In March 2020, Li Ning Sports (Shanghai) Co., Ltd. (“Li Ning”) found that the logo on the sports shoes sold by Quanzhou Hen Ai Shoes & Clothing Co., Ltd. (“Hen Ai”) through the online platform are similar to the Li Ning’s trademark, which may constitute trademark infringement. As a result, Li Ning  notarized the purchase of the sports shoes. After comparison, the pattern printed on one side of the sneaker was the alleged  trademark involved in the case held by an outsider, Xiamen Zhenmu Trading Co., Ltd. (“Zhenmu”), and the other side was the mirror logo of the alleged trademark. Li Ning believes that the alleged logo is similar to the their trademark and is suspected to constitute trademark infringement. Li Ning filed a lawsuit with the Quanzhou Intermediate People's Court, requesting the court to order the other party to stop infringing acts and compensate for economic losses totaling RMB 60,000. Hen Ai stated that the trademark on the sports shoes it sold was a trademark registered according to law, which was not similar to the registered trademark of Li Ning and did not constitute infringement.

The Quanzhou Intermediate Court held in the first instance that the logo on one side of the sneakers sold by Hen Ai was the same as the trademark held by Zheng Mu. Therefore, Hen Ai's sale of sneakers using the same logo as the trademark involved in the case did not infringe Li Ning's exclusive right to use the trademark. In addition, because each shoe has two sides and each pair of shoes itself has left and right feet, the footwear products need to symmetrically print the mirror logo when printing the logo, and the alleged logo is the mirror image of Zheng Mu’s trademark.

After the first trial, Li Ning appealed to Fujian High Court. Yuan Chunyi, the presiding judge of the second trial, said that the right trademark evolved from the initial letter “L” of the company's founder Li Ning's name, which was designed by an artistic composition of a skew and a down. The alleged logo used by Hen Ai is also composed of two parts: an artistic skew and a down, differing only by a small hook in the upper right corner of the skew. The relative positions and angles of the components of the alleged logo as well as the changes in the thickness of the lines are basically the same as those of the right trademark.

As for the claim that the infringing logo is a mirror image of the involved trademark, it does not constitute an infringement of Li Ning's exclusive right to  use the trademark. Yuan Chunyi said, according to PRC law, if the trademark right holder uses the trademark beyond the scope of the trademark and others' registered trademarks constitute the same or similar, it also constitutes trademark infringement.

Therefore, Fujian People's High Court made a second-instance judgment on Li Ning's trademark infringement dispute, finding that Hen Ai's logo was similar to the No.18359155 trademark and No.7650515 trademark held by Li Ning, infringing Li Ning's exclusive right to use the registered trademark, and Hen Ai had to stop the infringement and compensate Li Ning for the economic loss of RMB 20,000. The first-instance judgment that Hen Ai’s act did not constitute trademark infringement was revoked.

ZLWD Commentary：

Small and medium-sized enterprises should bear the duty of reasonable care when using registered trademarks, so as not to infringe other registered trademarks, or use the popularity of other trademarks to increase sales for their own enterprises. The behavior not only causes confusion which will affect the market order, but also limits the development of enterprises for trademark innovation.

The Supreme People's Court (SPC) held a press conference on China's protection of Intellectual Property Rights (IPR) on April 21, marking the official kickoff of the 14th IPR Publicity Week. A white paper on Chinese courts' IPR-related judicial protection in 2021 and the provisions on the jurisdiction of first instance trials on IPR-related civil and administrative cases were also released.

In 2021, courts across the nation accepted 642,968 IPR cases and concluded 601,544 cases, witnessing year-on-year increases of 22.33 percent and 14.71 percent respectively. A number of typical cases with a significant social impact have been trialed. Efforts were made to ease the burden of rights holders, increase the compensation amount and streamline the trial process. Punitive compensation was given as part of the sentence in 895 cases throughout the year.

In 2021, a series of judicial interpretations concerning IPR cases were released in response to new judicial needs arising from the emergence of new technologies, industries and business models. A major plan on IPR protection (2021-25) and a directive on improving the work of IP courts in the new era were also released, specifying the goals, tasks and measures of IPR protection in China.

More efforts were made to strengthen protection of original innovative achievements, crack down on trademark infringement and intensify international judicial exchanges and cooperation. SPC on Thursday released a white paper on Chinese courts' IPR-related judicial protection in 2021.

According to the white paper, the courts are seeing an increasing amount of IPR cases related to the internet, with more and more new and complicated legal issues involved. The courts have been taking active measures to streamline the process of handling lawsuits and ease the burden of rights holders, said Lin.

ZLWD Commentary：

Strengthening the judicial protection of intellectual property rights is an important guarantee to maintain the integrity obtained in the field of IPR. It is believed that by reducing the burden of proof and evidence preservation of the right holder in the process of litigation and other measures, and strengthening punitive damages, the courts can better maintain the market order and protect the development of enterprises.

The State Council Information Office held a press conference  on April 24, 2022, inviting Shen Changyu, director of the State Intellectual Property Office, He Zhimin, deputy director of the State Intellectual Property Office, and Wang Zhicheng, director of the Copyright Administration to discuss the development of intellectual property rights in 2021. Some highlights from the press conference include:

-crackdown on 482,000 maliciously registered trademarks in the trademark examination process, of which

-60,400 maliciously hoarded trademarks were voluntarily rejected, and

-1,628 maliciously registered trademarks that harmed social and public interests were rejected.

In the trademark opposition review process:

-a total of 30,000 malicious registered trademarks have been cracked down on.

-1,729 trademarks were declared invalid ex officio, and

-the number of trademarks invalidated ex officio was five times the total in the past 10 years.

Since 2022, the CNIPA has continued to crack down on malicious trademark registrations, issuing the Notice on Continuing to Crack Down on Malicious Trademark Registrations, and actively safeguarding the legitimate rights and interests of market players and social public interests with a "zero tolerance" attitude. In the first quarter of this year, the CNIPA  rejected 12,200 cases of malicious hoarding of trademarks in the examination procedure, rejected 1,628 cases of malicious infringement of trademarks, took the initiative to invalidate 707 cases ex officio, and notified and exposed 1,742 trademarks and their applicants and agents in two batches of malicious infringement involving the Winter Olympic Games and the Winter Paralympic Games.

ZLWD Commentary：

Malicious registered trademark is one of the main obstacles to the development of innovation and serious damage to the market order, which is not only illegal but also affects the integrity of the industry. The CNIPA's initiative to crack down and resolutely reject is an important guarantee to fundamentally curb the malicious registered trademark.

Guangzhou Netease computer system Co., Ltd. (“Netease company”) is the owner of the game “Dream Journey to the West”. The company found that Wang broadcast and recorded the picture of "Dream Journey to the West" on a live broadcasting platform without permission. Wang continuously publicized the competitor games during the live broadcast, violating Netease's reproduction right, information network communication right and other rights. Li not only provided Wang with a platform account for live broadcasting, but also provided multiple game accounts, and assisted Wang in transferring game roles to avoid Netease's punishment, which constituted contributory infringement. Netease has repeatedly punished Wang and Li for blocking their game accounts and informed them in writing of the violation of live broadcasting, but they changed their accounts and continued to infringe. Accordingly, Netease filed a lawsuit with the Guangzhou Internet court, requesting the court to order Wang and Li to assume punitive liability, compensate Netease for its economic losses and reasonable expenses, totaling 2 million Chinese yuan, and publish a statement in a prominent position on the front page of the live broadcast platform for 10 consecutive days to apologize to Netease and eliminate the impact.

During the trial, Wang argued that the live game picture was not original and was not a work in the sense of copyright law. The promoted third-party game does not constitute infringement of the Netease’s game involved in the case, so the promotion itself does not constitute infringement. The live broadcast of the game has been licensed by Netease and belongs to the transformative use of the original game works. Another defendant, Li, argued that the live broadcast account involved in the case was registered by Wang Mou using Li’s mobile phone number. He did not participate in or commit any infringement and should not bear relevant legal liability.

The court held that Wang used the account of the live broadcasting platform to upload the video recording and broadcasting of the game "Dream Journey to the West", so that the unspecified public can obtain the game picture content involved in the case at the time and place selected by the individual, meet the requirements of "interactive communication", and infringe on the information network communication right of Netease. Wang's defense of conversion use and reasonable use lacks factual and legal basis and is not accepted by the court. At the same time, it is pointed out that Li still allows Wang to use his live account and game account to broadcast the game involved in the case, knowing that he needed to register the game account and live broadcast platform account through real name registration. It can be seen that Li has obvious agreement about such live broadcast. After several game accounts of the two people were blocked by Netease for illegal live broadcasting, Li knew that Wang's live broadcasting of games without permission was prohibited by Netease, and also transferred Wang's game roles of live broadcasting from Wang's account number to Li's account number through the transaction designated by Netease's treasure Pavilion. He objectively implemented a number of helping acts and constituted a contributory infringement with Wang.

The court held that the acts of Wang and Li had met the requirements of punitive damages. According to the identified infringement profits, deducting the personal contribution of the anchor, and taking the implementation date of the civil code January 1, 2021, as the boundary, the previous illegal income is taken as the amount of compensatory compensation in this case, and the subsequent illegal income is taken as the base of punitive compensation in this case. Combined with the circumstances of the case, it is determined that the multiple of punitive compensation in this case is 4 times.

Accordingly, the Guangzhou Internet court ruled that the defendants Wang and Li should pay the plaintiff Netease a total of 541648.6 Chinese yuan in economic losses and reasonable expenses for rights protection within 10 days from the date of effect date of the judgment. other claims of the plaintiff have been rejected.

ZLWD Commentary：

Nowadays, online games have become a popular culture, and many online anchors also broadcast games to get view-flow and attention. However, there is still a lack of relevant legal knowledge and sense of responsibility. Therefore, there are many infringement facts like this case. The judgment of this case serves as a good warning, warning the network anchor should pay attention to the relevant legality in the process of live game to avoid infringement on relevant obligees.

The Marrakech Treaty on Facilitating Access to Published Works for the Blind, Visually Impaired or other Print Dyslexics (hereinafter referred to as the Marrakech Treaty) entered into force for China on May 5, and China became the 85th party to the treaty.

The Marrakech Treaty was adopted in Marrakech, Morocco, on June 27, 2013, and administered by the world intellectual property organization, a specialized agency of the United Nations. The treaty requires all parties to provide copyright restrictions and exceptions to ensure the equal right of people with reading disabilities to enjoy works and receive education. It is the only human rights treaty in the field of copyright in the world.

In the field of copyright, China has always attached great importance to ensuring the equal right to enjoy works and receive education for people with reading disabilities such as the visually impaired. The copyright law, which came into force on June 1st, 1991, stipulates that a published work may be published in Braille without the permission of the copyright owner or payment of remuneration. On June 28th, 2013, China signed the Marrakech Treaty and became one of the first signatories. On November 11th, 2020, the third amendment of the copyright law was completed and came into force on June 1st, 2021, which expanded the fair use situation from "changing published works into Braille" to "providing published works to people with reading disabilities in an accessible way that they can perceive", reflecting the core content of the Marrakech Treaty. On October 23rd, 2021, the 31st meeting of the Standing Committee of the 13th National People's Congress decided to ratify the Marrakech Treaty. On February 5th, 2022, China deposited its instrument of ratification of the Marrakech Treaty with the World Intellectual Property Organization.

After the Marrakech Treaty enters into force for China, it will greatly enrich the spiritual and cultural life of Chinese dyslexics, improve their education level, deepen the contact between overseas and domestic Chinese dyslexics, promote the overseas dissemination of China's excellent works, further enhance China's voice and influence in the field of international copyright, and show China's international image of vigorously developing the cause of the disabled and full respects for human rights.

ZLWD Commentary：

The entry into force of the Marrakech Treaty for China is an important embodiment of China's emphasis on equal appreciation of works and education for persons with disabilities. After the entry into force of this treaty, people with reading disabilities in China can better enjoy reading. This not only reflects that China attaches importance to the protection of human rights internationally, but also fully expands the cultural and spiritual world of the disabled within the country.

Over the past decade, the pharmaceutical industry has been discussing the possibility of implementing the drug patent link system in China. In October 2020, the fourth amendment to the patent law was passed, and the patent link system was finally implemented. However, since the implementation of the act for more than a year, many problems have still been exposed in the process of drug listing application, which need to be solved urgently. For example, in the past decade, the proportion of innovative drugs listed in China was only 23%, far lower than that in mature markets. In this context, the new-media platform of intellectual property held the "Seminar on China's Innovative Drug Investment Policy" online. The seminar invited domestic well-known intellectual property legal scholars, representatives of innovative pharmaceutical enterprises, industry associations, experts in practice and lawyers to discuss the current situation of domestic innovative drug licensing cooperation and analyze the impact of innovation policies on the development trend of pharmaceutical enterprises.

Experts at the meeting generally believed that a deterministic and predictable intellectual property protection system is a prerequisite for encouraging and ensuring the continuous innovation of pharmaceutical enterprises and producing more valuable new drugs for patients. In this regard, representatives of innovative pharmaceutical enterprises expressed their concerns about the improvement of drug patent protection system from three levels:

1. It is hoped that the drug administration department and the intellectual property protection department can strengthen coordination and cooperation, get through the relevant patent protection rules, promote the smooth settlement of drug patent disputes in the application stage of drug listing, and accelerate the listing process of innovative drugs. 

2. In terms of legislative system, it is suggested that relevant departments give a more reasonable definition of "new drug", so that the patent period extension system can benefit more real innovative pharmaceutical enterprises.

3. It is looked forward to the early implementation of drug experimental data protection. Patent protection and data protection are organically combined and mutually complementary, so that more innovative drug projects can land in China.

At the same time, experts believe that although the legislative purpose of the patent law is to protect innovation and encourage high-quality imitation, it can still have its own specific objectives, functions and meanings when it comes to a certain clause, specific rule or system of the patent law. For example, the third revision of the Patent Law added the "Bolar exception" clause to encourage imitation and accelerate the emergence of the patent cliff of innovative drugs. The fourth revision of the patent law introduces the patent link and patent period extension protection system, which also has the legislative purpose and significance behind the system construction. Participants agreed that the establishment of a stable and predictable drug innovation protection system is crucial to promoting the sound development of the pharmaceutical industry and building investor confidence. It is expected that in the near future, the pharmaceutical industry and relevant legislation and law enforcement departments can find a good way to balance the interests of all parties, so that more patients can take good, cheap and reassuring drugs.

ZLWD Commentary：

In recent years, China has paid more attention to drug patents, but how to encourage enterprises to innovate and improve quality has become a new issue. There is still a long way to go to shorten the gap with developed markets such as Europe and the United States. However, it is believed that the pharmaceutical industry will have further mature development through the strengthening of the protection of pharmaceutical innovation intellectual property rights and the improvement of relevant systems by relevant national departments.

On Beijing time May 5, when the Hague Agreement on International Registration of Industrial Designs (hereinafter referred to as the Hague Agreement) came into force in China, a total of 49 Chinese enterprises submitted 108 international applications for industrial designs. Among them, the State Intellectual Property Office has received 58 international design applications submitted by Chinese applicants. As of 5:30 p.m. Geneva time, 50 international design applications directly submitted by Chinese applicants to the World Intellectual Property Organization (WIPO).

In recent years, the State Intellectual Property Office has continued to pay attention to the development of the Hague system, actively promoted the process of China's accession to the Hague Agreement, and provided better services for domestic innovation subjects to "go global". To this end, in accordance with the working principle of "meeting the requirements of the Hague, facilitating users' use, reducing business adjustment and connecting international processes", the State Intellectual Property Office actively promoted business preparations such as examination standards, application and examination processes, notices and system requirements, and held several rounds of consultations with WIPO International Bureau on China's accession to the Hague Agreement, provide strong guarantee and support for the submission and examination of international design applications.

The Hague system provides a concise and efficient international design registration procedure for innovation subjects. They can seek design protection in multiple parties by using only one language, submitting one international application, using one currency and paying one group of fees, which significantly reduces the design registration cost of enterprises in the process of product globalization and greatly improves the registration efficiency.

There are two ways to submit international applications for design through the Hague system. Applicants can submit international applications directly to WIPO International Bureau. If permitted by the contracting office, the applicant may also submit an international application indirectly through the contracting office. Under the Hague system, the international registration of design is valid for the first period of five years and can be renewed twice in five years. In each designated party bound by the 1999 text of the Hague Agreement, international registrations are protected for at least 15 years.

ZLWD Commentary:

The entry into force of the Hague Agreement in China means that domestic enterprises can register designs more conveniently, quickly and effectively, and at the same time, they are more international. This entry into force will strengthen the protection of design protection, and encourage more small and medium-sized enterprises to make innovative design in design, which fully reflects China's current focus on the development of intellectual property.

The issuance of the Outline for Building a Strong Intellectual Property Country (2021-2035) (hereinafter referred to as the Outline) is a major event in the development of China's intellectual property cause and national modernization. At the same time, it responds to the diversified needs of China's intellectual property dispute resolution. At present, Chinese enterprises mainly choose litigation to solve intellectual property disputes, but litigation has some problems in solving some types of intellectual property disputes, such as time-consuming, high cost, poor confidentiality, difficult execution and so on. There are limitations in solving the balance of commercial interests between creators and users of intellectual property rights, often forming a zero-sum game or even a lose-lose situation.

The outline clearly proposes to "establish and improve the system of intellectual property arbitration, mediation, notarization, appraisal and rights protection assistance, and strengthen the construction of relevant systems", and accurately grasp the new situation and problems faced in the field of intellectual property dispute resolution in China. In addition, the construction of diversified solutions to intellectual property disputes and related systems will also greatly promote the construction of China's intellectual property culture and intellectual property credit system.

Commercial mediation has inherent advantages in solving international intellectual property disputes. The commercial mediation system provides a set of dispute resolution procedures to guide the parties to the settlement result. In particular, the United Nations Convention on International Settlement Agreements Arising from Mediation, which officially entered into force on September 12, 2019, solves the problem of cross-border implementation of settlement agreements reached by international commercial mediation, brings new opportunities for the development of commercial mediation, and makes international mediation an option to solve cross-border intellectual property disputes.

In recent years, many dispute resolution institutions in China have made a lot of positive and beneficial exploration in using mediation to resolve intellectual property disputes. For example, in 2020, the mediation center of CCPIT accepted 3809 commercial mediation cases, of which the number of intellectual property disputes exceeded the number of goods trade disputes for the first time, accounting for 32%, becoming the type of mediation cases with the largest number of cases involved.

Commercial mediation focuses on the commercial interests of the parties and maintains or develops the potential commercial relationship between the parties to the dispute, rather than determining the rights and obligations, right and wrong, and win-lose binary game. Commercial mediation has the following characteristics: 1) voluntary choice, 2) information confidentiality, 3) mediation at any time, 4) the mediation results can be judicially confirmed, 5) mediation does not exclude other dispute resolution procedures.

With the implementation of the Outline, especially the Implementation of the Opinions on Strengthening the Mediation of Intellectual Property Disputes, China's system of using commercial mediation to solve intellectual property disputes will be improved and developed, and commercial mediation will usher in a broader development space in the field of intellectual property dispute resolution. Commercial mediation will also play a positive role in helping China build an intellectual property protection system that supports a world-class business environment, build a world-class intellectual property power with Chinese characteristics, and build an innovative country and a socialist modern power.

ZLWD Commentary：

The implementation of the Outline is a major progress in the protection of intellectual property rights. Different from litigation ways of right-protection, in the commercial competition relationship, enterprises pay attention to their own interests and the future development of enterprises at the same time, not just the rights and interests themselves. Therefore, the Outline is a major embodiment of supporting the use of commercial mediation to solve intellectual property disputes. China's small and medium-sized enterprises will safeguard their rights and interests in a diversified and more efficient way in the future.

In order to thoroughly implement the "Outline for the Construction of a Strong Intellectual Property State (2021-2035)" issued by the Central Committee of the Communist Party of China and the State Council and the "14th Five-Year Plan for the Protection and Application of National Intellectual Property" issued by the State Council, as well as ensure the smooth  operation of the patent opening license system and promote the transformation and application of intellectual property rights, the NIPA has recently issued the “Patent Opening License Pilot Working Plan”  (“Working Plan”) and organized relevant provinces to carry out pilot patent opening license work. 

ZLWD Commentary：

The Working Plan is set out as a working initiative of the provincial intellectual property management authorities to promote the transformation of patent licensing. With reference to the basic concept, system design and relevant aspects of the implementation of the statutory opening license system, the Working Plan organises relevant municipalities, enterprises and service platforms to carry out pilot projects, in order to realise rapid licensing where the willingness and conditions of licensing are specified in advance by the patentee and publicly released by the provincial intellectual property management authorities, with a view to achieving multiple effects such as stimulating supply and demand, reserving projects, exploring experience and improving policies, and preparing for the full implementation of the opening license system in terms of policies, mechanisms, platforms and projects.

Recently, Anhui issued the “Outline for the Construction of a Powerful Intellectual Property Province  (2021-2035)” (the “Outline”) , which makes arrangements for the comprehensive construction of an innovative and powerful intellectual property province. The Outline specifies that by 2025, the construction of an innovative IP  power province will have achieved obvious results, the added value of patent-intensive industries will reach 14% of the Anhui's GDP, the added value of copyright industries will reach 7.5% of the Anhui's GDP, the annual import and export value of IP royalties will reach RMB 13 billion, and the number of high-value invention patents per 10,000 population will reach 12. By 2035, the comprehensive competitiveness of intellectual property rights will be significantly enhanced, the intellectual property rights system will be fully developed, whereas an IP powerful and innovative  province will be built up.

ZLWD Commentary：

Anhui is striving to build an IP regulatory system that supports the construction of a modern and prosperous Anhui, and to build a IP Protection system that supports the optimal business environment. Anhui is also determined to improve IP market operation mechanism that stimulates innovation and development, to build a standardized and convenient IP public service system, and to create a cultural atmosphere that promotes high-quality IP development. It is vital to build a new IP development pattern that promotes internal and external synergy, so as to open up the whole chain of creation, application, protection, management and service, and provide a solid guarantee for accelerating the construction of a modern and prosperous Anhui.