NetEase to Get $3 Million From JOYY in IP Infringement Lawsuit

The court upheld its ruling in favor of NetEase on Thursday, ordering JOYY (former YY Inc.) to pay the damages.

Belinda Zhou
    Dec 26, 2019 12:00 PM  PT
NetEase to Get $3 Million From JOYY in IP Infringement Lawsuit
author: Belinda Zhou   

Chinese game giant NetEase Inc. (Nasdaq: NTES) held its ground on Thursday in the intellectual property infringement case against social media platform JOYY Inc. (Nasdaq: YY).

People's High Court in Guangdong rejected JOYY's appeal in the second instance in a public judgment today. The original judgment in favor of NetEase was upheld.

"The result will have far-reaching significance in the field of intellectual property protection in China and will definitely promote the healthy development of China's live game broadcast industry," NetEase said in an official statement on Thursday. 

The company's stock jumped nearly 2% to $306.04 per share by midday in New York on the news.

The court first ruled in October 2017 that JOYY violated copyright law by using NetEase's online game Fantasy Westward Journey, and was ordered to pay 20 million yuan ($3 million) to the plaintiff in compensation. 

NetEase initially filed in 2014, demanding an apology, an order to stop copyright infringement and a compensation of 100 million yuan. The company claimed that JOYY and its affiliate, game livestreaming platform Huya Inc. (NYSE: HUYA), broadcast "Dream West Journey 2" without authorization, and called out on the infringement of copyright and unfair competition.

Intellectual property law can be used either as a shield or sword in what has become a battlefield of the gaming industry in China.

Separately, JOYY Inc. announced this week that it has changed its name from YY Inc., under which it has been operating since 2005. Based in Guangzhou, it is one of China's largest social media and entertainment platforms. 

Shares in JOYY were trading at $55.01 on Thursday afternoon, down 1%. 

Huya's stock rose 2% to $18 per ADS, while its rival, DouYu International Holdings Ltd. (Nasdaq: DOYU), gained nearly 6%, trading at $8.54 per share by late afternoon.