The Shanghai Pudong New Area People’s Court has ordered on Monday, Aug.24, two operators of an Android application to pay 100,000 yuan ($15,613) to a popular video website, iQiyi, for blocking the site’s online advertisements, the Shanghai Daily reported.
The report said that it was the first intellectual property infringement case related to video website advertisements filed in the city court.
According to the report, the two operators blocked iQiyi's advertisements using MoreTV, an app available on set-top boxes, smart televisions and smartphones.
The court also asked the two operators, Qianshan Network Technology and Yueguan Network Technology, to pay an additional 50,000 yuan as attorney's fees to iQiyi. It also ordered the app's operators to release a statement on their homepages for 72 straight hours, admitting unfair competition.
According to iQiyi, the advertisements and membership fees are important sources of income for the company. iQiyi offers free videos online with advertisements, played before the clips and users can avail ad-free viewing by becoming a member.
The report, however, said that with MoreTV app, the ads were removed so that users can watch the videos directly, which the court said was an infringement of iQiyi's intellectual property rights.
iQiyi filed a lawsuit and demanded from the operators more than 1 million yuan in compensation.
The two operators, however, denied that they intentionally blocked the ads and insisted that their app had more to do with crawling video links.
The two firms claimed that the videos and the advertisements were separate files. But iQiyi reasoned that all their video links were encrypted, making it virtually impossible to watch the videos unless they hack its algorithm.
Although both sides have professional assistants to press their case during the trial, the defendants' assistants failed to support their claims in the court.
According to the court's ruling, removing iQiyi's advertisements is similar to stealing part of iQiyi's users, especially those who wanted to enjoy an ad-free experience without paying to be a member, a violation under unfair competition.
Zhu Dan, the chief judge, told Shanghai Daily that professional assistants can help the court to understand the case better and their statements can be accepted as the parties' arguments.