Legal battle between Qihoo 360 and Tencent

The internet service provider Tencent (plaintiff) owning 600 million-plus users, filed a lawsuit against three defendants including Qihoo 360, Qizhi Software Company and Beijing Sanji Networks Company for unfair competition.

Developed by Qizhi Software Company in September 2010, 360 privacy protection tool was launched on 360 website (www.360.cn) which was run by Qihoo and sponsored by Sanji.

On September 27th, 2010, Tencent found that 360 privacy protection tool V1.0Beta could be downloaded from 360 website where a number of inappropriate writings and sayings were found to attack Tencent. Thus Tencent brought the three companies involved to court for unfair competition.

The defendants used the protection tool to spy on QQ2010 software, claiming that Tencent used QQ software to get users' private information, which allegedly severely infringed on users' privacy rights. The defendants also posted a number of articles on 360 websites, saying that Tencent had used its software to spy on its users by scanning the hard drive for quite a long time.

Tencent held that the defendants' remarks had deliberately and seriously distorted the truth and damaged Tencent's commercial reputation and public image, constituting unfair competition. Therefore, the plaintiff required the court to order the defendants to stop conducting such activities and make an official apology on 360 website, Sina, Sohu and Netease as well as the homepages of the "Legal Daily" and "China Intellectual Property News" for three consecutive months to eliminate the negative impact. The plaintiff also required the defendants to pay four million yuan in compensation.

In response to the censure, the defendants argued that the protection tool was simply used to monitor the running status of software in background and record documents QQ software had scanned in users' computers and finally send the report to users. The tool as a kind of software was neutral and could not judge whether QQ software had breached users' privacy rights or not. Users would make the judgment themselves according to the monitoring results. The tool helped users monitor the software running in their computers and delivered relevant reports to users objectively. As for the articles posted at 360 website, the main contents of them were the introduction of the function, the principle and the running results of the tool. A large part of the articles never mentioned Tencent or QQ software. For the ones accusing QQ software of infringing on users' privacy rights, the defendants could provide evidences to prove the accusation. Furthermore, the defendants argued that they had never deliberately said any words to malign Tencent and its software. So they required the court to reject the appeal of the plaintiff.

Beijing Sanji Networks Company, the sponsor of 360 website, said that the company did not actually run the website and no evidence could prove that the company was the copyright owner of the disputed tool. Therefore, it required the court to overrule the claim made by Tencent.

The court for the first trial rendered its sentence in line with national laws that the defendants must stop delivering the tool on 360 website and remove all infringing contents on the website. The defendants were also required by the court to make a public apology to Tencent on the homepage of the "Legal Daily" and pay 400 thousand yuan in compensation. Meanwhile, the court rejected other appeals from Tencent.

After losing the case at first instance, the defendants refused to accept the conviction and appealed to Beijing No.2 Intermediate People's Court.

Recently, the case is still under further investigation.