Local online game company pays TWD840,000 damages for copyright infringement

　X-Legend Entertainment Co., Ltd. (傳奇網路遊戲股份有限公司; hereinafter “X-Legend”) filed a lawsuit to seek TWD6 million damages against Loftstar Interactive Entertainment Inc. (星宇互動娛樂科技股份有限公司; hereinafter “Loftstar”) on the ground that there were 60 pieces of art pictures and images appearing in the online game, “Fly High女神之歌” released by Loftstar (hereinafter the “online game in dispute”) were suspected of infringement.  The Taiwan IP Court ruled in favor of X-Legend that Loftstar and its responsible persons, Tu, Chen, Shen shall be severally and jointly liable for damages in an amount of TWD0.84 million.  This case is appealable.  

　According to X-Legend, Loftstar committed infringement upon two online games developed by X-Legend, “Aura Kingdom” (幻想神域) and “Dragon Slayer” (狩龍戰記) by illegally reproducing in the online game in dispute Loftstar released in June 2015 the 60 pieces of images and pictures of the scenes, architectures, and natural landscapes of the two online games.  In regard to X-Legend’s infringement allegation, the personnel of PalmJoys Technology Co., Ltd. (中國成都掌娛天下科技有限公司; hereinafter “PalmJoys”), the developer of the online game in dispute, admitted their illegal use of these art pictures and images.  In this regard, X-Legend sought damages of TWD6 million against Loftstar, which damages sought was calculated by an least cost of TWD100,000 per picture and image incurred on the developer.  

　Loftstar defended itself by arguing that the allegedly infringing 3D pictures and images of fountain, stone ladder, alter, archway, and rocks are the architectures and natural landscapes commonly appearing in online games and thus lack creativity.  Also, Loftstar asserted that it holds no intent and has no negligence in committing the alleged copyright infringement because Loftstar had first blocked the allegedly infringing pictures or images by black clouds in the game and further notifying PalmJoy to remove these pictures or images upon receipt of the attorney letter issued by X-Legend.  Moreover, Loftstar denied its liability by pointing out that PalmJoy should be held liable whenever any IP right dispute arises as set forth in the agency agreement signed by and between Loftstar and PalmJoy.  

　According to the IP Court’s holding, game review was indeed conducted on the online game in dispute before release and it was also indicated in the review report that a lot of modules appearing in the online game in dispute were highly similar to that of other online games and thus needed change.  The IP Court determined that Loftstar does not hold the intent for infringement because Loftstar immediately provided relevant information to the developer and requested for the developer’s change and improvement upon receipt of X-Legend’s letter.  However, Loftstar’s failure in finding out the infringing content of the online game in dispute can simply explain its failure in performing thorough inspection obligation but cannot negate Loftstar’s negligence for infringement.  Based on the foregoing, the IP Court sustained Loftstar’s infringement upon 42 pieces of X-Legend’s copyrighted pictures, and, in consideration of the degree of complexity, creativity, and difficulty of the infringed art pieces, set an appropriate damages amount at TWD20,000 for each infringed piece.  (May 2018) 

/CCS