Keywords

Judgment of full amount prayed for; Civil sanction measures

Synopsis

In this case, the plaintiff Bayerische Motoren Werke Aktiengesellschaft of Germany (BMW) is the owner of registered trademarks “BMW,” “,” and “宝马” (Chinese transliteration of BMW) in China in Class 12 for vehicles, as well as “” in Class 25 for clothing. BMW bought the alleged infringing clothes in the defendant Li Shuzhi’s store. On the clothes, it was stated clearly that the manufacture is Guangzhou Century Baochi Garment Industrial Co., Ltd. (Century Baochi) with marks such as “,” “FENGBAOMAFENG and “,” “丰宝马丰FENGBAOMAFENG and “,” Meanwhile, the “FENGBAOMAFENG and Devices” marks were also prominently displayd in Century Baochi’s website and stores. BMW sued for trademark infringement and unfair competition, seeking an injunction and 2,000,000 yuan in damages.

Upon hearing the case, the court found that the marks “,” “FENGBAOMAFENG and “,” etc., which were prominently used by Century Baochi on the clothes it produced as well as associated tags, packages, brochures and website, were similar to BMW’s trademark “,” constituting infringement on BMW’s exclusive trademark right. Meanwhile, Century Baochi’s use the company name “Century Baochi Group Ltd. Of Germany” on its clothing tags, packages, brochures and website was in bad faith, to trade on BMW’s goodwill in contradiction with generally accepted business ethics, thereby engaging in unfair competition. The evidence adduced by BMW was sufficient to prove the bad faith of Century Baochi in its infringing activities, the extended duration and scope of its infringement, and its unjust enrichment well exceeding the 2,000,000 yuan, making it an aggravated circumstance. Moreover, since the BMW marks enjoy a significant reputation, and BMW had incurred reasonable expenses for the infringement case, its pray for monetary damages ought to be granted in full, hopefully to adequately protect the legitimate interests of the right holder, raise the cost of infringement, and lower the cost for preserving rights. Accordingly, a permanent injunction was issued against defendant, defendant was ordered to eliminate the adverse effects, and 2,000,000 yuan was awarded for damages. Meanwhile, a fine of 100,000 yuan was imposed as civil sanctions.

Judge’s comment

This case involves a record amount of damages of all trademark infringement cases that were concluded by the people’s courts of Beijing in 2012. In the trial process, the court once again clarified that the evidences submitted by the right holder in this case are sufficient in proving that the alleged infringer produced and sold infringing products in large amounts with obvious bad faith, and that the infringement had lasted for a long time in a wide range and had generated huge profits far exceeding the compensation claimed by the plaintiff, the court may exceed the compensation cap of 500,000 yuan as provided in the Trademark Law, in order to fully realize the right holder’s interests, raise tort costs and reduce the costs in safeguarding legal rights and interests. In circumstances where the administrative authorities have not meted out administrative punishments, the court may implement c ivil sanctions in accordance with the provisions of the Civil Law, the Trademark Law, the Implementing Regulations of the Trademark Law, as well as relevant judicial interpretations. This case serves as a reflection of the people’s courts’ efforts in providing equal protection to both foreign and domestic right holders and maintaining a fair and orderly market economic order, as well as their determination and practices in strengthening IP protection.

(Recommended by the Beijing Higher People’s Court)

2. Trademark infringement case over the “Le Coq Sportif” trademark

1st Inst. Case No.: (2011) ErZhongMinChuZi No. 11699 Civil Judgment, the Beijing Second Intermediate People’s Court
2nd Inst. Case No.: (2012) GaoMinZhongZi No. 3969 Civil Judgment, the Beijing Higher People’s Court

Keywords

Group buying websites shall bear certain examination duties as sellers

Synopsis

Descente, Ltd. (plaintiff) registered trademark “” in Class 25 for “clothing, footwear, headgear.” The two defendants Beijing Jinridushi Company (Jinridushi) and Shenzhen Xiu Network Technology Co., Ltd. (Xiu.com) entered into a “Promotion Contract” which stipulates that Jinridushi, as the operator of Didatuan.com, shal l provide a limited-time group buy platform for the promotion of Xiu.com’s “Le Coq Sportif ” sport shoes. Jinridushi released the following group buying information on Didatuan.com, “… pay 99 yuan (including shipping) for one pair of the French Le Coq Sportif sneakers (original priced 480 yuan) offered by Xiu.com. The shoes are guaranteed to be 100% authentic!” The selling page also released photos of the aforesaid sneakers and used the mark “” on it. A total of 1,858 people purchased the product. The packing boxes of the shoes were decorated with marks identical to the “” trademark; on one side of the box there was a French commodity label marked with a Chinese sentence “Xiu.com Code 1005684, Price 480 yuan;” the top of the shoes were marked with “” and “Le Coq Sportif;” and the insoles were labeled “Exporter: Distrinando S.A.” Descente then filed a law suit for trademark infringement, seeking an injunction against the two defenda n t s , elimination of the adverse effects, and joint liabilities for damages of 500,000 yuan with cost of 35,000 yuan.

After trial , the court found infringement by Xiu.com of Descente’s registered trademark because, firstly, Xiu.com should be fully aware that the sport shoes it sold with the marks “” and “Le Coq Sportif” on them infringed the registered trademark right of Descente; and secondly, the infringing products it sold lacked of legal sources. Jinridushi, as a rather influential group buying website in China, did not directly sell commodities to consumers on its selling platform, but adopted limited time offers to encourage consumers to buy their recommended products actively so as to fulfill its cooperation with Xiu.com. Therefore, the two defendants should be deemed as joint sellers. Analyzing from the scale and volume of the group buyings organized by Jinridushi as well as the operation mode of the company, it is believed that Jinridushi shall have the ability to conduct appropriate reviews on the products but failed to fulfill the review obligation. Accordingly, Jinridushi was deemed as infringed the registered trademark right of Descente. Thus, the court ordered that the defendants stop infringement, eliminate ill effects, and compensate 110,000 yuan for the plaintiff’s economic losses.

Judge’s comment

E-commerce is increasingly important in modern life while the forms of e-commerce services vary. The typical significance of this case lies in that it defined the nature of group buying websites as sellers and clarified their legal responsibilities as well as their obligations on reviewing the source and right status of the goods. By endowing group buying websites with the legal status as sellers and a certain degree of obligations for prior examination, it will not only contribute to protecting IP during e-commerce transactions and reducing infringement activities, but also help consumers safeguard their legitimate rights. The trial of this case has important meanings in promoting the sound development of e-commerce and maintaining a legitimate and orderly e-commerce environment.

(Recommended by the Beijing Higher Peoples’ Court)

3. Inventor’s signature right dispute: Lei Guang and Li Naiqiang v. Seven defendants including Huang Li with Shangdong Hilead Biotechnology Co., Ltd. as a third party

1st Inst. Case No.: (2012) YiZhongMinChuZi No. 1284 Civil Judgment, the Beijing First Intermediate People’s Court
2nd Inst. Case No.: (2012) GaoMinZhongZi No. 3975 Civil Judgment, the Beijing Higher People’s Court

Keywords

Accessibility and having no substantive features shall be essential factors in defining patent copycat

Synopsis

On August 7th 2006, Cathay Industrial Biotech Ltd. (Cathy) filed a patent application under No. ZL20610029784.6 for “a kind of longcarbon-chain dicarboxylic acid with fatty acids or their derivatives thereof as raw materials, and its preparing process,” which was published on February 13th 2008, and granted on March 9th 2011 (the existing patent). On December 12th 2011, SIPO issued a notification, which verified the formality and approved that the inventors of the patent could be changed into Li Naiqiang and Lei Guang. Wang Zhizhou and Ge Minghua were former employees of Cathay who joined Shangdong Hilead Biotechnology Co., Ltd. (Hilead) after they resigned from Cathay. On April 30th 2010, Hilead applied for an invention patent “refined procedures for producing long-carbon-chain dicarboxylic acid through biofermentation” with patent No. 20101060266.4 (the disputed patent), which was published on March 16th 2011. The inventors of the disputed patent are the defendants in this case, namely Huang Li, Liu Shuangjiang, Chen Yuantong, Fu Shenzhan, Cao Wubo, Ge Minghua and Wang Zhizhou. In January 2011, the Beijing First Intermediate People’s Court accepted the case over the signature right of patent inventors, with Hilead added as a third party.

The plaintiffs Lei Guang and Li Naiqiang complained that they, as participants in setting down the standardized operating procedures for preparing long-carbon-chain dicarboxylic acid and following up testing works, are the coinventors of the relevant technical solutions. The standardized operating procedures for preparing long-carbon-chain dicarboxylic acid applied in the disputed patent application is the same as the procedures of Cathay, and the core technical parameters are identical with that of Cathay’s granted patent No. ZL20610029784.6. Lei Guang and Li Naiqiang made substantive contributions to the aforesaid technical solutions, are the inventors of the prior patent and enjoy signature rights, whereas seven defendants made no substantive contributions and have no signature rights. The defendants’ acts of plagiarism violated the signature right of Lei Guang and Li Naiqiang.

The court of first instance compared the disputed patent with Lei Guang and Li Naiqiang’s, finding that the two patents were either identical in technology structures, or overlapping in their selected ranges of parameters. In addition, defendants Wang Zhizhou and Ge Minghua were able to access to Lei Guang and Li Naiqiang’s technical solutions. The defendants also failed to submit any evidences to prove that the disputed patent application was developed by them independently. Therefore, the inventors of the disputed patent application shall be deemed as Lei Guang and Li Naiqiang. The court then judged that: 1. the inventors of the disputed patent application are Lei Guang and Li Naiqiang; 2. the acts of the seven defendants has infringed the inventor signature right enjoyed by the plaintiff Lei Guang and Li Niaqiang over the disputed patent application; 3. the seven defendants shall publish an apology statement on Science and Technology Daily to plaintiffs Lei Guang and Li Niaqiang and eliminate ill impacts; and 4. dismiss all other appeals of Lei Guang and Li Naiqiang.

Unsatisfied with the first instance judgment, the seven defendants and Hilead appealed. The Beijing Higher People’s Court rejected the appeal and sustained the original judgment.

Judge’s comment

This case was covered by the world’s most authoritative science and technology magazine Nature, and was called as the first patent signature right case in China by People’s Court Daily and other media.

The signature right of patent inventors is an independent right different from the patent right or patent application right by nature: the former is a personal right whereas the latter belongs to property right. There is not a dependent or subordinate relationship between the two kinds of rights.

The signature right does not come from the acknowledgement of the patentee, but from the creative contributions that the inventor makes to the substantive features of the patent.

When determining patent plagiarism, whether the alleged infringer may have access to the technical solution being copied or whether the technical solutions of both parties have substantive features by comparison shall be taken into consideration. Under the preconditions where the alleged infringers have access to the copied technical solution, if the patent accused of plagiarism has no substantive feature comparing with the plaintiff’s technical solution, the alleged infringer shall be deemed as having made no creative contributions to the patent accused of plagiarism and has constituted patent plagiarism. On the contrary, if the patent accused of plagiarism has substantive features comparing with the original technical solution, the alleged infringer shall be deemed as having made creative contributions to the technical features which are the embodiment of those substantive features. However, in this circumstance, the identical parts of the two solutions can still constitute plagiarism upon the plaintiff’s solution, unless these identical parts belong to prior art. Situations of joint infringement on the signature right of the patent inventor include: 1. joint plagiarism, e.g. in the present case, Ge Minghua and Wang Zhizhou both accessed to the plaintiff’s prior technical solution, thereafter they slightly modified the original patent and filed another patent application, so their acts constitute joint plagiarism; 2. He who is fully aware that the patent is a copycat, makes no substantive contribution but still was listed as an inventor in patent documents shall be deemed as sharing the same intension with the plagiarist and is a party to the joint plagiarism; 3. he who knows nothing about the plagiarism, makes no substantive contribution but nonetheless listed as an inventor in patent documents as an inventor shall be deemed as having subjective faults and constitutes joint infringement with the plagiarist without conscious cooperation.

(Recommended by the Beijing First Intermediate People’s Court)

4. Copyright infringement case: Le Shi Internet Information & Technology Corp., Beijing v. Routon Electronic Co., Ltd

1st Inst. Case No.: (2011) ChaoMinChuZi No. 17348 Civil Judgment, the Chaoyang District
People’s Court of Beijing
2nd Inst. Case No.: (2012) ErZhongMinZhongZi No. 10166 Civil Judgment, the Beijing Second Intermediate People’s Court

Keywords

The first case in China concerning Internet TV set-top box infringement

Synopsis

Le Shi Internet Information & Technology Corp., Beijing (Letv) owns the network information dissemination right to the movie Painted Skin. Routon Electronic Co., Ltd. (Routon Electronic) has developed a player “Routon H3 Home Media Center” (Routon H3 Player) which can use TV sets as terminals when being connected with the Internet to play movies on its website. The online playing service of Painted Skin was provided directly on the said website without authorization. The act had infringed upon Letv’s right to network dissemination of information. Letv then filed an infringement action. In the first instance, Routon Electronic replied that: 1. Letv did not have the exclusive network information dissemination right to Painted Skin; 2. Routon H3 Player, which was only an intermediate product resembling a TV set-top box, was a pure Internet video playback device with all its video contents coming from the internet whereas the player itself contained no build-in content; and 3. the operating principle of Routon H3 Player was to acquire video contents automatically from online video sites while Routon Electronic, who merely provided link services, had not implemented any infringing activities in terms of the right to network dissemination of information and did not constitute infringement.

After hearing, the court of first instance held that: 1. Letv had obtained the exclusive network information dissemination right to Painted Skin; 2. the fact that Routon H3 Player could play Painted Skin online when connected with the Internet fell within the scope of Letv’s right of network dissemination of information concerning the movie; and 3. Routon Electronic should be liable for injunction against further providing link services, and for damages because it subjectively selected and rearranged the works added large amount of movie information, and its linking had specific target.

Both parties were unsatisfied with the first instance judgment and appealed to the second instance court.

During the process of the second instance, Routon admitted that it didn’t cooperate with the Shanghai PPlive Inc., but failed to prove the disputed movie on pplive.com could be linked to through normal search methods. Investigations and examinations found that the movie stills posted on pplive.com were different from those of on Routon Electronic’s website, whereas Routon Electronic could not provide evidences to justify the source of the movie stills of Painted Skin displayed on the Routon H3 Player. In summary, since Routon Electronic fell to fulfill its responsibility to prove that it provides only links searching services, it should bear the consequent adverse results in accordance with the law. At last, the court of second instance decided that: since Routon Electronic provided the disputed movie Painted Skin on its website without authorization of the appellant Letv, Routon Electronic had infringed upon Letv’s right to network dissemination of information, and should bear compensation liabilities.

Judge’s comment

In network copyright infringement disputes, the plaintiff usually complains that the defendant is an internet content provider (ICP) while the defendant claiming that it is only an internet service provider (ISP). Under this circumstance, the burden of proof is on the defendant. However, in judicial practices, how the evidence can be sufficient for admission in court remains an issue worthy of discussion. In this case, the Routon H3 Player could play the disputed movie Painted Skin online after connecting to the Internet. Routon Electronic claimed that the movie was linked from pplive.com through search, but failed to carry its burden of proof by showing that the services it offered were merely search links services, therefore shouldbear adverse consequences due to its inability to provide evidence in conformity with the law.

In such infringement cases, the defendants may not be simple hardware manufacturers or pure network service providers. They may also be content providers. It is therefore necessary to learn about whether they have subjective bad faith and to what degree they are involved in content preparations from their behaviors. Even if only link services are involved, it still demands much more attention than dealing with ordinary search links, because the value of service provided is inseparable with the contents. That means it is necessary to review whether the websites being linked have been authorized by the right holder to provide disputed movies.

(Recommended by the Beijing Second Intermediate People’s Court)