Teamwork in IP litigation brings fruitful rewarding-—Analyzing the key factors to Unitalen’s success

2012/11/1By Doris Li, China IP,[Trademark]

On the eve of World Intellectual Property Day, the Supreme People’s Court announced the Top 10 Judicial IP Protection Cases (Top 10 Cases) of 2011. The list was comprised of seven civil cases, two administrative cases and one criminal case.
 
Compared with the previous years, Internet related IP cases were a new focal point and occupied nearly half of the Top 10 Cases. The four Internet cases included some of the biggest names in the online community: a Taobao trademark infringement dispute, a Baidu MP3 copyright dispute, an unfair competition dispute between Qihoo 360 and Tencent QQ, and finally an unfair competition dispute of Kaixin001, which concerned trademark, copyright, unfair competition and other fields of IP.
 
Aside from the big names of the litigants in the cases themselves, Beijing Unitalen Attorneys at Law (Unitalen) was also a conspicuous player because lawyers from the firm served as legal counsel for parties in two litigations of the Top 10 Cases and in both cases they prevailed.
 
Two cases selected into Top 10
 
Unitalen’s achievement was fully recognized by the Supreme People’s Court in the Top 10 Cases. Unitalen served as attorney in the trademark dispute over LAFITE and also the automobile trademark dispute between Guangzhou Hongtaiyang Motor Vehicle Parts and Anhui JAC Motors. In both cases, its views were supported by the court. Court watchers interested in these sorts of cases couldn’t help but be interested in Unitalen’s legal team.
 
LAFITE trademark dispute
 
[Case brief] The plaintiff, French wine dealer SOCIETE CIVILE DE CHATEAU LAFITE ROTHSCHILD, was the holder of the two registered trademarks: “LAFITE” (No.1122916) and “ ” (No. G764270). Both of them were approved for use on “alcoholic beverages (except beers)” and “wine with the name of origin” under the International Class 33. One defendant, Shenzhen Jinhongde Trade Co., Ltd. (Jinhongde), labeled the logos of “Lafite Family,” “拉菲世族” (Chinese characters for “LAFITE FAMILY”) and “ ” on its wine products, websites and brochures. It also described part of its historical origins in a manner which was very similar to the history of the plaintiff, a French dealer. The co-defendant, the Health Industry Development Co., Ltd. under Hunan Biological & Pharmaceutical Group (Health Company), sold the allegedly infringing products. The trademark owner filed a trademark infringement and unfair competition litigation against the two Chinese companies.
 
The Changsha Intermediate People’s Court of Hunan Province ruled that both of the defendants’ actions constituted trademark infringement and unfair competition and ordered Jinhongde to stop using “LAFITE FAMILY” and “ ” logo in its wine products, website and promotional materials and to stop false advertisement. The Court also ordered cancellation of the domain name of “lafitefamily.com,” granted compensation of 300,000 yuan and ordered publication of an open letter on the China Industry & Commerce News to eliminate any remaining misconception among consumers that there was a relationship between the two products. The Health Company was also ordered to immediately stop selling the infringing products and using the promotional materials.
 
Jinhongde appealed to The Higher People’s Court of Hunan Province. The second instance court also believed that the accused infringing products with “LAFITE FAMILY,” “ ” and the “lafitefamily.com” domain name infringed the registered trademarks of SOCIETE CIVILE DE CHATEAU LAFITE ROTHSCHILD.
 
The appellate court agreed that “LAFITE” should be recognized as the unique name of the well-known wine and that Jinhongde’s conduct constituted unfair competition when it used the “LAFITE FAMILY” on its own wine. Consequently any statement implicating a relationship between the two products constituted false advertising and unfair competition. Therefore, the appellate court upheld the first instance judgment.
 
[Significance] Counterfeiting is a phenomenon that widely concerns society. This case reflects the court’s efforts in preventing counterfeiting and strengthening judicial IP protection. LAFITE wine enjoys a high international reputation. LAFITE is used as a label for sale, but the Chinese characters for LAFITE (拉菲) are not its registered trademark. The Higher People’s Court of Hunan Province held that LAFITE wine is very famous in China’s wine market and should be deemed as a “well-known product” protected by the Anti-Unfair Competition Law. Therefore, the Chinese characters for LAFITE should be recognized as the only corresponding Chinese name for LAFITE wine and possess a significant feature to show its origin.
 
According to the relevant provisions of China’s Anti- Unfair Competition Law, LAFITE should be recognized as the unique name of the well-known wine commodities, and thus its Chinese name should also be protected effectively from counterfeiting, imitating or other acts of unfair competition. This case clarifies the protection for the unique Chinese names of foreign products. It is necessary that the public is well aware of the product and its reputation should be generated by production, sale or other business activities in China. The fame of a product in foreign countries can also be a reference for identifying its well-known status in the Chinese territory.
 
Automobile trademark dispute
 
[Case brief] Anhui JAC Motors Group Co., Ltd. (JAC Group) and Anhui JAC Motors Co., Ltd. (JAC Holdings) have been using the logo on its cars since 2005 and continuously publicized this logo, which has helped it gain a certain popularity. Anhui applied for trademark was registrated and protection of the logo in 2005, but the application had not been approved yet. The trademark registrations by Guangzhou Hongtaiyang Motor Vehicle Parts Co., Ltd. (Hongtaiyang) for and were approved in 2007 for vehicles in International Class 12. In 2010, Hongtaiyang Company and its partners launched largescale publicity campaign for the registered trademarks. On March 26th, 2010, Hongtaiyang sent a Lawyer’s Letter to JAC Holdings, urging JAC to respect its intellectual property and stop infringing its registered trademarks. Upon receipt of the letter, the JAC Group filed suit on April 15th, 2010 to declare that its logo does not infringe on a registered trademark. The court of first instance believed that the two logos did not constitute approximation and ruled that the logos used by JAC Group and JAC Holdings do not infringe on the registered trademark of Hongtaiyang. Then Hongtaiyang appealed but the second instance court upheld the first instance judgment. Hongtaiyang refused to accept the verdict and brought the case to the Supreme People’s Court for retrial.
 
Since the case involved civil and administrative disputes, the Supreme People’s Court organized three reconciliation meetings and even went to Taiyuan city, Shanxi province to mediate with local government and court. After over six months’ unremitting efforts, all parties finally reached a package of settlement agreements. Both sides withdrew their applications for retrial in the Supreme People’s Court, proceedings in Beijing No.1 Intermediate People’s Court, as well as several applications at Trademark Office and the Trademark Reexamination Board. They also reached an agreement on the follow-up trademark registration and use. At this point, the litigation and disputes are resolved completely.
 
[Significance] This case reflects the SPC’s efforts in pursuing the goal of settling all disputes when litigation closes. The dispute is over the similarity of two logos seeking trademark protection and is not complicated. However, since the case involves two major auto companies, between which there are potentially a number of other civil and administrative disputes which could result in a lengthy ongoing social disruption. The Court foresaw that a single court decision alone would not fully resolve the plethora of disputes between the parties. However, an overall settlement agreement was more likely to be conducive to developing a foundation of cooperation between the companies to prevent a string of legal actions. Based on this understanding, the Supreme People’s Court made a full explanation to related parties and contributed to the signing of the settlement agreement with both parties withdrawing all related appeals.
 
From the settlement of this case, we can see that if a case is complex and may involve a series of associated litigations with great social influence, courts should adhere to the principle of upholding justice for the people and follow the principle of “mediation first.” To handle disputes properly, instead of focusing on resolving disputes one case at a time, courts should strive to comprehensively resolve conflicts between parties. This would help courts unify the social and legal benefits of dispute resolution.
 
Attorney reflection—always be prepared
 
China IP interviewed Li Yongbo, Partner of Unitalen to talk about having two cases selected into the annual Top 10 Cases. His excitement was palpable as he stated, “We were a bit surprised when the Supreme People’s Court officially announced the 2011 Top 10 Cases and found that we had two cases selected. Before the announcement we presumed that one case on the list would make us feel very good.” Unitalen’s BMW case was selected as the Top 10 IP Cases in 2010.
 
Unitalen stated that it had represented JAC for the noninfringement lawsuit in the automobile trademark dispute. Since the JAC automobile trademark dispute had large social impact, the case was comprised of nearly 10 different causes of actions, including tort, non-infringement certification, trademark administrative revocation, trademark administrative proceeding, etc. Li Yongbo said: “In order to properly resolve the disputes between the two companies and benefit mutual cooperation and development, the IP Tribunal of the Supreme People’s Court made great efforts in inviting chairmen of both companies to go to Beijing for mediation. The Supreme People’s Court presided over the three mediation meetings, and the two chairmen of the involved companies attended two of the mediations. The two sides finally reached a reconciliation consensus, which achieved good social effects.”
 
Another case on the list was the LAFITE trademark case. In 2011, Unitalen helped the French company with nearly 80 administrative investigations jointly conducted by industry and commerce administrations and quality inspections as well as three tort litigations. “The reason for its great social impact is that the Chinese trademark registration for LAFITE has not been approved in China while the French trademark had been registered. Since the Chinese characters (拉菲) for the trademark are widely used in the market, the public has linked the Chinese characters with this French trademark.
 
The production of LAFITE wine is limited, so that it was difficult to collect evidence for a well-known commodity, such as advertising, market share, sales, etc. which are generally required in actions involving the Anti- Unfair Competition Law. However, LAFITE’s reputation as a top wine brand was indeed a well known fact. The attorney suggested that for well-known brand like this, it is unnecessary to check off each element of evidence one by one according to the provisions of the Anti-Unfair Competition Law in a strict sense. Judges from the Higher People’s Court of Hunan Province had a different opinion at the beginning, but the collegial panel took this view after listening to the argument by the legal team of Unitalen. This is also the first case for foreign enterprise to gain protection of unregistered trademark in China under the Anti-Unfair Competition Law,” said Li Yongbo.
 
When the Top 10 Cases were announced, we could only read a hundred-word introduction for each case. When we looked deeply into each case, we learned more about the efforts made by companies and lawyers. “After taking the case, we must do a great deal of analysis on whether the court can or is likely to accept our argument. This involves a great deal of preliminary work, such as evidence collection and legal analysis. If the preliminary work is not sufficient, we will encounter many problems during the court hearing, and it will also lead to a lot of loopholes.” Li Yongbo gave an example: “with regard to the JAC case, JAC came to Unitalen because it knew that we had prior successful experience handling such cases. JAC occupies an important position in the automotive industry so we know that if we accept the commission we must fulfill the mission. If not, the repercussions and damage to JAC’s brand reputation will be devastating.
 
We organized a strong litigation team for this case. Our attorneys prepared a comprehensive analysis of the case and went to the company’s headquarters at Hefei City three times to discuss the case’s merits. However, we still encountered some problems in the litigation process. We found that JAC Group had submitted the infringement lawsuit complaint to the court by itself, but Guangzhou Hongtaiyang sent the Lawyer’s Letter to JAC Holdings. Since JAC Holdings was the main body for trademark registration in the Trademark Office while JAC Group was its parent group company, the other party held that the subject qualification of JAC Group could not be established and thereby filed infringement litigation in Shanxi province.
 
There was also a question of whether the non-infringement proceedings should be filed by JAC Holdings. Our attorneys argued that in view of this lawyer’s letter, the recipient can file litigation if he believes that it would cause harm to his interests. If other interested parties believe that their interests could be harmed, they may also bring a noninfringement lawsuit to court. Unitalen’s viewpoint was accepted by the court.”
 
In addition, attorneys must do substantial preparatory analysis before court and it is very important to respond freely in court. According to Li Yongbo, when hearing cases, judges may be very straightforward and they will ask about all the details of the case. Without adequate preparation, attorneys will perform poorly in court. Judges are very concerned about the evidence. If the evidence is well prepared and the attorney is very skilled in using legal terms, judges will also show respect to the attorney. Li Yongbo said emphatically: “an excellent attorney should be extremely familiar with the case and do his job with skill and ease in court, otherwise he will not receive respect and recognition from the judges.” Infinite Power of Teamwork During the interview, Li Yongbo mentioned the attorney team of Unitalen several times. He believes the Unitalen owes these achievements to this youthful team.
 
Talking about the advantages of Unitalen team, Li Yongbo said with pride that the legal team of Unitalen was very professional. Many attorneys specializing in patent litigation have academic backgrounds in science and engineering, and therefore they have a better understanding of related issues. At the same time, the patent agent team of Unitalen, which has over 100 professional agents, provides strong support. When it comes to the technical issues related to patents, our patent agents in the related fields will also participate in the legal proceedings. In addition, we hire experts and professional organizations to assist in some cases. Of course, other law firms will hire experts and professional organizations as well. By relying on Unitalen IP agents, cooperation is more convenient because we have our team of professional agents.
 
Unitalen now has a legal team of more than 70 attorneys, whose average age is below 35. They are full of vigor and enthusiasm and are very capable in legal proceedings. Unitalen handles about 200 IP cases every year, most of which are trademark and patent cases. So far, Unitalen has won 90% of the cases when representing the plaintiff and 75% of the cases when representing the defendant.
 
With regard to the two specific cases on the Top 10 list, Li Yongbo said: “we are very proud for the team spirit of our professional legal team and collaboration of team members. Some team members have handled many influential cases. They are very professional and serious with every litigation process and can make good use of legal provisions. For example, we just finished a case on patent infringement and trade secrets this year for a foreign client and the court awarded 22 million yuan in compensation, which well reflects the strengths and capabilities of our litigation team. The LAFITE case shows our good internal collaboration. Several sectors worked together closely in collecting evidence and preparing materials. In the JAC case, attorneys took the lead in the portion of the case that involved the invalid trademark and trademark administrative proceedings, infringement investigation and noninfringement litigation. The company’s legal department was invited to participate in the trademark portion of the dispute settlement.”
 
Li Yongbo also mentioned that the young team still has room for further improvement. In his opinion, the average age of the Unitalen team is below 35 and this young team still has a number of shortcomings in the course of legal proceedings, such as communication. It is important to keep good communication with judges, clients and litigation agents. Sometimes this communication will be a key to the case because it can effectively help others understand your ideas. Young attorneys still lack communication skills, so that they need to compensate in other areas, such as doing a better job in evidence. However, young attorneys have their own advantages as well, which help them analyze litigation from different perspectives. Compared with the young attorneys, experienced middle-aged attorneys tend to do better in communication with judges, which is also very critical. Throughout the entire litigation process, Unitalen has to see the case from many different perspectives and think like clients, other parties and judges so as to achieve effective communication.
 
(Translated by Li Guanqun)

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