01 Aug 2018 in Newsletter
The First Case in China Using Blockchain Technology to Preserve Electronic Evidence
On June 28, 2018, the Hangzhou Internet Court of China (the “Court”) made a public judgment regarding a dispute over infringement of the right to disseminate work on the Internet. In this judgment, the Court accepted the use of electronic data as evidence preserved by blockchain technology in a legal dispute while also specifying a method and process for examining electronic data preserved by blockchain technology. This case is significant because it is the first case in China involving the use of blockchain technology to preserve electronic evidence.
Specifically, although electronic data was permitted as a valid form of evidence when the Civil Procedure Law of the People’s Republic of China was amended in 2012, in Huatai v. Daotong, the Court permitted the use of data stored on a blockchain service as evidence. This instance of the Court permitting the use of data stored on a blockchain service was the first of its kind.
The case was filed by local media company Hangzhou Huatai Yimei Culture Media Co., Ltd. (“Huatai”) against technology firm Shenzhen Daotong Technology Development Co., Ltd. (“Daotong”) over copyright infringement. The plaintiff presented to the Court webpage images, website source code, and other relevant evidence that had been stored on a blockchain-based evidence storage platform called Baoquan.com. The evidence was uploaded to the FACTOM and Bitcoin blockchains for preservation.
The Court reviewed the electronic evidence using a practical approach, holding that “for electronic data that is perpetuated and preserved by blockchain or similar technical means, an open and neutral attitude should be taken by the court, and the analysis and determination should be conducted on a case-by-case basis.”
Furthermore, in order to determine the strength of the electronic evidence and whether Huatai’s method of evidence preservation complies with the law, the Court reviewed (1) the qualifications of the evidence preservation platform, (2) the credibility of the technical means for collecting the infringing webpages as evidence, and (3) the method used for preserving the electronic evidence in the blockchain. The remainder of this article will focus on above points (2) and (3) while providing a brief description of the examination process adopted by the Court.
Firstly, regarding above point (2), the Court found that Baoquan retrieved images of the targeted webpages automatically through the Google open source program Puppeteer and obtained source codes of the targeted webpages through Curl. These two platforms are open to all users and the operation processes are automatically completed by the machine according to the systems’ pre-set procedures. Therefore, the Court held that the source of the electronic data was highly reliable. The Court also had an approved judicial authentication center authenticate and confirm the credibility of these two platforms.
Regarding above point (3), the Court first analyzed and evaluated blockchain technology itself and confirmed that blockchain has the characteristics of being tamper-proof. Based on this evaluation, the Courts determined that blockchain should be a reliable method for preserving the content of the electronic data after confirming that the electronic data in suit is saved to the blockchain.
Furthermore, in determining whether the electronic data in suit was actually uploaded, the Court searched the FACTOM blockchain to review transaction hash and the generation time of the contents stored in the FACTOM blockchain. Based on the review, the Court deemed that the generation time of the block height met the time logic between the call log generation time and the FACTOM packaging rules.
Even further, the hash value of the packaged file, which includes the captured webpage images, the source codes, and the call information, downloaded from Baoquan was calculated. The result of the calculation was consistent with the hash value of the electronic data preserved in the blockchain provided by Huatai. Thus, the Court determined that the electronic data was uploaded to the blockchain and had been preserved in integrity without modification.
As a result of the above, the Court confirmed Huatai’s method of evidence preservation complies with the law. Based on the electronic evidence presented, the Court found that the facts of Daotong’s infringement were proved.
Although there are already many third-party evidence preservation platforms like Baoquan that use blockchain technology to preserve electronic evidence, this case is the first in Chinese judicial practice where electronic data was thoroughly reviewed, analyzed, and accepted through a specific examination process. The Hangzhou Internet Court’s pragmatic approach of thoroughly analyzing this new form of evidence preservation is commendable. Therefore, the method and process of examining electronic evidence preserved by blockchain technology adopted in this case is worth consideration and reference by other courts handling similar cases.
 The Civil Procedure Law of the People’s Republic of China, Article 63