Recently, Guangzhou IP Court” ruled that online streaming platform YY.com (similar to Twitch.tv) has infringed upon the copyrighted works in Fantasy Westward Journey II (hereafter "Westward Journey") that are owned by NetEase, a major video game developer and publisher in China.
During the proceedings, NetEase argued that YY.com has systematically infringed their copyrighted works embedded in Westward Journey by directly broadcasting, distributing, and reproducing live video gaming content uploaded by users without a license. YY.com argued in defense that, unlike simple Let's Play videos, the content in question added users' real-time commentary, original analysis, and sometimes creative subtitles. Thus YY.com argued that these additions created a transformative work of its own and should be protected under the fair use or fair dealing exception (China Copyright Law Art. 22 §1).
The Guangzhou IP Court recognized NetEase's rights to the audiovisual artwork in their game and found that YY.com had practiced some kind of "editorial control" by allowing their users to stream the Let's Play videos in noticeable areas on the website to attract more incoming traffic. Thus, the Guangzhou IP Court found YY.com liable for copyright infringement, regardless of the additional commentary and analysis by its users, and awarded the developer 20,000,000 RMB (approximately 3.15 million USD) in damages.
In a different case, MarsLive.cn - DOTA2's online gaming organizer, won an unfair competition lawsuit against Douyu.com, another live streaming site. Here, instead of ruling on copyright grounds, Shanghai IP Court concluded that MarsLive obtained exclusive licenses to host the MOBA game in China from DOTA's developer Valve Corporation and that Douyu.com's streaming of the same event was an act of "free riding" in spite of Douyu's hosts editing the videos and adding narration.
According to Newzoo, China took one-quarter of all global game revenues, reaching more than $27.5 billion in 2017, well ahead of the U.S. market. Although current rulings and legal ramifications are in favor for game developers and publishers like Tencent and NetEase, professional video gamers, streamers, and streaming platforms are seeking to validate their rights in the industry as well, and we can expect to see more fights in this area as the lines between fair use and protectable work get drawn deeper in the sand.
1. China Intellectual Property Right Net, http://www.cnipr.com/sj/al/alpx/201711/t20171114_222883.html