Haworth & Lexon IP Cases Report (10)

Haworth & Lexon IP Law Newsletter
No.4, 2003 (Total:No.10) May5th, 2003
Edited by Haworth & Lexon

"Haworth & Lexon Intellectual Property Law Newsletter" aims at introducing new cases and legal tendency in IP fields. All the comments do not mean the legal opinion of our firm and the firm does not have any legal liability for such comment. If you require any legal advice, we are willing to offer you considerate service. You can write E-mail to hl@hllawyers.com. If you have any interests and suggestions, or have any interests on some topics listed in this law newsletter, please contact with us.

★The Case Regarding "84 Disinfectant" was Judged by the Supreme People's Court of the PRC; "84 Disinfectant" was Decided as Ordinary Name, and Beijing Ditan Hospital Lost the Final Trial
★Beijing Innovation Furniture Co, Ltd. Lost the Trial on the Case Related to 3 Trademark and Copyright Infringements
★Fuzhou Jindeli, Whose Patent of Invention was Infringed, was Awarded RMB 550,000 in Damages
★The Case Regarding MP3 Infringement was Judged. The Music Copyright Society of China (MCSC) was Paid Damages of RMB 120,000.
★Copyright of "Lady White Snake" (Picture for the Spring Festival) was infringed; Henan Philately Co. was ordered to Pay the Damages

The Case Regarding "84 Disinfectant" was Judged by the Supreme People's Court of the PRC; "84 Disinfectant" was Decided as an Ordinary Name, and Beijing Ditan Hospital Lost the Final Trial

In March 2003, the Supreme People's Court of the PRC made the final decision in Beijing Ditan Hospital vs. Jiangsu Ai Te Fu Pharmaceutical Co, Ltd. & Jinhu County Ai Te Fu Chemical Co, Ltd. & Beijing Qing Yu Pharmaceutical Distribution Department. The court reversed the original judgment made by Beijing High People's Court and rejected the claim of the plaintiff, Beijing Ditan Hospital.

Beijing High People's Court held that, since it was launched in 1985, "84 Disinfectant" was very popular with consumers and has got certain reputation; therefore, it should be regarded as a well-known commodity.

Without the permission of Beijing Ditan Hospital, Ai Te Fu Chemical Co, Ltd. used "84 Disinfectant" as the name of its product, so that the consumers were easy to be misled.

The court held that, the unfair competition was established and Ai Te Fu Chemical Co, Ltd. must bear the civil responsibility.

The Supreme People's Court of the PRC held that, the focus of the dispute was whether "84 Disinfectant" was a well-known commodity or an ordinary name. The peculiar name of a well-known commodity, which cannot be used by relevant commodities, has evident features that the consumers can distinguish from other commodities. Different from peculiar names, ordinary names are not attached to exclusive right like peculiar names.

Ordinary names include not only the names listed in the standards of the country or a certain industry, and the names in professional dictionaries or reference books, but also the names which have been wildly recognized and used by the operators.
Since Beijing Ditan Hospital, the plaintiff, developed "84 Hepatitis Disinfectant" in 1984, which was changed to "84 Disinfectant" later, the hospital has transferred this technology to many enterprises, and entitled them to produce "84 Disinfectant". There is no particular promise on the name "84" specified in the relevant transferring contracts, so that, "84 Disinfectant" has become an ordinary name of this kind of commodity and was used widely. When using "84", every transferee of this technology has put its own trademark on the products as well.

In accordance to the regulation on naming issued by health department, every relevant enterprise uses the combination of its trademark with "84 Disinfectant" as the name of its product, which is specified in the license approved by health department. Therefore, it is impossible to make sure the source of a certain product, only based on the name "84 Disinfectant". It is the trademarks of the relevant enterprises but not the name "84 Disinfectant" that help consumers to distinguish among the relevant commodities. Thus, Ditan Hospital's claim that "84 Disinfectant" was a peculiar name of its well-known commodity, could not be supported.
Furthermore, Ditan Hospital once applied to the Trademark Review and Adjudication Board (TRAB) for the repeal of the others' registration of the trademark "84 Disinfectant" on commodities in Class 5 (Disinfectants). The ground for its application was that "84 Disinfectant" was a common name.

In addition, the relevant authorities, such as the Health Department, which was involved in the production and distribution of "84 Disinfectant", and the TRAB, which dealt with the disputes over the registration of the trademark, have regarded "84 Disinfectant" for years as a common name of disinfectants, and some of the authorities rejected the registration of "84", because they held that "84" just meant the type of the products. Thus, "84 Disinfectant" has been widely used as a common name in this industry.

Therefore, the claim of Ai Te Fu Pharmaceutical Co, Ltd. was supported, and the Supreme People's Court made the above decision.

Beijing Innovation Furniture Co, Ltd. Lost the Trial on the Case Related to 3 Trademark and Copyright Infringements

The Plaintiff, Beijing Innovation Furniture Co, Ltd. (the plaintiff for short) filed an action against Beijing Bei Mu Timber Co, Ltd. (the defendant for short) for copyright infringement and the infringement of the exclusive right to use a trademark. Beijing First Intermediate People's Court rejected the plaintiff's claims in three cases.

Upon hearing, the court held that, the trademarks (No.1393022 and No.14053035) were approved to be used on commodities in Class 24, which mainly includes textile. However, the plaintiff had no evidence to prove that the defendant had used the trademarks which was either identical with or similar to the two registered trademarks mentioned above on textile or other similar commodities. By comparison, the trademark (No.1386848) possessed by the plaintiff had no similarity in design with the trademark (No.1981044) owned by the defendant. The plaintiff's trademark had not the essentials possessed by the defendant's trademark, such as the design of words, the transformation of words and the design of circle.

The only similarity was that there was a reverse triangle designed in both trademarks. To ordinary consumers, however, the distinctions between these two trademarks were more obvious than the similarities, so that consumers were surely able to distinguish the different sources of these two kinds of commodities. Therefore, the infringement of the plaintiff's exclusive right to use the trademark (No.1386848) was not established.

The court also held that, compared with the trademark "Innovation" registered by the plaintiff, the defendant's two trademarks ("Inventiveness" and Bei Mu Yi Nuo) were quite different from the plaintiff's in the organization of letters, pronunciation and meanings. The differences were too obvious to confuse and mislead the consumers. Thus, the defendant hadn't infringed the plaintiff's exclusive right to use the trademark "Innovation".

As to the plaintiff's claim that the defendant had infringed its copyright, the evidence provided by the plaintiff were unable to prove the infringement, because there was no name of the defendant's on the booklets and the address put on the booklets was not the defendant's. Therefore, the Beijing First Intermediate People's Court didn't support the plaintiff's claim.

Fuzhou Jindeli, Whose Patent of Invention was Infringed, was Awarded RMB 550,000 in Damages

The plaintiff, Fuzhou Jindeli Art Ware Co, Ltd. ( Jindeli for short), brought a lawsuit against Shenzheng Feng He Sheng Industry Co, Ltd, Liu (the owner of Fuzhou Taijiang Ya Li Art Ware Shop) and Sheng, for patent infringement. In April 2003, Fuzhou Intermediate People's Court ordered that, Shenzheng Feng He Sheng Industry Co, Ltd. and Sheng must pay the plaintiff damages of RMB 500,000, which was the largest amount regulated of legal compensation for infringement, and Liu (the owner of Fuzhou Taijiang Ya Li Art Ware Shop) was ordered to pay the plaintiff RMB 50,000 in damages.

The court held that, the plaintiff's invention of "a kind of shaping technique to produce large hollow mental art wares" had been granted the patent by SIPO (the State Intellectual Property Office of P.R.C.) in September, 2000. The defendants Shenzheng Feng He Sheng Industry Co, Ltd, and Sheng manufactured decorations in gross, which was identical with the plaintiff's patent, and dumped them at low prices, without any authorization by the plaintiff. Thus, the infringement was established. For the plaintiff's trademark Jindeli is a well-known trademark with great reputation and high-rate market possession, the court ordered the two defendants to pay RMB 500,000 in compensation.

 found that Liu (the owner of Fuzhou Taijiang Ya Li Art Ware Shop) began to sell the decorations manufactured by the defendants in June 2001, and disregarding the plaintiff's request to stop immediately, Liu continued his selling. The court hereby held that Liu's infringement was established and ordered him to pay the plaintiff RMB 50,000 in damages.

The Case Regarding MP3 Infringement was Judged. The Music Copyright Society of China (MCSC) was Paid Damages of RMB 120,000.

In April, 2003, Beijing Second Intermediate People's Court made the decision in the Music Copyright Society of China (MCSC) vs. Beijing Wei Di Electronic Publishing Company & Beijing Zhong Lian Hong Yuan Compact Disc Co, Ltd. relating to MP3 infringement. The court ordered Beijing Wei Di Electronic Publishing Company to pay the plaintiff damages of RMB 118,800 and bear the reasonable payment RMB 2,500.
The court held that, as a legally-established administrative authorization of the copyright of music works, MCSC had the right to administer the property right of the works involved in cases, according to the contract entered into with the owners of the copyright of these works, and MCSC also had the right to brought a lawsuit in its own name.

Since it was before the amendment of the Copyright Law that Zhong Lian Hong Yuan Compact Disc Co, Ltd. copied the disc "The Same Song MP3 -- 300 Songs"，and Beijing Wei Di Electronic Publishing Company published and distributed it, this case should be judged in accordance to the Copyright Law before the amendment. Though the disc "The Same Song MP3 -- 300 Songs" was different in its data records and format of storage, it had no speciality in its copyright.
All the works involved were released before the publication of the disc. According to Article 37 of the Copyright Law, all the music works that have been released can be recorded as audio products, even without the permission of the owner of the copyright, but the owner of the copyright must be paid.

Therefore, the copyright infringement was established, for the two defendants had never paid MCSC, when they used the plaintiff's works to made digital audio products. They must bear the responsibility of compensation.

Copyright of "Lady White Snake" (Picture for the Spring Festival) was infringed; Henan Philately Co. was ordered to Pay the Damages

The seven plaintiffs in this case were Ren Mengzhang and his brothers and sisters. All of them are the children of Ren Shuaiying, the author of "Lady White Snake" (picture for the Spring Festival). The four defendants were Beijing East Area Stamps Company, Beijing East Area Post and Telecommunication Office Shui Zhui Zi Branch, Beijing West Area Post and Telecommunication Office Xi Wai Avenue Branch, and Henan Philately Company.

Beijing Chaoyang People's Court decided in April, 2003 as follows:
1. Henan Philately Company must stop immediately publishing and distributing the booklet of stamps "Lady White Snake";
2. Henan Philately Company must make apology to the plaintiffs in written form, and pay the plaintiff RMB 34,000 in damages;
3. The three defendants Beijing East Area Stamps Company, Beijing East Area Post and Telecommunication Office Shui Zhui Zi Branch, and Beijing West Area Post and Telecommunication Office Xi Wai Avenue Branch must stop selling the booklets of stamps "Lady White Snake".
The court found that Henan Philately Company published the booklet of stamps "Lady White Snake" in 2001. Without any authorization and paying relevant rewards, Henan Philately Company had used the 12 from the 16 pictures painted by Ren Shuaiying, for totally 22 times on the booklet's box, covers, shading of the foreword, illustrations, commemorative tickets and its shading.

The court held that the infringement of Ren Shuaiying's right to sign, amend and publish his works was established. Thus, Henan Philately Company should bear the obligation of compensation.

The rest defendants, acting as the sellers of the stamps involved in this case, had no fault in the process of purchasing and selling, so they needn't take the responsibility of compensation. As sellers, however, they must stop selling the stamps.