China’s Supreme People’s Court Releases Top 10 IP Cases of 2023
On April 22, 2024, China’s Supreme People’s Court (SPC) released the Top 10 Intellectual Property Cases of 2023 and 50 Typical IP Cases of 2023. While not officially a common law jurisdiction, these cases have “demonstration and guidance functions” for lower courts. The SPC also released the Top 10 Influential Cases earlier this year.
As explained by the SPC:
1. Case involving “Siemens” trademark infringement and unfair competition disputes
最高人民法院（2022）最高法民终312号民事判决书
[Case Summary] Xi AA Joint Stock Company and Xi AA (China) Co., Ltd. (hereinafter referred to as “Xi Company”) were owners of the registered trademarks of “西门子” and “SIEMENS”. Both trademarks were registered on washing machines and other commodities and had a relatively high popularity after long-term use and vigorous promotion and publicity by Xi Company. Ningbo Qi BB Electrical Appliances Co., Ltd. and other companies registered the name of “Shanghai Siemens Electrical Appliances Co., Ltd.” abroad as a commercial logo, which widely used in the washing machine products and external packaging produced and sold by them and in relevant publicity activities. Xi Company alleged that the acts of Ningbo Qi YY Electrical Appliances Co., Ltd., et al. infringed upon its right to exclusive use of its registered trademark and constituted unfair competition, and brought a lawsuit. The court of first instance held that the alleged infringement of Ningbo Qi BB Electric Appliances Co., Ltd. and other companies did not constitute trademark infringement, but constituted unfair competition, and ordered Ningbo Qi BB Electric Appliances Co., Ltd. and other companies to immediately stop the infringement, and compensate 100 million RMB of economic losses and 163,000 RMB of reasonable expenses. Ningbo Qi BB Electrical Appliances Co., Ltd., et al. refused to accept the decision, and appealed. After a second-instance hearing, the Supreme People’s Court held that, knowing the popularity of the trademark “SIEMENS”, Ningbo Qi BB Electrical Appliances Co., Ltd. and other persons intentionally used the trademark “Shanghai Siemens Electric Appliances Co., Ltd.” on washing machine products, causing confusion and misidentification on the part of consumers, constituted trademark infringement, and used the mark in product outer packaging and publicity activities also constituted unfair competition, and they should compensate for damages. As for the amount of compensation, although the existing evidence was difficult to determine the actual losses of Xi Company or the tort profits of Ningbo Qi BB Electrical Appliances Co., Ltd., it was sufficient to determine that the tort profits of Ningbo Qi BB Electrical Appliances Co., Ltd. had obviously exceeded the statutory maximum amount of compensation of 5 million RMB. Under this circumstance, in view of Ningbo Qi BB Electric Appliances Co., Ltd.’s refusal to provide the financial materials related to the infringement, which constituted an obstruction of evidence, the court of first instance determined that it was not inappropriate for Ningbo Qi BB Electric Appliances Co., Ltd. and other companies to be liable for the amount of compensation of 100 million RMB by calculating the proportion of sales of the allegedly infringing products on the basis of 15% of the total sales amount of 1.5 billion RMB by referring to the data in the media reports and according to the relevant facts of the case. Judgment of the Supreme People’s Court: The appeal shall be dismissed and the original judgment sustained.
[Typical Significance] The second-instance judgment in this case strictly applies the system of obstruction of evidence. For infringers who deliberately fail to provide evidence and hinder the people’s court from determining the facts of the case, unfavorable handling methods and judgment results will be made in accordance with the law. This case fully reflects the judicial attitude of the People’s Court to strictly protect intellectual property rights, effectively combats malicious attempts to cling to the goodwill of well-known trademarks, and plays an important role in purifying market order and creating a good business environment.
[Case Summary] La XX is the owner of the trademarks “LAFITE” and “CHATEAU LAFITE ROTHSCHILD” (hereinafter collectively referred to as the trademarks involved), and both trademarks were registered on the commodities containing alcoholic beverages. The trademark involved in this case has a high reputation after long-term use, and “LAFITE” and “拉菲” have established a solid connection. On April 1, 2005, Nanjing Jin XX Wine Co., Ltd. applied for the registration of the trademark “拉菲庄园” (Lafite Chateau) on wine and other commodities. After that, Nanjing Jin XX Wine Co., Ltd. and other companies used such logos as “拉菲庄园” and “LAFEI MANOR” in the process of producing, importing and selling wine, and carried out publicity and promotion in the website and transaction documents. On December 23, 2016, the Supreme People’s Court rendered a retrial judgment supporting the trademark administrative department in canceling the trademark “Lafite Manor.” Afterwards, La XX Winery sued Nanjing Jin XX Wine Co., Ltd. and others. The court of first instance held that the seven defendants, Nanjing Jin XX Wine Co., Ltd. and other six defendants, constituted trademark infringement and unfair competition, and ordered them to stop the infringement and applied punitive compensation. Nanjing Jin XX Wine Co., Ltd., et al. refused to accept the decision, and appealed. After a second-instance hearing, the Supreme People’s Court held that, in the process of applying for registration and use of the trademark “拉菲庄园”, Nanjing Jin XX Wine Co., Ltd. and other persons had malicious intent to evade the trademark involved in the case, their use of the “LAFEI MANOR” logo of “拉菲庄园” constituted trademark infringement, and their exaggeration of the historical inheritance and popularity of “拉菲庄园” wine in publicity constituted false publicity. Nanjing Jin XX Wine Co., Ltd. et al. had obvious malice and serious circumstances of infringement. Therefore, punitive compensation was applied to La XX winery’s claim, and Nanjing Jin XX Wine Co., Ltd. et al. were ordered to compensate for economic losses and reasonable expenses of 79.17 million RMB in total.
[Typical Significance] The judgment of this case points out that the trademark registrant that has the intention of evading a trademark should not be protected in the use of its trademark, is of positive significance in advocating market participants’ participation in market competition in a faithful and good-faith manner, and shows the strength and determination of the people’s court to severely punish “free riding.”
3. Administrative dispute involving the invalidation of the “face recognition” invention patent
最高人民法院（2021）最高法知行终556号行政判决书
[Case Summary] Beijing Zhong XX Technology Co., Ltd. was the patentee of an invention patent with patent number 200480036270.2 entitled “a method for obtaining a facial image and a face recognition method and system”, and Ping XX Computer Trading (Shanghai) Co., Ltd. filed a request for invalidation of the patent in question. Zhong submitted the amended version of the patent claims during the period of examination for the invalidation of the patent in question. The China National Intellectual Property Administration (CNIPA) did not accept some of the amended claims, and only examined the accepted claims, made an examination decision, determined that the patent involved in this case was not inventive, and declare the patent invalid. Zhong was dissatisfied and filed a lawsuit with the Beijing Intellectual Property Court, but was not upheld. Zhong appealed on the ground that all the amended claims should be accepted. The Supreme People’s Court held in the second instance that the extent of modification of claims in the administrative procedures for the determination of patent rights shall not include new matter as prescribed in Article 33 of the Patent Law and prescribed in paragraph 1 of Article 69 of the Detailed Rules for the Implementation of the Patent Law. Whether the modification method of a claim is “further limited” shall be reviewed only on the basis of whether the modified claim contains in its entirety all the technical features of the original claim, and whether the modified claim has added technical features compared to the original claim, and whether the added technical features are recorded in other claims in the original claim. The amendment of a claim in the administrative procedure for the determination of patent right shall generally be limited to the response to the grounds for invalidation, and may not be accepted if the claim is not reconstituted in the name of overcoming the defects referred to in the grounds for invalidation. In this case, Claims 4 and 7 are the original claims in substance, and are the basis for ex officio examination. The technical solution in Claims 4 and 7 quoted in Claims 8 to 10 as amended shall also be accepted. Claims 11 and 12 as amended are not in response to the grounds for declaring invalidity, and it is not inappropriate for the CNIPA not to accept them. Therefore, the judgment of first instance and the decision to be prosecuted shall be revoked and the CNIPA shall make a new decision.
[Significance] The present case clarifies the requirements for the extent, manner and purpose of modification of claims in the administrative procedures for patent invalidation, and in particular the determination standards for “further limited” modification, which are of reference significance in grasping the legal standards for the modification of claims in the administrative procedures for patent invalidation.
4. Case involving infringement disputes over the new corn plant variety “Danyu No. 405”
最高人民法院（2022）最高法知民终2907号民事判决书
[Case Summary] Liaoning XX Industry Science and Technology Co., Ltd. was the owner of variety right of “Danyu No. 405” new corn plant variety. Linghai Agricultural XX Industry Science and Technology Co., Ltd., without authorization, infringed upon the variety right of “Danyu No. 405” under the name of “Ziguang No. 4”, which was determined in a judgment effective in 2015 as infringement, and then, in 2019 and 2020, continued to conduct the infringement of “Danyu No. 405” under the name of “Jinyu 118”, “Anyu 13”, and “Danyu No. 606” respectively. Qingdao XX Agricultural Technology Development Co., Ltd. was the seller of the alleged infringing seeds. Liaoning XX Industry Science and Technology Co., Ltd. sued requesting the court to order Linghai Agricultural XXIndustry Science and Technology Co., Ltd. and Qingdao XX Agricultural Technology Development Co., Ltd. to cease the infringement and jointly compensate for the economic losses and reasonable expenses in a total amount of 3 million RMB(with 1.5 million RMB as the compensation base and 1X as the punitive compensation). The court of the first instance held that it was impossible to determine the basis for calculating the punitive damages, and therefore the statutory compensation judgment was applied to stop the infringement and compensate Liaoning XX Industry Science and Technology Co., Ltd. for economic losses and reasonable expenses in a total amount of 1 million RMB . Liaoning XX Industry Science and Technology Co., Ltd. refused to accept the decision and appealed. After a second-instance hearing, the Supreme People’s Court held that: The infringement of Linghai Agricultural XX Industry Science and Technology Co., Ltd. was committed for a long time, in a wide geographical area and on a large scale, and the infringement was repeated multiple times, the infringement was intentional and obvious, and the infringement circumstances were egregious, so Linghai Agricultural XX Industry Science and Technology Co., Ltd. should assume the punitive compensation liability. With reference to the quantity of “Danyu No. 405” seeds harvested from the 400 mu of infringing seeds self-acknowledged by Linghai Agricultural XX Industry Science and Technology Co., Ltd. and the sales gross profit, the compensation base of 1.5 million RMB claimed by Liaoning XX Industry Science and Technology Co., Ltd. has been basically satisfied. Therefore, in accordance with the compensation base of 1.5 million RMB and the punitive compensation of 1X, the court rendered a judgment to fully support the claim of Liaoning Dandong Certain Industry Science and Technology Co., Ltd. of 3 million RMB.
[Typical Significance] In this case, the basis for punitive damages may be determined based on the discretion of the evidence in the case, and statutory compensation shall not apply simply because it is difficult to accurately calculate. The judgment in this case demonstrated the determination and judicial attitude of the people’s courts to fully implement the punitive compensation system, legally reduced the difficulty of rights holders’ rights protection, effectively played the deterrent force of punitive compensation, and effectively made infringers pay a heavy price.
5. Navigation electronic map copyright infringement and unfair competition dispute case
北京市高级人民法院（2021）京民终421号民事判决书
[Case Summary] Since 2002, Beijing XX Science and Technology Co., Ltd. has started the research, development and promotion of electronic maps, and has created the 15Q4 and the 16Q2 Internet electronic maps (hereinafter referred to as the “rights maps”). In 2013, Beijing XX Technology Co., Ltd. and Beijing YY Technology Co., Ltd. signed a Cooperation Agreement, agreeing to authorize Beijing YY Technology Co., Ltd. and other companies to use the rights maps until the end of 2016. Beijing XX Technology Co., Ltd. claimed that after the expiration of the contract, Beijing YY Technology Co., Ltd. and its affiliated companies used navigation electronic maps that were substantially similar to the right maps in the six applications operated by it, namely, Baidu Map, Baidu CarLife and Baidu Navigation, and infringed upon its copyright and constituted unfair competition. Therefore, they sued. The court of first instance held that the navigation electronic map used in the application software by Beijing YY Science and Technology Co., Ltd. and other companies constituted copyright infringement, and ordered Beijing YY Science and Technology Co., Ltd. and its affiliated companies to cease the infringement, make an apology, eliminate the ill effects, and jointly and severally compensate 64.5 million RMB of economic losses and 920,000 RMB of reasonable expenses. Beijing YY Technology Co., Ltd., et al. refused to accept the decision and appealed. The Higher People’s Court of Beijing Municipality held in the second instance that the rights maps constituted a graphic work under the Copyright Law. As for the massive map data, through the 30 secret notes, 125 internal roads, 47 maps of the administrative area of sea expansion, and 44 model maps as provided for by the right holders, it may be determined that Beijing YY Science and Technology Co., Ltd. and its affiliated companies used navigation electronic maps substantially similar to the right map in the six applications operated after the expiry of the term of the Cooperation Agreement, which infringed upon the copyright of Beijing XX Science and Technology Co., Ltd. In view of the fact that the Copyright Law has already been applied to protect the lawful rights and interests of the right holders, it is no longer appropriate to apply Article 2 of the Anti-unfair Competition Law for repeated protection. Therefore, the appeal was rejected and the original judgment was upheld.
[Typical Significance] Data is a key element of the digital economy. This case is a typical case of protection of a navigation electronic map by the Copyright Law. This case not only deeply analyzed the essential elements of the navigation electronic maps constituting graphic works, but also made useful exploration on the substantial similarity comparison of massive map data, which highlighted the important role of intellectual property judicial trial services in guaranteeing the digital economy.
6. Cases involving unfair competition disputes involving “data”
广东省高级人民法院（2022）粤民终4541号民事判决书
[Case Summary] Beijing XX Network Technology Co., Ltd., an operator of Sina Weibo, alleged that Guangzhou XX Information Technology Co., Ltd. illegally used server APIs (application programming interfaces) to scrape a large amount of microblog data by malicious technical means for storage and sale, which constituted unfair competition. The court of first instance held that the acts of Guangzhou XX Information Technology Co., Ltd. constituted unfair competition, and ordered it to compensate 20 million RMB for economic losses and 272,680 RMB for reasonable expenses for rights protection. Guangzhou XX Information Technology Co., Ltd. refused to accept the decision and appealed. The Higher People’s Court of Guangdong Province held in the second instance that Beijing XX Network Technology Co., Ltd. enjoyed the rights and interests of controlling and legally utilizing the microblog data held in accordance with the law and regulations and obtaining economic benefits. Guangzhou XX Information Technology Co., Ltd. illegally invoked the micro-blog server API to scrape a large amount of background data for storage by changing IP (network address), UID (user account) and other deceptive technical methods, and sold it to unspecified Internet users without any processing, thus making a profit. Such conduct significantly increased the risk that the microblogging platform would be substantively replaced. It may also cause data security issues such as personal privacy and sensitive information leakage. It violates the principles of fairness, integrity and business ethics, disrupts the order of competition in the data market, and seriously damages the legitimate rights and interests of Beijing XX Network Technology Co., Ltd. and consumers and constitutes unfair competition behavior stipulated in Article 2 of the Anti-Unfair Competition Law. According to the median charging rates of Guangzhou Jian Information Technology Co., Ltd. of one RMB per 100 times, the profit was about 21,797,900 RMB. By comprehensively considering the long duration of the alleged infringement, huge data transfer scale, serious damage consequences and other circumstances, it was not inappropriate to fully support the compensation claim of Beijing XX Network Technology Co., Ltd.. Therefore, the court rendered a judgment to dismiss the appeal and affirm the original judgment.
[Significance] This case is a typical case of illegal scraping of data for trading and resale. The judgment is based on the balance relationship between “effective protection” and “orderly circulation” of data, clarifies the boundaries of data rights protection, and embodies the distinct judicial attitude of judicial trial to guide market subjects to acquire and use data with “reasonable and reasonable application”.
7. Crimes of infringement of copyright of medical equipment software
上海市第三中级人民法院（2023）沪03刑初23号刑事判决书
[Summary of the Case] Since March 2019, the defendant Liu XX, for the purpose of profit, without the permission of copyright owners such as XiYY Medical Systems Co., Ltd., has made dongles to circumvent copyright technical protection measures and provided repair manuals and other downloadable materials, copied Nebula workstation and other software without authorization, and sold the aforementioned dongles and pirated software through Xianyu accounts and other channels. Since July 2020, defendant Liu XX instructed defendant Liu YY to open a Xianyu account to sell dongles and pirated software. During this period, the defendant Liu XX was responsible for making dongles, copying pirated software, putting goods on shelves, sending express delivery, etc. The defendant Liu YY was responsible for account customer service, payment collection, etc. After auditing, the sales amounts of defendants Liu XX and Liu YY was more than 1.06 million RMB and more than 140,000 RMB respectively. After investigations it was determined that the dongles sold by the two defendants can avoid the technical protection measures taken by the copyright owner, and the pirated software they sell is essentially the same as the copyright owner’s work. The Shanghai No. 3 Intermediate People’s Court held that the two defendants copied and disseminated their works to the public through information networks without the permission of the copyright owner for profit-making purposes, and deliberately avoided the technical protection measures adopted by the copyright owner for their works. The case of Liu XX was particularly serious and the case of defendant Liu YY was serious. Both of their actions constituted the crime of copyright infringement. In the joint crime, the defendant Liu XX was the principal criminal; the defendant Liu YY was an accessory and should be given a lighter punishment. The two defendants both confessed and are entitled to a lighter punishment; they voluntarily confessed and accepted the punishment and prepaid the fine before trial, so they could be given a lighter punishment. The defendant Liu XX was sentenced to three years and two months in prison for the crime of copyright infringement and fined RMB 700,000. The defendant Liu YY was sentenced to one year in prison, suspended for one year, and fined RMB 80,000. After the first-instance verdict, neither defendant appealed.
[Typical Significance] This case is a typical criminal case in which copyright infringement by deliberately avoiding technical measures is punished according to law after the implementation of the Criminal Law Amendment. The judgment of this case clarified the relevant standards for criminal liability for circumventing or destroying technical measures, fully protected the legitimate rights and interests of medical device software copyright holders, and demonstrated the strength and determination to strengthen criminal judicial protection of intellectual property and serve the innovative development of the digital economy.
8. Dispute case over misappropriation of technical secrets for Lentinan
江苏省南京市中级人民法院（2019）苏01民初3444号民事判决书
[Case Summary] In 2004, Nanjing XX Pharmaceutical Technology Co., Ltd. and Di XX Pharmaceutical (Jiangsu) Co., Ltd. signed a “Lentinan Project Cooperation Contract”, agreeing that the former would provide the latter with technologies for producing lentinan raw materials; the products involved would be sold to the dealer designated by the former; the latter shall compensate the former 20 million RMB for distribution by itself or by entrusting others to distribute; both parties shall keep the technology of this project confidential, otherwise compensation shall be made in accordance with the aforementioned agreement. Later, Nanjing XX Pharmaceutical Technology Co., Ltd. delivered the technical results to Di XX Pharmaceutical (Jiangsu) Co., Ltd. as agreed. Di XX Pharmaceutical (Jiangsu) Co., Ltd. obtained the registration and production approval documents for lentinan API in 2006. In 2010, Di XX Pharmaceutical (Jiangsu) Co., Ltd. transferred the lentinan technology to a non-party for 1 million RMB. In 2014, the website of an outsider in the case promoted that the production line of lentinan raw material medicine was officially put into operation, and the annual output value will exceed 100 million RMB. Nanjing XX Pharmaceutical Technology Co., Ltd. then filed a lawsuit in court. The Intermediate People’s Court of Nanjing City, Jiangsu Province held that the technology involved in the case was not publicly known, valuable and confidential, and constituted a technical secret. Di XX Pharmaceutical (Jiangsu) Co., Ltd. transferred technology that was substantially the same as the aforementioned technology to an outsider, which constituted a breach of confidentiality. The agreement to disclose technical secrets to outsiders constituted misappropriation. According to the amount of compensation agreed upon by both parties, Di XX Pharmaceutical (Jiangsu) Co., Ltd. was ordered to compensate Nanjing XX Pharmaceutical Technology Co., Ltd. 20 million RMB. Di XX Pharmaceutical (Jiangsu) Co., Ltd. was dissatisfied and appealed. The second-instance judgment of the Supreme People’s Court rejected the appeal and upheld the original judgment.
[Typical Significance] This case involves the protection of technical secrets of traditional Chinese medicine techniques such as the selection, processing, and treatment of authentic mushroom raw materials. The judgment explores issues such as the identification of technical secrets of traditional authentic medicinal materials and compensation for illegal use of technical secrets, which is conducive to the application and development of traditional Chinese medicine technology and promotes the integrity and innovation of traditional Chinese medicine.
[Case Summary] Shenzhen XX Computer System Co., Ltd. and others have set up a “teenager mode” in the “Tencent Video” and “Tencent NOW Live” APPs operated by them. When the above-mentioned APPs are opened, a pop-up window will pop up on the homepage to remind teenagers. Guardians can easily turn on the “Youth Mode” based on this, which is equipped with high-quality content suitable for teenagers, restricts social and spending functions such as recharge, rewards, and gift-giving, and sets up an anti-addiction mechanism. In order to ensure the normal operation of the “Youth Mode”, the service agreements of both APPs stipulate that users shall not interfere with or destroy the normal operation of the software, may not add, delete, or change the functions or operating effects of the software, or perform any actions that endanger minors. The “Ad Removal Weapon” APP operated by Beijing XX Technology Co., Ltd. uses the “youth mode pop-up box automatic closing” function as a “member exclusive privilege” and guides users to enable and use this function for unlimited play. As a result, users cannot use the “Youth Mode” through the prominent pop-up window that pops up on the product homepage of Shenzhen XX Computer Systems Co., Ltd. Shenzhen. Shenzhen XX Computer Systems Co., Ltd. and others believed that Beijing XX Technology Co., Ltd. acts constituted unfair competition, so they filed a lawsuit in court. The People’s Court of the Tianjin Pilot Free Trade Zone held that Beijing XX Technology Co., Ltd.’s behavior of blocking “Youth Mode” was essentially to obtain economic benefits on the grounds of technological neutrality, hindering and destroying Shenzhen XX Computer Systems Co., Ltd.’s network products and the unfair competition resulted in the company’s youth protection software failing, which not only destroyed the market order of fair competition, but also violated relevant laws and regulations for the protection of minors, and hindered online audio and video, live broadcast and other industries, thereby constituting unfair competition. Taking into account that the products of Shenzhen XX Computer System Co., Ltd. have a greater influence on youth , Beijing XX Technology Co., Ltd. has a greater subjective fault. The youth mode blocking function covers a variety of software, has a wide range of influence, and has a large number of downloads. Due to factors such as the long duration of unfair competition, Beijing XX Technology Co., Ltd. was ordered to compensate for economic losses and reasonable expenses totaling 3 million RMB. After the first instance verdict was announced, neither party appealed and they reached a pre-execution settlement.
[Typical Significance] This case is a typical case of shielding unfair competition in the “youth mode”. The judge affirmed the positive role of “Youth Mode” in safeguarding the rights and interests of minors online, negatively evaluated the blocking of “Youth Mode” by applying the Anti-Unfair Competition Law, and guided network service providers to consciously fulfill their obligations to protect minors.
The original text is available here (Chinese only).
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