules.

Q2: Xuanting Company claims that the [structure, sequence and combination] contained in the continuous images of the game *Soul Land: Awakening of Martial Spirit* shall be protected under the Copyright Law. Why has its claim not been upheld by the court?

A2: (1) As it still falls within the realm of ideas, it is insufficient to constitute an expression within the meaning of the Copyright Law of the People's Republic of China. (2) In addition, the court compared the static images objectively presented by this part of content. Although the aforesaid images are basically identical or similar, their proportion in the continuous dynamic images as a whole is not high. Accordingly, they neither constitute substantial similarity in terms of image expression within the meaning of audiovisual works, nor constitute copyright infringement.

Q3: Which gameplay rules of Xuanting Company's *Soul Land: Awakening of Martial Souls* have been plagiarized by Zhongshun Company and Hengxiangwan Company in their game *Stickman Awakening*?

A3: (1) Gameplay: unlocking conditions, page layout, special values, appellations (2) Game characters, skill descriptions and values: level cap, class positioning, attributes, skill order (3) Game functions: character development functions, skills acquired upon character advancement, appellations of soul skills (4) Game rules: that is, various rule expressions that are substantially identical.

Q4: Why can large-scale copying of game gameplay rules be evaluated under the Anti-Unfair Competition Law?

A4: (1) A large collection of logically consistent and mutually coordinated game rules is an important cornerstone for providing players with gameplay experience, but such content cannot be fully protected through copyright protection channels. (2) The aforesaid collection of game rules requires enormous input of human, material and financial resources in the process of game development, and is also an important competitive advantage to win the favor of players. In conclusion, there is possibility and necessity to evaluate relevant matters in accordance with the Anti-Unfair Competition Law.

Q5: What is the reasoning for determining infringement by solely applying Article 2 (General Clause) of the Anti-Unfair Competition Law in the present case?

A5: (1) Extensive copying of game gameplay rules results in highly similar gaming experience, which will inevitably squeeze out the market share and business opportunities of Xuanting Company in the same category of games, thus impairing the interests of Xuanting Company. (2) The game involved is a card game. Diversified gameplays, detailed rule descriptions and balanced game parameters are important factors that attract players and ensure their sustained participation, for which the developer has invested enormous costs in research, development and testing. Zhongshun Company and Hengxiangwan Company, after fully copying the aforesaid core contents of the game, only made simple modifications to the storyline, graphics and expressions before operating the infringing game. Such act saves the two companies a large amount of financial and time costs that should have been spent on gameplay rule design and testing, and directly seizes the competitive advantages that Xuanting Company is entitled to enjoy based on its game gameplay rules, which undoubtedly runs counter to the principles of equality, fairness and good faith as well as generally recognized business ethics. (3) If such acts are left unchecked, it will severely dampen the enthusiasm of operators in the game industry to research and design gameplay rules, lead to monotonous gameplays, and undermine the overall orderly and innovative development of the game industry.

04 Summary

The specific presentation form of game gameplay rules is eligible for copyright protection, and the core criterion for adjudication rests with whether its objective manifestation constitutes "expression" within the meaning of the Copyright Law. In the present case, the "structure, sequence and combination" in the game screens claimed by the right holder, albeit complex and specific, essentially falls within the realm of ideas, and therefore cannot be protected under copyright law.

In the present case, the court independently applied Article 2 (General Clause) of the Anti-Unfair Competition Law of the People's Republic of China to hold that the act of extensively copying gameplay rules constitutes unfair competition. As reflected in the reasoning of the original judgment, there is a non-negligible determining element, namely that the aforementioned copying act will enable "players to obtain a highly similar gaming experience", as this is the direct cause leading to the reduction of the right holder's market share and the loss of its business opportunities.