Lawsuit Updates

Dispute over Ownership of Copyright in Commissioned Advertising Words 

In 2003, Liu Yi sued the True Dragon Advertising Corporation and the Nanning Cigarettes Factory in the Guilin City Intermediate People's Court for copyright infringement. The first-instance court believed that the advertising phrase "How lofty is the heaven? Ask the True Dragon" created by the plaintiff Liu Yi was original. While the defendant the True Dragon Advertising Corporation stated in its advertising phrase soliciting notice that it was the owner of the right in, and the right to use, candidate works, this did not mean that it had acquired the copyright in Liu Yi's work. If the Nanning Cigarettes Factory needed to continue to use his work, it should conclude another contract with him. On 14 December 2004, the Guilin City Intermediate People's Court rendered the first-instance ruling that the defendants the True Dragon Advertising Corporation and the Nanning Cigarettes Factory pay Liu Yi RMB 480,000 yuan in compensation for his economic losses, cease using his work of "How lofty is the heaven? Ask the True Dragon".

Dissatisfied, the defendants appealed to the Higher People's Court of the Guangxi Zhuang Nationality Autonomous Region on 10 January 2005. Upon hearings, the second-instance court decided that the work "How lofty is the heaven? Ask the True Dragon" at issue was a commissioned creation, and the personal right in the work went to Liu Yi, but the property right of the work belonged to the True Dragon Advertising Corporation under the contract; the Appellants the True Dragon Advertising Corporation and the Nanning Cigarettes Factory did not infringe the Appellee's copyright in the work at issue, so should not be civilly liable. Accordingly, the second-instance court rendered the Ruling No. Guiminsanzhongzi 3/2005, cancelling the Guilin City Intermediate People's Court's first-instance civil ruling, and rejected the plaintiff Liu Yi's litigant claims.

(5141X)

Dispute over Copyright in "CROCODILE" Trademark.

Chen Xianjin, a Chinese Malaysian, is the creator of the work of italicized English word "crocodile" and the crocodile device, and his application for registration of it has been approved in Singapore. Chen has licensed the work to the Singapore Crocodile International Organisation Private Co., Ltd. (Singapore Crocodile) to be used in Mainland China. The 鳄鱼trademark held by the French Lacoste Shirt Co., Ltd. (Lacoste) has been registered in China. After the Singapore Crocodile filed the application for registration of the "CROCODILE" trademark, the French Locaste filed an opposition to the application with the Trademark Office, and applied, in 1995, for registration of the device of the Singapore Crocodile as a trademark to be used on cosmetics. Chen Xianjin and the Singapore Crocodile accused the defendant Locaste of infringement of their copyright. In March 2003, the Shanghai No. 2 Intermediate People's Court rendered the first-instance ruling in favour of the plaintiffs.

The defendant Locaste appealed. Upon hearings, the Shanghai Higher People's Court believed that in the trademark registration proceedings, an interested party who requested protection of his copyright in his work because another person applied for registration of it as a trademark should have the matter addressed through the relief procedure under the Trademark Law. Where, with an opposition filed, the interested party brought a civil action on the grounds that another person's act to apply for registration of his work as a trademark, with the application preliminarily examined and published, has constituted an infringement, it was improper for the People's Court to accept the case. In July 2005, the Shanghai Higher People's Court finally decided to have cancelled the first-instance ruling and rejected the two appellees' litigation.

(5141X)

The Court: Estoppel Doctrine First Applicable in Patent Infringement Lawsuit

In March 2005, Xie Wenwu believed that the Qingdao Haier Communication Co., Ltd. (the Haier for short), with its manufactured cell phone of the Haier Carrier Pigeon 3100, infringed his patent for the intelligent anti-theft and loss-reporting technology and brought an action in the Beijing No.1 Intermediate People's Court.

The court discovered, upon hearings, that to be granted the patent, Xie Wenwu agreed, in a way of written statement in the patent examination and approval proceedings, to limit the scope of the claimed protection for the patent, expressly excluding the circumstance in which unauthorised users cannot use it in a normal manner from the scope of protection for the patent, and he was later granted the patent right. With the circumstance "in which unauthorised users cannot use in a normal manner", the intelligent anti-theft function" of the alleged infringing cell phone of the Haier Carrier Pigeon 3100 was substantially different from the technical features of Xie Wenwu's invention patent.

Regarding this conclusion, Xie Wenwu argued that the circumstance "in which unauthorised users cannot use in a normal manner" made his invention patent inferior; hence, it should be established that the "anti-theft function" of the cell phone of the Haier Carrier Pigeon 3100 is equivalent to the technical features of Xie Wenwu's invention patent, and the equivalent doctrine should apply.

The Beijing No.1 Intermediate People's Court held that in the patent infringement procedure, when the equivalent doctrine ran into conflict with the estoppel doctrine, the estoppel doctrine should first apply. In the present case, Xie's argument, which was estoppel of his statement made in the patent examination and approval proceedings, was not supported by the court. The Haier Communication Co., Ltd.'s act to manufacture, and Dazhong Electronic Appliances Corporation's act to market, the cell phone of the Haier Carrier Pigeon 3100 did not constitute an infringement of the patent. Accordingly, it was decided to have rejected Xie Wenwu litigant claims.

(5141X)

Unregistered Liquor Trademark "JIAJIA" Protected

In October 1999, the Laochuantong Brewery Co., Ltd. (the Laochuantong Brewery) filed an application for registration of the trademark composed of two Chinese characters "家家"（"JIAJIA"）, which was approved for registration in February 2001. In August 2002, the Xinghuacun Brewery Co., Ltd. (the Xinhuacun Brewery) filed an application with the Trademark Review and Adjudication Board (TRAB) for cancellation of the said registered mark, arguing that the Laochuantong Brewery had preemptively registered it by unfair means. In May 2004, the TRAB made Adjudication No. Shangpingzi 1812/2004, having revoked the trademark at issue.

Dissatisfied with the Adjudication, the Laochuantong Brewery instituted an administrative suit in the Beijing No. 1 Intermediate People's Court. The court of first instance, believing that Adjudication No. Shangpingzi 1812/2004 was made with solid evidence and due application of laws and regulations, and in compliance with the statutory procedure, decided to have upheld the Adjudication No. Shangpingzi 1812/2004.

The Laochuantong Brewery appealed to the Beijing Higher People's Court. The Beijing Higher People's Court held that the fundamental purpose of the Chinese Trademark Law was to protect the exclusive right to use trademarks; in order to maintain the principles of good faith and fair competition, due protection should also be accorded to unregistered trademarks under the Chinese Trademark Law. The Xinhuacun Brewery's "JIAJIA" trademark had been known to the consumers of the goods and competitors in the industry within the scope of its advertisement, and influential to a certain extent. The Laochuantong Brewery should have known that the "JIAJIA" trademark was the Xinhuacun Brewery's prior trademark. Based on these facts, the TRAB had made Adjudication No. Shangpingzi 1812/2004 on the basis of the clearly ascertained facts, through lawful procedure and with correct application of law; the judgment of the first-instance court to maintain the Adjudication was correct. The Laochuantong Brewery's litigant grounds were not tenable. On 8 May 2005, the Beijing Higher People's Court made Ruling No. Gaoxingzhongzi 71/2005 to have rejected the appeal and upheld the ruling of first instance.

(5141X)

Application for Registration of "MINGYANGTIANXIA" Trademark Finally Rejected

In June 2001, the Sichuan Yibin Wuliangye Group Co., Ltd (the Wuliangye Group) filed, with the Trademark Office of the State Administration for Industry and Commerce, an application for registration of the "MINGYANGTIANXIA" trademark. The Trademark Office rejected the application on the ground that the trademark at issue had the nature of exaggeration and fraud in advertising goods or services. The Wuliangye Group made a request for reexamination, which was rejected by the TRAB upon reexamination on 2 June 2004.

Dissatisfied, the Wuliangye Group brought an action in the Beijing No. 1 Intermediate People's Court on 30 July 2004. The court of first instance made Ruling No. Yixingchuzi 744/2004 to have upheld the reexamination decision made by the TRAB.

The Wuliangye Group then appealed to the Beijing Higher People's Court. The court of second instance held that, under the provision of Article 10, paragraph one (7) of the Trademark Law, indications having the nature of exaggeration and fraud in advertising goods or services should not be used as trademarks. Although the liquor with "WULIANGYE" used as its trademark was of relatively high reputation in China, it did not mean that it was also the case with the "MINGYANGTIANXIA" liquor; although the same "MINGYANGTIANXIA" trademark and many trademarks similar to "MINGYANGTIANXIA" had been registered and published by the Trademark Office, the reexamination of the trademark at issue in the present case by the TRAB was examination ad hoc. The Wuliangye Group's allegation was not based on law that the Trademark Office and TRAB had failed to observe trademark examination rules and regulations, and violated the fairness doctrine of the civil law, and its appellate request was not based on facts and law. On 19 April 2005, the Beijing Higher People's Court made Ruling No. Gaoxingzhongzi 43/2005 to have rejected the Wuliangye Group's appellate request. 

(5141X)