According to the "Judicial Protection of Intellectual Property Right (IPR) in China (2016)" report recently published by Supreme People's Court, during 2016 Chinese courts at various levels received 8352 first-instance criminal cases involving IPR, down 23.9%; concluded 8,601 first-instance criminal cases involving IPR, down 20.43%; and gave 10,334 criminal penalties, down 17.85%.

It is also reported that in 2016, the number of IPR judicial cases continued to grow, with the total of 17.7 million IPR cases received, including first instance, second instance, retrial and other types, and more than 171,000 concluded, up 19.07% and 20.86% respectively. Beijing, Shanghai, Jiangsu, Zhejiang and Guangdong continued to operate at high speed, receiving 70.37% of the nationwide IPR cases.

April 12, State Administration for Industry and Commerce (SAIC) briefed on the first quarter’s market environment in 2017.

It’s reported that market entities are found with increased trademark awareness and the trademark application volumne has increased at a relatively high speed. For the first quarter alone, there were 837,000 trademark applications filed, up 13.9%, and 636,000 trademark registration approved, up 35.2%.. By the end of March, there have been 12,397,000 valid trademark registrations nationwide.

In 2016, Chinese Customs had implemented 19,500 intellectural property protection actions, seizing over 42 million inbound and outbound goods suspect of IPR infringement.

According to Deputy Director General of Customs, Zou Zhiyu, goods seizured by the customs last year was mostly suspect of trademark infringement, taking 98.56% of the total number. Inspection of freighting and postage are the main channels for seizing suspected infringing goods.

April 20, 2017, Beijing People’s Higher Court published Top 10 typical judicial protection cases of 2016. Administrative litigation concerning “Wechat” trademark opposition Review and Wen Rui-an Kungfu Novels’ Adaptation Right and Unfair Competition Dispute, both represented by Unitalen, were among the list.

Attorneys at Law: Hou Yujing, Zhang Yazhou

Case Summary

Chuangbo Asia Pacific Technology (Shandong) Co., Ltd. (hereinafter referred to as “Chuangbo”) applied for registering trademark WeChat in respect of information transmission, and telephone services, etc. in Class 38. A natural person Zhang Xinhe raised opposition to the application on the grounds that 1) the opposed mark violates Paragraph 1 Clause 8, Article 10 of the Trademark Law, with ‘other negative influence’ and 2) the opposed mark violates Article 11 of the Trademark Law for lack of distinctiveness.

Trademark Office decided in 2013 that the opposed mark does not constitute lack of distinctiveness but is apt to mislead consumers and cause negative influence and hence denied the registration of the opposed mark. Trademark Review and Adjudication Board upheld the CTMO decision by stating that,1) whether a trademark will create any negative influence depends on the objective legal effect, other than the subjective state of the perpetrator; and 2) whether a conduct will damage social public interests and public orders depends not only on the de factor status at the time of trademark application but also the time when the decision is made. According to TRAB, although Tencent's WeChat software had not been officially launched when the opposed mark was filed, the registered user accounts of ‘WeChat’ had reached 400 million by July 2013, and many government agencies, courts, schools, banks have launched WeChat public service; the relevant public has associated WeChat with Tencent. If the opposed mark were to be approved for registration, great inconvenience and even losses would be brought to the registered WeChat users as well as the vast number of users of WeChat public service, who would misidentify the services provided by the opposed party under the “WeChat” mark, resulting in negative influences on social public interests and public orders.

While the TRAB decision was further upheld by Beijing IP court, Beijing Higher People's Court made a different ruling that the opposed mark does not violate Paragraph 1 Clause 8 of the Trademark Law, as the application of the opposed mark does not involve social public interests and public orders, but shall be refused for lack of distinctiveness.

On December 27, 2016, the Supreme People’s Court made a final ruling to dismiss the retrial request of Chuangbo. In this ruling, the Supreme Court did not comment on the application of the negative influence clause, but focused on the legality of the second-instance court’s switching to the distinctiveness clause to maintain the ruling of TRAB. The Supreme People’s Court believes that, although the judgment of first instance was focused on the clause of other negative influence only, the TRAB decision did comment on the distinctive clause, so the second-instance court’s ruling based on distinctiveness clause per request by the third party complies with Article 87 of the Administrative Litigation Law concerning the provision of ‘comprehensive review’.

Typical Significance:

This case affirms the judicial ‘comprehensive review’ principle in procedure, namely, in case of judicial review of a TRAB decision, the court shall review not only the grounds raised by the plaintiff but also the other grounds based on which the TRAB decision is made but not challenged by the other party, paying more attention to efficiency and saving judicial resources, so as to solve substantive disputes.

In substance, this case further tightens the scope of application of the "negative influence" clause specified in Clause 8, Paragraph 1, Article 1 of the Trademark Law, limiting the examination of "negative influence" to the trademark itself and its composing elements, instead of the influences that may be caused during actual use.

Attorneys at Law: Hou Yujing, Run Chunde

Case Summary:

“Four Detectives” is the name of more than 100 Kungfu series novels created by the plaintiff, Wen Rui-an. The mobile card game “Da Zhang Men” developed by the defendant, Beijing Playcrab Technology Co., Ltd. (hereinafter referred to as “Playcrab”) adopted the same five main characters, including characters’ names, characters’ relationship, facial features, backgrounds, personalities, kungfu styles, which infringed on the adaptation right of the plaintiff’s series novels. In addition, articles were on various game sites trying to associate “Da Zhang Men” with “Four Detectives”, which the plaintiff believed to have constituted unfair competition.

The court supported the plaintiff’s claim based on adaptation right as the five main characters are with high degree of originality and constitute the cornerstone of the ‘Four Detectives’ series novels. The copyright enjoyed by Wen Rui-an over his novels embodies the copyright over the original expression of the novels. The “Da Zhang Men” game presented the images of the five main characters of the ‘Four detectives’ series novels by way of online card game and thus infringed on Wen Rui-an’s adaptation right of his works.

The unfair competition claim, however, was not supported, as the court found the reports about “Da Zhang Men” game were composed by third parties and posted on third-party websites, which is not directly related to Playcrab company.

Eventually, the court made a ruling that Playcrab shall eliminate the influence and compensate Wen Rui-an for 800,000 yuan.

Typical Significance:

This case extends the definition of “expression” in Copyright Law to the character images including their background, martial arts styles, personality characteristics, and appearances, providing stronger protection to the adaptation right of literature against online games in the future.

On April 24, 2017, China Supreme People's Court published the "2016 Top 10 IP Litigation Cases", electing the retrial case of Chateau Lafite Rothschild, represented by Unitalen, vs. Trademark Review and Adjudication Board and Nanjing Golden Hope Wine Co., Ltd. on trademark dispute.

This has been the 6th time for Unitalen cases being elected by the Supreme Court ever since the first publication of the Top 10 IP litigation cases in 2009. Earlier TOP 10 cases of Unitalen are:

- BMW vs. Century Baoma for infringement of well-known mark and unfair competition in 2009;

- LAFITE vs. Jinhongde for trademark infringement and unfair competition in 2011;

- Jianghuai Auto vs. RedSun for affirmation of non-infringement of trademark in 2011;

- Sany vs. Yonghe for infringement of well-known mark in 2012;

- Powerdekor vs. Trademark Review and Adjudication Board & Hebei Guangtai over trademark dispute in 2013;

- Tencent vs. Qihoo 360 for unfair competition in 2014.

In addition, the case of Ashland Chemical, et al vs. Response-Chem, et al for patent infringement and trade secret represented by Unitalen was listed by the Supreme People’s Court as one of the 8 Typical IP Cases in 2013; and a number of other Unitalen cases can be found in the annual 50 typical cases selected by the Supreme Court.

This newly listed case of 拉菲庄园 (LAFEI MENOR) lasted for over 5 years, undergoing administrative review by TRAB, first instance trial at Beijing No. 1 Intermediate People 's Court, appeal at Beijing Higher People' s Court, and retrial by the Supreme Court. It involves protection of the renowned French luxury brand “LAFITE” in China, and complicated legal issues such as the corresponding relationship between the Chinese name“拉菲”and the registered trademark "LAFITE", and therefore has attracted great attention of various circles.

On August 2, 2016, the Supreme court broadcasted the 5-hour hearing through several official media platforms.

Case Summary

Chateau Lafite Rothschild (Appellant)，registrant of trademark LAFITE filed on October 10, 1996 for alcoholic beverages in Class 33, applied for invalidation of disputed trademark “拉菲庄园”, filed on April 1, 2005 by Nanjing Golden Hope Wine Co. Ltd (“Golden Hope”).

TRAB decided that the disputed mark shall be revoked due to the fact that “拉菲” had been widely known as the Chinese name for “LAFITE” by Chinese consumers prior to the filing date of the disputed mark, hence the disputed mark “拉菲庄园”has constituted similar mark to “LAFITE” and violated Article 28 of China Trademark Law (2001 version)

Golden Hope initiated administrative litigation against the TRAB, but Beijing First Intermediate People 's Court affirmed the TRAB decision made by TRAB. Golden Hope further appealed to Beijing Higher People' s Court. The appeal court found the evidence insufficient to prove that the cited mark had enjoyed high reputation in China prior to the filing date of the disputed mark, and that the relevant public had been able to make corresponding identification of the cited mark and the Chinese “拉菲”. In light that the disputed trademark has been registered and put into use for over ten years, from the perspective of maintaining the established market order, the appeal court decided that the registration of the disputed mark shall be maintained.

Appellant applied to the Supreme Court for retrial. The Supreme People’s Court accepted the case and issued the retrial verdict on December 23, 2016, which revoked the second-instance and sustained the first-instance verdict as well as the TRAB decision.

According to the Supreme Court, the cited mark “LAFITE” has established a high level of reputation through years of commercial business activities, and a solid connection between "拉菲" and "LAFITE" has been built; therefore the disputed mark and the cited mark have constituted similar trademarks in respect of similar or identical goods. In addition, for a trademark that has been registered and used for a certain period of time, whether it has established a relatively high market reputation and formed its own relevant public group shall not be determined just by the single factor of time span of use; whether its relevant public has been made capable of distinguishing the mark from the other related marks through its use, and whether there is any likelihood of confusion, shall serve as the criteria for determination, which however could not be proven in this case.

The retrial verdict covers discussions over composing elements of trademarks, degree of similarity in whole, the distinctiveness and reputation of the relevant trademarks, the determination of a stable corresponding relationship, and the relevant public groups, and, based on all the above mentioned, specifies the criteria for determination of similarity between Chinese and English trademarks, which provides vitally important guiding significance.

Managing Intellectual Property (MIP), an authoritative IP reference, published a list of "IP Stars" in 2017, by virtue of their high influences and outstanding professional performance. Unitalen deputy director, Li De Shan, and senior partner, Li Yongbo, received this award in their respective fields. This is the third year for these two professionals being selected in the list since 2015 and 2016.

MIP magazine has published the annual survey of global leading IP firms for more than 20 years, which was conducted by reviewing the most influential IP cases and transactions in each country and region, combined with the feedbacks and opinions collected from thousands well-known legal professionals and industry experts through questionnaires, e-mails, telephone interviews and meetings etc., to publish the annual rankings law firms, outstanding IP institutions and teams, figures and many other lists. It is regarded as one of the most comprehensive and authoritative IP surveys.

In 2017, Unitalen had outstanding achievements in both trademarks and patent firm rankings issued by MIP, listed in China Tier 1 for "trademark application" and "trademark litigation". Along with the two attorneys continued to be selected as “IP Stars” this time, it fully demonstrates the advantages of Unitalen in the overall strength and the excellence of our professionals.