This is a typical 2025 software copyright civil case selected by local intellectual property court, reflecting a common malicious infringement pattern in China’s SaaS industry. To evade litigation and compensation liability, the actual operator set up multiple independent shell limited companies, separating public platform operation ，fund‑receiving entities and technical development teams. The real controlling entity never appeared on website filings, platform merchant qualification or public contact information, making it extremely difficult for the copyright owner to identify the true infringer at the early investigation stage. In this case, the real infringer is anonymized as Nova Tech Group; three shell companies are named Shell‑A, Shell‑B and Shell‑C respectively. The plaintiff is a software developer holding complete copyright registration for a set of enterprise management SaaS source code.
The plaintiff completed software copyright registration for its enterprise management system in 2022 and invested massive manpower in iterative development. In early 2024, the plaintiff found that a commercial SaaS platform was selling an almost identical enterprise management system at a low price, including core functional modules, database structure and partial original code comments. The infringing platform displayed Shell‑A as the operating entity on website ICP filing and merchant page. When the plaintiff sent formal cease‑and‑desist letters to Shell‑A, this shell company replied that it only provided website technical hosting service and bore no responsibility for software content. Shell‑A had little capital and no independent technical personnel, and its registered address was a virtual office address shared by dozens of enterprises.
The plaintiff initially only sued Shell‑A. During litigation, the defendant submitted evidence claiming that software product development and sales were undertaken by Shell‑B, and the sales proceeds were collected through Shell‑C’s corporate account. Shell‑A, Shell‑B and Shell‑C maintained separate corporate registration information, different legal representatives and independent business licenses, creating formal legal isolation. All three shell companies had thin assets, and none possessed independent R&D capacity for complex SaaS software. If the court only judged liability according to superficial registered entities, the copyright owner would obtain a nominal winning judgment but could hardly realize actual compensation.
Facing such obstruction, the plaintiff applied to the court for evidence preservation and financial document production order, requesting to obtain bank transfer records, internal employee chat records, payroll accounting documents and server access logs of the three shell companies. After the court approved the evidence order, massive factual clues emerged. Payroll data showed that core developers of Shell‑A, Shell‑B and Shell‑C received salaries remitted directly from Nova Tech Group’s bank account. Internal work chats proved that all product iteration plans, pricing strategies and sales decisions were issued by Nova Tech’s management team. Shell‑A, Shell‑B and Shell‑C only performed divided procedural tasks: one was responsible for website filing, one for product sales promotion, and the third for receiving customer payments. These three shell companies had no independent decision‑making power and existed merely as risk‑isolation tools controlled by Nova Tech Group.
The core legal controversy of this case lies in whether the court could disregard the independent corporate personality of multiple shell companies and order the hidden actual controller Nova Tech Group to bear joint and several copyright infringement liability. The defendant argued that each limited company was an independent legal person with separate registration, and the plaintiff could not hold Nova Tech liable without direct signed documents. The intellectual property court analyzed multiple key factors: personnel mixing, fund mixing, business complete dependency and the purpose of setting up shells for illegal risk isolation.
The court held that where a legal person is controlled and used as a tool to evade copyright infringement liabilities, the court may pierce corporate veil under China’s revised Company Law and Civil Code. The three shell companies lacked independent business intentions; their personnel, capital and business activities were completely dominated by Nova Tech Group. Their establishment objective was to cut off legal risks for the actual controller. Therefore, Nova Tech Group, Shell‑A, Shell‑B and Shell‑C constituted joint copyright infringement. The court ordered all defendants to stop copying and distributing the infringing software, and jointly compensate the plaintiff for economic losses plus reasonable rights‑protection costs. The compensation amount included not only direct losses caused by piracy, but also reasonable attorney fees, notarization fees and software forensic appraisal expenses incurred by the plaintiff for tracing hidden infringing subject.
This case delivers practical enlightenment for copyright holders. First, do not only rely on publicly displayed filing as the sole litigation defendant. In network copyright cases, public operation entities are frequently low‑asset shell vehicles. Right holders should actively apply for court‑ordered evidence production to dig out fund flow, personnel relation and internal communication evidence. Second, during pre‑litigation investigation, collect multi‑dimensional clues including salary payment records, server information, social media work content and corporate associated relationship. Third, when multiple shell companies are involved, file joint litigation against both displayed shells and suspected hidden actual controllers, and submit sufficient mixing evidence to support veil‑piercing claim. Without adequate evidence of control relation, the court will not disregard corporate independent personality easily.
Many copyright litigants make the strategic mistake of only suing the superficial shell company. Even winning the case, they face enforcement difficulty because shell entities have no available property. This judgment sets clear judicial guidance: using multi‑layer corporate separation to hide real infringer cannot exempt actual controlling enterprises from civil copyright liability.
1. China Copyright Protection Center official website: https://www.ccopyright.com.cn
2. China IPR Judgment Documents website: https://ipr.court.gov.cn
3. Supreme People’s Court judicial interpretation on copyright civil disputes: https://ipc.court.gov.cn/zh‑cn/news/view‑1021.html
4. International Comparative Legal Guide – Copyright China 2026: https://iclg.com/practice‑areas/copyright‑laws‑and‑regulations/china
