Chinese
On September 25, the Guangzhou Intellectual Property Court released a series of typical cases related to the judicial protection of data rights and interests. These cases primarily involve issues of unfair competition and copyright. They demonstrated the court's active role in exercising its intellectual property adjudication functions, explored rules for data rights protection, effectively clarified the boundaries of market participants' behaviors, and promoted the healthy and orderly development of the data industry.
A total of six cases were published, addressing core issues regarding the ownership of different types of data rights, as well as various forms of data infringement, including improper acquisition, misuse of data, data obstruction, and data pollution. In the case of Tian Company vs. Rui Company concerning unfair competition, the court found that the software in question, which "one-click" scraped product data from Tmall and Taobao platforms to list on stores operated by non-source merchants on other e-commerce platforms and specially recommended those listings, constituted an act of unfair competition by stealing the competitive advantage that legitimate operators had over the product data. This case is significant as it is the first nationwide ruling recognizing that big data scraping software constitutes unfair competition, which is expected to further activate the value of data elements and support the development of new productive forces.
In the case of Jia Company vs. Zi Company et al. regarding the infringement of information network communication rights, the court determined that the network platform operator using RSS content source integration technology and text classification algorithms should bear responsibilities commensurate with its algorithmic capabilities and content management model. This reflects the judiciary's strong guidance for the healthy development of platform economies based on algorithms in the digital economy.
In the case of Hu Company vs. Chen and Xun Companies concerning unfair competition, the court ruled that an online store providing false real-name authentication services constituted unfair competition. This case is notable as it is the first ruling in the field of live streaming involving unfair competition related to false real-name authentication services, providing an important judicial precedent for establishing a healthy ecosystem in online streaming.
Case 1: The First Unfair Competition Case Involving Big Data Scraping Software — Determining the Ownership of Public Data Rights and Improper Data Utilization
Case Number: (2021) Yue 0192 Minchu 1692 / (2023) Yue 73 Minzhong 995
[Zhejiang Tian Company, Zhejiang Tao Company vs. Guangzhou Rui Company et al. in an Unfair Competition Dispute]
Facts and Judgment: Guangzhou Rui Information Technology Co., Ltd. (hereinafter referred to as Rui Company) developed and operated the software "Puhuo Yi" and "Dai Xiaoyi," which were marketed in the Pinduoduo service market at different permission levels and service durations. By using "Puhuo Yi," operators could "move" individual products or entire store data from Tmall and Taobao platforms to their Pinduoduo stores. Once a user placed an order on Pinduoduo, operators would create Tmall or Taobao orders using "Dai Xiaoyi," synchronizing these orders and logistics data to the Pinduoduo platform, thus establishing a "no-source-store" model where Tmall and Taobao merchants shipped goods directly to Pinduoduo users without authorization.
Zhejiang Tian Company (hereinafter referred to as Tian Company) and Zhejiang Tao Company (hereinafter referred to as Tao Company) claimed that the accused scraping software illegally obtained and used their platform data, constituting network infringement and unfair competition. They requested Rui Company to cease the infringement and compensate for damages.
After a hearing, the Guangzhou Internet Court ruled that product data is a fundamental element for e-commerce platforms to provide services. Tian Company and Tao Company, as operators of these platforms, legally collect and process product data, investing resources in finance, technology, and personnel, while also incurring costs for prevention, monitoring, and rights protection. They have the right to derive and develop insights from their platform data and to assert rights over it. The data utilization behavior in question lacked legitimacy:
1. Unauthorized use of others' product data for business activities is a "free ride" that lowers operational costs and disrupts market competition. This behavior prevented e-commerce platforms and merchants from discerning consumers' genuine evaluations, thus undermining the efficacy of the electronic commerce credit evaluation system.
2. The accused scraping software not only improperly increased the competition platform's traffic, transaction volume, and user engagement, damaging the legitimate rights and interests of Tmall and Taobao operators, but also allowed "no-source-stores" to use others' product data and sell others' goods without authorization. This led to substantial substitution of Tmall and Taobao merchants' operations and infringed on consumers' right to be informed and make choices, increasing shopping risks and costs related to rights protection. Furthermore, "Dai Xiaoyi's" handling and transport of personal information in orders also infringed on consumer privacy rights.
3. The accused scraping software disregarded the restrictions set by Tmall and Taobao on third-party access to and use of platform data and ignored the requirements of Pinduoduo's service market prohibiting unauthorized reproduction of others' products, thereby providing technical support to "no-source-store" operators to gain an unfair competitive advantage, violating the principle of good faith.
In summary, Rui Company was found to have engaged in unfair competition, and the Guangzhou Internet Court ordered Rui Company to compensate Tian Company and Tao Company for losses amounting to 500,000 yuan (including reasonable expenses). After Rui Company appealed to the Guangzhou Intellectual Property Court, the appeal was withdrawn. The ruling is now in effect.
Significance of the Case: This case is the first nationwide case involving big data unfair competition related to product data on e-commerce platforms. It recognizes the rights of e-commerce platforms over their legally operated product data from three perspectives: the legality of data generation, the investment in data operations, and competitive interests. The ruling identified that the contested behaviors disrupted competitive order and harmed the legitimate rights of other operators and consumers, without special provisions in other intellectual property laws. It concluded that Rui Company’s actions constitute unfair competition as defined in Article 2 of the Anti-Unfair Competition Law. This judgment effectively regulated the improper use of big data, helping to establish sound data governance rules and enhancing the judicial empowerment of data industry development.
Case 2: Unfair Competition Case Involving Data Scraping by the “Public Account Assistant” — Determining Standards for Unfair Competition Behavior Related to Data Scraping
Case Number: (2021) Yue 73 Minzhong 4453[Shenzhen Teng Company vs. Guangzhou Zhen Company in a Trademark Infringement and Unfair Competition Dispute]
Facts and Judgment: Shenzhen Teng Computer System Co., Ltd. (hereinafter referred to as Teng Company) is an operator of the WeChat Official Account platform, managing users and their passwords. Guangzhou Zhen Information Technology Co., Ltd. (hereinafter referred to as Zhen Company) is the developer of the "Public Account Assistant" application. After monitoring and capturing data packets transmitted between the software and its backend server in real-time, it was found that version 7.5.7 of the "Public Account Assistant" was submitting the WeChat Official Account users’ usernames and passwords to its server during the download process.
Teng Company claimed that Zhen Company's "Public Account Assistant" software, through technical means, obtained and stored the usernames and passwords of WeChat Official Account users, placing these users’ accounts and passwords in an uncertain risk environment. This behavior harmed the normal operational order, data security, and users' rights within the Teng Company’s WeChat Official Account platform. Consequently, Teng Company filed a lawsuit seeking an immediate halt to Zhen Company's unauthorized collection of WeChat Official Account user data and compensation for economic losses amounting to 5 million yuan.
The first-instance court found that the accused behavior constituted trademark infringement and unfair competition, ordering Zhen Company to cease its infringement and compensate Teng Company 3 million yuan in damages. Zhen Company subsequently appealed.
In its second-instance judgment, the Guangzhou Intellectual Property Court noted that Zhen Company misled WeChat Official Account platform users into downloading its "Public Account Assistant" software, amounting to 26,238,900 downloads, by using similar trademarks, similar software names, and promotional phrases. The behavior of collecting and storing WeChat Official Account users’ usernames and passwords during the software download process was classified as data processing.
The court held that Zhen Company's data processing behavior lacked legitimacy, as uploading users’ accounts and passwords to its server did not align with users’ data security interests. There was insufficient evidence to demonstrate that Zhen Company had the ability to ensure the continuous security, effective protection, and lawful utilization of the user data. Zhen Company's actions placed WeChat Official Account users’ accounts and passwords in an uncertain risk environment, harming Teng Company’s operational order and security on the platform, which constituted unfair competition by disrupting the normal operation of network services provided by other legitimate operators.
The Guangzhou Intellectual Property Court upheld that Zhen Company was to cease its unauthorized collection of WeChat Official Account user data and pay economic damages of 3 million yuan.
Significance of the Case: This case serves as a typical example of unfair competition related to internet data scraping. Operators who use technical means to scrape massive amounts of user account and password information from other operators pose a serious risk to users’ data security interests and can severely impact the order of online competition, thus constituting an instant-type data security-related unfair competition behavior.
The ruling in this case explores regulations on harmful data security behaviors, effectively safeguarding user data security interests, promoting the legitimate acquisition and effective protection of online data, and robustly regulating internet data-related unfair competition. The handling of this case achieved positive social effects, harmonizing legal outcomes with societal results, and is thus exemplary for similar cases.
Case 3: Copyright Case Involving Content Providers on Algorithm-Driven Platforms — Determining the Liability of Platform Operators for Assisting in Infringement
Case Number: (2021) Yue 73 Minzhong 5651[Guangzhou Jia Company vs. Beijing Zi Company and You Company in a Dispute over Information Network Transmission Rights]
Facts and Judgment: Beijing Zi Company (hereinafter referred to as Zi Company) is the operator of the Toutiao platform. On January 31, 2020, the "Homepage/Technology" section of the Toutiao platform published the contested article titled "How Jack Ma Survived SARS 17 Years Ago!" This article was accessed via RSS content feed synchronization technology from You Company (hereinafter referred to as You Company), which operates the Science Popularization Network. Subsequently, the article was published in the "Technology" section of the Toutiao platform using a text classification algorithm. The article indicated that it originated from the self-media account "Technology Life Express," which is operated by You Company. Before reposting the article, You Company indicated the source as "He Some Salt."
Guangzhou Jia Company (hereinafter referred to as Jia Company) is the entity behind the WeChat public account "He Some Salt" and is the copyright owner of the aforementioned article. Jia Company filed a lawsuit against Zi Company and You Company, claiming that they infringed its information network transmission rights concerning the article. The first-instance court found that both You Company and Zi Company failed to fulfill their reasonable duty of care and should bear the responsibility of network content providers, ordering them to compensate Jia Company 2,000 yuan. Zi Company appealed the decision.
In the second-instance ruling, the Guangzhou Intellectual Property Court held that Zi Company, by employing RSS content feed synchronization technology and text classification algorithms to categorize and distribute user content on its platform, was engaged in type-based recommendation of user content on the Toutiao platform. The company obtained the information network transmission rights for the platform content free of charge through user agreements and established profit-sharing arrangements with users to incentivize content generation and integration, maximizing platform profits. Thus, Zi Company not only provided information storage space but also acted as a manager of the platform's content.
The court noted that Zi Company had the necessary technical measures to prevent infringement and the capability to manage information. Given its advantages in selecting the subjects of content distribution, choosing technical models for preventing infringement, and managing infringement risks, Zi Company had an obligation to take necessary technical measures to prevent infringement, particularly for articles that had high visibility and readership on the Toutiao platform. If Zi Company failed to implement such measures, it should be held liable for assisting in the infringement based on the nature and method of its network services, its information management capabilities, its profit-sharing model, and other relevant factors.
Significance of the Case: This case addresses the determination of liability for platform operators assisting in infringement in an algorithm-driven environment. It analyzes the principles of liability for assisting infringement from four dimensions: legal provisions, algorithmic tools, profit models, and public interest. The ruling clarifies whether the use of algorithmic tools can serve as a defense for platform operators against infringement claims and establishes the legitimacy of data market participants' use and profit behaviors, along with their obligations for necessary technical measures.
This case contributes to the healthy development of the platform economy based on digital information technology and algorithmic tools, positively impacting the purification of the online information market. It represents a beneficial exploration by the people’s courts in safeguarding the digital economy and the development of the internet.
Case 4: Illegal Provision of Game Currency and Account Trading — Recognition of Unfair Competition Protection for Virtual Property Rights
Case Number: (2022) Yue 73 Minzhong 3597 [Shenzhen Teng Company vs. Zhengzhou Yi Company in an Unfair Competition Dispute]
Facts and Judgment: Shenzhen Teng Computer System Co., Ltd. (hereinafter referred to as Teng Company) is the authorized operator and rights holder of the game "Dungeon & Fighter." Zhengzhou Yi Information Technology Co., Ltd. (hereinafter referred to as Yi Company) provided trading services for game accounts and game currency for this game on its platform UU898, including related promotions that utilized the game's logo, characters, and props. Teng Company believed that Yi Company's actions infringed upon its network information transmission rights and constituted unfair competition, leading it to file a lawsuit in the Guangzhou Internet Court.
Subsequently, the two parties reached a settlement agreement where Yi Company agreed to cease its infringing activities and provide compensation, prompting Teng Company to withdraw the lawsuit. However, after paying the agreed compensation, Yi Company continued to offer trading services for "Dungeon & Fighter" game accounts and currency. Teng Company’s claim was based on Yi Company's actions after the settlement agreement.
In the first-instance court ruling, Yi Company was ordered to cease providing trading services for "Dungeon & Fighter" game accounts as well as trading services for game currency whose legal origins they could not prove. Yi Company was required to compensate Teng Company 3 million yuan in damages and 30,000 yuan in reasonable expenses. Both parties appealed the decision.
The Guangzhou Intellectual Property Court in the second instance determined that the core issue was whether Yi Company’s provision of trading services for the involved game account and game currency constituted unfair competition, concluding as follows:
1. Game users do not have the right to freely trade the involved game accounts, making Yi Company’s provision of such service inappropriate;
2. The legitimacy of Yi Company providing game currency trading services was contingent on the nature of the game currency's acquisition: the rights of those who obtained game currency legitimately should be protected; Teng Company cannot restrict users from trading their legitimately obtained game currency; and third parties providing trading services for game currency obtained legitimately should also be protected.
Thus, Yi Company's provision of trading services for unlawfully or improperly obtained game currency constituted unfair competition. The Guangzhou Intellectual Property Court rejected the appeals, upholding the original judgment.
Significance of the Case: This case addresses specific issues regarding the protection of virtual property rights. While China’s Civil Code has recognized the property nature of online virtual assets, it lacks specific legal provisions for their protection. In this context, internet platforms play a crucial role in forming a healthy ecological environment for virtual property through service agreements. Violating service agreements or engaging in illegal activities, such as using cheats to disrupt computer programs, not only harms the interests of platform operators and consumers but also disrupts the order of internet competition and the ecosystem of virtual property, posing real obstacles to the healthy development of the digital economy.
Therefore, this case recognized that illegal transactions of game accounts and game currency by professional market entities constitute unfair competition. The ruling effectively explores new governance paths for rights and interests, contributing to the establishment of a healthy network virtual property ecosystem and promoting the healthy development of the digital economy.
Case 5: E-commerce Platforms Providing False Real-name Authentication Services — Determination of the Impropriety of False Real-name Authentication
Case Number: (2022) Yue 73 Minzhong 2619 [Guangzhou Tiger Company vs. Chen and Shanghai Xun Company in an Unfair Competition Dispute]
Facts and Judgment: Guangzhou Tiger Information Technology Co., Ltd. (hereinafter referred to as Tiger Company) operates the Huya Live streaming platform. Given the requirements for the authenticity, legality, and accuracy of account identity information as stated in the "Huya User Service Agreement" and the "Huya Platform Host Broadcasting Agreement," as well as regulations mandating that internet live streaming service providers verify the real identity of hosts, Tiger Company claimed that Chen, who operated the "Online Good Service" store on the Pinduoduo platform, was providing false real-name authentication services to users by selling "Huya Live Activation" products. Tiger Company sued for a court order to close the store and for Chen to compensate for economic losses.
The first-instance court found that the accused actions constituted unfair competition. However, since the infringing links had been taken down and there was no evidence showing Chen engaged in other promotional activities related to the infringement, the court deemed the request to close the store insufficiently founded. It ordered Chen to pay Tiger Company 80,000 yuan in economic damages and reasonable expenses, while dismissing other claims from Tiger Company. Tiger Company appealed, requesting that the court mandate Chen to close the "Online Good Service" store on Pinduoduo and that Shanghai Xun Information Technology Co., Ltd. (hereinafter referred to as Xun Company) revoke the store account.
In the second-instance ruling, the Guangzhou Intellectual Property Court determined that: 1. The various product links in the accused store pointed to false real-name authentication services, making this the primary business of the store. 2. Although Xun Company had taken measures such as banning sales and prohibiting new listings for infringing links, evidence presented in the second instance indicated that the accused store was still providing false real-name authentication services, showing that existing measures were insufficient to stop the infringement. 3. False real-name authentication services are prohibited goods on the Pinduoduo platform, and measures like "removing sellers" did not violate Xun Company's governance rules for the platform. 4. Xun Company had not taken necessary actions to stop the infringement and was therefore legally responsible for closing the store.
In light of the serious harm that false real-name authentication services pose to the operational order and business model of live streaming, as well as the detrimental effects on the live streaming industry ecosystem—and considering Chen's involvement in providing false real-name authentication services to other online live streaming operators outside of Huya Live—the court found it necessary to prevent, warn against, and curb similar unfair competition behaviors. The court supported Tiger Company's appeal to order Chen and Xun Company to close the store.
Significance of the Case: This case represents the first instance of unfair competition related to false real-name authentication services in the live streaming sector. It thoroughly argued the impropriety of false real-name authentication for hosts and set a precedent by ordering the network service platform provider to take responsibility for closing the accused store.
The rapid development of the live streaming industry and its associated economic growth have given rise to various social problems, including economic and legal issues stemming from inadequate oversight leading to disorder in the live streaming space. Given the technical challenges and difficulties of regulatory enforcement relying solely on government oversight, the governance of live streaming should leverage industry self-management, particularly by live streaming platforms. As primary facilitators and direct managers of live streaming activities, these platforms hold a natural advantage in regulating the space.
Thus, while enhancing the autonomy of live streaming platforms, it is equally important to implement the responsibilities of platform governance. This case provides an essential analytical example for constructing a healthy ecological system within the network live streaming industry, marking a significant step in holding network service providers accountable for ceasing infringements.
Case 6: Commercial Marketing Interference by "WeChat Manager" — Standards for Determining Unfair Competition Due to Data Interference
Case Number: (2021) Yue 73 Minzhong 153 [Teng Technology (Shenzhen) Co., Ltd. et al. vs. Xiamen Lian Technology Co., Ltd. and Guangzhou Deng Communication Technology Co., Ltd. in an Unfair Competition Dispute]
Facts and Judgment: Teng Technology (Shenzhen) Co., Ltd. (hereinafter referred to as Teng Company) is the copyright holder of the instant messaging software "WeChat," which it has authorized its affiliated company to operate and exclusively use. Guangzhou Deng Communication Technology Co., Ltd. (hereinafter referred to as Deng Company) promoted and sold the "Lian Lian Yi WeChat Management System" software, developed by Xiamen Lian Technology Co., Ltd. (hereinafter referred to as Lian Company), on its "OK WeChat Management Website." This software exchanged data with the WeChat server through technical means to obtain various private data, including user information and chat content. It provided functions such as "mass personalized greetings," "unified management of Moments," "management monitoring," "aggregation management of multiple WeChat accounts," and assistance with brand marketing through data management.
The accused software was priced between 980 yuan and 5,980 yuan, and Lian Company's official website claimed that by April 2019, over 20,000 enterprise users had registered to use the software. Teng Company and its affiliates requested the court to order the defendants to cease their unfair competition activities, issue an apology to mitigate the impact, and jointly compensate for economic losses amounting to 10 million yuan and reasonable expenses of 450,567 yuan.
The first-instance court found that the actions of Lian Company and Deng Company constituted unfair competition, ordering them to stop the infringement, apologize, and pay a total of 3.6 million yuan in damages and reasonable expenses. Teng Company, Lian Company, and others appealed.
In the second-instance judgment, the Guangzhou Intellectual Property Court noted that Teng Company and its affiliates had developed and operated the WeChat software, which holds significant recognition and market influence. Lian Company, as a competitor, improperly used the "WeChat" trademark in its name and domain, and the infringing software severely compromised the security and integrity of the WeChat software and its services, disrupting the normal operation of the software. This posed significant risks to public data security and privacy, indicating clear malicious intent and substantial profits from Lian Company’s infringement, warranting a severe penalty. Additionally, since Deng Company was jointly operating the infringing software with Lian Company, it was held partially jointly liable for Lian Company’s compensation.
The court revised the judgment, ordering Lian Company to pay 10 million yuan in economic losses and reasonable expenses, while Deng Company was held jointly liable for 3 million yuan of that amount.
Significance of the Case: This case addresses the recognition of data interference actions as constituting unfair competition. It determined that the "WeChat Manager" software, which cracked the built-in public key and user agreement of the WeChat client without the consent of the data rights holder, and further distorted the original social functions of WeChat through commercial marketing activities, severely disrupted the normal operational order of the WeChat platform. This led to numerous data security risks, harming consumer interests and competitive order, thus constituting unfair competition.
Moreover, the case emphasized the principle of "making losses whole" while increasing penalties for malicious and severe infringement behaviors, rationally determining compensation amounts. This case is a significant practice that aligns with the judicial core concept of data rights and the current goals of establishing a foundational system for data rights protection. It contributes positively to enhancing the level of judicial protection for data rights and optimizing the business environment in the Guangdong-Hong Kong-Macao Greater Bay Area.
Source: Guangzhou Intellectual Property Court
On September 25, the Guangzhou Intellectual Property Court released a series of typical cases related to the judicial protection of data rights and interests. These cases primarily involve issues of unfair competition and copyright. They demonstrated the court's active role in exercising its intellectual property adjudication functions, explored rules for data rights protection, effectively clarified the boundaries of market participants' behaviors, and promoted the healthy and orderly development of the data industry.
A total of six cases were published, addressing core issues regarding the ownership of different types of data rights, as well as various forms of data infringement, including improper acquisition, misuse of data, data obstruction, and data pollution. In the case of Tian Company vs. Rui Company concerning unfair competition, the court found that the software in question, which "one-click" scraped product data from Tmall and Taobao platforms to list on stores operated by non-source merchants on other e-commerce platforms and specially recommended those listings, constituted an act of unfair competition by stealing the competitive advantage that legitimate operators had over the product data. This case is significant as it is the first nationwide ruling recognizing that big data scraping software constitutes unfair competition, which is expected to further activate the value of data elements and support the development of new productive forces.
In the case of Jia Company vs. Zi Company et al. regarding the infringement of information network communication rights, the court determined that the network platform operator using RSS content source integration technology and text classification algorithms should bear responsibilities commensurate with its algorithmic capabilities and content management model. This reflects the judiciary's strong guidance for the healthy development of platform economies based on algorithms in the digital economy.
In the case of Hu Company vs. Chen and Xun Companies concerning unfair competition, the court ruled that an online store providing false real-name authentication services constituted unfair competition. This case is notable as it is the first ruling in the field of live streaming involving unfair competition related to false real-name authentication services, providing an important judicial precedent for establishing a healthy ecosystem in online streaming.
Case 1: The First Unfair Competition Case Involving Big Data Scraping Software — Determining the Ownership of Public Data Rights and Improper Data Utilization
Case Number: (2021) Yue 0192 Minchu 1692 / (2023) Yue 73 Minzhong 995
[Zhejiang Tian Company, Zhejiang Tao Company vs. Guangzhou Rui Company et al. in an Unfair Competition Dispute]
Facts and Judgment: Guangzhou Rui Information Technology Co., Ltd. (hereinafter referred to as Rui Company) developed and operated the software "Puhuo Yi" and "Dai Xiaoyi," which were marketed in the Pinduoduo service market at different permission levels and service durations. By using "Puhuo Yi," operators could "move" individual products or entire store data from Tmall and Taobao platforms to their Pinduoduo stores. Once a user placed an order on Pinduoduo, operators would create Tmall or Taobao orders using "Dai Xiaoyi," synchronizing these orders and logistics data to the Pinduoduo platform, thus establishing a "no-source-store" model where Tmall and Taobao merchants shipped goods directly to Pinduoduo users without authorization.
Zhejiang Tian Company (hereinafter referred to as Tian Company) and Zhejiang Tao Company (hereinafter referred to as Tao Company) claimed that the accused scraping software illegally obtained and used their platform data, constituting network infringement and unfair competition. They requested Rui Company to cease the infringement and compensate for damages.
After a hearing, the Guangzhou Internet Court ruled that product data is a fundamental element for e-commerce platforms to provide services. Tian Company and Tao Company, as operators of these platforms, legally collect and process product data, investing resources in finance, technology, and personnel, while also incurring costs for prevention, monitoring, and rights protection. They have the right to derive and develop insights from their platform data and to assert rights over it. The data utilization behavior in question lacked legitimacy:
1. Unauthorized use of others' product data for business activities is a "free ride" that lowers operational costs and disrupts market competition. This behavior prevented e-commerce platforms and merchants from discerning consumers' genuine evaluations, thus undermining the efficacy of the electronic commerce credit evaluation system.
2. The accused scraping software not only improperly increased the competition platform's traffic, transaction volume, and user engagement, damaging the legitimate rights and interests of Tmall and Taobao operators, but also allowed "no-source-stores" to use others' product data and sell others' goods without authorization. This led to substantial substitution of Tmall and Taobao merchants' operations and infringed on consumers' right to be informed and make choices, increasing shopping risks and costs related to rights protection. Furthermore, "Dai Xiaoyi's" handling and transport of personal information in orders also infringed on consumer privacy rights.
3. The accused scraping software disregarded the restrictions set by Tmall and Taobao on third-party access to and use of platform data and ignored the requirements of Pinduoduo's service market prohibiting unauthorized reproduction of others' products, thereby providing technical support to "no-source-store" operators to gain an unfair competitive advantage, violating the principle of good faith.
In summary, Rui Company was found to have engaged in unfair competition, and the Guangzhou Internet Court ordered Rui Company to compensate Tian Company and Tao Company for losses amounting to 500,000 yuan (including reasonable expenses). After Rui Company appealed to the Guangzhou Intellectual Property Court, the appeal was withdrawn. The ruling is now in effect.
Significance of the Case: This case is the first nationwide case involving big data unfair competition related to product data on e-commerce platforms. It recognizes the rights of e-commerce platforms over their legally operated product data from three perspectives: the legality of data generation, the investment in data operations, and competitive interests. The ruling identified that the contested behaviors disrupted competitive order and harmed the legitimate rights of other operators and consumers, without special provisions in other intellectual property laws. It concluded that Rui Company’s actions constitute unfair competition as defined in Article 2 of the Anti-Unfair Competition Law. This judgment effectively regulated the improper use of big data, helping to establish sound data governance rules and enhancing the judicial empowerment of data industry development.
Case 2: Unfair Competition Case Involving Data Scraping by the “Public Account Assistant” — Determining Standards for Unfair Competition Behavior Related to Data Scraping
Case Number: (2021) Yue 73 Minzhong 4453[Shenzhen Teng Company vs. Guangzhou Zhen Company in a Trademark Infringement and Unfair Competition Dispute]
Facts and Judgment: Shenzhen Teng Computer System Co., Ltd. (hereinafter referred to as Teng Company) is an operator of the WeChat Official Account platform, managing users and their passwords. Guangzhou Zhen Information Technology Co., Ltd. (hereinafter referred to as Zhen Company) is the developer of the "Public Account Assistant" application. After monitoring and capturing data packets transmitted between the software and its backend server in real-time, it was found that version 7.5.7 of the "Public Account Assistant" was submitting the WeChat Official Account users’ usernames and passwords to its server during the download process.
Teng Company claimed that Zhen Company's "Public Account Assistant" software, through technical means, obtained and stored the usernames and passwords of WeChat Official Account users, placing these users’ accounts and passwords in an uncertain risk environment. This behavior harmed the normal operational order, data security, and users' rights within the Teng Company’s WeChat Official Account platform. Consequently, Teng Company filed a lawsuit seeking an immediate halt to Zhen Company's unauthorized collection of WeChat Official Account user data and compensation for economic losses amounting to 5 million yuan.
The first-instance court found that the accused behavior constituted trademark infringement and unfair competition, ordering Zhen Company to cease its infringement and compensate Teng Company 3 million yuan in damages. Zhen Company subsequently appealed.
In its second-instance judgment, the Guangzhou Intellectual Property Court noted that Zhen Company misled WeChat Official Account platform users into downloading its "Public Account Assistant" software, amounting to 26,238,900 downloads, by using similar trademarks, similar software names, and promotional phrases. The behavior of collecting and storing WeChat Official Account users’ usernames and passwords during the software download process was classified as data processing.
The court held that Zhen Company's data processing behavior lacked legitimacy, as uploading users’ accounts and passwords to its server did not align with users’ data security interests. There was insufficient evidence to demonstrate that Zhen Company had the ability to ensure the continuous security, effective protection, and lawful utilization of the user data. Zhen Company's actions placed WeChat Official Account users’ accounts and passwords in an uncertain risk environment, harming Teng Company’s operational order and security on the platform, which constituted unfair competition by disrupting the normal operation of network services provided by other legitimate operators.
The Guangzhou Intellectual Property Court upheld that Zhen Company was to cease its unauthorized collection of WeChat Official Account user data and pay economic damages of 3 million yuan.
Significance of the Case: This case serves as a typical example of unfair competition related to internet data scraping. Operators who use technical means to scrape massive amounts of user account and password information from other operators pose a serious risk to users’ data security interests and can severely impact the order of online competition, thus constituting an instant-type data security-related unfair competition behavior.
The ruling in this case explores regulations on harmful data security behaviors, effectively safeguarding user data security interests, promoting the legitimate acquisition and effective protection of online data, and robustly regulating internet data-related unfair competition. The handling of this case achieved positive social effects, harmonizing legal outcomes with societal results, and is thus exemplary for similar cases.
Case 3: Copyright Case Involving Content Providers on Algorithm-Driven Platforms — Determining the Liability of Platform Operators for Assisting in Infringement
Case Number: (2021) Yue 73 Minzhong 5651[Guangzhou Jia Company vs. Beijing Zi Company and You Company in a Dispute over Information Network Transmission Rights]
Facts and Judgment: Beijing Zi Company (hereinafter referred to as Zi Company) is the operator of the Toutiao platform. On January 31, 2020, the "Homepage/Technology" section of the Toutiao platform published the contested article titled "How Jack Ma Survived SARS 17 Years Ago!" This article was accessed via RSS content feed synchronization technology from You Company (hereinafter referred to as You Company), which operates the Science Popularization Network. Subsequently, the article was published in the "Technology" section of the Toutiao platform using a text classification algorithm. The article indicated that it originated from the self-media account "Technology Life Express," which is operated by You Company. Before reposting the article, You Company indicated the source as "He Some Salt."
Guangzhou Jia Company (hereinafter referred to as Jia Company) is the entity behind the WeChat public account "He Some Salt" and is the copyright owner of the aforementioned article. Jia Company filed a lawsuit against Zi Company and You Company, claiming that they infringed its information network transmission rights concerning the article. The first-instance court found that both You Company and Zi Company failed to fulfill their reasonable duty of care and should bear the responsibility of network content providers, ordering them to compensate Jia Company 2,000 yuan. Zi Company appealed the decision.
In the second-instance ruling, the Guangzhou Intellectual Property Court held that Zi Company, by employing RSS content feed synchronization technology and text classification algorithms to categorize and distribute user content on its platform, was engaged in type-based recommendation of user content on the Toutiao platform. The company obtained the information network transmission rights for the platform content free of charge through user agreements and established profit-sharing arrangements with users to incentivize content generation and integration, maximizing platform profits. Thus, Zi Company not only provided information storage space but also acted as a manager of the platform's content.
The court noted that Zi Company had the necessary technical measures to prevent infringement and the capability to manage information. Given its advantages in selecting the subjects of content distribution, choosing technical models for preventing infringement, and managing infringement risks, Zi Company had an obligation to take necessary technical measures to prevent infringement, particularly for articles that had high visibility and readership on the Toutiao platform. If Zi Company failed to implement such measures, it should be held liable for assisting in the infringement based on the nature and method of its network services, its information management capabilities, its profit-sharing model, and other relevant factors.
Significance of the Case: This case addresses the determination of liability for platform operators assisting in infringement in an algorithm-driven environment. It analyzes the principles of liability for assisting infringement from four dimensions: legal provisions, algorithmic tools, profit models, and public interest. The ruling clarifies whether the use of algorithmic tools can serve as a defense for platform operators against infringement claims and establishes the legitimacy of data market participants' use and profit behaviors, along with their obligations for necessary technical measures.
This case contributes to the healthy development of the platform economy based on digital information technology and algorithmic tools, positively impacting the purification of the online information market. It represents a beneficial exploration by the people’s courts in safeguarding the digital economy and the development of the internet.
Case 4: Illegal Provision of Game Currency and Account Trading — Recognition of Unfair Competition Protection for Virtual Property Rights
Case Number: (2022) Yue 73 Minzhong 3597 [Shenzhen Teng Company vs. Zhengzhou Yi Company in an Unfair Competition Dispute]
Facts and Judgment: Shenzhen Teng Computer System Co., Ltd. (hereinafter referred to as Teng Company) is the authorized operator and rights holder of the game "Dungeon & Fighter." Zhengzhou Yi Information Technology Co., Ltd. (hereinafter referred to as Yi Company) provided trading services for game accounts and game currency for this game on its platform UU898, including related promotions that utilized the game's logo, characters, and props. Teng Company believed that Yi Company's actions infringed upon its network information transmission rights and constituted unfair competition, leading it to file a lawsuit in the Guangzhou Internet Court.
Subsequently, the two parties reached a settlement agreement where Yi Company agreed to cease its infringing activities and provide compensation, prompting Teng Company to withdraw the lawsuit. However, after paying the agreed compensation, Yi Company continued to offer trading services for "Dungeon & Fighter" game accounts and currency. Teng Company’s claim was based on Yi Company's actions after the settlement agreement.
In the first-instance court ruling, Yi Company was ordered to cease providing trading services for "Dungeon & Fighter" game accounts as well as trading services for game currency whose legal origins they could not prove. Yi Company was required to compensate Teng Company 3 million yuan in damages and 30,000 yuan in reasonable expenses. Both parties appealed the decision.
The Guangzhou Intellectual Property Court in the second instance determined that the core issue was whether Yi Company’s provision of trading services for the involved game account and game currency constituted unfair competition, concluding as follows:
1. Game users do not have the right to freely trade the involved game accounts, making Yi Company’s provision of such service inappropriate;
2. The legitimacy of Yi Company providing game currency trading services was contingent on the nature of the game currency's acquisition: the rights of those who obtained game currency legitimately should be protected; Teng Company cannot restrict users from trading their legitimately obtained game currency; and third parties providing trading services for game currency obtained legitimately should also be protected.
Thus, Yi Company's provision of trading services for unlawfully or improperly obtained game currency constituted unfair competition. The Guangzhou Intellectual Property Court rejected the appeals, upholding the original judgment.
Significance of the Case: This case addresses specific issues regarding the protection of virtual property rights. While China’s Civil Code has recognized the property nature of online virtual assets, it lacks specific legal provisions for their protection. In this context, internet platforms play a crucial role in forming a healthy ecological environment for virtual property through service agreements. Violating service agreements or engaging in illegal activities, such as using cheats to disrupt computer programs, not only harms the interests of platform operators and consumers but also disrupts the order of internet competition and the ecosystem of virtual property, posing real obstacles to the healthy development of the digital economy.
Therefore, this case recognized that illegal transactions of game accounts and game currency by professional market entities constitute unfair competition. The ruling effectively explores new governance paths for rights and interests, contributing to the establishment of a healthy network virtual property ecosystem and promoting the healthy development of the digital economy.
Case 5: E-commerce Platforms Providing False Real-name Authentication Services — Determination of the Impropriety of False Real-name Authentication
Case Number: (2022) Yue 73 Minzhong 2619 [Guangzhou Tiger Company vs. Chen and Shanghai Xun Company in an Unfair Competition Dispute]
Facts and Judgment: Guangzhou Tiger Information Technology Co., Ltd. (hereinafter referred to as Tiger Company) operates the Huya Live streaming platform. Given the requirements for the authenticity, legality, and accuracy of account identity information as stated in the "Huya User Service Agreement" and the "Huya Platform Host Broadcasting Agreement," as well as regulations mandating that internet live streaming service providers verify the real identity of hosts, Tiger Company claimed that Chen, who operated the "Online Good Service" store on the Pinduoduo platform, was providing false real-name authentication services to users by selling "Huya Live Activation" products. Tiger Company sued for a court order to close the store and for Chen to compensate for economic losses.
The first-instance court found that the accused actions constituted unfair competition. However, since the infringing links had been taken down and there was no evidence showing Chen engaged in other promotional activities related to the infringement, the court deemed the request to close the store insufficiently founded. It ordered Chen to pay Tiger Company 80,000 yuan in economic damages and reasonable expenses, while dismissing other claims from Tiger Company. Tiger Company appealed, requesting that the court mandate Chen to close the "Online Good Service" store on Pinduoduo and that Shanghai Xun Information Technology Co., Ltd. (hereinafter referred to as Xun Company) revoke the store account.
In the second-instance ruling, the Guangzhou Intellectual Property Court determined that: 1. The various product links in the accused store pointed to false real-name authentication services, making this the primary business of the store. 2. Although Xun Company had taken measures such as banning sales and prohibiting new listings for infringing links, evidence presented in the second instance indicated that the accused store was still providing false real-name authentication services, showing that existing measures were insufficient to stop the infringement. 3. False real-name authentication services are prohibited goods on the Pinduoduo platform, and measures like "removing sellers" did not violate Xun Company's governance rules for the platform. 4. Xun Company had not taken necessary actions to stop the infringement and was therefore legally responsible for closing the store.
In light of the serious harm that false real-name authentication services pose to the operational order and business model of live streaming, as well as the detrimental effects on the live streaming industry ecosystem—and considering Chen's involvement in providing false real-name authentication services to other online live streaming operators outside of Huya Live—the court found it necessary to prevent, warn against, and curb similar unfair competition behaviors. The court supported Tiger Company's appeal to order Chen and Xun Company to close the store.
Significance of the Case: This case represents the first instance of unfair competition related to false real-name authentication services in the live streaming sector. It thoroughly argued the impropriety of false real-name authentication for hosts and set a precedent by ordering the network service platform provider to take responsibility for closing the accused store.
The rapid development of the live streaming industry and its associated economic growth have given rise to various social problems, including economic and legal issues stemming from inadequate oversight leading to disorder in the live streaming space. Given the technical challenges and difficulties of regulatory enforcement relying solely on government oversight, the governance of live streaming should leverage industry self-management, particularly by live streaming platforms. As primary facilitators and direct managers of live streaming activities, these platforms hold a natural advantage in regulating the space.
Thus, while enhancing the autonomy of live streaming platforms, it is equally important to implement the responsibilities of platform governance. This case provides an essential analytical example for constructing a healthy ecological system within the network live streaming industry, marking a significant step in holding network service providers accountable for ceasing infringements.
Case 6: Commercial Marketing Interference by "WeChat Manager" — Standards for Determining Unfair Competition Due to Data Interference
Case Number: (2021) Yue 73 Minzhong 153 [Teng Technology (Shenzhen) Co., Ltd. et al. vs. Xiamen Lian Technology Co., Ltd. and Guangzhou Deng Communication Technology Co., Ltd. in an Unfair Competition Dispute]
Facts and Judgment: Teng Technology (Shenzhen) Co., Ltd. (hereinafter referred to as Teng Company) is the copyright holder of the instant messaging software "WeChat," which it has authorized its affiliated company to operate and exclusively use. Guangzhou Deng Communication Technology Co., Ltd. (hereinafter referred to as Deng Company) promoted and sold the "Lian Lian Yi WeChat Management System" software, developed by Xiamen Lian Technology Co., Ltd. (hereinafter referred to as Lian Company), on its "OK WeChat Management Website." This software exchanged data with the WeChat server through technical means to obtain various private data, including user information and chat content. It provided functions such as "mass personalized greetings," "unified management of Moments," "management monitoring," "aggregation management of multiple WeChat accounts," and assistance with brand marketing through data management.
The accused software was priced between 980 yuan and 5,980 yuan, and Lian Company's official website claimed that by April 2019, over 20,000 enterprise users had registered to use the software. Teng Company and its affiliates requested the court to order the defendants to cease their unfair competition activities, issue an apology to mitigate the impact, and jointly compensate for economic losses amounting to 10 million yuan and reasonable expenses of 450,567 yuan.
The first-instance court found that the actions of Lian Company and Deng Company constituted unfair competition, ordering them to stop the infringement, apologize, and pay a total of 3.6 million yuan in damages and reasonable expenses. Teng Company, Lian Company, and others appealed.
In the second-instance judgment, the Guangzhou Intellectual Property Court noted that Teng Company and its affiliates had developed and operated the WeChat software, which holds significant recognition and market influence. Lian Company, as a competitor, improperly used the "WeChat" trademark in its name and domain, and the infringing software severely compromised the security and integrity of the WeChat software and its services, disrupting the normal operation of the software. This posed significant risks to public data security and privacy, indicating clear malicious intent and substantial profits from Lian Company’s infringement, warranting a severe penalty. Additionally, since Deng Company was jointly operating the infringing software with Lian Company, it was held partially jointly liable for Lian Company’s compensation.
The court revised the judgment, ordering Lian Company to pay 10 million yuan in economic losses and reasonable expenses, while Deng Company was held jointly liable for 3 million yuan of that amount.
Significance of the Case: This case addresses the recognition of data interference actions as constituting unfair competition. It determined that the "WeChat Manager" software, which cracked the built-in public key and user agreement of the WeChat client without the consent of the data rights holder, and further distorted the original social functions of WeChat through commercial marketing activities, severely disrupted the normal operational order of the WeChat platform. This led to numerous data security risks, harming consumer interests and competitive order, thus constituting unfair competition.
Moreover, the case emphasized the principle of "making losses whole" while increasing penalties for malicious and severe infringement behaviors, rationally determining compensation amounts. This case is a significant practice that aligns with the judicial core concept of data rights and the current goals of establishing a foundational system for data rights protection. It contributes positively to enhancing the level of judicial protection for data rights and optimizing the business environment in the Guangdong-Hong Kong-Macao Greater Bay Area.
Source: Guangzhou Intellectual Property Court
