In July 2018, the Beijing IP Court made an administrative judgment on the trademark of “D2” with App. No. 4231099 (hereinafter referred to as “the Disputed Trademark”) that the Invalidation Decision on the Disputed Trademark made by the TRAB (hereinafter referred to as “the Disputed Decision”) should be revoked in accordance with the law, as part of the Disputed Decision was based on unclearly identified facts and contained incorrect law application. In 2016, DSQUARED2 TM S.A. (the Invalidation Applicant) filed an invalidation application against the Disputed Trademark registered by Hangzhou Xiaoshan Heshang Town Chenchen Grocery Store. During the administrative procedure, the TRAB ruled that the Disputed Trademark is not similar with the trademark of “D2 DSQUARED2” with App. No. 3968186 (hereinafter referred to as “the Cited Trademark”) and should be maintained. The Applicant, dissatisfied with the Disputed Decision, filed an administrative lawsuit in the Beijing IP Court.
The Applicant, DSQUARED2 TM S.A., is a famous Italian clothing company. This company has sold its products in “I.T” store in China since 2002. It registered the Cited Trademark in November 2010, designated to the goods of raincoat in Class 25. The Respondent, Hangzhou Xiaoshan Heshang Town Chenchen Grocery Store, applied for the Disputed Trademark in Class 25, designated to the goods of shirts, trousers, knitwear [clothing], etc.. DSQUARED2 TM S.A., filed the invalidation application to the TRAB based on the claim that the Disputed Trademark violates Articles 28, 31 and 41 of the Trademark Law in 2001. After examination, the TRAB held that: i) The Disputed Trademark is not similar with the Cited Trademark on similar goods, and the Respondent did not improperly register the trademark with certain influence that had been priorly used by others; ii) Meanwhile, as there is no evidence to prove that the Disputed Trademark was obtained by fraud or other improper means, the Disputed Trademark does not have the nature of exaggeration and fraud in advertising goods; iii) Therefore, the Applicant’s claim should not be supported. The Applicant, dissatisfied with the Disputed Decision, filed the administrative lawsuit in the Beijing IP Court. After the hearing, the Court held that: i) As the designated goods of the Disputed Trademark (shirts, trousers, knitwear [clothing], etc.) and the Cited Trademark (raincoat) have high relevance in the terms of marketing channel and consumers, which constitute similar goods, and part of the elements of the two trademarks are extremely similar, the coexistence of the two trademarks on similar goods can easily confuse and mislead the relevant public about the source of the goods, and the two trademarks constitute similar trademarks used for similar goods; ii) The Disputed Decision made by the TRAB should be corrected. At last, the Court ruled that the Disputed Decision made by the TRAB should be revoked and the TRAB should make a new invalidation decision. user dee prov exa good 2. 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(the stered by Q that the Dis and consum ed by the s e confusion HFG, the C ed judgmen k invalida by HFG) (Fro rt made a fir characters k”) that the Disputed De n unclearly i e Invalidatio Qingdao Les sputed Trad mer, etc., w ame source n among co Court identi nt. ation cas ) om the Inter rst-instance equivalent e Invalidatio ecision”) sho dentified fa on Applican shi Sanitary demark didn whether the e or there i onsumers. fied that ra e against rnet) e judgment o to PIRELLI) n Decision o ould be revo acts and con nt) filed an y Products ’t violate th HFG IP y can easily s a specific Based on aincoat and t the trad on the trade ) with App. on the Dispu ked in accor ntained inco n invalidatio Co., Ltd.. he provisions P GOSSIP in C y make the c relationsh the above clothing co demark o emark of “PE No. 120333 uted Tradem rdance with orrect law ap on applicat During the s of the Trad China (August relevant pu ip between e factors, a onstitute sim of “PEINE EINEILI Bei N 384 (hereina ark made by the law, as pplication. tion against e administra demark Law t 2018) 4 ublic n the after milar EILI Nai Li” after y the part t the ative w and The Applicant, PIRELLI & C.S.P.A. is a famous Italian tire manufacturer, whose main brand “PIRELLI” and its Chinese equivalence “Bei Nai Li” enjoy high reputation in the tire industry and other relevant areas and have been identified as well-known trademarks. The Respondent, Qingdao Leshi Sanitary Products Co., Ltd. applied for the Disputed Trademark in January 2013, designated to the goods of paste, personal sexual lubricants, chemical preparations for the diagnosis of pregnancy, medicines for human purposes, disinfectants for hygiene purposes, lotions for pharmaceutical purposes, isotopes for medical purposes, medicinal oils, oil formulation, etc. in Class 5. The Applicant filed the invalidation application to the TRAB based on the claim that the Respondent improperly registered the trademark with certain influence that had been priorly used by others. After examination, the TRAB held that the Disputed is not similar with the Cited Trademarks on similar goods, and the Respondent did not improperly register the trademark with certain influence that had been priorly used by others, therefore, the Applicant’s claim should not been supported. The Applicant, dissatisfied with the Disputed Decision, filed the lawsuit in the Beijing IP Court. After the first-instance hearing, the Court held that: i) the Third Party has registered a large quantity of trademarks, which has disturbed the public order, damaged the public interest, disturbed the trademark registration order and violates the principles of good faith; ii) Therefore, the registration of the Disputed Trademark violates the relevant provision about improper registration in the Trademark Law. 【Comments by HFG】Lanny Lee, the Chief Executive Lawyer of HFG, pointed out that from the perspective of present judicial practice, Article 44 of the Trademark Law pays more attention to the protection of the public interest and public order. If the applicant registers a large quantity of trademarks without legitimate reasons, and has no actual intention to use the trademarks, it can be deemed as improper occupation of public resources. In this case, the Third Party registered 439 trademarks, in which many are intended imitation of famous/well-known marks of others. Although the Third Party interpreted such large amount of trademark registration as commercial reserves, but it failed to submit the evidence to prove that these applications are really for the usage. Above all, the Court held that the Third Party disturbed the regular trademark registration order, and finally made the above-mentioned judgment. 3. Litens wins over RMB 10.64 million compensation in a patent infringement case concerning automobile engine (From the Internet) On 24 July, 2018, the Jiangsu High People’s Court made a second-instance as “Chery”), ruling that i) the two types of four-cylinder engine assembly of SQR481 and SQR484 series manufactured and sold by the two defendants constitute patent infringement and ii) the two defendants should bear joint liabilities for compensation of over RMB 10.64 million in total for damages and reasonable expenditure. Background: The Plaintiff, Litens Suzhou, a wholly-owned subsidiary of Litens Automotive Group in Canada, was registered in 2003, and mainly manufactures automatic tension pulleys and shock absorbers of automobile engines. Defendant 1, Gates Unitta Shanghai, a wholly-owned subsidiary of Gates Nitta Belt Company LLC in the United States, was registered in 2003, and mainly produces automotive transmission equipment. In the above dispute, Defendant 1 mainly provided technical solutions and major parts for Defendant 2. Defendant 2 is a well-known full-vehicle manufacture in China which produced and sold the products accused of infringement. The patent involved in this case is the Chinese invention patent of “Synchronous Transmission Device with Non-Circular Drive Parts as well as Operation and Construction Method Therefor” with Patent No. ZL02823458.8, applied by Litens Automotive Group (the parent company of Litens Suzhou) through the PCT route. This patent was applied on October 24, 2002, granted on June 25, 2008 and its priority date is November 27, 2001. The patent is to set the driving wheel of the engine timing system (on/off control system for engine intake and exhaust system) as a non-circular wheel and correct the torque by using the fluctuation of the non-circular wheel to reduce or offset the fluctuation load torque generated by the camshaft, so as to eliminate or reduce the vibration and noise of the automobile engine timing system. This patent was licensed to Litens Suzhou through a patent license. Afterwards, Litens Automotive Group authorized Litens Suzhou to file a lawsuit for compensation in its own name. HFG IP GOSSIP in China (August 2018) 8 Litigious Process: In 2012, the Plaintiff, Litens Suzhou, filed the first lawsuit against Gates Unitta Shanghai, Chery and Suzhou New Century Automobile Trade Co., Ltd (as the company was only involved in selling the accused products and has evidence of legitimate sources, after being canceled in the process of second instance, the Plaintiff withdrew the lawsuit against it, it will not be discussed here) in the Suzhou Intermediate People's Court, claiming for compensation of over RMB 38.44 million for damages, on the grounds of Claims 1, 30, 39 and 58 of the patent involved in this case. On August 2, 2010 before the lawsuit was filed, Gates Nitta Belt Company LLC (the parent company of Gates Unitta Shanghai) filed an invalidation application against the patent involved in this case to the Patent Reexamination Board of SIPO, and the Patent Reexamination Board of SIPO ruled that the patent should be maintained. On August 6, 2012 after the patent lawsuit, Gates Unitta Shanghai again filed an invalidation application against the patent to the Patent Reexamination Board of SIPO, and the Patent Reexamination Board of SIPO still ruled that the patent should be maintained. On December 19, 2014, after the hearing, the Suzhou Intermediate People’s Court made a first-instance judgment, ruling that the products accused of infringement do not fall into the scope of protection of the patent, and dismissed Litens Suzhou’s claim. Litens Suzhou, dissatisfied with the first-instance judgment, appealed to the High People’s Court of Jiangsu Province. The High People’s Court of Jiangsu Province held that: i) The first-instance court made a restrictive interpretation of the relevant technical features of the claims and improperly narrowed the scope of protection of the claims; ii) Through infringement comparison, the products accused of infringement fall into the scope of protection of Claims 1, 30, 39 and 58; iii) The act conducted by Chery is manufacturing, using and selling the products that infringed on the patent right; iv) Gates Unitta Shanghai provided technical solutions and major parts for the patent infringement of manufacturing and selling the infringing products conducted by Chery, which constitutes contributory infringement. In terms of compensation, the second-instance court made the final judgment, ruling that according to the relevant data of sales volume and profit margin of the products accused of infringement, the two defendants should bear joint liabilities for compensation of over RMB 10.64 million in total for damages and reasonable expenditure to Litens Suzhou. HFG IP GOSSIP in China (August 2018) 9 【HFG Former Patent Examiner’s Views】The former patent examiner and senior patent attorney of HFG pointed out that this patent lawsuit had lasted for about six years from 2012 to 2018, which mainly involved the identification of patent infringement, particularly the interpretation of claims and infringement comparison. In the field of mechanical mechanism, the technical features of the patent are usually described in structural terms, and include the position relationship between the parts and the features of change in the movement, but not limited to the mere mechanical connection relation of each part. Based on the technical expertise and complexity of the patent involved in this case and the infringing products, both parties and the second-instance court invited several expert assistants to participate in the analysis and discussion to determine the correct interpretation of technical solutions. In accordance with the provisions of functional features in Article 4 of the Interpretation by the Supreme People's Court on Some Issues Concerning the Application of Laws to the Trial of Patent Infringement Disputes and Article 8 of the Interpretation by the Supreme People's Court on Some Issues Concerning the Application of Laws to the Trial of Patent Infringement Disputes (2), the determination of whether the technical features of the patents involved in this case is functional features or not shall be based on the correct interpretation of technical solutions, and the records of patent examination, reexamination, invalidation and other procedures shall also be taken into consideration to determine whether the technical solutions to be protected can be obtained by a person having ordinary skill in the art from the claims. In addition, as the technical solutions applied in the infringing products of synchronous transmission device for engine transmission system cannot be identified by technical identification when the infringing products are being used, Litens Suzhou conducted the related measurement tests by itself and issued four measurement experiment reports to prove that the infringing products fall into the scope of protection of the claims involved in this case. Therefore, although the identification of patent infringement is complicated in the field of automobile parts where infringement occurs frequently, professional and reasonable protection measures can be taken to stop massive infringement and pave the way for the promotion of products in the market.