The Supreme People’s Court and the Supreme People’s Procuratorate Releases Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Intellectual Property Infringement (Draft for comment)
Release Date: 18 Jan 2023
In January, The Supreme People’s Court and the Supreme People’s Procuratorate jointly released the Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Intellectual Property Infringement (Draft for comment). The Draft mainly clarifies the circumstances in which misuse of IP will constitute a criminal offence. Article 213 of the criminal law makes provision for trademark criminal offences where the circumstances are ”serious” or “particularly serious” ; the Interpretation lists specific circumstances that constitute ‘serious’ or ‘particularly serious’ circumstances.
Specifically, for trademarks used in relation to goods, Article 1 provides: “Using a trademark identical to a registered trademark on the same commodity without the permission of the owner of the registered trademark, under any of the following circumstances, shall be considered “serious circumstances” as stipulated in Article 213 of the Criminal Law:
(1) The amount of illegal income is more than 30,000 yuan (approx. US$ 4,500) or the amount of illegal business operations is more than 50,000 yuan (approx. US$ 7,500);
(2) Two or more registered trademarks have been counterfeited, and the amount of illegal income is more than 20,000 yuan (approx. US$ 3,000) or the amount of illegal business is more than 30,000 yuan (approx. US$ 4,500);
(3) Administrative punishment for acts falling within Articles 213 to 215 of the Criminal Law has been received within the last two years, and the amount of illegal income is more than 20,000 yuan (approx. US$ 3,000) or the amount of illegal business is more than 30,000 yuan (approx. US$ 4,500);
For trademarks used in relation to services, the following use shall be considered “serious circumstances”:
(1) The amount of illegal gains is more than 100,000 yuan (approx. US$ 14,500);
(2) Two or more registered trademarks have been counterfeited, and the amount of illegal income is more than 50,000 yuan (approx. US$7,250);
(3) Administrative punishment for acts falling within Articles 213 to 215 of the Criminal Law has been received within two years, and the amount of illegal income is more than 50,000 yuan (approx. US$7,250);
Where the amount of illegal gains or illegal business operations is ten times or more the sums mentioned above, the circumstance shall be considered “particularly serious” and bear heavier penalties.
The Interpretation also covers patent counterfeiting, copyright infringement and trade secret theft.
Comments are due March 5, 2023.
CNIPA Issues Revised Draft of Trademark Law of the People's Republic of China (Draft for Comment)
Release Date：13 Jan, 2023
On 13 January, the China National Intellectual Property Administration (CNIPA) released the Revised Draft of Trademark Law of the People's Republic of China (Draft for Comment), seeking comments by 27 February 2023.
The amendments aim to strengthen the legal protection of intellectual property rights, further improve the trademark system, and solve various ongoing problems that exist in the field of trademarks. In a statement on the need for the Draft, the CNIPA said that in increasing the amount of fines, establishing a compulsory transfer system, clarifying civil compensation responsibilities, establishing an intellectual property public interest litigation system, and establishing strict codes of conduct for trademark registration applications, market players will be guided to “register with virtue” and the rights granted will be effectively protected.
The Draft expands the Trademark Law into 10 chapters and 101 articles; 23 new articles are introduced, along with 45 substantive modifications. Many of the amendments focus on reducing bad-faith registrations and forcing the transfer of maliciously squatted trademarks. These include:
- Article 14 - provides that a trademark the subject of application for registration must not violate public order and good custom;
- Article 22 - clarifies specific circumstances that constitute bad-faith application for trademark registration.
- Articles 45 to 47 - establish a system of forced transfer of maliciously squatted trademarks; and
- Article 67 - increases the amount of fines for malicious registration of trademarks;
In addition, trademark registrants will now be required to file “statements of use” every five years; further, they will be subject to spot checks. This is another indication that the legislature is trying to ensure good faith in the field of trademarks.
Beijing High Court Holds ‘Shiseido’ a Well-known Trademark
Release Date：Jan 26, 2023
The Beijing High Court issued a final judgment in an administrative action between China National Intellectual Property Administration (CNIPA), Shiseido Co.,Ltd, the well-known Japanese cosmetics manufacturer, and Jingmen Zishentang Co.,Ltd, a Chinese gypsum plaster manufacturer. The CNIPA decision in dispute was revocation of Zishengtan Co Ltd’s mark ‘Zishengtang Gypsum’ on the application of Shiseido. (‘Zishengtang’ is ‘Shiseido’ in Chinese). The Beijing High Court ruled that CNIPA was right to revoke the trademark registration: the mark ‘Shiseido’ constitutes a well-known trademark and is, therefore, entitled to “cross-class protection”..
Jingmen Zishengtang Co. was not satisfied with the administrative procedure and filed a civil case with the Beijing Intellectual Property Court (first trial), requesting revocation of the CNIPA decision and reinstatement of its trademark. It was successful in these proceedings and, both CNIPA and Shiseido Co. appealed to the Beijing High Court (second trial).
On appeal, the Court held that the ‘Shiseido’ trademark was so well-known in relation to cosmetic products in Class 19, including in China, it qualified for protection as a well-known trademark. The trademark in dispute, ‘Zishengtang Gypsum‘, contained all the characters of the ‘Shiseido’ mark: the two marks were similar in word composition, pronunciation, and meaning. Jiangmen Zishengtang Co. had, therefore, copied or imitated a well-known trademark. The Beijing High People’s Court upheld the appeal of both CNIPA and Shiseido Co., Ltd., and ordered the CNIPA to revoke Jiangmen Zishengtang Co.,Ltd’s registration.
IQIYI and Douyin Reach a Settlement in the ‘Story of Yanxi Palace’ Short Video Algorithm Recommendation Case
Date: Jan 28, 2023
Recently, Beijing Iqiyi Technology Co., Ltd (‘Iqiyi’) and Beijing Douyin Information Service Co., Ltd (‘Douyin’) reached a settlement in a copyright infringement action brought by Igiyi in relation to Douyin’s use of an algorithm to recommend and distribute short videos extracted from Igiyi’s hugely popular TV series, ‘Story of Yanxi Palace’. Following settlement, the action has been withdrawn.
In September 2018, Iqiyi had commenced copyright infringement proceedings against Beijing Bytedance Technology Co., Ltd (the previous name of Douyin) in the Haidian People’s Court claiming infringement of its information network dissemination right and seeking an injunction and compensation of RMB 30 million (approx. US$ 4,350,000). It claimed that the short videos extracted from episodes of ‘Story of Yanxi Palace’ had been uploaded by users to Douyin’s information platform "Today's Headline”, and Douyin had used algorithms to recommend and disseminate these short videos more broadly.
After the hearing, the Haidian People’s Court ruled that Douyin should pay RMB 1.5 million (approx. US$ 220,000) for damages and RMB 500,000 (approx. US$ 72,500) for reasonable expenses. Both parties appealed to the Beijing Intellectual Property Court. In April 2022, the Beijing Intellectual Property Court heard the case and the parties have since reached a settlement. As well as settling this action, they reached agreement on future authorised use and also resolved existing litigation between the parties and their affiliates in various countries around the world.