A Cross-Border Copyright Game: Hit IP Meets Free-Riding Marketing
In early 2026, a case heard by the People’s Court of Baoshan District, Shanghai, sounded an intellectual property (IP) protection alert for the booming cultural and creative industry. The copyright owner of the national animated film Ne Zha: Birth of the Demon Child sued a well-known national children’s photography chain, accusing it of launching unauthorized "Nezha" and "Lady Shiji" themed photography packages during the film’s hit run, which constituted copyright infringement and unfair competition.
The uniqueness of this case lies in breaking the industry barrier of "films belong to films, photography belongs to photography", revealing the legal risks of cross-border "free-riding" marketing amid the growing popularity of IP derivative development. The defendant’s defenses were quite representative: there was no competitive relationship due to different main businesses; Nezha was a traditional cultural figure available to everyone; and creative shooting based on cultural hotspots constituted legitimate commercial innovation. However, the court’s judgment clearly drew the legal red line—different industries do not equal non-infringement, and traditional cultural elements are not a exemption pass for the public domain.
Copyright Infringement Determination: Original Expression Is the Core Criterion
The copyright infringement determination in this case reflects the court’s precise application of the idea-expression dichotomy principle. The presiding judge pointed out that although the Nezha image originated from traditional Chinese mythology and belonged to public domain materials, the film creators endowed it with unique original expression through specific artistic techniques.
Non-infringing Part
The alleged infringing image was similar to the film in terms of bun hairstyle and red-black color scheme, but these elements derived from the public domain or prior works and were not originally created by the plaintiff. The most distinctive features of the plaintiff’s work, such as buck teeth and smoky makeup that reflected the rebellious and cute temperament, were not reflected in the infringing image, so no substantial similarity was constituted.
Infringing Part
The mini-version of Lady Shiji, Nezha the Demon Prince, and the barrier beasts were substantially similar to the film works. The defendant uploaded these images to multiple platforms, making them accessible to the public, which infringed the plaintiff’s right of communication through information networks.
This distinction sets an important example: when using traditional cultural IP, public domain elements can be borrowed, but the original expression of others shall not be copied. For the photography industry, shooting "Guochao" (Chinese trendy) themes is not illegal in itself, but directly copying specific shapes, makeup, and character designs from films may cross the infringement boundary.
Unfair Competition Determination: Competitive Relationship Is Not Limited to the Same Industry
Another highlight of the case is the determination of "competitive relationship". The defendant claimed that the two parties belonged to different industries with no direct competitive relationship, thus no unfair competition was constituted. The court corrected this view, pointing out that with the growing popularity of IP derivative development, competitive relationship has expanded from traditional same-industry competition to the competition for intangible assets such as commercial signs and goodwill.
The court held that through extensive promotion and commercial development of the film, the plaintiff had established a stable corresponding relationship with the film title, main character images, classic lines, etc., which served to identify the source of goods and services. The film copyright owner could fully extend its business to the themed photography field through licensing, and there was a potential and indirect competitive relationship between the two parties.
The defendant’s use of relevant commercial signs during the film’s hit run was highly likely to cause consumers to mistakenly believe that its services were associated with the official film, resulting in source confusion. Such free-riding acts not only harmed the legitimate rights and interests of the copyright owner, but also disrupted the market competition order, constituting unfair competition.
This determination aligns with the legislative spirit of the Anti-Unfair Competition Law—it protects market competition order and consumer interests, not just operators in the same industry. In the era of attention economy, the commercial value of IP often transcends its original carrier, and cross-border use that causes confusion or free-rides on goodwill is also regulated by law.
Industry Implications: Compliance Paths for IP Derivative Development
The trial method of this case is also noteworthy. The People’s Court of Baoshan District held the trial at Shanghai University in a circuit court, specially inviting representatives of animation and cultural creative enterprises, university teachers and students to participate, and presented evidence comparison through visual PPT, turning the trial into a vivid open class on IP. This approach of "trying one case, educating the whole industry" reflects the judiciary’s risk early warning function for emerging industries.
For industries keen on IP marketing such as photography studios, catering, and cultural tourism, this case provides the following compliance guidelines:
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Distinguish between reference and plagiarism. Traditional cultural elements can be used for original design, but original fine works of others shall not be copied. It is recommended to establish an internal compliance review mechanism to trace the source of used images, lines, and poster designs.
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Avoid parasitic use. Be cautious about using relevant commercial signs during the hit period of works. Even if copyright infringement is not constituted, it may still constitute unfair competition if consumer confusion is caused.
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Seek legal authorization. Operators who need to use popular IP shall obtain authorization through formal channels. The IP licensing market is becoming increasingly mature, and legal authorization is not only respect for creators’ rights and interests, but also the best choice for enterprises to avoid legal risks.
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Focus on cultivating own IP. Instead of free-riding on hotspots, it is better to create exclusive photography themes and brand images. If the defendant in this case had devoted energy to the development of original themes, it might have established a differentiated competitive advantage.
Conclusion: Striking a Balance Between Protection and Innovation
The judgment of the Nezha case is not intended to restrict the dissemination and use of traditional culture, but to strike a balance between protecting the rights and interests of obligees and the interests of the public domain. As the presiding judge stated, as a landmark creation in China’s animation history, the Nezha film series embodies the painstaking efforts of creators and shall be protected by copyright law; meanwhile, some elements derived from traditional myths still belong to the public domain and can be freely used by the public.
This art of balance is the essence of the IP system—it stimulates innovation and promotes the dissemination of knowledge. For cultural and creative enterprises such as photography studios, respecting others’ IP rights is not only a legal obligation, but also the cornerstone of establishing a sustainable business model. In the blue ocean of IP derivatives, only compliant operation can ensure steady and long-term development.
This case also provides a new model for the judicial protection of the cultural industry. Through circuit trials, visual evidence presentation, and post-trial legal popularization, individual case trials are extended to industry governance, achieving the unity of legal and social effects. It is expected that more such judgments will escort the healthy development of the cultural and creative industry, so that creators of works like Ne Zha can receive due rewards, and the flowers of innovation can bloom more brilliantly in the soil of the rule of law.
Selection Intellectual Property Research Institute
