Shanghai verdicts may become benchmark
Nearly 13 percent of the more than 7,400 disputes received by the Shanghai Intellectual Property Court since it was established in 2015 involved at least one party from overseas, including Fortune 500 companies and international brand owners.
The court said the trials and final verdicts in such cases involving parties from 29 countries and regions had gained widespread social attention and may become the benchmark in their respective industries.
Chen Yajuan, president of the court, said that with economic globalization, international trade facilitation and the popularity of the internet economy, the infringement and protection of IP rights have become “more international than ever”.
“We’ll make efforts to build the court into a center with international impact to protect brands, a hub in the global network of IP advocacy and a place to gather talent with professional backgrounds in IP and international vision,” Chen said.
“The principle of strict, equal and efficient protection that the court has adhered to is also vital to better foster a business environment that encourages innovation and fair competition, especially in Shanghai, which accommodates the country’s first free trade zone and hosts the annual China International Import Expo,” she said.
In a verdict at the end of December, the court ruled that two local auto parts producers infringed design patents held by Volvo Car Group and awarded compensation of 780,000 yuan ($115,700). The verdict came before any sales involving the infringement had taken place.
Volvo Car Group said, “Shanghai Intellectual Property Court is not only a role model in China that is making great progress in creating a highly efficient and successful IP enforcement environment, but also a model for the world.”
Volvo holds a large number of design patents in the automotive field. It successfully applied to the China National Intellectual Property Administration in 2012 for such patents for rearview mirrors and vehicle front panels.
The company said the two domestic manufacturers exhibited products that infringed its patent rights during auto shows in 2015 and 2016. Both companies promised to stop the infringements after receiving lawyers’ letters. However, they continued to display such products on their websites.
In another verdict delivered by the court in early 2017, it ordered two defendants in a dispute to cease their trademark infringement of French winemaker Chateau Lafite Rothschild’s signature Lafite brand and pay it 2 million yuan in damages as well as expenses.
In 2015, Chateau Lafite Rothschild discovered that Shanghai Mellowines Development Co and its parent company Shanghai Safe International Logistics were selling imported wine under a fake name containing the word ‘Lafitte’, both on the company’s website and a store on Tmall, a major online retail platform.
The Shanghai wine seller also used a Chinese expression on the packaging of its Lafitte wine to describe its origin, which appeared similar to the Chinese trademark that the French company had yet to obtain.
The court found the original Lafite registered trademark had a high reputation in China. Its Chinese version, although still awaiting trademark approval at the time, had also established a stable relationship with Lafite.
Mellowines, as a professional wine importer and distributor, should have adequate knowledge of Lafite wines, but it did not observe reasonable avoidance when naming its products and showed obvious subjective malice, the court said.
“‘Lafite’ and ‘Lafitte’ are similar in pronunciation and appearance for Chinese consumers and may mislead them (into thinking) that the two products have a specific relationship in their origin,” the court added.
It ruled that the two defendants infringed Chateau Lafite Rothschild’s exclusive right to use the registered trademark Lafite and its unregistered trademark for the Chinese version of Lafite.
The French winemaker said, “We highly appreciate the Shanghai Intellectual Property Court identifying Lafite’s Chinese version as an unregistered well-known trademark in the country after conducting market investigations and rendering us equal protection.
“After encountering trademark infringement cases in the Chinese market in the past two decades, as a foreign investor we’re delighted to see the Chinese government’s tremendous contributions and efforts in IP protection.”
The Shanghai court also investigated and identified technical details with the help of industry experts to help solve the problem of IP disputes that usually take a long time to investigate.
Senior officials from the European Union Intellectual Property Office visited the court in October and said the office spent an average of 113 days before concluding a dispute, a shorter time than in individual EU countries, the court said.
As a foreign investor we’re delighted to see the Chinese government’s tremendous contributions and efforts in IP protection.” Chateau Lafite Rothschild, French winemaker