FENDI is an Italian luxury fashion house renowned for its fur, fur accessories and leather goods. FENDI ADELE S.R.L. (FENDI) owns the registered trademarks “ ” (Class 18 & 25) and “ ” (Classes 18 & 25 and services in Class 35) in China.
Shanghai YI LANG Trading Ltd. (YI LANG) imports genuine FENDI products from an authorized FENDI dealer in France and resells these products through a store located in a local outlet in Kunshan, Jiangsu, called Capital Outlets. Without authorization from FENDI, the FENDI mark is used on the signboard and outer wall signage of the store. The mark also appears, together with YI LANG's own logo and contact information, on discount posters, interior décor, bills of sale and shopping bags. The store is advertised on the outlet floor signage and in a brochure, as well as an advertorial circulated via the outlet's WeChat account, all using the FENDI mark.
In 2016, FENDI brought a lawsuit against YI LANG and Capital Outlets, before the Pudong Court of Shanghai, for trademark infringement and unfair competition.
The issue in dispute was whether the using of the FENDI mark on the signboard etc. constituted trademark infringement and/or unfair competition, or whether such use fell under the scope of fair use.
On November 10, 2016, the court ruled that the use of FENDI mark qualified as "fair use" and dismissed FENDI’s claims.
The court reasons were:
- YI LANG merely indicates the true origin of the merchandise for consumers’ sake. The products are authentic. The fact that YI LANG displays its own logo, business name and contact information, on shopping bags and posters, makes it unlikely for the consumers to identify the store as a FENDI store. Capital Outlets’ using of the FENDI mark in the promotion of the store aims at facilitating YI LANG’s sales of the products, and is not foul play.
- Sales service is not covered by the plaintiff’s trademark registered in Class 35. The acts of YI LANG of selling the FENDI products are neither identical nor similar to services designated by the plaintiff’s service mark in Class 35. The act of using the FENDI mark on the store signboard is needed to sell authentic FENDI products and does not constitute infringement on the plaintiff’s trademarks registered in classes 18 and 25.
- The Outlet advertorial merely states that FENDI products are available in the outlet, which contains no misleading content about the relationship between YI LANG and the plaintiff. Such act is thus within the reasonable range of promotion and does not constitute false advertisement.
FENDI appealed to the Shanghai IP Court. In its appeal, FENDI submitted the result of a notary-supervised survey conducted in the proximity of the outlet using voluntary participants chosen at random among the pedestrians. The survey indicates that the majority of the interviewees assume that the accused store is a chain store or franchised store of FENDI.
The Shanghai IP Court rendered on July 28, 2017, a decision in favour of FENDI, granting injunction and awarding indemnification of RMB 350,000 to be jointly paid by both defendants.
The Court of Appeal gave a definition of fair use:
- The user does not use the mark to designate its own goods or services;
- The use is confined within the necessity to illustrate or describe the commodities offered for sale by the user; and
- The use does not cause confusion among the relevant public.
The Court opined that using a mark on the signboard of a store aims to indicate, in essence, that such store is operated directly or under license, by the mark owner. Despite the efforts that YI LANG has made in order to identify itself as the operator of the store (by indicating its logo and other information etc.), the court confirmed that the relevant public is most likely to believe that the store is operated or licensed by FENDI, as corroborated by the survey. Given that the operator of the store has no affiliation with FENDI, the accused act exceeds the necessary scope of illustrating or describing the commodities sold in the store, which causes confusion. The Court therefore concluded that the act of using FENDI mark on the signboard of the accused store is not fair use.
The court added that using a mark on a store signboard falls within the category of operation and management services designated in Class 35. The Court upheld FENDI's claim on trademark infringement citing its registered trademark in Class 35 and finding that the accused violates Article 57 of the Trademark Law (identical mark on similar services).
The court acknowledged that through long-term use, the name FENDI has formed a strong relation with the fashion house and is known to the relevant public in China. The use of FENDI’s trade name, without authorization is likely to mislead the public into misconstruing that the accused store is operated or licensed to operate by FENDI, which constitutes unfair competition (Article 5.3 of the 1993 Anti-Unfair Competition Law).
Finally, the Court held Capital Outlets liable for providing assistance or convenience to YI LANG’s trademark infringement and unfair competition acts and failing to stop it.
Wanhuida Peksung represented FENDI in both proceedings.
There is a difference between saying "I sell XYZ products" in my shop, and opening a shop with a sign "XYZ" to sell such products. In both cases, the products are the same. The difference is that in the second case, the shop owner does not merely say "I sell XYZ products", it makes believe, "I am XYZ", which is untrue. Why does the XYZ trademark owner complain? It is to protect its "brand image", which is often the main value of a trademark. Brand image takes many years to build, and can be easily destroyed. This is why brand owners pay a lot of attention to selecting who is licensed to use their name, and why unauthorized use cannot be tolerated.
Contributors: Dr. Liang Sisi, Mr. Paul Ranjard & Ms. Jiang Nan
On March 2, 2017, the State Intellectual Property Office of the P.R.C. (SIPO) issued a Decision on amending “Guidelines for Patent Examination” (Guidelines). In accordance with this Decision, the newly revised “Guidelines for Patent Examination” came into effect on April 1, 2017.
In the newly revised Guidelines, it is explicitly prescribed that an invention involving computer programs is not the same as the computer program per se, which broadens the scope of eligible subject matters in this field. An invention involving computer programs refers to a technical solution which is wholly or partly based on the processing flow of computer programs to control or process external or internal objects of a computer. But computer program per se refers to a coded instruction sequence, a symbolized instruction sequence, a symbolized statement sequence, source programs, and object programs, etc. For one acceptable format of claims in relation with computer programs, it can be drafted as “medium + computer program flow”.
For implementing the new provisions in the revised Guidelines, the SIPO announced that “there is no transitional period, and they are applied to all the pending applications”. In other words, the new provisions are applicable to all new applications filed on or after April 1, 2017 as well as all the pending applications under the examination stage.
Upon implementation of the newly revised Guidelines, it is suggested that the patent attorneys and the applicants should pay attention to those patent applications involving computer programs. When such applications for inventions are handled during the examination procedure, there will be opportunities to make appropriate amendments, provide statements and/or file divisional applications, in order that the related subject matter may obtain prospect of being granted and thus can be protected by China’s patent law.
We take a Chinese patent application for invention as an example and explain how the new patent practice in the computer related area works. In this application, the independent claim 11 asks for “a non-transitory computer readable medium having stored thereon software instructions that, when executed by a processor, cause the processor to generate control signals for controlling exterior lights of a controlled vehicle, by executing the steps comprising:…”, and claims 12-15 are dependent from the independent claim 11.
Concerning this application, the examiner issued a First Office Action on February 24, 2016, in which claims 11-15 are objected as belonging to the subject matter for which no patent rights shall be granted. The reason for such an objection is that all the contents defined in claims 11-15 merely relate to computer program per se. When responding to the First Office Action on July 8, 2016, the applicant deleted claims 11-15 to conform to the prescription of the Guidelines at that time.
Nevertheless, under the newly revised Guidelines, claims 11-15 can be eligible subject matters because they actually intend to protect the computer readable storage medium corresponding to the computer flow defined in each step of the method claims, and thus they relate to the inventions involving computer programs rather than computer program per se.
Taking the advantage of no transitional period for implementing the newly revised Guidelines, the applicant, as suggested by the patent attorney, took the opportunity of responding to the Second Office Action on May 23, 2017 to add back the deleted claims 11-15 into the application. To facilitate the granting procedure, the applicant also submitted convincing arguments in support of the inventiveness of these claims over the prior art cited in the First Office Action. As to these amendments and arguments presented by the applicant, the examiner did not raise any further objections except some formality issues in the following office action. Finally, all the claims including claims 11-15 of the above Chinese patent application have been allowed.
In another Chinese patent application, claim 15 asks for “a non-transitory tangible computer readable medium having stored thereon software instructions that, when executed by a processor within a vehicle, cause the processor to distinguish between tail lights of another vehicle and a flashing red stop light, by executing the steps comprising…”. With regard to this application, the examiner issued a First Office Action on December 29, 2016, in which the following was also pointed out: “claim 15 and its dependent claims 16-20 ask for a ‘non-transitory tangible computer readable medium’; nevertheless, all contents defined in these claims merely relate to a computer program per se and substantially relate to rules and methods for metal activities which do not belong to the subject matter under the patent protection”. Since the deadline for responding to the First Office Action was due on May 13, 2017, it would be possible to change the situation positive according to the newly revised Guidelines. The attorney advised the applicant to retain claims 15 as well as its dependent claims 16-20 by submitting the corresponding arguments. After the response, the examiner did not raise further objection regarding the issue of ineligible subject matter in the Second Office Action, and merely raised the inventiveness objections. Currently, this Chinese patent application is under examiner’s evaluation of inventiveness.
From the above, it can be seen that under the newly revised Guidelines, we have been successful in the patent application cases in which claims are drafted as “medium + computer program flow”.
In summary, under the newly revised Guidelines, when drafting claims involving technical solutions “wholly based on the process of computer programs”, the applicants are permitted to select one of the following claim formats: (i) method claims; (ii) apparatus claims including computer programs; (iii) program modular architecture claims; and (iv) “medium + computer program flow” claims. These types of claims may be allowable. However, attention needs to be paid regarding the clarity of the claims entitled “program products”. They may be construed as having different meanings, including programs per se, medium having programs stored thereon, electronic device running the programs, etc., which renders the claims unclear for their subject matter and thus may not be allowable.
The newly implemented provisions relax the restrictions as to the subject matter of the invention involving computer programs and provide a flexible route for filing patent applications. This will enhance the patent protection in China and be beneficial for both international and domestic applicants. In the future practice, as to patent applications for inventions in such field, the applicants need to pay more attention to the substantive issues, such as novelty, inventiveness and claim support, and especially inventiveness of the claimed invention.
Contributors: Ms. Guan Lili
Wanhuida Peksung View
China’s Trademark Review and Adjudication Board (TRAB) has launched an online searchable database on December 28, 2017, making its decisions available to public, according to an announcement released by TRAB on December 14, 2017.
It is the furthering of an earlier TRAB initiative in publishing every month decisions selected at random, since December 2016.
The purpose of the database is to make a greater number of TRAB decisions available to the public, to increase transparency. Decisions will be published on the site within 20 workdays following delivery to the parties.
In general, publishable decisions will be those instruments rendered to conclude a review or adjudication procedure, including:
- Decision on review of refusal
- Decision on review of opposition
- Decision on declaration of invalidation
- Decision on review of invalidation declaration
- Decision on review of cancellation
However, the decision is NOT published, if it falls under any of the following circumstances:
- Where the party’s trade secret or personal privacy is involved;
- Where the party explicitly requests the non-disclosure of the decision and the TRAB finds such request reasonable;
- Where there is other peculiar circumstance that the TRAB finds inappropriate to publish the decision on the Internet.
According to TRAB Director Zhao Gang, as of November, the agency has accepted 182,400 cases, of which 154,700 cases concerns review of refusal (up 42.08% year on year) and the rest 27,600 cases concerns both parties (also known as “other cases”, up 20.50%) in 2017. Among these cases, 151,000 cases are concluded, including 128,700 reviews of refusal (up 53.75%) and 22,300 other cases (up 16.08%).
Contributors: Ms. QIN Huimin & Ms. JIANG Nan