Keywords

Right of authorship in characters

Synopsis

Tsuburaya Production Co., Ltd. of Japan (Tsuburaya Japan) produced the Ultraman Tiga series (1-52) in 1996, which created the sci-fi hero Ultraman Tiga, a powerful and cool peace maker. On February 13th, 2009, Tsuburaya Japan executed a certificate to grant Shanghai Century Huachuang Cultural Images Management Co., Ltd. (Shanghai Huachuang) the exclusive right to reproduce, distribute, license and character merchandize the Ultraman Tiga series (1-52) and its character images, and the exclusive right to sublicense such right, in the territory of the Mainland China (excluding Hong Kong, Macau and Taiwan), for a period from February 1st, 2007 to January 31st, 2021. On April 13th, 2009, this was recorded with Shanghai Copyright Office, but the information so recorded did not contain such provision as in the above certificate that Shanghai Huachuang was granted the right to reproduce, distribute the Ultraman Series or its character merchandizing. On July 8th, 2010, Shanghai Huachuang discovered that Hubei Xinyijia Supermarket Co., Ltd. (Xinyijia Supermarket) sold a toy product named “Supertransformer,” which was suspected of infringing the copyright in the character image of Ultraman Tiga. Thus, it brought an action in court. Shanghai Huachuang argued that Xinyijia Supermarket was put on notice of the copyright that Shanghai Huachuang owned in the work, but went on selling the infringing goods bearing the image of Ultraman Tiga. Xinyijia Supermarket, which was subjectively in fault, should be responsible for the civil liability for the infringement. It requested the court to enjoin Xinyijia Supermarket from selling the infringing toy products and pay 30,000 yuan in damages. Xinyijia Supermarket answered that the alleged infringing product came f rom a lawf u l source, it had exercised due care, and should not be held liable. It requested the court to reject the claim of Shanghai Huachuang. The Intermedia te Peop l e ’ s Court of Wuhan, Hubei Province opined that the character image of the Ultraman Tiga may be a copyrightable work, apart and separate from the Ultraman Tiga series copyright, for which the authorship must be demonstrated. Shanghai Huachuang failed to introduce evidence showing the authorship of Ultraman Tiga such as designorship or ownership in the character, it should be responsible for the adverse consequence caused by the failure of burden of proof. The court dismissed the claims of Shanghai Huachang.

Dissatisfied with the judgment, Shanghai Huachuang appealed. The Hubei Higher People’s Court affirmed.

Judge’s comment

This case is a dispute over the infringement of the copyright in the image of the movie/TV character Ultraman Tiga. For the many legal points involved and the novel application of the law by the court, it provides a perspective for academic study. As to whether the image of a character in a movie/ TV product should be protected by the copyright law and how it should be protected, there are different opinions in the academic circle and the judicial practice circle. Although similar cases have been heard by other courts, these courts only state in very general terms that such copyright may be protected and recognized as a common law right.

In this case, through demonstration level by level, the court decided that the character image may be protected separately. The claims of Shanghai Huachuang were dismissed, on the ground that the plaintiff failed to carry its burden of proving its ownership in the copyright of the character image. It overturns the usual idea of common law right in a movie/TV work or in the image of the characters in the work. It motivates the legislation and full protection for movie/TV character images and their related works.

(Recommended by the Hubei Higher People’s Court)

14. Personality right infringement and unfair competition: Yao Ming v. Wuhan Yunhe Shark Sports Products Co., Ltd.

1st Inst Case No.: (2011) WuMinShangChuZi No. 66 Civil Judgment, the Wuhan Intermediate People’s Court
2nd Inst Case No.: (2012) EMinSanZhongZi No. 137 Civil Judgment, the Hubei Higher People’s

Keywords

First case of merge of publicity right and unfair competition

Synopsis

On March 29th, 2011, the case that Yao Ming, the internationally famous basketball star, sued Wuhan Yunhe Shark Sports Products Co., Ltd. (Wuhan Yunhe) for dispute over publicity right infringement and unfair competition was heard by the Wuhan Intermediate People’s Court of Hubei Province. Yao Ming complained that without his consent, Wuhan Yunhe used his name and portrait on its products for marketing purposes the manufacture and sell of “Yao Ming Generation” products have seriously infringed his right of name. Also, these acts and actions of Wuhan Yunhe constituted unfair competition. He requested that the court direct an injunction against Wuhan Yunhe from the infringement, an award of damages in the amount of 10,000,000 yuan, an apology, and elimination of the effect of the infringement.

At trial, the court held that Yao Ming, through his personal efforts, had excelled in the men’s professional basketball area and achieved a good social image and an influence among consumers. His interests that resulted from these achievements should be protected by law. Despite the argument of Wuhan Yunhe that the “Yao Ming” as appearing on its products was not the complaining Yao Ming, it used the image and name of Yao Ming for more than one time, and connected the sports products manufactured and sold by i t with Yao Ming. Taking advantages of Yao Ming’s good social image and influence among consumers, it had misled the consumers about the source of the goods during marketing. These acts, out of bad faith, damaged the name right and publicity right of Yao Ming, constituted unfair competition and should be prohibited. The infringer should be held responsible for civil liability. Thus, the court issued an injunction against Wuhan Yunhe from infringement of the name right and publicity right of, and from competing unfairly against, Yao Ming; make an apology to Yao Ming on a designated medium to eliminate the effect of the infringement and unfair competition; and pay 300,000 yuan to Yao Ming for the economic loss he had sustained as a result of the infringement and unfair competition.

Dissatisfied with the first-instance decision, Yao Ming appealed to the Higher People’s Court of Hubei Province, requesting an order that Wuhan Yuanhe pay damages in the amount of 10,000,000 yuan, together with the court costs for the secondinstance trial and the reasonable costs of Yao Ming in pursuing his remedies. On September 20th, 2012, the Court announced the judgment in public, holding that in determining the compensation, the first-instance court failed to take full account of the nature, outcome and duration of the infringement, and the seriousness of the subjective fault of Wuhan Yunhe in continuing or permitting the infringement even after the formal declaration was made by Yao Ming in March 2010. Therefore, in light of the above elements and considerations, as it was difficult to determine the loss that the infringee sustained as a result of the infringement or the income that the infringer received from the infringement, the Court decided that Wuhan Yunhe should pay Yao Ming 1,000,000 yuan for the economic loss sustained by Yao Ming and his other reasonable costs in seeking remedies.

Judge’s comment

The publicity right has always been a hot spot in academic and practical circles of law. The right, which comprises of the name, portrait, and other external indications or features of the subject, represents huge commercial value in the society of commodity economy. This is especially true to the name or portrait of famous persons. Yao Ming v. Wuhan Yunhe for publicity right infringement and unfair competition dispute has received wide attention from the media and the society, for the fame and influence of Yao Ming and the case itself as being the case of first impression in China. The court not only solved the interests dispute between the parties in a fair and just way, but also selectively applied the Unfair Competition Law, when the personality right concurred with unfair competition. It set a typical example for trying similar cases in the future. Surrounding the claim for 10,000,000 yuan in damages and the reasons of Yao Ming, the second-instance court based its decision on the core of the dispute, conducted a thorough study of legal provisions and justifications, and amended the original judgment to increase the compensation from 300,000 yuan to 1,000,000 yuan. Both of the parties expressed their willingness to obey the judgment once it was announced to public. Thus, it achieved good social effect.

(Recommended by the Hubei Higher People’s Court)

15. iPad trademark dispute: Apple Inc., IP Application Development Ltd. v. Proview Technology (Shenzhen) Co., Ltd.

1st Inst. Case No.: (2010) ShenZhongMinFaSanChuZi No. 208, No. 233 Civil Judgment, the Shenzhen Municipal Intermediate People’s Court
2nd Inst. Case No.: (2012) YueGaoFaMinSanZhongZi No. 8, No. 9 Civil Judgment, the Guangdong Higher People’s Court

Keywords

Mediation as best solution

Synopsis

In 2000, the subsidiaries of Proview Technology Inc. registered the trademark “iPad” in a number of countries and regions in the world. One of them, Proview Technology (Shenzhen) Co. , Ltd. (Proview Shenzhen) registered the trademark in the Mainland China. In 2009, Apple Inc. (Apple) entered into an agreement with one of the subsidiaries in Taiwan (Proview Taiwan), whereby the parties agreed that the iPad trademark be assigned to Apple at a price of ?35,000. The assignment, however, led to a dispute between Apple and Proview Shenzhen in 2010. Apple, which believed it had acquired the iPad trademark on an all-inclusive basis, brought an action before the court, requesting an order that Proview Shenzhen should also assign to it the iPad trademark.

Proview Shenzhen contended that the company and Proview Taiwan were separate entities independent of each other, so that the assignment signed by the latter was not binding upon it. When the dispute occurred, the company was on the verge of bankruptcy, and the creditors involved were in hundreds. The most valuable property was on the valuation of the “iPad” trademark. The Guangdong Higher People’s Court, following an analysis of the advantages and disadvantages, concluded mediation as the best solution to the case. Thanks to the coordination at the three levels of the courts, the judgments by the courts and the interaction with the enforcement authorities, the overall planning, the innovative thinking and the continuing efforts for more than four months, the Court finally successfully mediated between the parties and settled the case at a price of US$ 60,000,000.

Judge’s comment

The successful mediation finally solved the series of disputes among the parties in the US, Hong Kong and the Mainland China. It showed to the international society that the Chinese IP system and judicial protection become more and more mature, with positive comments from the Associated Press of the United States and several other domestic and international news media.

It was also praised by Wang Shengjun, former Chief Justice of the Supreme People’s Court, and Shen Deyong, former Executive Vice President of the Supreme People’s Court that the success “reflected the skills and good practice of the judges who took the whole situation into consideration, used law to resolve the conflict, and solve also the related social issues;” and it was “a true milestone in the IP adjudication of China.”

(Recommended by the Guangdong Higher People’s Court)

16. Design patent infringement dispute: Li Jiankai v. Huang Zefeng

1st Inst. Case No.: (2011) JiangZhongFa(Zhi) ChuZi No. 64 Civil Judgment, the Jiangmen Intermediate People’s Court
2nd Inst. Case No.: (2012) YueGaoFaMinSanZhongZi No. 298 Civil Judgment, the Guangdong Higher People’s Court

Keywords

Case of first impression in China of successful prior art defense to allegation of design patent infringement.

Synopsis

On July 3rd, 2009, Li Jiankai filed an application with the State Intellectual Property Office (SIPO) to apply for a design patent entitled “Folding Legs.” On May 12th, 2010, the SIPO granted the patent and published it on the same day under No. ZL200930081693.1 which remains valid. On September 1st, 2011, Li Jiankai, through notarized purchase, bought from the hardware factory run by Huang Zefeng the alleged infringing product, together with the delivery note and promotional materials. On this account, he sued Huang Zefeng for infringing upon his design patent.

At trial, Huang Zefeng introduced three reference documents as prior art design in defense, arguing that the alleged infringing product did not fall into the protection of the patent in suit.

The first-instance court opined that the alleged infringing folding leg product of Huang Zefeng, in comparison with that of the issued design patent, had the same overall visual appearance and the two are identical. Thus, the alleged infringing product falls into the protection range of the design patent. The prior art references proffered by Huang Zefeng make no defense and defendant should be liable for injunction against its manufacture and sales, destruction of the remaining infringing products with any related promotional materials, and payment to Li Jiankai 30,000 yuan in damages.

Dissatisfied with the decision below, Huang Zefeng appealed, contending that the alleged infringing product did not fall within the protection range of the design patent, and that the prior design defense was tenable.

The second-instance court held that the alleged infringing product is the practice of prior art without infringing the Li Jiankai patent. The non-infringement defense should be sustained and no infringement liabilities should be imposed. The court vacated the judgment below and dismissed all the complaints of Li Jiankai.

Judge’s comment

This is an IP infringement case of first impression in China where the defendant raised a non-infringement defense based on prior art reference which was sustained by court. In this case, Reference 3 introduced by Huang Zefeng carried a filing date prior to the patent in suit. As pointed out at the National IP Adjudication Workshop by Xi Xiaoming, Vice President of the Supreme People’s Court, where an accused infringer asserts interference application as defense to patent infringement, it could be judged by analogizing prior art defense. In this case, reference 3 was actually an interference of the patent in suit. Because it was filed on October 1st, 2009 before the current Patent Law became effective, it should be governed by the Patent Law 2000, which did not provide for interference. Therefore, pursuant to the spirit of the statement of Vice President Xi, the appellant made a non-infringement defense on account of a prior application by referring to the prior design defense. The judgment proves that China is increasing its efforts in judicial IP protection by clarifying the thinking in the trial of similar cases.

(Recommended by the Guangdong Higher People’s Court)