Wen Nuocheng Game Law Zhu Junchao Chen Jie
01 The second trial of Universal Awakening was announced in Guangdong High Court, and the full compensation of ten million dollars was upheld.
01
The second trial verdict of the High Court of Guangdong is upheld, with full compensation of ten million dollars.
The second trial verdict was handed down by the Guangdong High Court.
The second trial verdict of the Guangdong High Court has been upheld.
The Guangdong Provincial High Court issued a final judgment in the case of Universal Awakening v. Commander Copyright Infringement and Unfair Competition Dispute, rejecting the appeal and upholding the first instance judgment.
The second instance judgment found that
1 The mechanism design of the gameplay level, even if it is more specific, detailed, complex, sophisticated or even creative, is not an expression in the sense of copyright law. Therefore, Commander’s act of skinning and copying Universal Awakening does not constitute copyright infringement, and the Court of First Instance erred in determining that it constitutes copyright infringement, which should be corrected.
2 Imitation of gameplay design does not necessarily constitute unfair competition. To determine whether unfair competition is constituted, it is necessary to examine three aspects: (1) the core competitive interests suffered substantial damage; (2) the imitation exceeded the reasonable limit; and (3) the act violated the principle of good faith and business ethics, and disrupted the order of market competition.
Commander’s behavior of skinning and stitching to bring the game to the market within a short period of time and seize the market share that did not belong to it constituted unfair competition.
3 The buying and promotion of online games is in line with commercial practice, and the amount of compensation can in principle be determined by deducting the necessary and reasonable costs and expenses. After comprehensive deduction, the amount of compensation still exceeded the amount of compensation requested by the plaintiff, and the amount of compensation in the first instance was reasonable, so it was supported in full.
Nuocheng comments
In this case, the Court of Second Instance corrected the conclusion of the Court of First Instance that it constituted copyright infringement, and held that the specific expression of the rules of the game could not be arbitrarily used to determine that it constituted other intellectual achievements that conformed to the characteristics of the work, but at the same time, it also pointed out that copyright protection was not the only path of redress, and that redress could be provided through anti-unfair competition.
However, it should be noted that the two different remedial paths mentioned above may lead to a large gap in the determination of the amount of compensation.
For example, the same is to the perspective of the subject of infringement to calculate the amount of compensation, unfair competition compensation amount calculation standard is the infringement of profits, while the copyright protection of the compensation amount calculation standard is the illegal income, the former need to deduct the infringement of the reasonable cost of expenditure, the latter does not need to be deducted.
Moreover, the unfair competition is limited to the circumstances of punitive damages for malicious infringement of trade secrets and seriousness of the circumstances, while the circumstances of punitive damages for copyright infringement are broader, as long as the infringement is intentional and serious.
02 Tencent’s Anti-Fraud Bulletin, Many People Sent to Public Security Authorities
02
Tencent’s Anti-Corruption Bulletin: Several People Sent to Public Security Authorities.
Tencent’s Anti-Fraud Bulletin.
Many people have been transferred to the public security organs.
On January 16, 2025, Tencent Group issued an anti-fraud circular, disclosing the results of the work of Tencent’s anti-fraud investigation department in 2024.
According to the briefing, in 2024, Tencent’s Anti-Fraud Investigation Department discovered and investigated more than 100 cases of violating Tencent’s high-pressure line, more than 100 people were dismissed for violating Tencent’s high-pressure line, and more than 20 of them were transferred to public security organs for suspected crimes.
Tencent publicly named 21 people in this notification, 10 of whom were found to have violated the law by obtaining benefits for external companies and receiving benefits from external companies, which resulted in their dismissal from their jobs and never being hired, and in the worst case, they were sentenced by the court to fixed-term imprisonment and fines for the crime of accepting bribes from non-state employees.
The rest were dismissed and never employed for illegally appropriating company assets, illegally selling company assets, leaking confidential information within the company, stealing company assets, and using company product information to develop new products.
In addition, the circular also announced the addition of 35 new never-work subjects in 2024, which were blacklisted for their involvement in corrupt behavior with Tencent employees.
In corporate anti-fraud criminal cases, job misappropriation and bribery of non-state employees are common offenses, and companies can establish anti-fraud mechanisms in terms of system construction in the front, supervision and restraints in the middle, and timely accountability and review in the back.
1 System construction beforehand
Enterprises should introduce a detailed and clear anti-fraud system manual to accurately define various types of fraud, including job misappropriation, embezzlement of public funds by non-state employees, leakage of business secrets and other common forms.
Clearly define the code of conduct for employees in their daily work, for example, it is strictly prohibited for employees to accept gifts from suppliers, kickbacks, and prohibit the use of their positions to subcontract the company’s business to businesses run by their relatives, etc., so that employees from the very beginning of their employment know exactly where the red line is.
2 Supervision and Restriction in the Middle of the Process
Enterprises should be open to a variety of reporting channels, set up a special reporting mailboxes and telephone hotlines, and in the internal office system of the company’s conspicuous position. At the same time, to ensure the confidentiality of reporting information and timely processing.
If necessary, the enterprise can set up a professional and independent internal audit team to formulate an annual audit plan based on the risk-oriented principle, focusing on high-risk areas, such as project investment involving large amounts of funds, frequent expense reimbursement, new business development, etc.
3 Timely accountability and review after the event
Once the anti-fraud management department of the enterprise confirms the existence of fraudulent behavior of employees, it should strictly follow the rules and regulations of the enterprise and laws and regulations to punish the personnel involved, such as termination of employment and never be employed, and meet the conditions of the criminal case can be sent to the public security organs for processing.
In addition, for fraud cases that have occurred, companies should organize cross-departmental teams to review and analyze the root causes of fraud, and based on the results of the review, targeting to improve the system, optimize the supervision process, strengthen employee training, and continue to strengthen the effectiveness of the anti-fraud mechanism.
03 Star and Moon Dagger Tower private service case pronounced, Lilith was awarded millions of dollars in damages.
03
Lilith is awarded a million dollars in damages in the Dagger Tower case.
Lilith was awarded millions in damages in the Dagger Tower case.
Lilith was awarded a million dollars.
On January 10, 2024, Lilith Games released a public announcement stating that the verdict in the criminal incidental civil case of copyright infringement by the private service of the Little Ice Legend game was officially announced.
Unlawful elements used the game’s source code, character settings and storyline without authorization, and illegally operated private services to make improper profits, with the Star Moon Blade Tower private service being a typical case.
After being informed of the infringement, Lilith and Xuhui Public Security launched a cross-regional enforcement campaign and successfully arrested 10 suspects in Wuhan, Zhuhai, Luoyang and other places. The public security authorities have taken criminal enforcement measures against the relevant persons in accordance with the law, and at the same time, the Star Moon Dagger Tower private service was shut down.
In November 2024, the Xuhui District People’s Procuratorate filed a public indictment with the Xuhui District People’s Court and simultaneously initiated the criminal incidental civil litigation process, with Lilith filing a claim for compensation as the plaintiff in the incidental civil litigation. During the litigation, after many rounds of communication and coordination, the five defendants finally agreed to compensate Lilith for economic losses and reasonable expenses totaling more than 1 million yuan to make up for the losses of the enterprise.
The Xuhui District People’s Court held that the defendants, Yan Mou Ye Mou Zhou Mou Hu Mou Lai Mou Mou, knew that their actions infringed on copyright, but still operated the private service through promotion funds settlement, etc. The amount of illegal business amounted to millions of yuan, which constituted the crime of infringing copyright. The court sentenced the five defendants to prison terms ranging from one year and two months to two years, and fines ranging from RMB 40,000 to 300,000 yuan.
When a game company encounters the problem of private service infringement, filing a criminal incidental civil lawsuit is an effective means of defending its rights and interests, and can protect its rights and interests in multiple dimensions.
The advantage of this means of defense is that it is conducive to the protection of the game company’s compensation amount to be paid off. In practice, after the criminal lawsuit, the infringing subject may not be able to pay the full amount of civil damages after paying the fine, while the criminal incidental civil lawsuit will prioritize the order of civil damages to protect the interests of the game company.
04 fire valley network real controller suspected of bribery, lost two years after the arrest of the execution
04
The actual controller of Fire Valley Network is suspected of bribery, and was arrested after two years of being out of contact.
The actual controller of the Valley of Fire network is suspected of bribery.
Arrested after two years
Ltd. Hereinafter referred to as Fire Valley Network on January 14, 2024 announced that the company’s controlling shareholder, the actual controller Zhang Yong suspected of bribery, according to the Yuxi Jiangchuan District People’s Procuratorate on December 27, 2024 issued a notice of arrest was arrested.
Fire Valley Network said that Zhang Yong has resigned from the position of chairman and director of the company on January 31, 2019, and after resignation, he no longer holds any position in the company and has not participated in the company’s operation and management.
The company has no further business dealings with Zhang Yong outside of fulfilling its statutory information disclosure obligations.2024 On September 23, the company attempted to verify share freezing with him, but was unable to get in touch, and was unaware of the reasons for his prolonged loss of contact.
According to the previous announcement of Fire Valley Network, on September 24, 2024, the company disclosed that 31,237,500 shares held by Zhang Yong, accounting for 74,4532 of the company’s total share capital, have been frozen since September 20, 2024, and the freezing period is up to March 20, 2025, the end.
In addition, on July 4, 2023, an equivalent number of shares held by Zhang Yong were also judicially frozen for the period from July 4, 2023 to January 3, 2024. The Company attempted to verify the situation with Zhang Yong on August 9, 2023, but again failed to make contact.
The Company indicated that it will continue to monitor the progress of the case and fulfill its relevant information disclosure obligations in accordance with the law.
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