Alibaba was Fined RMB 18.2 billion

In December 2020, the State Administration of Market Supervision filed an investigation regarding abuse of dominant market position in the Chinese online retail market by Alibaba Group Holdings Limited (“Alibaba Group”) pursuant to the PRC Anti-monopoly Law.

The investigation indicates that the Alibaba Group's “choose one” policy excludes and limits the competition which violates article 17 of the PRC Anti-monopoly Law, providing that “restrict trading counterparts to transact only with the undertaking or only with designated undertakings without a valid reason”. The State Administration of Market Supervision made a decision on administrative penalties according to law, ordered Alibaba Group to stop illegal acts, and imposed a fine of RMB 18.228 billion.

Alibaba Group issused an announcement on April 10, stating that they sincerely accept this punishment and they will further strengthen the construction of compliance system, in order to better fulfill social responsibility.

Source: Xinhua News

Date of Issue: April 10, 2021 

ZLWD Commentary:

Monopoly is the enemy of market economy. The standard and sustainable development of platform economy shall stick with fair competition. Alibaba Group's “choose one” policy impose restrictions on sellers that they can only trade with them, which infringes the legitimate rights and interests of sellers and damages the interests of consumers. Such acts violates Article 17 of the PRC Anti-monopoly Law, which states that “restrict trading counterparts to transact only with the undertaking or only with designated undertakings without a valid reason”. According to the Anti-monopoly Law, where an undertaking has violated the provisions of this Law in abusing its dominant market position, the anti-monopoly enforcement agency shall order the undertaking to stop the illegal act and confiscate the illegal income; a fine of 1% to 10% of the sales amount of the preceding year shall be imposed. The regulator imposed a fine of 4% on Alibaba Group's 2019 sales, taking into account the nature, extent and duration of the violation. The punishment of Alibaba Group is a sign of protecting market order.

Kuaishou Launched Music Copyright Policy, Top Songs could be Paid over RMB 100,000

On March 22, the short video live broadcast platform Kuaishou announced their new music copyright policy, and for the first time defined the music copyright settlement standard of the live broadcast room scene. Under this set of copyright rules, as long as the music clips are used on the Kuaishou platform (including short video and live broadcast), Kuaishou will have to pay the copyright owners pursuant the rules.

For the copyright owners, Kuaishou completed music copyright policy for the first time, adding separate settlements for lyrics and music copyrights, as well as the independent musicians settlement. In addition to the payment for the copyright owners of recording works, the copyright owners of the lyrics and music will be separately paid. The songwriter who performs well will be paid for extra bonus. Independent musicians' works can also receive reward for copyrights. The copyright owner does not need to provide exclusive authorization for the song, and for those high-quality copyright owners, Kuaishou will offer advance payment.

Source: Jiemian News

Date of Issue: March 23, 2021

ZLWD Commentary:

For a long time, the copyright problem respecting to the background music in short videos and live steaming has been ambiguous. In the early development of short video industry, music copyright parties, including independent musicians and music companies, mostly use short video platform as a channel for song promotion to help songs expand their influence. But with the rapid development of the short video industry, the music copyright revenue behind background music has not been shared.

The new Copyright Law, which will come into effect on June 1 this year, will regulate short video and live streaming, and using music as background sound in the live streaming will be supervised accordingly. The rights of copyright parties will be further protected. The correct use of music copyright and reasonable distribution of remuneration can better ensure the long-term sustainable development of music industry.

“Peppa Pig” is Recognized as a Well-known Trademark

A defendant was ordered to pay RMB 30,000 over Entertainment One UK Ltd (eOne)'s losses for Peppa Pig trademark infringement, with Peppa Pig having been declared a well-known trademark in China.

The defendant surnamed Chen listed their products (LED lamps) sold online using the term "Peppa Pig" in addition to adding the name on the products' packaging. The brand owner eOne claimed that the company used the brand “Peppa Pig” in the public domain for an extended period; therefore, the brand had garnered a high degree of reputation among children around the world.

The court, having found the brand Peppa Pig met the requirements for recognition of well-known trademarks as provided for by law, made a verdict that the defendant had infringed on their trademark; related products have been sealed accordingly.

Source: ShanghaI Intellectual Property Court

Date of Issue: March 18, 2021

ZLWD Commentary:

Generally, trademarks can only be protected by law in the categories of goods or services that have been licensed for registration and enjoy the right to use trademarks. Well-known trademarks are subject to varying degrees of cross-category protection due to their originality and importance, and others can be prohibited from using the same or similar trademarks in all categories. Therefore, well-known trademarks are given a relatively wide range of exclusive rights. In the trial of trademark dispute cases, the people's court may determine whether the registered trademark is well-known based on the request of the parties and the specific circumstances of the case.

Paul Frank Unknowingly Became Pendant

The Paul Frank’s cartoon image was authorised to use on clothes, toys and backpacks. However, a jewelry company was sued for production and sale of Paul Frank image of jewelry pendant.

Recently, the Jiangsu People's High Court issued a second instance judgment in the dispute between Honglian International Trade Co., Ltd. and Zhou Jinsheng Jewelry Co., Ltd. for infringement of copyright. Since the Paul Frank image has a high reputation, whether the scope of copyright protection of two-dimensional pictures should be extended to three-dimensional modeling has gained a lot of attention.

Source: China Intellectual Property Report

Date of Issue: April 2, 2021

ZLWD Commentary:

Whether the boundary of copyright protection should be limited to plane image or should be extended to three-dimensional is the focus of controversy in this case. The court held that the right to reproduce art works protected by copyright law includes not only the reproduction of the plane image, but also the reproduction of the three-dimensional, which is regulated by the copyright law. If it is considered that the three-dimensional works made according to graphic art works are not replicas, it will greatly weaken the protection of art works and do not conform to the basic principles of copyright law.

A White Paper on the Trial of Unfair Competition Cases Issued by the Shanghai Intellectual Property Court

In order to maintain the market economic order of fair competition and create an top-class international business environment in Shanghai, on April 13, the Shanghai Intellectual Property Court held a news briefing and released 2015-2020 trial of unfair competition cases white paper and typical cases therein.

The white paper demonstrates that from 2015 to 2020, the Shanghai Intellectual Property Court accepted 950 unfair competition cases, accounting for 6.2% of the total number of intellectual property cases received in the same period, and closed 850 cases. There are large number of counterfeiting cases (684) and infringing trade secrets cases (136), accounting for 72% and 14.3% of the total unfair competition cases. Unfair competition cases normally have four characteristics, First, there are usually multiple infringement acts in one unfair competition case. Second, the object of litigation is quite high. Third, internet unfair competition behaviors are diverse. Forth, cases are quite

The conference also reported 12 typical cases of unfair competition. For instance, Beijing Iqiyi Technology Co., Ltd. v. Beijing Sogou Information Service Co., Ltd., Shanghai Ronglian v. Shanghai Luomaisi, Zhengda and  Chen violations of trade secrets cases.

Source: Report of the People's Court

Date of Issue: April 15, 2021

ZLWD Commentary:

From the release of the white paper, the Shanghai Intellectual Property Court has continuously improved its working mechanism and made new progress in recent years. The typical cases can take a leading role for demonstration, which therefore improving the law and order.

Pop Mart Failed at Suing Ruotai

On April 9, the Shanghai Intellectual Property Court issued a first instance judgment for the case between the plaintiff Pop Mart and the defendant Ruotai.

The Shanghai Intellectual Property Court found that:

The accused products called Chocat Meow! Goddess series, which is the blind box for a set of 12 dolls. 

The main difference between the doll and the jasmine doll is the facial features and hairstyle. The eyes of the chocat doll are sharper, while the eyes of the doll are larger and more round, and the iris and pupil design in the eye circle, the way the eye circle is sketched, the upper eyelashes and the lower eyelashes are designed, and whether there are nevus;

Chocke meow's lips are slightly O, the corners of the mouth are horizontal, while the jasmine's lips are closed, the upper lips pout outward.

Although both are Qi Liu Haibo head modeling, but the Liu Hai of Qiaoke Meow doll has two bifurcation, the tip end is vertical, and the jasmine doll's Liu Hai has no gouge, and the end of the hair tip has a level upward roll.

The Shanghai Intellectual Property Court held that:

Since there are great differences in facial features, hair style and clothing between the accused infringing products and the patent involved, there are indeed substantial differences in the overall visual effect between the design of the two series of dolls.

Hence, the chocat series of products does not constitute infringement to the plaintiff’s design patent. Pop Mart’s claim was rejected.

Source: Tencent

Date of Issue: April 10, 2021

ZLWD Commentary:

The first instance judgment of Shanghai Intellectual Property Court is to find a balance between protecting patents, eliminating plagiarism and encouraging innovation. In cultural and creative industry, plagiarism is not the only thing that shall be paid attention to. It is important to cracking down on plagiarism and keep creativity at the same time. For those enterprises, they shall make plans ahead in terms of protection of their intellectual property, in order to safeguard their legitimate rights and interests in the fierce market competition.

Hangzhou Wildlife World’s Face ID Dispute had its Second Judgement

On the afternoon of April 9, 2021, the Hangzhou Intermediate People's Court gave a public judgment on the second instance of the service contract dispute between GUO Bin and Hangzhou Wildlife World Co., Ltd (“Wildlife World”).

On April 27, 2019, GUO Bing and his wife purchased an annual pass from Wildlife World and left their relevant personal identity information, photos and fingerprints. After the Wildlife World sent a group message to annual pass consumers, including GUO Bin, saying that the way to enter the park was changed from fingerprint recognition to face recognition, requiring customers to activate face ID, thus causing a dispute in this case. On November 20, 2020, the Fuyang court issued a judgment of first instance, ordering the Wildlife World to compensate GUO Bin for the loss of contract benefits and transportation expenses for RMB 1038. vely to the Hangzhou Intermediate people's Court appeal.

The second instance of the Hangzhou Intermediate people's Court held that GUO Bing, knowing the contents of the notice that using fingerprint as identification to enter the park, independently made a decision to get an annual pass and provided relevant personal information. Thus GUO Bing is legally binded by the fingerprint clause. The behavior of Wildlife World does not constitute fraud, but the unilateral change of entry mode of wildlife world constitutes breach of contract. Now the Wildlife World wants to use the collected photos to expand the scope of information processing, which beyond the purpose of prior collection, indicating that there are possible and dangerous violations of the personality interests of GUO Bing's facial feature information. In view of the fact that the Wildlife World stopped using the fingerprint identification, the original agreed service mode could not be realized, so the second instance added the fingerprint identification information submitted by GUO Bin shall be deleted as well.

Source: Intellectual Property Home

Date of issue: April 9, 2021

ZLWD Commentary:

As sensitive personal information, biometric information deeply embodies the physiological and behavioral characteristics of natural persons and has strong personality attributes. Once it is leaked or used illegally, it may lead to personal discrimination or personal and property safety being endangered, and should be handled with caution and strictly protected.

After Changing a New Logo of RMB 2 million, Xiaomi Applied for 90 Trademark Registrations

At last month's Xiaomi spring conference, Xiaomi officially announced that its new logo which is at worth of RMB 2 million and took three years. The new LOGO seems to simply be changed from a square logo to a round logo. People made joke that LEI Jun might be deceived by designers.

LEI Jun explained that Xiaomi as a mature brand, can only make minor changes on its logo. Although it seems that only shape has changed, the font, spacing, color number and other aspects have also changed.

Qichacha shows that Xiaomi Technology Co., Ltd. has recently applied for the registration of nearly 90 trademarks with the word “Xiaomi” and Xiaomi's new logo. The international classification includes scientific instruments, manual instruments, communications services, advertising sales, etc. The status of the said trademarks applications are pending.

Source: WIPO

Date of Issue: April 7, 2021

ZLWD Commentary:

According to the trademark law, the registered trademark shall not randomly modify the elements of the trademark. Xiaomi's original trademarks are registered in square shape. According to Article 24 of the Trademark Law, if a registered trademark needs to change its logo, it shall reapply for registration. Obviously, if the enterprise wishes to modify the trademark, or to modify the original trademark, it is necessary to re-register the trademark. Therefore, in order to protect its new logo, Xiaomi needs to re-register trademarks.

Short Video Templates are Protected by the Law

On April 16, the Hangzhou Internet Court concluded the dispute between the two plaintiffs Shenzhen Lianmeng Technology Co., and Ltd., Beijing Weishi Technology Co., Ltd., and the two defendants. The court ruled the two defendants immediately stop uploading the short video template on Tempo App and compensate for economic losses and reasonable expense for RMB 60,000.

Source: Hangzhou Internet Court

ZLWD Commentary:

The short video template is created on the platform, which has the characteristics of short recording time, specific theme, strong social interaction and simplified production procedure. Based on the balance of interests between copyright owners and the public, it is not appropriate to set high standard when judging whether it is original or not. On the one hand, the short video template must be created independently by the author and can not copy or plagiarize other people's works. On the other hand, the short video template must be creative intellectual achievement of the author and the expression of the author's thought or emotion.

Whether Sharing Video Membership is Legal?

M company offered “sharing membership” service on platform owned by Youku Information Technology (Beijing) Co., Ltd. (“Youku”) without the permission of the company. The court of first instance held that the M company's behavior violates the principle of good faith and the business ethics of the internet industry, and damaged the legitimate rights and interests of Youku. Such behaviour caused reduction of trading opportunities and unfair competition. The court ruled the M company to compensate Youku for economic losses and reasonable expenses. The court of second instance upheld the judgment.

Source: Jingfa Network

Date of Issue: April 14, 2021

ZLWD Commentary:

Under the new economic model of Internet, judging whether there is a competitive relationship between different undertakings can be determined based on their specific business behaviour and ultimate interest. As for the legitimacy of competition behavior, it can be confirmed from three aspects case by case: the subjective fault of the doer, the accountability of the behavior, improper seizure of trading opportunities and cause damage to the legitimate interests of other operators. When trying to conduct new business models, operators shall not violate the principles of fair competition and disrupt the normal order of market transactions. 

National Clean Energy Intellectual Property Operation Center Launched in Dalian

The National Clean Energy Intellectual property Operation Center applied by Dalian Institute of Chemistry and Physics under Chinese Academy of Sciences applied was formally approved by the NIPA, the center became the first national industrial intellectual property operation center in Liaoning Province.

Source: NIPA Strategy Network: http://www.nipso.cn/onews.asp? id=52315

ZLWD Commentary:

With a leading role in the construction of the national intellectual property operation service system, Dalian has previously formulated patent navigation, patent operation, pledge financing and other intellectual property financing and incentive policies for the clean energy intellectual property operation center.

With the support of a series of policies, the clean energy intellectual property operation center has developed rapidly, and the amount of intellectual property operation has exceeded RMB 30 million for three consecutive years. The formal approval of the center will further facilitate the development of Dalian and contribute to the construction of innovative cities and Northeast Asia Science and Technology Innovation and Entrepreneurship Center.

This Newsletter is produced by Economic and Legal Development Research Centre for Guangdong-Hong Kong-Macao Greater Bay Area For Your Reference Only.

Editorial Board: Wei LIN，Simon TANG，Lisi ZHOU，Yu DENG，Yuming LI，Oyagi，Gong CHEN，Ning NING，Zhao LIU，Yawen HAN

All Information published in this Newsletter is from open source.

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