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Copyright Issues on Online Game Live streaming

05

JUL

2019

Preface

In recent years, along with the development of internet transmission technology, online game live streaming has become more and more popular in worldwide and in China. At the same time, copyright issues associated with online game live streaming have also emerged. The earliest two typical lawsuits with respect to online game live streaming in China are the one between Guangzhou Douyu Network Technology Co., Ltd. and Shanghai Yaoyu Culture and Media Corporation in 2015 (hereinafter referred to as “Douyu v. Yaoyu”) [1], and the one between Guangzhou NetEase Computer System Co., Ltd and Guangzhou Huaduo Network Technology Co., Ltd. in 2015(hereinafter referred to as “NetEase v. Huaduo”) [2]. In these two lawsuits, both the plaintiffs alleged unauthorized live streams constitute copyright infringements and unfair competitions. However, the two judgments are not the same. This article will analyze the differences in these two cases and discuss the relevant copyright issues involved in online game live streaming.

Case Background

In the case of Douyu v. Yaoyu, the online game concerned is a Multiplayer Online Battle Arena Game called “DOTA2” which was sponsored as E- sports competition, and the plaintiff “Yaoyu” is the sole licensee to live stream this competition. But it found the defendant “Douyu” live streamed the competition without license. “Yaoyu” brought this case to Shanghai Pudong New District People’s Court by claiming “Douyu”’s behavior as copyright infringement and unfair competition. The 1st instance court denied online game live streaming to be the right of information network dissemination or any statutory right prescribed in China Copyright Law. The court also denied the images formed during the E-sports competition to be work. Therefore, the plaintiff’s claim of copyright infringement was not supported by the court. But the court confirmed that the defendant’s unauthorized streaming violated commercial morality and the principle of good faith, and thus constituted unfair competition. The defendant “Douyu” is unsatisfied with the 1st instance judgment and then filed appeal to Shanghai IP Court. But Shanghai IP Court avoided of making comments on if the online game images constitutes work, or what type of right live streaming is, but went straight to rule that the unauthorized live stream constitutes unfair competition, and thus upheld the decision of 1st instance court. This case was concluded in 2016.

However, in the later case of NetEase v. Huaduo, the online game concerned is a Role Play Game named “Meng Huan Xi You”(梦幻西游) which was developed and operated by the plaintiff “NetEase” . Without obtaining license from the plaintiff NetEase, the defendant “Huaduo” live streamed the game. The plaintiff NetEase thus brought this case to Guangzhou IP Court and claimed defendant’s behavior as copyright infringement and unfair competition. Guangzhou IP Court held that the continuous dynamic images formed during online game operation constitute work created in a way similar to cinematography(“类电作品”). Also, the court held that defendant infringed “other rights which shall be enjoyed by the copyright owners” as prescribed in Article 9.1 (17) in China Copyright Law. Based on this determination, the court supported the claim of the plaintiff and concluded that the unauthorized live streaming of the game by the defendant constituted copyright infringement. This case was concluded in 2017 but we do not know if any of the interested parties filed appeal.

In comparison of the aforementioned two typical cases on online game live streaming, the courts supported both the plaintiffs’ claims from different laws. In the case of Douyu v. Yaoyu, the courts supported the plaintiffs’ claims based on China Unfair Competition Law, while in the case of NetEase v. Huaduo, the courts supported plaintiffs’ claims based on China Copyright Law. In our view, the reason for such difference is because the online games concerned in both cases are different. In the former case, the online game “DOTA” is a Multiplayer Online Battle Arena GameMOBA) which is organized as E-sport competition, while the online game “Meng Huan Xi You” is a Role Play Game(RPG) as a non-sport game. In judicial practice, E-sport competition(DOTA) is usually deemed as sport event which does not constitute work of any type and shall not be ruled by Copyright Law(while there is likelihood that the recorded video of sports event may constitute video recordings as neighboring work). The right in connection with sports even is thus usually protected under unfair competition law.

In the latter case with respect to the non-sport online game concerned, namely “Meng Huan Xi You”, since online game constitute work and it is thus necessary to grant it for protection according to Copyright Law in view that Copyright law is the law to protect substantive right while Unfair Competition law is a law to regulate business behavior.

While we believe there is less discussion on the differences between the judgments on the above-mentioned two cases, there are still a lot of controversies on issues with regard to copyright protection on online game, particularly on online game live streaming.

Copyright Issues on Online Game Live Streaming

The first issue discussed warmly is what type of work that online game shall be categorized. There is no specific reference to “online game” in China Copyright Law. However, in accordance with the Interim Measures on Administration of Online Games(hereinafter referred to as “IMAOG”) enacted in March 2010 by the Ministry of Culture of China, online game is classified as computer software or software. Moreover, under the Regulations for Computer Software Protection of 2002(hereinafter referred to as “RCSP”), “computer software” is defined broadly to include all types of computer programs and related documentation. “Related documentation” in RCSP then includes the program design specifications, flow charts and operating manuals which can be classified as copyrighted works under the PRC Copyright Law. Therefore, online game is fixed as the work of computer software. However, there is also online games whose producer does not actually develop software. Such online games are designed through an intermediary software developed by third party and thus such online games is not fixed in the form of computer software. The next issue then comes to how to protect such video game.

On April 20, 2018, Beijing High People’s Court confirmed in the Guidelines for the Trial of Copyright Infringement Cases that static game images produced during online game play may constitute a work of fine art, continuously dynamic game images produced during online game play may constitute a work created in a manner similar to cinematographic production(“类电作品” in Chinese). Based on the guidelines, for online games, even such online games designed through third party’s software, there is copyright protection available for the dynamic and static game images(as a work created in a manner similar to cinematographic production).

As far as live streaming discussed, another most intense discussion is what type of right that live streaming is. Since live stream is a way to transmit the game to audience at fixed time, the audience are unable to individually select the time to access to the live streaming. Therefore, the right of live streaming does not fit into the definitions of the right of Information Network Dissemination or the right of broadcasting. It is also not very accurate to classify it into other named rights as set forth in China Copyright Law. None of the listed named rights serves accurately for online game live streaming. For such reason, in court practice, such as in the case of NetEase v. Huaduo, the court determined that the right of online game live streaming shall be protected as “other rights which shall be enjoyed by the copyright owners” as prescribed in Article 9.1(17). Since China is a country adopting the principle of statutory, we believe it is rather appropriate to admit the right of live streaming as the right set out in the save clause in China Copyright Law. Of course, in the drafted 3rd Amendment of China Copyright Law, it is suggested to amend the original Right of Broadcasting to the Right of Transmission (“播放权”) which defined as “the right to publicly transmit a work or to re-transmit such transmitted work by wireless or wire, and to transmit the work to the public through technical equipment”. If such draft is promulgated, we believe the right of live streaming shall fall within the “Right of Transmission”.

Having said the above, there are also arguments that the images produced during online game live streaming created original work different from the images produced during online game playing. Of course, we have to admit that online game live streaming will not only transmit the images of the online game, but also transmit the images including various screen windows, such as the windows showing comments from audiences and the streamers(the host of the live streaming), and sometimes other elements apart from the game images. Thus, the images displayed during live stream are not totally the same as the images displayed in game playing. Therefore, the streamers may argue that they created derivative works with sufficient degree of originality. We understand that since there are a lot of types of online games. We will have to follow the case-by-case principle and stick to the degree of originality as a prerequisite for copyright protection to the game images generated during live stream. In different online games, we think that there is indeed space to argue that the game images generated during live streaming create derivative work or even original work. For instance, in a game with story lines (including images of characters, dialogues, scenes and plots, etc.), the game images are actually pre-set by the producer. The game operation is similar to film projection. The player are receiving the images proactively rather than creating the images. There is limited space for the streamer (usually also as a player) to add any creative content into such pre-set images. Therefore, for such online game, the court will generally deny the originality of the images generated during online game live streaming, and thus the images formed in the live streaming does not constitute derivative work or original work. But for some other games such as game of painting, the player can indeed create paintings which is apparently not pre-set by the producer and such painting is derivative work created by the player(also as a streamer if live streaming). Furthermore, for games such as Mine Craft, as a sandbox game, the images are totally created by the player but not the producer who just created the work of computer software or elements of the game. The ownership of the images belong to the player and player’s work is total different from the work of the producer. The player created derivative work. In any event, even if the argument of derivative work formed in live streaming is established, the live streamer still could not infringe the right(the right of adaptation) of the original work which it derived from, according to the Article 12 of China Copyright Law.

With the above in mind, since online game shall be regulated by Copyright Law, is it copyright infringement for a streamer to stream the online game without obtaining license from the game owner. We understand that there listed twelve scenarios deemed as limitations on rights in China Copyright Law(or the so-called “fair-use”). The streamer will usually argue that online game live streaming is “self-entertainment” and it falls into the scenario as set forth in Article 22.1(1). Of course, there are arguments that online game live streaming constitutes “transformative fair use” as live streaming inherently changed the content, purpose or the function of the online game. The concept of transformative fair use was actually adopted from the testing method of “four elements” as prescribed in section 107 of US Copyright Act of 1976. There is no such clause in China Copyright Law. But there is indeed a similar concept in an opinion made by China Supreme People’s Court which referred the testing method of “four elements”. China Supreme People’s Court pointed out in the“Opinions of the Supreme People's Court on Giving Full Play to the Role of Intellectual Property Judicial Functions to Promote the Great Development and Prosperity of Socialist Culture and Promote the Coordinated Development of Economy”(最高人民法院关于充分发挥知识产权审判职能作用推动社会主义文化大发展大繁荣和促进经济自主协调发展若干问题的意见)on 16 December 2011[3] that, it may be held as fair use depending on four elements, namely 1) the characteristics and purpose of the use, 2) the characteristics of the work in use, 3) the quantity and quality of the part in the used work, and 4) the influence such use may cause to the potential market or value of the work. It also mentioned that provided that such use will not conflict to the normal exploitation of the work, and do not prejudice the legitimate interests of the author unreasonably, such use can be deemed as fair use. Therefore, four requirements and two criteria shall be full filled in order to argue transformative fair use. However, such argument was never supported by courts in China. Therefore, we think there is limited space to argue unauthorized online game live streaming as transformative fair use and it appears to be hardly to be supported by the court.

Moreover, there are also arguments that live streaming shall be deemed as implied license which is also a concept referred from the US. Implied license in copyright cases was firstly introduced in Effects Associates v. Cohenby at US 9th Circuit Court in 1990. The court ruled that even though the contract between Effects Associates and Cohenby did not mention to assign the copyright in the effect, and did not provide for a license for the effect to be used in the horror movie, the effect created by Effects Associates could still be used in the horror movie through an implied license, since the specific effect was created with the intent that it be used and distributed in the movie of Cohenby. [4]Afterwards, in 2006 in the case of Field v. Google, the US Federal District Court applied the scope of implied license to the field of information network. The court also held that there are two criteria having to meet for implied license, namely 1) knew the use, and 2) did not raise object. [5] Of course, China court indeed introduced implied license in the case of Founder Group v. P&G on copyright case. which was ruled by Beijing First Intermediate People’s Court in 2011.[6] However, implied license is not a statutory concept in China. The only similar definition is implied permission in Article 140 in General Provisions of Civil Law. However, this Article 140 also states that implied license will only be established when there is explicit regulations in law, the express agreements or established transaction habit. We also believe that the standard for establishing a transactional habit would not be easy. We follow statutory law instead of case law in China. Since implied license is not prescribed in China Copyright Law or has not formed the transaction habit, it appears to be not an appropriate way to apply implied law to copyright cases in China. Therefore, almost all of the courts will rule unauthorized online game live streaming as copyright infringement.

There is also another issue that to protect the online game as a whole one work or as separate element. The current practice is that the copyright owner will generally claim protection both wholly and separately. If the online game images does not reach to the protectable degree of originality, the court will agree to protect the separate elements upon the plaintiff’s claim. Otherwise, the court would held that it is sufficient to protect the online game wholly as one work such as software or work created in a way similar to cinematography(“类电作品”) depending on the characteristics of the particular game. As mentioned in the “Beijing High People’s Court Guidelines for the Trial of Copyright Infringement Cases” issued on April 20, 2018, the court pointed out that elements of an online game constituting a work individually can be protected under the Copyright Law.

Conclusion

As discussed above, while there is possibility that the streamer may create derivative work, it will still need to seek for license from the copyright owner of the online game in online game live streaming. Also, since live streaming is usually conducted through streaming platform and it is for commercial public entertainment, there is thus limited space for the streamer to argue fair use of self-entertainment. Since unauthorized online game live streaming on platform neither falls into fair use nor constitutes transformative fair use(there may be change on the application of this concept), nor can it apply to implied license, unauthorized online game live streaming will usually be deemed as copyright infringement. Of course, the owner of the online game may not enforce its right, however, it does not mean unauthorized live streaming on platform will exempt from liability. Having said the above, in practice, the court will usually follow the principle of case-by-case depending on different type of game. As a safer strategy, it would always be recommended for the live streamer (and the platform) to obtain explicit license from the copyright owner prior to the live streaming. For the owner of the online game, in order to mitigate the uncertainty of decision made by the court due to lack of explicit laws and regulations on online game live streaming, it is necessary to state expressly in user agreement or in license agreement to restrict the right of live streaming.

Author : Ms. Chunling XIANG joined Liu, Shen & Associates since March 2016. Before joining Liu, Shen & Associates, Ms. Xiang worked worked as IP administrator and paralegal at SheppardMullin(Bejing office) and as legal assistant at Baker&Mckenzie(Beijing Office).

Ms. Xiang specializes in trademark prosecution and enforcement, including trademark application, opposition, invalidation, cancellation, trademark litigation, and copyright, customs recordal and domain name.

Ms. Xiang is qualified as an Attorney-at-Law in China.


[1] See (2015)huzhiminzhongzi No.641.

[2] See (2015)yuezhifazhuminchuzi No. 16.

[3] Supre People’s Court:Opinions of the Supreme People's Court on Giving Full Play to the Role of Intellectual Property Judicial Functions to Promote the Great Development and Prosperity of Socialist Culture and Promote the Coordinated Development of Economy,posted on http://zscq.court.gov.cn/dcyj/201205/t20120509_176751.html.

[4] See Effects Associates, Inc. v. Cohen, 908F.2d555(9th Cir. 1990).

[5] See Field v. Google Inc., 412F.Supp.2d1106, 1115-16(D.Nev.2006).

[6] See(2011)yizhongminzhongzi No..5969.

About the Firm

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Tel 86-10-6268 1616
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Email mail@liu-shen.com
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