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Legal Department
Linda Liu & Partners

Preface

China has taken an important place in intellectual property protection since its entry into WTO. Especially with the improvement of the protection system for intellectual property and the perfection of relevant rules and regulations, the rights of intellectual property holders have been fully protected. With the rapid development of science and technology, as well as the economics, cases involving intellectual property right infringement of different kinds are gradually attracting more and more attention.  Further, the great value of intellectual property is also gradually becoming of greater concern to enterprises.
 
This paper details the cases represented by our firm, which mainly include civil litigation cases of patent infringement, trademark infringement, unfair competition, and infringement of trade secrets.  There are also explanations of noteworthy cases, like the administrative action against the Review and Adjudication of the Trademark Review and Adjudication Office in the National Industrial and Commercial Bureau. Each specific case is a typical example, from which we can find different kinds of practical problems concerning Chinese intellectual property and the exercise of owner’s rights. It will be my honor if this paper can be of any help to you.
 
I. Civil litigation

1. Trademark infringement and unfair competition cases

Case1 & 2 - Company X sued Company Y for trademark infringement and unfair competition

This is a typical case concerning the conflict of trademark and trade name, which is very complicated and hard to grasp. It took one year and six months to complete the long process of filing the case, hearings, testifying, deciding, negotiating, and compromising, and with the help of the judge, the plaintiff (Company X) eventually won the case. The conflict of trademark rights and trade name rights can be frequently seen in practice; there are many cases which cannot be enforced even though the court has made a decision. Furthermore, in view of the present situation with its various difficulties, the best case scenario for the plaintiff’s is to reach a compromise agreement on the change of the enterprise’s name, signifying that the holder’s right has been protected fully, thus, the result of this case should receive high praise.

In the numerous cases on the conflict between copyright and trademark, this is the first case which has changed the enterprise’s name through compromise, of similar cases. This is the most favorable result for the holder of the trademark rights. The mastery and utilization of relevant information, the stipulation of the litigation process, the performance of a particular strategy in litigation, the analysis and grasp of judge’s opinion as well as the utilization of the judge’s power, and the negotiation of a resolution and the judgment are all worth examining.
 
(1) Case history

① bringing a lawsuit

In 2004, Company X found that because Company Y’s enterprise name was similar to that of Company X’s, which could easily cause confusion among the public, Company X thought that Company Y’s name should be changed as soon as possible, so as to protect its own legal rights.
 
Our firm’s attorneys immediately began to collect evidence and draft the complaint, and with the great support of Company X, the litigation preparation was completed in March, 2005. Meanwhile, on March 9, 2005, our firm contacted the legal representative of Company Y through telephone and fax for the purpose of negotiation. However, Company Y refused to change the enterprise name. Under such circumstances, we decided to bring a lawsuit.
 
On May 26, 2005, we brought a lawsuit of trademark infringement and unfair competition to the city’s Intermediate Court. On May 30, the court accepted the case (hereinafter referred to as the “XX Case”).
 
In order to strengthen our case and increase the likelihood of success, on August 18, 2005, we supplemented the evidence of “XX Case” by bringing a lawsuit against the trademark of “XX Printing Ink” to the city’s court. On September 1, the city’s court accepted the suit of “XX Printing Ink” trademark action against Company Y (hereinafter referred to as the “XX Ink Case”).
 
② Hearing

This is a case concerning the conflict of trademark and trade name, which is very complicated. There was plenty of evidence on both parties’ side so, the court held a hearing before trial to cross-examine the parties’ witnesses.
 
On July 5, 2005, the principal judge held a hearing of “XX Case”. During the hearing, when the judge asked for both sides’ opinions on compromise, we declared that “if the opposite side can stop using the present enterprise name and also compensate at least RMB 300,000, we will agree to compromise”. However, the defendant’s attorney insisted that the plaintiff had not yet used the “XX” trademark, and argued that a trademark which has never been used can not be protected. The defendant had already established a company and had begun to produce products as well as publicize them; accordingly they would never agree to stop using the enterprise name.
 
On November 21, 2005 and January 10, 2006, the main judge held two hearings, for the plaintiff and defendant separately. In order to ensure justice, we invited some legal experts to participate in the hearing for the defendant. Compared to the previous hearings, the judge’s attitude was quite neutral and showed no obvious favor toward the defendant during this hearing. Additionally, the principal judge had a friendly conversation with our party.
 
After the hearing, our lawyer had a talk with the defendant’s representative and their lawyer, regarding requiring the change of the enterprise name. The defendant replied that “because the enterprise had begun to produce and sell, it will do harm to the enterprise if it changes the enterprise name midway”. Our lawyer proposed that by “giving a buffer period and changing the name within a certain period would be considered a solution.” The defendant’s lawyer indicated he may consider the suggestion and the defendant’s representative showed no obvious reaction.
 
Our lawyer indicated more than once to the judge our determination to fight to the end, and requested that the principal judges of the two cases continue trying to persuade the defendant, so as to definitively settle this case.
 
③ Opening the court session
The “XX Ink Case” was open to a court session on August 24, 2006. In court, both parties proposed their own claims and cross-examined the opposite side’s witnesses as well. The chief judge concluded the disputed points of the case, and required our side to provide supplementary explanations to some questions. After court, the judge prepared to visit and investigate the relevant enterprise.
 
The “XX Case” conducted court sessions on October 10 and 11, 2006, which were mainly about the court inquiry, and both parties proposed their claims and cross-examined witnesses. There was no debate in court. According to the statement of the chief judge—Judge Guan, after the investigation on the enterprise, the two cases were again open to court sessions with court debate and were judged on the basis of the investigation results.
 
(2) After the judge’s mediation, our party finally reached a compromise with the defendant.

① On November 7, 2006, our firm was contacted by the judge. The judge declared that he eventually persuaded the defendant to change the enterprise name, but the defendant proposed three compromise conditions: one year of buffer period, no publicity, and both sides bearing the fees and payments separately. Our lawyer finished our side’s compromise conditions through analyzing the defendant’s compromise conditions.
 
② On December 1, 2006, the parties held a formal negotiation in court. The representative of Company X and our firm’s lawyer joined the negotiation. Besides the defendant’s lawyer, the defendant’s representative also joined the negotiation. Under the mediation of the two cases’ judge, both parties discussed each clause on the basis of the compromise draft agreement proposed by our party. Finally, both parties reached and signed the final compromise agreement.
 
③ On December 8, 2006, our lawyer received the Notification of Permitting the Change of the Defendant’s Enterprise Name Issued by X Industrial and Commercial Administrative Bureau, which allowed the defendant of this case a the buffer period until June 8, 2007, after which he would have to change the enterprise name.
 
④ On December 27, 2006, the court made the civil decisions separately, permitting the plaintiff to withdraw the two suits. This case was settled successfully at last.
 
(3) Comment — disputed points of this case

There are no specific legal regulations for the settlement of conflicts between trademark rights and trade name, so the court and the representative both had difficulties in this case. In this case, the two parties’ disputed issues are as follows:
 
A: On whether “XX” and “XX Ink” are the well-known trademarks

According to Chinese Trademark Law, forcing others to change the enterprise name lacks legal basis because of the trademark right held by other enterprise. Therefore, it would be rather difficult. However, if the plaintiff’s trademark is a well-known trademark, he can request to change an enterprise name which is easily confused, according to the Regulations on the Confirmation and Protection of the well-known trademark. Thus, in this case, our firm applied for the confirmation of the well-known trademark and also submitted abundant relevant evidence.
 
The defendant claimed in his bill of defense:

Company X mainly uses the English trademarks of “XXXX”, “XXXX INK”, while its Chinese trademarks of “XX”, “XX Ink” were seldom used. Specifically, there was no evidence of using them on a commodity and no mark of the registered trademark on the commodity. Thus, a trademark which is not actually used cannot be confirmed as a well-known trademark.
 
As for the defendant’s claim above, our side claimed:

The use of trademark cannot be restricted to a commodity.

According to Article 3 of Rules for the Implementation of the Trademark Law, the use of trademarks (refer to the definition in the Trademark Law and these Regulations) include, among other things, the use of trademarks on goods, packages or containers thereof and commodity trading instruments, or use of trademarks in advertisements, exhibitions and other commercial activities. Therefore, the use of trademark is not restricted to products and packages. It also includes advertisement publicity, the full use of advertisement and claims issued on the exhibition’s board, advertisement board, newspapers and magazines. Further, we used the protection of “Nissan Automobiles” as a well-known trademark as an example.
 
b) The use of trademark cannot be restricted to the clear mark of a registered trademark.

According to the provision of Article 37 of the Rules for the Implementation of the Trademark Law, where a registered trademark is used, it may carry the indication of “注册商标” ("Registered Trademark") or the registration signs of the goods, packaging or description or other attachments of the goods. So the mark of registered trademark belongs to the trademark right holder and is not a compulsory obligation. Therefore, there is no reason for the defendant to claim that if the plaintiff does not mark the registered mark it should be regarded as non-use of the trademark.
 
c) Several registered trademarks can be used on one commodity at the same time.
Using several registered trademarks on one commodity is the enterprise’s strategy. Thus, it is recognized by the law to use several trademarks like “XX Ink”, “XXXX Ink”, “XX”, etc. at the same time.
 
d) The use of a trademark which does not change the registered trademark’s essence is a kind of legal use.
The use of trademark must be in accordance with the registration certificate of trademark. However, the change of character pattern and the change of the arrangement direction will not affect the recognition and pronunciation. In view of this, it is not forbidden by law and is also in conformity with international customs.
 
B: On whether “XX”, “XX Ink” are similar to “Big XX Ink”

The defendant’s use of the characters similar to our party’s registered trademark constitutes infringement of the trademark. The defendant claimed that his enterprise name “Big XX Ink” is dissimilar to “XX Ink”, and gave examples of “ Pei Luo Meng” and “Luo Meng”; “Qian Bai Du” and “Bai Du”; “Ba Qian Dai” and “Qian Dai”.
 
As for the defendant’s claims, our side made the following counterclaims:

a) The judgment of similarity should lie in comprehensive factors including the visual effect, appearance, pronunciation and meaning, etc.
 
According to the Guideline of Trademark Examination, if the trademark’s characters show the same meaning, and there is only a modifier between the characters, it will often be regarded as a similar trademark. For example, “Jin Ba Wang”, “Da Ba Wang”, “Kong Ba Wang”, “Chao Ba Wang” are all similar to “Ba Wang”.
 
b) The three series of trademarks proposed by the defendant, like “Pei Luo Meng” and “Luo Meng”; “Qian Bai Du” and “Bai Du”; “Ba Qian Dai” and “Qian Dai”, bear no meaning at all and possess no comparable features. Furthermore, “Qian Bai Du” and “Bai Du” belong to different categories.
 
C: Is it likely to cause confusion among the public?

The defendant claimed in the bill of defense that, they used the complete name as well as the “XX” trademark on the commodity, and also, their package and code of commodity are different from the plaintiff’s, so it would not cause confusion among public.
 
As to the defendant’s claim above, our side made the following counterclaims:

a) The confusion caused by the defendant’s act is not simply confusion with the plaintiff’s trademark.  Also important is the relationship of the two enterprises. That is, the consumers are likely to regard the defendant as the plaintiff’s sole corporation or joint corporation.
 
The plaintiff has established many sole corporations or joint corporations in China. For example, there are Company X’s sole corporations or joint corporations in Jiangmen, Taiwan, Zhuhai, Hong Kong, Tianjin and Shanghai, etc. Among these joint and sole corporations, some of them own trademarks by themselves. Each affiliated company uses different codes and packages in different regions, but the most obvious common point is that there are the characters of “XX Ink” on the name of each company. This means, if the enterprise name contains the characters of “XX Ink”, it will give people the impression that this enterprise is an affiliated company of “XX Ink”.
 
b) On the exhibition, the employees of the plaintiff were frequently asked by most of the participants “why XX Ink owns an exhibition area here, when there is another exhibition area of X city’s XX Ink." In view of this, the defendant’s act has caused confusion among the public.
 
c) The defendant’s English name and its domain name are similar to its affiliated enterprises, which contributes to confusion among the public.
 
(4) Significance

In general, from the initial entrusting to the entry-into-force of the settlement agreement, Company X gave our firm great support and endeavored to collect evidence, which helped our firm concentrate on the study of the specific legal questions of this case.
 
The aim of this case is to make the defendant change the enterprise name. Therefore, to the trademark right holders, though this case was settled through reaching a settlement agreement, the plaintiff eventually gained an essential success. This was the first case of a trademark and trade name conflict which made the defendant change the enterprise name successfully and exerted great influence on the same kind of cases in the future. The acquisition of relevant facts, the design of litigation strategy, the performance of the strategy during the action as well as the analysis and grasp of the judge’s opinion are all worth studying.
 
2. The Patent Infringement Cases

Cases 3 & 4 - Company A sued Company B for the infringement of a design patent

(1) Case history

① Negotiation

Company A owned two design patents in China. In 2004, there were suspicious infringing commodities of patent Z1 and Z2 produced by Company B. Company A expected to make the opposing side cease producing and selling the infringing products through the initial negotiation. However, the infringer Company B was a large-sized enterprise in China, of which the economic capability, the comprehension of law and the influence power in China could not be ignored. Furthermore, Company B filed the request for patent invalidation after it acquired the documents unfavorable to Company A’s patents for design. In view of the above reasons, Company B took a hard stand during the negotiation, and refused to admit its infringement, to cease the act of infringement, and to assist Company A in this case.
 
② Strategic decisions

Company A may institute legal proceedings in Beijing since the infringing commodities can be purchased in Beijing, so that the influence power exerted by Company B as a large-sized state-owned enterprise can be reduced as much as possible.
 
Postpone the prosecution of the request for patent invalidation while promoting the litigation. According to the advantageous pursuit of litigation, the influence brought about by examination to determine patent invalidation can be reduced and at least, the time could be prolonged by exerting pressure on Company B.
 
Promote the litigation and the examination of patent invalidation in the very beginning. Compare the design patents with the infringing design and compare the design patents with the existing design of the infringing commodities. We analyzed their similarities and differences and decided which ones could be used in the litigation, and which ones could be used in the proceeding of invalidation, and the occasion to use them was also analyzed on this basis. According to the analysis, we chose a standard to determine similarity, which was the most favorable for Company A to achieve during both the litigation and the examination of patent invalidation.
 
③ Litigation

Company A brought a lawsuit against the Pattern Z1 tire on January 18, 2005 and brought a lawsuit against the Pattern Z2 tire on January 31, 2005. On March 15, 2005, Company A exchanged evidence with Company B regarding the case concerning Pattern Z1 tire. Based upon the analysis of the evidence submitted by Company B, we predicted the possible grounds of the pleading by Company B and made the corresponding strategy in view of the relevant laws and incomplete evidence.
 
On March 30, 2005, the court held a hearing on the case of Pattern Z1 tire. Afterwards, in view of the grounds of pleading and evidence submitted by Company B, we submitted the attorney opinions on the case of Pattern Z1 tire. The court held two hearings on the case of Pattern Z2 tire on April 22, 2005 and June 9, 2005 respectively.
 
(2) The settlement was reached after the court’s mediation and the negotiation between two parties

On June 9, 2005, after the second court session on the case of Pattern Z2 tire, Company B reached a settlement due to the pressure of losing the case.
 
Under the court’s mediation, Company A and Company B reached an initial agreement on June 9, 2005. On June 15, 2005, after the confirmation of accepting the final settlement agreement drafted by the court, under the presiding by the Judge Xuan HE and the clerk Xiaobing ZHOU, Company A signed the settlement agreement with Company B’s attorney Daocheng LIU in the Pattern Z1 tire and Pattern Z2 tire cases.
 
The basic contents of the settlement agreement are as follows:

① Company B should cease producing and selling the tire products of Pattern Z1 and Pattern Z2.
② Company B should change the molds of Pattern Z1 tire and Pattern Z2 tire, and assist the attorney of Company A in confirming the change of molds and the results.
③ Company B should withdraw the request for invalidation of Company A’s design patents.
④ Company B should pay Company A the acceptance fees of this case.
⑤ Company A should withdraw the action.

So far, Company A eventually succeeded in the lawsuit and eliminated the counterfeits.
 
(3) Comments --- the disputed points of this case

Hot topics concerning the infringement of industrial design patents were brought up in these two litigations.
 
During the court session of the case of Pattern Z1 tire, Company B proposed the grounds of pleading as follows:

① Company A’s patents for design should be declared invalid.
② The Pattern Z1 tire was obtained through well-known techniques.
③ The Pattern Z1 tire has prior right of use.
④ The tire tread pattern should be excluded from the patent protection for design.
 
With respect to the above pleas and the incomplete provisions as well as the evidence submitted by Company B, we made a powerful refutation as described below:

A: On the invalidation of the patent for design

Among the differences between Company A’s industrial design patent with the prior design, we picked out the obvious difference and submitted it during the court session. We put the most decisive difference in the Attorney Opinion submitted to the court after the opening of the court session. Under such circumstances, we made the judge aware of the obvious difference between Company A’s industrial design patent and the prior design, and also prevented Company B from knowing about the content before the oral hearing during the invalidation examination, which guaranteed a favorable position to Company A in the case of invalidation examination.
 
B: On the well-known plea technique

According to the provisions stipulated by Beijing High People’s Court, the well-known plea technique is not applicable to the case of the infringement of patents for design; we denied this ground of pleading fundamentally so that the opposing side was not able to make any defense. In this case of Pattern Z2 tire, the opposing side did not adopt this ground of pleading, for Company B approved our opinion and gave up this ground of pleading.

C: On the plea in terms of the prior right of use

On the one hand, we pointed out that the Chinese law’s ascertainment of prior right is very strict; on the other hand, there was deficiency in the evidence submitted by Company B, which proved that Company B’s ground of pleading should not be supported. Finally, the court did not support Company B’s ground of pleading.
 
D: On the problem whether the tire tread pattern belongs to the object that can be protected by the patent for design

In court, Company B did not provide any evidence to support this ground of pleading. We refuted according to the provision of laws and regulations at that time.
 
In the Attorney Opinion submitted to the judge later, we particularly described that the tire tread pattern could be an object that can be the protected by a design patent, and also invited Professor Zongshun Tong, the previous consultant for the China Patent Office, to draft a legal opinion favorable to our firm. Compared to some legal expert’s opinion on the supplementary evidence submitted by Company B after the opening of court session, our legal opinion was more powerful and convincing.
 
During the court session of Pattern Z2 tire, besides the pleas mentioned above, the opposing side put emphasis on the points in common between Company A’s design patent (00348650.8) and the prior design, and emphasized that this patent was likely to be declared invalid, and thus requested the court to suspend the hearing.
 
Since the difference between Company A’s industrial design patent (00348650.8) and the prior design was not obvious, we explained to the judge that, according to the provision of China Patent Examination, Company B did not submit the Chinese translation of the foreign language evidence within the time limit, thus, the Patent Reexamination Board might make a decision favorable to Company A. Based upon the above grounds, Company A showed its optimism in this case regarding the invalidation examination to the Judge and to Company B.

(4) Significance

In this case, Company A was able to relate these two cases and reached a settlement with Company B. Company A achieved a very satisfactory result.

① Company B was required to cease producing and selling the tires of Pattern Z1 and Pattern Z2, and cease the act of infringing Company A’s patent for design through changing the molds. Company A thus reached the goal of bringing this lawsuit, i.e., forcing Company B to cease its infringing act.
② Company A could continue to own the two patent rights for the industrial design, as the two litigations regarding the patents for design both had a successful settlement.
③ Company A owns the right to disclose the result of this case and might gain greater achievement from it.
④ The successful settlement of this case helped Company A to establish a good image in China, which is good for cooperating with Chinese enterprises and local governments and good for the enlargement of market share.
 
Case 5 - Company A sued Company C for the infringement of a patent right for an industrial design
 
This is a case involving the infringement of a patent right for an industrial design. The plaintiff’s claims were supported by the court in demanding that the defendant pay damages, destroy the molds for producing the infringed commodity, as well as the infringed commodities in the store. However, after the written judgment came into effect, the defendant refused to execute the written judgment. Accordingly, our firm filed an application to the court for compulsory execution, which was executed by the execution division of the court in the defendant’s residence. The case was settled perfectly at last.
 
(1) Case history

In the latter half of 2006, Company A found that there were Company C’s products in the market that infringed its industrial design patent right. Thus, in order to protect its intellectual property rights, Company A decided to take legal measures against the infringing act. On December 13, 2006, Company A instituted an infringement litigation of industrial design, which was accepted by the court. On March 5, 2007, under the court’s organization, the court held the first trial openly, both the parties experienced the procedures of cross-examining, court inquiry and court debate. On March 20, 2007, the court made the judgment of first instance that the plaintiff’s claim was supported by the court.
The defendant did not appeal within the legal period, so the judgment of first instance came into effect. On April 18, 2007, the execution period expired, but the defendant didn’t comply with the judgment as yet. On June 28, 2007, the plaintiff filed for compulsory execution. With the help and cooperation of the execution division of the district court in the defendant’s location, the whole execution process was completed and the dispute was settled perfectly on December 12, 2007.
 
(2) Comments ---- the disputed points of this case

A: On the plaintiff’s patent right

① The plaintiff claimed:

The plaintiff’s company was established in 1931 under Japanese Law, and its main products are tires and affiliated products, as well as chemical products. The plaintiff began to export and sell its tires to China in 1993, established a tire manufacturing stock company in China in 1999, and provided numerous technologies including No.xxxxxx industrial design patent to its tire manufacturing company established in China. On December 27, 2000, the plaintiff filed an application for its own tire industrial design with the Chinese Patent Office, and was granted a patent for industrial design, numbered xxxxxx.
 
In May, 2003, the defendant began to produce and sell the Pattern Y tire without authorization from the plaintiff. On June 8, 2006, the plaintiff found that the design of Pattern Y tire produced and sold by the defendant was very similar to the plaintiff’s patent. After thorough research and analysis, the plaintiff held that according to the provisions of Clause 2, Article 11, Clause 2, Article 56 as well as Clause 1, Article 57 of the Patent Law, the defendant’s act of producing and selling the Pattern Y tire infringed the plaintiff’s exclusive right to the use of this patent.
 
② The defendant defended:

Because Company C owns the patent right of Pattern Y tire, the production of patented products is an act of patent exploitation, which does not violate the laws.
 
There are obvious differences between Pattern Y tire and the plaintiff’s industrial design patent. The plaintiff’s purpose of using its patent right and bringing a lawsuit is to defeat its competitor.
 
The defendant made some profits from producing and selling the Pattern Y tire. The output of Pattern Y tire is 12 pieces in total, among which 10 pieces had been sold out, but 2 pieces were available. According to the Patent Law, even if the defendant’s act constitutes infringement, he should only bear two civil liabilities: one is ceasing the infringing act, and the other is compensating for the losses brought by the infringement, including destroying the molds as well as the stock products. However, the molds of Pattern Y tire had already been destroyed by the company.
 
B: On the damages

① Plaintiff claimed:

As for the calculation of the defendant’s profits, the defendant’s evidence 5 - 7 originated from its brochure, which may indicate the defendant’s producing and selling situation. If the defendant refutes, he should prove that the brochure did not originate from the defendant, and if the defendant is not able to submit the relevant evidence, he must bear the liability of his failure to prove.
 
With regard to the losses brought to the plaintiff, since X city Tire Company is the subsidiary company of Company A, then if it brings damage to X city Tire Company, it would definitely bring losses to the plaintiff.
 
② The defendant defended:

X city Tire Company and the plaintiff are two independent companies, and the plaintiff has never used patent No. xxxxxx in China, therefore it is impossible to account for losses.
 
With regard to the amount of damages, for Company C has stopped producing and selling the Pattern Y tires, it is groundless for the plaintiff to claim for RMB 300,000.
 
As for the industrial design of Pattern Y tire, the Patent Office has authorized the industrial design patent. If Company C’s act of producing its own patented products constitutes the patent infringement, then the patent system is meaningless.
 
(3) Significance

For quite a long time, Company A not only endeavors to protect the intellectual property of the unique advanced technology and design which is the fruit of research and development, but also plays an active role all over the world. In addition, in order for clients to feel their products are safe, Company A will make every effort to perform the strategy of intellectual property management and deal seriously with counterfeiting through informing of each offense, bringing a lawsuit, etc.
 
In addition, when the defendant did not appeal and intentionally did not perform the judgment after the judgment of first instance, the plaintiff filed an application to Beijing No. 2 Intermediate Court for the execution within the legal period. After the acceptance of the application, the Beijing No. 2 Intermediate Court relegated the case to the execution division of the court in the defendant’s location for enforcement. After accepting the entrustment from the Beijing No. 2 Intermediate Court, the execution division of the city’s district court executed the relevant matters of this case and sent the damages to the plaintiff, which settled the dispute.
 
3. Unfair Competition Cases

The unfair competition cases related to intellectual property can be classified into two types, the trade secret infringement case and the infringement in particular name, package and decoration of the well-known commodity. The following section is the detailed introduction of these two cases.
 
Case 6 - Company Q sued Company P for the infringement of the particular package and decoration of its well-known commodity

(1) Case history

①The strategy making

Company Q is a world-famous enterprise, whose products enjoy a high reputation. Since 2002, Company Q began to export and sell its fermented drinks marked with the trademarks “Yi Li Duo” and “Yang Le Duo”. The packages thereof have obvious distinctiveness. Furthermore,       Company G widely publicized its products including the products with this package via media like television, newspaper, magazine, internet, etc.
 
Company R is a well-known enterprise in Guangdong Province, which produces “Xi Le Duo” fermented drinks. In May, 2005, Company G found that the “Xi Le Duo” fermented drinks with a package different from the old one were sold in several cities like Beijing. The new package of “Xi Le Duo” is very similar with that of “Yi Li Duo” and “Yang Le Duo”, which is likely to cause confusion among the consumers.
 
Based on the above facts, we held that the opposing side’s act violated the provision of Clause 2, Article 5 of Anti-unfair Competition Law. After analyzing the advantages and disadvantages of sending a C&D letter, administrative banning and litigation, etc., we sent a letter of opinion suggesting filing a lawsuit to Company Q on December 19, 2005. After discussion, Company Q decided to take our advice.
 
② Litigation and evidence supplementation

In order to avoid local protectionism, we looked for the store in Beijing as the second defendant who was selling the infringing products. In view of the Company Q’s business development in the future, we decided to choose small-scale Merry Mart as the second defendant as compared to large-scale Carrefour and Wal-Mart.
 
After determining the second defendant, we began to buy the infringing commodity and notarized on the spot. On January 10, 2006, under notarization of the notary, we bought the infringing commodity in Merry Mart.
 
After we got everything prepared including the bill of complaint, evidence and other relevant documents regarding the litigation, the plaintiff filed a lawsuit with Beijing No. 1 Intermediate People’s Court on March 1, 2006, and received the Acceptance Notification issued by the court on March 13. On March 21, the court issued the Notification of Evidence Adducing, the deadline for adducing evidence being April 30.
 
During that period, except for arranging the received documents, we also notarized the website and surveyed the market. With respect to the market survey, we communicated with the notary organization and Company Q regarding the content, method and place of survey. We made the final strategy before March 17. We did a market survey under the notarization of the notary on March 20, and got back 150 questionnaires. According to the results of the questionnaire, 70% of consumers confused the products of the two companies.
 
We submitted the supplementary evidences 1 and 2 to the court before April 30.
 
③ Settlement

On March 27, Guangzhou Company Q received a request for a meeting from the defendant. After discussion, we held that settlement was a way to solve the dispute if the conditions were proper. Therefore, we contacted the defendant and expressed our wish to solve this dispute through settlement on April 10. On April 19, we received the fax from the defendant, which expressed their desire for a negotiation with our firm. Thus, the negotiation was held in the afternoon on April 21 in Beijing. During the negotiation, there was great discrepancy on the settlement conditions, the grace period of ceasing the infringement, the apology as well as damage compensation between the two parties. Ultimately, the two parties did not reach an agreement on the above discrepancy and the negotiation failed.
 
④ Preparation before opening the court session

On May 17, according to the Judge’s summon, both parties exchanged evidence and fully prepared before opening the court session.
 
The principal judge of this case examined the evidence submitted by both parties briefly and expressed his personal opinion. The Judge suggested that we supplement our evidence. In addition, upon the request of the first defendant, the Judge presided over the first mediation, but the mediation was suspended due to the failure of the agreement on the amount of damage compensation. Our attorney came back to the office immediately and requested Company Q to assist in supplementing the evidence upon the Judge’s advice. Company Q collected important evidences and sent them to our firm within one day, which had a positive effect on this case. Then we bound up the documents on hand and made an evidence list. This evidence was submitted to the court as the supplementary evidence at 1:30 p.m. on May 19. For the date of the opening court session is on May 26; our attorney classified all the documents, researched and discussed the defendant’s evidence, prepared the counter opinion, collected the relevant law and regulations as well as the cases, which was our overall preparation before opening of the court session.
 
⑤ Opening of the court session

At 9:00 a.m. on May 26, Beijing No.1 Intermediate People’s Court opened the court session in No.19 courtroom. Both parties experienced the procedures of party status identification, claims confirmation, court inquiry and court debate. After the debate, the Judge proposed and presided over the second mediation. The Judge negotiated with us separately and stated the suggestions as below:
 
A. As for the last mediation, the divergence of the settlement lay in the compensation for damage. Company Q could not submit evidence regarding the plaintiff’s losses or the defendant’s legal profits, even if high damages were required, they would be hard to ascertain. The plaintiff may require the defendant to pay reasonable fees for its prevention of the infringement, but it is hard to determine other compensation.
 
B: The purpose of this litigation is to prevent infringement and enlarge the market share. Thus the goal of litigation has been achieved if the defendant will no longer use that kind of packaging. Compensation for damages is not our main purpose.
 
We decided that we should wait for the instruction of the plaintiff and Company Q in Japan. The judge indicated that it was better to solve the dispute through mediation so that he might exert pressure on the defendant and persuade both parties. The judge expressed his strong will to solve the dispute through mediation and presided over the mediation again at 9:00 a.m. on May 29.
 
⑥ Mediation

After the opening of court session, we contacted Company Q again via telephone and written form to report the relevant information. We sent the report and submitted our attorney opinion as well as the settlement conditions for the client’s confirmation on May 28.
 
Upon the instruction, the third mediation was held in the court on May 29. Under the Judge’s mediation, the finally agreed to settlement conditions are as described below:
 
a. Company G should cease the production and usage of the potentially infringing packaging, and withdraw all the potentially infringing products no later than June 13.
b. Company Q should cease selling the potentially infringing commodity.
c. Company G should compensate RMB 50,000 of damage compensation (remit the payment within seven days).
d. The process fee was RMB 10,010, Company G pays RMB 5,005.
 
Based on the above settlement, the court issued a Civil Mediation Document, which came to force on May 29.
 
Company G sent an apology letter in writing to the plaintiff, which was kept in the court for reference. The contents were, "we extend our apologies to the plaintiff for the dispute of unfair competition and promise to abide by the items written on the mediation document.”
 
Finally, the litigation was settled. The Company expelled the opposing side’s infringing products out of market and reached the goal of this litigation.
 
(2) Comments --- the disputed points in this case

According to the provision of Clause 2, Article 5 of Anti-unfair Competition Law, imitation of well-known commodity’s particular package and decoration constitutes unfair competition and could be taken as the cause of action by Company Q. The disputed points can be summarized as the following three aspects:
 
A: On whether Y product is the well-known commodity

The opposing side claimed:

① The commodity enjoying high reputation nationwide can be regarded as the well-known commodity. However, Y product is only sold in Beijing.
② Besides, the evidence of the publicizing of Y products in Guangzhou or Shanghai can not prove that it has high reputation nationwide, thus it can not meet the standards of being a well-known commodity.
 
Our side claimed:

① The sales invoice in Beijing can prove that Y product was once sold in Beijing.
② Although Y product is only advertised in Guangzhou and Shanghai, the advertisements and the range are nationwide, for example, People’s Daily has great influence nationwide. Moreover, the programs of Guangzhou TV station and Shanghai TV station can be received all over the country.
 
The Judge’s opinion:

Although the Judge did not express this explicitly, he apparently agreed with our opinion.
 
B: On whether this package is the particular package

The opposing side claimed:

① The usage of row packages or the change of colors is very common.
② There are a lot of similar packages in the market.
 
Our side claimed:

① The package or decoration includes colors, characters, patterns and a combination of the three. In this case, the plaintiff not only owns rights to the five in a row packages as well as the change of colors, but also on their combination.
② This package and decoration were originally created by us.
③ This package and decoration have obvious distinctiveness.
④ We used this package from the start of production and sales of our products, and they have become the first impression that consumers have of our products.
⑤ There is an obvious difference between other products and our package in the package itself and its decoration.
⑥ The products the opposing side mentioned were purchased in 2006, but our products have been very popular in the market since 2002.
⑦ If another company uses packaging similar to ours, it constitutes infringement.
 
C: On whether there is a possibility of causing confusion

The opposing side claimed:

① The package of the potentially infringing commodity has an obvious trademark of their own, and consumers may distinguish the sources of the commodity according to this trademark.
② The trademark of Xi Le has enjoyed high reputation, thus there is no possibility of causing confusion.
Our side claimed:
① The package plays an important role in the sales of commodity, 63% of consumers will choose a commodity according to the commodity’s package.
② As a business indication, the package will indicate the source of the commodity.
③ The claim that it will not cause confusion, for its products have high reputation, cannot be supported, and it will easily cause confusion in two companies’ relation.
④ According to the result of the questionnaire, more than 70% of consumers hold that there is a possibility of causing confusion.
 
(3) The result and meaning of this case

Although this case was solved through mediation, the Judge indicated that the court decision would be basically the same as this mediation document. In fact, the mediation is more favorable to Company Q than the decision in this case.
 
To cease producing and selling of the infringing commodity.

Since the Judge has ascertained that the defendant is performing an infringing act, if the Judge decides, he can also compel the opposing side to cease producing and selling the infringing products.  With respect to the point, the results of mediation and decision are identical.
 
② To destroy the inventory products and withdraw the products on sale.

In the court, the judge may apply one of two ways of civil remedies - ceasing the infringement and compensating for damage. That is to say, for there are no relevant provisions, the judge will not attempt to destroy the store products and withdraw the products on sale. This claim will probably be rejected.
 
In the mediation document, the opposing side agreed to withdraw all the products on sale no later than June 13, which was very beneficial for us to expel the opposing side’s products out of the market and create a sound environment for the sales of Company Q’s real commodity.
 
③ To extend a formal apology.

Extending a formal apology is encompassed in the practices of Anti-unfair Competition Law in China. It is only a strategy during litigation and will be probably given up after settlement. In this case, the principal Judge indicated that extending of a formal apology would not be supported.
 
After the mediation, the opposing side issued an apology letter, which was a more favorable result. Although the apology letter was not expressly mentioned in the mediation document, it was kept in the court for reference.
 
④ To compensate for damage.

As for the compensation for damage, the court may support the part proven by the post office. In this case, since the evidence proving damage, as well as the opposing side’s profits were not submitted, it was very likely to only ascertain the fees on the invoice. In the mediation document, the opposing side agreed to compensate RMB 50,000 for damages, which was much more than the reasonable amount.
 
Though the damage compensation was not the main purpose of this litigation, the result of this case was more powerful than a decision for Company Q.
 
In conclusion, Company Q reached the goal of this litigation through mediation. The mediation document would come to force immediately, which could solve the dispute as soon as possible. Expelling the opposing side’s products out of the market during the summer supported the business interests of Company Q, and in view of this, Company Q sent a gratitude letter to our firm.
 
On the contrary, if the Judge decides that the second instance may be instituted after the first instance, it would take one year or more to reach the final result, which is unfavorable to Company Q, for it may miss the sale season and weaken the consumers’ impression of Company Q.
 
II. Administrative litigation

Case 7 - Company O sued Trademark Review and Adjudication Board

This is a very typical administrative litigation related to trademark. On June 20, 2008, Beijing Higher People’s Court declared four administrative judgments (which mean the final judgments) to the case of trademark “**** & logo” and other three relevant trademark disputes that had lasted many years. The Japanese Paper Group (hereinafter referred to as Company O) has achieved a complete overall success in trademark disputes in China. The success of Company O in the administrative litigation has had a great impact among the foreign-capital enterprises. Not only did it indicate the fairness of justice in China, but also showed to the world its progress on the road to the internationalization.
 
In this case of trademark dispute, Company O has experienced the processes of motion of cancellation, administrative litigation of first instance, and administrative litigation of second instance, etc. It is hard to imagine how long the whole course was and how arduous the path to the right protection was from the administrative stage to the litigation stage. Initially the motion of cancellation was unsuccessful due to the limitation of evidence, but Company O and the representative Linda Liu & Partners didn’t give up hope of seeking evidence. They notarized and legalized all the possible evidence, which strengthened the power of the evidence. As a result, our strenuous efforts led at last to a complete success.
 
(1) Case History:
Company O, the earliest paper manufacturing enterprise in Japan, was established in 19^th century and has four trademark rights in Japan.
 
The disputed trademark is the first trademark among the four disputed trademarks filed by X1 with the State Trademark Office on June 28, 1994, and obtained registration under class 1 on the commodity of “fax paper” on May 21, 1996 with the expiration date of May 20, 2016 after the renewal. The disputed trademark was transferred to X2 on November 28, 1996; then transferred to X3; and finally transferred to X4 on June 5, 2007.
Company O instituted legal proceedings before Beijing No. 1 Intermediate People’s Court (hereinafter referred to as the court of first instance) on July 26, 2007. On December 26, 2007, the court of first instance made the judgment. The X1 company was not satisfied with the decision and appealed to Beijing Higher People’s Court.
 
(2) The claims of both parties in the second instance

① The appellant claimed:

A. The time Company O requested for the cancellation of disputed trademark has exceeded the five year time limit stipulated by law.
B. The registration of the disputed trademark did not violate the provision of Clause 1, Article 13 of the Trademark Law. The evidence provided by Company O can only prove the notability of its trademark in Japan, but can not conclude that its trademark had notability in other countries, including China.
C. The registration of the disputed trademark did not violate the provision of Article 31 of the Trademark Law. The registration of the disputed trademark did not infringe Company O’s prior rights. The evidence provided by Company O can only prove the notability of its trade name in China, thus the registration of the disputed trademark did not infringe its right of trade name.
D. The registration of the disputed trademark did not violate the provisions of Article 15, 41 of the Trademark Law. Company O can only prove that its products were imported to China through several international trade companies in Xiamen from 1993 to 1994, but can not prove that the registrant X1 had purchased Company O’s products from these companies, or X1 and these companies had affiliated relations, thus its application for the registration of the disputed trademark had no malicious intention.
 
② The appellee claimed:

A. The registration of the disputed trademark violated the provision of Clause 1, Article 13 of the Trademark Law. As early as 1950s, Company O applied for the trademark of “**** & logo”. “****” is the Roman expression of the Japanese pronunciation of “**”. Its trademark enjoys high reputation in China and even in the world, and has reached the standard of well-known trademark, while the disputed trademark is the plagiary and imitation of Company O’s trademark.
 
B. The registration of the disputed trademark violated the provision of Article 15 of the Trademark Law. Company O and the disputed trademark’s applicant X1 once had an agency relationship through the Japanese Itochu Corporation in Japan, Xiamen Lianfa Company and Zhongji Channel Company. Furthermore, Jie ZHANG who held an important post in Anne Paper Company as well as the disputed trademark’s applicant X1, has known Company O’s trademark and its notability prior to the application date of the disputed trademark.
 
C. The registration of the disputed trademark violated the provision of Article 31 of the Trademark Law. The registration of the disputed trademark infringed the prior right of Company O’s trade name and was a kind of preemptive registration of the influential trademark pre-used by Company O through unfair means.
 
D. The registration of the disputed trademark did not violate the provision of Clause 1, Article 41 of the Trademark Law. Before the application for the registration of the disputed trademark, Jie ZHANG, who held an important post in the disputed trademark’s applicant X1, has known of Company O’s trademark and its notability. Jie ZHANG once held the post of manager in the 6^th International Trade Department of Zhongji Channel Company, and once signed an agency contract with Company O’s agent Itochu Corporation in his post term. If the registrant of the disputed trademark knows or should know that the disputed trademark is the trademark pre-used by others, but still applied for the registration in bad faith, which violated the principle of good faith, he has infringed the legal right of the prior user, and damaged the market order of fair competition; thus, the disputed trademark should be cancelled.
 
(3) Analysis of the case
According to the claims of appellant and the appellee, the Trademark Review and Adjudication Board, court of first instance, court of second instance all drew different conclusions. During the procedures of trademark cancellation, the Trademark Review and Adjudication and Adjudication Board made the decision unfavorable to Company O for it regarded that Company O did not submit a complete evidence chain. During the court trial of first instance, Company O and its representative made every effort to collect evidence in order to form a complete evidence chain as requested by the court of first instance. This would allow the court of first instance to support Company O’s claim of “the registration of the disputed trademark stands in violation of the provision of Article 41 of the Trademark Law”, and to make a judgment favorable to Company O, which would help to lay a foundation for the success of second instance. Although the court of second instance was different from the court of first instance in the application of law, it did not change the result of Company O’s success in the lawsuit.
 
The following part will introduce the application of law and the forming process of the evidence chain for your reference.

① The application of law

A. On the provision of the request for cancellation of the disputed trademark within the five year time limit.

Clause 2, Article 41 of the Trademark Law stipulates: Where a registered trademark stands in violation of the provisions of Article 10, 11 and 12 of this Law, any other organization or individual may request the Trademark Review and Adjudication and Adjudication Board to make an adjudication to cancel such a registered trademark. Article 84 of Law of the People's Republic of China on Legislation stipulates that laws, administrative regulations, local regulations, autonomy regulation, separate regulation and rules are non-retroactive except for the special provisions laid down for the purpose of better protecting the rights and interests of citizens, legal persons and other organizations. It can be concluded from the above provisions that, within five years from the date of the registration of the trademark, the trademark owner or interested party may file a request with the Trademark Review and Adjudication and Adjudication Board for adjudication to cancel the registered trademark. Moreover, the laws and regulations are stipulated by the non-retroactive principle. In this case, the registration date of the disputed trademark is May 21, 1996, while the provision of Clause 2, Article 42 of the Trademark Law on the time limit of dispute was executed after the Trademark Law, secondly revised on December 1, 2001, coming into force. There was no provision on the disputed time limit of the registered trademark earlier. According to the provision of Article 5 of “the Supreme People’s Court’s Interpretation on the Issues of Jurisdiction and the Range of Application of Law during the Trial on Trademark Cases”, the dispute in this case should apply to the provision of the five year time limit stipulated in the new Trademark Law; that is, the five year time limit should be calculated from December 1, 2001. Thus, Company O’s request for the cancellation on the ground that the registration of the disputed trademark violated the provisions of Article 13, 15, 31 and 41 of the new Trademark Law did not exceed the time limit of five years. The court of second instance rejected the appellant’s claim that Company O’s request for the cancellation of the disputed trademark has exceeded the time limit of five years stipulated by law, and ascertained that the decisions made by the Trademark Review and Adjudication and Adjudication Board and the court of first instance were correct.
 
B. The application of the law for Article 13 of the Trademark Law.

Article 13 of the Trademark Law stipulates: A trademark that is applied for registration in non-identical or dissimilar goods shall not be registered and its use shall be prohibited, if it is a reproduction, an imitation or a translation, of a well-known mark which is registered in China, misleads the public, and the interests of the registrant of the well-known mark are likely to be damaged by such use. This provision is the stipulation of the protection of a well-known trademark. According to the provision of Clause 2, Article 6 of Paris Convention for the Protection of Intellectual Property on the protection of a well-known trademark not registered in China: the countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well–known mark or an imitation liable to create confusion therewith. During the procedure of trademark cancellation in this case, the Trademark Review and Adjudication and Adjudication Board ascertained that Company O’s evidence was not powerful enough to prove that its trademark had some influence among the public in China, thus, the existing evidence was not powerful enough to prove its trademark as the well-known trademark. The court ascertained that, although Company O had submitted plenty of evidence to prove its notability, they could not prove that Company O’s trademark had been well-known before the application for the registration of the disputed trademark. Thus the evidence was not accepted by the court. During the application of law, the court of second instance ascertained that the evidence submitted by Company O could not prove that its cited trademark had been a well-known trademark among the public in China before the application for the registration of the disputed trademark, thus the court did not support Company O’s claim that the registration of the disputed trademark violated the provision of Article 13 of the Trademark Law. From this we can conclude that a country has no duty to protect a trademark if it is not used in that country, no matter how well-known the trademark is in other countries. Since the evidence submitted by Company O can not prove that its trademark was a well-known trademark among the public in China before the application for the registration of the disputed trademark, thus, no matter how well-known the trademark is in Japan, it is still hard to gain protection.
 
② The evidence of this case

A. The evidence proved that the cited trademark has distinctiveness and the disputed trademark constitutes similarity with it.
 
B. The cited trademark was used in China and had some influence, and the registrant of the disputed trademark had the opportunity to know about Company O’s trademark.
 
C. The formation of the evidence chain regarding X1 knowing of Company O’s trademark before the registration of the disputed trademark.
 
D. The corroborative evidence regarding the formation of the above evidence chain
 
(4) Conclusion

In this case, due to the limitation of evidence, Company O did not succeed in the initial procedure of revocation. However, Company O insisted on its belief, and under the unceasing efforts of Company O and its representative, there was a favorable turn in this case with little chance of success, which indicated the importance of entrusting an experienced and responsible representative; because the representative endeavored to collect the evidence and did not give up hope. Moreover, any possible evidence was notarized and legalized, which strengthened its power and gave some hope to the initial success of this case. However, because the administrative action refers to the proceedings on the legality of the specific administrative act made by the administrative authority, the court only judges the legality of the administrative act and seldom adopts the supplementary evidence during the trial on the case of administrative action. But in this case, the Trademark Review and Adjudication and Adjudication Board did not accept some of the evidence proposed by Company O during the procedure of revocation and there was no explanation in the written decision, which made its decision lack persuasive power. In addition, the new evidence made Company O’s evidence chain become more complete and helped to form a tight connection among the evidence. This complete evidence chain made Company O’s claim more powerful. If the court only takes the administrative action into consideration instead of facts, the decision will be obviously unfair to Company O. Accordingly, the court of first instance decided that the Trademark Review and Adjudication and Adjudication Board rehear this case; that is, to request that the Trademark Review and Adjudication and Adjudication Board correct the mistakes of not confirming the evidence proposed by the plaintiff during the procedure of revocation and also not explaining the reasons in the written verdict. More importantly, Company O’s complete evidence chain changed the judge’s view. Although the court of second instance held that the court of first instance improperly applied the law, it eventually ascertained that X1’s application for the registration of the disputed trademark violated the provision of Article 31 of the Trademark Law. Furthermore, the court of second instance not only ascertained the application of Article 31 of the Trademark Law, but also ascertained that X1’s application for the registration of the disputed trademark violated the provision of Article 15 of the Trademark Law due to the existence of the trade relationship between Company O and X1, the court of first instance and the court of second instance both determined that the registration of the disputed trademark should be cancelled. We are not sure if the appellant in this case will file an action for retrial before the Supreme People’s Court in the future, but we believe that a fair judgment would be granted even if the case was brought before the Supreme People’s Court.
 
Case 8 - Company S sued the Trademark Review and Adjudication Board

This case is an administrative action case brought by the trademark holder against the decision in a trademark opposition review and adjudication. Since the third party in this case was written off and bankrupted eventually, there was something unique in dealing with the third party in this case. Our claim of a prior copyright owned by Company S was recognized by the court. How to claim for a prior copyright is the focus of this case.
 
(1) Case history

①Bringing a lawsuit

In 1999, the plaintiff filed an opposition against the trademark “※※※※※” (assumed name) to the National Industrial and Commerce Administrative Bureau Trademark Office (hereinafter referred to as Trademark Office), after examination, the Trademark Office made the decision on the trademark opposition of trademark “※※※※※”, which decided to reject the plaintiff’s request and permitted the registration of trademark “※※※※※”.
 
The plaintiff did not agree with the decision and filed a request for the opposition adjudication to the Trademark Review and Adjudication and Adjudication Board on January 3, 2000. After examination, the National Bureau of Industrial and Commerce Trademark Review and Adjudication and Adjudication Board (hereinafter referred to as Trademark Review and Adjudication Board) made a decision on July 16, 2007, which maintained the Trademark Office’s decision and confirmed that the plaintiff’s excuse for the opposition Review and Adjudication was untenable, thus, the trademark “※※※※※” was permitted to register.
 
The plaintiff was still dissatisfied with the Trademark Review and Adjudication Board’s decision and brought an administrative litigation in order to fully protect its legal rights and interests. Thus, in view of the case’s facts and relevant laws, our firm analyzed the innovative nature of this case and made an action strategy and plan under the guide of the plaintiff. After the above preparations, the plaintiff brought an administrative litigation to the Beijing No. 1 Intermediate Court (hereinafter referred to as No. 1 Intermediate Court) on August 15, 2007.
 
② Opening the court session

The No. 1 Intermediate Court accepted the case and formed a collegial panel. On December 3, 2007, the No. 1 Intermediate Court opened the court session. There was a court debate after the court inquiry and cross-examination. The specific situation will be discussed fully in the next section. During the suit, along with submitting evidence which showed that the trademark “N” (assumed name) of Company S is a well-known trademark and trademark “N” owns the prior copyright to the Trademark Office and Trademark Review and Adjudication Board, our side also submitted similar cases published on the website of the Trademark Office as a reference. Although these materials could not be adopted as evidence for the decision during the trial, they played an important role in the formation of free evaluation of evidence on the court.
 
In addition, one feature of this case is that the involved third party Company G does not exist any more. After the service of summons through publication, the third party never arrived, so the court heard the case by default. This is a special point of the case’s procedure.
 
(2) Result of this case

On December 18, 2007, the No. 1 Intermediate Court made a judgment of first instance. The court ascertained in accordance with the stipulation of article 31 of trademark law, the application for the trademark registration should not damage another person’s prior rights at present, and should not preemptively register another person’s trademark which has been used before and bears some influence, through the means of unfair competition. The plaintiff submitted the contract of commissioned work of trademark “N” during the opposition process and submitted the certificate of copyright registration as supplementary evidence during the proceedings in order to prove that trademark “N” bears the prior copyright. The evidence was adopted by the court which ascertained that the plaintiff’s picture of trademark “N” illustrates a very strong three-dimensional sense. It differs from the common printing characters and is fulfilled with the creator’s intellectual labor, so it should be confirmed as bearing copyright; meanwhile, the involved mark of third party bears no difference from the plaintiff’s trademark in its appearance, which became an infringement to the plaintiff’s copyright and thus, the mark should not be registered. The court made the judgment of revoking the defendant’s decision of trademark opposition adjudication; the defendant must rehear the opposition case of trademark “※※※※※” in three months when the written judgment comes into effect, and the proceeding fees were to be borne by the defendant.
 
As stated above, the third party of this case does not exist any more, and the written judgment will come into effect after the service of publication.
 
The defendant Trademark Review and Adjudication Board reorganized the collegiate panel to decide the plaintiff’s request of trademark opposition review and adjudication, and made the written adjudication of trademark opposition on April 7, 2008, which decided that the trademark “※※※※※” should not be registered.
 
(3) Comments—disputed point of this case

On the process of opening a court session, the plaintiff and the defendant debated on the following points.
 
A: On the copyright claimed by the plaintiff

With respect to the prior copyright of “N design” claimed by the plaintiff in his complaint, the defendant claimed:

● With respect to the copyright of the cited trademark, in the opposition proceeding, the plaintiff only submitted the agreement document with the designer as a proof of its copyright. Merely submitting the agreement document will not help the plaintiff to prove its copyright.
● According to the consultation from the relevant Chinese experts, “N design” is too simple to constitute the artistic work with copyright. It means that there is no copyright for this “N design”. On the other hand, only the formal examination by the judgment department is not enough to argue that the certificate can guarantee the existence of copyright.
 
The plaintiff claimed:

● With respect to the copyright of the cited trademark, it is apparent that Company S owns the copyright, because it is clearly indicated in the submitted agreement at opposition procedure that the copyright of the cited trademark and “N design” belong to the plaintiff. Besides, since the cited trademark and “N design” were applied for registration in 1987 and 1995 respectively, it is true that the trademarks have already been publicized in China. The certificate of copyright issued by China Copyright Office will definitely reinforce the fact of the existence of our copyrights.

● Concerning the “N design”, the defendant stated that they have obtained “the Chinese expert’s opinion”, but not submitted any relevant evidences on it. Therefore the statement should not be adopted by the court. In addition, the “N design” was accomplished by the professional designing institution commissioned by the plaintiff. It is the achievement of intellectual creativity and owns copyright due to its distinctiveness.
There are numerous designs of “N”, while the design almost identical with the plaintiff’s “N design” is rarely seen in reality.
 
B: On whether the opposed trademark and the cited trademark constitute similarity, the plaintiff claimed:
a) In the trademark itself, the opposed trademark and cited trademarks 1, 2, 3 constitute similar trademarks.
b) On the designated goods, the opposed trademark and cited trademark 2 belong to a similar group 1202, thus the two trademarks constitute similarity regarding the designated goods.
c) Although the designated goods of the opposed trademark and cited trademarks 1, 3 do not belong to the same or similar group, their functions and usages are so similar that the consumers will confuse the sources of the goods and services. Thus, in practice, the designated goods of the two trademarks are also similar.
 
The defendant claimed:
a) In the trademark itself, the first two characters of the opposed trademark and cited trademarks 1, 2 are different and they also differ in their pronunciations and appearances, thus they are not similar trademarks. Cited trademark 3 only consists of the artistic and capitalized “N”, and is different from the cited trademark in their pronunciations and appearances, thus, they do not constitute similar trademarks.
 
b) On the designated goods, although the designated goods of the opposed trademark and cited trademark 2 are similar, the designated goods of the opposed trademark are different from that of cited trademarks 1, 3 on the production, sales and consumer group, etc., thus the opposed trademark and cited trademarks 1, 2, 3 do not constitute similarity.
 
The plaintiff made the following refutations against the defendant’s claims above:
a) In the trademark itself, the opposed trademark and the cited trademarks 1 and 2 are both character trademarks consisting of five Roman letters. Their lengths are identical, the middle letters are “N” and both end with “O”. Especially “N” devices of the obvious part of both trademarks are completely identical, and both trademarks have a tendency to the right on the whole. Thus, it will easily mislead the public that these two trademarks have some relationship and may be series trademarks.
 
b) On the opposed and cited trademark 3, it can be seen from the comparison between the “N” device of cited trademark 3 and the most obvious part of the opposed trademark that they are totally identical. According to the provision of page 73 in the Trademark Examination and Trial Rules, the trademark, which completely includes other’s device trademark with high reputation or obvious distinctiveness and thus makes the public confuse the source of the goods or services, will be regarded as a similar trademark. Thus, these two trademarks constitute similarity in themselves. Moreover, in the No. 976226 Trademark “ANISN” Opposition Adjudication, the Trademark Office has ascertained that the cited trademark has a reputation among the Chinese consumers, thus the “N” letter device has distinctiveness and is the plaintiff’s initial creation.
 
The opposed trademark and the “N” device of cited trademark 3 is totally identical, and the designated goods of both trademarks are closely related. The use of the opposed trademark will mislead the consumer that it is the plaintiff’s trademark and the opposed trademark has some relation with the plaintiff, thus they constitute similarity. This case is similar to the above mentioned No.976226 Trademark “ANIS” Opposition, thus, its adjudication result can be a reference.
 
c) As for the designated goods, although the designated goods “cooling and hearting equipment” of cited trademark 1 and “vehicle cooling equipment, vehicle heating equipment” of the opposed trademark belong to different classifications, their functions and usages are very similar, which can easily mislead the consumers. They constitute similar goods in reality.
 
d) The designated goods “air heating equipment”, “air conditioning equipment” of cited trademark 3 are identical with “vehicle ventilator (air adjuster), which belong to the 1106 similar group in class 11. Although its designated goods “vehicle cooling equipment”, “vehicle heating equipment” of the opposed trademark belong to class 12, they are the same as “vehicle air heating and adjusting equipment”. There is no difference between their functions as well as usages, and the plaintiff’s designated goods. Thus, they constitute similar goods.
 
e) The basic standard of deciding similarity lies in whether or not it will confuse the consumer as to the product’s source. The defendant neglected this basic principle and believed that similarity was found only through the description of the good classification and the trademark’s appearance, which was an improper and unfair examination.
 
(4) Significance

It is very important for the right holders to maintain their resolutions and confidence, although in this case, the right holder failed to get the confirmation of protecting his rights and interests from the Trademark Office and Trademark Review and Adjudication Board, so he had to resort to judicial means to protect his legal rights. In most people’s minds, it is very hard to reverse the administrative body’s decision, but eventually it is possible. Administrative litigation is an important remedy empowered to the right holders by the law, and also a process of judging the lawfulness of the administrative act. How to achieve success through administrative litigation impacts the views of right holders. Regarding the complete maintenance of one’s own rights instead of winning the case as a final goal, and the finding of the case’s breakthrough which forms a powerful evidence chain, the administrative litigation is not something to be fearful of. This case is a good example of that.
 
III. Useful tips for the foreign enterprise’s protection of intellectual property in China

Through the conclusion and analysis of the above practical cases, we can get many useful inspirations, especially for foreign enterprises to be mindful to take precautions in order to protect their own legal rights.
 
(1) We suggest that the enterprises strengthen the protection of their own rights and register their patent and trademark in China immediately as well as, guarantee the effectiveness of the authorized intellectual property. For example, apply for the registration of those trademarks which can easily cause confusion among the public, and make a declaration one or two years ahead of time so as to guarantee the rights, and prevent the cancellation of the trademark.
 
(2) In China, since we mainly use characters, the trademark of Chinese characters will give the consumers a deep impression. Therefore, except for an English trademark, we suggest that the foreign enterprises strengthen the usage and publicity of the Chinese character trademark before they enter into China.
 
(3) We suggest regulating the company’s intellectual property relationship with each affiliated company. Along with signing the trademark licensing contract and putting it on record in the Trademark Office, we suggest signing the contract for technology transfer and putting it on record in the relevant department when transferring patent technology.
 
(4) We suggest formulating the regulations of intellectual property management thoroughly within the company, like the protection and regulation of job-related invention and trade secrets.
 
(5) We suggest strengthening the intellectual property management in each affiliated company. For instance, give intellectual property training to the employees in the affiliated company, formulate the regulations of intellectual property management within the affiliated company.
 
(6) Pay attention to the intellectual property protection situation. For example, check the registration situation of similar trademark and domain names regularly. Once the unfair competition infringing the company’s intellectual property is found, actions should be taken as soon as possible so as to avoid missing the proper deadline.
 
(7) We suggest strengthening the intellectual property management inside the company and preserving the routine evidence materials. For example, set up management of trademark files and preserve the trademark certificate of registration materials, publicity and usage information, trademark licensing contracts, records of past infringement cases and their strategy. Only by following these steps can the company submit evidence materials immediately and completely when a dispute occurs. Additionally, the materials which can not be provided in a written form should also be preserved well. For example, record telephone conservations as soon as possible when a consumer calls to complain. Preserve the relevant materials of replies if they were unable to be saved at that moment.
 
IV. The experience of success in the lawsuits.

(1) Client’s guidance and assistance

In the above five lawsuits, from the initial strategy making to the final settlement, Company A, Toyo Ink Group, and Company Q have provided us guidance and confirmation all the time, and assisted us in collecting the relevant materials as well as evidence.
 
The above five cases were all solved through mediation or settlement. Compared to decisions, settlement has many advantages, like solving the dispute earlier and making execution easy. Thus, it is one strategy to exert pressure on the opposing side by litigation and finally reach for a settlement.
 
(2) Use of relationship

In the Company A’s litigation, we invited Professor Zongshun Tang, the previous legal consultant of China Patent Office, to draft a legal opinion letter which supported our opinion. In the Toyo Ink case, we asked the expert of Academy of Social Science for advice. The usage of experts not only strengthened our claim, but also exerted great pressure on the Judge and the opposing side.
 
(3) Representatives’ efforts

There were great difficulties in the above litigations. After the research on the suit, evidence, laws, and cases, the representatives proposed convincing opinions in the court and in the Attorney Opinion Letter, which not only gained the Judge’s support, but also gained the respect from the opposing side, thus achieved a sound final result.

(2008)