Introduction

The case of Shenzhen Tencent Computer System Co Ltd v. Shanghai Yingxun Technology Co Ltd (2019) (Guangdong 0305 Civil First Trial No. 14010) is a key ruling in Chinese intellectual property (IP) law, particularly concerning copyright infringement in artificial intelligence (AI) software development. The Guangdong courts examined whether Shanghai Yingxun Technology Co Ltd had infringed on Tencent’s AI-driven software, specifically focusing on Dreamwriter, Tencent’s AI-powered system that generates financial articles. The case addressed key issues of ownership, infringement, and damages under Chinese copyright law.

Background

Tencent, a leading Chinese technology company, alleged that Shanghai Yingxun Technology Co Ltd had illegally copied and distributed portions of its AI-powered software code without authorization. The dispute arose when Tencent discovered that Yingxun was offering an AI-based product that allegedly contained substantial similarities to Tencent’s AI models and algorithms used in Dreamwriter.

Dreamwriter is an AI-powered content generation system developed by Tencent, primarily designed to produce financial news articles and reports. The software analyzes financial data, market trends, and economic indicators to generate automated news articles, which are widely used in digital financial journalism. Tencent filed a copyright infringement lawsuit under China’s Copyright Law (2010 Amendment), seeking damages and an injunction against further use of its AI-generated financial article system.

Legal Issues

The court examined the following key legal questions:

1. Ownership and Copyright Protection of AI Software
   • Whether Tencent held valid copyright ownership over Dreamwriter and its underlying AI algorithms.
   • Whether the AI-generated financial articles and the software elements copied by Yingxun were eligible for copyright protection under Article 3 of China’s Copyright Law.
2. Copyright Infringement and AI Development
   • Whether Yingxun’s AI software contained a substantial reproduction of Tencent’s AI-generated content and algorithms.
   • Whether the copying constituted literal or non-literal reproduction, including neural network architectures, model parameters, and automated text generation methods.
3. Damages and Injunctive Relief
   • The extent of economic losses suffered by Tencent due to the infringement.
   • The appropriate remedies, including financial compensation and potential injunctions against Yingxun.

Legal Principles Applied

1. Copyright Ownership and Protection of AI Software Under Chinese Law

• Article 3 of China’s Copyright Law (2010 Amendment) grants protection to software as a literary work, including AI-based software incorporating machine learning models and neural networks.
• Tencent provided copyright registration certificates as evidence of ownership of its AI algorithms, training datasets, and source code.
• The court affirmed that Tencent’s Dreamwriter software and AI-generated financial articles were original and eligible for copyright protection.

2. The Substantial Similarity Test in AI Development

• Chinese courts apply the substantial similarity test to determine copyright infringement.
• The court conducted a comparative analysis of Tencent’s Dreamwriter software and Yingxun’s product, focusing on:
  • Neural network architectures (deep learning frameworks, layer structures, and activation functions).
  • Model parameters and training data similarities.
  • Decision-making processes and algorithmic outputs related to automated financial article generation.
• The ruling found that Yingxun’s software contained core AI functionalities and structures that were substantially similar to Tencent’s, demonstrating infringement.

3. Remedies and Compensation in AI Software Infringement

• Injunctive Relief: The court ordered Shanghai Yingxun to cease all infringing activities immediately.
• Statutory Damages: Under Article 49 of China’s Copyright Law, Tencent was awarded financial damages based on the scale of infringement and market impact.
• Legal Costs: The court also required Yingxun to cover reasonable litigation expenses incurred by Tencent.

Court’s Decision

The Guangdong court ruled in favor of Tencent, finding that:

• Tencent held valid copyright over the Dreamwriter AI software and its financial article generation system.
• Yingxun’s software contained substantial similarities amounting to copyright infringement.
• Yingxun was ordered to stop using, reproducing, and distributing the infringing AI software.
• Tencent was awarded monetary damages and litigation costs.

Implications of the Judgment

• Strengthened Copyright Protection for AI in China
  • The ruling reinforces AI software copyright enforcement and protects intellectual property rights in the technology sector.
• Strict Liability for AI Model Copying
  • Companies engaging in unauthorized reproduction of AI algorithms and models face injunctions and financial penalties.
• Legal Precedent for AI Copyright Cases
  • The case serves as a benchmark for future AI-related copyright disputes, particularly in the field of automated financial journalism.
  • The ruling highlights that AI-generated financial content and the underlying models may be protected under copyright law.

Conclusion

The Shenzhen Tencent v. Shanghai Yingxun decision marks a significant victory for AI software copyright protection in China. The ruling affirms that Chinese courts apply strict copyright standards to safeguard technological innovation, AI-generated financial journalism, and software development. This case sets a precedent for enforcing IP rights in the AI sector, particularly for AI-generated content in finance and business reporting. The judgment underscores the growing recognition of AI-created works and the need for robust copyright protection in the digital economy.

Case: Shenzhen Tencent Computer System Co Ltd v. Shanghai Yingxun Technology Co Ltd (2019). Guangdong 0305 Civil First Trial No 14010 (WIPO Lex)