First Foreign Film and Television Works Copyright Infringement Case in Shenzhen
Liu and Ma, managers of the App content production department of a cultural media company in Shenzhen, downloaded and edited domestic and foreign films on a large scale without the permission of the copyright owners, and then made the films available to users through the App. VIP users could not only watch the films free of advertising, but also download them to personal devices. From May 2018 to 10 January, 2020, the company had derived about CNY 1.4 million (approx US$217,000) from provision of the unauthorized films via the App. The Nanshan District Procuratorate of Shenzhen city initiated a public prosecution.
After the hearing, the Court held that: both the cultural media company, and the individual defendants, including Zhang and Li who were responsible for the daily operation and management of the company, had distributed films to the public via the Internet without permission of the copyright owner. This constituted the crime of copyright infringement, in breach of Article 217 of the Criminal Law of the People's Republic of China..
The Court made a first instance judgment and fined the cultural media company defendant CNY 400,000 (approx. US$217,000). The four individual defendants were sentenced to imprisonment ranging from one to three years as well as being fined.
Lego wins toy counterfeiting appeal
In June 2011, an individual, Li, founded Guangdong Meizhi Zhijiao Technology Co., Ltd., a company that engages in R & D and the production and sale of toys. Since 2015, Li, together with eight other people, has been engaged in dismantling LEGO products, undertaking computer modeling, copying drawings, and commissioning others to make the new LEGO series toy moulds without permission. They set up a toy factory specifically to manufacture copy LEGO assembled building block toys, and then sold them under the brand ‘Lepin’. Li and the other defendants were prosecuted before the Shanghai Third Intermediate People's court. At first instance, Li was sentenced to six years' imprisonment and fined CNY 90 million (approx. US$13,945,000) for the crime of copyright infringement; the other defendants were sentenced to imprisonments ranging from three years to four years and six months and received commensurate fines. The Defendants Li, Yan, Zhang, Wang, Du and Lu were not satisfied with the judgment and appealed to the Shanghai Higher People's court.
The Shanghai Higher People's Court held that: first, the works in question had been created by the Lego company, and constituted artistic works for the purposes of China’s Copyright Law. Secondly, in calculating the value of the Defendants’ illegal business operation, the Court relied on an Accounting Appraisal Opinion, which had been provided by a certified firm of public accountants, and other relevant evidence and valued it at more than CNY 330 million (approx. US$51,130,000). Finally, the case not only caused great loss to the goodwill and economic interests of the copyright owners, but also disturbed the economic order, causing great social harm. It should, therefore, be punished severely.
The Shanghai Higher People's court rejected the appeal and upheld the first instance judgment.
Punitive damages awarded in Wyeth Trademark Infringement and Unfair Competition Case
Wyeth Nutrition is a leading global brand in the field of infant and young child nutrition. The Chinese licensee of its registered trademarks "惠氏" (Chinese Characters of Wyeth) and "Wyeth"（the cited trademarks), discovered that Guangzhou Wyeth Baby Maternal and Infant Products Co., Ltd. (Guangzhou Wyeth) was engaging in the large-scale production and sale of maternal and infant care products bearing the cited trademarks, Further, it had registered the Wyeth marks, or obtained transfers of registrations, in classes in which Wyeth had not registered. Guangzhou Wyeth’s promotional activities also suggested that it was associated with Wyeth Nutrition. The company had, further, authorized Guangzhou Zheng’ai Daily Necessities Co., Ltd., Hangzhou Danheng Maternal and Infant Products Co., Ltd. and Qingdao Wyeth Baby Maternal and Infant Products Co., Ltd. (Qingdao Wyeth) to sell products online. Wyeth Nutrition and Wyeth Shanghai commenced a trademark infringement and unfair competition action against Guangzhou Wyeth and the other companies in the Hangzhou intermediate people's Court.
The Court held that: the six defendants' use of ‘惠氏 (Chinese Characters)’ and the ‘Wyeth’ logo on the alleged products, product packaging, brochures and website constituted use of marks identical with or similar to Wyeth’s registered trademark on or in relation to similar goods, and amounted to both trademark infringement and unfair competition.
In awarding compensation, the Court considered the high reputation of the Plaintiff's trademark, the Defendant’s obviously malicious infringement, the long duration and geographical scope of the infringement, and the fact that the products involved related to the health and safety of infants and children, and decided to award punitive damages.
Accordingly, the Court ordered the six defendants to immediately stop using ‘惠氏(Chinese Characters)’ and ‘Wyeth’ trademarks in their business activities. Further, Qingdao Wyeth was ordered to stop using ‘惠氏’ in its enterprise name. Guangzhou Wyeth, Chen and Guan were ordered to jointly and severally compensate the Plaintiffs for economic loss and reasonable expenses, totaling CNY 30.55 million (approx. US$4,733,000); Hangzhou Danheng Maternal and Infant Products Co., Ltd was held jointly and severally liable for CNY 15 million (approx. US$2,324,000) of the CNY 30.55 million(approx. US$4,733,000); Guangzhou Zhengai Daily Necessities Co., Ltd. was held jointly and severally liable for CNY 100,000 (approx. US$15,500) of the CNY 30.55 million(approx. US$4,733,000), and Qingdao Wyeth was held jointly and severally liable for CNY 600,000 (approx. US$93,000) of the CNY 30.55 million(approx. US$4,733,000).
一审法院经审理认为：经过百度在线公司广泛使用推广，“小度”作为其智能音箱的商品名称，属于反不正当竞争法第六条第一项所规定的有一定影响的商品名称；“xiaodu xiaodu”是用户在使用小度智能音箱时必不可少且频繁出现的特定语音指令，该语音指令已与百度在线公司及其产品建立起了明确、稳定的联系，并具有较高知名度和影响力，应受到反不正当竞争法第六条第四项保护。结合“小度”和“xiaodu xiaodu”的知名度和影响力，小度智能音箱和杜丫丫学习机从功能、受众、销售渠道等方面来看属同类产品，子乐公司实施被诉行为，主观上具有恶意，客观上也易使相关公众误认为杜丫丫学习机与百度在线公司的小度智能音箱及其相关服务可能存在产品研发、技术支持、授权合作等方面的特定联系，导致混淆。子乐公司上述行为违反了反不正当竞争法第六条第一项及第四条之规定，对百度在线公司构成不正当竞争。
The First Unfair Competition Case Relating to Voice Instructions of Intelligent Products in China
Baidu Online Network Technology (Beijing) Co.,Ltd. (Baidu), the leading Chinese language internet search provider, introduced its Xiaodu branded smart speaker several years ago; now it rivals Amazon’s Alexa. Beijing Zile Technology Co., Ltd. (Zile), a local hardware manufacturer, produced an English language machine, Du YaYa, to help children learn English. It highlighted 小杜(Chinese character, Pinyin ‘Xiaodu’) in reference to the machine, and used ‘xiaodu’ as the voice instruction for start and operation. Baidu considered that Zile’s behavior constituted unfair competition, and sued both Zile and its distributor, Beijing Jingwei Zhicheng E-commerce Co., Ltd. (Jingwei Company) in the Beijing Haidian District People's court.
The Court held that Baidu had used and promoted the name 小度 (Chinese character, Pinyin ‘Xiaodu’) extensively in relation to its smart speakers, and that, as a result, the speakers qualify as a ‘commodity with certain influence’ pursuant to Item 1 of Article 6 of the Anti Unfair Competition Law. "Xiaodu xiaodu" is a specific voice instruction used by the Xiaodu smart speakers. It is very well known and closely connected with Baidu. As a result, Zile’s use of the name falls within the behavior proscribed by Item 4 of Article 6 of the AntiUnfair Competition Law. Considering the popularity and influence of ‘小度’ and ‘Xiaodu" Xiaodu ‘, and the fact that the Xiaodu smart speaker and the Du YaYa learning machine are similar products in terms of function, audience and sales channels, Zile’s behavior is clearly likely to mislead the relevant public to think that there may be specific links such as product R & D, technical support, authorized cooperation, etc., between the two products and their related services. It contravenes both Items 1 and 4 of Article 6 of the Anti Unfair Competition Law.
The Court ordered Zile to eliminate the influence of its unfair competition and compensate Baidu for economic loss of CNY 500,000 (approx. US$77,500) and reasonable expenses of CNY 50,000 (approx. US$7,750).