Recently, the Supreme People’s Court (hereinafter referred to as “SPC”) released a civil judgment of the second instance of a dispute between a Japanese company and 4 magnetic companies in Ningbo, Zhejiang Province over the abuse of market dominance. The SPC revoked the first-instance judgment made by the Intermediate People’s Court of Ningbo in 2021, holding that the Japanese company did not constitute an abuse of its dominant market position by refusing to trade.
As early as August 2012, the Japanese company filed a “337 investigation” with the United States International Trade Commission (“ITC”) regarding 4 patents for Sintered NdFeB. Since then, the Japanese company has authorized 8 Chinese enterprises to use the patent, and no longer authorized other Chinese rare earth enterprises.
In December 2014, four Chinese companies filed an anti-monopoly civil lawsuit against the Japanese company. In April 2021, the Intermediate People’s Court of Ningbo made a first-instance judgment, ruling that the Japanese company had a dominant position in the market related to the alleged patent, and its behavior constituted an abuse of dominant market position by refusing to trade. Subsequently, the Japanese company was unsatisfied with the first-instance judgement, and appealed to the SPC.
On December 14, 2023, the SPC made the second instance judgment. The judgment held that in the event that the existing evidence is insufficient to prove that the sintered NdFeb patent owned by the Japanese company is technically irreplaceable, based on the demand substitution of sintered NdFeb material production technology, the relevant product market in this case should be defined as the sintered NdFeb material production technology market, including patented and non-patented technology with close substitutability. The court of first instance defined the product scope (product market) of the relevant market involving in this case as the market related to the patent license for Sintered NdFeB’s essential patents owned by the Japanese company, which were ungrounded and lacked legal basis, and should be corrected. (Feb. 23th, 2024,WeChat Public Account of China Judgements Online)
Anti-Unfair Competition
The Video Game CompanyWas Sued for the Infringement of “The Knockout”
In 2023, the TV drama “The Knockout” was a big hit. The defendant -W company commissioned Q Company to produce and distribute videos to promote a video game under its ownership. And then Q Company released multiple game promotional videos on short video platforms, claiming that the game was “the Knockout version” and “one on one restoration of The Knockout’s story and playing method”. They used a large number of elements and characters images from the alleged TV drama, including character names, location names, etc. It also stated in the alleged videos: “The promotional scenes in advertisement would appear after reaching a certain level or triggering the certain function module.”
IQiyi Company, the IP right holder of the TV drama “The Knockout”, has full rights to the TV drama, script, materials, clips, behind the scenes, dubbing, pictures and images of “The Knockout”. It filed a lawsuit with the Kaifu District Court, claiming that the defendant's behavior constituted unfair competition.
The court held that the case was an unfair competition dispute. The defendant, Q Company, despite knowing that “The Knockout” had high market popularity, still used the title of “The Knockout” and marked “The Knockout version” as well as characters, props, environment and other elements in a number of alleged infringing videos it produced and distributed, which constituted unfair competition involving counterfeiting and confusion. Although the defendant, WCompany, did not directly engage in the infringement, it knew that the alleged infringing videos had the possibility of infringement, and failed to take measures, which ultimately led to the infringement. Accordingly, the court determined that the defendantWcompany constituted joint infringement.
After comprehensive consideration, the court ruled the defendants to compensate the plaintiff for 180,000 yuan for economic losses and reasonable costs of rights enforcement and dismissed plaintiff’s other litigation requests. (Mar. 1st, 2024, Huasheng News)
“Wusu” Beer Beat “Niaosu” in Unfair Competition Case and Awarded with 2.08 Million Yuan Damages
Recently, Nanjing Intermediate People’s Court, Jiangsu Province heard a trademark infringement and unfair competition dispute case filed by “Wusu” Beer against “Niaosu” Beer. The first instance granted the plaintiff’s 2.08 million yuan compensation request in full amount, and the High People’s Court of Jiangsu Province upheld the original judgment in the second instance.
Xinjiang Wusu Beer Company has been producing beer since 1986. It registered the image trademark No. 4142284 in 2006 and is also the right holder of multiple related registered trademarks. Through its long lasting and continuous use and promotion, it has a high influence in domestic beer market.
Since 2016, Wusu Beer Company has been using the packaging and decoration of “red canned Wusu beer 500ml” and red canned Wusu beer has a high reputation in domestic beer market.
But a beer company fabricated “Niaosu” as its trade name. A company in Tianjin registered “Niaosu” trademark No. 36942919 and commissioned a company in Wuxi and a company in Shandong to produce and sell “Niaosu” beer which is similar to the plaintiff’s red canned Wusu beer 500ml.
After the trial, the court held that the plaintiff’s trade name “Wusu” had already gained high popularity and influence at the time of the defendant’s establishment in August 2020. The defendant fabricated a highly similar “Niaosu” as its trade name, despite knowing that they are competitors in same industry. The subjective intention of “free riding” was obvious, which contradicted the basic principle of honesty and creditability that companies should follow in business activities. The behavior constituted unfair competition. Thus, the above judgment was made. (Mar. 4th, 2024, SINA Finance)
Statistics
WIPO Released theWorld Intellectual Property Indicators
Recently, the World Intellectual Property Organization (WIPO) released the World Intellectual Property Indicators. Affected by rising interest rates and economic uncertainty, the total number of international patent applications filed through the Patent Cooperation Treaty (PCT) system of WIPO was 272,600, a year-on-year 1.8% decrease, marking the first decline in 14 years; the number of applications to the international trademark system decreased by 7%; and the number of international design applications increased by 1%. China still remains the largest source country of international patent applications, followed by the United States, Japan, South Korea and Germany. In the applicant ranking, Huawei of China filed the most international patent applications, followed by Samsung of South Korea and Qualcomm of the United States.
Asian countries accounted for 55.7% of international patent applications filed through the WIPO, up from 40.5% a decade ago.
Among the published international patent applications, computer technology field accounted for the highest proportion, 10.2%; followed by digital communications (9.4%), electrical machinery (7.9%), medical technology (6.7%) and pharmaceuticals (4.7%), which accounted for about two-fifths of all published applications. (Mar.7th, 2024, CCTV News)
PRC: 2,508 Supervision Cases of IP Civil Administrative LitigationWere Handled Last Year
Recently, the work report of The Supreme People’s Procuratorate (PRC) shows that in 2023, 45 measures were released for procuratorial organs to handle IP cases and strengthen comprehensive protection. About 18,000 people were prosecuted for infringement of trademarks, patents, copyrights and trade secrets, with a year-on-year increase of 40.8%. Also, the protection of trade secrets in litigation was strengthened to prevent “secondary leaks”. About 2,508 supervision cases of IP civil administrative litigation were handled, 2.7 times compared to 2022. And 873 public interest lawsuits were handled in IP field. (Mar. 8th, 2024, The Paper)
