Supreme People's Court, Annual Report on Intellectual Property Cases (2016) (Abstract)

(Issued by the Supreme People's Court on April 26 2017.)

 

In 2016, the Supreme People's Court actively adapted to new changes in the international situation and the new normal in economic development; duly strengthened its awareness of opportunities, awareness of responsibilities and awareness of innovation; extensively and thoroughly implemented the state's intellectual property strategy and innovation-driven development strategy; implemented the basic judicial policy of “judicial guidance, stringent protection, implementation of policy based on classification, and proportional coordination”; took stringent protection, intensified reform, improvement of systems and uniform rules as points of emphasis; relentlessly promoted the modernization of the intellectual property judicial regime and judicial capabilities; and provided staunch and powerful judicial protection for the development of an intellectual property power and world scientific power.

 

The Intellectual Property Division of the Supreme People's Court accepted a total of 724 new intellectual property cases in 2016. Categorizing the newly-accepted cases by trial procedure, there were, in total, 2 procuratorate-protested cases, 7 appeal cases, 99 review cases, 601 cases of applications for retrial, 3 petition cases and 12 cases requesting instructions. Categorizing them by the type of subject matter involved, there were, in total, 227 patent cases, 1 new plant variety case, 337 trademark cases, 64 copyright cases, 2 integrated circuit layout design cases, 2 monopoly cases, 12 trade secret cases, 23 other unfair competition cases, 38 intellectual property contract cases and 18 other cases (mainly involving intellectual property trial management matters). Categorizing the cases by their nature, there were, in total, 352 administrative cases (of which 84 were administrative patent cases and 268 administrative trademark cases) and 372 civil cases. A total of 735 intellectual property cases were concluded during the year, of which 2 were procuratorate-protested cases, 11 were appeal cases, 96 were review cases, 614 were cases of applications for retrial and 12 were cases requesting instructions. Of the 614 concluded cases of applications for retrial, 238 were applications for administrative retrial and 331 were applications for civil retrial; meanwhile in 454 of the cases, a ruling to dismiss the application for retrial was rendered, in 76 of the cases, a ruling for review was rendered, in 31 of the cases, a ruling ordering or designating retrial was rendered, in 18 of the cases, a ruling withdrawing the suit (including withdrawal of cases following settlement) was rendered, and 35 of the cases were otherwise resolved.

 

The basic patterns and characteristics of the intellectual property and competition cases tried by the Supreme People's Court in 2016 were as follows: patent and trademark-related intellectual property cases continued to account for the largest percentage of all of the accepted cases, with administrative trademark right grant and confirmation cases showing a marked increase; the focus of disputes in administrative patent cases continued to be centered on the assessment of novelty and inventiveness, and in the chemical, pharmaceutical and biological fields, whether the description provided full disclosure and whether the claims were supported by the description remained relatively prominent legal issues. The holding by parties of erroneous views concerning the status and effect of rights valuation reports was an issue commonly existing in civil patent cases. Furthermore, the role played by the technical investigator system in the ascertainment of technical facts is worthy of attention. Trademark cases continued to hold the top spot in terms of the total number of cases, with administrative trademark cases also accounting for a relatively large percentage. There continued to be disputes over the issue of the application of the law to the question of whether a disputed trademark has an adverse effect, and to the conditions and scope of protection of prior rights. Finally, adjudication criteria and benchmarks required further clarification and unification. Through the application of flexible factors such as similarity of trademarks, similarity of goods and confusion, and on the basis of full consideration of market realities, the balancing of the intensity of protection of trademark rights with the degree of distinctiveness and notoriety of trademarks was manifested, and the principle of “proportional coordination” was relatively fully reflected in the trial of civil trademark cases. The number of copyright cases and the percentage for which they accounted remained essentially stable, with a relatively high number of associated cases involving subjects of litigation such as karaoke operators, and instances of parties obtaining evidence in an inappropriate manner and lack of uniformity in the criteria for the verification of evidence remaining relatively common. In competition cases, trade secret disputes accounted for a relatively large percentage, with the focus of disputes mostly centered on legal issues relating to substantiation of the basis of rights, such as the secrecy of the relevant information and whether confidentiality measures were taken. The number of monopoly cases showed an increase, but the procedural capacity of parties still requires building up and enhancing.

 

This year's report carefully selects 27 typical cases (associated cases in which the facts and legal issues were essentially identical are counted as one case) from among the intellectual property and competition cases concluded by the Supreme People's Court in 2016. The aforementioned cases cover all of the cases that were selected as the 10 major intellectual property cases and 50 typical intellectual property cases of the Chinese courts in 2016. From amongst them, we derived 39 law application issues with general guiding significance that reflect the Supreme People's Court's trial approaches and adjudication methods in handling new-type, difficult and complex cases in the intellectual property and competition fields.

 

I. Trial of Patent Cases

 

1. Trial of Civil Patent Cases

 

(1) Ascertainment of the preparation process for the alleged infringing pharmaceutical in a patent infringement dispute over a pharmaceutical preparation method

 

In appellant, Eli Lilly and Company, v. appellant, Watson Pharmaceuticals (Changzhou) Co., Ltd. [(2015) Min San Zhong Zi No.1], an invention patent infringement dispute, the Supreme People's Court pointed out that, in a patent infringement dispute over a pharmaceutical preparation method, the preparation process for the alleged infringing pharmaceutical placed on the record with the pharmaceutical regulator should, in the absence of any counter evidence, be presumed to be its actual preparation process; if there is evidence to show that the process for the alleged infringing pharmaceutical placed on the record is not the real method, evidence such as the source of the technology, the production protocol, batch production records, record filing documents, etc. for the alleged infringing pharmaceutical should be fully reviewed to determine the actual preparation process for the alleged infringing pharmaceutical in accordance with the law. Complex technical facts such as the preparation process for the alleged infringing pharmaceutical may be ascertained through numerous means, such as comprehensive use of various types of help including that of technical investigators, expert assistants, forensic analysis, and inquiries made to scientific and technological experts.

 

(2) Whether instructions for use of a product are a publicly available publication for the purposes of the Patent Law

 

In retrial applicant, ThyssenKrupp Airport Systems Co. (Zhongshan) Ltd., v. respondents, China International Marine Containers (Group) Ltd. and Shenzhen CIMC-TianDa Airport Support Ltd., and defendant at first instance, Guangzhou Baiyun International Airport Company Limited [(2016) Zui Gao Fa Min Zai No.179], an invention patent infringement dispute, the Supreme People's Court pointed out that instructions for the operation and maintenance of a product are delivered to the user with the sale of the product, and neither the user nor anyone interacting therewith bears an obligation of confidentiality in respect thereof, the same can be obtained by any non-specific member of the public, and, as such, are publicly available publications for the purposes of the Patent Law. The time of disclosure of the technical solution contained therein is the time at which the instructions are delivered to the user.

 

(3) Understanding of “retroactively” in the second paragraph of Article 47 of the Patent Law

 

In retrial applicant, Shanghai Youzhou Electronic Technology Co., Ltd., v. respondent, Shenzhen Jinghualong Security Equipment Co., Ltd. [(2016) Zui Gao Fa Min Zai No.384], a utility model patent infringement dispute, the Supreme People's Court pointed out that, if the enforcement of a judgment in which a people's court rendered a finding of infringement has been completed before the invalidation of a patent, the decision invalidating the patent does not retroactively apply to the content of the aforementioned judgment. However, once the patent is invalidated, the relevant technical solution enters the public domain and any entity or individual may freely exploit the same, and the patentee has no right to halt it.

 

2. Trial of Administrative Patent Cases

 

(4) Determination of whether an invention patent application has practicability

 

In retrial applicants, Gu Qingliang and Peng Anling, v. respondent, Patent Reexamination Board of the State Intellectual Property Office [(2016) Zui Gao Fa Xing Shen No.789], an administrative dispute involving a review of the rejection of an invention patent application (the “magnetic levitation power machine” invention patent rejection review case), the Supreme People's Court pointed out that an invention patent application has practicability, meaning that the technical solution itself follows natural law, can actually be applied and can be industrially reproduced.

 

(5) Relationship between “can be manufactured or used” and “could realize” in the Patent Law

 

In the aforementioned “magnetic levitation power machine” invention patent rejection review case, the Supreme People's Court pointed out that the phrase “can be manufactured or used” specified in the fourth paragraph of Article 22 of the Patent Law means that the manufacturing or use in industry of the technical solution for the invention or utility model is possible. The phrase “could realize” specified in the third paragraph of Article 26 of the Patent Law  refers to whether a person skilled in the art could realize the invention or utility model based on the content of the description. The criteria for determining the two are different and there is no necessary connection between them.

 

(6) Requirement of full disclosure in an application for a chemical product patent

 

In retrial applicant, Mitsubishi Tanabe Pharma Corporation, v. respondent, Patent Reexamination Board of the State Intellectual Property Office [(2015) Zhi Xing Zi No.352], an administrative dispute involving a review of the rejection of an invention patent application, the Supreme People's Court pointed out that, with respect to an application for a chemical product patent, the purpose of and/or effect of using the product should be disclosed in full. If a person skilled in the art would be unable to anticipate that the invention can realize the specified purpose of and/or the effect of using the same based on the prior art, the description should additionally document qualitative or quantitative experimental data that, for a person skilled in the art, would be sufficient to show that the technical solution for the invention could realize the specified purpose and/or achieve the anticipated effect.

 

(7) Criteria for determining the disclosed content of prior art in the determination of the novelty of a compound

 

In Genetic Technology Co., Ltd. v. Patent Reexamination Board of the State Intellectual Property Office [(2015) Zhi Xing Zi No.356], an administrative dispute involving a review of the rejection of an invention patent, the Supreme People's Court pointed out that, in the course of determining whether a compound patent is novel, the criterion as to whether the prior art documents have disclosed the compound should be whether a person having ordinary skill in the art could manufacture or isolate the compound based on revelation from such documents.

 

(8) Determination of whether claims for biological sequences using the method of limitation by homology plus origin and functions are supported by the description

 

In retrial applicants, Patent Reexamination Board of the State Intellectual Property Office and Novozymes, v. respondent, Jiangsu Boli Bioproducts Co., Ltd. [(2016) Zui Gao Fa Xing Zai No.85], an administrative invention patent invalidation dispute, the Supreme People's Court pointed out that, with respect to whether claims in which the subjects of protection are biological sequences are supported by the description, consideration needs to be given to the limiting effect on the biological sequences of technical features such as homology, origin and functions. If the restriction imposed by such features result in the biological sequences contained in the claims being extremely limited and, based on the content disclosed in the patent description, it can be foreseen that these extremely limited sequences can realize the objective of the invention and achieve the anticipated technical effect, the claims are supported by the description.

 

II. Trial of Trademark Cases

 

1. Trial of Civil Trademark Cases

 

(9) General rules on the exercise of rights by trademark right co-owners

 

In retrial applicant, Zhang Shaoheng, v. respondents, Cangzhou Tianba Agricultural Machinery Co., Ltd. and Zhu Zhanfeng [(2015) Min Shen Zi No.3640], a trademark infringement dispute, the Supreme People's Court pointed out that, where a trademark is co-owned, the exercise of trademark rights is required to comply with the principle of autonomy of will of the parties and such rights exercised after the co-owners have reached a consensus thereon through consultations. If they fail to reach such a consensus, and there are no legitimate grounds, none of the co-owners may prevent another co-owner from licensing such trademark to a third party by means of a non-exclusive license.

 

(10) The strength of protection of a trademark should be consistent with its distinctiveness and degree of notoriety

 

In retrial applicant, Hangzhou Aupu Bathroom & Kitchen Technology Co., Ltd., v. respondents, Zhejiang Modern New Energy Co., Ltd., Zhejiang Linpu Electric Appliance Co., Ltd. and Yang Yan [(2016) Zui Gao Fa Min Zai No.216], a trademark infringement dispute, the Supreme People's Court pointed out that the strength of protection of trademark rights should be consistent with the distinctiveness and degree of notoriety of the trademark. If use has not impaired the identification and differentiation functions of the trademark in question, and has not, as a result, led to confusion in the market, it is not prohibited by law.

 

(11) An act of use of a trademark on a sales invoice that indicates a non-infringing good does not constitute infringement

 

In retrial applicant, Wuxi Little Swan Company Limited, v. respondents, Inner Mongolia Baotou Department Store Group Co., Ltd. and Inner Mongolia Baotou Department Store Group Co., Ltd. Kun District Haiwei Supermarket [(2016) Zui Gao Fa Min Shen No.2216], a trademark infringement and unfair competition dispute, the Supreme People's Court pointed out that whether the use of a trademark on a sales invoice is lawful needs to be determined based on whether the goods or services indicated thereon are themselves infringing or not.

 

(12) The commercial use of a personal name may not conflict with a third party's lawful prior rights

 

In retrial applicant, Beijing Qing-Feng Steamed Dumpling Shop, v. respondent, Shandong Qingfeng Catering Management Co., Ltd. [(2016) Zui Gao Fa Min Zai No.238], a trademark infringement and unfair competition dispute, the Supreme People's Court pointed out that citizens have the lawful right to their names and have the right to reasonably use their names, but may not violate the principle of good faith and infringe another's prior rights. Where one knows the relatively high degree of notoriety of another's registered trademark or trade name but one nonetheless, with the objective of taking advantage of the notoriety of another, registers identical characters as a trade name and prominently uses the same, such use does not constitute reasonable use of one's name, even if such trade name contains characters that are identical to one's name, and constitutes infringement of another's exclusive right to use its registered trademark as well as unfair competition.

 

(13) Examination and determination of whether prior use is constituted in a trademark infringement case

 

In retrial applicants, Liang Huo and Lu Yijian, v. respondents, Anhui Caidiexuan Cake (Group) Co., Ltd. and Hefei Caidiexuan Enterprise Management Service Co., Ltd., and defendant at first instance and appellee at appeal, Anhui Bali Tiantian Cake Food Co., Ltd. [(2015) Min Ti Zi No.38], a trademark infringement and unfair competition dispute (the “Caidiexuan” trademark infringement and unfair competition case), the Supreme People's Court pointed out that a party that claims prior use rights and interests is required to adduce evidence showing that its time of use is earlier than the application date for the registered trademark and that, through use, the unregistered trademark has given rise to a certain influence.

 

(14) The calculation of the measure of damages should accord with the principle of proportionality

 

In the aforementioned “Caidiexuan” trademark infringement and unfair competition case, the Supreme People's Court pointed out that sales revenues are closely related to the scale of production and operations, advertising and promotion, merchandise quality, etc. and do not solely originate from the use and degree of notoriety of a trademark. Where a party claims that all of its sales revenues and the sales profit rate should serve as the basis in calculating the profit derived from the infringement, the same should be rejected.

 

2. Trial of Administrative Trademark Cases

 

(15) A sign that injures religious feelings may be found to “have another adverse effect”

 

In retrial applicant, Tai Shan Gypsum Co., Ltd., v. respondent, Shandong Wanjia Building Materials Co., Ltd., and defendant at first instance and appellee at appeal, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce [(2016) Zui Gao Fa Xing Zai No.21], an administrative trademark dispute, the Supreme People's Court pointed out that, with respect to a trademark that has religious connotations, in general, it may be found to “have another adverse effect” on the grounds that its registration would injure religious feelings, religious beliefs or folk beliefs. When determining whether a trademark has religious connotations, comprehensive consideration should be taken by combining the evidence submitted by the parties, knowledge from religious personages, the historical origins of the religion in question and current social realities to come to a finding.

 

(16) Determination of the distinctiveness of a certification mark

 

In retrial applicant, Bluetooth SIG Inc., v. respondent, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce [(2016) Zui Gao Fa Xing Shen No.2159], an administrative dispute involving a review of a trademark rejection, the Supreme People's Court pointed out that, although the Trademark Law provides specific provisions on the entity that applies for, the entity that uses, and the basic functions of, a certification mark, the requirement of the Trademark Law that a registered trademark be distinctive also applies to a certification mark.

 

(17) Criteria for examination of the evidence for the recognition of a well-known trademark

 

In retrial applicant, Apple Inc., v. respondent, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce, and third party at first instance, Xintong Tiandi Technology (Beijing) Co., Ltd. [(2016) Zui Gao Fa Xing Shen No.3386], an administrative dispute involving a trademark opposition review, the Supreme People's Court held that, when determining whether relevant evidence can substantiate that the reference mark is well-known, it is necessary to keep in mind that: the operational history and notoriety of the company are not necessarily equivalent to the publicity for, history of use of or degree of notoriety of, the reference mark; whether the relevant public can know and understand the reference mark through regular and valid channels; and general news reports (not advertisement and publicity specifically for the reference mark) are not sufficient to serve as the factual basis for rendering a finding that a specific trademark has reached the level of being well-known in China through broad commercial publicity.

 

(18) When determining whether a Chinese language trademark is similar, consideration needs to be given to whether the two have given rise to stable one-to-one relationships

 

In retrial applicant, Château Lafite Rothschild, v. respondents, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce and Nanjing Golden Hope Wine Company Limited [(2016) Zui Gao Fa Xing Zai No.34], an administrative trademark dispute (the “Château Lafitte” trademark dispute case), the Supreme People's Court pointed out that, when determining whether a Chinese language trademark is similar to a foreign language trademark, not only must consideration be given to factors such as the degree of similarity of the constituent elements and the whole of the trademark, the distinctiveness and degree of notoriety of the relevant trademark, the degree of association with the good for which it is used, etc., but consideration also needs to be given to whether the two have given rise to stable one-to-one relationships among their relevant public.

 

(19) Determination of whether a registered trademark has given rise to a stable market order

 

In the aforementioned “Château Lafitte” trademark dispute case, the Supreme People's Court pointed out that, with respect to whether a trademark that has been registered and used has established a relatively high market reputation through use and given rise to a relevant public, whether the relevant public can objectively realize market differentiation and avoid confusion and misidentification should be taken as the criteria for determining the same.

 

(20) Effect of co-existence agreement in the course of application of Article 28 of the Trademark Law as revised in 2001

 

In retrial applicant, Google Inc., v. respondent, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce [(2016) Zui Gao Fa Xing Zai No.103], an administrative dispute involving a trademark rejection review, the Supreme People's Court pointed out that a co-existence agreement is an important factor to consider when determining whether an applied for trademark violates Article 28 of the Trademark Law as revised in 2001. Where a co-existence agreement does not prejudice state interests, the public interest or the lawful rights and interests of a third party, admission of the co-existence agreement should not be refused simply on the grounds that it prejudices the interests of consumers.

 

(21) Rights in a personal name constitute “prior rights” protected by the Trademark Law

 

In retrial applicant, Michael Jeffrey Jordan, v. respondent, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce, and third party at first instance, Qiaodan Sports Co., Ltd. [(2016) Zui Gao Fa Xing Zai No.27], an administrative trademark dispute (the “Qiaodan” trademark dispute case), the Supreme People's Court pointed out that rights in one's personal name are important personal rights that natural persons have in their names and rights in one's personal name can constitute “prior rights” as specified in Article 31 of the Trademark Law as revised in 2001.

 

(22) A natural person is entitled to protection of the rights in his/her personal name in respect of a specific name that he/she has not used on his/her initiative

 

In the aforementioned “Qiaodan” trademark dispute case, the Supreme People's Court pointed out that “use” is one of the rights that the holder of rights in a personal name enjoys, not an obligation that he/she bears and certainly not a statutory condition precedent for the holder of the rights in the personal name to claim protection for such rights. Where the conditions for protection of the rights in one's personal name are satisfied, a natural person is, in accordance with Article 31 of the Trademark Law as revised in 2001, entitled to protection of the rights in his/her personal name in respect of a specific name that he/she has not used on his/her initiative.

 

(23) The conditions that a natural person is required to satisfy when claiming protection of the rights in his/her personal name in respect of a specific name

 

In the aforementioned “Qiaodan” trademark dispute case, the Supreme People's Court pointed out that, where a natural person claims protection of the rights in his/her personal name in respect of a specific name, such specific name is required to satisfy three conditions: (i) the  specific name has a certain degree of notoriety and is familiar to the relevant public in China; (ii) the relevant public refers to the natural person in question when using the specific name; and (iii) a stable one-to-one relationship has been established between the specific name and the natural person in question. If the Chinese translation of the foreign-language personal name of a foreign person satisfies the foregoing three conditions, a claim for protection of the rights in such personal name may be made in accordance with the law.

 

(24) Commercial success and a market order for which operation in good faith is not precedent are not legitimate grounds for maintenance of the registration of a trademark

 

In the aforementioned “Qiaodan” trademark dispute case, the Supreme People's Court pointed out that the market order or commercial success claimed by the trademark rights holder is not entirely the lawful fruit of operation in good faith, but rather is, to a certain extent, built on the basis of misidentification by the relevant public. Protection of such market order or commercial success is not only not conducive to protecting the lawful rights and interests of the holder of the rights in the personal name, but is also not conducive to protecting the rights and interests of consumers and certainly not conducive to cleansing the trademark registration and use environment.

 

(25) The particulars of a trademark applicant or registrant are not an act of signing that indicates the author's identity as specified in the Copyright Law

 

In retrial applicant, Gregory Mountain Products, LLC v. respondent, Heshan Sanliya Handicraft Product Co., Ltd., and defendant at first instance and appellee at appeal, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce [(2016) Zui Gao Fa Xing Shen No.2154], an administrative trademark opposition review dispute (the “Gregory” trademark opposition case), the Supreme People's Court pointed out that the particulars of a trademark applicant or trademark registrant merely evidence the vesting of registered trademark rights and are not an act of signing that indicates the identity of the creator of the work as specified in the Copyright Law.

 

(26) The probative force of a copyright registration certificate for prior copyright

 

In the aforementioned “Gregory” trademark opposition case, the Supreme People's Court pointed out that, provided that the work is original and there is no counter evidence sufficient for overturning, a copyright registration certificate that was secured earlier than the trademark application date can evidence that the rights holder indicated on the registration certificate has prior copyright. A copyright registration certificate secured later than the application date does not have probative force in evidencing prior copyright.

 

III. Trial of Copyright Cases

 

(27) Understanding and determination of whether a work is original and has tangible form

 

In retrial applicant, Sun Xinzheng, v. respondent, Ma Jukui [(2016) Zui Gao Fa Min Shen No.2136], a copyright infringement dispute, the Supreme People's Court pointed out that, if the method of expression of an intellectual achievement is unique, making it impossible to reflect the difference with existing works, it does not satisfy the requirement of the Copyright Law in respect of originality. The fruit of intellectual effort must be known to and determined by others by virtue of taking a specific form and is the necessary fulfillment of the requirement that a work must have a tangible form.

 

(28) Rules for the exercise of copyright in a work that incorporates the lawful prior rights of another

 

In retrial applicant, Zhuji Happy Cat Food Co., Ltd., v. respondents, Zhuji Youlaike Food Shop, Wang Kun, He Tieyong, Fu Fengli, Guangdong Feie Color Printing Packing Co., Ltd. and Changsha Yudekang Food Trading Co., Ltd. [(2016) Zui Gao Fa Min Shen No.1975], a trademark infringement dispute, the Supreme People's Court pointed out that, when a copyright holder exercises its rights, it is required to comply with the principles of lawfulness, good faith and prudence, and reasonably avoid another's lawful prior rights that is incorporated in a work due to historical reasons.

 

IV. Trial of Unfair Competition Cases

 

(29) Determination of the qualifications of a party as a subject of litigation in an unfair competition case

 

In the aforementioned “Caidiexuan” trademark infringement and unfair competition case, the Supreme People's Court pointed out that the determination of the qualifications of the plaintiff as a subject of litigation in an unfair competition case may not be determined merely on the basis of whether it is a product dealer that is in direct competition with the defendant.

 

(30) Determination of reasonable confidentiality measures in a trade secret joint ownership case

 

In appellants, Nantong Synthetic Material Plant of the Ministry of Chemical Industry, Nantong Xingchen Synthetic Material Company Limited and Nantong Zhonglan Engineering Plastic Co., Ltd., v. appellees, Nantong Wangmao Industrial Co., Ltd., Zhou Chuanmin, Chen Jianxin, Chen Xi, Li Daomin and Dai Jianxun [(2014) Min San Zhong Zi No.3], an infringement dispute on trade technical secrets and trade operational secrets, the Supreme People's Court pointed out that, although parties claimed joint ownership of the relevant trade secrets, the information in question actually took form separately at the locations of the different parties. Accordingly, the confidentiality measures taken by any one of the parties could not substitute for the reasonable confidentiality measures that each of the other parties should have taken in respect of the trade secrets in question.

 

V. Trial of Monopoly Cases

 

(31) Determination of whether a business operator has a dominant market position

 

In retrial applicant, Wu Xiaoqin, v. respondent, Shaanxi Broadcast & TV Network Intermediary (Group) Co., Ltd. [(2016) Zui Gao Fa Min Zai No.98], a bundle transaction dispute (the “bundle transaction” case), the Supreme People's Court pointed out that, where a business operator is the sole lawful operator of a cable television transmission business and is the television program centralized broadcast controller for a specific region, it has advantages in all factors such as market access, market share, operating position, scale of operations, etc., and, as such, may be found to have a dominant market position.

 

(32) Determination of an act of “tie-in sale” in an abuse of dominant market position case

 

In the aforementioned “bundle transaction” case, the Supreme People's Court pointed out that, where a business operator uses its dominant market position and bundles together and charges consumers for the basic reception and maintenance charge for digital television along with the digital television pay per view program fee, it infringes consumers' right to choose and is inimical to entry into the digital television service market by other service providers. Even if there are exceptions where the operator charges the fees separately for two different services, this is not sufficient to deny that it carried out a tie-in sale act that is prohibited by the Anti-monopoly Law.

 

VI. Trial of Technology Contract Cases

 

(33) Basic principles for determining fraud in a commissioned technology development contract

 

In appellant, Qinzhou Ruifeng Vanadium Titanium Iron Technology Co., Ltd., v. appellee, Beihang University [(2015) Min San Zhong Zi No.8], a technology contract dispute (the “vanadium-bearing titanomagnetite” technology contract dispute), the Supreme People's Court pointed out that, with respect to determining fraud by the commissioned party under a commissioned technology development contract, the features and patterns of technology development activities themselves need to be respected and the different stages in technology development distinguished, and the facts known at the time of execution of the contract and the circumstances that can reasonably be foreseen by the commissioned party at the time in question should serve as the criteria in determining whether it gave false information or concealed the true circumstances.

 

(34) Understanding of the term “product” in a commissioned technology development contract and determination of fraud by the commissioned party

 

In the aforementioned “vanadium-bearing titanomagnetite” technology contract dispute, the Supreme People's Court pointed out that, with respect to the understanding of the term “product” in a technology contract, consideration needs to be given to the fact that technology research and development activities involve stages and that there are differences in the product at different stages. With respect to the use by the commissioned party of not entirely identical concepts to refer to the product in the technology contract, the finding as to whether it committed the fraudulent act of falsely reporting the product of the project should be rendered based on consideration of the research and development stage that has been reached and the corresponding specific process.

 

(35) Understanding of “technology development costs” in a commissioned technology development contract and determination of fraud by the commissioned party

 

In the aforementioned “vanadium-bearing titanomagnetite” technology contract dispute, the Supreme People's Court pointed out that technology development costs include but are not limited to relevant expenses for the experimental equipment, and the same is merely one of the factors in deciding the technology development contract price. With respect to the determination of the technology development costs, these should agree with the objective breakdown of the technology development costs as well as the basic norms for technology development contract pricing and then, on this basis, the finding as to whether the commissioned party committed fraud by falsely reporting the technology development costs should be rendered.

 

(36) The commercial judgment that the commissioned party should itself render in a commissioned technology development contract and determination of fraud by the commissioned party

 

In the aforementioned “vanadium-bearing titanomagnetite” technology contract dispute, the Supreme People's Court pointed out that, when determining whether the client under a technology contract made an erroneous judgment due to being deceived, it is necessary to fully respect the special nature of technology development activities and comprehensively take into consideration factors such as the client's cognitive abilities, the source of information and circumstances that can be reasonably foreseen. Where the commissioned party has performed its obligation of reasonable communication of information, and the client has failed to render the commercial judgment that it is itself responsible for rendering, the commissioned party may not be found to have committed fraud on this basis.

 

 

VII. Trial of Integrated Circuit Layout Design Cases

 

(37) Determination of whether a defense of lawful provenance is tenable in an integrated circuit layout design infringement case

 

In retrial applicant, Nanjing Micro One Electronics Inc., v. respondent, Quanxin Electronic Technology (Shenzhen) Co., Ltd. [(2016) Zui Gao Fa Min Shen No.1491], a dispute over infringement of the exclusive right to an integrated circuit layout design, the Supreme People's Court pointed out that the gazette for an integrated circuit layout design normally only includes bibliographic information and does not include the specific content of the layout design. If there is evidence to show that the alleged infringing product was acquired through lawful means and that it was not known and that there was no reasonable grounds for knowing that it contained an illegally reproduced layout design, the defense of lawful provenance is tenable.

 

VIII. Intellectual property litigation procedure and evidence

 

(38) In a review of a trademark rejection, evidence of notoriety should not usually be considered

 

In retrial applicant, Shenzhen Beson Housewares Co., Ltd., v. respondent, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce [(2016) Zui Gao Fa Xing Shen No.362], an administrative trademark rejection review dispute, the Supreme People's Court pointed out that, since a review of a trademark rejection is an ex parte procedure, the reference mark holder does not have the opportunity to submit evidence on the notoriety of the reference mark. To maintain the legitimacy of the procedure, in a review of a trademark rejection, evidence of notoriety should not usually be considered.

 

(39) Handling of an appeal judgment in which there are defects in application of the law but in which the adjudication outcome is correct

 

In retrial applicant, Huang Xiaodong, v. respondent, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce, and third party at first instance, Saudi Arabian Oil Company [(2016) Zui Gao Fa Xing Shen No.356], an administrative trademark objection review dispute, the Supreme People's Court pointed out that, where there are defects in the application of the law in an appeal judgment but the adjudication outcome is correct, the defects in the application of the law can be corrected by applying the Civil Procedure Law and relevant judicial interpretations mutatis mutandis, and a ruling to dismiss the application for retrial rendered on this basis.