China-South culture "Ghost Blows Out the Lamp" disputes or intellectual property risks involving intellectual property violations

Behind the huge economic benefits generated by the super IP "Ghost Blows Out the Lamp", it is involved in many copyright lawsuits. Recently, Zhongnan Red Culture Co., Ltd.(hereinafter referred to as "Zhongnan Culture") was involved in the IP dispute of "Ghost Blows Out the Lamp" due to a 450 million yuan acquisition, which attracted much attention.

Recently, Zhongnan Culture announced the progress of the acquisition of Beijing Xinhua Pioneer Culture Media Co., Ltd.(hereinafter referred to as "Xinhua Pioneer"). The announcement disclosed that Xinhua Pioneer, as one of the defendants, was involved in 6 litigation cases, all of which involved "Ghost Blows Out the Lamp" IP, with a total litigation amount of more than 50 million yuan.

In response, the reporter sent a phone call on July 28 and sent a letter to interview relevant aspects of Central and South Culture. The other party refused the interview on the grounds that the secretary of the board of directors was not present. Zhongnan Culture stated in an interview before this that the seller had promised the listed company that if the target company incurred litigation before this acquisition and caused losses, the seller would bear all losses.

This

disclosure by a listed company or Zhongnan Culture involved in breach of credit regulations surprised the industry, because Zhongnan Culture has not only never mentioned the above case since it began planning the acquisition in October 2015, but also made a statement on the acquisition in June this year. In the announcement of assets, it was clearly stated that "the target of this acquisition is 100% equity of Xinhua Pioneer. There is no mortgage, pledge or other third-party rights in the equity, there are no major disputes, litigation or arbitration matters involving the equity, and there are no judicial measures such as seizure or freezing."

In this regard, Zhongnan Culture explained in a new announcement that according to the contract signed by Xinhua Pioneer and Zhang Muye, Zhang Muye authorized the relevant rights of some of his works to Xinhua Pioneer. The contract signing party for the works involved in this litigation case was mainly Publishing technology, not Xinhua Pioneer; At the same time, the subject matter of this lawsuit is all book copyrights, which are currently attributed to "Publishing Technology", a subsidiary company of Xinhua Pioneer. This company is not within the scope of the acquisition by the listed company. The subject matter of the acquisition "Xinhua Pioneer and Horgos Pioneer" will be mainly responsible for the operation of other copyright in addition to book copyrights in the future (including movies, TV series, online dramas, games, stage dramas, variety shows, animation adaptations, etc.).

In the eyes of industry insiders, the purpose of Zhongnan Culture being so "candid" this time is to reduce its acquisition risks. "Taking IP as the focus for publicity purposes and distancing litigation for acquisition purposes are actually just the company's marketing needs in a specific period of time."

Deng Xueping, senior partner of Jingheng Law Group's Shanghai office, said that this kind of behavior by Zhongnan Culture may involve illegal information disclosure. Deng Xueping mentioned that Article 63 of the Securities Law stipulates that the information disclosed by issuers and listed companies in accordance with the law must be true, accurate and complete, and must not contain false records, misleading statements or major omissions.

"In short, for such major acquisitions, information should be disclosed in a timely manner. If it deliberately conceals and deliberately fails to disclose, then according to the Securities Law, the listed company shall be liable for compensation if investment losses are caused. The China Securities Regulatory Commission may order corrections and take regulatory measures such as regulatory interviews, issuing warning letters, and ordering suspension or cessation of acquisitions." Deng Xueping said that if the circumstances are serious, they may be suspected of "violating regulations and failing to disclose important information."

Hot IP robberies continue to highlight the intellectual property crisis

. The news that Xinhua Pioneer is involved in a lawsuit of 50 million yuan has caused the industry to worry about the acquisition of Zhongnan Culture. In this regard, Wu Qingfeng, vice president of Zhongnan Culture, previously stated in an interview that the litigation matters have been handled by the major shareholders of Xinhua Pioneer, and the profit forecast does not include works related to "Ghost Blows Out the Lantern".

Zhongnan Culture also pointed out in the announcement that Xinhua Pioneer is currently one of the few modern new media Internet + companies in China that has the integration of Internet publishing rights (Xinhua Reading Network), physical book publishing and film and television adaptation throughout the industry chain. It owns a large number of famous writers such as Wang Meng, Yan Geling, Liang Xiaosheng, Tianxia Ba Chang, Liu Meng, Ji Lianhai, and Xu Kaizhen. At the same time, a group of newcomers will be launched every year. After the acquisition of Xinhua Pioneer, Zhongnan Culture can open up the entire cultural and entertainment industry operations, which is expected to achieve good market synergy between movies, TV series, games and derivatives in the future with the same high-quality IP, and truly become a comprehensive cultural enterprise from IP source to derivatives. Layout.

"The target of our acquisition did not include Ghost Blows Out the Lantern as the core IP of the target company. At that time, Xinhua Pioneer did not include Ghost Blows Out the Lantern's revenue when making profit forecasts. In other words, the Xinhua Pioneer acquired by Zhongnan Culture does not include Ghost Blows Out the Lantern itself." Wu Qingfeng said.

The company stated that the litigation matters were covered by Xinhua Pioneer

until the early morning of July 19. Reporters searched for a total of 263000 pieces of information on the Baidu website for "Ghost Blows the Light IP Dispute", while the search for "IP Dispute" reached 1.6 million pieces. In fact, in addition to Zhongnan Culture's pioneering technology that is deeply involved in the "Ghost Blows the Lantern IP battle", these listed companies include Lu Chuan's "Nine-Layer Demon Tower", director Wu Ershan's "The Quest for the Dragon", and the online dramas "Ghost Blows the Lantern" and "Touching the Golden Fu" and two versions of the "Ghost Blows the Lantern" mobile game under development. These listed companies have all been involved in this IP war.

Industry observers pointed out that the current various IP disputes surrounding "Ghost Blows Out the Lamp" are actually a fierce pain and rebound after IP regained its value positioning after a long period of domestic disregard for intellectual property rights and various tricks. The "Ghost Blows Out the Lamp" dispute is actually more a "resentment" gathering and a "punching bag" of a large number of IPs who have not received reasonable copyright income for a long time. "This is a belated fine paid by some companies for their past disregard for copyright at a time when IP is booming."

Deng Xueping said that the strong market appeal of the Ghost Blowing the Lantern series has led people from all walks of life to intervene in it, all wanting to get a piece of the pie by getting involved with "Ghost Blowing the Lantern". This is caused by the popularity of copycat culture in China and insufficient attention to intellectual property rights including copyright.

Editor: vian