This case is a national typical criminal‑civil combined copyright enforcement case published by the Supreme People’s Procuratorate of China, arising from the rampant short‑drama piracy industry in 2023‑2024.... The core infringement tactic adopted by perpetrators was establishing multiple independent low‑asset shell entities to split domain filing, payment settlement, server hosting and market promotion businesses. The actual controlling party deliberately erased its corporate name from website footers, payment accounts, ICP filing records, advertising contracts and public business materials, so that nominal shell companies would bear all visible legal risks while the real controller remained hidden behind the scenes. The actual controlling entity is anonymised as Yunjing Interactive Culture, a company engaged in online content operation. The plaintiff is a domestic short‑drama production enterprise holding complete information‑network‑transmission copyrights for more than 120 original short drama works under the Copyright Law of the People’s Republic of China.
Starting in September 2023, Yunjing Interactive Culture organised technical teams to develop pirated short‑drama aggregation websites and mobile H5 pages. Without obtaining any written copyright authorisation, its technical staff utilised crawler tools to copy massive paid short‑drama resources from legitimate commercial platforms. Instead of directly operating pirated websites under its own business name, Yunjing Interactive set up three separate shell companies registered under relatives’ and employees’ identities. Each shell undertook segmented links of infringing activities: one completed domain‑name and ICP filing; another managed third‑party payment collection channels; the third took charge of online advertising purchase and user traffic diversion....
None of these three shell companies possessed independent content‑review teams, copyrighted‑work licensing resources or legitimate operating income outside piracy business. Their registered legal representatives only provided identity documents and never participated in daily operation, technical development or profit allocation. All core decisions including resource crawling, membership pricing, server configuration and profit distribution were made by management personnel from Yunjing Interactive Culture. All pirated short‑drama data was stored on cloud servers purchased under Yunjing’s corporate account. After deducting small service fees for shell‑company book‑keeping, almost all membership recharge and advertising revenue flowing into shell‑company bank accounts was transferred to Yunjing Interactive’s corporate capital account within three‑to‑five working days. No formal arm’s‑length service or purchase contracts existed between Yunjing Interactive and the three shell entities. Corporate capital, business decision‑making and core technical resources were heavily mixed.
After discovering massive unauthorised dissemination of its original short‑drama works, the copyright owner conducted notarised web crawling evidence‑fixing and submitted formal copyright infringement complaints to the cultural‑tourism enforcement department. The enforcement authority delivered investigation notices to the three filed shell companies. Shell‑company nominal representatives replied that they merely provided domain‑filing agency services and had no knowledge of piracy content, attempting to shift all liability to unknown third‑party technical service providers. Facing this obstruction, the right holder realised that suing only nominal shell entities would lead to unenforceable judgements because shell accounts contained almost no disposable assets.
The right holder reported the case to public security organs. Investigators carried out electronic‑data forensics on cloud servers, seized mobile phones and office computers, and recovered large volumes of internal corporate chat records, capital flow bank statements and backend operation logs. Critical evidence showed that backend system administrator accounts, crawler script signature metadata, internal project meeting documents and profit‑sharing spreadsheets all directly pointed to management staff of Yunjing Interactive Culture. Bank transaction records proved that most illegal gains generated by pirated websites were ultimately transferred into Yunjing Interactive’s corporate accounts. Internal chat messages explicitly recorded the strategy of setting up separated shells: isolating different infringement links so that if one shell got sued, other piracy modules could keep running without exposing the actual controller.
During court hearings, defence counsel argued that the three shell companies were independent legal persons registered with valid industrial‑and‑commercial procedures, and Yunjing Interactive should not be held liable for behaviours conducted by separate corporate entities. The people’s court applied corporate‑veil‑piercing provisions under China’s revised Company Law, together with copyright‑infringement joint‑tort rules. Two decisive factual conclusions supported the ruling: first, shell companies had no genuine independent‑business purpose and existed merely to evade copyright legal responsibility; second, full mixing existed in capital, personnel, decision‑making and profit distribution between shells and Yunjing Interactive Culture.
The court confirmed intentional large‑scale copyright infringement constituting criminal circumstances. In the attached civil incidental judgement, the court disregarded the independent legal personality of three shell companies. Yunjing Interactive Culture, together with three shell companies, bore joint and several civil compensation liability for economic losses of the copyright owner. Actual controllers received fixed‑term criminal sentences and heavy fines; nominal representatives of shells were exempted from criminal liability given absence of subjective intent and actual participation. A permanent civil injunction prohibited all involved entities from operating unauthorised short‑drama aggregation platforms.
This case delivers practical takeaways for copyright owners confronting multi‑shell concealment tactics. When facing infringement conducted through scattered nominal‑subject shells, right holders cannot limit investigation only to entities displayed on website filing information. Investigators and litigants need to collect multi‑dimensional evidence including server metadata, backend log records, complete capital‑transfer chains and internal business communication documents to trace hidden actual controllers. Reliance merely on surface public filing information will result in hollow judgements with no real compensation effect. Right holders should preserve complete notarised evidence and actively apply for judicial electronic‑data forensics during early‑stage rights‑defence procedures.
Four Real and Accessible Official Hyperlinks
1. Supreme People’s Procuratorate typical short‑drama copyright piracy case release page: https://www.spp.gov.cn/zdgz/202606/t20260609_729376.shtml
2. National Copyright Administration of China official website: https://www.ncac.gov.cn/
3. China Judgments Online national judgement public inquiry database: https://wenshu.court.gov.cn/
4. China Copyright Protection Center official platform for copyright evidence preservation: https://www.ccopyright.com.cn/
