IP GOSSIP in China
Latest News of China IPOct. 2016
The latest developments of China IP protection............................................................. 2 1. HFG won the opposition lawsuit against "Mei Lin Kai (Chinese characters) MLK" trademark ..................................................................................................................... 2 2. A big financing CASE worth RMB 864m was stranded for IP dispute.IP can't be ignored ........................................................................................................................................... 4 3. Dispute on patent fee upgraded, MEIZU was sued by Qualcomm................................ 5 4. The first case on selling counterfeit goods on WeChat was cracked down by YI WU Police ................................................................................................................................. 7 5. Huangshan AIC seized 800 bottles of infringing "GU JING" liquor................................ 8 6. The "most handsome chimpanzee in history" was registered as a trademark .............. 9
The latest developments of China IP protection
1. HFG helped win the Administrative Litigation against "Mei Lin Kai (Chinese characters) MLK" trademark which shall not be approved for registration as trademark in the judgment .
Cited Trademark 1
Cited Trademark 2
The plaintiff ZOU Yan filed an administrative litigation to the Beijing Intellectual Property Court for dissatisfying the Decision on Review of Trademark Opposition made by the TRAB, in which the "Mei Lin Kai (Chinese characters) MLK" trademark applied by the plaintiff shall not be approved for registration. Recently, the Beijing Intellectual Property Court made the judgment to reject plaintiff's claims.
The plaintiff claimed that the Opposed Trademark was completely different with the Cited Trademarks. Moreover, the Opposed Trademark is applied for being used on goods of pillow, sleeping bag, mattress and bamboo crafts, etc. which are not similar to the goods of cosmetics, designated on by the Cited Trademarks. Therefore, the existence of the Opposed Trademark will not mislead and confuse the consumers. So, the plaintiff requested the Beijing Intellectual Property Court to revoke TRAB's Decision.
HFG, on behalf of Mary Kay Inc., attended this administrative litigation, and submitted evidence in the trial, to further explain that the Cited Trademarks have been identified as well-known trademarks under class 3, and we have submitted a large quantity of evidence
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during the review of trademark opposition, to prove the Cited Trademarks have been well-known before the application date of the Opposed Trademark. At the same time, the third party further illustrated that although the Opposed Trademark was designated on goods of bamboo crafts and others, which all belonged to daily articles, the target consumers of which were relatively large connected with that of cosmetics goods and others designated on by the Cited Trademarks. Common consumers are much possible to think the Opposed Trademark has certain relation with the Cited Trademarks when they see the Opposed Trademark. Meanwhile, HFG further emphasized that the use of the Opposed Trademark may desalt the close tie between the "Mei Lin Kai (Chinese characters)"" trademark (Cited Trademark 1) and the third party company.
After the trial, the Beijing Intellectual Property Court confirmed the facts and grounds by the third party during the administration period and litigation period, and rejected plaintiff's claims.
Comments by HFG This case is a significant success of HFG representing the client, as well as manifests the HFG has taken a milestone step forward for protecting the client's trademarks. By this litigation, the Beijing Intellectual Property Court pushed back the well-known trademark recognition of the "Mei Lin Kai (Chinese characters)" trademark (Cited Trademark 1) and "Mary Kay" trademark from 2009 to 2006 and before, and clearly expressed in the judgment that the "Mei Lin Kai (Chinese characters)" trademark (Cited Trademark 1) and "Mary Kay" trademark were recognized as well-known trademarks and protected by law for many times. More delightfully, under the efforts of HFG lawyers, the Court protected the "Mei Lin Kai (Chinese characters)" trademark (Cited Trademark 1) and "Mary Kay" trademark with the anti-dilution theory in the judgment. In the juridical practice of China, the conditions to protect trademark with the anti-dilution theory by the Court is much stricter than the anti-dilution protection to the common well-known trademarks. However, as long as a trademark is protected by the Beijing Intellectual Property with the anti-dilution theory, it indicates that this well-known trademark has more reputation than other common well-known
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trademarks, and suggests this trademark has higher brand value.
2. A big Financing CASE worth 864m was stranded for IP dispute. IP can'tbe ignored.
The upsurge of the acquisition and reorganization among Chinese enterprises started from 2013. In 2015, up to 337 cases of acquisition and reorganization in China were examined and approved. With the more and more strict examination by supervisory department, the approval cases of acquisition and reorganization declaim in 2106. Acquisition and reorganization rejected by supervisory department due to IP disputes is nothing new now.
On June 17, 2016, the CSRC (Chinese Securities Regulatory Commission) rejected a total of 18 companies' reorganization, among which the acquisition of Fuchun Communications Co., Ltd. and Chunqiu Time (Tianjin) Film Co., Ltd. was the typical case rejected for IP dispute.
According to the Article 11(4) of the Measures for Administration of Material Assets
Reorganization of Listed Companies, "Assets involved in the material assets reorganization
shall have clear ownership, with no legal obstacles to assets ownership transfer or assets
transfer and relevant debtor-creditor relation shall be handled legally.. The acquisition of
Fuchun Communications and Chunqiu Time (Tianjin) was rejected as it did not comply with
the above rule.
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From January to August 2015, all revenue of Chunqiu Time (Tianjin) Film Co., Ltd. came from the film Wolf Warriors which was co-invested and co-produced by Chunqiu Time Culture Co., Ltd. and other companies. In September 2015, the president of Chunqiu Time Culture Co., Ltd. LV Jianmin (the president of Chunqiu Time (Tianjin) Film Co., Ltd. at present transferred his share rights to other people. In January 2016, the legal person of the Beijing Chunqiu Time Culture Co., Ltd. sued LV Jianmin and Chunqiu Time (Tianjin) Film Co., Ltd to the Court, and asked for returning all revenue and rights of Wolf Warriors as well as the rights of other several films.
We learned that the transaction amount of the acquisition between Fuchun Communications and Chunqiu Time (Tianjin) Film Co., Ltd. reached up to RMB 864m. However, the acquisition was rejected finally, because the CSRC believed the core IP of Chunqiu Time (Tianjin) Film Co., Ltd. was involved in litigation.
Comments by HFG IP is the core capital of the enterprise. The IP issue of the enterprises to be listed is always followed closely by the CSRC, which shall affect directly whether the enterprise can be listed successfully. Moreover, in this specific case, if the company loses this listing opportunity, after the IP dispute resolved, it may be harder for an enterprise to be listed by re-funding in consideration of this rejected "history".
3. Dispute on patent fee upgraded, MEIZU was sued by Qualcomm.
The patent disputes between Qualcomm and many domestic mobile phone manufacturers in China are always paid high attention by the public. On October 15, 2016, Qualcomm declared it will take legal remedy for the infringement acts of MEIZU
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Technologies Co., Ltd. (hereinafter referred to as "MEIZU") in America, Germany and France.
On June 23, 2016, Qualcomm sued the MEIZU to the Beijing Intellectual Property Court on the grounds of patent fees in arrears and for a long time having not signed a License Agreement, and claimed for indemnity of RMB 520m. On June 30, Qualcomm sued the MEIZU again to the Beijing Intellectual Property Court and the Shanghai Intellectual Property Court on the grounds that MEIZU infringed many cellphone-related patents of Qualcomm, such as 3G and 4G, etc. and claimed for indemnity of RMB 17m.
MEIZU held the press conference immediately after the Qualcomm filed the first lawsuit, on which MEIZU suggested that it refused to pay Qualcomm patent fee considering that the licensing clauses and standards were non-transparent and breached the license obligations of fairness, reasonableness and non-discrimination. However, after Qualcomm declared to file lawsuits around the world, MEIZU made the response that it would like to pay the patent fee as long as there would be "reasonable rate", otherwise, the "patent fee will account for 1/3 of the sales price of the mobile phone".
Currently, many domestic mobile phone manufacturers in China such as ZTE, Lenovo and VIVO, etc. have signed the Patent License Agreement with Qualcomm, the mobile phone sale prices of which are not higher than that of MEIZU. Therefore, part insiders of the industry believe those declarations of MEIZU are a kind of "delay policy".
Comments by HFGMEIZU has very weak patent reserves. Almost all its patents are concentrated in Mainland China and most were applied after 2015. As for European and other important Asian markets, MEIZU obtained only few registered patents for the time being. From another aspect, the patent value of MEIZU is far lower than the average level of the industry by comparing with the average value of industries of digital data processing, telephone communication and wireless communication network,
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etc. Therefore, for those "bruising", MEIZU may choose to close this lawsuit out of the court. Additionally, MEIZU needs to store energy to expand its oversea patent market in a large quantity, and only this can make it possible for MEIZU to prepare itself well for marching into oversea markets.
4. The first case on selling counterfeit goods on WeChat was cracked down by YI WU Police. As an alternative something like this YiWu police cracked down WeChat shop selling the counterfeit goods.
Selling counterfeit goods on WeChat is nothing new. But now in IP industry, there was no significant breakthrough on the crackdown to the WeChat sales.
On October 14, 2016, YI WU Police cracked down one exceptionally serious case of packaging and processing counterfeit constant temperature socks of one famous brand. This was the first case cracked down by Yi Wu Police on selling counterfeit goods on WeChat.
At the end of September 2016, one company in Jiangyin City, Jiangsu Province reported to YI WU Police that many WeChat merchants were selling constant temperature socks of their company, but after preliminary examination, a large part of those socks were counterfeit. This company further indicated that selling counterfeit socks of those WeChat merchants seriously damaged their economic interests and brand image.
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After receiving this report, YI WU Police launched a deep investigation immediately. After tracking investigation for a week, the Police finally found the factory of manufacturing and packaging counterfeit products, as well as its associated warehouse in 3rd District, Zijin, Futian Street, YI WU. In the raid on October 14, YI WU Police totally seized 2780 bags full of counterfeit socks, and a total of 70,000 pieces of package materials such as packaging bag and hang tag, etc. with the name of that brand. The involved amount of this case was up to more than 100,000 yuan. Two suspects involved in this case have been held in criminal detention. Comments by HFGAt present, the WeChat merchants mainly show products for sales on WeChat platform (or WeChat Official Accounts or WeChat Moments), transfer payment by WeChat and then deliver goods by the express, which is the main mode of their sales. WeChat merchants sell counterfeit products in a very secret way and it is very hard to confirm their sales amount and track the sales sites. For such above advantages, it is becoming much fiercer to sell counterfeit products on WeChat in recent three years.
This is the first serious attack of Chinese Police on those who sell counterfeit products on WeChat. However, the past cases mainly cracked down the offline warehouses accompanied by tracking the WeChat transfer accounts recording. This is the first case to track manufacturers and offline warehouses from WeChat Moments, and then crack down.
5. Huangshan AIC seized 800 bottles of infringing "GU JING" liquor.
On October 13, 2016, Huangshan AIC seized totally 800 bottles of Virgin pulp liquor infringing the trademark registered by the Anhui Gujing Gongjiu Limited Liability Company. In this year, Huangshan AIC has cooperated with many famous enterprises for many times to inspect the
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liquor market. Until now, all kinds of infringing liquor they have seized amount to more than 80,000 yuan.
The "GU JING" liquor involved in this case was found in one logistics location, which should be transferred to QIMEN. The AIC launched an investigation to this target location immediately after receiving this information. However, the AIC could not find the consigner of these counterfeit goods by information of so many purchasers all the time. The manufacturers written on the goods packages expressed they never produced those products. At present, all infringing liquor has been seized, and related departments have also opened investigations.
Comments by HFG It is the main method of producing and selling counterfeit goods in China to manufacture counterfeit goods by underground factories, illegally use others' "three certificates (business license, tax registration certificate, and organization code certificate)" to label false manufacturer information on the goods, transport certain number of inventory to some freight stations or the logistics warehouses to store, and to deliver the products by transport company to consumers once there are orders . On one hand there is highly concealment for the storage of goods, on the other hand, such mode can "protect" the true counterfeit goods manufacturers and sellers from being tracked. Once the counterfeit goods were found, the true counterfeit goods manufacturers could escape from the legal sanction considering no inevitable evidence. Currently it has become a main operation mode in the counterfeiting industry in China.
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6. The "Most handsome chimpanzee in history" was registered as a trademark.
In early 2016, one chimpanzee called "Shabani" in Higashiyama Zoo, Nagoya, Japan, became popular on the internet for its handsome appearance. Many women in Japan believe this chimpanzee is very different from other chimpanzees, and the word "extremely handsome" can be used to describe it. Therefore, they come to the zoo for desiring to have a look at it.
HigashiyamaZoo started to sell "Shabani" related products attracting more and more visitors. As early as March 2016, Nagoya, the operator of Higashiyama Zoo has filed a trademark application to the Japan Patent Office, which recently got the "Shabani" (in Japanese katakana) and "SHABANI" trademark recognition in the end. One leader in this zoo expressed that "Shabani" was one the most popular animals here in the zoo, and products related to it were sold very well, even once one foreign visitor bought 15 bags of "Shabani" snack himself.
Comments by HFGConsidering the "most handsome chimpanzee in history" is so popular in Japan, we welcome the Higashiyama Zoo to register trademarks related with "Shabani" (in Chinese Characters) and "SHABANI" in China for protection. Meanwhile, please remember, relevant images or cartoon images of "Shabani" can be registered in terms of copyright for protection as well. "Handsome" can be cross-border, while IP protection has definite frontier.
HFG Law Firm October 24, 2016
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HFG since found in 2003as a firm uniquely integrated and co-managed by multi-national
professionals, persists in providing clients with service of the highest standard and quality all
the time. By profound understanding for the commercial requirements of clients from all
walks of life all over the world, we do our best to obtain the largest business interests for clients.
At the moment, HFG consists of three entities: HFG Law Firm, HFG Intellectual Property
Consulting Co. Ltd and HFG Intellectual Property Agency Co. Ltd. and sets up two offices in
Beijing and Shanghai.
HFG collects an abundant and diversified knowledge base and multi-lingual communication
capability through a long-term practical experience, and does all kinds of intellectual property
business for clients in administrative and judicial authorities at various levels at provinces,
municipalities directly under the central government and autonomous regions of the country.
HFG integrates the commercial and corporate law services of IP contentious and
non-contentious practices, providing a one stop solution to companies whose intangible assets
out value the tangibles. Service scope of HFG includes IT communicationpetrochemistry,
wine such as grape wine, fashion cosmetics, retail and e-commerce trade, food and
pharmaceuticals standard, the acquirement of certificate and the earnings of patent
Cases completed by HFG are evaluated as the top ten representative criminal cases and top
five classic cases by Ministry of Public Security for several continuous years, in addition, the
top ten best cases claimed by high quality brand protection committee of CAEFI and the
classical lawsuit in that every year by many medium and high courts at many main provinces.
HFG has been awarded as the best IP service provider by many international clients for
several continuous years.
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HFG is recommended by Legal 500 as the No.1 in terms of IP business in Shanghai since 2010 and by MIP ranked in Chambers and Partners and WRT 1000.
Please feel comfort to contact us if you have any advices or opinions for IP news of food industry in this season. Contact information: Tel+86 21 5213 5500 Fax+86 21 5213 0895 Emaillli@hfgip.com; Hfg_china@hfgip.com
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