Case 2. Trademark infringement and unfair competition in the real estate sector

[Dispute over trademark infringement and unfair competition between RenXX Land (Chengdu) Co., Ltd., Shanghai RenXX Real Estate Co., Ltd., Nanjing RenXX Enterprise Management Co., Ltd., Singapore RenXX Holdings Co., Ltd. and Lanzhou RenXX Real Estate Co., Ltd.]

Second instance: 最高人民法院（2023）最高法民终418号

【Basic Facts】

In 1993, RenXXLand (Chengdu) Co., Ltd. and Shanghai RenXX Real Estate Co., Ltd. were established. In 1994, Nanjing RenXX Enterprise Management Co., Ltd. was established. Since 1995, the above companies have launched real estate projects in Shanghai, Nanjing, Chengdu and other places, and have been approved to register multiple “RenXX” trademarks in multiple categories such as construction services. In January 2002, Jin, the legal representative of Lanzhou RenXX Real Estate Co., Ltd., purchased real estate developed by Shanghai RenXX Real Estate Co., Ltd. in Shanghai. Lanzhou RenXX Real Estate Co., Ltd. was registered and established on November 26, 2002, and began to use the “RenXX” corporate name, and successively developed and constructed RenXX International, RenXX Meilin County, and RenXX Jingcheng real estate projects in Lanzhou. RenXX Land (Chengdu) Co., Ltd. and others believed that the above-mentioned actions of Lanzhou RenXX Real Estate Co., Ltd. constituted trademark infringement and unfair competition, and thus filed a lawsuit. The court of first instance ruled that Lanzhou RenXX Real Estate Co., Ltd. should stop infringing trademark rights and engaging in unfair competition, compensate RenXX Land (Chengdu) Co., Ltd. and other companies for economic losses and reasonable expenses totaling RMB 13,405,992.3, and publish a statement to eliminate the impact. Lanzhou RenXX Real Estate Co., Ltd. appealed.

[Judgment Result]

The Supreme People’s Court held in the second instance that although Lanzhou RenXX Real Estate Co., Ltd. only used the alleged infringing logo in Lanzhou, considering the similarity between the alleged infringing logo and the four trademarks involved, the degree of relevance between the services and goods used, the popularity of the “RenXX” trademark, the actual use of Lanzhou RenXX Real Estate Co., Ltd., and the actual confusion that has occurred, it can be determined that the alleged infringing behavior of Lanzhou RenXX Real Estate Co., Ltd. is likely to cause confusion among the relevant public and constitute an infringement of trademark rights. Based on the use of the “RenXX” trademark by Shanghai RenXX Real Estate Co., Ltd. and others, including the fact that the legal representative of Lanzhou RenXX Real Estate Co., Ltd. had purchased a property developed by Shanghai RenXX Real Estate Co., Ltd. and was aware that Shanghai RenXX Real Estate Co., Ltd. had used the “RenXX” trademark first, it can be determined that the “RenXX” trademark constitutes a prior trademark with a certain influence. As a peer operator, Lanzhou RenXX Real Estate Co., Ltd. should have given way to the competition, but it still registered and used the “RenXX” brand name to engage in the same business activities as Shanghai RenXX Real Estate Co., Ltd., which easily led the relevant public to believe that the real estate projects it developed and constructed had a specific connection with Shanghai RenXX Real Estate Co., Ltd., etc. The above-mentioned behavior of Lanzhou RenXX Real Estate Co., Ltd. constituted unfair competition. The second-instance judgment dismissed the appeal and upheld the original judgment.

【Typical significance】

This case involves the protection of corporate name rights and trademark rights in the field of commercial housing development and construction. There are currently a large number of such disputes. This case clarifies common issues such as trademark use, likelihood of confusion, and fair use in trademark infringement in the field of commercial housing, and clarifies the review criteria and proof standards for the protection of competitive interests of corporate names in Article 6, Item 2 of the Anti-Unfair Competition Law of the People’s Republic of China. The judgment in this case includes the circumstances where the infringer is aware of the prior use of the name by others in the determination of “names with a certain influence”, conveying the judgment concept of protecting honest business and maintaining fair competition order.

Case 3. Infringement of trade secrets of undisclosed characters in a “spoiler” game

[Dispute between Shanghai MiXX Technology Co., Ltd. and Chen on infringement of trade secrets]

First instance: 上海市浦东新区人民法院（2024）沪0115民初38294号

【Basic Facts】

Shanghai MiXX Technology Co., Ltd. is the operator of a certain game and has obtained the permission of the copyright owner of the game to use and protect the rights. Since its launch, the game has aroused enthusiastic response in the global game market. During its operation, Shanghai MiXX Technology Co., Ltd. updates the version every once in a while, adding new characters, scenes, plots, activities and other content to maintain game attention and the vitality of the product. These contents will undergo internal testing in advance. To this end, Shanghai MiXX Technology Co., Ltd. and its affiliated companies recruited a number of players including Chen to participate in the internal testing and signed a confidentiality agreement. During Chen’s participation in the internal test, he secretly photographed and recorded the actual images (i.e. the images of the game characters that can be controlled by players), skill effects, skill data and other test content and pictures of the seven game characters involved in the game “Zhi XX” without permission, and disclosed them to third parties many times. After discovering this, Shanghai MiXX Technology Co., Ltd. filed an application for pre-trial behavior preservation (injunction) with the People’s Court on the grounds that the relevant information was a trade secret and further disclosure would cause irreparable damage to it, and filed a lawsuit within the statutory period, requesting an order to stop infringement, eliminate the impact and compensate for losses. Chen argued that the above-mentioned game content did not constitute a trade secret.

[Judgment Result]

The Shanghai Pudong New Area People’s Court reviewed the application for pre-litigation behavior preservation and held that the request of Shanghai MiXX Technology Co., Ltd. had factual basis and legal basis, and that failure to take corresponding preservation measures might cause irreparable damage to the legitimate rights and interests of Shanghai MiXX Technology Co., Ltd., and that taking behavior preservation measures would not lead to a significant imbalance of interests between the parties. Therefore, within 48 hours after receiving the application, the People’s Court of Pudong New Area of Shanghai made a ruling in accordance with the law, ordering Chen not to disclose, use, or allow others to use the game content that he had recorded without authorization during the game test.

The Pudong New District People’s Court of Shanghai held at first instance that the continuous dynamic game screens composed of elements such as the actual image of the characters, the effects of the characters’ skills, and the skill data of the seven game characters involved in the game met the business information characteristics and business secret constituent elements stipulated in the Anti-Unfair Competition Law, and were business secrets protected by the law. Chen violated the confidentiality obligation and secretly filmed and disseminated these business secrets, and should bear the corresponding legal responsibility. The essence of business secret protection is the competitive advantage that business secrets bring to operators. Even if the game characters have been made public due to version updates, Chen is still not allowed to disclose the test game screens that he may have. Therefore, Chen was ordered to stop the infringement, eliminate the impact, and compensate for economic losses and reasonable expenses totaling 500,000 RMB. After the first-instance judgment, neither party appealed.

【Typical significance】

This case involves the criteria for determining and adjudicating trade secrets based on undisclosed character designs and other information in the game, which is of positive significance for promoting the healthy development of the gaming industry. The pre-litigation behavior preservation ruling, combined with the characteristics of the online gaming industry, provides timely legal relief to the applicant. The judgment targets the situation of game character leakage, not only protecting the content of the game character itself, but also protecting the business model that increases attention through game version updates, as well as the competitive advantage brought by this business model, thus providing strong regulation on the behavior of early “spoilers”.

Case 4. “AI face-swapping” copyright infringement case

[Dispute between Chen XX and Shanghai Yi XX Network Technology Co., Ltd. over infringement of the right to disseminate information on the Internet]

First instance: 上海市嘉定区人民法院（2024）沪0114民初1326号

【Basic Facts】

Chen XX used the real-name authentication account “Photographer XX” on the Douyin (TikTok) platform to post 13 short videos of women wearing ancient costumes, each about 10 seconds long. Shanghai YiXX Network Technology Co., Ltd. developed the Douyin mini program “XXyan”, which uses AI video synthesis algorithms to provide users with face-swapping technology. The 13 short videos displayed on “XXyan” and the 13 short videos posted by Chen only differ in the facial features of the characters, while the video scenes, lenses, character modeling, and movements are basically the same. “XXyan” users can replace the faces in the videos displayed on the mini program with their own faces and save them by watching advertisements or purchasing memberships. Chen filed a lawsuit, requesting that Shanghai YiXX Network Technology Co., Ltd. be ordered to stop the infringement, apologize, and compensate for the loss of 48,000 RMB and reasonable expenses of 2,000 RMB.

[Judgment Result]

The Jiading District People’s Court of Shanghai held at first instance that the original video shot by Chen XX reflected original selection and arrangement in terms of content arrangement, scene selection, shooting angle, etc., and was an audiovisual work protected by copyright law. The video involved in the case displayed by the “XXyan” mini program was synthesized by partially replacing the original video through AI algorithms, and the two are substantially similar. Shanghai YiXX Network Technology Co., Ltd. used “AI face-swapping” as a selling point, provided platforms, materials and technologies, and enabled users to use the original video in a “face-swapping” manner at any selected time and place to seek commercial interests, infringing on Chen’s right to disseminate information on the Internet. This behavior is neither an original adaptation nor a fair use, nor does it apply to the technical neutrality defense. Shanghai YiXX Network Technology Co., Ltd. actively cooperated in the litigation to delete videos, perform algorithm filing procedures and other rectification behaviors, and accepted judicial suggestions on the use of algorithm technology to provide network services, and made a commitment to standardize operations. Chen XX expressed understanding and withdrew his request to stop infringement and apologize. Based on this, Shanghai YiXX Network Technology Co., Ltd. was ordered to compensate Chen XXfor economic losses and reasonable expenses totaling 7,500 RMB. After the first-instance judgment, neither party appealed.

【Typical significance】

This case is a typical dispute in the application scenario of generative synthesis algorithms, involving the nature of the use of artificial intelligence technology to partially synthesize other people’s works. The judgment in this case clarified that “AI face-swapping” does not constitute an original adaptation and fair use of the original work; those who use artificial intelligence technology to provide network services have a reasonable duty of care and may not use algorithmic technology to infringe on the copyright of others. This case balances technological innovation and rights protection, and clarifies the legal boundaries of the application of artificial intelligence technology. The people’s courts focus on the innovative application of emerging technologies and the needs of algorithm governance, urging companies to strengthen the legality review of material sources and generated content and algorithm security assessments, strengthen the protection of intellectual property rights and personal rights, and guide companies to standardize digital transformation.

Case 5. Game “skin-changing” infringement case

[Copyright infringement and unfair competition dispute between Chengdu LeXX Technology Co., Ltd., Shanghai LiXX Network Technology Co., Ltd. and Shenzhen JiuXX Interactive Technology Co., Ltd. and Hainan FanXX Technology Co., Ltd.]

Second instance: 广东省高级人民法院（2023）粤民终4326号

【Basic Facts】

“Awakening XX” is a war strategy simulation game (SLG), developed and operated by Chengdu LeXX Technology Co., Ltd. and Shanghai LiXX Network Technology Co., Ltd. “XX Official” is a WeChat platform mini-program game, developed and operated by Shenzhen JiuXX Interactive Technology Co., Ltd. and Hainan FanXX Technology Co., Ltd. From December 2020 to March 2022, the revenue of the game “XX Official” was approximately 18.9 million RMB, and after deducting the corresponding channel fees, it was approximately 12.5 million RMB. Chengdu LeXX Technology Co., Ltd. and Shanghai LiXX Network Technology Co., Ltd. filed a lawsuit, believing that the “skin-changing” behavior of the game “XX Official” constituted copyright infringement and unfair competition, and requested an order to stop the infringement, publish a statement to eliminate the impact, compensate for economic losses of 10 million RMB and reasonable rights protection costs of 500,000 RMB. After comparison, the overall structure and gameplay system of the two games are basically the same, and the parameter types, specific values, and interactive relationships of the game elements all have one-to-one correspondence, and even a large number of text expressions are completely consistent. The only difference is the art and audio-visual materials. The court of first instance determined that the alleged acts constituted copyright infringement and ordered Shenzhen JiuXX Interactive Technology Co., Ltd. and Hainan FanXX Technology Co., Ltd. to immediately stop developing, operating and promoting the “XXX” game, publish a statement to eliminate the impact, and compensate for economic losses of 10 million RMB and reasonable rights protection costs of 500,000 RMB. Shenzhen JiuXX Interactive Technology Co., Ltd. and Hainan FanXXTechnology Co., Ltd. appealed.

[Judgment Result]

The Guangdong Provincial High People’s Court held in the second instance that copyright law protects the original expression of game play rules. The game structure, system, numerical planning and corresponding relationship requested for protection in this case belong to the game play mechanism design, reflecting all the ideas of the game developers for the virtual game world from details to the whole, and are not expressions in the sense of copyright law. Game play rules do not constitute “other intellectual achievements that meet the characteristics of works”, so the accused behavior does not constitute copyright infringement. However, the accused behavior violates the principle of good faith and business ethics, and exceeds reasonable limits to imitate and copy the overall classification framework of game play design to the details of numerical settings. It only simply replaces the art resources, diverts and seizes the market share of related games through this “skin-changing” method, disrupts the market competition order, and seriously damages the core competitive interests of Chengdu LeXX Technology Co., Ltd. and Shanghai LiXX Network Technology Co., Ltd., constituting unfair competition. The first-instance judgment found that the facts were clear, and although the application of the law was improper, the judgment was correct. The second-instance judgment dismissed the appeal and upheld the original judgment.

【Typical significance】

This case clearly states that game play rules do not belong to expressions in the sense of copyright law and should not be considered as “other intellectual achievements that meet the characteristics of works.” The judgment clarifies the legal boundaries, analytical framework, and adjudication rules for copyright law and anti-unfair competition law to protect game play, which will help promote innovation, creation, and healthy competition in the digital entertainment industry.

Case 6. Unfair competition case of online evaluation with “some criticizing and some praising”

[Unfair competition dispute between Wuxi ShiXX Clothing Co., Ltd., Wuxi JiuXX Trading Co., Ltd. and Suzhou BuXX E-commerce Co., Ltd., Suzhou XiXX E-commerce Co., Ltd., Suzhou XiXX Network Technology Co., Ltd., and Suzhou KuXX Network Technology Co., Ltd.]

Second instance: 江苏省苏州市中级人民法院（2023）苏05民终5492号

[Omitted as it relates to false advertising and not IP]

Case 7. Unfair competition case involving ticket grabbing software

[Dispute over unfair competition on the Internet between Beijing DaXX Culture Media Development Co., Ltd. and Zheng XXzhong]

First instance: 北京市东城区人民法院（2024）京0101民初4607号

【Basic Facts】

Beijing DaXX Culture Media Development Co., Ltd. is a large domestic comprehensive ticketing platform enterprise, operating DaXX.com and DaXX APP with ticketing functions. Zheng XXzhong sells ticket grabbing software for Damou APP through online stores. Beijing Damou Culture Media Development Co., Ltd. filed a lawsuit, claiming that Zheng XXzhong specially developed and sold plug-in software for its ticketing APP to grab tickets on sale on the APP, which constituted unfair competition, and requested that Zheng XXzhong be ordered to stop the infringement and compensate for economic losses and reasonable expenses. Zheng XXzhong argued that he did not have a competitive relationship with Beijing DaXX Culture Media Development Co., Ltd., and he was only the seller of the ticket grabbing software involved in the case, not the developer. His behavior of selling ticket grabbing software did not cause a reduction in the ticketing revenue of Beijing DaXX Culture Media Development Co., Ltd., nor would it affect the public ticket purchasing order, and did not constitute unfair competition.

[Judgment Result]

The Beijing Dongcheng District People’s Court held at first instance that Zheng XXzhong provided ticket grabbing services to users of Beijing DaXX Culture and Media Development Co., Ltd., and used the business activities and user base of Beijing DaXX Culture and Media Development Co., Ltd. as the basic resources for its own business. Therefore, the alleged behavior was a market competition behavior and fell within the scope of regulation of the Anti-Unfair Competition Law. The essence of the alleged behavior was that software replaced manual methods to help users grab tickets for performances on the DaXX platform. This behavior not only directly increased the operating costs of the platform and interfered with the operator’s correct business decisions, but also increased the difficulty for users to use the DaXX platform to buy tickets, and reduced users’ evaluation of the services provided by the DaXX platform. Although the alleged behavior did not directly reduce the ticket sales revenue of a single performance on the DaXX platform, it caused damage to the operating interests and goodwill of the DaXX platform and damaged the competitive interests of Beijing DaXX Culture and Media Development Co., Ltd. At the same time, the alleged behavior did not belong to fair competition in technological innovation, and also damaged the legitimate rights and interests and long-term interests of consumers, which was not conducive to the fair and orderly market competition order and the improvement of overall social welfare. In summary, the alleged behavior constituted unfair competition. Since the alleged behavior has been stopped, no separate judgment is made to stop the infringement, and Zheng XXzhong is ordered to compensate Beijing DaXX Culture Media Development Co., Ltd. for economic losses and reasonable expenses totaling 20,000 RMB. After the first-instance judgment, neither party appealed.

【Typical significance】

This case clearly points out that the ticket grabbing software involved in the case uses technical means to provide users with unfair advantages in ticket grabbing, undermines the platform’s ticket purchasing rules, interferes with and hinders the normal operation of the platform’s ticket sales business, and damages the competitive interests of specific operators. On this basis, the consumer’s fair ticket purchasing rights and the normal order of the ticket market are taken into consideration, and it is determined that the alleged behavior constitutes unfair competition. This case warns ticket grabbing service practitioners and technology developers to abide by legal rules, which has positive significance for combating online black and gray industries, safeguarding the legitimate rights and interests of operators and consumers, and building a fair and orderly ticket purchasing order and market competition environment.

Case 8. Criminal and civil lawsuit involving copyright infringement of popular film and television works

First instance: 浙江省东阳市人民法院（2024）浙0783刑初585号

【Basic Facts】

Since May 2020, the defendant Lu XXqian has built multiple illegal film and television websites by purchasing domain names, renting servers, purchasing system programs and film and television website templates. During this period, the defendants Ji XXshi and Fang XX knew that the defendant Lu XXqian was operating an illegal film and television website and still sold him the film and television navigation Content Management System program and multiple film and television website templates, and provided program technical maintenance services, charging more than 6,990 RMB. Without the permission of the copyright owner Beijing Guang XX Film Co., Ltd. and other rights holders, Lu XXqian added more than 120,000 film and television works such as “YOLO” and “Pegasus 2” on the website by adding video links, etc., for visitors to watch online, and cooperated with illegal advertisers to place advertisements on the website. From April 30, 2022 to February 15, 2024, the defendant Lu XXqian collected more than 1.48 million RMB in advertising fees. The People’s Procuratorate of Dongyang City, Zhejiang Province accused the defendants Lu XXqian, Fang XX, and Ji XXshi of copyright infringement and filed criminal charges. During the criminal proceedings, five companies including Beijing GuangXX Film Co., Ltd. filed a supplementary civil lawsuit, requesting that Lu XXqian be ordered to bear corresponding civil liability.

[Judgment Result]

The Dongyang People’s Court of Zhejiang Province held at first instance that the defendant Lu XXqian, for the purpose of profit, disseminated other people’s audiovisual works to the public through the information network without the permission of the copyright owner, and the illegal income was huge; the defendants Fang XX and Ji XXshi knew that others infringed the copyright and still provided assistance, and their actions also constituted the crime of copyright infringement. In response to the incidental civil lawsuits filed by the plaintiffs of the incidental civil lawsuits, the defendant Lu XXqian was determined to compensate the plaintiffs of the incidental civil lawsuits for economic losses by taking into account the nature, time, and profit of the defendant’s infringement. The defendant Lu XXqian was sentenced to four years in prison and a fine of 1.5 million RMB; the defendant Fang XX was sentenced to one year in prison, suspended for one year and six months, and fined 16,000 RMB; the defendant Ji XXshi was sentenced to ten months in prison, suspended for one year and four months, and fined 10,000 RMB; the defendant Lu XXqian compensated the plaintiffs of the incidental civil lawsuits for economic losses totaling 880,000 RMB; the illegal income was returned and seized crime tools were confiscated. After the verdict, none of the defendants or plaintiffs in the ancillary civil lawsuit filed an appeal, and the procuratorate did not file a protest.

【Typical significance】

This case is an example of severely punishing the illegal and criminal acts of broadcasting key protected cinema films during the Spring Festival. Pirated broadcasts of popular TV series and movies, the establishment of illegal and irregular film and television websites, and the dissemination of related film and television works to the public through information networks involve infringement of the copyright of film and television works. The trial of this case fully reflects the advantages of the “three-in-one” trial mechanism of civil, criminal, and administrative intellectual property rights, which not only solves the problems of conviction and sentencing of the defendants, but also solves the problem of civil compensation for the victims, and provides timely and comprehensive protection for intellectual property rights holders, achieving the organic unity of combating crime and efficiently safeguarding rights.