Model IP Cases of China from 2012 (2)

2013/9/5By Kevin Nie, China IP,[Patent]

5. Patent infringement case: Ningbo Yuexiang Equipment Machine Co., Ltd. v. Shanghai Changyi Machinery Manufacture Co. Ltd.

1st Inst. Case No.: (2011) HuErZhongMinWu(Zhi) ChuZi No. 106 Civil Judgment, the Shanghai No. 2 Intermediate People’s Court
2nd Inst. Case No.: (2012) HuGaoMinSan(Zhi) ZhongZi No. 10 Civil Judgment, the Shanghai Higher People’s Court


Determining Patent Infringement by Equivalents


Plaintiff is the patentee of an invention patent for “Folding Scooter Frame,” comprising 7 limitations in its claim 1, namely, 1. a front frame; 2. A rear frame; 3. a foot panel; 4. a locking mechanism adjusting angles between said front frame and said rear frame; 5. wherein the rear portion of said front frame, and front portion of said rear frame being linked by a cardinal axis; 6. the front portion of said locking mechanism being connected to the front frame; 7. the rear portion of said locking mechanism being connected to said rear frame. Five embodiments are provided in the written description and the drawings for the folding scooter frame, employing locking mechanisms of A1 through A5.

The alleged infringing scooters produced and sold by the defendant have the following elements: 1' front frame; 2' rear frame; 3' foot panel; 4' pneumatic cylinder for telescopic locking, thereby controlling the angle between the front frame and rear frame; 5' a cardinal axis linking rear portion of the front frame, and the front portion of the rear frame onto the center of the panel; 6' one end of the pneumatic cylinder being connected to the front frame; 7' the other end of the pneumatic cylinder being connected to the rear frame. Upon comparison, the elements 1', 2', 3', 5', 6', 7' of the alleged infringing products are found to correspond to the limitations of 1,2,3,5,6,7 of the patent, while element 4' of the pneumatic cylinder is structurally different from the locking mechanism A1 and A4 as described in plaintiff’s patent specification. Plaintiff claims that the pneumatic cylinder in the accused device is an equivalent of the locking mechanism A1 and A4.

At trial, the court of first instance opined that element 4' of the accused device is an equivalent of limitation 4 of the asserted patent claim, and is therefore within the reach of claim 1 of plaintiff’s patent. Defendant’s manufacture, sale or offer to sell of the scooters in suit without permission from plaintiff constitute infringement of plaintiff’s patent. For this reason, defendant is liable for injunction and damages. The court of second instance reversed, holding that element 4' of the accused device is neither identical with nor equivalent to limitation 4 of the asserted patent claim, outside the reach of the patent protective range, and infringement cannot therefore be established.

Judge’s Comment

The application of the Doctrine of Equivalents in patent infringement cases is one of the hardest problems. In this case, the first instance court and the second instance court took different stands, leading to different results. Since the Doctrine of Equivalents tends to extend the reach of a patent claim beyond its literal range, such extension should be sufficiently contained so as to maintain certainty of the scope of patent protection. In applying the Doctrine of Equivalents, it is necessary to consider both the interests of the patentees and the actual needs of the development of China’s technology and economy. Courts cannot be too careful in determining infringement by equivalency in entertaining patent disputes. In specific cases, while observing the judicial interpretations of the Supreme People’s Court in determining whether an element in an accused device or process is an equivalent of a particular limitation in the asserted patent claim, it is necessary to evaluate the evidentiary weight of the technical background described in the patent specification, the intended purpose of the invention (technical problem to be solved), and the improvement in the patent specification, and on this basis, determine whether the element in the accused device is an equivalent of the limitation in the patent claim.

(Recommended by the Shanghai Higher People’s Court)

6. Adaptation right dispute: Huayan Culture & Arts Co., Ltd. v. Shanghai Local Opera Theatre, Luo Huaizhen, Chen Liyu
1st Inst Case No.: (2012) XuMinSan(Zhi) ChuZi No. 4 Civil Judgment, the Shanghai Xuhui District People’s Court
2nd Inst Case No.: (2012) HuYiZhongMinWu(Zhi) ZhongZi No. 112 Civil Judgment, the Shanghai No.1 Intermediate People’s Court


Three-step test


The novel Rouge was written by the Hong Kong novelist Lilian Lee. In 2008, Lilian Lee assigned the related rights of the novel Rouge and other works for the Greater China region under copyright to the Shanghai Huayan Culture & Arts Co., Ltd. (Huayan). On January 14th, 2009, the Shanghai Local Opera Theatre (Opera Theatre) signed a contract with a Luo Huaizhen, inviting him to adapt Lilian Lee’s novel Rouge into local opera script Rouge. The Opera Theatre reserved the copyright for Shanghai local opera Rouge and Luo Huaizhen shall enjoy the right of authorship and related rights and interests.

Huayan found that the title, character names, relationships between the characters, scenes and plots of the script were similar to the novel, and then filed a lawsuit, claiming that the script constituted adaptation of the novel and the Opera Theatre, Luo Huaizhen and Chen Liyu infringed its adaptation right of the novel Rouge.

Shanghai Xuhui District People’s Court found in the first instance that the basic expression of the alleged infringing opera script has no substantial similarity with the novel Rouge owned by Huayan. Therefore, the opera script does not constitute adaptation of the novel. The court dismissed all the claims of Huayan.

After trial, Huayan was dissatisfied and appealed to the Shanghai No.1 Intermediate People’s Court. The court of second instance determined that work of adaptation could be examined by three-step test, namely, eliminating main idea, filtering off habitual expressions and comparing originality of expression. Two works involved in the case, after removing main idea and habitual expression, differ materially from the aspect of expression of originality. Therefore, the opera script did not constitute a material similar adaptation and should not be identified as an adapted version of the novel. Accordingly, the court of second instance rejected the appeal and upheld the original judgment. Judge’s Comment The similarity of two works is generally examined by the “threestep test” in judicial practice, but the application of the theory has always been the difficulty in copyright disputes. The Rouge case applied the “three-step test” in the judgment of adaptations for written works. After the test, the court found that the opera script did not constitute a substantial similarity, and came to the conclusion that the opera was not an adaptation of the novel. The case has great social impact and can be taken as reference for similar cases.

(Recommended by the Shanghai No.1 Intermediate People’s Court)

7. Trademark infringement dispute: Nippon Paint (China) Co., Ltd. v. Shanghai Zhanjin Trading Co., Ltd., Zhejiang Taobao Network Co., Ltd.

1st Inst. Case No.: (2011) XuMinSan(Zhi)ChuZi No. 138 Civil Judgment, the Xuhui District People's Court
2nd Inst. Case No.: (2012) HuYiZhongMinWu(Zhi) ZhongZi No. 64 Civil Judgment, the Shanghai No.1 Intermediate People’s Court


Trademark nominative use


Nippon is the owner of the trademark  and “Nippon” involved in this case. Zhanjin opened an online shop named “Huitong Paint” at Taobao. com (Taobao), selling a variety of branded paint products. When selling Nippon’s products, it uses several pictures related Nippon, including the Nippon trademark involved in this case.

Nippon believed that the online store infringed its trademark and sent an e-mail complaint to Taobao, which replied that if the Taobao store posts the information for the Nippon products, then the use of its original logo and pictures in the product introduction does not constitute trademark infringement according to related laws and regulations. Then, Nippon brought Zhanjin and Taobao to court on grounds of infringement of its registered trademark.

After hearing the case, the Shanghai Xuhui District People’s Court opined that it’s reasonable for Zhanjin to use the involved trademark in promotional materials when selling the products of Nippon and the act is in line with normal commercial practice. The court dismissed Nippon’s claim that the defendants should bear responsibility for trademark infringement. Since Zhanjin did not constitute infringement, the Nippon’s claim that Taobao should assume joint tort liability was not supported either.

The plaintiff was not satisfied with the first instance judgment and lodged an appeal. Shanghai No.1 Intermediate People’s Court found that Zhanjin’s act of using the Nippon trademark to indicate the goods did not cause public confusion, and the use of the trademark did not undermine or lower the reputation of the trademark. Therefore, there is no damage caused to the interests of trademark owner, and the Nippon’s cause of trademark infringement cannot be sustained. Since Zhanjin did not infringe the trademark, Taobao, as a network service provider, should not be considered to constitute trademark infringement.

Judge’s comment

The case is a trademark infringement dispute. The key to the trial is whether Zhanjin committed trademark infringement for using the Nippon trademark when selling Nippon products. The core is judicial determination on fair use of trademark indication.

Determination on fair use of trademark should be premised on two principles: 1. For the user, the use of trademark does not fall into scope of illegal trademark use prohibited by the Trademark Law, i.e. the purpose of using trademark is not to identify the source of goods or services, but to illustrate or describe the goods; 2. The use of trademark does not cause damage to the interests of the trademark owner.

(Recommended by the Shanghai No.1 Intermediate People’s Court)

8. Trademark infringement and unfair Competition dispute: New Balance v. Quanzhou Niubanlun Sporting Goods Co., Ltd.

1st Inst. Case No.: (2010) HuangMinSan(Zhi) ChuZi No. 368 Civil Judgment, the Shanghai Huangpu District People’s Court
2nd Inst. Case No.: (2012) HuErZhongMinWu(Zhi) ZhongZi No. 26 Civil Judgment, the Shanghai No. 2 Intermediate People’s Court


China’s first dispute of “special position decoration”


The “newbalance” sneakers produced by the plaintiff New Balance have bold English letter “N” depicted in the middle part of both soles. New Balance has done a lot of advertising, publicity, promotional activities in a number of newspapers and magazines. The defendant Niubanlun highlighted the use of a slightly distorted “N” mark with two smaller slashes on both soles. In its promotional materials, the defendant also used the “N” mark on both sides of its sneakers. Many pictures of the defendant’s products also highlighted the “N” mark. The plaintiff sought injunction and damages of 500,000 yuan, plus cost.

Shanghai Huangpu District People’s Court held that the plaintiff’s use of the “N” mark on both sides of its shoes is a special decoration of well-known brand protected by the Anti-Unfair Competition Law. The defendant’s act constituted unfair competition. The court then granted injunction and awarded damages of 480,000 yuan, as well as costs.

The defendant appealed to the Shanghai No. 2 Intermediate People’s Court, which, upon review de novo, dismissed the appeal by upholding the decision below.

Judge’s comment

This case raises a question of first impression: whether the distinct decoration on a specific position of well-known products can be protected. This is also the first dispute on special position decoration. There is little reference in theory and practice, and the case itself is contentious. Judges in this case follow the legislative purpose of the Anti-Unfair Competition Law, holding that the specialty in the decoration of the well-known commodities should be judged from both regional perspective and position perspective. Distinct decoration with unique position should also be protected as a decoration feature of a well-known commodity, but the scope of protection should be limited to the specific location that has become a significant feature. In other positions, competitors can still be free to use the decoration. Judges in this case have enriched the theoretical connotation for special decoration of well-known products. The judgment skill and wisdom may also provide useful reference to future trials of such cases.

(Recommended by the Shanghai No.2 Intermediate People’s Court)

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