China: China Newsletter – February 2018

Last Updated: 2 March 2018
Article by Daniel Chew, (Ellie) Li Min, Kirwin Lee and Michael Conway


At the end of January 2018, US based animation studio, DreamWorks Animation finally won a seven year trade mark battle against Shanghai Weipu Dress Co. Ltd.

Written by Michael Conway

The saga began in June 2009 – one year after the first Kung Fu Panda film was released – when Shanghai Weipu, a Chinese company, filed an application to register the trade mark "KUNG FU PANDA 功夫熊猫."

DreamWorks had filed an application for the KUNG FU PANDA trade mark as far back as 2006. This was subsequently approved for registration in 2009 and is protected for products such as toys and games.

Shanghai Weipu's application claimed protection not for these products but for services including medical, hairdressing and beauty salon services. In August 2010, the Chinese Trade Mark Office ("TMO") examined the trade mark and published it for opposition purposes.

DreamWorks considered the application a clear imitation of its brand and filed an opposition citing its earlier trade mark protected in China. However, in July 2012, the TMO rejected DreamWorks' opposition and approved the registration of the trade mark, noting the dissimilar services claimed. After a failed appeal to the Trade Mark Review and Adjudication Board (TRAB), DreamWorks filed an appeal to the Beijing No.1 Intermediate People's Court.

After hearing the appeal, the Beijing No.1 Court revoked the earlier decision and instructed the TRAB to issue a new ruling stating that Weipu's trade mark infringed the lawful rights of DreamWorks.

The TRAB then appealed to the Beijing Higher People's Court, which has now confirmed that, even though the services are not similar to DreamWorks' goods, the application illegitimately took advantage of the popularity and reputation of the film, Kung Fu Panda, so should be rejected.

This marathon case, in which the Beijing Higher People's Court eventually confirmed that Shanghai Weipu had prejudiced the existing rights of DreamWorks, follows a now familiar pattern. In cases involving dissimilar products or services, the lower tribunals are often reluctant to recognise an obvious copy of a famous brand as contravening the rights of the owner, with an appeal to the higher courts being required before the extent of the owner's reputation is recognised and justice can be served.

Brand owners face a much easier task in enforcing their rights when the later mark claims protection for the same or related products, even if the earlier right does not have a reputation. In these situations, the Chinese authorities at all levels are issuing increasingly robust decisions that often favour the brand owner.


A number of other landmark IP cases in 2017 has highlighted the willingness of the Chinese Courts to rule in favour of IP right owners. Here we provide summaries of two cases in which disputes between foreign corporations and Chinese companies were involved.

Written by Daniel Chew

Luxury designer brand, Michael Kors, has successfully defended a trade mark lawsuit filed by Shantou Chenghai Jianfa Handbag Craft Factory alleging infringement for using its MK logo. The Hangzhou Intermediate People's Court made the decision to reject the claims raised by the claimant, Shantou Jianfa, which had pushed for damages worth CNY 95 Million, the highest ever claimed in a trade mark infringement case!

A recent case in December 2017, involving Danish toymaker, Lego and its rival Bela, has seen the Shantou Intermediate Court ruling in favour of Lego, which had claimed copyright infringement and unfair competition against producers of imitation toy bricks in China. This reassuring victory for Lego highlights once more China's increasing willingness to enforce IP law against domestic infringers.

Growth in IP registrations

China has seen huge growth in patent filings in 2017, with government data showing the number of applications filed in China reaching a record 1.38 million, a 14.2 percent rise from 2016. International filings from China via the Patent Cooperation Treaty have also jumped, rising to 12.5 percent (51,000) last year compared to 2016. According to Commissioner of the State Intellectual Property Office, Shen Changyu, the nation's growth in IP innovation is largely thanks to an increased collaboration with a wide variety international partners.

Similarly, the number of new trade mark applications received in 2017 also increased compared to previous years. According to the State Administration for Industry and Commence (SAIC), the Chinese Trade Mark Office (CTMO) received more than 5.7 million applications for trade mark registration in China, representing an increase of 56% compared to 2016 and an increase of 98% compared to 2015.

PPH - China and Germany

The German Patent and Trademark Office (DPMA) and the State Intellectual Property Office of China (SIPO), have had an established pilot PPH (Patent Prosecution Highway) programme since early 2012. This programme has now been prolonged for a second time (extended for the first time with effect from January 2016) until January 22, 2021. Therefore the requirements of patent offices to accelerate substantive examination remain unchanged, allowing applicants to continue using expedited examination to obtain patents more quickly and efficiently.

The DPMA and SIPO have been working closely together since the launch of the programme and with the extension for an even longer period than the previous one, it proves that this cooperation in the PPH field has been beneficial for both parties.



The Intermediate People's Court in Shenzhen recently ruled in favour of Huawei against Samsung in a case involving two standard-essential patents (SEP) owned by Huawei, after finding that Samsung infringed the two patents and had "maliciously delayed negotiations".

Written by Kirwin Lee

This decision is the latest in an ongoing saga of patent disputes between the Asian tech giants, which have been filing lawsuits against each other in China and the US since May 2016. In the ruling, Samsung was ordered to immediately stop the manufacturing and sales of their infringing products and to pay a small court fee, although it is not clear which of the phone models are affected.

Two main issues were considered in detail by the court during an 18-day trial - the first relates to whether the two patents owned by Huawei are essential to the 4G standard, and the other being whether FRAND was breached by either of the parties during the negotiation discussions.

On the first issue, the two patents asserted by Huawei were both declared as essential to the 4G/ LTE standard in the decision. It was also found that because Samsung manufactured and sold 4G capable terminal products in China, Huawei's patent rights were infringed. Samsung put forward an argument during the trial that Huawei's patents were exhausted through being implemented in Qualcomm's products, which were then used in Samsung products. However, this argument was not accepted as it was found that there could be no exhaustion, as Huawei did not grant any licence with regard to their 4G and LTE technology to Qualcomm. On the second issue, it was found that during the cross-licence talks between the companies Samsung made obvious violations of their FRAND obligations in both procedure and substance.

On the other hand, it was decided that Huawei made no obvious breach of the FRAND principle as they made conscious efforts to resolve the conflict through negotiation and arbitration.

In the press release, the court indicated that this decision has a great significance on Shenzhen's "innovation-driven development strategy", as well as the "equal protection of the IP rights and interests of intellectual property owners home and abroad". An interesting point to note is that the Shenzhen court has appeared to have adopted a similar approach to its German counterparts, compared to what has been observed in Unwired Planet v. Huawei (UK) and TCL v. Ericsson (US). Instead of imposing a licence on the parties and/or setting the terms of a licence, the Chinese court has elected to grant a SEP injunction against future infringement.

Huawei first scored its patent infringement win against Samsung in April 2017 and was awarded 80 million RMB in damages, after Samsung filed its own patent infringement case against Huawei the previous year seeking 161 million RMB. This latest and second victory of Huawei in their legal battle against Samsung demonstrates how a strong commitment to maintaining a robust patent portfolio can help a company to remain successful in an increasingly favourable IP licensing and enforcement environment in China.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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