Defining legal character, liability of online game platforms (Part II)

According to the law, operators of online game platforms can be held liable for directly engaging or indulging in infringement if they know or should have known of it.

Is direct operation involved? In many game infringement cases, game platforms argued that they only acted as internet service providers (ISPs) and should not therefore be held liable for infringing acts. However, to be identified as an ISP, it is first necessary to determine whether a platform has been involved in game operation, based on the following criteria:

1. whether a user was forced to access the platform’s Software Development Kit (SDK) payment interface;
2. whether user payments in a game directly enter the platform’s account;
3. whether the platform shared revenue from value recharged with the developers;
4. whether the platform publishes game-related content such as game news, event announcements, game strategies and internet forums;
5. whether a large number of platform logos — or even words similar to “official co-operative games” – were marked on the game’s login page during operation of the game involved; and
6. whether funds were provided for promotion purposes, or expenses arising from game operations were shared.

Game download and installation services are available on some platforms. These platforms also offer access to fee-charging systems or collect recharge payments for games directly, which are then shared with game developers.

They carry out game promotion activities in their own names, adding platform logos to the game pages subject to lawsuit. In which case, they are more likely to be identified as online game operators rather than simply ISPs – and should be held liable as game operators.

Know perfectly well or should have known of infringement? Even if not directly involved in game operation, platforms are still required to fulfil some reasonable duties of care. They will be held liable if found to know perfectly well of an infringing act while adopting a permissive attitude.

The term “knows perfectly well” covers “know” or “should have known”.

Pursuant to article 9 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Laws in the Trial of Civil Disputes Involving Infringement of the Rights to Information Network Transmissions, the people’s court shall comprehensively consider the following factors when determining whether an ISP “knows”, based on paragraph 3 of article 36 of the Tort Liability Law:

1. whether the ISP recommends, ranks, selects, edits, sorts, modifies, etc. the infringing online information manually or automatically;
2. the ISP shall be able to manage information based on the nature and method of services provided as well as the possibility of infringement;
3. the type of online information that infringes on personal rights and interests, and the degree of such infringements;
4. the social impact of online information or the number of views within a certain period of time;
5. whether it is technically possible for the ISP to take measures against infringements and has taken reasonable measures accordingly;
6. whether the ISP has taken reasonable measures against repeated infringing acts by the same user or against the same infringing information; and
7. other relevant factors.

If a game product has obvious signs of an infringement, it will be determined that the platform “knows perfectly well” or “should have known” of infringements according to the above-mentioned criteria.

For example, the game product used another party’s well-known ownership trademarks and materials or was highly similar to other products, or the contents of its external publicity documents – like “cracked version”, “unlimited gold coin version” or “in-app purchase cracked version” – were obviously at risk of infringement.

Moreover, determining whether an ISP knows perfectly well of an infringement is not based on whether the rights holder has given explicit notice to the ISP.

Indulgence towards infringement

“Indulgence” means allowing an infringing act to exist when the act is known perfectly well or should have been known to occur; or failure to take necessary, timely measures to delete, block or disconnect links on the receipt of notification of infringements from the rights holder.

Article 1195 of the Civil Code stipulates that on receiving such notification, the internet service provider shall promptly forward it to relevant internet users and take necessary measures based on preliminary evidence of the infringement and type of service. Failure to take necessary measures in a timely manner results in joint liability with the internet user for the expanded part of the damage.

Therefore, if a platform knows perfectly well that there is a game-infringing act but fails to take necessary measures, it may constitute assistance in such infringement and bear tort liability accordingly, based on the degree of fault.

If the platform becomes aware of existence of the infringement only after receiving an effective notice from the rights holder, it shall be held liable only for the expanded part of the loss due to its small fault.

That is to say, even if the platform does not know perfectly well or should not have known of an infringing act involved during the launch and operation of a game product but fails to take necessary, timely measures after receiving an effective notice from the rights holder – or should have known of the infringement – then both the platform and the infringer may be jointly held liable for the expanded part of the damage.

Jeff Yang is a director at Wang Jing & GH Law Firm

Read the related article here:

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Defining legal character, liability of online game platforms (Part I)

What responsibility should platforms providing internet services bear when the internet or its services become a tool for infringing others’ rights and interests? In Part 1 of this article, the author analyses the legal character of online game platforms in internet infringement, and corresponding liabilities

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