News and Cases from China: May 2018
China’s First Copyright Dispute in Relation to a musical work forming part of an acrobatic performance
In April 2018, a copyright infringement dispute brought by The China National Acrobatic Troupe was heard in the Beijing People’s Court. The Troupe enjoys copyright in a musical work forming part of its ‘Qiao Hua Dan - Group Diabolo’ performance. The Defendant, Zhang Shuo, created a work that used similar in terms of background music, and in actor costumes and performance details. The Plaintiff claimed that the Defendant had infringed its copyright in the musical work and brought infringement proceedings against Zhang Shuo and the internet service provider Tencent and radio and TV station, Xuchang County Radio and TV Station, which had published the work. It sought compensation RMB 100,000 (approx. $US 15,311 U.S.).
As the parties were unable to reach an agreement in court, the Court did not organize mediation. A decision is awaited.
Gree Electrical Appliances Win Utility Model Patent Infringement action
In 2008, Gree Electrical Appliances Inc. a leading Chinese manufacturer of air conditioners, applied for a utility model patent for an indoor air conditioning unit . The patent was granted by SIPO in 2009. The Defendants, Ningbo AUX IMP.& EXP. Co.,Ltd. (Aux), also a leading Chinese manufacturer of air conditioners, together with another Guangzhou trading company produced, sold, and offered for sale eight types of air-conditioner product that Gree claimed made use of its protected technology without permission. Gree commenced patent infringement proceedings in the Guangzhou Intellectual Property Court in 2017.
In April 2018, in a first-instance judgment, the Court held that the Defendant’s products fell within the scope of the Plaintiff’s patent and that the Defendants had, therefore, infringed Gree's utility model patent. The Court ordered the immediate suspension of sale of the infringing products and use of special moulds for their manufacture. It also ordered the Defendants to pay compensation and costs of 40 million yuan (approx. $US 6.1 million).
Court Rejects Application to Register Lao Zi Portrait as Trademark
An individual. filed an application to register a portrait of Lao Zi, the ancient Chinese philosopher and writer, as a trademark in relation to alcoholic beverages and was later asked to issue an invalid declaration. The application was opposed by a third party.
The Trademark Review Board concluded that use of the Lao Zi portrait in relation to alcoholic beverages, including Soju, would be detrimental to religious feeling; thus, the mark was unregistrable. The applicant appealed unsuccessfully to the Beijing Intellectual Property Court, arguing, among other things, that the portrait was not recognizable as a portrait of Lao Zi.
The Court upheld the decision of the Trademark Review Board. Maintenance of cultural tradition demanded that respect be given to figures such as Lao Zi and the image being used here would be recognized by consumers as a portrait of Lao Zi.
Zhejiang Province First Database Source Code Trade Secret Case
In the database (source code) trade secret infringement case between Ningbo Driving A Network Technology Company (company A) and Kim and Zhejiang Driving B Network Technology Company (Company B), the Zhejiang province Zhenhai District Administration for Market Regulation is investigating company B’s activity in the Alibaba Cloud on the basis of evidence produced by Company A. This is the first source code trade secret case in Zhejiang Province.
Company A’s investigation had found: (a) that both the content and a secret key in Company B’s source code were the same as those used by Company A; and (b) Company A’s legal representative, Kim, had participated in the formation of the company B, which was operating in the same field. It suspected that Kim had disclosed trade secrets, and breached both a Confidentiality and Non-competition Agreement and Article 9 of the Anti-unfair Competition Law. Further, Company B’s WeChat official accounts platform was almost identical to that of Company A and Company B had registered copyright in computer software similar to that used by Company A and sold the software at a significantly lower price.