In a first-of-its-kind decision that could impact how future intellectual property disputes in the technology and Internet sector are decided, the Internet Court of Hangzhou, China, ruled that the data stored in a blockchain are admissible evidence to verify the copyright and intellectual property of that copyright or IP holder, due to the immutability and other characteristics of blockchain technology.

In the case, a Hangzhou-based media company, Huatai Yimei, submitted screen-captured images and texts to prove unauthorized use by a Shenzhen technology firm, using a third-party evidence deposition platform called Baoquan.  

One of the main questions in the case was whether blockchain may be used as a legal procedure for ascertaining the authenticity of a piece of evidence. The Internet Court of Hangzhou adopted an open and neutral approach to the emerging blockchain technology, ruling that the blockchain-based electronic evidence deposition can be legally viable on a case-by-case basis.

The Court ruled:

“As a decentralized database, blochchain has characteristics of openness, distributed, and cannot be tampered with. As a electronic data storage platform with the advantages of low cost, high efficiency, and high stability, in the judgement, this type of electronic evidence deposition method shall be held legally valid in accordance with the principle of technological neutrality, technological explanation and review of specific case.”

In China, the legal method of authenticating evidence is traditionally notarization services.  The ruling by the Internet Court of Hangzhou opened the door for alternative forms of authentication.

The Court noted:

“We can't exclude blockchain and other technology or improve the approval standard just because it's a current complex technology. Nor can we lower the standard just because it is tamper-proof and traceable.”

The court ruled in favor of Huatai Yimei and noted that even if the contested infringement was removed at a later date, the evidence stored on the blochchain is significantly valid and is legally approved by the court.

Formally incorporated in August 2017, the Internet Court of Hangzhou is among the earliest in China that processes cases only through the Internet and has the duty to rule on internet-related intellectual property disputes.  The court has also established a dedicated e-evidence platform that provides access to both traditional notarization services and approved third-party services, including blockchain-based evidence platforms.

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