China Software Copyright – Supreme Court awards limited damages

The China Supreme People’s Court (“Supreme Court”) on November 15, 2021 issued its final judgement in a copyright infringement case about the use of royalty-free software. The Supreme Court upheld the decision of the trial court that the defendant was liable for infringing the software copyright owner’s authorship, but not other rights. The end user licence agreement required all “free” users to include the copyright owner’s logo and links to its website on websites created with the software. The defendant did not include the logo or the links on the websites it created using the software. It is an interesting case as the final compensation awarded, CNY 11,000 (approx USD 1,735) is very low.


The Plaintiff, Changsha Mi Tuo Information Technology Co Ltd (“Mi Tuo”) created the software MetInfo V7.0 (“MetInfo”) which is used to create websites. Mi Tuo has a software copyright registration certificate issued by the State copyright bureau. In practice, users only need to download and install the software and add their content to its templates to set up their websites.

Mi Tuo provides MetInfo in two ways: royalty free subject to agreeing to be bound by the particular End User Licence Agreement (“EULA”); and restriction free subject to a one time fee of CNY 6,999 (approx USD 1,104). The fee also includes some website maintenance advice and trouble shooting help from Mi Tuo.

The Supreme Court, in reviewing the facts of the case, described a two step process – the download to the user’s computer after clicking on the “free download” on Mi Tuo’s web page, followed by a pop up licence agreement when the software was installed on the user’s computer. At the latter point, the user could choose free or paid versions.

Copyright: the EULA for MetInfo includes the following:

This Licence Agreement is the agreement between you (natural person, legal persons or other organisations) and Mi Tuo regarding duplicating, downloading, installation and use of MetInfo. This Licence Agreement also applies to any subsequent update and upgrades. Upon duplicating, downloading, installation or otherwise use MetInfo, it indicates you agree to be bound by all terms of this Agreement. If you do not agree to the terms of this Agreement, please do not duplicate, download, install or otherwise use MetInfo.

The rights licensed to you:

  1. Provided that you are fully compliant with the terms and conditions of this agreement, you may use MetInfo on multiple websites, and no royalty shall be paid for your use.
  2. You may modify MetInfo to make it fit for your own website subject to the constraints and limitations provided in this agreement.
  3. For the website you create with the assistance of MetInfo, you have full ownership of the website content and accordingly, you are solely responsible for it.
  4. Constraints and limitations include: as long as all or part of MetInfo is used to create a website, regardless of extent or purpose or how the software is modified, the copyright logo (PoweredbyMetInfo) and the links to Mi Tuo websites (, must be shown on such website, unless otherwise approved by Mi Tuo. The page of the mini Apps set up with MetInfo must contain the copyright logo which cannot be removed or modified. Otherwise it will be treated as breaching this agreement and constitutes infringement.

Further, Mi Tuo has the right to take legal actions to protect its rights and claim for compensation against any website or user for any illegal removal of the copyright logo and the links.

The Defendant, Henan Engineering Construction Association (“HECA”) used the free version of MetInfo to create its official website but it did not include the copyright logo and Mi Tuo’s website links, contrary to the terms of the EULA.

Decision of the Trial Court

The trial court decided the case in favour of Mi Tuo and ordered HECA to:

  1. stop the infringement activities;
  2. pay CNY 11,000 (approx USD 1,735) as compensation to Mi Tuo including CNY 6,000 (approx USD 946) as damages and CNY 5,000 (approx USD 789) as compensation for Mi Tuo’s legal costs; and
  3. make a public apology to Mi Tuo by publishing a statement on its own website for a period of 30 days.

The trial court did not uphold Mi Tuo’s argument that HCEA’s infringement activities went beyond the scope of the authorised licence and had also infringed Mi Tuo’s authorship, right to duplicate, modify, and to obtain remuneration, etc.

The trial court held that when HECA obtained the software, it was already consented to by Mi Tuo so its use of the software to build its own website did not exceed the scope of authorisation by Mi Tuo. Therefore HECA only infringed Mi Tuo’s authorship rights but not the right to duplicate.

Appeal to the Supreme Court

Both parties appealed the decision of the trial court. The appeal was accepted by the Supreme Court on August 16, 2021 and concluded on November 15, 2021. The Supreme Court upheld the decision of the trial court on the compensation awarded to Mi Tuo.

HECA denied infringement and its main arguments were that when clicking the “one click installation” button to download the software and install it on its own computer, the alleged EULA did not pop up. Because Mi Tuo did not put up any obvious notification, this agreement should be regarded as a standard or form contract which increased the liabilities of the user and should be regarded as void according to Chinese law. These arguments were rejected by the Supreme Court.

Mi Tuo’s main arguments were that the trial court erred on identifying the various components of copyright infringed. HECA’s infringement had gone beyond the authorised scope of the EULA and had infringed various rights including authorship, the right to duplicate, modify, and to obtain remuneration, etc. Further, the compensation awarded by the trial court is too low, its claim of CNY 70,000 (approx USD 11,040) should be supported.

Review of key issues

Did HECA infringe the copyright of Mi Tuo by not showing the copyright logo and website links?

In this case, the trial court held that the use of MetInfo by the HECA did not infringe the copyright of Mi Tuo because it had obtained the consent of Mi Tuo to download and install the software – the consent is implied by offering a free download. However, removal of the copyright logo without approval of Mi Tuo infringed its right of authorship.

The Supreme Court held that HECA had obtained the consent of Mi Tuo to use the MetInfo software but it breached the EULA when it removed the copyright logo and this infringed the authorship right of Mi Tuo.

The Supreme Court also held that downloading and duplicating the software and the necessary modification is still within the scope of the EULA. Removing the logo and the links mainly infringed the authorship, but not other rights of Mi Tuo. Accordingly, the Supreme Court rejected Mi Tuo’s argument that HECA had infringed the other components of its copyright.

Consequences of HECA’s infringement

The Supreme Court held that it was difficult to calculate Mi Tuo’s actual losses arising from the free use of its software contrary to its EULA.

The trial court decided to use the royalty charged by Mi Tuo for a similar product (ie. one time payment of CNY 6,999 (approx USD 1,104) to determine the damages and ordered CNY 6,000 (approx USD 946) as damages. The trial court also allowed part of the legal costs incurred by Mi Tuo to be reimbursed by HECA – CNY 5,000 (approx USD 789).

The Supreme Court upheld the overall amount of compensation to be awarded to Mi Tuo but commented that HECA had acted in bad faith in the copyright infringement and the damages should be a little higher, for example CNY 10,000 (approx (USD 1,577). The Supreme Court continued that the legal costs should be a little less, for example CNY 2,000 (approx USD 315). The amount determined by the trial court was justified overall and was affirmed.


This is an unusual case on many grounds.

Very few cases rise to the level of the Supreme Court. Even fewer relatively small commercial disputes. The limited damages awarded could not justify the expense and time involved and it may be, as media speculation suggests, that Mi Tuo had a wider agenda.

On any analysis it looks like Mi Tuo achieved a Phyrric victory. Not only with immediate effect in this case, but likely to impact other cases based on their EULA and business method.

The facts as reported do not make it clear why the two step process: free download, followed after installation by a “choose your licence” step was implemented by Mi Tuo. One explanation open is to maximise the number of downloads. Another is likely breach of the EULA.

The Supreme Court found that Mi Tuo had more than 700 similar cases running for copyright infringement and more than 500 additional cases to be filed. A quick online search indicates that Mi Tuo has many ongoing actions against its end users.

Chinese litigators often have a fee based on the amount of damages sought. Chinese media reports indicate that Mi Tuo had sought large amounts in other matters – in at least one case CNY 50,000 (Approx USD 7,936).

According to an interview by a local newspaper in September 2021 with the actual owner of Mi Tuo, Mr YANG Haijun, Mi Tuo’s original intention was to settle with the end users so they become paid users but Mi Tuo was forced into litigation.

Mi Tuo was also accused by many as “fishing” for court action. Many end users ended up involved in court action for infringement without understanding why.

On any analysis, and leaving aside any punitive element, it is difficult to see any basis for the damages for a EULA breach to greatly exceed the nominated licence fee for unrestricted use.


  • The use of “click to accept” EULA is common practice in China and elsewhere. To be effective they need to comply with the law and take account of human behaviour.
  • One click agreements usually limit the rights of end users, and as such, they need to be given some prominence, often blocking further action until accepted. Chinese law provides for the validity of these provided that terms that exclude or limit the main responsibilities of the software provider are adequately brought to the attention of the end user.

WEI Xin & PENG Wei

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