China’s Supreme Court Clarifies Standards for Accepting and Consolidating Counterclaims in Software Copyright Infringement Cases
Published 25 May 2026
Yu Du
On 21 May 2026, the Intellectual Property Court of the Supreme People’s Court of China (SPC) released a guiding adjudication summary in a software copyright infringement case to clarify the standards for accepting counterclaims in such disputes. The SPC confirmed that where a defendant in a software copyright infringement action asserts prior lawful ownership of the software at issue and files a counterclaim challenging the plaintiff’s asserted ownership, the counterclaim will generally satisfy the statutory requirements for consolidated adjudication because the claims are mutually opposing, causally connected, and based on the same core facts concerning software ownership.
Prior Practice
Prior to this SPC ruling, Chinese courts had not adopted a fully consistent approach toward counterclaims in software copyright infringement disputes involving ownership challenges.
In practice, some courts tended to treat ownership disputes merely as defensive arguments rather than independent counterclaims, especially where the defendant challenged the plaintiff’s software copyright registration or asserted prior development rights.
As a result, courts in certain cases refused to formally accept counterclaims on the ground that the issues could already be addressed within the infringement defense framework. This inconsistency created procedural uncertainty and increased the risk of fragmented proceedings and conflicting judgments.
Case Background
The dispute arose from a software copyright infringement action filed by Dong Company against Hunan Hua Company, Long, Changsha Yuan Company, and Long Company. Dong Company alleged that the defendants infringed software developed in October 2010 by Zhou, Dong Company’s legal representative.
In response, Hunan Hua Company, Long, and Changsha Yuan Company (collectively, the “Counterclaimants”) filed a counterclaim, asserting that the disputed software had in fact been derived from software independently developed by Pang in June 2005 and later assigned to Long. The Counterclaimants argued that the two software programs were substantially similar and challenged the validity of Dong Company’s software copyright registration.
The parties submitted competing software copyright registration certificates showing completion and registration dates of 2005 and 2010 respectively, together with evidence preliminarily indicating substantial similarity between the two software systems.
The court of first instance refused to accept the counterclaim, holding that the counterclaim could instead be raised as a defense and should not be consolidated with the principal infringement action. The Counterclaimants appealed.
On 14 November 2024, the SPC revoked the first-instance ruling and ordered the lower court to accept the counterclaim.
The SPC’s Key Judicial Opinions
1. A defendant may raise ownership through both defense and counterclaim
The SPC first emphasized that a software copyright registration certificate constitutes only prima facie evidence of ownership under the Regulations on Computer Software Protection and the Measures for the Registration of Computer Software Copyright.
Accordingly, where a defendant claims prior lawful ownership of the software at issue, the defendant is entitled not only to raise such arguments as a defense, but also to file a counterclaim pursuant to the Civil Procedure Law. The SPC expressly corrected the lower court’s view that a counterclaim was unnecessary merely because the ownership challenge could be asserted defensively.
The ruling underscores that the right to file a counterclaim is an important procedural right of defendants in civil litigation.
2. Counterclaims concerning software ownership should generally be consolidated with the main action
The SPC further held that where the defendant’s counterclaim directly challenges the ownership basis of the plaintiff’s asserted software copyright, the counterclaim and the principal action are inherently interconnected.
The Court reasoned that the claims are mutually exclusive and depend upon the same underlying factual determination - namely, ownership of the disputed software. Because both claims arise from substantially identical factual circumstances, they fall within the circumstances contemplated by Article 233 of the SPC’s Interpretations on the Application of the PRC Civil Procedure Law.
The SPC notably stated:
“The claims in the principal action and the counterclaim mutually negate each other, there is a causal relationship between the claims, and both involve the fundamental fact of ownership of the software copyright at issue. Therefore, the principal claims, counterclaims, and evidence in the case should be considered and examined together. It is inappropriate to artificially separate the principal action and the counterclaim into different proceedings, thereby turning one case into multiple cases. Such fragmentation would not only increase the litigation burden on the parties, but also easily lead to conflicting judgments or situations in which different cases ‘wait’ upon one another, which is not conducive to the substantive resolution of disputes.”
The Court therefore stressed judicial efficiency, procedural economy, and consistency of adjudication as important considerations supporting consolidated trial.
3. The counterclaim did not fall within any statutory grounds for refusal
Finally, the SPC concluded that none of the statutory grounds for refusing a counterclaim were present in this case.
The Court referred to Articles 143, 232, and 233 of the Civil Procedure Law and the SPC’s judicial interpretations, which permit consolidated adjudication where the claims are causally related, arise from the same facts, or involve the same legal relationship.
The SPC emphasized that refusal is appropriate only where the counterclaim falls under the exclusive jurisdiction of another court or bears no factual or legal connection to the principal action. In this dispute, however, both the principal action and the counterclaim centered on the ownership of substantially similar software and therefore possessed a sufficiently close connection to justify joint adjudication.
Comment
This decision is significant because it provides an authoritative clarification of an issue that had previously been treated inconsistently in judicial practice. The ruling also reflects the SPC’s broader preference for procedural efficiency and substantive dispute resolution. The decision may therefore serve as an important procedural reference for future software copyright disputes involving competing ownership claims or challenges to copyright registrations.
By encouraging consolidated adjudication of interrelated ownership and infringement claims, the Court seeks to reduce duplicative litigation, avoid inconsistent judgments, and lower litigation costs for parties. Parties accused of infringement may now rely more confidently on counterclaims challenging ownership or registration validity, rather than being confined to defensive arguments alone.
Prior Practice
Prior to this SPC ruling, Chinese courts had not adopted a fully consistent approach toward counterclaims in software copyright infringement disputes involving ownership challenges.
In practice, some courts tended to treat ownership disputes merely as defensive arguments rather than independent counterclaims, especially where the defendant challenged the plaintiff’s software copyright registration or asserted prior development rights.
As a result, courts in certain cases refused to formally accept counterclaims on the ground that the issues could already be addressed within the infringement defense framework. This inconsistency created procedural uncertainty and increased the risk of fragmented proceedings and conflicting judgments.
Case Background
The dispute arose from a software copyright infringement action filed by Dong Company against Hunan Hua Company, Long, Changsha Yuan Company, and Long Company. Dong Company alleged that the defendants infringed software developed in October 2010 by Zhou, Dong Company’s legal representative.
In response, Hunan Hua Company, Long, and Changsha Yuan Company (collectively, the “Counterclaimants”) filed a counterclaim, asserting that the disputed software had in fact been derived from software independently developed by Pang in June 2005 and later assigned to Long. The Counterclaimants argued that the two software programs were substantially similar and challenged the validity of Dong Company’s software copyright registration.
The parties submitted competing software copyright registration certificates showing completion and registration dates of 2005 and 2010 respectively, together with evidence preliminarily indicating substantial similarity between the two software systems.
The court of first instance refused to accept the counterclaim, holding that the counterclaim could instead be raised as a defense and should not be consolidated with the principal infringement action. The Counterclaimants appealed.
On 14 November 2024, the SPC revoked the first-instance ruling and ordered the lower court to accept the counterclaim.
The SPC’s Key Judicial Opinions
1. A defendant may raise ownership through both defense and counterclaim
The SPC first emphasized that a software copyright registration certificate constitutes only prima facie evidence of ownership under the Regulations on Computer Software Protection and the Measures for the Registration of Computer Software Copyright.
Accordingly, where a defendant claims prior lawful ownership of the software at issue, the defendant is entitled not only to raise such arguments as a defense, but also to file a counterclaim pursuant to the Civil Procedure Law. The SPC expressly corrected the lower court’s view that a counterclaim was unnecessary merely because the ownership challenge could be asserted defensively.
The ruling underscores that the right to file a counterclaim is an important procedural right of defendants in civil litigation.
2. Counterclaims concerning software ownership should generally be consolidated with the main action
The SPC further held that where the defendant’s counterclaim directly challenges the ownership basis of the plaintiff’s asserted software copyright, the counterclaim and the principal action are inherently interconnected.
The Court reasoned that the claims are mutually exclusive and depend upon the same underlying factual determination - namely, ownership of the disputed software. Because both claims arise from substantially identical factual circumstances, they fall within the circumstances contemplated by Article 233 of the SPC’s Interpretations on the Application of the PRC Civil Procedure Law.
The SPC notably stated:
“The claims in the principal action and the counterclaim mutually negate each other, there is a causal relationship between the claims, and both involve the fundamental fact of ownership of the software copyright at issue. Therefore, the principal claims, counterclaims, and evidence in the case should be considered and examined together. It is inappropriate to artificially separate the principal action and the counterclaim into different proceedings, thereby turning one case into multiple cases. Such fragmentation would not only increase the litigation burden on the parties, but also easily lead to conflicting judgments or situations in which different cases ‘wait’ upon one another, which is not conducive to the substantive resolution of disputes.”
The Court therefore stressed judicial efficiency, procedural economy, and consistency of adjudication as important considerations supporting consolidated trial.
3. The counterclaim did not fall within any statutory grounds for refusal
Finally, the SPC concluded that none of the statutory grounds for refusing a counterclaim were present in this case.
The Court referred to Articles 143, 232, and 233 of the Civil Procedure Law and the SPC’s judicial interpretations, which permit consolidated adjudication where the claims are causally related, arise from the same facts, or involve the same legal relationship.
The SPC emphasized that refusal is appropriate only where the counterclaim falls under the exclusive jurisdiction of another court or bears no factual or legal connection to the principal action. In this dispute, however, both the principal action and the counterclaim centered on the ownership of substantially similar software and therefore possessed a sufficiently close connection to justify joint adjudication.
Comment
This decision is significant because it provides an authoritative clarification of an issue that had previously been treated inconsistently in judicial practice. The ruling also reflects the SPC’s broader preference for procedural efficiency and substantive dispute resolution. The decision may therefore serve as an important procedural reference for future software copyright disputes involving competing ownership claims or challenges to copyright registrations.
By encouraging consolidated adjudication of interrelated ownership and infringement claims, the Court seeks to reduce duplicative litigation, avoid inconsistent judgments, and lower litigation costs for parties. Parties accused of infringement may now rely more confidently on counterclaims challenging ownership or registration validity, rather than being confined to defensive arguments alone.