S Korea video game publisher launches lawsuits against Chinese copycat titles

Over the past decade, the development of the digital entertainment industry has mainly focused on gaming, animation, film, literature and music. Some of these areas – such as animation and literature – have been around since long before the birth of the digital media, when they were closely reliant on analogue methods and materials. Film and music have long been spread through TV, CDs and other such platforms. The biggest common denominator of these modes of communication was their limited reach and slow dissemination among audiences. Before the advent of digitization, these two points were almost fatal to the traditional entertainment industry. However, in the present era, rapidly-delivered online forms of transmission and the widespread coverage of the Internet have been quick to replace traditional communication methods.

That makes the manager one of the few executives from overseas strong-willed enough to challenge a batch of firms in the world’s largest video game market. Chang has already claimed a few victories. Last year, a Beijing court ordered Guangzhou-based 37 Interactive Entertainment Technology Co. to stop selling a game allegedly reworked from Mir. Last month, a Singapore-based arbitration court required a unit of China’s Kingnet Network Co. to pay royalties of 468 million yuan (US$68 million).

Commentators say Chinese courts are taking a firmer stance on copyright law. And while multinationals have long avoided filing suits against rivals in China, Chang thinks it is now worth the effort, partly because Trump’s trade war has raised awareness about IP.

“Some people say Trump is bringing the world to its end, but I think he’s playing a positive role when it comes to China,” says Chang.“He’s speeding up China’s change through pressure.”

On the company’s official WeChat account, just before the arbitration court’s decision, Kingnet said that although it was open to negotiations, the damages WeMade was seeking were too large. It urged the South Korean firm to stop “unreasonable” demands and “ill-intentioned” lawsuits.

“We fully respect the IP rights of others and of our own, and we are a constant advocate for protection of copyright,” NetEase reported in a statement. “NetEase has always had a no-tolerance policy toward copycatting and plagiarism.”

Even before the trade war with the U.S., Chinese courts had started enhancing protections for IP, as more local corporations climbed the value chain and produced cutting-edge innovations. But Chang feels that has accelerated as the President called attention to the issue, not least via public tweets. He hopes winning more suits will add profitability to his firm.

“It would embolden more foreign companies, especially ones in the States and Japan, to go ahead with suing Chinese firms on Chinese soil,” said Wi Jong-hyun, a business management professor at Seoul’s Chung-Ang University. “These lawsuits would add headaches for Chinese companies who would no longer enjoy the kind of protection they would in the past,” he added.

Still, the effects of legal battles like Chang’s could be felt beyond video games and affect more areas of the digital entertainment market as a whole, spilling over into music, digital TV, streaming services and online publishing.

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