The First Digital Avatar Case in China

In April 2023, Chinese Hangzhou Internet Court ruled on the first case regarding digital avatar in China.[1] The plaintiff, Mofa Company ("Mofa"), lodged a complaint alleging that the defendant, a network company located in Hangzhou (the "Defendant"), had engaged in copyright infringement and unfair competition. Ultimately, the court of first instance ordered the Defendant to bear the legal responsibility of eliminating the impact and compensating for the loss. Unsatisfied with the result, the Defendant appealed to the Intermediate People's Court of Hangzhou. At present, the case is awaiting commencement of court session by the court of second instance.

In this case, the court of first instance focused on the following issues: (1) whether digital avatar enjoys copyright and/or neighboring right protection; (2) whether the image of digital avatar and its related videos are copyrightable subject matter; (3) whether Mofa, the developer of the digital avatar, enjoys the neighboring right protection; and (4) whether the economic interests of digital avatars can be regulated and protected by the Copyright Law and Anti-Unfair Competition Law. 

Mofa is the developer and creator of the digital avatar "Ada", based on a number of artificial intelligence technologies, including AI performance animation technology, intelligent modeling and binding technology for hyperrealistic characters, intelligent animation and speech synthesis technology, among others.

In October 2019, Mofa released Ada through a public event. In the following few months, Mofa released two short videos through Bilibili, a popular Chinese social network platform, to promote Ada, using the motion capture pictures of a real actress named XU.

Mofa claimed that the two videos distributed by the Defendant in July 2022 through its Douyin account, infringed the copyright of Mofa's earlier released videos, and thus the Defendant's behavior constituted copyright infringement, unfair competition and false advertising. The Defendant countered that Mofa did not enjoy the copyright for the infringed videos or the subject digital avatar.

The court identified the issues concerned as follows:   

1. Whether digital avatar enjoys copyright and/or neighboring right protection under the Copyright Law;  

2. Whether the image of Ada and its related videos are copyrightable subject matter, and whether Mofa enjoys the neighboring right protection for such images and videos;  

3. Whether the Defendant is liable for copyright infringement and unfair competition.   

1.Whether digital avatar enjoys copyright and/or neighboring right protection.

With regard to the first issue whether digital avatar might enjoy copyright protection or neighboring rights protection, the court concluded that, under the current legal framework, Ada and other similar "weak AI" digital avatars do not enjoy either copyright or neighboring rights protection. 

With regard to "copyright" protection, the court reasoned that a digital avatar, similar to Ada, being a specialized application of artificial intelligence technology and a fusion of several technological fields, embodies the interventions and decisions of developers and designers through pre-set algorithms, rules, computational capabilities and learning abilities. The subject digital avatar Ada is mostly driven and determined by human control, functioning as a form of weak artificial intelligence with a relatively limited scope of intellectual creation. Therefore, the court determined that Ada is a tool that supports authorial creativity, but does not qualify as an "author".

With regard to "neighboring rights", the court stated that the "performance" of Ada and similar weak AI digital avatars is, in essence, a digital projection of human performance. The digital avatar itself shall not be recognized as a performer under the current Chinese Copyright Law, and thus does not enjoy performers' rights. The court went further and held that, when a digital avatar participates in filming or acts as a character, it does not enjoy the copyright of audio-visual works or the neighboring right of video producers either.

2.Whether the image of Ada and its related videos are copyrightable subject matter, and whether Mofa enjoys the neighboring right protection for such images and videos.

The Hangzhou Internet Court ruled that the image of Ada and its related videos constitute copyrightable subject matter, and Mofa enjoys all rights related to Ada, including the right as producer of audio-visual works and as performer. 

The court held that as a human-driven digital avatar, Ada's form of expression borrows from the physique of a real individual, while also embodying the developer's unique aesthetic choices and judgments regarding line, color and specific image design through the use of virtual beautification. Therefore, the image of the digital avatar Ada qualifies as an "artistic work", and the relevant videos qualify as "audio-visual works" respectively. As such, Mofa enjoys the copyrights for the images and video productions related to Ada. 

Furthermore, the court noted that the motion captures presented by Ada, including its monologues, dancing and other behaviors, are not self-generated. Instead, they closely mirror the actions of the real actress XU. Hence, the court concluded that XU meets the relevant criteria for "performers" as defined by the Chinese Copyright Law. Given the fact that XU is the employee of Mofa, and therefore, Mofa shall own the performing rights related to Ada.

3.Whether the Defendant is liable for copyright infringement and unfair competition.

Regarding the two infringing videos released by the Defendant, the court ruled that both videos were similar to Mofa's earlier released videos, and therefore, finding the Defendant liable for copyright infringement. 

Additionally, the court also found that the Defendant exploited the digital avatar Ada's image and related videos on the Douyin platform for marketing and sales purposes. Specifically, the Defendant displayed the digital avatar Ada in video form on its Douyin account and posted product links associated with the digital avatar on its Douyin merchant page, thereby attempting to use Ada's image and related videos to promote courses produced by the Defendant. As such, the court held that the Defendant's behavior would affect consumers' rational decision-making, disrupt the order of market competition, and directly damage Mofa's business interests. As a result, the Defendant was found to constitute unfair competition.

Footnotes：

[1] See Hangzhou Internet Court (2022) Zhe 0192 Minchu 9983.

Thanks to Wang Mo for her contributions to this article. 

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