Analysis on the combat against web-game higention in China

Hackers in China have found their new way of fortune, as reported by Changjiang Time (note: the link is in Chinese), the police in Huangshi City of Hubei Province has recently detected a serious cyber infringement, with 16 men arrested and a higention publishing website named 3000ok shut down. By the investigation, the hacker would establish a game higention publishing website, attracting players for higention operators through ads, and once the operator refuses their ads agency, the hacker will attack the higention server.

3000ok had been running the business of Mir II higention ads, which is one of the hottest online games in China and has been popular among players after its import in 2011. However, the game was encountered the source code release the second year of its running in China, and that brought various higentions, which haunted Shanda Interactive Entertainment Limited (NASDAQ: SNDA, the “Shanda”), who is the licensed game operator in China and has reported such infringement to the local police departments for several times. And the case mentioned above is the typical one detected on Shanda’s report.

During the investigation of the case, another evil force of the internet emerged, namely the hacker agent.

The hacker agents appear to be preemptory, and to take Dark Khight, the hacker group detected previously, as the example, they tend to initiatively contact the higention ads website demanding for the ads agency, and once the website refuses their agency demand, they will revenge in their hacker’s way that to attack the website. On the other hand, the hacker would also force the higention runner give in to their demands in the same way, to let them as the higention ads agents or even the exclusive ones. Through such measures, the hacker agent gradually monopolizes the market and gains a huge profit, for the Dark Knight, they have made illegal profits of 70 million yuan (approximately 1.1 million dollars) in short several years.

The source of such crime lies on the higention after all, which boosts the development of group bundled with the dark profit. Then could there be any countermeasures of legal operators to fight back such infringement? Basing on current laws and our practice experience, Bridge IP Law Commentary giving our answers as follows:

I. To whom shall the right owner report on higention infringement?

By the existing laws and regulations, any crime shall subject to the jurisdiction of the police department of the crime place, which involves the place where the crime committed and the result occurs. As to the higention infringement, the crime committed place shall be where the server is located, and for the IPR rights of the legal owner will be damaged by such crime, therefore, the place of the crime result shall be the right owner’s residence or domicile. For this reason, on any higention infringement, the right owner is entitled to report the case to the police department where the higention is located, the residence of higention runner is or its’ own residence is. Surely, for the judicial convenience, it’s suggested to choose the place of higention location.

II. Is there any influence of the crime amount on the conviction and how to determine such amounts?

The higention infringement could constitute the crime of copyright infringement in criminal law, and by the relevant judicial interpretation, it could be sentenced to the imprisonment of less than 3 years or 3 to less than 7 years. The former sentence mainly made for those crimes with the amount of more than 50 thousand yuan (approximately 7936.5 dollars) of individuals and 200 thousand yuan (approximately 31, 746 dollars) of units; the latter one made for 200 thousand yuan of individuals and 1 million yuan (approximately 158, 730 dollars) of units. Besides, the illegal operation amount involved with the business could also influence the measurement of the penalty.

On that account, the determination of the crime amount is essential to the higention infringement combat. In practices, the higention operator tends to use the special account in higention business, and post it on their website or web page. And that could be the clue to decide the crime amount.

II. How to recover the losses?

The right owner could file the civil lawsuit to recover their losses after the criminal sentence when combating the infringement through a criminal investigation. And there are two advantages for the right owner when filing the lawsuit at this moment:

(1) The clear infringement fact

By China Civil Litigation Law, the facts affirmed in the written judgment could be the evidence in the lawsuit, and for it’s affirmed by the judicial organ, such evidences are more highly proving. When the right owner claims the compensation basing on such evidence, the proof of infringement is quite convenient but stronger.

(2) The sealed property ensures the enforcement

The bank account of higention runner is sealed up by the police department in practices, and once the right owner could apply for the property preservation in time when filing the civil lawsuit after the criminal sentence, the conduct of such preservation is relatively easier and thus could ensure the immediate and full performance of the written judgment after winning the lawsuit.

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Author: Albert Chen
Attorney-at-law of DeBund Law Offices
Co-author: Mr. You Yunting
Founder & Editor-in-Chief of Bridge IP Law Commentary
Partner & Attorney-at-law of Shanghai DeBund Law Offices
Email: Bridge@chinaiplawyer.com, Tel: 8621-5213-4900,
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Bridge IP Law Commentary is a website focus on the introduction of commercial laws in China, especially the intellectual property laws. All the posts here are our original works. And all news or cases referred here are from public reports, and our comments or analysis are of due diligence, neutrality and impartiality, representing our own opinions only and are our original works. You may contact us shall you have any opinions or suggestions.

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