Chinese Court Recognizes Blockchain-Verified Evidence for the First Time

Perkins Coie
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On June 27, 2018, the Chinese Hangzhou Internet Court announced its decision on a case regarding the infringement of the right of communication through an information network. In a first for Chinese courts, the court accepted electronic data that was stored using blockchain technology as legal evidence. The court also clarified the examination standards for such electronic data.

Factual Background:

This case was filed by the plaintiff, Hangzhou Huatai Yimei Culture Media Co., Ltd. (“Huatai”) against the defendant, Shenzhen Daotong Technology Development Co., Ltd. (“Daotong”). On July 24, 2017, a newspaper published an article discussing an incident and granted Huatai an exclusive right of communication through information networks to the article. However, the same article was then published on a website owned by Daotong without permission.

Although Huatai subsequently requested Daotong to stop the infringement, Daotong ignored the request. As a result, Huatai initiated legal proceedings against Daotong in the Hangzhou Internet Court. Huatai submitted evidence of the alleged infringement, including webpage screenshots and website source code, which were all uploaded to Factom and Bitcoin blockchains through Baoquan.com, a third-party evidence preservation platform based on the blockchain technology.

Court Examination:

To confirm whether Huatai’s approaches to storing evidence complied with Chinese laws and regulations regarding electronic data and to prove the validity of the evidence, the court took the following aspects into consideration: (1) the qualification of the evidence preservation platform; (2) the credibility of the technical method to obtain the evidence on the infringing website; and (3) the integrity of blockchain electronic evidence preservation.

Regarding the first aspect, the court recognized that Baoquan.com is neutral with regard to Huatai and is qualified as a third-party electronic evidence preservation platform.

Regarding the second aspect, the court ascertained that Baoquan.com captures images from target webpages by automatically invoking Puppeteer (a Google open source program). Meanwhile, Baoquan.com also obtains the source code of the target webpages by invoking the curl command. The whole system is open to the public equally, and the operational process is automatically completed. Therefore, the court concluded that the source of the electronic data obtained via this system was highly reliable. In this case, the screenshots captured through Puppeteer indicate that the above-mentioned article published on the website of Daotong in 2017 was exactly the same as the article at issue.

Finally, with regards to the third aspect, through analyzing the theory of the blockchain technology, the court confirmed that the distributed database of blockchain makes it difficult to tamper with or delete the data stored on the blockchain. Accordingly, if the electronic data at issue can be proved to have been saved to a blockchain, this method of maintaining the integrity of contents should be reliable.

For this case, the court further examined the two following aspects to confirm that the electronic data had been uploaded to the blockchain: (i) whether the electronic data had truly been uploaded; and (ii) whether the uploaded electronic data is the electronic data at issue. The court calculated and compared the hash value of the contents contained in the block node in the Bitcoin blockchain, the contents stored in the Factom blockchain, and the file that packaged and compressed the webpage screenshots, source code, and invocation information downloaded from Baoquan.com. Since all the values were confirmed to be consistent, the court found that the electronic data had been actually uploaded into the Factom blockchain and Bitcoin blockchain, and such electronic data had been preserved completely without any change since being uploaded.

In summary, the court concluded that the electronic data stored and secured with blockchain and other technologies should be analyzed and determined on a case-by-case basis. The standard for determining the validity of electronic evidence should not be raised because the relevant technologies are novel, nor should it be lowered because of the difficulty of tampering with or deleting the electronic data. The effectiveness of evidence should be determined in a comprehensive manner according to relevant laws and regulations, where the emphasis should be on the examination of the data source and content integrity, security of the technical method, etc.

Based on the above analysis, the court recognized the reliability and integrity of the blockchain-based electronic data at issue, finding that the action of Daotong infringed Huatai’s right of communication through an information network.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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