Company A used individual characters from a font library on its official website without authorization. The company that developed the font library sent a warning letter to Company A alleging that Company A used several individual characters from the font company’s copyrighted font library without authorization. The Statement of Intellectual Property Rights for Computer Fonts, a screenshot of the copyright page and a photocopy of the copyright certificate were appended to the letter to certify that the font company owned the copyrights to the computer font software. In the meantime, samples from the computer font library, an evidence collection checklist and Company A’s Computer Font Authorized Use Conditions (i.e. screen shots of the official website accompanied by a comparison with the font examples) were also appended to establish Company A’s use of individual characters generated by the computer font software. The warning letter alleged that since Company A used individual characters from the font company’s copyrighted font library on its own website, it infringed the font company’s copyright and consequently Company A must pay royalties.

The font company produced a copyright declaration and a copyright certificate for the font, thereby proving that it held copyrights in the font software.

Under the Copyright Law and general principles of civil law, infringement of an owner’s copyright occurs when the following four conditions exist simultaneously:

  1. The object used by the infringer constitutes a “work”;
  2. The complaining party is the copyright owner of the work;
  3. The infringer reproduced and/or distributed the work; and
  4. The infringer’s reproduction and distribution was not expressly or impliedly authorized by the copyright owner. 

Since the evidence provided by the copyright holder indicated that Company A used individual characters generated by the font company’s copyrighted font software on its own website, to establish infringement the following four conditions must be met:

  1. The individual characters used on the official website constituted “works” in a legal sense;
  2. The font company held the copyrights for the disputed individual characters;
  3. Company A’s use of the individual characters on its official website constituted reproduction and/or distribution of the font company’s copyrighted individual characters; and
  4. Company A’s reproduction and/or distribution was not expressly or impliedly authorized by the font company.

Only if all of the foregoing four conditions were met would Company A’s use of the font on its official website constitute infringement of the font company’s copyrights.

Based on the foregoing analysis, the key points to be clarified in this case are:

  1. Does the mere display of individual characters on an official website constitute infringement of the font company’s copyright if the characters were generated by the font company’s font software? In other words, do individual characters generated by a font company’s copyrighted computer font software constitute independent “works” as defined under the Copyright Law?
  2. Since the Statement of Intellectual Property Rights for Computer Fonts appended to the Notice Letter on Font Use includes a statement restricting the software users’ right to use the font, does this statement constitute a definite, reasonable and effective restriction on software purchasers? In other words, does it legally bind software purchasers?

Although the Copyright Law and its judicial interpretations do not directly address these foregoing issues, two precedents exist with facts that are similar to the above-described case. A brief introduction to these precedents is given below in order to better understand and analyze the legal risks in this case.  :

Case 1: Peking University Founder Group v. Blizzard Entertainment Inc., re copyright infringement, 2010

Brief Introduction: Peking University Founder Group (hereinafter “Founder Group”) is the copyright owner of five Founder fonts in the Founder Lanting Font Library V5.0 including the Founder Northern Wei Dynasty Regular Script (GBK). Blizzard Entertainment Inc. (hereinafter “Blizzard”) is the copyright owner of the online game World of Warcraft. Blizzard authorized Shanghai The9 Information Technology Co., Ltd. (hereinafter “The9 Company”) to sinocize and operate the game in mainland China. Founder Group suspected that Blizzard Entertainment reproduced and installed its five copyrighted fonts in the game’s client-side without authorization. Furthermore, during the operation of the game, Chinese characters in the various interfaces used the foregoing five fonts. Consequently, Founder Group asserted that Blizzard’s acts infringed its computer software copyrights in the five fonts as well as the fine art work copyrights in each of the Chinese characters therein. It filed a lawsuit with the Beijing Higher People’s Court.

The trial court, the Beijing Higher People’s Court, held that the font library does not fall within the scope of “programs” under the Regulations for the Protection of Computer Software. Nevertheless, since each of the fonts expressed the creator’s originality, the fonts should be classified as works of fine art protected under the Copyright Law and its Implementing Regulations.

Nevertheless, the appeals court, the Supreme People’s Court, held that (i) the Founder Lanting Font Library should be protected under the Copyright Law as computer software instead of works of fine art; (ii) an individual Chinese character generated by a computer font library can be considered a work of fine art only when it incorporates originality as defined under copyright law; and (iii) an individual Chinese character generated by a computer font library, regardless of whether or not a work of fine art, can be used to restrict others’ legitimate right to use Chinese characters to express certain thoughts or communicate certain information.

Based on the foregoing case the Supreme People’s Court’s view was that the Founder font software alone was worthy of protection under the Copyright Law as computer software, while individual characters generated by the software do not fall within the scope of “works” that are protected under the Copyright Law.

Applying the Supreme People’s Court’s view to the facts in this case, we believe that if Company A displays only individual characters generated by computer software on its official website and is not otherwise involved with the font company’s copyright, Company A’s acts are unlikely to constitute infringement.

Case 2: Peking University Founder Group v. P&G Co., Ltd., re copyright infringement, 2011

Brief Introduction: Peking University Founder Group (hereinafter “Founder Group”) is the copyright owner of a series of works of fine art called Founder Qian Style Fonts. In August 2000 Founder Group began producing and selling discs from the Lanting Font Library. P&G Co., Ltd. (hereinafter “P&G) was the manufacturer of the Rejoice series of daily care products. Founder Group believed that since P&G, used the word “飘柔” generated from the Qian Style font library on the foregoing products for commercial purposes without authorization, it infringed Founder Group’s copyrights. Consequently, Founder Group sued P&G in the Beijing Haidian District People’s Court.

P&G argued that the packaging of the disputed “Rejoice” products was designed by NICE Company (a design company) that it had retained, and since it was the design company that directly used the font library and profited therefrom, Founder Group should directly sue the design company instead of the end user of the design, P&G. P&G also argued that individual characters in a font library do not constitute works of fine art. In response Founder Group asserted that when it sold the Qian Style Font Library product, it sold only the software product and did not transfer or authorize the rights to specific characters from the font library that constitute a work of fine art. Users are only authorized to “screen display” and “print output” specific characters from the font library under the licensing agreement, and all other copyrights are reserved. Accordingly, argued Founder Group, a design company is not entitled to commercially re-utilize the design “飘柔” using specific characters generated from the font library product -- if it wants to commercially re-utilize such designs it must obtain authorization from Founder Group.

The trial court, the Beijing Haidian District People’s Court, held that since the Founder Qian Style Font Library incorporated a certain degree of originality and met the requirements for works of fine art under the Copyright Law, it could be protected as a whole; nevertheless, individual characters from the font library could not be protected as works of fine art. Founder Group’s claims that (i) P&G infringed fine art copyrights in the two characters “飘柔” contained in its Qian Style Font Library and (ii) its petition to find P&G liable for infringement for its use of the characters as an end user both lacked legal basis. Consequently, the court dismissed all of the plaintiff’s claims under Item (8), Article 4 of the Regulations for the Implementation of the P.R.C. Copyright Law . 

The appeals court, the Beijing No.1 Intermediate People’s Court, affirmed the trial court judgment and further held that since the two characters “飘柔” were designed by the retained design company using the genuine Founder Qian Style Font Library product, and since Founder Group did not provide any express, reasonable or effective restrictions, the alleged infringing acts were acts of use that the design company could reasonably anticipate as a purchaser of the software. Consequently, the court reasoned, these acts should be deemed to have been performed under an implied license from Founder Group. Since there was no evidence that the design company knew of and accepted the license agreement that was impliedly offered by Founder Group, it was only a unilateral offer with no binding effect on the design company. Furthermore, since the restrictive terms of the license agreement excluded the design company’s main rights as a commercial purchaser, they were unreasonably restrictive terms and therefore were null and void. On that basis, the appeal court affirmed the trial court judgment.

From this case we can see that the Haidian District Court and the Beijing No.1 Intermediate Court adhered to the Supreme People’s Court’s opinions in Case 1, i.e. by ruling that individual characters generated independently from font software do not constitute “works” protected under copyright law. Further, whether the party designing and using the Founder individual-character solutions for the disputed product was legally authorized by the copyright owner Founder Group to use the relevant font software; in other words, whether the Founder font software used by the design company was “genuine software”, was the key point in determining whether P&G’s use of the characters “飘柔” constituted infringement.

Based on the outcome of this case, if font software generating individual characters is genuine software legitimately acquired, subsequent design and use will have a legal basis and further reproduction and distribution of individual characters generated therefrom is still likely to be deemed use “that the purchaser can reasonably anticipate”. In view of this case, even if a font company attempts to restrict the purchaser’s use through a license agreement, the purchaser can reduce its risk of committing infringement to a relatively low level by using the font software to create the design and by further using the design.

As discussed above, the legal issue in this case is not directly provided for under the current Copyright Law and its interpretations. Considering the particularity of this case with respect to the foregoing two precedents, and considering the question of whether the font company’s Statement of Intellectual Property Rights for Computer Fonts attached to the attorney’s letter constitutes a “definite, reasonable and effective restriction” on software purchasers, it is still difficult to make a determination on the issue based on current circumstances and materials.

Based on a comprehensive analysis of the foregoing precedents, however, if a party uses copyrighted computer font software without the authorization of the font company, individual characters generated therefrom will not constitute independent “works” under the copyright law. Consequently, whether the individual characters that Company A used on its official website infringe the font company’s copyright depends on the specific nature of the use. If Company A embeds some or all of the disputed computer font software and uses it as a part of the operational software for its website, it will face a relatively high risk of copyright infringement. By contrast, the use of font software on its web pages simply to display individual characters using the font probably will not constitute infringement under current judicial precedents.

Moreover, to reduce and even to avoid the risk of copyright infringement, companies can outsource such services such as the construction, operation and maintenance of official websites and the design and production of promotional articles to third-party companies. Companies should examine outsourcing contracts before signing them, however, to ensure the legitimacy of the computer font software that is used by the third-party companies. If the software is confirmed to be genuine, it is advisable to further examine the software documentation to identify the scope of authorization. Meanwhile, it is also advisable to insert a term into outsourcing contracts that has third-party companies warrant that their work is non-infringing . On that basis, if any subsequent infringement occurs then a company can pursue the third-party company for breach of contract.