China patent: Courts respond positively to blockchain evidence
A China court recently issued Guidelines on Implementation of the Most Stringent Judicial Protection of Intellectual Property Rights to Provide Judicial Guarantees for High Quality Development (guidelines). The guidelines issued by the Jiangsu High Court, cover a wide range of topics, such as punitive damages for wilful infringement, restriction of malicious prosecution, support of reasonable attorney's fee, etc. This report focuses on the authentication and admissibility of blockchain evidence.
The guidelines stipulate in Article 9 that evidence collected or preserved with modern technologies should be allowed according to the law. If evidence is preserved using timestamp, blockchain, and other devices, or is obtained with remote login control realised with Telnet commands, judges should recognise the evidence if it meets the standard of proof.
Without a US-style discovery process, Chinese litigants usually have to use their own resources to produce evidence. For digital evidence such as webpages and documents, which is by nature easily tampered with and destroyed later on, the litigants usually need to store the evidence in advance under witness of a notary public in order to guarantee the integrity of the evidence. However, notarisation can be disproportionately costly, especially for cases where the amount of damages is relatively small.
As an encryption technology, blockchain offers a strong tamper-proof technical measure with a cost remarkably lower than notarisation. Notarisation of 100 pages of documents or screenshots of webpages could cost at least RMB 1,000 to 2,000 (USD140 to 280), while blockchain deposition services would cost as little as RMB 10 (USD1.4).
In June 2018, Hangzhou Internet Court admitted blockchain-authenticated evidence in a copyright case in which the plaintiff used a third-party blockchain deposition service to secure online webpage evidence of the alleged copyright infringement. This was the first court to do so in the country. In the case, the plaintiff used a snapshot of webpages of the defendant as evidence of copyright infringement. Prior to filing the case, a third-party blockchain platform, Baoquan.com, was used to securely capture and store the snapshot. The blockchain platform obtained a copy of the snapshot, source code of the webpage, and invocation log, packed them in a package file and calculated the hash value of package file, and then uploaded the hash value to blockchains, which enabled the court to determine that the package file downloaded from Baoquan.com was intact. It did this by comparing the hash value of the downloaded package file and the hash value stored on the blockchains.
In September 2018, the Supreme People's Court officially issued the Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Cases by Internet Courts. Article 11, Paragraph 2 of the provisions specifies that "[f]or electronic data submitted by the parties concerned, if collected through electronic signature, trusted timestamping, hash value verification, blockchain and other evidence collection, and verified with retention and tamper-proof technical means or via the electronic forensics and deposit platform, which are able to prove its authenticity, the Internet Court shall confirm its authenticity." The rule thus confirmed the practice of Hangzhou Internet Court and expanded it to all the three Internet courts.
After the issue of the provisions, the Internet courts of Hangzhou, Beijing, and Guangzhou launched their own blockchain platforms to increase credibility of generating, storing, distributing, and using electronic data. The courts have cooperated on third-party evidence deposition platforms. The user stores the digital evidence on a third-party evidence deposition platform which directly stores the calculated hash values of the digital evidence on the court's blockchain. This helps both the judges and the litigants.
In spite of the above developments, blockchain evidence is still seen by many as only acceptable for use by Internet courts. The guidelines by the Jiangsu High Court could extensively extend the practice. In practice, all courts in the Jiangsu province would follow the provisions when hearing intellectual property cases.
There are a few cases so far that can be used as a reference for how the courts examine blockchain evidence. According to the Hangzhou Internet Court mentioned above, the court examines if the evidence storage platform is legal and neutral, if the technology used for deposit of the evidence is reliable, and if the electronic data has been tampered with. The court points out that blockchain evidence should be determined in a comprehensive manner and on a case-by-case basis. The emphasis should be on examination of the source of electronic data and the content integrity, security of the technical means, reliability of the methods, legitimacy of formation, and degree of association with other evidence.
We will keep a close eye on the developments relating to admitting and authenticating electronic evidence like blockchain evidence.
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