Top 10 IPR Cases of Internet and Software Industry in 2019

China Intellectual Property Magazine,[Patent]

On April 29th, in order to give full play to the leading, demonstrating and guiding role of typical cases, organize the learning of typical cases and improve the level of intellectual property protection in China, China Intellectual Property Magazine planned and launched the selection and voting activities of the “2019 Top Ten Intellectual Property Cases of the Internet and Software Industry”. After a 6-day public vote, the 10 most valuable typical cases stand out, and the results are now announced.

 
Case I
NewTV Co., Ltd. v. Whaley Technology Co., Ltd. infringement on the right of communication of information on networks and unfair competition
 
【Case Introduction】
 
NewTV Co., Ltd. is authorized by CCTV to operate the China Internet TV platform launched by CCTV, in addition, it has the right to protect the rights of all TV channels that CCTV enjoys copyright and related rights and all TV programs it contains in its own name on the Internet TV service side. Because Whaley Technology Co., Ltd. provides the online broadcast service of a Chinese cultural exploration reality TV program "National Treasure" to the public on Whaley TV Internet software platform that it develops and operates, NewTV Company sued Whaley Technology Co., Ltd. to Tianjin Binhai New District People's Court. The defendant argued that it only provided a link service, and did not download or upload the work involved to the Whaley server, which did not constitute an infringement. In this regard, the defendant submitted a packet capture notarization to prove the source of the work involved.
 
The first-instance court held that, from the external manifestation, there was no jump link during the entire broadcast process, which did not meet the basic characteristics of the link service in the general sense, and the packet capture was for evidence collection afterwards. The package capture program was re-launched, and the TV source used for packet capture is not clear. Even if the packet capture shows that the program originated from a third-party video URL (CNTV), the allegedly infringing Whaley TV displays "Tencent Video" when playing the program in question, which is inconsistent with the defendant's description, so the packet capture notarization is not relevant to the case and cannot prove that the link service is provided. The defendant’s infringement was found to be established and was liable for compensation. The second instance of the case was brought to the Third Intermediate People's Court of Tianjin. The court of second instance held that the correct, complete and clear display of the original appearance of the linked webpage should be regarded as a link service. The service provided by the network service provider cannot be regarded as a link service only by using the link technology. The defendant’s evidence was insufficient to prove his claim. The appeal was dismissed and the original sentence was upheld.
 
【Typical meaning】
 
This case is one of a series of disputes concerning the infringement of information network communication rights by NewTV Co., Ltd. and Whaley Technology Co., Ltd. This series of cases involves a series of well-known cultural programs such as "National Treasure", " A Bite of China" and "Rise of Great Powers". It is a typical dispute that infringes on the copyright of works created in a similar way to filmmaking. This case has made in-depth explanations on how to distinguish between providing link services and providing content services, the distribution of burden of proof, and the credibility of evidence, etc., which has reference significance for the trial of similar cases.
 
Case II
Beijing Baidu, Inc. v. China National Intellectual Property Administration, Beijing Sogou, Inc. infringement on the request for an administrative patent invalidation
 
【Case Introduction】
 
The patent in question was an input method patent of Sogou. Baidu filed a request for invalidation. The set of evidence submitted was the input method used in mobile phones related to several brands such as Philips, Amoi, Samsung, Motorola, and Panasonic. However, because the notary is a purchased mobile phone, the actual operation demonstration of the mobile phone is required for the determination of the technical method of the input method. The Patent Reexamination Board believes that through operation, it can be seen that these evidences can only prove that these mobile phones can achieve a certain function, but it is not enough to prove how the background programs and mobile phone hardware of these mobile phones cooperate and which specific technical solutions are used to achieve these functions. Therefore, the evidence does not clearly disclose the complete technical solution, and the evidence is not used.
 
Baidu filed an administrative lawsuit with the Beijing Intellectual Property Court for the invalid decision. After a live demonstration of the physical evidence, the Beijing Intellectual Property Court believed that the physical evidence could be used to claim existing technology. In the end, the Supreme People's Court upheld the first-instance court's claim.
 
【Typical meaning】
 
This case is the No. 1 administrative case accepted by the Supreme People's Court after the establishment of the Intellectual Property Court, and was also named as the top 10 classic cases of the Beijing Intellectual Property Court in 2019, and was selected into the 60 typical cases of intellectual property cases concluded by the Supreme People's Court in 2019. .
 
Case III
Shenzhen Tencent Computer System Co., Ltd. et al. v. Hunan Anyue Network Information Co., Ltd. unfair competition dispute
 
【Case Introduction】
 
The WeChat application software jointly operated by the plaintiff Tencent, based on instant messaging, provides users with comprehensive Internet services such as instant messaging, graphic information and other functions or content. In order to create a platform environment for users to be safe and avoid excessive commercial interference, the plaintiff not only prohibited third-party induced sharing and other violations through relevant service agreements, but also continued to invest a lot of personnel, funds and technology and other resources to manage and maintain the platform environment. The defendant Hunan Anyue is the developer and operator of the Seed Video application. The defendant set up multiple tasks for sharing and earning cash, such as "invite apprentices", "red envelopes video", "show your income", "click to sign in" and "grabbing treasure chests for a limited time" in the Seed Video application, and lure users with benefits such as red envelope rewards to spread the relevant content of seed video links in a large amount through WeChat platform. And the application adopts the method of repeatedly changing the domain name to maliciously counter the management measures of the WeChat platform, and these links are also embedded with special identification codes to grab the WeChat relationship chain and use it. Tencent believes that the aforementioned behavior violates the WeChat platform’s published governance rules, severely damages the WeChat platform’s ecological environment and normal operations, violates the basic principles of good faith, infringes the rights of operators and users, and disrupts the market order of fair competition. Therefore, Tencent sued the defendant to the Third Intermediate People's Court of Tianjin and requested the court to find that the defendant constituted unfair competition.
After trial, the court held that the defendant’s improper use of the user data obtained by the plaintiff after years of lawful operation directly deteriorated the WeChat ecosystem’s safe, private, and harassment-free environment, reduced the WeChat user’s product experience, increased the operating costs of the WeChat platform, destroyed the virtuous cycle of the healthy development of WeChat platform ecology, damaged the plaintiff’s competitive advantage and commercial interests in the Internet field, and constituted unfair competition. The defendant was sentenced to stop the alleged infringement, publicly apologize, and compensate 3 million yuan in economic losses.
 
【Typical meaning】
 
This case defines for the first time the nature of induced sharing behavior, provides an example for the unfair competition behavior of operators in the regulation platform of Internet platforms, and provides new ideas for the governance of network platforms at the judicial level. The positive role of governance and guiding the healthy and orderly development of the platform have certain exemplary significance.
 
Case IV
NewTV Co., Ltd. v. Shenzhen Fengmang Information Technology Co., Ltd. infringement on the right of communication of information on networks and unfair competition
 
【Case Introduction】
 
NewTV Co., Ltd. is authorized to obtain the right to provide the public with the rights and protection of rights for the 2016 Rio Olympic Games through the Internet TV business model. The client software of "Bees Video", an Internet TV terminal video application developed by the outsider of the case (the copyright was transferred to Fengmang Company afterwards), is provided for users to download through the "Sofa Manager" of the Internet TV terminal application market developed by the defendant Xinmengxiang Company. During the 2016 Rio Olympics broadcast, the “Sofa Manager” homepage set up a “Olympic Live Watch” section in a prominent position, where “Bee Video” was also recommended in the section. After downloading the software involved, users entered their “on-demand” page, showing the "Olympic Games" column, after entering, there are event-related programs that can be played continuously. NewTV believes that the "Bee Video" app directly provides the involved program to the public, which constitutes an infringement of right of communication of information on networks it enjoys and is suspected of unfair competition. Xinmengxiang Company provided help for the "Bee Video" operator to implement infringement, which was subjectively wrong and constituted help infringement.
 
After trial, the court held that the act involved infringed the copyright of the NewTV company for the work involved; Fengmang Company was not the software developer involved in the case when infringement occurs, so it does not assume responsibility; Xinmengxiang Company constituted a help infringement and the defendant Xinmengxiang Company was ruled for a compensation of 300,000 yuan for economic losses and reasonable expenses. The case was trialled by the Second Intermediate People's Court of Tianjin City and retrialled by the Third Intermediate People's Court of Tianjin City, and the original judgment was upheld.
 
【Typical meaning】
 
This case established a groundbreaking standard that regulates the behavioral boundary of the Internet TV application market service provider's duty of care, so that the application market cannot circumvent its legal responsibilities by the "safe haven principle".
 
Case V
IQIYI v. Hangzhou Feiyi Information Co., Ltd. and other companies on making fake video views
 
【Case Introduction】
 
In 2017, iQIYI, a Chinese online video platform, found that in its back-end data analysis, the number of visits to a number of film and television works had risen sharply and returned to normal. After verification, iQIYI found that it was caused by Feiyi Company using technical means to forge video views. iQIYIsaid that Feiyi is a company that provides fake video views for iQIYI website, Youkutudou website, Tencent video website, etc; Lv is a shareholder and legal representative of Feiyi company, mainly responsible for use of his personal account to solicit business and receive remuneration; Hu is a shareholder and supervisor of Feiyi Company, mainly responsible for applying for domain name registration for Feiyi company, and also uses his personal account to solicit business. Feiyi Company, Lv, and Hu cooperated to continuously access the video of iQIYI website by using multiple domain names and continuously changing the access IP address, etc., and quickly increased the number of video views in a short time. iQIYI believed that Feiyi’s actions had seriously damaged its legal rights and interests and disrupted the fair competition order in the video industry. Feiyi, Lv, and Hu constituted a joint infringement, and iQIYI then sued them before Shanghai Xuhui District people's court and  requested the court to order the three defendants to stop the infringement, publish a statement, eliminate the impact, and compensate 5 million yuan in economic losses.
 
The Shanghai Xuhui District people's court held that Feiyi Company, Lv, and Hu cooperated in the market competition and jointly implemented the act of interfering and destroying the access data of the iQIYI website through technical means, which violated the recognized business ethics and damaged the legitimate rights and interests of iQIYI and its consumers, which constituted unfair competition. They ordered Feiyi Company, Lv, and Hu to compensate iQIYI Company for 500,000 yuan, and published a statement to eliminate the impact. After the judgment of the first instance, iQIYI Company, Feiyi Company, Lv and Hu all appealed to the Shanghai Intellectual Property Court. After trial, the Shanghai Intellectual Property Court held that the behavior involved was an unfair competition act for false propaganda regulated by the Anti-Unfair Competition Law. According to the facts found, Feiyi Company, Lv, and Hu cooperated and jointly carried out the acts involved in the case, and should be jointly and severally liable for compensation. The amount of the judgment made by the Shanghai Xuhui District people's court based on comprehensive consideration was reasonable and should be maintained. Therefore, the Shanghai Intellectual Property Court rejected the appeal and upheld the original judgment.
 
【Typical meaning】
 
As the first judicial case in the country to determine making fake video views as unfair competition, this case further clarifies the application of the Anti-Unfair Competition Law to regulate the rules of typed and untyped unfair competition, which provides important reference for similar cases in the industry.
 
Case VI
Zhongyiyou Company v. Shengshi Xinghui Company software development contract dispute
 
【Case Introduction】
On July 27, 2016, Zhongyiyou Company (Party A) and Shengshi Xinghui Company (Party B) signed the contract. Among them, the project acceptance agreed: 1. Acceptance at the development stage: Party A shall test and accept the products developed by Party B at each development stage according to the development plan. If it does not comply with the development plan, Party A has the right to request Party B to modify; 2. Acceptance of product delivery: (1) Acceptance criteria: a. The program runs normally; b. All the functions mentioned in the function manual are realized; c. The project is completed on time. Agreement on liability for breach of contract: 1. Party A's liability for breach of contract: If Party A fails to pay the contract amount on time according to the contract, Party B has the right to immediately stop the work of the current period and not refund the development costs of other periods; if Party A fails to accept the contract on time according to the contract For the project, Party B acknowledges that Party A has passed the acceptance check by default and asks for development costs. 2. Party B's liability for breach of contract: If Party B does not complete the project on time and in accordance with the contract, Party A has the right to terminate the contract and recover the development costs that have been paid; if Party B does not complete the project function as agreed in the contract, Party A has the right to terminate the contract and recover the development fees already paid.
 
Zhongyiyou Company filed a lawsuit request with the court of first instance: 1. Termination of the contract involved; 2. Shengshi Xinghui Company refunded the software development payment paid by Zhongyiyou Company and compensated for the corresponding interest loss; 3. Shengshi Xinghui Company bears all litigation costs in this case. Shengshi Xinghui Company's original trial argued that Shengshi Xinghui Company agreed to cancel the contract, but the reason for the cancellation was not its breach of contract. Shengshi Xinghui Company fulfilled its contractual obligations and delivered the work results as agreed. During the implementation process, Zhongyiyou Company changed the requirements many times, which led to the extension of the execution period and caused Shengshi Xinghui Company to pay a lot of additional costs for this.
 
The original judgment of the Beijing Intellectual Property Court: (1) The Software Development Contract signed between Zhongyiyou and Shengshi Xinghui Company shall be rescinded from the effective date of the judgment; (2) Other litigation requests of Zhongyiyou Company shall be rejected. The case acceptance fee of 2,900 yuan shall be borne by Zhongyiyou Company. Zhongyiyou Company appealed to the Supreme People's Court against the judgment of the original trial court. The second instance of the Supreme People's Court held that Zhongyiyou Company's appeal request could not be established and should be rejected.
 
【Typical meaning】
 
For such situations where the requirements (or functions) and the development plan have not been agreed in advance, the court of second instance has clarified the rules for determining the delay in the performance of the developer of the computer software development contract, that is, it is normal for both parties to adjust and improve the content and functions of the software, but it is not advisable to simply assume that the software developer exceeds the performance period agreed in the contract to deliver the software.
 
Case VII
Shenzhen Tencent Computer System Co., Ltd. et al. v. Shenzhen WeChat Food Co., Ltd. et al. trademark infringement disputes
 
【Case Introduction】
 
"WeChat and Pictures" and the corresponding "Wechat" trademark that Tencent registered in the 9th category of computer software and other commodities and the 38th category of communication services, has a very high reputation among the relevant public. The defendant Shenzhen WeChat Foods Co., Ltd. registered "WeChat" as its corporate name on April 14, 2015, and at the same time used the "WeChat" logo to open a number of restaurants, offline supermarkets, and online malls. In addition to operating the above-mentioned restaurants and supermarkets, WeChat Food Company even publicly promotes its investment promotion policies for restaurants and supermarkets by publishing WeChat public account articles, buying Baidu promotion, and setting up its own website. The model's malicious "free ride" on Tencent's "WeChat" brands has made huge profits. Tencent filed a lawsuit against Shenzhen WeChat Food Co., Ltd. to the Beijing Intellectual Property Court. In the first instance, the court determined that "WeChat" was a well-known trademark, and sentenced WeChat Food Company to stop using the company name, promptly change its name and compensate Tencent for more than RMB 10 million. Both parties refused to accept the judgment of the first instance and appealed to the Beijing Higher People's Court.
After trial, the Beijing Higher People’s Court held that the four rights trademarks involved in Tencent were well-known trademarks, and the defendant was immediately sentenced to stop the infringement of the exclusive rights of well-known trademarks, and the defendant WeChat Food Company was compensated more than 10.29 million yuan, XiaoXiaoshu Company compensated more than 150,000 yuan.
 
【Typical meaning】
 
To determine whether the trademark used in the alleged infringement has a considerable degree of connection with the well-known trademark involved and whether it will diminish its distinctiveness, it should be based on the level of public awareness of the specific use of the goods or services in the alleged infringement. This trial provides an important reference for other similar cases.
 
Case VIII
Unfair competition dispute case of Shuabao taking Douyin short videos
 
【Case Introduction】
Shuabao app (a short video platform) was suspected of obtaining short videos and comments from the Tik Tok app (a short video app) and providing it to the public through technical means or manual methods, which constituted unfair competition. Beijing Weiboshijie Technology Co., Ltd. sued Beijing Chuangrui Media Co. Ltd. and Chengdu Li’ao Communication Co., Ltd. to the court. During the hearing of the case, Weiboshijie Company filed an application for behavior preservation, requiring Chuangrui and Li’ao to immediately stop using technical means or manual methods to obtain video files and comments from Tik Tok app and share to the public through its Shuabao app.
 
Weiboshijie Company claimed that it was the developer and operator of the Tik Tok app. By investing high operating costs and providing high-quality original content, it formed a competitive advantage among similar products, and it enjoys the legal rights of the short videos and comments in the Tik Tok app. The two defendants as competitors in the same industry, provided the public with short videos and user comments illegally grabbed from the Tik Tok App in its jointly operated Shuabao app. The number of short videos that have been taken for evidence has reached more than 50,000. The above-mentioned actions of the two defendants weakened the competitive advantage of the Weiboshijie Company and violated the provisions of Article 2 of the Anti-Unfair Competition Law, which constituted unfair competition. Li’ao Company denied that it carried out the actions involved, and stated that the videos and comments involved were uploaded by users; after receiving the court notice, it has deleted most of the videos involved, and stated that the remaining 1220 undeleted videos had a low proportion with legal authorization and would not cause irreparable damage. Chuangrui Company denied that it was the developer and operator of the Shuabao app. The Haidian District People's Court of Beijing made a ruling on conduct preservation on June 28, 2019 in accordance with the law, which supported the behavior preservation application of Weiboshijie Company.
 
【Typical meaning】
 
The litigation injunction, as one of the efficient and fast civil rights remedies, has played an active role in curbing infringement and protecting rights and interests. With the fast development of the short video market and its tension in public cultural products, short videos and user accumulation have become the core resources for short video platforms to grab traffic. The injunction made in this case not only safeguarded the legitimate rights and interests of the applicant in time, but also effectively regulated the order of competition in the short video market. Song Chunfeng, Director of Litigation and Rights Defense of Weiboshijie Company, said that after the popularity of short videos, the phenomenon that some platforms take short videos from other platforms was prevalent, which greatly hurts the enthusiasm for short video creation and industrial development.
 
Case IX
Youku v. "Graphmovie" infringement on the right of communication through information network
 
【Case Introduction】
 
Youku Network Technology (Beijing) Co., Ltd. (plaintiff) has the right of communication through information network of the television drama Eternal Love(a.k.a. Ten Miles of Peach Blossoms). Shenzhen Shushu Technology Co., Ltd. (Defendant) is the operator of the Graphmovie App and the Graphmovie website. The website provides software for movie commentary in pictures and words and its homepage is marked with the words "Taste a good movie in ten minutes", and a collection of pictures of the first episode of Eternal Love(a.k.a. Ten Miles of Peach Blossoms)is provided. The picture collection contains a total of 382 pictures, all of which are taken from the above episodes. The picture content covers the main screen of the above episodes, and the subtitles are added separately by the producer of the picture collection. Through the Graphmovie software to view the picture collection, you can choose 5 seconds per frame, 8 seconds per frame and other speeds for automatic playback, or you can manually play by clicking the next one. The plaintiff believes that the content of the involved picture collection basically covers the main picture and all the plots of the drama series involved, infringing the plaintiff's right of communication through information network, so he requested the court to order the defendant to compensate the plaintiff for economic losses and reasonable expenses totaling 500,000 yuan. The defendant argued that the pictures in the case used screenshots instead of videos, and that they were fair use and did not constitute infringement.
 
【Typical meaning】
 
This case is the first infringement case in China that clarified the improper use of pictures and words for movie commentary constitutes infringement. The act of taking screenshots of other’s tv/film works to make a collection of pictures, which actually presents the keyframes, specific plots and other content, exceeds the necessary limits of introduction and comment, and objectively plays the role of replacing the original work, and does not constitute a reasonable use. The judgment in this case defined the boundary for the rational use of film and television works, and the act of improper use of works under the name of innovation or with the use of new technological means is regarded as an infringement, which helps to encourage innovation and promote the healthy development of the film and television industry.
 
Case X
First copyright dispute in China over content generated by computer software
 
【Case Introduction】
 
A law firm, as the plaintiff, filed a lawsuit to the Beijing Internet Court, claiming that it has the copyright of an article firstly published on its WeChat on September 9, 2018. On September 10, 2018, the article was published on the Baijiahao platform (a content creation platform owned by Baidu) operated by a company of the defendant, and the signature and introduction of the article were deleted, which infringed the plaintiff's right of communication through information network, right of signature, and right of keeping integrity of a work and caused economic losses to the plaintiff. Accordingly, the plaintiff requested the court to order the defendant to apologize, eliminate the impact, and compensate for economic losses and reasonable expenses. The defendant disagreed with this, and believed that the article in question involved graphics and text, both of which were intelligently generated reports using legal statistical data analysis software, rather than obtained through the plaintiff’s intellectual labor creation, and were not protected by the Copyright Law.
 
The Beijing Internet Court heard that the graphics in the article involved were automatically generated by artificial intelligence software, did not meet the originality requirements of the graphic work, and did not constitute a graphic work. The plaintiff ’s claim of enjoying copyright should not be established. However, the text in the article involved was not automatically generated by artificial intelligence software, but was an original expression with the plaintiff's thoughts and emotions, and constituted a written work, and thus the plaintiff enjoyed copyright to it.
 
【Typical meaning】
 
The Beijing Internet Court conducted the first instance judgment on China’s first case of copyright disputes over intelligently generated content of computer software, and made the first judicial response to the attributes of artificially generated content of artificial intelligence software and their attribution of rights and interests.
 
Does the content generated by artificial intelligence software constitute a work and does it have copyright? In the process of artificial intelligence software automatically generating content, the behavior of the software developer (owner) and the user is not a creative act in the legal sense, and the relevant content does not convey the original expression of the two, so neither of them should be regarded as the author of the content generated by AI, and the content cannot constitute a work and does not possess copyright. Although the content does not constitute a work, it does not mean that the public can use it freely.

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