Copyright ownership of online game Enigma Online to be ascertained by IPC Court

　The Taiwan Supreme Court rendered a judgment on the case between Heluo Games Co., Ltd. (hereinafter referred to as “Heluo”) and Soft-World International Corporation (hereinafter referred as “Soft-World”) for economic right dispute, remanding this case to the Intellectual Property and Commercial Court (hereinafter referred to as the “IPC Court”) that dismissed Heluo’s appeal.  

　Soft-World alleged that its online role-playing game, Enigma Online, released on August 27, 2001, is the work developed and accomplished by its former employee, XU Chang-Long (hereinafter referred to as “Xu”) during his employment at Soft-World, and in this regard, the economic right subsisting in the work should be vested in Soft-World.  The former employee, XU has incorporated another online game company, Heluo since March 7, 2014 and further launched another online game, Tale of Wuxia in July 2015, which is a plagiarized and adapted version of Enigma Online.  Soft-World also pointed that by Tale of Wuxia, Xu infringed upon Soft-World’s economic rights, and hence, Xu, as the statutory representative of Heluo, should be held severally and jointly liable for the damages suffered by Soft-World.  

　Heluo countered Soft-World’s allegation by the following arguments.  It is a fact that Xu signed an employment agreement with Soft-World on December 26, 1994.  After that on January 23, 1996, for cost control purpose, Soft-World concluded another agreement for game development outsourcing with Heluo Studio (namely, Heluo Games Co., Ltd. before its reorganization), under which Soft-World should advance copyright royalty and provide Heluo Studio with a fund, office, computer equipment for developing new games and also deal with the labor insurance, health insurance, and taxation matter for the employees of Heluo Studio.  However, Heluo Studio is not an internal division subject to Soft-World, and Xu and the members of Heluo Studio are not Soft-World’s employees.  Enigma Online is created and developed by Heluo Studio, instead of a work for hire by Xu during his employment at Soft-World.  In a word, Soft-World has only publishing right according to the agreement for game development outsourcing.  

　The IPC Court adjudicated in the first instance proceedings that Heluo and Xu should pay TWD24 million in damages to Soft-World, stop distributing or transmitting in public Tale of Wuxia and also run a notice of the gist of the first-instance judgment in the front page of the local newspapers for one day. The IPC Court’s first-instance judgment was affirmed in the second instance proceedings, and therefore, Heluo appealed this case to the Taiwan Supreme Court.  

　This case moved on to the proceedings at the Supreme Court, which found the IPC Court’s holding disputable on the ground that the IPC Court sustained Enigma Online as a work for hire during Xu’s employment at Soft-World simply based on witnesses’ testimonies and Xu’s labor insurance records.  Besides, such issues as the enjoyment of economic rights of Enigma Online, the exact time when Soft-World was aware of the content of the Tale of Wuxia, and if Soft-World has a basis to claim damages against and to seek removal of infringement against Heluo, and to request for Heluo’s running a notice for rehabilitation of reputation matter a lot in this case.  Therefore, the Supreme Court sees the necessity of remanding this case back to the IPC Court for further investigation on these issues.  (Released 2022.03.25)  

/CCS