News & Cases from China: April 2019
Tech giants Baidu and Bytedance in Unfair Competition battle
On 26 April, Baidu, China’s leading search engine, brought an unfair competition action against Bytedance, one of its major competitors, claiming damages of 90 million yuan (approx. US$13 million) and a published apology. Baidu claimed that Bytedance’s news feed app, Jinri Toutiao, had stolen search results produced by its Top1 search product.
A few hours later, Bytedance filed a counter-lawsuit against Baidu, claiming that Baidu had stolen videos from its Douyin app (the Chinese market equivalent of TikTok), and seeking remedies similar to those being sought by Baidu.
Beijing Haidian District Court Rules in Copyright Infringement case involving Short Advertising Video
Mr. Liu, claiming to be the owner of copyright in a short advertising video, sued Shanghai Yitiao Network Technology Co. Ltd, (Yitiao) for copyright infringement, claiming compensation for economic loss in the sum of 1 million yuan (approx. US$145,000) and reasonable expenses of 38,000 yuan (approx. 5,520 USD). Yitiao is a video-focused content producer and one of the top WeChat Official Accounts.
On 26 April, the Beijing Haidian District Court concluded the case, ruling that Yitiao publish an apology and compensate Liu for economic loss and reasonable expenses of more than 500,000 yuan (approx. US$72,632). It has been reported that the case is the first case relating to the infringement of copyright in a short video used in an advertisement, and the highest level of compensation awarded in relation to a single short video.
The Court held that the alleged video was produced by a photographer with a professional camera device and combined multiple shooting clips. The filming and editing of the video embodied the intellectual achievements of the creator. Although the video was short, it constituted an original work created using methods similar to film making. The relevant evidence submitted by Mr. Liu established that he was the author of the video and entitled to copyright protection. There was insufficient evidence to establish that Yitiao had obtained Mr. Liu's authorization. Therefore, the Court ruled in the Plaintiff’s favour and ordered Yitiao to apologise and compensate the Plaintiff for economic loss and reasonable expenses.
Intellectual Property Court of China’s Supreme People’s Court Concludes its first case
China's first national-level Intellectual Property Court, established on 1 January 2019, has heard its first case: a patent infringement action between Valeo Systemes d’Essuyage (Valeo Systemes), one of the world’s leading auto component providers, and three Chinese companies. Valeo Systemes claimed infringement of its patent for ‘motor vehicle windscreen wiper and corresponding connecting devices’
Valeo Systemes had succeeded at first instance before the Shanghai IP Court; the Defendants had appealed to the IP Court of the Supreme Court.
The IP Court held that the Defendants’ products fell within the scope of claim 1, and, therefore, infringed.
The verdict shows a willingness on the part of the Chinese intellectual property judicial protection system to treat all intellectual property rights holders equally, and reflects the intention of Chinese intellectual property laws to fully implement the national treatment principle required by International Treaties.
First Court Win in Unfair Competition Action for Car Design in China
On 13 March 2019, in an action brought by Jaguar Land Rover (‘JLR’), the Beijing Chaoyang District Court determined that Jiangling Motors (“JM”) had engaged in unfair competition.
The Court held that the design of JLR’s Land Rover Evoque had acquired a reputation and that the design of JM’s Land Wind X7 was sufficiently similar to potentially confuse the relevant public. The Defendant was ordered to stop manufacturing, marketing and selling i vehicles to this design, and to pay damages of RMB 1.5 million (approx. US$ 220,588).
JLR had simultaneously filed a copyright lawsuit in relation to the same design, but the court dismissed that claim.
This is a landmark case in that it is the first successful unfair competition claim relating to a car design in China. Up till now, there have only been successful unfair competition cases in relation to other products, such as luxury goods, wine bottles and industrial machines. This case may be particularly significant for car makers whose design patent is no longer valid or at risk of invalidation. More generally, it may be helpful in suggesting an alternative means of protecting car designs..