The18th China Digital Entertainment Expo and Conference (China Joy) was held inShanghai from July 31st to August 3rd, 2020. As inprevious editions, CJ held a number of themed conferences.
Onthe afternoon of July 30th, Mr. Jeff Yang, senior partner of WangJing & GH Law Firm and head of the Internet and High-Tech Department, wasinvited to attend the opening ceremony of the China International DigitalEntertainment Industry Conference (CDEC) and delivered a speech entitled "JudicialProtection Strategy under the Trend of Online Game Quality Improvement".
The following is thefull text of the speech.
Mr.Jeff Yang:
Goodafternoon, everyone!
Itis a great honor to be invited by the Organizing Committee to come to the stageof China Joy again and talk with you guys. I found that the guests of China Joywere excellent, and they all shared a lot of interesting insights on various topicsin terms of product content and product originality. Next, I will take you guysto observe the booming online game industry from another perspective.
Letme introduce myself. My name is Jeff Yang, and I have been engaged in legalwork in the online game industry for 15 years. I have witnessed theextraordinary growth of the online game industry from the very beginning, withclient games, web games, H5, etc., and also witnessed the national process ofgradual judicial standardization of the industry, carried out by Chinesejudicial authorities. At present, our legal team mainly serves major gamecompanies, and the Internet industry in general. As we received the invitation,we started to think about what we should share with everyone. When we consider whatnew dynamics the online game industry has witnessed in terms of law andregulations over the past year, the first thing to think about is what thecurrent trend of the online game industry is. When we saw the theme of theconference, we thought that the trend of the online game industry should be -------- QualityImprovement.
Takea look at the market’s calls for high-quality products and the constantconsideration given to precision and accuracy in games: the future trend of thegame industry is indeed high-quality, and long-term operations of high-qualityproducts have become the driving force of the Chinese game market.
Accordingto the actual sales revenue and growth rate of the Chinese game market, the Chinesegame market in 2019 increased by 16.44 billion yuan compared with 2018, whilethe number of people working in the industry only increased by 10 million.
Thisshows that the network game industry has entered a period of stable marketdevelopment. In this period of steady development, the market has put forward higherrequirements for the content and quality of the games. But I know that many ofyou here are industry insiders, and I am just displaying information that youalready know for sure.
Underthe trend of high-quality in the online game industry, what changes have takenplace at the legislative and judicial level in the process of practice?
Thebiggest change is that the amount of compensation for online game infringementis increasing year by year. From August 30th, 2016 to 2019, theamount of compensation has increased year by year, especially in 2019, when itreached 50 million yuan for the first time.
Letme share with you guys the precedent amounts of compensation in judicial practicein the online game industry in recent years. In a copyright infringement caseof the Beijing High Court, the amount of prosecution was 100 million yuan, andthe amount of compensation was more than 16.3 million yuan. The Guangdong HighCourt sued 100 million yuan in copyright infringement and unfair disputes andawarded 20 million yuan in damages. The Jiangsu High Court sued 30 million yuanand awarded damages of 30 million yuan. The Hunan Middle Court filed acopyright unfair competition lawsuit of 50 million and sentenced 50 million. Inthe latter two cases, the court's judgment prescribed the maximum penalty.
(1) Punitive damages
Aseveryone in the online game industry knows, carrying out judicial protection inthis type of industry was a big problem just a decade ago. It was difficult forthe Court to understand the characteristics of the online game industry, and thecriteria adopted by the Court for infringements in the industry might be thesame of ordinary art standards. For example, for an infringing picture, theyrefer to the infringing picture of the photographic work to make a judgment. Atthat time, some companies often joked about this matter. In fact, the cost ofinfringement was not high, and the early infringement penalty amount was onlytens of thousands of yuan. That is nothing for a popular game. An infringementpenalty of tens of thousands of yuan is not enough to punish a game that hasmade tens of millions of yuan.
Butin the past one or two years, more and more courts have begun to apply punitivedamages. The Supreme People's Court solicited opinions on the “Opinions onStrengthening the Sanctions for Intellectual Property Infringement”. Forexample, the upcoming Civil Code also opens a new era of key protection ofpunitive damages for intellectual property rights.
Isthis a good thing for the gaming industry?
Ofcourse, there are many excellent enterprises in the online game industry thatattach great importance to originality. The time cost, energy cost and moneycost of originality need to be well protected by China's judicial environment.
(2) Expansion of the scope of protection
Afew years ago, it was discovered that a large number of online gameinfringement protections was focused on the main character image infringement,as well as the scene map and other relatively clear traditional parts thatcould be identified as protection of works of art. In the past two years, moreand more courts have begun to break through the traditional concept of IPprotection in the online game industry, and have begun to pay attention to otherthings such as game play, UI interface and game live screen. There was a timein the game industry when there was a saying circulating around, “just copythe gameplay", because the gameplay was not protected. But now, the courtswill protect more and more elements of the game industry.
(3) The court has a deeper understandingof the game
Thejudges have gained a deeper understanding of the online gaming industry.
Forexample, a case that has had a huge impact on the gaming industry over the pastyear was the court's first explicit interpretation of online game cloning.
Thecourt divided the research and development of online games into five levels:The first level is positioning the type of game in the project stage; Thesecond level is designed around the rules of the type of game; The third levelis the production of the core part of the game resources, which can be dividedinto the route design of the map matching the battle targets, the initialnumerical planning of the game characters, the assignment of parameter valuesand skills for each character, and the overall layout of the user interface;The fourth level is resource connection and function debugging to polish thecorrespondence between game rules and game resources; The fifth level is furtherrefinement of the game resources production.
Thecourt held that the essence of game cloning is to completely change all the artstyles of the fifth layer of the game, and retain the plagiarism of the thirdand fourth layers, thereby simplifying the production of core game resources, whichrequire the highest economic and time costs. After the judgment came out, Iconsulted a lot of senior game planners, and everyone thought that the court'sconclusion was very accurate. At the same time, once the five levels ofstandards are divided, the definition of the so-called "game cloning"also becomes very clear, so the judge's understanding of the game is gettingdeeper and deeper.
Inthe past year, there has been another incident in the justice system that hashad significant implications for the gaming industry. On April 13th,2020, the Guangdong Higher People's Court issued trial guidelines specificallyfor online game industry, called “Guidelines for Online Game IntellectualProperty Civil Disputes (for Trial implementation)”. It is the first normativedocument in China specifically for the trial of online game dispute cases. Article40 of the Guidelines also clarifies the punitive nature, the amount ofcompensation according to the actual loss or according to a reasonable multiple of the share of infringementprofits.
Letus consider how to conduct protection strategies under the general trend of"high-quality" games. At the trademark level, many companies will justprotect the name of the game. When you apply a “high-quality” game strategy,you need to consider more aspects, such as the name of the enterprise, the namesof important game characters and names of iconic scenes, as well as the coverage of peripherals, film andtelevision categories. Of course, it is also very important for many gamecompanies to file for trademark infringement before applying for the versionnumber.
Theprotection of the game content shall be based on the original level of applicationfor software copyright. Under the strategy of refinement, the game companyshall consider copyright registration protection for art works, planningdocuments, music, videos, etc. There is also the core asset code of a gamecompany. In the past, we were often familiar with the code of the first set ofgame software. However, the game goes through a process of frequent updates,and the code may have undergone significant changes within five months ofoperation. Many companies do notupdate the continuous versions of code V1.0, 2.0, 3.0 and 4.0, and willencounter many difficulties and obstacles in the protection of rights in thefuture. Therefore, it is necessary to define in advance the copyrightprotection of major updated versions and even the trade secret protectionrules.
Asthe rights holders’ awareness of rights protection has been greatly enhanced, manyrights holders protect their rights also overseas against infringing acts suchas the promotion of materials and IP infringement. Overseas is no longer anextra-legal place for infringement and illegal hot spots.
Insummary, all prevention costs will always be far lower than accident costs. Asonline games are becoming “refined” products, we hope that everyone can payattention to prevention costs, and let prevention play a major role in thebusiness process.
Inthe past two years, our team has done two things: last year, China Joy launchedour “Online Game Company Compliance Guide”. It is the first book in the onlinegame industry from the perspective of our company. After the launch, we got alot of recognition, because the book contains a lot of practical suggestions. Inthe past year, we did another thing. We collected 100 cases selected from theonline game industry from the beginning to the present, and summarized some keyproblems encountered in the operation of online game companies from theperspective of big data. The answer to these key questions is not the lawyer'sanswer, but the case's answer, and a lot of cases will tell you what to do andwhat not to do.
Ifyou guys are interested in these two books you can follow our WeChat, and thetop 30 WeChat followers will receive these two books away for free.
That'sthe end of my speech today. Thank you everyone!
