NEWSLETTER - April 2021
Table of Contents
CNIPA Provides the Definition of High Value Invention Patents
China Launches Patent Transfer Plan to Support SME Innovation
2020 International Intellectual Property Protection Rankings Released
Theme of 2021 National Intellectual Property Publicity Week Released
Judges Urge Trademark Applicants to Be More Honest
Alibaba Fined 18.2 Billion Yuan for Monopoly
New Capsicum Varieties Infringement Case Opens for Hearing
New Judicial Interpretation on Punitive Damages in IP Infringement Disputes
Ge Shu, Director General of the Strategic Planning Department of China’s National Intellectual Property Administration (CNIPA), recently accepted an exclusive interview with Xinhua News Agency and gave answers to how to define high value invention patent.
According to Ge Shu, five kinds of valid invention patents will be included into the statistical range of high-value invention patents:
1. A patent for invention in the strategic emerging industries;
2. A patent for invention having overseas family member patent(s);
3. A patent for invention maintainded for more than 10 years after grant;
4. A patent for invention that realizes the higher amount of pledge financing; or
5. A patent for invention that has won the State Science and Technology Award or China Patent Award.
Ge Shu further comments "[i]t is expected that by 2025, China will have 12 high-value invention patents per 10,000 population, which means that China's innovation strength will be greatly enhanced, and the gap between China and developed countries such as the United States and Japan will be further narrowed."
China has launched a three-year plan to offer monetary incentives to provincial-level regions that have made achievements in fostering patent technology transfers from small and medium-sized enterprises.
The plan was unveiled in a recent notice jointly released by the Ministry of Finance and the National Intellectual Property Administration. It aims to support SME innovation, helping promote the utilization of their patented technologies and prevent them from lying dormant.
Provinces, autonomous regions and municipalities with well-developed schemes, proper measures, strong execution and outstanding achievements in transferring patent technologies will each be awarded 100 million yuan (about $15.3 million), according to the plan.
The monetary incentives can be used to further help SMEs acquire and materialize patent technologies and carry out intellectual property pledge financing.
The Legal Service Department of China Chamber of International Commerce (CICC) has released the International Intellectual Property Protection Index Report 2020 in Beijing. In 2020, global IPR protection, especially in key monitoring countries, will overcome the impact of the epidemic and maintain a long-term trend of strengthening IPR protection, reporters from Economic Information Daily learned at a press conference.
According to the ranking of the 10 countries highlighted in the report, Germany, South Korea, Japan, Australia, Brazil, Vietnam, Singapore, Russia, the United States and India are ranked from highest to lowest in the IP protection index.
The report shows that the international intellectual property innovation competitiveness of the key monitoring countries continues to intensify. In areas such as artificial intelligence and 5G information and communications, large multinational companies have accelerated their global presence, and patent and trademark registration applications have maintained an active momentum.
On the occasion of the 21st World Intellectual Property Day, the Organizing Committee of the National Intellectual Property Publicity Week has decided to organize the National Intellectual Property Publicity Week in 2021 to strengthen publicity and education on intellectual property protection and enhance the awareness of the whole society to respect and protect intellectual property.
The theme of this publicity week is to comprehensively strengthen the protection of intellectual property and promote the construction of a new pattern of development
The event is held on April 20 to 26, 2021.
2020 Statistics: CNIPA's Measures Inspire Innovation of SMEs
In a bid to meet the demands of small and medium-sized enterprises (SMEs), the CNIPA has been deeply implementing SMEs IP strategy promotion projects jointly with the Ministry of Industry and Information Technology and introducing and promoting a series of policies and measures.
In 2020, more than 20,000 SMEs benefited from the IP trusteeship services; nearly 8,000 SMEs obtained about loans of 60 billion yuan by pledging their IPs as collaterals; 53,000 companies passed the enterprise IP management standards certification, most of which were SMEs and 5,729 national IP template enterprises were cultivated, 76% of which were SMEs. At the end of 2020, the research and development intensity, the average number of valid invention patents and IP pledge financing of SMEs from template enterprises were respectively 4.8%, 29.4 and 1.08, much higher than the national average numbers, namely 2.2%, 2.9 and 0.01.
Moreover, enterprises' vitality was motivated through IP services. First, SMEs were encouraged to implement the enterprise IP management standards and their relevant abilities were strengthened. As of the end of 2020, the number of companies passed the enterprise IP management standards certification reached 53,000, most of which were SMEs. Second, IP trusteeship service system centering on SMEs was established. The pilot work was carried out at 35 parks with SMEs assembling in 20 pilot cities and areas. In 2020, IP trusteeship services were provided to more than 20,000 SMEs, and the activity to support the development of enterprises through IP service was carried out nationwide. Over 7,000 times of abundant and various events were held, benefiting more than 50,000 companies, with SMEs taking up a majority. Third, 5,729 national IP template enterprises were cultivated, 4,354 of which were SMEs, accounting for 76%.
Judges Urge Trademark Applicants to Be More Honest
Individuals and enterprises should be more honest when applying to register trademarks since many applicants have lost lawsuits due to deception in recent years, Beijing judges said.
"The trademarks we found were incompatible with the applicants' actual products or services, meaning they might easily mislead or even defraud consumers, so we didn't support them in handling relevant cases," Zhang Jian, a judge at the Beijing Intellectual Property Court, said on Wednesday.
For example, an investment consulting company sued the China National Intellectual Property Administration because its application for a trademark named Li'an Fund was rejected by the government department, according to Zhang.
But the court ruled in favor of the administration "because the company had no qualification in the fund business," he said, adding that consumers would misunderstand the enterprise's service if the trademark was registered.
In another case, a Shenzhen-based technology company came to the court after it failed in its effort to register a trademark called Quan Tian Ran for its products of shampoos, hair dyes and cosmetics at the administration.
The court did not side with the company, "as quan tian ran in Chinese means 'all ingredients are natural', which isn't suitable to be used in products like shampoos," said Luo Mingxin, another judge at the court. "Consumers might be easily be misled to believe that the goods contain no chemicals when seeing such a trademark."
Additionally, some applications for trademarks that included the name of a place or country were also identified as "deceptive" because those applicants were not from those areas, he said.
For instance, a company from Jilin province initiated a lawsuit against the administration after the authority disagreed with its application of a trademark called Yue Gang Ao for its wine products, he said.
"Yue gang ao in Chinese means Guangdong, Hong Kong and Macao," Luo said. "If the Jilin company used such a trademark, consumers might be confused with the wine's producing area, so we overruled its application."
Since the IP court was open in 2014, trademark administrative cases have accounted for more than half of all IP-related disputes, many of which have been initiated by companies after their applications were rejected by the administration, said Song Yushui, vice-president of the court. She added that the court supported the administration in about 81 percent of such lawsuits.
"That means the administrative and judicial authorities have the same understanding on what should be identified as deceptive trademarks in most cases," she said.
She suggested individuals and enterprises be honest and prudent when applying to register trademarks, preventing fake or exaggerated designs or descriptions of their products or services to protect consumers' right to know what the goods or services are.
She said the honesty of market entities will also contribute to creating an orderly business environment and maintaining high-quality development.
In December 2020, the State Administration for Market Regulation filed an investigation against Alibaba Group Holding Co., Ltd. (hereinafter referred to as Alibaba Group) for abusing its dominant market position in the online retail platform service market in China in accordance with the Anti-Monopoly Law.
According to the investigation, Alibaba Group has a dominant position in the online retail platform service market in China. Since 2015, alibaba group, the dominant market position, abuse within the platform on merchants "alternative" request, ban merchants set up shop in other competitive platform or platform to participate in promotional activities, and with the help of the rules of market forces, platform and data, algorithms and other technical means, take a variety of rewards and punishments measures to guarantee execution "alternative" requirement, Maintain and enhance their own market power and gain unfair competitive advantages.
The investigation shows that Alibaba Group's implementation of the "one or the other" behavior excludes and limits the competition in the service market of online retail platforms in China, impedes the free circulation of goods, services and resources, affects the innovative development of platform economy, infringes the legitimate rights and interests of merchants on the platform, and damages the interests of consumers. Paragraph 1 (4) of Article 17 of the Anti-Monopoly Law prohibits the abuse of dominant market position by "limiting the counterparty to trade with the counterparty without justifying reasons".
In accordance with the provisions of Article 47 and Article 49 of the Anti-Monopoly Law, and taking into account the nature, extent and duration of Alibaba Group's illegal acts, the State Administration for Market Regulation made an administrative punishment decision on April 10, 2021, ordering Alibaba Group to cease its illegal acts. It also imposed a fine of 4 percent of its 2019 sales in China of 455.712 billion yuan, totaling 18.228 billion yuan. At the same time, in accordance with the principle of combining punishment with education in the Administrative Punishment Law, it issued the Administrative Guidance to Alibaba Group, requiring it to make comprehensive rectification in strictly implementing the main responsibility of enterprises on the platform, strengthening internal control and compliance management, maintaining fair competition, and protecting the legitimate rights and interests of merchants and consumers on the platform. In addition, it has submitted self-inspection compliance reports to the State Administration of Market Supervision for three consecutive years.
The plaintiff, in this case, Syngenta Seeds (Beijing) Co., Ltd. (Syngenta for short), owns the right to a new variety of pepper named "Marceau".
In 2017, the plaintiff Syngenta discovered in the market that the defendant Beijing Boshou Seed Co., Ltd. (abbreviated as Boshou) was selling the sweet pepper product "Shenghong" (referred to as the infringing variety involved). After that, Syngenta purchased from the defendant Shouguang Ludingshuo Agricultural Technology Co., Ltd. (referred to as Ludingshuo) the seedlings of the infringing varieties produced by the Boshou Company through notarization, and also obtained the infringement from the Boshou Company. The seeds, seedlings and "Marceau" seeds and seedlings of the seeds mentioned above and seedlings were tested for DNA (SSR molecular marker detection).
In September 2017, Syngenta sued Boshou and Ludingshuo to the Beijing Intellectual Property Court and held that the infringing variety involved in the case was the same as the "Marceau" that Syngenta enjoyed the right to new plant varieties. The company's production and sales activities with Ludingshuo Company constituted an infringement of its new plant variety rights, and requested the court to order the two defendants to stop the infringement according to law, and jointly compensate for economic losses and the costs of investigating and stopping the infringement, totaling RMB 3 million.
The defendant, Boshou, believed that it also owned an authorized sweet pepper variety named "PP1201" (the name was once used as "Shenghong"), and the variety rights were acquired on April 23, 2018.
The infringing variety involved is the protected "PP1201" variety, which did not infringe on Syngenta's new plant variety rights.
The court organized DNA identification on the involved infringing varieties, "Marceau" and "PP1201", to ascertain the facts. The results showed that the number of different sites in the pairwise comparison of the three varieties was 0, similar to the variety. In July 2020, the plaintiff applied for withdrawal on the grounds of needing to organize evidence again.
On August 18, 2020, the plaintiff filed a lawsuit again and believed that the DNA identification results of the court's preliminary organization could not rule out the infringement of the rights of the new plant varieties by the actions of the two defendants, and applied for the court to organize a DUS identification to further ascertain the facts.
In this case, based on DNA testing, DUS testing should be used to further find out whether the three species involved are identical. Even if the DUS test shows that the three varieties are identical, it cannot deny the legal facts of Boshou's selection of varieties, and Boshou has not promoted and sold "PP1201" on a large scale, and has no intention to infringe on the variety rights involved, which does not constitute infringement. Lvdingshuo's planting and selling of the defendant's demonstration varieties did not constitute infringement.
Defendant Lvdingshuo Company: The defendant Lvdingshuo Company submitted a written statement expressing its waiver of participating in the court hearing on the same day and recognized the defense opinions of Boshou Company.
The case has not been pronounced in court and is being further tried.
The Supreme People's Court of China recently issued a Judicial Interpretation on the application of punitive damages in trials of civil cases of infringement of intellectual property rights.
The JI provides specific guidance on the application of punitive damages in civil intellectual property infringement disputes and how it may be calculated. It also clarifies in which circumstances that the defendant will be held as holding the intent of infringement and what will be considered as serious infringement.
Here is the full text translation:
Judicial Interpretation of the Supreme People's Court on the Application of Punitive Damages in the Trial of Civil Cases of Infringement of Intellectual Property Rights
Fashi  No. 4
(Adopted at the 1831st meeting of the Judicial Committee of the Supreme People's Court on February 7, 2021 and effective as of March 3, 2021)
In order to correctly implement punitive damages system for intellectual property rights, lawfully punish serious infringement of intellectual property rights and comprehensively strengthen the protection of intellectual property rights, this interpretation is formulated in accordance with the Civil Code, the Copyright Law, the Trademark Law, the Patent Law, the Anti-Unfair Competition Law, the Seed Law and the Civil Procedure Law and other relevant laws and regulations of the People’s Republic of China, and in combination with judicial practice.
Article 1 Where the plaintiff claims that the defendant has intent to infringe on the intellectual property rights that he enjoys in accordance with the law and the circumstances are serious, and requests the defendant to pay punitive damages, the people's court shall try it in accordance with the law.
The term “intent” in this Interpretation includes bad faith as stipulated in Paragraph 1 of Article 63 of the Trademark Law and in Paragraph 3 of Article 17 of the Anti-Unfair Competition Law.
Article 2 Where the plaintiff requests punitive damages, he shall specify the amount of compensation, the calculation method, and the facts and reasons that he bases on when filing the lawsuit.
Where the plaintiff adds a request for punitive damages before the end of the debate in the court of first instance, the people's court shall allow it. Where a request for punitive damages is added in the second instance, the people's court may conduct mediation based on the principle of voluntariness of the parties. If the mediation fails, the court shall notify the parties to file a separate lawsuit.
Article 3 For the determination of intentional infringement of intellectual property rights, the people's court shall comprehensively consider factors such as the type of the infringed intellectual property rights, the status of the rights, the public awareness of the related products, and the relationship between the defendant and the plaintiff or the interested parties.
Under the following circumstances, the people's court may preliminarily determine that the defendant has the intention of infringing on the intellectual property rights:
(1) The defendant continues to commit the infringing act after being notified or warned by the plaintiff or the interested parties;
(2) The defendant or its legal representative or manager is the legal representative, manager or actual controller of the plaintiff or the interested parties;
(3) The defendant has a labor, service, cooperation, licensing, distribution, agency, representative or other relation with the plaintiff or the interested parties, and had access to the infringed intellectual property rights;
(4) The defendant has business dealings, or has negotiated for reaching a contract, etc., with the plaintiff or the interested parties, and had access to the infringed intellectual property rights;
(5) The defendant commits an act of piracy or counterfeiting of a registered trademark; or
(6) Other circumstances that can be determined as intentional.
Article 4 For the determination of serious infringement of intellectual property rights, the people's court shall comprehensively consider factors such as the means and frequency of the infringement, the duration, geographical scope, scale and consequences of the infringing act, and the behavior of the infringer in the litigation procedure.
If the defendant has any of the following circumstances, the people's court may determine that the circumstance is serious:
(1) Committing the same or similar infringement again after being administratively punished or being held liable by a people’s court;
(2) Committing infringement of intellectual property rights as a business;
(3) Forging, destroying or concealing evidence of infringement;
(4) Refusing to fulfill a preservation ruling;
(5) Making huge gains or causing the right holder to suffer huge losses (from the infringement);
(6) Endangering national security, public interests or personal health with the infringing act;
(7) Other circumstances that can be determined as serious.
Article 5 When determining the amount of punitive damages, the people's court shall, in accordance with relevant laws, take the amount of the plaintiff’s actual loss, the amount of the defendant’s illegal gain or benefit obtained due to infringement as the calculation basis. This basis does not include the reasonable expenses paid by the plaintiff to stop the infringement; if the law provides otherwise, such provisions shall prevail.
If the amount of actual loss, the amount of illegal gain and the benefit obtained due to infringement mentioned in the preceding paragraph are all difficult to calculate, the people's court shall reasonably determine them with reference to the multiple of the license fee of the right in accordance with the law, and use the same as the basis for calculating the amount of the punitive damages.
The people's court shall order the defendant to provide the infringement-related books and materials that are in the control of the dependent. If the defendant refuses to provide or provides false books and materials without justifiable reasons, the people's court may refer to the plaintiff's claim and evidence to determine the calculation basis of the amount of the punitive damages. Those whose acts constitute the circumstances stipulated in Article 111 of the Civil Procedure Law shall be investigated for legal liabilities in accordance with the law.
Article 6 When determining the multiple of punitive damages in accordance with the law, the people's court shall comprehensively consider the degree of the subjective fault of the defendant, the seriousness of the infringement and other factors.
If an administrative fine or a criminal fine has been imposed for the same infringement and the execution is completed, the people's court shall not support the defendant's claim for reduction or exemption of punitive damages, but can comprehensively consider it when determining the multiple mentioned in the preceding paragraph.
Article 7 This interpretation shall come into force on March 3, 2021. If relevant judicial interpretations previously issued by the Supreme People's Court are inconsistent with this interpretation, this interpretation shall prevail.
Translating from the official publication in Chinese http://www.court.gov.cn/fabu-xiangqing-288861.html