This case arose from the article submission by the associate editor of Xuanting Entertainment on the platform of iReader Technology. The author involved in the case, “Fa Biao De Wo Niu” (the pseudonym of Tai WANG, a well-known online literature writer), signed an exclusive license agreement with Xuanting Entertainment, stipulating that the copyright of the works created by Tai WANG will be exclusively licensed to Xuanting Entertainment for a period of time. During the agreement, the author involved in the case reached cooperation with iReader Technology and published his works Xing Wu Shen Jue on the platform of iReader Technology. Xuanting Entertainment hereby claims to appeal the above actions:
It infringed the exclusive commercial interests in the author’s name and pseudonym of Xuanting Entertainment.
It misled people to think that there is special relationship like cooperation between the plaintiff and the defendant.
There are cases of violation of the principle of good faith, such as breach of contract by the author who is induced maliciously by iReader Technology.
Although the online literature market has developed for several years, the dispute in this case is still relatively new, and the court has never accepted such dispute before. How to define the boundary of rights (rights and interests) between the platform and the author and to define that of the rights and interests to be protected by the anti-unfair competition law is not only the focus of the dispute in this case, but also relates to the healthy development and healthy competition of the online literature market.
In view of the above-mentioned focus of controversy, the courts of first and second instance in this case all adopted our defense opinions and agency opinions.
Regarding the boundary of rights (rights and interests) between the platform and the author, the final judgment pointed out that if the pseudonym of the author has a certain popularity and has the function of identifying the source of the work, then the corresponding relationship should be formed by the author himself, not by his publishing platform. At the same time, under the condition that the rights and interests generated by his pseudonym are not stipulated in the contract, the personality right attribute of the name determines that once it is infringed, the subject of exercising rights can only be the author himself.
Regarding the application of the principle clauses of the anti-unfair competition law, the final judgment reiterated the standards established in the “kelp quota case” of the Supreme People’s Court of the People’s Republic of China, and pointed out that this case is a dispute between the operators of the online literature platform over the ownership of the relevant copyright of the works of the same author. If the possible interests are damaged, Xuanting Company may claim the author's breach of contract or bring a corresponding civil lawsuit according to the contract, so as to safeguard its own legitimate rights and interests. Whereas, the principle clauses of the anti-unfair competition law do not have the applicable conditions in this case.
The case ended with the court ruling rejecting all of Xuanting’s claims. In another similar case, Shuxin CHANG, the original author of Yu Zui, was also involved in a dispute over unfair competition between China Literature and iReader Technology. After many times of evidence exchanges and formal court sessions, the lawsuits were withdrew by China Literature and Xuanting Entertainment.
So far, two cases of iReader Technology represented by our lawyers have achieved success. The trial of the above-mentioned cases helps to clarify the boundaries of rights (interests) between platforms and between authors and platforms, and provides reference for similar disputes to a certain extent. In addition, the two lawsuits took place at the sensitive node where iReader Technology applied for IPO from China Securities Regulatory Commission. The court of first instance in this case made a successful judgment in a timely manner, clearing the legal obstacles for iReader Technology to be allowed to go public. The agency team also won high praise from customers for this.