According to Xiaoming Song, chief of the Third Civil Tribunal, the Interpretation (II) was passed by the Judicial Committee of the Supreme People's Court after 16 revisions, to serve the purpose of ensuring proper implementation of Patent Law, aligning and refining judicial standards on patent infringement, and meeting the new expectations in patent judgments arisen from technology innovation.

With a total of 31 articles, the Interpretation (II) covers the areas of claims interpretation, indirect infringement, standards implementation defense, legitimate source defense, ceasing of infringement act, indemnity calculation and the impact of patent invalidation on infringement litigation, so as to address the key issues found in patent juridical practices.

Extend juridical protection to solve issues of “long cycle, difficult to prove and low indemnity” in patent litigation.

The indirect infringement stipulated in Article 21 of the Interpretation (II) aims at further strengthening the protection to patentees, which can also be found in the ongoing draft revision of the Patent Law. In practice, an indirect infringer does not constitute joint negligence if it doesn’t have communication with the infringer who conducts the actual infringement act. However, if the indirect infringer has clear knowledge that the parts they provide to the infringer can only be used for manufacturing infringing product, or actively induces others to conduct patent infringement, its act shall fall into the circumstances prescribed by Article 9 of the Tort Liability Law, due to its subject malice.

Song indicated that it doesn’t mean the protection to the right holder is extended outside of the preexisting legal paradigm, instead, it’s an interpretation of the true meaning that shall apply to the Tort Liability Law, which is to be in compliance with the reality of the patent right holder’s protection.

In correspondence to the issues of “difficult to prove and low indemnity”, Article 27 of the Interpretation (II) has brought in certain improvement to the rule of evidence for indemnity amount in patent infringement litigations. Based on the patentee’s preliminary evidence and the evidence that are possessed by the infringer, the burden of proving the profit earned by the infringer is shifted to the infringer. This works in junction with Article 65 of Patent Law to determine the indemnity calculation order.

As to the issue of long cycle of trial, the Interpretation (II) has introduced the procedure of “dismissal first, new suit later”, i.e. the court may decide, procedurally instead of substantively, to dismiss a patent infringement litigation suit after Patent Reexamination Board issues invalidation decision against the patent at issue without having to wait for final outcome of the administrative litigation; while the patentee can file another lawsuit to obtain juridical protection if the invalidation decision is overturned during the administrative litigation.

Stick to the principle of interest balance, protect patentees’legal rights while avoid improper expansion of patent right .

While Article 70 of the Patent Law stipulates that any party who is engaged in use, offer for sale or sale shall be exempted from indemnity responsibility if their legitimate sources defenses is sustained, the dispute lies in whether a bona fide user shall cease the use after proving the legitimate source and paying a fair consideration. The Supreme Court, after thorough studying and collecting opinions from other legislative organizations, decides that it is against the original intent of Article 70 of Patent Law to overstate the interest of patentees through bypassing the rightful interests of bona fide users. Therefore, Article 25 of the Interpretation (II) exempts the bona fide users’who have paid a fair consideration from the liability to cease use by way of proviso.

Regarding the order to cease infringement activity, Article 26 of the Interpretation (II) stipulates that if the cessation of infringement activity would damage the interests of the State and the public, the court may order infringer to pay reasonable fees instead. (Source: People’s Daily)

1. Compile and publish “Trademark Registration Application FAQ Guidebook” on official website, to answer frequently asked questions in the process of trademark application and to address the issues that concern trademark applicants most.

2. Cancel notarization requirement on certain certifying documents, such as documents required for trademark applications involving portraits or celebrities names, applications for assignment and removal, and applications for correction of foreign name and address, in an effort to reduce the burden on trademark applicants and shorten the processing time.

3. Specify the contents of Notification of Amendment, such as adding explanatory or instructive content, to give better guidance to trademark applicants in making pertinent and precise amendment.

4. Accept the same set of evidence used for multiple oppositions filed within the same month, provided the complete set of evidence has been submitted in the first filed opposition, and the other cases share the whole set (not part) of the evidence. The case number of the opposition containing the whole set of evidence (the preliminary approval number of the opposed mark or the official filing number of the opposition) shall be indicated prominently.

5. Expand the scope of combined examination of trademark oppositions, to those between the same parties, against identical marks, sharing the same set of evidence, or cross-oppositions between two parties, or per application by the interested party based on other reasons that are accepted by the Trademark Office after consideration.

6. Launch expedited examination passage for applications concerning post registration procedures such as modification, assignment or renewal, in case of urgent or critical situations. Applicants may submit written request and corresponding evidences for CTMO to consider and approve.

7. Optimize user experience of the official website, by perfecting menu setting, timely updating information, improving website stability, improving trademark searching function and adding procedure information such as “mail received / returned” for applicants to track processing status.

The above measures shall be implemented from the date of announcement. (Source: CTMO)

The report also records a growth of 16.8% in China’s PCT applications, which tops the ranking of growth; Korea is the second with a growth of 11.5%. US patent application has slightly decreased to 6.7%.

WIPO report says China, Japan and Korea are those mainly behind the growth of applications, for Asia’s PCT applications is more than double of the number in 2005 and has taken up 43% of the world’s total.

In a recent report by Chinese Academy of Science and Technology for Development (CASTED), China’s technology contribution rate has reached over 55.1%, and the national innovation ability increased to the 18th of the world ranking.

According to CASTED, the first 16 technology and finance integration pilot areas in China have attracted 1.2 trillion yuan in loans, and over 700 billion yuan in startup investment and private equity investment targeted technology companies. In 2015, the national collateral financing on patents has reached over 50 billion yuan.

During China’s 12th five-year plan period (2011-2015), there are totally 97 pricing monopoly cases inspected, with the economy sanction of 10.397 billion yuan. Among these cases, 29 were inspected by National Development and Reform Commission (NDRC) directly and 68 by the provincial pricing departments; there are 76 cases involving monopolization agreements, 13 abuses of dominant market position and 8 administrative monopoly cases.

EPO has recently released their 2015 report in Brussels, according to which, China has submitted a total of 5,721 patent applications to EPO at a growth of 22.2% from 2014, which tops the application grwoth ranking in EPO.

China’s patent applications are mainly found in 3 technical fields: digital communication, computer technology and telecommunication. The applications in these fields has increased from a ratio of 50% to 57% in 2015; Huawei, in the field of digital communication, ranked at top for the second time, followed by Ericsson and Qualcomm; ZTE ranked at the 4th, followed by Samsung and Nokia.

Amonf all the Chinese companies, Huawei is the most acitve applicant with 1,953 patent applications, followed by ZTE with 870 applications. Other companies in the top ranks include Xiaomi, Tencent, BOE, China Institute for Telecommunication Science and Technology, and Alibaba.

EPO has received totally 279,000 patent applications in 2015, a slight increase from 274,000 in 2014. US companies’ patent applications are found with a noticeable growth, while applications filed by companies from the 38 EPO member states maintain a similar level as in 2014.

Medical technology is the field in which most patent applications have been received in 2015, up 11% from 2014. The other fields with noticeable growth are engines / pumps / turbines, pharmacy, measurement and computer. Philips leads the global ranking of EPO filings, followed by Sansumg, LG, Huawei and Siemens.

According to Beno?t Battistelli, President of the EPO, “The number of patent filings received by EPO grew significantly, which shows Europe remains the center of global innovation and an attractive technical market; it also indicates businesses and inventors are willing to seek high quality patent protection in European market.”

A Chinese individual Jin A Huan (Jin) applied for registration of trademark 非诚勿扰 (You are the one) before the China Trademark Office in 2009 and obtained registration in September 2010 in respect of friend-finding and dating services in Class 45.

China Jiangsu TV launched a program named非诚勿扰 in early 2010, which has soon earned popularity and broke viewing records with their high quality production and a brand new dating content model.

Jin filed a lawsuit against Jiangsu TV for trademark infringement before Shenzhen Nanshan District People’s Court, which was dismissed as the Court believed that the use of “非诚勿扰” by Jiangsu TV in respect of TV program does not constitute trademark infringement due to dissimilarity of service class.

Jin appealed to Shenzhen Intermediate Court and the court found that the purpose, content, approach and target audience of Jiangsu TV’s program are all related to dating, friend finding and marriage-seeking, which is identical with the approved service of Jin’s trademark registration. The court also found that Jin had put its mark in commercial use already, while due to Jiangsu TV’s publicity and propaganda, the public was reversely confused. On the other hand, Jiangsu TV has earned substantial advertisement fees through the TV program, which shows they have made use of the mark for profit in commercial use. Therefore, the court ordered Jiangsu TV to stop using 非诚勿扰 as the program name.

As known, Jiangsu TV has requested for reexamination of this case.

Observation:
Due to the high viewing rate of the disputed TV program, this case has attracted extensive attention from the public. The court’s finding reflects that, in determining trademark infringement, the similarity of goods / services shall not be judged by rigidly following the “Guidebook on Similar Goods and Services”; instead, comprehensive consideration shall be given to the content and nature of the goods / services at issues. It’s noticeable that with the development of new business models, one item of goods or service could possess multiple features. Businesses should strengthen their protection by conducting full-scale trademark search to avoid infringement on others’ trademark rights.

Back in 2012, CTMO announced “Notice Concerning Applications for Newly Added Retail or Wholesale Service” to cope with the execution of “Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks”. Article 4 in the CTMO’s Notice stipulated an interim period from January 1, 2013 to January 31, 2013, and applications filed within this interim period claiming the newly added services shall be considered as being filed on the same day.

Huayuan Medicines filed its trademark application in Class 35 on January 4, 2013, the first working day after the newly added service mark notice becomes accepted. Right after this, another two companies filed respective applications for a similar trademark within the interim period. CTMO issued “notice of negotiation concerning applications filed on the same day” on October 23, 2014 to three parties, asking them to decide whose application shall stay by negotiation or by a draw if they cannot reach an agreement. Huayuan Medicines, upon receipt of the CTMO notice, filed an administrative suit before Beijing IP Court and requested cancellation of the notice.

Beijing IP Court believed the “interim period” stated in Article 4 of CTMO’s has modified the definition of “same day” stipulated in Article 31 of the Trademark Law, which has exceeded CTMO’s authority of providing explanation on actual application of law. The court therefore ordered CTMO cancel the “notice of negotiation concerning applications filed on the same day” issued on October 23, 2014, and reexamine Huayuan Medicines ‘s trademark application.

Observation:
This is the first judicial case on the validity of the regulatory documents issued by State ministries and commissions since the implementation of the new Administrative Procedure Law. Beijing IP Court’s decision was highly regarded in the juridical circle, which will prompt the governmental organs to be more cautious and lawful while executing public power.

US New Balance, which was founded in 1906, entered China in 90s of last century with a translated name as 纽巴伦 (Niu Ba Lun) which however was preemepted by its Chinese manufacturer at that time. After business cooperation broke up, New Balance started using 新百伦 (Xin Bai Lun) in Chinese market, but this new name brought them the trouble of infringement.

In 2013 Lelun Zhou, a natural person in Guangzhou China filed a lawsuit against New Balance’s Chinese subsidiary on the ground that New Balance’s extensive use of新百伦in marketing and sales infringed his registered trademarks 百伦 and新百伦.

The defendant argued that the company has been using 新百伦extensively since 2003, when the plaintiff’s 百伦mark had not been put into commercial use, and that 新百伦is a combination of translation and transliteration of New Balance which enjoys renowned publicity.

Guangzhou Intermediate Court believed the defendant kept using 新百伦mark substantially in their sales and marketing with clear knowledge of the plaintiff’s ownership to the 新百伦 trademark reigistration, which shall not be viewed as bona fide use. The court did not support the defendant’s claim of prior right over 新百伦and ordered the defendant cease using 新百伦mark and pay 98 million yuan to the plaintiff., which is the highest amount of IP indemnity ever decided by Guangzhou Intermediate Court.

The defendant appealed and a hearing was held by Guangdong High People’s Court on November 2015, pending judgment till now.

Observation:
It’s unavoidable for international brands to register and use Chinese trademarks in China. Although the 新百伦 case is pending for a second instance judgment, it serves as a warning for both foreign businesses entering China and Chinese businesses entering overseas markets to get early preparation for IP protection to avoid future disputes.

March 23, 2016, International Trademark Association (INTA) and Unitalen co-organized 2016 INTA 2016 Pre-Annual Meeting Seminar and Reception at W Hotel in Beijing. Over 100 guests, including Mr. Yongbo Li, Vice President of INTA Unfair Competition Committee and Co-Chairman of INTA China Global Consultancy Board of Directors, Mr. Lei Zhao, INTA Anti-Counterfeiting Committee member, China Supreme Court judges and professors from well-known law schools, IP lawyers and in house counsels attended the event.
　 　

Unitalen has recently received the donation certificate from China Youth Development Foundation (CYDF) for long-term support to CYDF’s “Hope Project”. Meanwhile Unitalen’s donation of 800 thousand yuan made in 2015 and 2016 will be put into the construction of two elementary schools, which will be Unitalen’s 11th and 12th Hope schools.

The two schools in the construction project are Tacheng Village Center School (Tacheng) in Yunnan province and Jieling Center School in Hunan province. Their current school buildings are in dangerous condition. Due to limited space on plain and the bumpy location, students don’t have much room for activities and their study and life are challenged by lack of facilities. Under Unitalen support, new buildings will be constructed and the old facilities will be improved so as to accommodate more school-age children and improve their study environment and activities.