Newsletter: Volume 4 (2021) Chinese IP Information
(English and Chinese)
- Interpretation of the "deceptive" provision in the prohibition provisions of trademark registration
- Four cases involving intersecting civil and administrative procedures for patents of medical application inventions were held in the Intellectual Property Tribunal of the Supreme People's Court
- Interpretation and application of the leading "Case of dispute over the infringement on the exclusive right of integrated circuit layout design between Wuxi New Silicon Microelectronics Co., Ltd. and Nanjing Rixin Technology Co., Ltd."
- Zhejiang's first judicial interpretation of punitive damages with "Wyeth" received 30.55 million yuan in compensation
Interpretation of the "deceptive" provision in the prohibition provisions of trademark registration
Article 10 of the Trademark Law stipulates several situations in which "shall not be used as trademarks". Among those, item (7) regulates that “Those in the nature of fraud in advertising that easily confuses the public with the quality or other characteristics or origins of the goods, or the place of origin of the goods shall not be used as trademarks.” In practice, the said provision is usually referred to as a "deceptive" provision.
The so-called prohibition provisions refer to the clauses in the Trademark Law that forbidden the use of certain words, graphics, or combinations of graphics and text as trademarks. If violating the stipulation, it means that it cannot be used as a trademark itself, nor can it obtain possibility of registration through use.
In accordance with the law, with the nature of fraud means that a trademark shows something exceeding the inherent degree or inconsistent with the facts for the characteristics like the quality or place of the designated goods or services, easily making the public have misunderstanding of the said points. Next, let’s show you what kind of logo will be identified as "deceptive" in combination with a case.
One group limited company applied for the registration of its logo on the 32nd category of non-alcoholic juice beverages, beer (non-alcoholic) and other commodities. After being rejected by CNIPA on the grounds of violating the "deceptive" provision during reexamination, it sued to the Beijing Intellectual Property Court. The Intellectual Property Court held that the term “Xian zha” has the meaning of “freshly squeezed”, and its use on non-alcoholic beverages and other commodities can easily make the relevant public believe that its products are all “freshly squeezed”, which may lead to misidentification on the characteristics of technology and craftsmanship. Therefore, it was identified as deceptive, and the plaintiff's litigation request was rejected.
In judicial practice, the following factors need to be seriously taken into consideration for the application of "deceptive" clauses:
The basis for judging whether the trademark is deceptive is that the registered trademark objectively expresses or describes the quality of the goods or services and other characteristics or origin information, which is quite different from the truth, may causing a wrong understanding for the related public. Whether a trademark applicant has a subjective intention to deceive is usually not considered.
Only when a mark is combined with a product or service can it play the role of identifying the origin. To determine whether a mark is deceptive, a concrete analysis and judgment should be made based on the understanding of trademark’s meaning and combining the characteristics of the designated goods or services.
When judging whether a sign is in the nature of fraud, it is not required that the sign actually produces deceptive results. As long as the registration mark itself may cause the public to misunderstand, it is in compliance with the regulation of "deceptive" clauses.
The judgment to determine whether the logo is deceptive should be consistent with the general cognition level and cognitive ability of the public. If the public will not misunderstand the quality or place of the goods or services designated for use by the trademark in terms of their daily life experience, it does not conform to the cases stipulated in the "deceptive" provision.
The "deceptive" clause stipulates marks violating the public interests, it does not apply to situations where marks only damage the private rights of specific subjects. If a trademark only infringes on the prior rights and interests of others, it should be regulated by other provisions of the Trademark Law.
The "deceptive" term is an absolute prohibition term for trademarks, and marks applying to the conditions specified in this clause cannot be used as trademarks, nor can they be registrable through use.
The "deceptive" term is one of the most direct manifestations of the principle of good faith in the Trademark Law. Its legislative purpose is to prevent "deceptive" signs from influencing consumers to make wrong decisions on consumption, and to enable trademarks to play their due role in indicating the source of commodities or services.
From: Beijing Intellectual Property Court
Four cases involving intersecting civil and administrative procedures for patents of medical application inventions were held in the Intellectual Property Tribunal of the Supreme People's Court
On the morning of April 25, the Intellectual Property Tribunal of the Supreme People's Court carried out trial to consolidate four cases involving trot and administrative confirmation of rights for medical invention patents.
Two medical invention patents of “Levo-Ornidazole” from Shenghe Company were involved in two cases of infringement for patent rights. The Shanghai Intellectual Property Court believed that Warner Company and CITIC Company infringed the aforementioned two patent rights of Shenghe Company in the first instance, and judged the two companies to jointly compensate Shenghe Company in total of 800,000 yuan for economic losses and reasonable expenses. The trial implemented investigations based on whether the alleged infringing product "Levo-Ornidazole Tablet" belongs to the prior art and whether it has priority right.
In two cases of administrative disputes over the invalidation of patent rights, Huamei Company filed an invalidation request for the above-mentioned two patents. The CNIPA reckoned that both patents involves inventive step and maintained the validity of the patent rights. The first-instance of Beijing Intellectual Property Court judged revoking the sued decision and its new decision by the CNIPA. The CNIPA and Shenghe Company both refused to accept it and appealed to the Supreme People’s Court, claiming that the technical problem to be solved by the two patents is providing a medicine with less toxicity and safer medication, and the prior art did not give technical enlightenment, so it involves inventive step. Huamei Company defended that it is inevitable to find the medical use of "Levo-Ornidazole" during the research and development of chiral drugs. During the trial, all parties engaged in a fierce debate on the creative issue of the patent involved. The case was not sentenced in court.
The Intellectual Property Tribunal of the Supreme People’s Court adopted a “two-in-one” collaborative trial model for the technical intellectual property administrative and civil appeal cases, which systematically guaranteed the simultaneous trial and coordination of administrative case of rights confirmation and civil case of infringement, effectively alleviating bottlenecks in litigation procedures, for instance, the "long period" of patent holders' rights protection. In order to enable the full and in-depth progress of the confrontation between all parties, the administrative case and civil infringement case involving the same patent right were handed over to the same collegiate panel.
From: Supreme People’s Court
Interpretation and application of the leading "Case of dispute over the infringement on the exclusive right of integrated circuit layout design between Wuxi New Silicon Microelectronics Co., Ltd. and Nanjing Rixin Technology Co., Ltd."
On December 14, 2020, the CNIPA released the leading case for administrative enforcement of intellectual property rights "Case of dispute over the infringement on the exclusive right of integrated circuit layout design between Wuxi New Silicon Microelectronics Co., Ltd. and Nanjing Rixin Technology Co., Ltd.". The interpretation and application of the leading case are explained as follows.
1. Election process and guiding significance
This leading case is the first case of an infringement dispute over the exclusive rights of integrated circuit layout designs judged by the Integrated Circuit Administrative Enforcement Committee of CNIPA(hereinafter referred to as the "Administrative Enforcement Committee"), which recommended it as a guiding case. On August 16, 2018, the Administrative Enforcement Committee made a decision handling the case and determined the claimant's infringement. After the decision was made, neither party filed an administrative litigation against the decision.
The Administrative Enforcement Committee has determined the following principles in the administrative adjudication of the leading case: confirming the carrier for the protection scope of the layout design shall be based on the copy or pattern with the integrated circuit sample as a reference.
2. The interpretation and explanation of the case’s main points
(1)Validity determination of right carrier
In accordance with Article 8 of the Regulations on the Protection of Layout-Designs of Integrated Circuits (hereinafter referred to as the Regulations), only registered layout-designs of integrated circuits can be protected by exclusive rights, registration is necessary for obtaining exclusive rights.
According to Article 16 of the Regulations, regardless of whether the layout design is put into commercial use, the copy or pattern is a constituent element for registration; only based on putting into commercial use, the integrated circuit sample becomes the registration element. For this aspect, obviously, the copy or pattern is at the core of the exclusive right carrier for layout design. In addition, the exclusive right of layout-design is established after registration, and it has the legal effect of public summons and public faith to the public, who can trust this publicity as a certain conduct. From this perspective, the layout-design reflected in the copy or pattern shall prevail.
As for the determination of the right carrier validity, the Administrative Enforcement Committee believed that for layout-designs that have not been put into commercial use while registration, the copies or pattern shall prevail. For the layout-design that has been put into commercial use during registration, if the copy or pattern can clearly and completely present all the details of the layout design, the copy or pattern shall prevail; if the details of the copy or pattern are not clear enough, and the protection scope of the exclusive right cannot be defined while relying on the copy or pattern alone, and the layout-design of the integrated circuit sample is consistent with the copy or pattern, the integrated circuit sample may be referred to clarify the unclear details of the copy or pattern.
(2) Determination of protection scope for the exclusive right of layout-design
In accordance with Article 4 of the Regulations, the protected layout-design should involve inventive step, or the combination as a whole should have inventive step although the layout-design consisting of conventional designs. According to Article 30 of the Regulations, all the copying conducts protected by the layout design or any part with inventive step of it, or commercial use conducts on integrated circuit protected by layout-design circuit or with it are all regarded as infringement. It can be seen that for the protection scope of the exclusive right of layout design, all the inventive areas of the layout design shall prevail.
Regarding how to ensure the protection scope of the exclusive right of layout-design, the Administrative Enforcement Committee believed that in consideration of the fact that the inventive step of the layout-design is not required to be declared while registration, in infringement disputes, the scope of protection of the exclusive rights claimed by the right holder should be determined in terms of the layout-design specified in the right carrier and combined with the statement on inventive step made by the rights holder in the request determines, and whether the infringement is established should be judged on the basis of the protection scope. In addition, the description of design ideas and functions involved in the inventive step statement of the right holder shall not be considered when determining the protection scope of the exclusive right of layout-design.
Zhejiang's first judicial interpretation of punitive damages with "Wyeth" received 30.55 million yuan in compensation
On April 26, the 21st World Intellectual Property Day, the Zhejiang Higher People’s Court opened a second-instance trial and declared the first case applying to the Supreme People’s Court’s Interpretation on the Application of Punitive Damages to the Trial of Civil Cases of Infringement on Intellectual Property Rights (hereinafter referred to as Judicial Interpretation of Punitive Damages), the defendant was sentenced to punitive damages of 30 million yuan and compensation for reasonable expenses of 550,000 yuan.
"Wyeth", coming from the United States, is an old brand popular among consumers in the infant milk powder industry. It has been developed for nearly 100 years. The American Wyeth Company is also the trademark owner of trademarks like “Hui Shi”"Wyeth".
The defendant Guangzhou Wyeth Company was established in 2010. In recent years, it has produced and sold goods such as maternal and child care products with the marks of “Hui Shi” “Wyeth”, and “Hui Shi Little Lion” on a large scale for a long time. Trademarks like "Hui Shi" and "Wyeth" have been registered in the categories of toiletries through squatting, assigning form others and other methods. Guangzhou Wyeth Company also indicated in activities associated with Wyeth Company of the United States in its promotion.
Then Wyeth Company and Wyeth Shanghai Company sued Hangzhou Intermediate People’s Court and named Guangzhou Wyeth Company, Chen Zeying, Guan Xiaokun, Guangzhou Zhengai Company, Qingdao Wyeth Company, and Hangzhou Xiangdi Company as the defendants, and demanded Guangzhou Wyeth Company, etc. The defendant stopped trademark infringement and unfair competition, and applied punitive damages of 30 million yuan for economic losses and 550,000 yuan for reasonable expenses.
The Hangzhou Intermediate People's Court made a first-instance judgment and determined that the above six defendants jointly committed trademark infringements. Qingdao Wyeth had committed unfair competition and applied punitive damages, it was determined for infringement profit of at least 10 million yuan, 3 times. Finally the court fully supported the litigation request of Wyeth Company and Wyeth Shanghai Company, namely compensation of 30 million yuan and a reasonable cost of 550,000 yuan.
All defendants dissatisfied about the decision and appealed to the Zhejiang Higher People's Court. After the trial, the Zhejiang High Court further clarified the applicable conditions of punitive damages, compensated for the application deviation caused by determining the base with discretionary thought in the first instance, and carried out accurate calculations on the base of punitive damages based on the evidence submitted by Wyeth Company and Guangzhou Wyeth Company, therefore, the upper and lower limits of infringement profits were determined. Particularly, according to the Judicial Interpretation of Punitive Damages, were calculated separately, and the total amount of compensation was finally determined with separate calculation of the base and multiples. Due to the lower limit of the total amount of compensation has exceeded Wyeth's litigation request, the court of second instance pronounced a judgment in court, rejected the appeal, and upheld the original verdict!
In commercial practice, the material investment requires huge amount of material investment on exploiting the consumer market, and whether the products are enable to achieve good consumer performance and market share in the market has is closely related to the investment of brand owners and users. Therefore, the law regulates a punitive compensation system against malicious registration, intentional infringement and other acts that seriously infringe on the interests of brand owners, for the purpose of curbing infringements and compensating right holders for losses, meanwhile, warns market competition entities to return to the framework of fair competition and focus on their own brands instead of deliberately cling to the reputation of other businesses.
From: China Intellectual Property Magazine