CHINA: Courts Define Boundaries of Creativity and Competition in Video Marketing

In a recent landmark case involving copyright infringement and unfair competition, the Hangzhou Railway Transport Court addressed the legal boundaries of creative content in short video and live-streaming marketing.

Beijing Hengxiang Future Technology Development Co., Ltd. (Hengxiang) accused Hangzhou Meiyu Culture Media Co., Ltd. (Meiyu) of copying its short video scripts, live-streaming layouts, and design concepts shown on the Douyin (TikTok in China) platform, alleging copyright infringement and unfair competition. The decision was made public during China IP Week in April.

In defense of the accusation of copyright infringement, Meiyu argued that the scripts did not qualify as protected works in accordance with People’s Republic of China Copyright Law.

After examination, the court ruled that Meiyu’s unauthorized use of scripts, which were substantially similar to Hengxiang’s scripts, infringed that company’s right of dissemination and communication of information network.

Additionally, the court noted that Meiyu’s comprehensive imitation of Hengxiang’s design concepts and promotional styles went beyond permissible boundaries and should be deemed as a violation of the Anti-Unfair Competition Law, given it undermined Hengxiang’s competitiveness, misled the relevant consumers, and disrupted market order.

The court emphasized that while imitation is permissible to some extent, it must not exceed reasonable restrictions or infringe on the original creator/author’s legitimate rights. Hence, the court found Meiyu’s actions were an intentional “free ride” on Hengxiang’s creative efforts and ordered Meiyu to cease infringement and pay Hengxiang compensation of RMB 15,000.

This case highlights the importance of protecting creative content in the digital marketing landscape. Furthermore, the court’s decision underscores that unique promotional styles, developed through significant investment of resources, generate economic benefits and competitive advantages. By clarifying the boundaries of permissible imitation and fair competition, the ruling sets a precedent for safeguarding intellectual property in short video and live-streaming marketing. It serves as a reminder to businesses that innovation and originality are critical to maintaining a healthy market environment and the judgment encourages companies to respect creative boundaries while fostering a culture of innovation in an increasingly competitive e-commerce landscape.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

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