No.186 January 28, 2022 |
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In this issue
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 China Acceded to the Marrakesh Treaty and Hague System of WIPO
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China's accession to the Hague System for international registration of industrial designs of the World Intellectual Property Organization (WIPO) marks a major development in the international design system. China also acceded to the Marrakesh Treaty at the same time, integrating one of the world's great cultural and literary traditions into the Marrakesh community.
Deng Hongsen, Director General of WIPO, accepted the instrument of China's accession to the Marrakesh Treaty submitted by Zhang Jianchun, the vice-minister of National Publicity Ministry of China and the head of National Copyright Administration of China, and the instrument of China's accession to the Hague System submitted by Shen Changyu, the China National Intellectual Property Administration (CNIPA) Commissioner.
China's accession coincided with the opening ceremony of the 2022 Beijing Winter Olympics, which Mr. Deng Hongsen attended. The opening ceremony was also attended by the Secretary General of the United Nations António Guterres, the President of the United Nations General Assembly and the heads of other international organizations.
Chinese designers submitted a total of 795,504 design applications in 2020, accounting for about 55% of the world total. China's entry into the Hague System will make it easier and cheaper for these designers to protect and promote their designs overseas.
China is the most populous country in the world and one of the birthplaces of the world's great literary and cultural traditions. The accession to the Marrakesh Treaty means that more than 17 million blind and visually impaired persons in China will have more access to copyrighted works. This will also increase the cross-border flow of accessible Chinese works, making them accessible to blind and visually impaired persons in other parts of the world.
(Source: WIPO China)
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| CNIPA Recently Provided that Foreign Patent Agency May Set Resident Representative Office in China
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The China National Intellectual Property Administration (CNIPA) recently issued the Measures for Administration of the Establishment of Resident Representative Offices in China by Foreign Patent Agencies (hereinafter referred to as "the Measures"). Before then, the CNIPA launched a pilot program concerning the establishment of resident representative offices in China by foreign patent agencies in Beijing, Jiangsu and some parts of Guangdong.
The Measures explicitly stipulates that the establishment of resident representative offices in China by foreign patent agencies is a natural part of the patent agency industry. The CNIPA and the intellectual property administration department of the provincial government shall govern the representative offices and their representatives according to law. Meanwhile, in accordance with the principle of equality, the state's policies and measures for supporting the development of the intellectual property services may equally apply to the representative offices.
The Measures stipulates that the establishment of a resident representative office in China by a foreign patent agency shall be approved by the CNIPA. The CNIPA shall make a decision within three months from the date of receipt of the application. A foreign patent agency shall, within 90 days from the date of approval by the CNIPA, apply to the registration authority for registration of establishment according to law. The intellectual property administration department of the provincial government where the representative office is located shall put the representative office on record according to law.
Regarding the possible law-breaking behaviors of representative offices and their representatives, the Measures stipulates the legal responsibilities that representative offices or representatives should take according to law. The Measures stipulates that the CNIPA and the intellectual property administration department of the provincial government may have warning conversations with representative offices and their staff who have law-breaking behaviors to urge them to make timely rectifications or conduct investigations or, if necessary, bring them to relevant departments according to law.
(Source: People's Daily Online)
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| “Green Channel” Fully Open for Chinese Brands to Register Abroad --- China’s Madrid International Trademark Application System is Fully Online
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On December 31, 2021, the online application platform "Madrid international trademark application withdrawal service" officially went live, marking that Chinese applicants can handle all aspects of the Madrid International trademark applications via e-channels. The online application rate reached 97% among Madrid international trademark registrations by Chinese applicants in 2021. At present, Chinese applicants can handle online all 10 businesses including application, renewal, transfer, and cancellation of Madrid international trademark registrations. By using the electronic application system, the instability of the international postal mail system caused by the Covid-19 epidemic is avoided and the application period is effectively shortened.
In 2021, the average review period for applications for international registration by Chinese applicants was shortened to 2 months. In order to equally protect the rights and interests of foreign applicants, the Trademark Office of the China National Intellectual Property Administration (CNIPA) has comprehensively improved the quality and efficiency of the examination of international trademark applications. At present, the review period for an international trademark application entering China, designated through the Madrid system, has been shortened to 4 months, and the review period of international transfer, change and renewal has been shortened to 1 month, reaching the fastest level in history.
(Source: Trademark Office of the CNIPA)
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| Cases in Spotlight
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| Unitalen Client CHATEAU LAFITE ROTHSCHILD Won a Trademark Infringement Case and Received 5 Million Yuan in Compensation
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Case Brief:
CHATEAU LAFITE ROTHSCHILD (Chinese name as "拉菲酒莊") ranks first among the five top wineries in France. Since the 1990s, the wines of CHATEAU LAFITE ROTHSCHILD formally entered the Chinese market. After a long period of publicity and use, the trademark No. 1122916 "LAFITE" and the trademark No. 6186990 "拉菲" (the Chinese name of "LAFITE") of CHATEAU LAFITE ROTHSCHILD have enjoyed a high reputation in the wine industry in China and around the world. The trademark "LAFITE", as a well-known trademark, has been protected in trademark administrative procedures, administrative litigations and civil litigations for many times, and the trademark "拉菲" once was recognized as a well-known trademark and obtained cross-class protection.
The three defendants, without authorization, prominently used the marks "CHATEAU LAFITE", "拉斐水岸" (English name as "CHATEAU LAFITE"), and "拉斐" (English name as LAFITE) on the community gate and supporting facilities of the properties for sale involved in the case and in the WeChat official account and other advertisement activities, on the walls, stair armrests, sand tables, sales brochures, disposable paper cups and the like of the Beijing marketing center of the properties for sale involved in the case, on the official website, and in relevant video ads.
CHATEAU LAFITE ROTHSCHILD believed that the above-mentioned acts of the defendants infringed on its exclusive right to use its registered trademarks and filed a lawsuit with the Beijing Intellectual Property Court. The Beijing Intellectual Property Court found that the infringement was true, and ordered the defendants to stop the infringement and sales, and compensate the plaintiff for economic losses and reasonable expenses totaling 5 million yuan. The Beijing High People's Court upheld the original judgment.
Case analysis:
First, on the issue of whether the name of the properties for sale constitutes trademark use.the defendants in this case held the opinion that the use of the name of the properties for sale was reasonable use to introduce, publicize and indicate the location of the properties for sale. However, in cases such as the "星河灣(Star River)" case no. Min Zhong 102 (2013) heard by the Supreme People's Court and the "大悅城(Joy City）" case no. Jing 73 Min Zhong 798 (2017) heard by the Beijing Intellectual Property Court, the courts all held that the names of properties for sale actually play a role in identification of the properties for sale and are also commercial marks, and that the use of the names of properties for sale is use of trademarks. In addition, based on the case of "百家湖" (Baijia Lake) and the like, Unitalen attorneys discussed the application of "fair use" should include the case where the words or characters contained in the name of properties for sale are the place names in the registered trademarks of others. The alleged infringement acts in this case are not "fair use". Both the first-instance court and the second-instance court supported the claim of Unitalen attorneys, and found that the use of the marks in the name of properties for sale and other places constitute trademark use because the marks had the function of indicating the source of goods or services.
Second, on the cross-class protection of well-known trademarks. In this case, the trademarks claimed by CHATEAU LAFITE ROTHSCHILD were designated for use in goods of "alcoholic beverages" etc. in class 33, while in the alleged infringement acts, the marks were used in the name of properties for sale, the supporting facilities of the community, the marketing place of the properties for sale, and relevant advertisements. In accordance with "A Letter of Reply on How to Determine the Class of "Commercial Residential Building" (Trademark Letter [2003] No. 32) issued by the Trademark Office of the State Administration for Industry and Commerce, the alleged infringement acts should fall within the services of real estate management in class 36 and the services of housing construction and other services in class 37. So this case involves cross-class protection of registered well-known trademarks. During the litigation, Unitalen attorneys explained the damage brought about by the alleged infringement acts to the interests of CHATEAU LAFITE ROTHSCHILD as the owner of the registered well-known trademarks mainly from the two aspects of "confusion" and "dilution".
The court of first instance determined that the alleged infringement acts caused cross-class confusion merely based on factors such as the distinctiveness and popularity of the plaintiff's trademarks, the degree of awareness of the well-known trademarks among the public related to the accused marked goods, the degree of similarity of the marks and the relational degree of the goods, and the specific use of the accused marks. The court of first instance did not comment on whether the alleged infringement acts weakened the distinctiveness of the plaintiff's well-known trademarks and diluted the trademarks.
The court of second instance affirmed that it was appropriate for the court of first instance to determine that the use of the accused marks infringed the exclusive right to use the well-known trademarks of CHATEAU LAFITE ROTHSCHILD from the perspective of "cross-class confusion". Moreover, the court of second instance determined that the alleged infringement acts were sufficient to weaken the distinctiveness of the well-known trademarks on the basis of the prominence and reputation of the well-known trademarks, the degree of overlap of relevant public, the degree of similarity of the marks, and the defendants' emphasis on elements of wine and red wine in the properties for sale, thereby fully supporting the claims of "confusion" and "dilution" of CHATEAU LAFITE ROTHSCHILD.
Third, on the amount of compensation. In order to prove the defendants' possible profits by infringement, on one hand, Unitalen attorneys collected a large amount of evidences, including the query report of Huailai real estate exchange center on the defendants' real estate transaction data (proving that the recorded sales amount of the properties for sale involved in the case reached 3.06 billion yuan), China Real Estate Yearbook (proving that the average profit rate of real estate is about 10%), etc.; on the other hand, they also collected relevant evidences to show that the defendants highlighted the theme of red wine and the "拉菲" wine-like quality of the properties for sale involved in the case, emphasizing that the defendants took advantage of the popularity of CHATEAU LAFITE ROTHSCHILD maliciously in promoting and selling the properties for sale involved in the case.
The court of first instance held that the trademark contribution rate of the infringing marks in the retained profits of the properties for sale involved in this case could not be determined. Therefore, the court appropriately determined the economic losses of 4.80 million yuan and reasonable expenses of 0.20 million yuan based on the reputation of the trademarks claimed by the plaintiff, the subjective malice of the defendants in trading off the reputation of CHATEAU LAFITE ROTHSCHILD's trademarks, the duration of the alleged infringement acts, the promotion function of the sued marks on the sales of the properties for sale involved in the case, the diversity of factors affecting the purchase of commercial housing, etc.
The court of second instance held that since commercial housing is a special commodity, factors such as the location, surrounding environment and supporting facilities, traffic conditions, reputation and strength of the real estate developer, quality of the housing, and the sales price are more decisive for the final purchase of housing by consumers. However, the contribution and role of trademarks in commercial housing sales are usually limited. Certainly, the court of second instance did not deny that some properties for sale have a strong influence on the relevant public after long-term operation, and finally upheld the amount of compensation determined by the court of first instance.
Typical significance:
Compared with previous cases of trademark infringement by names of properties for sale, the highlight of this case is the high compensation amount. The reason why the amount of compensation determined in this case can reach up to 5 million yuan mainly lies in that, while fully weighing up the factors that affect consumers' purchase of commercial housing, the court also took into account the extremely high reputation and popularity of the trademarks "LAFITE" and "拉菲" of CHATEAU LAFITE ROTHSCHILD, and realized that the defendants tried their best to maliciously associate the properties for sale with elements such as France and red wine and that the infringing marks played a certain role in promoting the sales of the properties involved in the case. Accordingly, the court of this case not only took into account the special nature of trademark infringement by the name of properties for sale in this case, but also fully safeguarded the interests of CHATEAU LAFITE ROTHSCHILD as an owner of well-known trademarks. More importantly, the justice policies of cracking down malicious intellectual property infringement, strengthening intellectual property protection, and improving the business environment were shown.
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| Unitalen Client China Resources Holdings Won a Retrial Case of Civil Infringement of Trademark and Unfair Competition
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Case brief:
Since China Resources Holdings opened supermarkets in mainland China in 1992, it has operated more than 3,000 supermarkets in many provinces and cities across the country. Its trademark No. 776090 "華潤(rùn)" (English name as "China Resources") and trademark No. 3843561 "華潤(rùn)萬(wàn)家" (English name as "China Resources Vanguard") have been continuously used in operation of supermarkets to this day since they were approved for registration. After long-term use and publicity, these trademarks have become well-known in related industries. In addition, China Resources Holdings has been engaged in capital investment, real estate, commodity retailing and other industries for a long time. After years of operation, its trade name "華潤(rùn)" has been widely known by the public in many related industries.
Chengdu Huarun Lighting (Chinese name as "成都華潤(rùn)燈飾"), which is engaged in lighting wholesale and retail, registered "華潤(rùn)" as an enterprise name in 2002, and used "Huarun Lighting" (Chinese name as "華潤(rùn)燈飾") in its storefront signboards, product labels and other places for promotion.
China Resources Holdings held that the above acts not only infringed on its exclusive right to use its registered trademarks, but also constituted unfair competition, so it filed a lawsuit with the Chengdu Intermediate Court, requesting the court to order Chengdu Huarun Lighting to cease the acts of infringement and compensate China Resources for losses.
Decision process:
In the first instance, the Chengdu Intermediate People's Court took the view that the use of "Huarun Lighting" by Chengdu Huarun Lighting was not use of a trademark, and that the retail services using the mark was not the same as or similar to the services "sales promotion (for others)" in which the registered trademarks as claimed are designated for use. Therefore, the court determined that there was no absolute proof of trademark infringement. At the same time, the court determined that since the son of the operator of Chengdu Huarun Lighting was named "華潤(rùn)" when he was born in 2001, the registration and use of the trade name "華潤(rùn)" of Chengdu Huarun Lighting was legitimate and did not constitute unfair competition. Then, the court dismissed all the claims of China Resources Holdings. Later, China Resources Holdings was not satisfied with the first-instance judgment and appealed to the Sichuan High Court. The court of second-instance further took the view that the registration and use of the trade name "華潤(rùn)" in Chengdu Huarun Lighting was legal because the name was derived from the name of the operator's son, and the court also believed that the retail services were not the same as or similar to the services "sales promotion (for others)" in which the registered trademarks as claimed are designated for use. Therefore, the court dismissed the appeal of China Resources Holdings and upheld the first-instance judgment.
China Resources Holdings refused to accept the judgment of the first and second instances, and entrusted Unitalen to apply to the Supreme People's Court for retrial.
Then, Unitalen and China Resources Holdings reached an agreement on preparation of expert argument, in-depth investigation and evidence collection and other plans, and made an investigation on legal issues including the relationship between "sales promotion (for others)" in class 35 and "retail or wholesale services" and limitation on commercial use of a person’s name. With the joint efforts of China Resources Holdings and the Unitalen team, the Supreme People's Court ruled to bring the case to trial. After the trial, it was finally determined that the defendent's acts constituted trademark infringement and unfair competition, the judgment of the first and second instances was abrogated, and Chengdu Huarun Lighting was ordered to immediately stop infringing on the petitioner's exclusive right to use the trademarks "華潤(rùn)" and "華潤(rùn)萬(wàn)家" registered in services "sales promotion (for others)" in class 35, stop using the enterprise name with the characters "華潤(rùn)" and changing the enterprise name, and compensating the petitioner for economic losses and reasonable expenses.
Typical significance:
It is reported that this case is the first case in which the Supreme People's Court agreed in a trademark civil infringement case that commodity wholesale and retail services and "sales promotion (for others)" in class 35 are similar services. In the judgment of retrial, the Supreme People's Court held that Chengdu Huarun Lighting classified various brands of lighting products sold by itself as an agency or purchased for sales so that consumers can easily pick out and buy products. "華潤(rùn)燈飾" is a service identifier provided on the above lighting products. Such a sales model overlaps with the services in which the trademarks involved are designated for use. The two services are similar services. This case is a useful guideline for handling of similar cases.
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| Unitalen Client M-I Won a Patent Infringement Case and 6 Million Yuan in Compensation
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Circumstances of a case:
The patentee, M-I Co., Ltd., is a subsidiary of Schlumberger, the world's largest multinational oilfield technology services group. Schlumberger entered China's oil market as early as 1980 to conduct business of oilfield services. Schlumberger has always been committed to working together with China's major oil companies and has made significant contributions to the development of China's oil industry. Schlumberger and its subsidiaries and affiliated companies have always attached importance to intellectual property protection and own a large number of basic patents in all fields of oilfield technology.
For global protection of its intellectual property rights, M-I Co., Ltd. filed an application of 337 investigation against a company in China with the United States International Trade Commission (ITC) in the second half of 2019, and subsequently brought several patent infringement proceedings to the Beijing Intellectual Property Court in China.
During the litigation, the defendant, as the petitioner, submitted a request for invalidation to the China National Intellectual Property Administration (CNIPA) at the end of 2019 and at the beginning of 2020 respectively against the Chinese patents for invention owned by M-I involved in the litigation and their patent families. Unitalen and the Orrick team have done a lot of serious and meticulous work and successfully maintained the total validity of the two patents involved, paving the way for success in the proceedings.
Court decision:
Recently, the Beijing Intellectual Property Court made a judgment, in which the court determined the infringement facts of the defendant and determined that the defendant’s continued sale of the allegedly infringing products was with subjective malice because the defendant learned that the alleged products might be infringing at that time. Therefore, the defendant was ordered to stop the infringement and compensate the plaintiff for economic losses and reasonable expenses totaling 6.16 million yuan.
Case analysis:
The most complex legal issue in this case lies in whether the defense of legitimate sources claimed by the defendant is tenable.
Opinions of Unitalen attorneys: according to the evidences submitted by the defendant, although the contract signed between the defendant and its customers (who are not involved in the case)_ is called "Sales Contract of Industrial Products", there are many contracts showing that the objects sold are parts such as frameworks, injection frameworks, flat injection molds, etc., and some contracts show that provisions of the production standards include "products should be produced strictly according to the drawings and model numbers provided by Party A (the defendant)", "the products should be designed and produced according to the model provided by the seller (the defendant)", etc. Accordingly, the products purchased were mainly assembled parts, and the finished products were assembled by the defendant. In fact, the final products were also sold in the name of the defendant. Therefore, the above-mentioned acts involved in the case should pertain to manufacturing consignment, and such a mode was not in conflict with the fact that the defendant manufactured and sold the infringing products as its own products.
In the end, the court recognized Unitalen attorneys' view, and held that the evidence on record submitted by the defendant were insufficient to prove that the alleged infringing products sold by the defendant had a legitimate source, and that the defendant's defense of legitimate source is untenable.
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